ITAT Weekly Round-Up

This weekly round-up analytically summarises the key stories related to the Income Tax Appellate Tribunal ( ITAT ) reported at Taxscan during the previous week from December 28th 2024 to January 3rd 2025

Interest from FDRs Exempt as Part of Corpus Fund u/s 11(1)(d): ITAT Remands Matter to AO [Read Order] National Culture Fund vs ITO CITATION: 2024 TAXSCAN (ITAT) 1703

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) remanded the matter to the Assessing Officer (AO) to review the non-taxability of interest from Fixed Deposit Receipts (FDRs) as part of the Corpus Fund under Section 11(1)(d) of the Income Tax Act,1961.

 National Culture Fund,appellant-assessee, was set up by the Ministry of Human Resources Development in 1996 and registered under section 12A in 1997. The assessee filed its income return for 2017-18, showing an income of Rs.84,24,460/-. The AO noticed that the assessee had filed Form 10 late and had set apart a large sum under section 11(2) of the Act.

Non-Compliance Due to Notice for Seven AYs Issued in Short Period: ITAT Deletes 6 Penalties, Upholds Only One [Read Order] Dimki Hemang Jhaveri vs Assistant Commissioner of Income-tax CITATION: 2024 TAXSCAN (ITAT) 1709

The Surat Bench of the Income Tax Appellate Tribunal (ITAT) deleted penalties levied on seven assessment years due to non-compliance citing all notices served in a short period and upheld only one relevant default year penalty.

Dimki Hemang Jhaveri (assessee), a search action was carried out on residential premises of assessee. Several incriminating documents were found and seized. The assessee was issued with notice to file Income Tax Return. Therefore the assessee filed Income Tax return. The assessing officer AO issued a notice seeking details for seven assessment years within 5 days.

Failure to issue Intimation before Adjustment u/s 143(1)(a): ITAT allows Appeal Satishchandra Hiralal Berawala vs Deputy Commissioner of Income Tax CITATION: 2024 TAXSCAN (ITAT) 1711

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) allowed the appeal due to the failure to issue intimation before adjusting Rs. 6,50,830 under Section 143(1)(a) of Income Tax Act,1961.

Satishchandra Hiralal Berawala,appellant-assessee,challenged the appeal dated  29.03.2024 for the Assessment Year 2020-21 passed by Commissioner of Income Tax(Appeals)[CIT(A)]. The assessee raised several grounds including that the  Additional Joint Commissioner of Income Tax(Addl. JCITA) dismissed the appeal without addressing the failure to issue the required notice under Section 143(1)(a) before the Rs. 6,50,830 adjustment.

Taxpayer’s Claim on Bad Debt Deduction u/s 36 (1) (vii) Allowed: ITAT Condones Delay in Appeal [Read Order] Hybrid Financial Services Ltd VS Assistant Commissioner of Income Tax CITATION: 2024 TAXSCAN (ITAT) 1715

In a recent case, the Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ), in an appeal filed by the assessee against the order of the Commissioner of Income Tax ( Appeals ) [ CIT (A) ] under Section 143 (3) of the Income Tax Act, allowed the appeal raised by the assessee for the Assessment Year( AY ) 2014-15 permitting deduction of ₹6.17 Crores as bad debts.

The assessee, Hybrid Financial Services Ltd, filed their return of income reporting a loss of ₹1.6 Crores, which was revised later by the assessee declaring income as NIL and claimed loss as per the original return. During the assessment, the assessee made fresh claims for “Bad Debt Written Off” amounting to ₹6.17 Crores, which was not in the original return of income to be filed.

Notice to Merged Entity Void ab intio: ITAT strikes down Income Tax Reassessment u/s 148 [Read Order] DCIT, 15(1)(2) vs Carron Investment Private Limited CITATION: 2024 TAXSCAN (ITAT) 1718

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) struck down a reassessment proceeding initiated against a non-existent company, declaring it void ab initio and had no legal validity.

