ITAT Validates AO’s Estimation of Gross Profit at 20.97% for Road Contractor Amidst Unverifiable Cash Transactions

The Income Tax Appellate Tribunal (ITAT) validated the Assessing Officer's (AO) estimation of gross profit at 20.97% for a road contractor, amidst unverifiable cash transactions. The ITAT acknowledged the challenges faced by the AO in the absence of proper books of accounts and the prevalence of cash transactions that could not be substantiated. While upholding the AO's estimation, the tribunal emphasized the need for a reasonable basis for such estimations in the absence of reliable financial records provided by the assessee, particularly in sectors prone to cash dealings.