The ITAT found the 16% estimate fair and reasonable, reiterating that where suppressed receipts are business receipts, only the profit embedded therein can be brought to tax and not the entire gross receipts. Hence, the Tribunal upheld the CIT(A)’s more conservative estimation of 16% profit on the unaccounted receipts of ₹40.93 crore and dismissed the Revenue’s appeal. In such circumstances, netting is possible vis-à-vis gross unaccounted receipts and gross unaccounted expenditure. for the purpose of assessment, there is clear evidence for unaccounted expenditure like the unaccounted receipts considered by the A.O. In other words, it is settled principle of law that only the profit embedded in gross receipts should be taxed, but not gross receipts, if such gross receipts are on account of business receipts, and further, the receipts also applied for incurring various expenditure towards the project.