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 May 19th to May 26th
The District Magistrate vs ITO (TDS) CITATION: 2025 TAXSCAN (ITAT) 926
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) condoned a 350-day delay in filing an appeal by the District Magistrate, Badaun, in a case concerning non-compliance with Tax Collected at Source (TCS) provisions under Section 206C(6A) of the Income Tax Act, 1961, despite the absence of any representation by the District Magistrate’s authorized representative during the hearing. The case arose from an order passed by the ITO (TDS), Moradabad, on 31.03.2017 for the Assessment Year 2010-11, in which a tax liability of Rs. 8,13,688 was imposed on the District Magistrate’s office for failure to collect TCS. The order went unchallenged until an appeal was filed with a long delay of 350 days. The Commissioner of Income Tax (Appeals), Moradabad, dismissed the appeal as time-barred, refusing to condone the delay.
Smt Seema Swami vs ACIT, Rohtak, Haryana CITATION: 2025 TAXSCAN (ITAT) 927
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) quashed the reassessment proceedings against the legal heir of a deceased CFO, ruling that the reopening of assessment under Section 147 of the Income Tax Act, 1961, lacked tangible material linking the assessee to the alleged escaped income. Seema Swami, the assessee and legal heir of Late Shri Manoj Kumar Swami, a Chartered Accountant and CFO of IHHR Hospitality Pvt. Ltd., challenged the validity of reassessment proceedings for the Assessment Year 2008-09. The original assessment was completed under Section 143(3), determining total income at Rs. 93.36 lakhs.
Motorola Solutions India Private Limited vs ACIT CITATION: 2025 TAXSCAN (ITAT) 929
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) granted partial relief to Motorola Solutions by holding that software expenses incurred by the company were revenue in nature, as they related to recurring maintenance and did not result in any enduring benefit. Motorola Solutions, the assessee, had filed appeals for Assessment Years 2005–06 and 2006–07 challenging, among other disallowances, the treatment of software expenses as capital expenditure. The Assessing Officer (AO) had disallowed the software expenses amounting to Rs. 1.65 crore and Rs. 2.12 crore respectively in the two assessment years, classifying them as capital in nature, and granted depreciation instead.
Shravan Singh Parmar vs ITO CITATION: 2025 TAXSCAN (ITAT) 930
The assessee is an individual and is, inter alia, engaged in providing loans to its customers against the gold ornaments and taking loans from the Federal Bank against the same. In this manner, the assessee also earns interest income from its customers. During the year under consideration, pursuant to a notice issued under section 142(1) of the Act based on the information that the assessee has deposited cash of Rs.12,24,500/- in his bank account maintained with Federal Bank, Sakinaka Mumbai Branch, during the demonetization period, i.e., from 09.11.2016 to 31.12.2016, the assessee filed his return of income on 13.11.2019, declaring a total income of Rs.95,470/- earned from salary and interest.
Manarkattu Theatres Pvt. Ltd vs The Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 931
The Cochin Bench of Income Tax Appellate Tribunal(ITAT)restored the matter to the Assessing Officer for fresh adjudication after finding that key documents submitted by the assessee, including audited accounts, cash book, day book, expense records, and bank statements, were not considered either by the AO or the Commissioner of Income Tax(Appeals)[CIT(A)]. Manarkattu Theatres Pvt. Ltd., appellant-assessee,operated two cinema theatres. For the assessment year 2018-2019, it filed its income tax return after receiving a notice under section 148, declaring income of Rs. 12,73,860. The AO completed the assessment on 24.03.2023 under sections 147 and 144B, determining income at Rs. 1,93,97,120.
Dipakkumar Pushkarray Vyas vs The ITO CITATION: 2025 TAXSCAN (ITAT) 934
The Ahmedabad Bench of Income Tax Appellate Tribunal(ITAT)held that income already taxed cannot be treated again as unexplained cash credit. Dipakkumar Pushkarray Vyas,appellant-assessee, filed his return declaring income of Rs. 19,85,572 for the year 2012-13. The case was reopened after approval and notice under section 148 was issued in March 2019. He filed a revised return in April 2019 showing income of Rs. 19,81,572. Reasons for reopening were shared in June 2019 along with a notice under section 143(2). Further notices were issued, and the assessee provided information and objected to the reopening in November 2019. The Assessing Officer (AO)found that Shripal Pravinchandra Shah, owner of M/s. Akshar Corporation, ran a bogus billing and accommodation entry business with no real sales or purchases. Transactions between the assessee’s firm, Krupa Jewellers, and Akshar Corporation were found to be sham. Bank records showed Rs. 41,99,500 debited from Krupa Jewellers’ account during 2012-13 linked to these bogus entries. The AO treated this amount as unexplained income and added it to the appellant-assessee’s total income.
