Karnataka HC deletes ₹1 lakh gross profit addition, ruling estimate lacked basis despite sales to sister concern

The article covers a Karnataka High Court decision deleting an addition of ₹1 lakh to gross profit made by tax authorities on estimation grounds. Though a substantial portion of sales was to a sister concern, the Court found the estimate lacked supporting basis (benchmarks, comparables, justification) and could not sustain the addition. The judgment highlights the requirement for demonstrable basis for estimations and rejects purely speculative additions even in related‑party transactions.