The Income tax department issued a reassessment notice under Section 148 of the Income Tax Act, 1961, to M/s Modern Trading Business Pvt—Ltd on March 21, 2021. The notice was to reopen the company’s tax assessment for the 2013-14 Assessment  Year. M/s Modern Trading Business Pvt Ltd had ceased ro exist following its merger with Carron Investments Pvt. Ltd. following an order by the National Company Law Tribunal ( NCLT ) dated july 19, 2012.

S. 263 of Income Tax Act cannot be initiated based on “Borrowed Satisfaction” ITAT [Read Order] Manoj Padaliya vs The Principle Commissioner of Income Tax-3 CITATION: 2024 TAXSCAN (ITAT) 1719

In a recent ruling, the Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) held that Section 263 of the Income Tax Act, 1961, cannot be initiated based on “borrowed satisfaction”. This case deals with nine appeals filed by different assessees against the order passed by the Principal Commissioner of Income Tax ( PCIT ) under Section 263 of the Income Tax Act.

As there are 9 different assessees and various assessment years, the bench has taken the case of one particular assessee, Manojbhai Padaliya, who has appealed against the order of PCIT for the AY 2013-14 as the lead assessment year, and this decision would be binding on all the 9 above mentioned appeals.

PCIT Cannot Substitute AO’s View in 263 Proceedings Unless AO’s Decision Wholly Unsustainable in Law: ITAT [Read Order] Mrugesh Jitendrabhai Shah vs Principal Commissioner of Income Tax CITATION: 2024 TAXSCAN (ITAT) 1720

The Ahmedabad Bench of Income Tax Appellate Tribunal(ITAT) ruled that the Principal Commissioner of Income Tax (PCIT) cannot substitute the Assessing Officer’s (AO) view in proceedings under Section 263 unless the AO’s decision is wholly unsustainable in law.

Mrugesh Jitendrabhai Shah,appellant-assessee, engaged in a share trading business under the name M/s. M. J. Marketing. He filed a return showing an income of Rs. 2,28,870/- for the assessment year. The assessment was reopened under Section 147, and an additional Rs. 4,79,700/- was added for unexplained investment.

Eligibility for S.80P(2)(d) Deduction on Interest Income from Cooperative Banks: ITAT Upholds CIT(A) Order [Read Order] The DCIT vs The Sardar Patel Cooperative Credit Society Limited CITATION: 2024 TAXSCAN (ITAT) 1721

The Ahmedabad Bench of Income Tax Appellate Tribunal(ITAT)upheld the Commissioner of Income Tax (Appeals)[CIT(A)]’s order allowing a deduction under Section 80P(2)(d) of Income Tax Act,1961 for interest income earned by the assessee from deposits in cooperative banks.

The Revenue-appellant challenged the order passed by the CIT(A) dated 03.11.2023, for the Assessment year(AY) 2020-21. The grounds raised by the Revenue are that the CIT(A) wrongly allowed a deduction of Rs. 2,27,33,574 under section 80P(2)(d) for interest received from deposits in Co-operative and Nationalized Banks, and also allowed the deduction under section 80P(2)(a)(i) without considering section 57 of the Act.

Credit Card payment without showing Income Source attracts S. 69A Addition: ITAT upholds Rs. 6.16L Addition [Read Order] Dipak Parmar vs The ITO CITATION: 2024 TAXSCAN (ITAT) 1722

In a recent decision, the Surat bench of the Income Tax Appellate Tribunal ( ITAT ) held that credit card payment without showing income source attracts addition under Section 69A of the Income Tax Act, 1961.

The Bench dismissed the appeal filed by the assessee due to non-compliance to the notices and lack of evidence on the part of the assessee and upheld the addition of Rs. 6.16 lakhs under Section 69 A of the Income Tax Act for unexplained cash payments.

