BABULI SETHI,CUTTACK vs. THE INCOME TAX OFFICER, WARD-1(1), CUTTACK, CUTTACK

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ITA 204/CTK/2026Status: DisposedITAT Cuttack27 May 2026AY 2020-213 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal directed the Assessing Officer to estimate the net profit at 3% of the turnover, considering the assessee filed a return in response to a notice u/s 148 and did not provide all details. The disclosed income was to be reduced from the determined net profit for addition.

What were the facts?

The assessee, engaged in the retail dairy business, offered a net profit of 2% on a turnover of Rs. 3,50,84,227. The Assessing Officer estimated the income at 8%, which the assessee contended was excessive.

What were the issues?

The primary issue was the correctness of the estimated net profit rate applied by the Assessing Officer on the assessee's retail dairy business turnover.

Which sections of the Income-tax Act were involved?

Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “HYBRID COURT AT CUTTACK”

Before: SHRI GEORGE MATHAN & SHRI RAJESH KUMAR

For Appellant: Shri Prasanta Kr. Mishra, AR
For Respondent: Shri Vijay Singh, Sr. DR
Hearing: 27.05.2026Pronounced: 27.05.2026

IN THE INCOME TAX APPELLATE TRIBUNAL “HYBRID COURT AT CUTTACK” BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA No.204/CTK/2026 Assessment Year: 2020-21 Babuli Sethi ITO, WARD-1(1), Cuttack

M/s Tridev Tea Stall, Vs AT/P.O/P.s Karanga, Dist- Cuttack 754004. Odisha. (PAN: HKWPS0184L) (Appellant) (Respondent)

Assessee by : Shri Prasanta Kr. Mishra, AR Revenue by : Shri Vijay Singh, Sr. DR Date of Hearing : 27.05.2026 Date of Pronouncement : 27.05.2026

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.NFAC/2019- 20/10477582 dated 19.06.2025.

2.

Shri Prasanta Kr. Mishra, AR appeared on behalf of the assessee and Shri Vijay Singh, Sr. DR represented on behalf of the revenue.

3.

It was the submitted by the ld. AR that the assessee is engaged in the retail business of dairy products. It was the submission that the assessee admittedly had turnover of Rs.3,50,84,227/-. It was the submission that net profit offered by the assessee was about 2% and the

ITA No.204/CTK/2026 Assessing Officer estimated the income of the assessee at 8%. It was the submission that the assessee being in the business of retail trading of milk products, the estimated income of the assessee as 8% is excessive. It was the submission that the assessee has offered income at an amount of Rs.5,51,680/-. It was the submission that GP rate of 2% is correct.

4.

In reply, the ld. Sr. DR submitted that GP rate should be at least 3% considering the turnover of the assessee and on the fact that the assessee is doing business in dairy products.

5.

We have considered the rival submissions. Considering the fact that the return has been filed by the assessee only in response to the notice u/s 148 and also considering the fact that the assessee has not given all the details before the Assessing Officer, in the interest of justice, after considering the net profit for the earlier years and subsequent years, the Assessing Officer is directed to estimate net profit @ 3% of the turnover. The Assessing Officer shall reduce the disclosed income from the net profit determined to make the addition.

6.

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

Cuttack, the 27th May, 2026.

Sd/- Sd/- [Rajesh Kumar] [George Mathan] लेखा सद�य/Accountant Member �या�यक सद�य/Judicial Member

Dated: 27.05.2026. RS

ITA No.204/CTK/2026

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

//True copy// By order Assistant Registrar

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