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 February 15th to February 21st 2025
PRINCIPAL COMMISSIONER OF INCOME TAX 13 KOLKATA vs CHAMPALAL OMPRAKASH CITATION: 2025 TAXSCAN (HC) 235
The Calcutta High Court recently affirmed an ITAT ruling that removed an assessee’s income addition of more than ₹4 crore made in a reassessment proceeding under the Income Tax Act, 1961. The Assessing Officer (AO) must give oral directions in response to the assessee’s written objections, the court said.
Revenue’s appeal against the ITAT’s decision to grant the assessee’s appeal and revoke the assessment order under Section 147 for failing to address the assessee’s objections was before the Court. The ITAT had referenced the ruling in M/s. Home
Indrayani Seva Samiti Nyas vs The Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 400
The Pune Bench of the Income Tax Appellate Tribunal (ITAT) dismissed the appeal for an unexplained delay of over 4000 days (nearly nine years) in filing. The tribunal rejected the trust’s argument that negligence by its tax consultant justified the delay, ruling that ignorance of tax laws and procedural lapses cannot excuse inordinate inaction.
Indrayani Seva Samiti Nyas, a charitable trust, the assessee challenged the addition of Rs. 11,00,000 under Section 56(2) of the Income Tax Act, 1961, which was treated as taxable income instead of a capital receipt towards the construction of a hostel for orphan girls. The trust failed to appeal the assessment order for nearly nine years, finally filing an appeal before CIT(A) on 30.10.2021 against the order passed on 30.11.2012.
DCIT CC 4 (2) Mumbai vs K Raheja IT Park (Hyderabad)Ltd. CITATION: 2025 TAXSCAN (ITAT) 401
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) held that the assessee was entitled to a deduction under Section 80IA(4)(iii) of the Income Tax Act, 1961, as no violation of scheme conditions was found. The revenue has appealed against the orders of the Commissioner of Income Tax Appeals [CIT(A)] for the assessment years (AY) 2012-2013 to 2018-19.
The assessee had claimed deductions under Section 80IA(4)(iii) of the Income Tax Act, 1961, for income derived from license fees, maintenance services, and interest, among other sources.
DCIT vs John Deere India Private Limited CITATION: 2025 TAXSCAN (ITAT) 402
The Pune Bench of the Income Tax Appellate Tribunal (ITAT) held that the disallowance under Section 14A of the Income Tax Act, 1961, was invalid due to the absence of exempt income. The revenue has appealed against the order passed by the Commissioner of Income Tax Appeal for the assessment year 2015-16.
Sri Vittalappa Ganesha Plot No.5 vs ITO CITATION: 2025 TAXSCAN (ITAT) 403
The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) deleted the addition of Rs. 15 lakhs made under Section 69A of the Income Tax Act as the cash deposits that the assessee made during the demonetisation period were duly explained.
In this case, the assessee has appealed against the order passed by the Commissioner of Income Tax (Appeals) [CIT(A)] for the assessment year (AY) 2017-18.
Finders Housing Limited vs. The Income Tax Officer (2017) by the Madras High Court, which reversed the reassessment judgment and returned the case to the AO for failing to issue a speaking order on the assessee’s objections.
Jitendra Amrutlal Patel vs The ITO CITATION: 2025 TAXSCAN (ITAT) 404
The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) upheld the addition of Rs. 4.64 crores made under Section due to the assessee’s failure to explain and lack of cooperation.
In this case, the assessee has filed 2 appeals and has challenged the ex-parte orders passed by the Commissioner of Income Tax [CIT(A)] for the assessment years 2012-13 & 2013-14, respectively.
Shri Khandelwal Diamonds Pvt. Ltd vs ACIT, Circle -1 CITATION: 2025 TAXSCAN (ITAT) 405
The Jaipur Bench of the Income Tax Appellate Tribunal (ITAT) ruled that Section 145(3) of the Income Tax Act, 1961, cannot be invoked without identifying specific defects in the books of accounts and that mere suspicion of increased cash sales is not sufficient to make an addition under Section 68 of the Income Tax Act, 1961.
Shri Khandelwal Diamonds Pvt. Ltd., engaged in the trading of diamonds and gold jewelry, filed its return of income for Assessment Year 2017-18, declaring a total income of Rs. 1,98,84,120. During the demonetization period, the company deposited Rs. 1,51,32,000 in HDFC Bank and Punjab & Sind Bank, which became the subject of scrutiny. The case was selected for complete scrutiny under CASS.
