Annual Income Tax Case Digest: ITAT Decisioncs 2025 [Part VIII]

The Surat Bench of Income Tax Appellate Tribunal (ITAT) deleted the penalty imposed for failure to file Form 15CA on non-taxable foreign remittances, observing that although Section 195(6) of the Income Tax Act,1961 was amended effective June 1, 2015, the rules prescribing the form and procedure were notified only from April 1, 2016.

The two member bench comprising Sanjay Garg (Judicial Member) and Bijayananda Pruseth ( Accountant Member) heard both sides and reviewed the case. Section 195(6) of the Income Tax Act was amended from June 1, 2015, requiring the remitter to provide payment details in a prescribed form. However, the rules about the form and procedure were notified only from April 1, 2016.In short,the appeal was allowed.

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) remanded a reassessment matter involving the assessee, Naimishbhai Kantibhai Patel, to the file of the Assessing Officer (AO) for de novo adjudication. The Tribunal found that the assessee had not complied with the procedural requirements before both the Assessing Officer (AO) and the Commissioner of Income Tax (Appeals). It imposed a cost of ₹5,000 for the non-compliance, payable to the Prime Minister’s Relief Fund.

The Tribunal made it clear that this cost would be taken into account before the AO proceeds with the assessment and that fresh proceedings are to be conducted strictly by the law, with due opportunity for the assessee to present their case. As a result, the appeal was allowed for statistical purposes.

The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) directed the Assessing Officer to recalculate the taxable income of the appellant under the presumptive taxation scheme of Section 44AD of the Income Tax Act, 1961, after finding a mismatch in the turnover figures declared.

Accordingly, the ITAT set aside the addition and remanded the matter back to the Assessing Officer with clear instructions to recompute the income under Section 44AD based on the correct turnover. The appeal was thus partly allowed

The Income Tax Appellate Tribunal (ITAT) Kolkata Bench has ruled in favor of Lahoti India Ltd., deleting an addition of ₹1 crore made by tax authorities on advances received by the company. The tribunal held that since the money was refunded to the parties, it could not be treated as taxable income.

The tribunal rejected the tax department’s argument that the transaction was a sham, pointing out that the police investigation confirmed the robbery and the refunds were properly recorded. Since the money was not retained by Lahoti India, the ITAT ruled that it could not be treated as income. In Conclusion, the appeal was allowed.

The Income Tax Appellate Tribunal (ITAT) Kolkata Bench has condoned a 148-day delay in filing an appeal, accepting medical reasons and legal oversight as valid grounds. The tribunal directed the case to be reconsidered by the Commissioner of Income Tax (Appeals), giving appellant another opportunity to present evidence.

The ITAT Bench comprising Pradip Kumar Choubey (Judicial Member) and Sanjay Awasthi (Accountant Member), presiding over the case, accepted the medical grounds and legal oversight as sufficient cause for condoning the delay. They directed the CIT(A) to reconsider the case on merits, allowing Prasad to submit fresh evidence if needed. In Conclusion, the appeal was allowed for statistical purposes.

The Income Tax Appellate Tribunal (ITAT), Jaipur Bench, has ruled in favor of a Jewellery deleting additions of over ₹1.2 crore made by the tax department due to alleged discrepancies in cash and jewellery stock during a search operation. The tribunal found the department’s claims lacked supporting evidence and ignored the assessee’s explanations backed by documents.

The ITAT’s decision highlights the importance of evidence-based assessments and proper scrutiny of taxpayer submissions. The bench allowed the appeal in full, deleting all additions and providing relief to Kiran Fine Jewellers. In Conclusion, the appeal was allowed.

The Delhi Bench “A” of the Income Tax Appellate Tribunal (ITAT) recently granted relief to Bharti Airtel in a case involving the disallowance of Tax Deducted at Source (TDS), noting that the Income Tax Department cannot deviate from the binding precedent and promulgation made by the Karnataka High Court in the case of CIT vs. Vodafone South Ltd. (2023 TAXSCAN (HC) 1161).

ITAT observed that the Delhi High Court held that once the judgment delivered by the Hon’ble Karnataka High Court in Vodafone South Ltd. had been accepted by the Revenue and was not made the subject of appeal before the Hon’ble Supreme Court, it was not open to the Revenue to challenge the correctness of the findings rendered in that decision in the case of other assessees without just cause. In such circumstances, the Bench partly allowed the Appeal, granting relief to Bharti Airtel in this regard.

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) recently held that Bharti Airtel Ltd. was obligated to deduct tax at source (TDS) on interest payments made to ABN Amro Bank’s Stockholm branch, rejecting the Airtel’s pleas of bona fide belief in exemption from conducting the same.