Write-off of Rs. 8,002 on Non-Recoverable Employee Advances Allowed as Business Expense u/s 37: ITAT [Read Order] Siwana Agri Marketing Ltd. vs The ACIT CITATION: 2024 TAXSCAN (ITAT) 1723

The Ahmedabad Bench of Income Tax Appellate Tribunal(ITAT)allowed the write-off of Rs. 8,002 on non-recoverable employee advances as a deductible business expense under Section 37 of the Income Tax Act,1961.

Siwana Agri Marketing Ltd,appellant-assessee, filed its income tax return for AY 2017-18, declaring ₹31.91 lakh as income. After scrutiny, the Assessing Officer(AO) completed the assessment, increasing the income to ₹97.85 lakh.

Section 153C Assessment Quashed: ITAT Holds Search-Based Additions Invalid Without Incriminating Material [Read Order] K.R. Chawla Consulting Pvt. Ltd. vs DCIT, Central Circle 25, CITATION: 2024 TAXSCAN (ITAT) 1724

Delhi Bench of  Income Tax Appellate Tribunal (ITAT), quashed the assessment orders for the Assessment Years (AYs) 2011-12 to 2016-17 due to Jurisdictional issues as well as held that the search based additions will be invalid without the incriminating material. The ruling was made on November 20, 2024, in the appeals filed by the company against the orders of the Commissioner of Income Tax (Appeals).

K.R. Chawla Consulting Pvt. Ltd,the appellant-assessee appealed after a search was conducted on the premises of Harvansh Chawla, a third party, in 2016. During the search, certain documents belonging to K.R. Chawla Consulting Pvt. Ltd. were seized. Based on this seized material, the Assessing Officer (AO) subsequently initiated proceedings under section 153C of the Income-tax Act, 1961, for the AYs 2011-12 to 2016-17.

Non-Compliance of Section 153C Income Tax: ITAT quashes Issuance of Scrutiny Notice [Read Order] Mukul Rani Thakur vs DCIT CITATION: 2024 TAXSCAN (ITAT) 1725

In a landmark decision, the Income Tax Appellate Tribunal ( ITAT ) Delhi Bench struck down an assessment order due to non-compliance with Section 153C of the Income Tax Act, highlighting critical procedural requirements in search and seizure cases.

The case involved assessee Mukul Rani Thakur, a senior citizen, whose assessment for the Assessment Year 2021-22 was quashed because of procedural irregularities in the tax assessment process.

No Additions Can Be Made Without Incriminating Evidence: ITAT [Read Order] Dr. Purvesh Mansukhlal Shah vs Income Tax Officer CITATION: 2024 TAXSCAN (ITAT) 1726

The Ahmedabad Bench of Income Tax Appellate Tribunal(ITAT) ruled that no additions can be made to an assessee’s income without incriminating evidence.

Dr. Purvesh Mansukhlal Shah,appellant-assessee,was subjected to a survey under Section 133A on June 1, 2011, where he disclosed ₹14 crores as undisclosed income for the assessment year (AY) 2012-13. He admitted to earning this income through unaccounted cash from land dealings as a land broker. However, in the return filed for AY 2012-13, he declared only ₹94.19 lakhs and did not include the ₹14 crores.

Disallowance of Deduction for Interest from Nationalized Bank u/s 80P(2)(a)(i): ITAT Remits Matter for Verification of Expenditure [Read Order] The State Transport Employees Co Operative Credit and Thrift Society vs D.C.I.T CITATION: 2024 TAXSCAN (ITAT) 1727

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) partly allowed the appeal filed by the assessee remitting the matter back to the Assessing Officer ( AO ) for verification of related expenditures concerning the disallowance of deduction for interest from a Nationalized Bank under Section 80P(2)(a)(i) of Income Tax Act,1961.

The State Transport Employees Co Operative Credit and Thrift Society, appellant-assessee,filed its return showing no income after claiming a deduction of Rs.34,32,392 under Section 80P. The case was selected for scrutiny, and notices were issued.

