ACIT-4(1)(1), MUMBAI, MUMBAI vs. QUALITY APPLICATION SOLUTIONS PVT. LTD., MUMBAI

ITA 7859/MUM/2025Status: DisposedITAT Mumbai20 February 2026AY 2020-211 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the AO's addition was based on surmises and conjectures, without considering the impact of the COVID-19 pandemic and the abnormal business conditions. The CIT(A) had found that balance confirmations were submitted and not disproved, and the AO had not conducted any age-wise analysis of creditors or invoked Section 41(1). The Tribunal found no infirmity in the CIT(A)'s order.

What were the facts?

The Revenue appealed against the CIT(A)'s order deleting an addition of Rs. 5,60,00,000/-. The addition was made by the Assessing Officer (AO) due to an unexplained increase in trade payables, attributing it to a lack of genuine explanation from the assessee despite the COVID-19 pandemic. The assessee explained that the outstanding commission for March 2020 remained unpaid due to office closures caused by the pandemic.

What were the issues?

Whether the CIT(A) erred in deleting the addition made on account of unexplained increase in trade payables without sufficient verification.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144B,Section 250,Section 41(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH MUMBAI

For Appellant: Shri K. Gopal & Ms. Neha Paranjpe, Ld
For Respondent: Shri Annavaram Kosuri, Ld. DR, Shri K. Gopal & Ms. Neha Paranjpe, Ld
Hearing: 18.02.2026Pronounced: 20.02.2026

PER MAKARAND VASANT MAHADEOKAR, AM: This appeal is filed by the Revenue against the order dated 18.09.2025 passed by the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”] under section 250 of the Income-tax Act, 1961 [hereinafter referred to as “the Act”]for the Assessment Year

2 Quality Application Solution 2020-21 arising out of assessment framed by the Assessing Officer vide order dated 12.09.2022 passed under section 143(3) read with section 144B of the Act. Facts of the Case

2.

The assessee is a resident company engaged in the business o

The order continues below.

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