During the course of assessment, the AO made an addition under section 69A aggregating to ₹1,03,27,743 on account of unaccounted income from cash sales of scrap (₹25,79,334) and piling business (₹77,48,409), allegedly based on statements recorded during the course of search and materials seized. The assessee contended that even if such transactions were undertaken, the correct approach would be to estimate the income component and not treat the entire cash receipt as undisclosed income, especially when expenses related to such business activity had already been booked in the regular books. The CIT(A) restricted the addition by estimating income at 8.56% of the gross receipts (based on average profit before tax margin), resulting in reduced additions of ₹2,20,791 (for scrap) and ₹6,63,264 (for piling). The issue before the Tribunal was , whether cash receipts from alleged unaccounted business activity (scrap sale and piling) can be added in full under section 69A, or whether only the income component, estimated on a reasonable profit margin, should be taxed. On appeal the  Tribunal agreed with the assessee’s contention and upheld the CIT(A)’s approach. The Tribunal held that  ,the business of scrap sale and piling formed part of the assessee’s regular operations. Even if cash transactions were undertaken outside the books, the income component needed to be determined on an estimate, not the entire turnover. The AO failed to establish that the entire cash receipts were pure income or profit, especially in absence of evidence that related expenses were not incurred or were also outside the books. The assessee’s regular books already accounted for corresponding expenses, which the AO did not dispute. The Tribunal held that applying an average profit rate of 8.56% on such cash receipts was a reasonable method to determine taxable income in the absence of exact details. Accordingly the Tribunal held that  additions under section 69A must be restricted to estimated profit margins on unaccounted turnover. Addition of gross receipts is not justified. Order of CIT(A) upheld.( ITA Nos. 4147 to 4153 & 4585 to 4593/Mum/2024 dt. 3-7 -2025 ) (  AY 2016–17 to 2022–23 )