Denial of Rs. 50,000 Basic Deduction u/s 80P(2)(c) to Co-operative Society: ITAT Orders Grant of Deduction [Read Order] The State Transport Employees Cooperative Credit and Thrift Society vs D.C.I.T CITATION: 2024 TAXSCAN (ITAT) 1727

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) allowed the appeal of the assessee, holding that the Rs. 50,000 basic deduction under Section 80P(2)(c) of Income Tax Act,1961 should have been granted.

The State Transport Employees Co Operative Credit and Thrift Society, appellant-assessee,filed its return showing no income after claiming a deduction of Rs.34,32,392 under Section 80P. The case was selected for scrutiny, and notices were issued.

Disallowance of Deduction on Interest from Co-Operative Banks: ITAT allows Deduction u/s 80P(2)(d) [Read Order] The State Transport Employees Co Operative Credit and Thrift Society vs D.C.I.T CITATION: 2024 TAXSCAN (ITAT) 1727

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) allowed the deduction under Section 80P(2)(d) Of Income Tax Act,1961 for interest received from Co-operative Banks.

The State Transport Employees Co Operative Credit and Thrift Society, appellant-assessee,filed its return showing no income after claiming a deduction of Rs.34,32,392 under Section 80P of the Act. The case was selected for scrutiny, and notices were issued.

Validity of Cash Deposits as Agricultural Income u/s 68: ITAT Finds Addition Unjustifiable [Read Order] Kamleshbhai Vinodbhai Patel vs Income Tax Officer CITATION: 2024 TAXSCAN (ITAT) 1728

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT )  found validity of cash deposits as agricultural income under Section 68 of Income Tax Act,1961 unjustifiable, as the Assessing Officer (AO) and Commissioner of Income Tax(Appeals) [CIT(A)] failed to properly consider the evidence of agricultural income provided by the assessee.

Kamleshbhai Vinodbhai Patel,appellant-assessee,did not file his income tax return. The AO found cash deposits totaling Rs. 10,80,000 in his savings bank account and issued a notice under Section 148 of the Act on March 28, 2016. Despite further notices and a questionnaire, the assessee neither filed his return nor attended the assessment proceedings.

AO Must Probe Partner’s Creditworthiness, not the Firm’s, when Capital Contribution is in Doubt: ITAT [Read Order] J K Associates Vikram Plaza vs ITO CITATION: 2024 TAXSCAN (ITAT) 1729

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT )  ruled that the Assessing Officer ( AO ) must probe the creditworthiness of the partners, not the firm, when capital contributions are in doubt. J K Associates, appellant-assessee, did not file a return of income for AY. 2017-18.

The AO found that the assessee had bought property worth Rs. 1 Crore in Financial Year 2016-17, but the source of the money was not explained. So, the AO started proceedings under Section 147 of the Act. The assessment was completed on 25.03.2022, with an addition of Rs. 1 Crore for the unexplained investment in the property.

Reopening of Assessment for unexplained Investment in Property: ITAT upholds Reopening [Read Order] J K Associates vs ITO CITATION: 2024 TAXSCAN (ITAT) 1729

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) upheld the reopening of assessment under Section 147 of Income Tax Act,1961 for unexplained investment in property, dismissing the appeal of the assessee.

J K Associates,appellant-assessee,did not file a return of income for A.Y. 2017-18. The Assessing Officer (AO) found that the assessee had bought property worth Rs. 1 Crore in F.Y. 2016-17, but the source of the money was not explained. So, the AO started proceedings under Section 147 of the Act. The assessment was completed on 25.03.2022, with an addition of Rs. 1 Crore for the unexplained investment in the property.

Addition of Rs 99.52 Lakh u/s 69 for Unexplained Loans: ITAT Refers Matter to AO [Read Order] Dharmendrasinh Manharsinh Chudasama vs Income Tax Officer CITATION: 2024 TAXSCAN (ITAT) 1730

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT )  referred the matter back to the Assessing Officer ( AO ) regarding the addition of Rs. 99.52 lakh under section 69 of Income Tax Act,1961 for unexplained loans. Dharmendrasinh Manharsinh Chudasama,appellant-assessee,filed his return on 31.12.2021, reporting total income of Rs.1,35,200/- and exempt income of Rs.52,30,000/-.

