MAGSONS SUPERCENTRE ,TALEIGAO vs. ASSISTANT COMMISIONER OF INCOME TAX, CIRCLE - 1(1), PANAJI

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ITA 291/PAN/2025Status: DisposedITAT Amritsar22 October 2026AY 2017-183 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the assessee failed to make any submissions before the CIT(A) to justify its Gross Profit rate and credit card expenses. Despite the CIT(A) having dealt with the merits, the Tribunal, in the larger interest of justice, decided to set aside the impugned order. The issues raised in the appeal were restored to the file of the CIT(A) for fresh adjudication. The Tribunal directed the CIT(A) to provide a reasonable opportunity of hearing to the assessee. The assessee was also directed to provide its latest email ID and contact details and to remain vigilant regarding notices from the ITBA portal, avoiding unnecessary adjournments. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Magsons Super Centre, a partnership firm engaged in the business of provisions and departmental store products, filed its return for Assessment Year 2017-18 declaring an income of Rs. 28,27,490/-. During scrutiny, the Assessing Officer (AO) found that the assessee had not furnished complete details of its books of account. Consequently, the AO rejected the declared Gross Profit (GP) rate of 14.61%, applied a GP rate of 16.50%, and made an addition of Rs. 83,79,618/-. The AO also disallowed credit card expenses of Rs. 2,96,403/- due to lack of necessary details. The assessee appealed to the NFAC, Delhi, but failed to make any submissions there. The NFAC dealt with the merits and upheld the AO's actions. The assessee then filed an appeal before the ITAT.

What were the issues?

1. Whether the Tribunal had to decide on the correctness of the estimation of a higher Gross Profit rate by the Assessing Officer, leading to an addition of Rs. 83,79,618/-, and the disallowance of credit card expenses of Rs. 2,96,403/-. The assessee argued that it failed to make submissions before the CIT(A) and prayed for one more opportunity to present its case. The revenue did not object to this request. The issues revolve around the AO's rejection of the assessee's GP rate and disallowance of expenses due to lack of details, and the assessee's failure to provide substantiation at the appellate stage.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 142(1),Section 143(2)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PANAJI DB BENCH, PANAJI

Before: DR.MANISH BORAD & SHRI VINAY BHAMORE

For Appellant: Shri Rahul Sarda, Advocate, Shri Pranav Naik, CA
For Respondent: Shri Mayur Kamble, Sr. DR
Hearing: 20.08.2026Pronounced: 22.10.2026

PER DR. MANISH BORAD, ACCOUNTANT MEMBER :

The captioned appeal at the instance of assessee pertaining to A.Y. 2017-18 is directed against the order dated 22.08.2025 of ld. NFAC, Delhi emanating out of Assessment Order dated 29.12.2019 passed u/s.143(3) of the Income Tax Act, 1961 (in short ‘the Act’).

2.

Grounds of appeal raised by the assessee are firstly against the estimation of higher Gross Profit rate thereby making addition of Rs.83,79,618/- and secondly against the disallowance of credit card expenses at Rs.2,96,403/-.

3.

At the outset, ld. Counsel for the assessee submitted that assessee failed to make any submission before ld.CIT(A) in support of its grounds and even though ld.CIT(A) has dealt with merits of the 2 Magsons Supercentre

case, however, since the assessee has not furnished any details, therefore, he prayed for affording one more opportunity to the assessee to which ld. Departmental Representative raised no objection.

4.

We have heard both the sides and perused the record. We note that the assessee is a partnership firm engaged in the business of dealing in provisions and other products in departmental stores in Goa. Income of Rs.28,27,490/- declared in the return of income for A.Y. 2017-18 e-filed on 21.10.2017. During the course of scrutiny proceedings carried out through CASS by validly issuing notices u/s.143(2) and 142(1) of the Act, ld. Assessing Officer called for the details to which submissions were made. Ld. Assessing Officer noted that the assessee has not furnished complete details of books of account and therefore came to the conclusion that the Gross Profit rate of the assessee shown at 14.61% is not acceptable and ld. Assessing Officer applied the Gross Profit at 16.50% thereby making addition of Rs.83,79,618/-. Further, ld. Assessing Officer also disallowed credit card expenses at Rs.2,96,403/- for want of necessary details. Assessee carried the matter before ld.CIT(A) but after filing the appeal could not make proper submissions. Ld.CIT(A) has given the finding on merits with the observation that during the appellate proceedings appellant has not submitted any details whatsoever to justify the valuation of closing stock adopted by it and therefore it is not possible to find fault with the action of the Assessing Officer estimating the Gross Profit at 16.50% instead of 14.61%. Similarly no details were filed for the credit card expenses also.

5.

Before this Tribunal, only prayer of the ld. Counsel for the assessee is to afford one more opportunity and we therefore in the larger interest of justice deem it appropriate to set aside the 3 Magsons Supercentre

impugned order and restore the issues raised in the instant appeal to the file of ld.CIT(A) for afresh adjudication. Needless to mention that ld.CIT(A) shall provide reasonable opportunity of hearing. Assessee is directed to provide latest email id and contact detail to the Department for receiving the notices from ITBA portal. Assessee is also directed to remain vigilant and not to take adjournment unless otherwise required for reasonable cause.

6.

In the result, the appeal of the assessee is allowed for statistical purposes.

Order pronounced on 22nd October 2026 under Rule 34(5) of the Income Tax (Appellate Tribunal) Rules, 1963. (VINAY BHAMORE) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER Panaji; दिन ंक / Dated : 22nd October, 2026. Satish Satish Kumar Kumar Madishetty Madishetty Date: 2026.10.22 16:59:22 +05'30'

आदेश की प्रतिलिपि अग्रेपिि / Copy of the Order forwarded to : अपील र्थी / The Appellant. 1. प्रत्यर्थी / The Respondent.

2.3.

The Pr. CIT concerned. विभ गीय प्रतितनधि, आयकर अपीलीय अधिकरण, Panaji 4. ‘DB’ Bench / DR, ITAT, Panaji ‘DB’ Bench ग र्ड फ़ इल / Guard File. 5. आिेश नुस र / BY ORDER, ////

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