Scan Ispat Limited vs Deputy Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 936
The Income Tax Appellate Tribunal (ITAT), Raipur bench has dismissed the appeal filed by Scan Ispat Limited after the steel manufacturer opted to settle its tax dispute under the Direct Tax Vivad Se Vishwas Scheme, 2024. The company had challenged additions of Rs.3.43 crore made by tax authorities for assessment year 2010-11 regarding unexplained share capital and premium. Scan Ispat Limited, based in Raigarh, Chhattisgarh, had filed the appeal against an order passed by the Commissioner of Income-Tax (Appeals) at the National Faceless Appeal Centre. The dispute originated from a 2017 assessment order that made additions under Section 68 of the Income Tax Act, treating share capital transactions as unexplained cash credits.
Sri.Julius Ruben vs The Assistant Commissioner of Income-tax CITATION: 2025 TAXSCAN (ITAT) 932
The Cochin Bench of Income Tax Appellate Tribunal (ITAT) deleted a disallowance of ₹6.55 lakh under section 40A(3) of Income Tax Act,1961, holding that the cash payments were made for capital assets and not revenue expenses. Julius Ruben,appellant-assessee, ran a proprietary business called Rocky Transport and Crane Services. For the assessment year 2015-16, he filed his return on 04.12.2015, declaring income of ₹49,02,700. The case was taken up for scrutiny, and the assessment was completed on 12.12.2017, accepting the returned income. Later, the Assessing Officer(AO) passed a rectification order under section 154, disallowing ₹6,55,650 for cash payments made to buy capital assets, citing section 40A(3). The assessee explained that no deduction was claimed on this amount, so section 40A(3) should not apply. However, the AO rejected the explanation and passed the order on 28.12.2021.
Income Tax Officer vs Janardan Shyam Bihari Singh Ganesh Nagar CITATION: 2025 TAXSCAN (ITAT) 938
The Nagpur Bench of the Income Tax Appellate Tribunal (ITAT) recently dismissed two appeals filed by the Income Tax Officer against the assessee Janardan Shyam Bihari Singh, a civil contractor, for Assessment Years (AYs) 2011–12 and 2014–15. The Tribunal held that the tax effect in both cases was below the monetary limit of ₹60 lakhs as prescribed under CBDT Circular No. 9/2024 and that the grounds raised by the Revenue were too vague to be adjudicated upon. The assessee, a civil contractor, had not filed his return of income for AY 2011–12 and AY 2014–15 despite having received contract receipts exceeding ₹1.97 crores and TDS deductions under section 194C. The Assessing Officer (AO), invoking section 144 of the Income Tax Act, estimated the income by applying a profit percentage and disallowed certain expenses, thereby adding to the total income.
Zarina Foundation vs CIT(Exemption)CITATION: 2025 TAXSCAN (ITAT) 939
In a recent ruling, the Income Tax Appellate Tribunal (ITAT), Mumbai Bench, remanded the case of a charitable trust, back to the Commissioner of Income Tax (Exemptions) [CIT(E)] after holding that the rejection of the trust’s registration application, solely on the basis of quoting an incorrect provision due to technical limitations in the online portal, and without issuing a show cause notice, was unsustainable in law.
The trust had applied for regularisation of registration under Section 12A of the Income Tax Act, 1961, using Form 10AB. However, due to a glitch in the income tax e-filing portal, it was unable to select the correct applicable clause under Section 12A(1)(ac)(iii), and was instead forced to file under an incorrect Section 12A(1)(ac)(vi)(B).
ACIT vs M/s. Vishal Gold & Precious Stones Pvt. Ltd CITATION: 2025 TAXSCAN (ITAT) 940
The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ),quashed reassessment proceedings initiated without any documentary evidence and based solely on borrowed satisfaction. The Revenue-appellant appealed against the order passed by CIT(A) dated 03.10.2016 for AY 2007–08. In this case,Vishal Gold & Precious Stones Pvt. Ltd,respondent-assessee,argued that the reassessment under Section 147 was initiated without any documentary evidence found or impounded during the survey conducted on 06.10.2010 under Section 133A.
Vertool Consultancy LLP vs The Deputy Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 941
The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) held that the addition of Rs. 2.02 crore as accommodation entries was unsustainable due to lack of primary proof. Vertool Consultancy LLP,appellant-assessee,challenged the reopening of assessment for AY 2017–18, initiated based on information received from the Investigation Wing, Ahmedabad. As per the Assessing Officer(AO)’s letter dated February 8, 2022, the firm was alleged to have received accommodation entries amounting to ₹2,02,15,000 from entities controlled by Jignesh Shah and Sanjay Shah. The Officer concluded that there was a failure on the part of the assessee to fully and truly disclose all material facts, resulting in income escaping assessment under Section 147 of the Act.
Upashan Debnath vs ITO, Ward-41(3 CITATION: 2025 TAXSCAN (ITAT) 937
In a recent ruling, the Income Tax Appellate Tribunal ( ITAT ), Kolkata Bench directed the Commissioner of Income Tax (Appeals) [CIT(A)] to issue a speaking order where the appellate authority dismissed the appeal on technical grounds rather than considering the merits. An individual assessee, Upashan Debnath filed an income tax appeal challenging the ex parte order passed by the CIT(A) for the Assessment Year 2015-16. The delay of 266 days in filing the appeal before the ITAT was condoned after the Tribunal was satisfied with the assessee’s explanation for the delay.