The Tribunal referred to the decision of the ITAT, Bangalore in Google India P Ltd. vs. Joint Director of Income Tax(International Taxation) (2023 TAXSCAN (ITAT) 798) and disregarded Airtel’s plea of bona fide belief, while clarifying that statutory provisions requiring TDS under Section 40(a)(i) held precedence over the assessee's purported bona fide belief. Thus, the Tribunal held that Bharti Airtel was indeed required to deduct TDS on interest payments made to ABN Amro Bank under the Indo-Netherlands DTAA.

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has quashed the rejection order passed by the Commissioner of Income Tax (Exemption), [CIT(E)], denying approval under Section 80G(5)(iii) of the Income Tax Act, 1961, to the assessee Trust. The Bench found that the assessee was not given a fair opportunity to respond, constituting a serious breach of natural justice.

The Tribunal comprises Sanjay Garg(Judicial Member) and Makarand V. Mahadeokar (Accountant Member). Also noted that the CIT(E) appeared not to have given due consideration to the reply dated November 23, 2024, and the documentary evidence placed on record. The ITAT ruled that this omission compounded the procedural lapse, rendering the rejection order unsustainable.

In a significant ruling for charitable trusts seeking tax‐exempt status, the Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench has set aside the Commissioner of Income Tax (Exemption)’s refusal to grant Section 80G registration to Shree Bhandari Gnyati Mandal. The Bench, comprising Judicial Member Shri Siddhartha Nautiyaland Accountant Member Shri Narendra P. Sinha, remanded the case to the Commissioner for a fresh examination of whether the trust had applied less than five percent of its total income toward religious activities, as permitted by law .

The Commissioner (Exemption) in Ahmedabad is now tasked with examining the Mandal’s financial statements and verifying religious‐purpose expenses. A fresh order is expected in due course, which will clarify the trust’s entitlement to issue tax‐deductible receipts under Section 80G—a development closely watched by nonprofit organizations nationwide.

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) ruled that gift of property share from husband to wife is eligible for capital gain exemption under Section 54 of Income Tax Act,1961, but held that clubbing provisions and capital gains rules would still apply.

The appellate tribunal found that the assessee paid the full purchase amount by 12 March 2021, within the extended deadline allowed under the law. The money used for this payment was initially kept in fixed deposits and with a company, and then paid to her husband after tax deduction.In short,the appeal was allowed

The Mumbai bench of Income Tax Appellate Tribunal (ITAT) in a recent ruling directed the AssessingOfficer (AO) to accept the sales-based allocation of common expenses for computing deduction under Section 80-IC of the Income Tax Act, 1961, noting that the method was consistently followed by the assessee and accepted by the department in the past, and any deviation to the same would constitute a breach to the rule of consistency.

The bench comprising Narendra Kumar Billaiya (Accountant Member) and Sunil Kumar Singh (Judicial Member) found merit in the appellant’s contention, observing that the basis of allocation had been accepted by the AO in past assessment years. It was held that there was no merit in the action of the AO, as it was in breach of the rule of consistency. The Tribunal accordingly directed the AO to accept the basis of allocation made by the assessee and allowed the appeal by the appellant.

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) recently reaffirmed that deductions under section 80-IC of the Income Tax Act, 1961 must be computed solely on the profit of the eligible unit, without setting off losses from non-eligible units.

The bench comprising Narendra Kumar Billaiya (Accountant Member) and Sunil Kumar Singh (Judicial Member) ruled in favour of the assessee, directing the AO to allow deduction under section 80IC at 30% on the profit of eligible units without any set off. The Tribunal observed that the eligible undertaking must be treated as the only source of income for the assessee, and that profits and losses of other units are not to be netted for computing deduction under section 80IC.

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) allowed Genpact Services LLC's claim for depreciation on customer contracts and assembled workforce, holding that these qualify as intangible assets under the Income Tax Act, 1961.

The two-member bench, comprising Judicial Member Anubhav Sharma and Accountant Member Brajesh Kumar Singh, considered the submissions of both sides. The tribunal agreed with the assessee and referred to its earlier decision that fully recognized customer contracts and assembled workforce as intangible assets. It also observed that the claim arose from admitted facts and was consistent with the treatment upheld in prior years.

In a significant relief for luxury retail giant Louis Vuitton India Retail Pvt. Ltd. (LV), the Delhi Bench of the Income Tax Appellate Tribunal (ITAT) ruled that the Bright Line Test (BLT) cannot be considered a valid method for making transfer pricing adjustments (TPA) relating to Advertisement, Marketing, and Promotion (AMP) expenses.

