THE MAHARASHTRA AGRO INDUSTRIES DEVELOPMENT CORPORATION LIMITED,MUMBAI vs. DCIT-CIRCLE 8(3)(1), MUMBAI

IN THE INCOME-TAX APPELLATE TRIBUNAL, MUMBAI “D” BENCH, MUMBAI BEFORE SHRI SANDEEP GOSIAN, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER ITA No.1945/MUM/2026 (AY: 2018-19) The Maharashtra Agro Industries vs. DCIT- Circle-8(3)(1), Mumbai Development Corporation Limited Aayakar Bhavan, M, K. Road, Mumbai- Krushi Udyaog Bhavan, Dinkar Rao 400020. Desai Marg, Aarey Milk Colony, Goregaon East, Mumbai-400065. PAN/GIR No: AAACT1546M (Appellant) (Respondent) Assessee by Shri Vipul Joshi, Adv. & Dinkle Hariya, Adv. Revenue by Shri Umashankar Prasad (CIT DR) Date of Hearing 14.05.2026 Date of Pronouncement 11.08.2026 O R D E R PER BIJYANANDA PRUSETH, AM:

This appeal filed by the assessee emanates from the order passed under

section 250 of the Income-tax Act, 1961 (in short, ‘Act’) by the National Faceless

Appeal Centre [in short, ‘NFAC’], dated 24.12.2025 for the assessment year (AY)

2018-19.

“1. THE ORDER IS BAD IN LAW, ILLEGAL AND WITHOUT JURISDICTION 1.1 In the facts and the circumstances of the case, and in law, the appellate order u/s. 250 of the Income tax Act, 1961 ['the Act'] framed and passed on 24.12.2025 by the Commissioner of Income tax (Appeals), National Faceless Appeal Centre, Delhi ['Ld. CIT (A)'] is bad in law, illegal and without jurisdiction, as the same is framed in breach of the statutory provisions of the Act and the scheme and as otherwise also is not in accordance with the law.

1.2 Without prejudice to the generality of the above, the appellate order so passed is bad in law, illegal and void as the same is arbitrary and perverse. 2. VIOLATION OF PRINCIPLES OF NATURAL JUSTICE 2.1 In the facts and the circumstances of the case, and in law, the appellate order so framed in bad in law and illegal, as the same is framed in breach of the principles of Natural Justice. 2.2 Without prejudice to the generality of the above ground, in the facts and the circumstances of the case, the Ld. CIT (A) erred in - (i) not granting proper, sufficient, reasonable and fair opportunity of being heard to the Appellant while passing the appellate order, and (ii) not granting an opportunity of personal hearing. WITHOUT PREJUDICE TO THE ABOVE: 3. REJECTION OF BOOKS OF ACCOUNTS U/S. 145(3) 3.1 The Ld. CIT (A) crred in confirming the action of the A.O. in rejecting the books of accounts of the Appellant by invoking the provisions of section 145(3) of the Act on the ground that the authenticity of the figures of the bools of accounts could not be verified/ascertained. 3.2 While doing so, the Ld. CIT(A) erred in -

(i) Basing his action only on surmises, suspicion and conjecture; (ii) Taking into account irrelevant and extraneous considerations; (iii) Ignoring relevant material and considerations as submitted by the Appellant; (iv) Arriving at the erroneous and misleading conclusion that books of the Appellant were not audited.

3.3 It is submitted that in the facts and the circumstances of the case, and in law, such action of rejection of books of accounts is bad in law, illegal and without jurisdiction and that no such rejection was called for.

WITHOUT PREJUDICE TO THE ABOVE: 4. ADDITION OF Rs. 12,43,39,852/- 4.1 It is submitted that, in the facts and circumstances of the case and in law, the CIT(A) erred in confirming the action of the A.O. in making addition of Rs. 2,04,25,809/-, being the amount of enhanced gross profit arrived at by applying the gross profit rate of the last year with the turnover of the current year

4.2 While doing so, the Ld. CIT(A) erred in -

(i) Basing his action only on surmises, suspicion and conjecture, (ii) Taking into account irrelevant and extraneous considerations; and (iii) Ignoring relevant material and considerations as submitted by the Appellant. 4.3 It is submitted that in the facts and the circumstances of the case, and in law, no such addition was called for.