DCIT vs Manuvel Mezhukanal CITATION: 2025 TAXSCAN (ITAT) 406
The Delhi Bench of Income Tax Appellate Tribunal(ITAT) upheld the Commissioner of Income Tax(Appeals)[CIT(A)]’s decision to delete the addition of ₹3.24 crore under Section 68 of Income Tax Act, 1961,concerning cash sales made post-demonetization.
The Revenue–appellant,appealed against the order passed by CIT(A) dated 31.01.2022. In this case,Manuvel Mezhukanal,respondent-assessee,claimed cash sales of ₹3,24,71,745 on November 8, 2016, between 8 PM and midnight after the demonetization announcement. The Assessing Officer (AO) found it unrealistic to have over 200 customers in three hours and allowed only ₹17,79,636, based on Dhanteras sales on October 28, 2016.
Bajrangbali Tufanbhai Das vs Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 407
Read More: The Surat bench of the Income Tax Appellate Tribunal ( ITAT ) reduced an addition on unexplained cash deposits to 25% concerning the assessment years 2011-12 and 2013-14. The assessee, Bajrangbali Tufanbhai Das, a wholesale vegetable trader, was scrutinised by the Income Tax Department after failing to file his original income tax returns for the AY 2011-12.
Upon reopening the assessment, it was found that he had deposited ₹13 Lakhs in an undisclosed savings bank account. The department also identified total credit entries of ₹89.6 Lakhs in his disclosed current account and sought to estimate profit at 35% of this turnover. In the 2013-14 AY, a similar issue arose with cash deposits and total income turnover under examination.
Mrs. Balbir Kaur Birdie vs The Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 408
The Pune bench of the Income Tax Appellate Tribunal ( ITAT ) set aside a penalty proceeding of ₹20,000 levied under section 271(1)(b) of the Income Tax Act. The penalty was imposed for non-compliance with notices issued under section 142(1) of the act during reassessment proceedings.
The assessee, Balbir Kaur Birdie, is the legal heir of the late Major General Sandeep Singh Birdie, an officer of the Indian Army. She filed her income return for the AY 2016-17, declaring a total income of ₹75 lakhs. The assessing officer (AO) completed the assessment proceedings under Section 143(3) and accepted the initial return filed.
Belve Vyavasaya Seva Sahakari Sangha Ltd vs ITO Ward-1 Belve CITATION: 2025 TAXSCAN (ITAT) 409
The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) remanded the case back to AO to reconsider his decision of rejecting the deduction claim made by the assessee under Section 80P(2)(d) of the Income Tax Act.
The assessee, Belve Vyavasaya Seva Sahakari Sangha Ltd, is a Primary Agricultural Credit Society (PACS) engaged in providing credit facilities to its members for agricultural activities, selling fertilisers and PDS distribution. The assessee had filed its income tax return for the assessment year (AY) 2020-21, declaring a total income pf NIL after claiming a deduction of ₹1.2 Crores under the provisions laid out in Section 80P(2)(a)(i).
Deputy Commissioner of Income Tax vs M/s. Welspun Mercantile Limited CITATION: 2025 TAXSCAN (ITAT) 410
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) struck down an excessive disallowance made under Section 14A of the Income Tax Act, 1961, as the Assessing Officer (AO) had failed to record any dissatisfaction with the assessee’s claim regarding the expenditure incurred to earn tax-exempt income, which is a mandatory requirement before invoking Rule 8D for disallowance under Section 14A of the Income Tax Act. In this case, the assessee, Welspun Mercantile Limited, had filed a nil return, showing income from business and short-term capital gains, which were adjusted against brought-forward losses for the assessment year 2014-15.
Karim Tajdin Halani vs Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 417
The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) held that mere suspicion cannot be grounds for making an addition and deleted the addition of Rs. 18 lakhs. The assessee has appealed against the order passed by the Commissioner of Income Tax (Appeals) [CIT(A)] for the assessment year (AY) 2016-17.
Sh. Manoj Kumar Contractor vs DCIT CITATION: 2025 TAXSCAN (ITAT) 424
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) limited the addition to ₹1 lakh after the net profit rate was increased to 6% following the rejection of books of account.
Manoj Kumar,appellant-assessee,appealed against the order dated May 22, 2024, passed by Commissioner of Income Tax(Appeals)[CIT(A)] for the assessment year 2020-21 under section 143(3) of the Act.
Lahar Joshi vs Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 428
The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) has condoned a delay in filing an appeal and remanded the matter back to the Commissioner of Income Tax (Appeals) [CIT(A)] for fresh adjudication, ensuring a fair hearing for the appellant. The assessee had appealed against the order passed by the CIT(A) for the assessment year 2018-19. The assessee had filed his income tax return declaring an income of Rs. 4,96,320.
