Unsubstantiated Income shown in ITR: ITAT upholds Estimation of Income at 8% of Gross Receipts by AO

The ITAT upheld an income assessment by the AO, where the taxpayer’s income, shown unsubstantiated in the ITR, was estimated at 8% of the gross receipts. The taxpayer failed to provide sufficient evidence for the claimed income, leading the Assessing Officer (AO) to estimate it at 8% of the gross receipts under section 44AD of the Income Tax Act. The ITAT confirmed the AO’s action, stating that the estimated figure is a reasonable basis for determining the income when supporting documentation is inadequate.