The assessment was completed under section 144B due to the assessee’s not responding to six notices, except the final one. This led to the total income being determined at Rs.1,00,91,700/-.

Incorrect Rejection of S.80IC Deduction due to Village Name Discrepancy: ITAT Allows Appeal [Read Order] Acacia Biotech Limited VS Income Tax Officer CITATION: 2024 TAXSCAN (ITAT) 1731

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) allowed the appeal filed by the assessee challenging the incorrect rejection of the Section 80IC of Income Tax Act,1961 deduction claim due to a village name discrepancy.

Acacia Biotech Limited, appellant-assessee, challenged the order dated 30.10.2023 passed by Commissioner of Income Tax (Appeals) [CIT(A)] for the Assessment Year ( AY ) 2009 -10. The Assessing Officer ( AO ) rejected the claim for a deduction under Section 80IC, stating that the unit was not in the eligible location as per the Central Board of Direct Taxes ( CBDT ) notification.

AO added Rs.89,49,138 u/s 69A as unexplained money, Taxpayer submitted paper book explaining each entries: ITAT Remands Matter for Reconsideration [Read Order] Mahavir Enterprises vs Income Tax Officer CITATION: 2024 TAXSCAN (ITAT) 1732

The Ranchi Bench of Income Tax Appellate Tribunal (ITAT) remanded the addition of Rs. 89,49,138 under section 69A of the Income Tax Act matter back to the Commissioner of Income Tax (Appeals) [CIT(A)] after considering that the assessee submitted a paper book explaining entries. Mahavir Enterprises (assessee) deposited Rs. 91,55,652 for the whole year including Rs. 11,44,500 which was deposited during the demonetization period from 09.11.2016 to 30.12.2016.

The assessee deposited cash in his bank account in the Giridih Branch of the Bank of India. The information was received by the Assessing Officer (AO) from AIMS. The AO found that the assessee did not file an income tax return for the relevant assessment year (AY).

ITAT confirms Rs. 35.83 Lakh LTCG Addition, rejects Sauda Chitthi Claim for Enhanced Acquisition Cost due to Absence in Previous Financial Records [Read Order] Jitendra Nathubhai Katargamwala vs Income Tax Officer CITATION: 2024 TAXSCAN (ITAT) 1733

The Surat Bench of the Income Tax Appellate Tribunal ( ITAT ) upheld the addition of Rs. 35.83 lakh Long-Term Capital Gain to total income, rejecting Sauda Chitthi’s claim for enhanced acquisition cost, as it was absent in previous financial records.

Jitendra Nathubhai Katargamwala (assessee) filed his income tax return for the Assessment Year AY 2015-2016 on 31.10.2015. The assessee revised the return of income on 31.03.2017 of Rs. 13,86,890.

PCIT revises to disallow Expenditure u/s 14A: ITAT clarifies S.14A Non-Obstante Clause applies prospectively from 01.04.2022 [Read Order] Meril Life Sciences Private Limited vs The PCIT CITATION: 2024 TAXSCAN (ITAT) 1734

The Surat Bench of the Income Tax Appellate Tribunal ( ITAT ) held that Section 14A of the Income Tax Act, 1961 was a Non-Obstante clause that can be applied prospectively from 01.04.2022 and quashed the order of PCIT.

Meri Life Sciences Private Limited (assessee) is a company that filed an income tax return for the Assessment Year 2018-2019 and declared income of Rs. 39,24,06,630. The Assessing Officer (AO) selected the case for complete scrutiny and accepted the total income.

Exchange Gain can be Adjusted from Total Income by Reducing it from Block of Assets u/s 43A and ICDS: ITAT [Read Order] Meril Life Sciences Private Limited vs The PCIT CITATION: 2024 TAXSCAN (ITAT) 1734

The Surat Bench of the Income Tax Appellate Tribunal ( ITAT ) held that exchange gain can be adjusted from total income by reducing it from the block of assets under section 43A of the Income Tax Act and Income Computation and Disclosure Standards ( ICDS ).