During the assessment, it was found that Joshi had not disclosed remuneration amounting to Rs. 10,35,600 received from M/s. Pink Elephant Disruption LLP. The assessing officer (AO) made an addition of this amount to assessee’s income and imposed a penalty of Rs. 5,35,844 under Section 270A of the Income Tax Act, 1961, due to misreporting of income.
Kumaon Exports Pvt. Ltd vs DCIT, Circle 14 (2) CITATION: 2025 TAXSCAN (ITAT) 429
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) allowed the assessee’s appeal, noting that the assessee had filed Form 10CCB before the completion of the proceedings under Section 143(1) of the Income Tax Act, 1961. The assessee has appealed against the order of the Commissioner of Income Tax Appeals [CIT(A)] for the assessment year (AY) 2018-19.
In this case, for the AY 2018-19, the assessee had filed its original income return on 23-10-2018. The company claimed a deduction under Section 80IC of the Income Tax Act, which provides tax benefits to businesses operating in certain specified regions, including backward areas.
DCIT vs Koh inoor Benga l Infrastructure Private Limited CITATION: 2025 TAXSCAN (ITAT) 431
The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) ruled that the mere non-production of directors of investor companies cannot be a valid ground for making an addition under Section 68 of the Income Tax Act, 1961.
Kohinoor Bengal Infrastructure Pvt. Ltd., the assessee, filed its return for the Assessment Year (AY) 2013-14 under Section 139 on 27.09.2013, declaring a total loss of Rs. 8,33,753. The return was processed under Section 143(1) on 07.03.2014.
Kasi Viswanath Gupta Chalamcharla vs ITO CITATION: 2025 TAXSCAN (ITAT) 433
The Pune Bench of the Income Tax Appellate Tribunal ( ITAT ) directed fresh adjudication because the Commissioner of Income Tax (Appeals) [CIT(A)] failed to provide a reasoned order under Section 250(6) of the Income Tax Act, 1961.
Kasi Viswanath Gupta Chalamcharla, the assessee, had not filed his return of income for the Assessment Year 2014-15. The Income Tax Department obtained information that he had sold an immovable property valued at Rs. 53 lakhs but had not disclosed this transaction.
M/s. NI Systems (India) Pvt. Ltd vs DCIT CITATION: 2025 TAXSCAN (ITAT) 434
The Bangalore Bench of Income Tax Appellate Tribunal (ITAT)directed the Transfer Pricing Officer (TPO) to conduct a fresh transfer pricing (TP) study on the applicability of the arm’s length price (ALP) determined under the Mutual Agreement Procedure (MAP) to transactions with non-US-based associated enterprises (AEs). NI Systems (India) Pvt. Ltd., appellant-assessee, was a subsidiary of a US-based company engaged in contract software and hardware development services. It had AEs in the US and other countries.
For the relevant assessment year, it reported an income of ₹4,60,74,010. Due to international transactions, the case was referred to the TPO for an ALP assessment, leading to certain adjustments.
M/s. The Naragund Taluka Prathamika Shiksa Shiksakiyar Co-op. Credit Society Ltd. vs The Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 435
The Bangalore Bench of Income Tax Appellate Tribunal (ITAT) remitted the matter back to the Assessing Officer (AO) to verify the eligibility of interest income for deduction under Section 80P(2)(a)(i) of the Income Tax Act,1961.
The Naragund Taluka Prathamika Shiksa Shiksakiyar Co-op. Credit Society Ltd., appellant-assessee,is a co-operative society that provides credit facilities to its members. It filed its return and claimed a deduction under Section 80P(2)(a)(i) of the Act. The case was selected for scrutiny, and the AO added Rs. 3,09,103/- as interest income from savings and other sources, taxing it under “Income from Other Sources.”
Nachiket Dipak Shah vs The Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 436
The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) restored the deduction under Section 10AA of Income Tax Act,1961 for Assessment Year ( AY ) 2017-18, despite the late submission of Form 56F.
Nachiket Dipak Shah,appellant-assessee, filed the return for AY 2017-18 on November 7, 2017, declaring an income of ₹16,30,680 after claiming a ₹26,81,185 deduction under Section 10AA. He provided IT-enabled services under “Brain Teclabs” within a Kandla SEZ-approved IT/ITES SEZ.
Mudaliar and Sons Hotels Pvt. Ltd. vs ACIT Circle 1(2)(2 CITATION: 2025 TAXSCAN (ITAT) 437
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT)allowed the appeal of the assessee in the disallowance of expenses under Section 14A of Income tax Act,1961, finding that no exempt income was earned during the year and thus the disallowance made by the Assessing Officer (AO) was not justified. Mudaliar and Sons Hotels Pvt. Ltd.,appellant-assessee,filed its return of income for the year on November 30, 2013, declaring no income.
