What did the Tribunal hold?

The Tribunal found merit in the revenue's argument that expenses were already considered. Consequently, the estimated net profit rate was reduced from 6.5% to 5.75% on the actual turnover.

The assessee's auditors reported a lower turnover than the actual figure. The Assessing Officer applied a net profit rate of 6.5% on the actual turnover, which the assessee argued was too high, citing lower profit margins in subsequent years.

What were the issues?

The primary issue was the correctness of the net profit rate applied by the Assessing Officer on the assessee's turnover, considering the actual profit margins and subsequent years' performance.

Bikram Sahoo, Cuttack vs ITO | ITAT Cuttack 2026

Income Tax Appellate Tribunal, “CUTTACK BENCH, CUTTACK

Before: SHRI GEORGE MATHAN & SHRI RAJESH KUMAR

For Appellant: Shri Mohit Sheth, AR

For Respondent: Shri Vijay Singh, Sr. DR

Hearing: 14.05.2026Pronounced: 14.05.2026

IN THE INCOME TAX APPELLATE TRIBUNAL “CUTTACK BENCH, CUTTACK VIRTUAL HEARING AT KOLKATA BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA No.239/CTK/2026 Assessment Year: 2017-18 Bikram Sahoo ITO, Ward-2(1), Cuttack

Prop. Adya Enterprises, Tele Vs Sahi, College Square, Ranihat, Cuttack, Odisha-753001. (PAN: BETPS5318R) (Appellant) (Respondent)

Assessee by : Shri Mohit Sheth, AR Revenue by : Shri Vijay Singh, Sr. DR Date of Hearing : 14.05.2026 Date of Pronouncement : 14.05.2026

ORDER PER BENCH: This is an appeal filed by the assessee against the order of the NFAC, Delhi [hereinafter referred to as the ‘CIT(A)’] in appeal no.CIT(A), Cuttack/10707/2019-20 dated 26.12.2024 for the assessment year 2017-18.

Shri Mohit Sheth, AR, represented on behalf of the assessee and Shri Vijay Singh, Sr DR represented on behalf of the revenue.

ITA No.239/CTK/2026

It was submitted by the ld. AR that in the audit report, the auditors have shown a lower turnover as against the actual turnover of the assessee. It was the submission that actual turnover of the assessee was Rs.2,40,98,471/- whereas the auditors had by mistake taken a figure at Rs.1,04,55,835/-. It was the submission that when the mistake has pointed out, the assessee has accepted the high turnover. It was prayed that the Assessing Officer has adopted a net profit rate of 6.5% on total turnover whereas the net profit of the assessee was only 5.7%. It was submitted that the assessee is dealing in bakery items. It was the submission that the estimation of income at 6.5% is much higher. The assessee has shown 5.7% for assessment year 2018-19 and 4.7% for the assessment year 2019-20. It was prayed that the assessee’s net profit may be estimated at 4.5%.

In reply, the ld. Sr. DR has submitted that as the expenses have already considered by computing regular income of the assessee, the higher rate of profit must be applied.

We find substance in the arguments of the ld. Sr. DR. consequently, the estimation as done by the Assessing Officer at 6.5% is reduced and the Assessing Officer is directed to estimate income of the assessee at 5.75% on the total turnover of Rs.2,40,98,471/- as the income of the assessee. The Assessing Officer shall recompute the

ITA No.239/CTK/2026

income of the assessee by replacing the said income against the profit from the business as shown in the return of income.

In the result, the appeal of the assessee is partly allowed.

Kolkata, the 14th May, 2026.

Sd/- Sd/- [Rajesh Kumar] [George Mathan] लेखा सदस्य/Accountant Member न्याययक सदस्य/Judicial Member

Dated: 14.05.2026. RS Copy of the order forwarded to: 1. Appellant - 2. Respondent – 3. CIT(A)- 4. CIT- , 5. CIT(DR),

//True copy// By order Assistant Registrar

BIKRAM SAHOO,CUTTACK vs. ITO , WARD-2(1),CUTTACK, CUTTACK

What did the Tribunal hold?

What were the facts?

What were the issues?

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