Marappa Gounder Balakrishnan vs The Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 945
The Chennai Bench of the Income Tax Appellate Tribunal ( ITAT ) remanded for fresh adjudication with cost of Rs. 5000 in the case involving high value transactions in savings accounts for which Income Tax Return ( ITR ) was not filed due to the illiteracy of the assessee. Marappa Gounder Balakrishnan (assessee), an individual engaged in job work for the power loom industry, faced scrutiny for high-value cash deposits and withdrawals in his savings bank account. The AO observed that the assessee had not filed a return of income for AY 2013-14 and had total credits of Rs. 1.03 crore in his bank account.
JCR Traders vs The Deputy Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 943
The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) has remanded a case involving additions of Rs. 2.31 crore back to the Assessing Officer (AO) for fresh adjudication, citing the need for appropriate enquiries into unexplained cash deposits and disallowances under Section 40(a)(ia) of the Income Tax Act. JCR Traders (assessee) a partnership firm filed its return of income for the Assessment Year (AY) 2017-18 declaring a taxable income of Rs. 11,25,800. The case was selected for complete scrutiny under the Centralized Automated Scrutiny Selection (CASS). The AO issued a notice and the assessee failed to respond to notices. The AO issued show-cause notice (SCN) to complete the assessment under Section 144 of the Income Tax Act, but the assessee did not comply with the SCN.
R 1618 Varadharajapuram Primary vs The Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 948
The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) has remanded a case involving unexplained cash deposits of Rs. 6.16 crore to the Assessing Officer (AO) for fresh adjudication, citing non-compliance with statutory notices. Varadharajapuram Primary Agricultural Co-operative Society Ltd., (assessee) faced scrutiny for significant cash deposits in its bank account during the Assessment Year (AY) 2019-20. The AO noted that the assessee had not filed an Income Tax Return (ITR) for AY 2019-20. The AO initiated assessment proceedings based on information regarding cash deposits amounting to Rs. 6,16,68,376. The AO issued several notices and a show-cause notice (SCN) under Section 144 on 06.09.2023.
Munireddy Prakashreddy vs Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 949
The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) has remanded a case involving an addition of Rs. 23.08 lakh for unexplained cash deposits and held that the Commissioner of Income Tax (appeals) [CIT(A)] erred in rejecting additional evidence submitted by the assessee solely due to the non-mention of Rule 46A of the Income Tax Rules. Munireddy Prakashreddy (assessee), an individual, faced scrutiny for cash deposits amounting to Rs. 23,08,000 in his bank account for the Assessment Year (AY) 2012-13. The Assessing Officer (AO) observed the assessee’s failure to comply with statutory notices.
J Ray McDermott Engineering Services Pvt. Ltd vs The Deputy Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 947
The Chennai Bench of the Income Tax Appellate Tribunal ( ITAT ) has quashed a reassessment order and ruled that the reopening of the assessment was invalid due to it being based on a mere change of opinion. The case involved the treatment of software license fee expenses as capital expenditure, which the Assessing Officer (AO) had disallowed as revenue expenditure. J Ray McDermott Engineering Services Pvt. Ltd. (assessee), a private limited company engaged in providing design and drawing services for the engineering industry, filed its return of income declaring a total income of Rs. 18,09,99,774.
The Bhagyalaxmi Co.Op. Credit Society Limited vs Dy. Commissioner of Income Tax Mehsana Circle CITATION: 2025 TAXSCAN (ITAT) 955
The Ahmedabad SMC Bench of the Income Tax Appellate Tribunal has ruled in favour of a cooperative credit society, holding that interest income earned from deposits in an Urban Cooperative Bank is eligible for deduction under Section 80P(2)(d) of the Income Tax Act, 1961. The appeal was filed by The Bhagyalaxmi Co-operative Credit Society Limited, Mehsana, against the order dated September 20, 2022, passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, for the Assessment Year 2018–19. The dispute arose when the society’s claim for deduction of Rs. 17,30,372 under Section 80P(2)(d) was disallowed by the Assessing Officer. The said amount represented interest received from fixed deposits and savings accounts maintained with Mehsana Urban Cooperative Bank.
Vasagar vs The Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 954
The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) has remanded with one more opportunity in a case involving the disallowance of claim towards the cost of improvement in computing Long Term Capital Gains for fresh adjudication to substantiate with documentary evidence. Vasagar, (assessee) an individual filed a return of income for the Assessment Year (AY) 2018-19, declaring a total income of Rs.5,71,430. In the return, the assessee reported a consideration of Rs.23 lakh from the sale of a property. The assessee claimed a deduction of Rs.18,20,472 as the cost of improvement while computing Long Term Capital Gains.
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