4.4 Without prejudice to the above, assuming but not admitting that some addition was called for, the Ld. CIT (A) failed to appreciate that the computation of the addition made by the A.O. is not in accordance with the law, is arbitrary, and excessive.

The Appellant craves leave to add, alter, delete or modify all or any the above ground at the time of hearing.” 3. Facts of the case, in brief, are that the assessee filed return of income for

the AY 2018-19 declaring loss of Rs.1,07,67,785/-. It filed its revised return of

income declaring income at Rs.1,38,58,390/- on 20.03.2019. The assessee-

company is engaged in the business of dealing in fertilizers, pesticides,

agricultural implements, cattle feed and processing of fruit products. The case

was selected for scrutiny under CASS on the issues of depreciation claim, refund

claim and expenses incurred for earning exempt income. Statutory notices u/s

143(2) and 142(1) were issued and served upon the assessee. Replies along with

financial statements and other details were furnished by the assessee. During

assessment, the AO noticed discrepancies between the audit report and the financial statements filed with the original and revised returns. The AO also

observed that the accounts were purportedly audited by different auditors and

that the requisite audit report under the Companies Act, 2013 as well as Forms

3CA/3CD and other supporting records, were not properly furnished/uploaded.

The assessee explained that the tax audit report was based on provisional

accounts, resulting in variation in the figures. The AO issued a show-cause notice

proposing rejection of the books on the ground that the accounts were not

properly audited and the figures could not be verified. The assessee was also

called upon to furnish, inter alia, GSTR-9/9C and AOC-4/MGT-7 and to

substantiate the expenditure claimed. However, the assessee did not furnish any

reply or the documents sought for in response to the show-cause notice.

Consequently, the AO rejected the books of account. The AO thereafter adopted

the net profit rate of 2.3128%, being the rate shown by the assessee for AY 2017-

18, on the gross revenue of Rs.597,53,65,050/- declared in the revised return. The

income was accordingly determined at Rs.13,81,98,242/-, resulting in an addition

of Rs.12,43,39,852/- over the income processed u/s 143(1). Accordingly, the

assessed income was determined at Rs.14,49,95,650/-. The AO also initiated

penalty proceedings u/s 270A(1) read with 270A(9) and 271B of the Act.

Tribunal. The Ld. CIT DR submitted that the AO was not justified in rejecting the

books of account and estimating the profit at 2.3128% of the turnover merely on

the basis of the preceding year's net profit rate. It was submitted that the

assessee had furnished the relevant financial statements, audit reports and

explanations, and that the variations in the figures arose as the accounts were

initially prepared on a provisional basis. It was further submitted that the addition

of Rs.12,43,39,852/- was made without properly appreciating the submissions

and documents furnished by the assessee and without bringing any material on

record to justify adoption of the preceding year's profit rate. The ld. AR therefore contended that the rejection of books and consequent estimation of income were

unjustified and prayed for deletion of the addition. He also submitted that since

the AO has passed the order without considering the submission of the assessee,

the AO may be directed to verify the details and pass order thereafter.

He submitted that both lower authorities have rightly rejected the books of

account and estimated the income on the basis of the result for the preceding AY.

Though the assessee was having huge turnover of approximately Rs.600 Cr., it had

filed return of income declaring loss of Rs.1,07,67,785/- on the basis of provisional

report. Subsequently, revised return was filed on 20.03.2019 declaring income of

Rs.1,38,58,390/-. The AO rejected the books because the books were not audited

and no audit report, ROC records, GST returns etc. were filed to verify the

correctness of the figures shown by the assessee. The CIT(A) has rightly upheld

the addition.

needed by him. The assessee should be granted adequate and reasonable

opportunity of being heard. The ground is allowed for statistical purpose.

7.1 We make it clear that we have not expressed any opinion on the merit of

the case. The AO shall independently decide the case as per law after considering

the facts of the case and the submission of the appellant.

Order is pronounced on 11.08.2026.

Sd/- Sd/- (SANDEEP GOSAIN) (BIJYANANDA PRUSETH) JUDICIAL MEMBER ACCOUNTANT MEMBER *Aniket Chand; Sr. PS MUMBAI Date: 11.08.2026 Copy of the Order forwarded to: 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, MUMBAI 6. Guard File

By Order

Assistant Registrar ITAT, MUMBAI