Meri Life Sciences Private Limited (assessee) is a company that filed an Income Tax Return ( ITR ) for the Assessment year 2018-2019 and declared an income of Rs. 39,24,06,630. The Assessing Officer ( AO ) selected the case for complete scrutiny and accepted the assessee’s total income.

CIT(A) cannot Direct Reopening u/s 150(1) if Time Limit beyond 6 years u/s 150(2) has Expired: ITAT [Read Order] Lexus Softmac vs The DCIT CITATION: 2024 TAXSCAN (ITAT) 1735

The Surat Bench of the Income Tax Appellate Tribunal ( ITAT ) held that CIT ( A ) could not be reopened under Section 150 of the Income Tax Act due to the expiry of the time limit of 6 years stated under Section 149 of the Income Tax act, 1961.

Lexus Softmac ( assessee ) engaged in the business of diamond processing machinery, filed an income tax return for the Assessment Year ( AY ) 2012-2013 on 22.09.2012 declaring a total income of Rs. 3,41,63,640.

ITAT Dissects ‘Gupt Daan’ Mystery: Unraveling unexplained Cash in Religious Trust Lockers [Read Order] Vinod Kumar Bajaj vs DCIT CITATION: 2024 TAXSCAN (ITAT) 1737

The Delhi Bench of  Income Tax Appellate Tribunal ( ITAT ) dissected a ‘Gupt Daan’,a secret gift regarding unexplained cash in a Religious Trust locker. A detailed examination was conducted regarding a search and seizure operation carried out on 20.04.2017 at the Bajaj Group premises.

During this operation, cash totaling Rs. 63,00,000 was discovered in two bank lockers – Rs. 41,00,000 in Federal Bank and Rs. 22,00,000 in SBI, which the Assessing Officer initially added as unexplained income.

Stamp Duty Value Difference Leads to Addition of Rs.1.28 Crore: ITAT Upholds CIT(A)’s Decision [Read Order] Tejas C Joshi vs Dy. Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 101

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) dismissed the appeal filed by the assessee regarding the addition of Rs. 1.28 crore under Section 56(2)(vii)(b)(ii) of Income Tax Act,1961 on account of stamp duty value difference in a property purchase.

Tejas C Joshi,appellant-assessee,filed his return of income for Assessment Year 2015-16 on 30.03.2016, declaring Rs.45,46,760/- as total income. His case was selected for limited scrutiny. During assessment, it was found that he bought a property for Rs.10,28,28,600/- on 10.03.2015. The appellant paid additional stamp duty after the Deputy Collector valued the property at Rs.12,79,67,530/-.

Disallowance of Rs.25.85 Lakh Purchases due to Lack of Documentation: ITAT reduces Addition to 12.5% [Read Order] Shamkant Gajmal Desale vs The ITO CITATION: 2025 TAXSCAN (ITAT) 102

The Surat Bench of Income Tax Appellate Tribunal(ITAT) reduced the disallowance of Rs. 25.85 lakh worth of purchases, originally made due to lack of documentation, to 12.5%. Shamkant Gajmal Desale,appellant-assessee,filed his return for the assessment year 2008-09, declaring an income of Rs. 1,05,387. The Assessing Officer (AO) issued notices under sections 143(2) and 142(1), but the assessee did not respond.

 A show cause notice was then issued, asking why the assessment should not be completed under section 144 and why the purchases should not be disallowed. Since the assessee failed to provide any details, the AO disallowed the total purchases of Rs. 25,85,747 and assessed the income at Rs. 26,91,130.

Disallowance of Rs.25.85 Lakh Purchases due to Lack of Documentation: ITAT reduces Addition to 12.5% [Read Order] Shamkant Gajmal Desale vs The ITO CITATION: 2025 TAXSCAN (ITAT) 102

The Surat Bench of Income Tax Appellate Tribunal(ITAT) reduced the disallowance of Rs. 25.85 lakh worth of purchases, originally made due to lack of documentation, to 12.5%.