The return was selected for scrutiny, and statutory notices were issued and complied with. The AO noted that the assessee earned income solely from interest on inter-corporate loans and claimed expenses of Rs. 2,49,05,027/-, including employee benefits, finance costs, depreciation, and other expenses.
Mudaliar and Sons Hotels Pvt. Ltd vs ACIT Circle 1(2)(2) CITATION: 2025 TAXSCAN (ITAT) 437
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) directed the Assessing Officer (AO) to verify the commencement of business in the case of the assessee regarding the disallowance of ₹50.05 lakh under Section 37(1) of Income Tax act,1961. Mudaliar and Sons Hotels Pvt. Ltd.,appellant-assessee,filed its return of income for the year on November 30, 2013, declaring no income.
The return was selected for scrutiny, and statutory notices were issued and complied with. The AO noted that the assessee earned income solely from interest on inter-corporate loans and claimed expenses of Rs. 2,49,05,027/-, including employee benefits, finance costs, depreciation, and other expenses.
Nagarajan Manivannan vs ITO Non-Corporate Ward-10(3) CITATION: 2025 TAXSCAN (ITAT) 438
The Chennai Bench of Income Tax Appellate Tribunal(ITAT) granted another opportunity to the assessee to substantiate cash deposits of Rs. 54.70 Lakh made during the demonetization period, subject to a cost of Rs. 5,000.
Nagarajan Manivannan,appellant-assessee, appealed against the order 1-07-2024 passed by the Commissioner of Income Tax (Appeals)[CIT(A)] concerning an assessment made by the Assessing Officer(AO) under section 147 read with section 144 of the Act, on 16-05-2023, for the Assessment Year (AY) 2017-18.
MSC Agency (India) Private Limited vs ACIT CITATION: 2025 TAXSCAN (ITAT) 439
The Mumbai Bench of Income Tax Appellate Tribunal(ITAT) upheld the remand of the issue concerning the non-reduction of profit from the sale of fixed assets to the Assessing Officer (AO) for verification.
MSC Agency (India) Private Limited,appellant-assessee,filed its return of income on 30.11.2018, declaring Rs. 405,76,11,380/-, and a revised return on 29.03.2019, declaring Rs. 401,71,18,820/-. The case was selected for scrutiny, and the AO passed an assessment order on 04.03.2021, determining total income at Rs. 405,86,96,408/- after making additions.
Deputy Commissioner of Income Tax vs Zari Silk (India) Pvt. Ltd. CITATION: 2025 TAXSCAN (ITAT) 440
The Jaipur Bench of the Income Tax Appellate Tribunal (ITAT) deleted the addition made due to the alleged undervaluation of stock, directing the reclassification of wages as direct expenses, as the Assessing Officer (AO) failed to consider the correct accounting treatment.
Zari Silk (India) Pvt. Ltd., the assessee, is engaged in the manufacturing and trading of sarees, salwar suits, and dress materials. During a survey conducted under Section 133A of the Income Tax Act, 1961, the survey team observed discrepancies in the valuation of stock, observing that the wages paid to labor were classified under “Employee Welfare & Other Benefits” as indirect expenses instead of being recorded as direct manufacturing expenses.
Deputy Commissioner of Income Tax vs Zari Silk (India) Pvt. Ltd. CITATION: 2025 TAXSCAN (ITAT) 440
The Jaipur Bench of the Income Tax Appellate Tribunal (ITAT) deleted the addition made due to the alleged undervaluation of stock, ruling that the assessee’s practice of applying an ageing effect for inventory valuation at Net Realisable Value (NRV) was a standard accounting practice and should not be disregarded.
Zari Silk (India) Pvt. Ltd., the assessee, is engaged in the manufacturing and trading of sarees, salwar suits, and dress materials. During a survey conducted under Section 133A of the Income Tax Act, 1961, the survey team observed a discrepancy in stock valuation, observed that the company valued older inventory at a reduced percentage of cost (100% for current-year stock, 90% for one-year-old stock, 80% for two-year-old stock, and 50% for older stock).
Dy.CIT vs Kushal Singh CITATION: 2025 TAXSCAN (ITAT) 441
The Delhi Income Tax Appellate Tribunal ( ITAT ) has upheld the deduction claimed under Section 54F of the Income Tax Act, 1961, and dismissed the appeal filed by the department.
The issue in this case is regarding the claim of deduction for long-term capital gains arising from the sale of a property, which the assessee had reinvested in the purchase of a new residential property.
