TULSIDAS VIRJI CHOTHANI,MUMBAI vs. INCOME-TAX OFFICER WARD 27(3)(1), MUMBAI, MUMBAI

ITA 319/MUM/2026Status: DisposedITAT Mumbai04 March 2026AY 2016-17Bench: SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER SHRI SANDEEP SINGH KARHAIL (Judicial Member)1 pages
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What did the Tribunal hold?

The Tribunal observed that the assessee had inadvertently entered gross profit figures in the gross receipts column of the return, which was a bona fide error. It was also noted that the assessee had declared income under Section 44AD, and regular books of accounts were not maintained as per statutory requirements. The Tribunal found that the gross turnover declared in the return was slightly less than the turnover as per the ITD system, and the alleged addition was based on a 51% profit margin. Considering the inadvertent error and the nature of the export business where direct expenditure is always incurred, the Tribunal found no merit in the addition.

What were the facts?

The assessee, engaged in export business, filed its return of income declaring a net profit of Rs. 5,18,564. The Assessing Officer (AO) noticed a discrepancy between the reported turnover in the return (Rs. 10,16,637) and the export sales reflected in the AIR data (Rs. 64,84,157). The AO treated the difference as suppressed turnover and made an addition of Rs. 27,88,435, representing 51% of the alleged suppressed turnover. The Commissioner of Income Tax (Appeals) upheld the AO's order.

What were the issues?

Whether the addition made by the AO on account of alleged suppressed turnover and upheld by the CIT(A) is justified, considering the assessee's explanation of inadvertent error in filing the return and the applicability of Section 44AD.

Which sections of the Income-tax Act were involved?

Section 250,Section 143(3),Section 143(2),Section 142(1),Section 44AD,Section 139(5),Section 44AA,Section 44AB

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Income Tax Appellate Tribunal, “H(SMC

Before: SHRI VIKRAM SINGH YADAVSHRI SANDEEP SINGH KARHAIL

For Appellant: Shri Mehul Shah
For Respondent: Shri Pravin Salunkhe, Sr. DR

PER SANDEEP SINGH KARHAIL, J.M.

The assessee has filed the present appeal against the impugned order dated 25/09/2025, passed under section 250 of the Income Tax Act, 1961 (“the Act”) by the learned Additional/Joint Commissioner of Income Tax (Appeals)-1, Gurugram, [“learned Addl./Joint CIT(A)”], for the assessment year 2016-17. 2. In the appeal, the assessee has raised the following grounds: - “Being aggrieved by the order of the Assessing Officer, 27(3) - 4, Mumbai and learned Commissioner of Income-tax (Appeal), NFAC Delhi, this appeal petition is filed on the following amongst other grounds of appeal, which it is prayed

The order continues below.

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