ITAT rejects 25% Addition for Unverifiable Purchases u/s 153A of Income Tax Act citing Incorrect GP Rate Estimation

The Income Tax Appellate Tribunal (ITAT) has rejected a 25% addition made to an assessee's income for unverifiable purchases under Section 153A of the Income Tax Act. The tribunal found that the addition was based on an incorrect estimation of the Gross Profit (GP) rate, which was not substantiated by concrete evidence. The ITAT emphasized the need for accurate and reliable data in making such additions, protecting taxpayers from arbitrary assessments. This ruling reinforces the principle that tax authorities must base their assessments on verifiable and accurate information, ensuring fairness in tax proceedings.