Shamkant Gajmal Desale,appellant-assessee,filed his return for the assessment year 2008-09, declaring an income of Rs. 1,05,387. The Assessing Officer (AO) issued notices under sections 143(2) and 142(1), but the assessee did not respond.

PCIT’s Rejection of Refund Claim and Rectification Application: ITAT Dismisses Appeal [Read Order] 2025 TAXSCAN (ITAT) 103

The Surat Bench of Income Tax Appellate Tribunal(ITAT) dismissed the appeal filed by the assessee, challenging the  Principal Commissioner of Income Tax (PCIT)’s rejection of the refund claim and rectification application, stating that the rejection was not an appealable order under Section 253 of the Income Tax Act,1961.

Shiraz Marazban Italia,appellant-assessee,filed an appeal challenging the rejection of a rectification application under Section 154 of the Act, for the assessment year 2015-16. The appeal arose from an order dated April 16, 2024, passed by the Commissioner of Income Tax (Appeals)[CIT(A)],National Faceless Appeal Centre (NFAC).

Time Gap between Cash Withdrawal and Deposit Insufficient to treat amount as Undisclosed Income u/s  69: ITAT [Read Order] Mahendrakumar Prahladbhai Vs ITO CITATION: 2025 TAXSCAN (ITAT) 104

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT )ruled that the time gap between cash withdrawals and deposits was insufficient to treat the amount as undisclosed income under Section 69 of Income Tax Act,1961.

 Mahendrakumar Prahladbhai Vaghela, appellant-assessee, was flagged by the Income Tax Department under the ‘Operation Clean Money’ initiative for depositing large sums of cash during demonetization (November 9, 2016, to December 30, 2016) without filing income tax returns for the 2017-18 assessment year.

AO adds Rs. 24 lakhs u/s 69A Income Tax Act: ITAT confirms Agriculture Income, reduces addition to Rs. 2 lakhs to prevent Revenue Loss [Read Order] Jehan Percy Variava Vs Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 106

The Surat Bench of the Income Tax Appellate Tribunal ( ITAT ) held that the income obtained from agriculture and reduced additions made by the Assessing officer to 2 Lakhs in order to prevent revenue loss.

Jehan Percy Variava ( assessee ) engaged in agricultural activities and filed his income tax return declaring no income for the assessment year (AY) 2017-2018. However, the assessee declared that every income obtained by him would fall under the domain of agricultural income.

Interest on Compensation on Acquisition of Agricultural Land to be Treated as Income from Other Sources: ITAT [Read Order] Vachaspati Sharma vs ITO CITATION: 2025 TAXSCAN (ITAT) 107

The Income Tax Appellate Tribunal (ITAT) Delhi Bench has carefully examined the complex issue of taxability of interest received under Section 28 of the Land Acquisition Act, 1894, and held that interest on compensation on acquisition of agricultural land will be treated as Income from other sources.

The core dispute centers on whether the interest received on enhanced compensation during land acquisition is a capital receipt exempt under Section 10(37) or a revenue receipt taxable under “Income from Other Sources”. The assessee, Vachaspati Sharma, received Rs. 4,78,95,440 as enhanced compensation including interest, and claimed complete exemption.

ITAT quashes Disallowance of Interest on Credit already confirmed to be Genuine [Read Order] Prarthana Gems vs The DCIT CITATION: 2025 TAXSCAN (ITAT) 108

The Income Tax Appellate Tribunal ( ITAT ), Surat Bench, quashed the disallowance of interest on an unsecured loan, which had already been confirmed as genuine by the assessee.

In this case, the appellant, Prarthana Gems, had received an unsecured loan of Rs. 25,00,000 from the late Mr. Rafique Peer Mohammad, a well-known individual in the diamond industry. Despite initial scrutiny, the ITAT acknowledged that the identity, genuineness, and creditworthiness of the lender had been sufficiently demonstrated.

