ITAT Deletes Ad Hoc Profit Addition

The Bangalore ITAT held that an Assessing Officer cannot estimate profits on an ad-hoc basis without first rejecting the books of account. 

The Tribunal also deleted an addition under Section 68, observing that creditworthiness cannot be judged solely with reference to the lender’s income of a single year and that family loans cannot be disbelieved merely because they are interest-free.