Navjyoti Farming Private Limited vs ITO, Ward-3, Panvel CITATION: 2025 TAXSCAN (ITAT) 442
The Pune Bench of Income Tax Appellate Tribunal ( ITAT ) ruled that reassessment is invalid if no addition is made on the issue for which the case was reopened and no fresh notice under Section 148 of Income Tax Act,1961 is issued.
Navjyoti Farming Private Limited,appellant-assessee,engaged in agricultural and related activities, filed its income tax return on September 27, 2012, declaring ‘Nil’ income after adjusting a loss of ₹99,419 against short-term capital gains. The return was processed under section 143(1), and the case was later selected for scrutiny. After issuing statutory notices, the Assessing Officer ( AO ) completed the assessment under section 143(3) on March 11, 2015, accepting the declared income.
Neena Commerc ial Pvt . Ltd vs ACIT(OSD) CITATION: 2025 TAXSCAN (ITAT) 443
The Kolkata Bench of Income Tax Appellate Tribunal(ITAT) quashed the reassessment of the assessee for Assessment Year 2010-11, citing vague reasons and lack of jurisdiction for new additions.
Neena Commercial Pvt . Ltd.,appellant-assessee, filed its return of income on September 29, 2010. The Assessing Officer(AO) later received information about large cash deposits in ICICI Bank branches in Kolkata, which were transferred to the assessee’s accounts. It was alleged that the assessee received an accommodation entry of ₹15 lakh.
Smt. Neelamma vs ITO Ward-1 & TPS CITATION: 2025 TAXSCAN (ITAT) 444
The Bangalore Bench of Income Tax Appellate Tribunal(ITAT)ruled that a notice issued under Section 148 of the Income Tax Act,1961 beyond the prescribed three-year period is not valid when the escaped income is below ₹50 lakh.
Neelamma, appellant-assessee, had been in the flower business for 15 years but did not file a return for the relevant assessment year. The department received information about a ₹61,90,000 deposit in City Co-operative Bank Ltd., prompting the Assessing Officer(AO) to issue a notice under Section 148A(b) on March 22, 2022.
Niket Ravibhai Patel 4, Patel Square vs The DCIT CITATION: 2025 TAXSCAN (ITAT) 448
The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) has directed a fresh assessment in a property valuation dispute involving Niket Ravibhai Patel, a resident of Vadodara, under Section 50C of the Income Tax Act, 1961.
The assessee had appealed against the order passed by the Commissioner of Income Tax (Appeals) [CIT(A)] for the assessment year (AY) 2013-14.
Mahle Behr India Pvt. Ltd. vs DCIT CITATION: 2025 TAXSCAN (ITAT) 449
The Pune Bench of the Income Tax Appellate Tribunal (ITAT) ruled that capitalized R&D expenditure can be claimed under Section 35(1)(iv) of the Income Tax Act, 1961 if disallowed under Section 35(2AB), confirming the assessee’s right to alternative relief.
Mahle Behr India Pvt. Ltd., the assessee, is engaged in manufacturing automotive air conditioning and cooling systems. The company claimed a weighted deduction under Section 35(2AB) for R&D expenses, including certain expenditures incurred outside India for product testing and validation.
Dy. Commissioner of Income Tax vs Naresh Kumar Garg CITATION: 2025 TAXSCAN (ITAT) 446 Case Number: ITA No.2280/Del/2023
The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) dismissed the Revenue’s appeal, noting that the tax effect of ₹54.04 lakh was below the ₹60 lakh threshold set by Central Board of Direct Taxes ( CBDT ) Circular No. 9/2024, dated 17.09.2024.
The Revenue-appellant, challenged the order dated 17.05.2023 for the assessment year 2016-17 passed by CIT(A), in proceedings under section 143(3)/147 of the Income-tax Act, 1961.In this case Naresh Kumar Garg,respondent-assessee, did not appear despite two calls, so the proceedings were conducted ex-parte.
LM Wind Power Blades (India) Pvt. Ltd vs DCIT CITATION: 2025 TAXSCAN (ITAT) 450
The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) deleted the protective addition made by the Assessing Officer (AO) because the Transfer Pricing Officer (TPO) had already made adjustments to the Mutual Agreement Procedures (MAP) regarding the Information & Technology Fees.
LM Wind Power Blades (India) Pvt. Ltd., the assessee, is engaged in the business of manufacturing blades used in wind turbines. For the assessment years 2010-11, 2011-12, and 2013-14, the company’s income tax returns were scrutinized, and it was observed that the company had entered into international transactions.
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