Nature and Source of Credit Satisfactorily Explained: ITAT directs AO to delete Additions u/s 68 [Read Order] Prarthana Gems vs The DCIT CITATION: 2025 TAXSCAN (ITAT) 108

The Surat Bench of Income Tax Appellate Tribunal ( ITAT ) in Surat has directed the Assessing Officer ( AO ) to delete additions made under Section 68 of the Income Tax Act, 1961, in relation to a loan of Rs. 25,00,000 received by Prarthana Gems, a Surat-based firm.

The case pertains to the assessment year 2016-17, where the AO had made additions under Section 68, claiming that the creditworthiness of the lender, had not been established.

ITAT remands case to Assessing Officer: Allows Assessee to furnish details for Unexplained Investment [Read Order] Maheshbhai Nagjibhai Desai Vs Income-Tax Officer CITATION: 2025 TAXSCAN (ITAT) 109

The Income Tax Appellate Tribunal ( ITAT ), Ahmedabad bench, has remanded a case back to the Assessing Officer ( AO ) for further examination, allowing the assessee to furnish the necessary details regarding unexplained investments.

This decision came after the Tribunal found merit in the assessee’s request for another opportunity to submit supporting documents, which were not presented earlier. Maheshbhai Nagjibhai Desai, the appellant, a resident of Ahmedabad, had been subjected to an assessment by the Income Tax Officer ( ITO ) for the Assessment Year 2012-13.

CIT(A) Dismisses Appeal as Time-Barred Despite Extended Deadline: ITAT Orders Rehearing and ₹10,000 Cost on Revenue [Read Order] Seema Ajay Ranka vs Deputy Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 110

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) orders rehearing and imposed ₹10,000 on Revenue as Commissioner of Income Tax(Appeals)[CIT(A)] dismisses appeal as time-barred despite extended deadline.

Seema Ajay Ranka,appellant-assessee, challenged the order passed by CIT(A), National Faceless Assessment Centre ( NFAC ) dated 17.09.2023 for the  Assessment Year 2013-14.This is the second appeal before the tribunal. In the first round, the CIT(A) passed an ex-parte order on 28-12-2016 due to no representation.

Interest Income classified as Business Income: ITAT grants allowance of Related Expenses [Read Order] Samir Networks LLP VS The ACIT Circle-4(1)91) CITATION: 2025 TAXSCAN (ITAT) 112

Read More: https://www.taxscan.in/interest-income-classified-as-business-income-itat-grants-allowance-of-related-expenses/475098/

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) ruled that interest income earned by the assessee should be classified as business income, granting the allowance of related expenses. Samir Networks LLP, appellant-assessee,reported interest income of Rs. 9,96,855 under “income from business and profession” and claimed expenses of Rs. 1,05,20,522, resulting in a net loss.

However, the Assessing Officer ( AO ) taxed the interest income under “income from other sources” and disallowed the expense claim, making the entire interest income of Rs. 9,96,855 taxable. The Commissioner of Income Tax ( Appeals ) [CIT(A)] upheld the AO’s decision.

CIT(E) Denies Registration to Trust Engaged in Fund-Raising Activities: ITAT sets aside Denial and directs Grant u/s 12AB [Read Order] Rotary International District 3054 vs The CIT(Exemption) CITATION: 2025 TAXSCAN (ITAT) 113

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) set aside the Commissioner of Income Tax (Exemptions)[CIT(E)]’s denial of registration to a trust engaged in fund-raising activities and granted registration under Section 12AB of Income Tax Act, 1961.

Rotary International District, appellant-assessee,was formed on 24-09-2020 and registered under the Bombay Public Trust Act, 1950. It received provisional registration from the CIT(E) on 27-05-2021 for the years 2020-21 to 2023-24. The trust applied for final registration under Section 12AB on 05-04-2023, but the CIT(E) rejected it.

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