The bench comprising Judicial Member Yogesh Kumar U.S. and Accountant Member Avdhesh Kumar Mishra, referenced the decision of the co-ordinate Bench in LV’s own matter from A.Y. 2012-13 which relied on the decisions of Delhi High Court that disapproved the usage of BLT as a benchmarking method. The tribunal noted that if a situation of determining the ALP arises, then no transfer pricing adjustment should be made by applying the Bright Line Test, thereby granting partial relief to LV.

In a recent ruling, the Delhi Bench of the Income Tax Appellate Tribunal (ITAT) granted relief to Micromax Informatics Ltd. by quashing a revision order concerning Rs. 16 crore fixed deposit (FD) interest and disallowance under Section 14A made during the original assessment.

The tribunal explained that for revision under Section 263 to be valid, there must be both an error in the order and loss to the revenue, and merely having a different view is not enough. The tribunal referred to earlier judgments, including that of the Delhi High Court in the case of Clix Capital Services Pvt. Ltd., to support its conclusion. The appeal was allowed in favour of Micromax Informatics Ltd.

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) quashed tax demand against Chinese companies for income from turnkey power project supplies, holding that offshore supply contracts are not taxable under section 44BBB of Income Tax Act,1961.

Accordingly, the tribunal concluded that the CIT(IT)’s revision directions were unsustainable both in law and on facts. It held that the offshore supply revenue was not taxable under normal provisions, and therefore section 44BBB was also not applicable. The revision order was reversed. In short,the appeal was allowed.

The New Delhi bench of the Income Tax Appellate Tribunal (ITAT) set aside order against Samsung C & T Corporation as the processing intimation under section 143(1) of Income Tax Act, 1961 without giving 30 days time to assess is bad in law.

A two member bench of Yogesh Kumar Us, Judicial Member and Brajesh Kumar Singh, Accountant Member as the intimation under section 143(1) of the Act has been passed on 30.03.2019, without waiting for the response of the assessee for which time available to the assessee was 22.04.2019, as evident from the copy of the notice under section 143(1)(a) dated 23.03.2019 (placed at page number 137 to 138 of the paper book) and the so called response submitted by the assessee on 23.03.2019, being not correct as discussed above.

In a recent case, the Income Tax Appellate Tribunal (ITAT) has held that option money to be treated as “Capital Receipt” and directed the Assessing Officer (AO) to recompute capital gains on Dabur’s sale of 23 % stake in Aviva JV.

The Tribunal held that the option price received by the assessee against its own investment in joint venture company from CUIH is capital in nature being advance against sale of shares as per the terms of the joint venture agreement and as approved by RBI, the quantum of such option money has to be ascertained in terms of joint venture agreement on date of sale of shares and the excess amount would be refunded to CUIH.The court dismissed the appeals of the Revenue and appeal of the assessee for the AY 2017-18 is partly allowed.

The Income Tax Appellate Tribunal (ITAT) Delhi Bench has deleted an addition of Rs. 24 lakh made as alleged capitation fee for the assessment year 2013-14.

The Tribunal observed that neither the assessment order nor the CIT(A)’s order provided any concrete evidence or analysis to show that the sum of Rs. 24 lakh was actually paid by Hitesh Rohilla. The ITAT emphasized that in the absence of any direct evidence linking the payment to the assessee, the addition could not be sustained.

The Delhi bench of the Income Tax Appellate Tribunal (ITAT) allowed the rectification of error on the application seeking approval under section 80 G (5)(i) of the Income Tax Act, 1961 which was rejected on technical ground without providing time for rectification. Alumni Association, the assessee challenged the order dated 17/12/2024 of the Commissioner of Income Tax (Exemption) whereby the application of the assessee seeking approval under section 80G of the Act, 1961 was rejected.

The two member bench of Shri Vijay Pal Rao, Vice-President and Shri Manjunatha, G. Accountant Member has set aside the impugned order and the matter is remanded to the record of the CIT (E) for reconsideration of the application on merits. The assessee is also directed to rectify the mistake in mentioning the wrong section in the application.

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) ruled that the income earned by Ethiopian Airlines from providing simulator training services to Flight Simulation Technique Services (FSTC), a Dubai-based company, was not taxable in India.

The appellate tribunal observed that the simulators were standard facilities provided in Ethiopia and not tailored to any specific user. Citing rulings from the Delhi High Court in SFDC Ireland and the Supreme Court in Kotak Securities and A.P. Moller Maersk, it held that general facilities used by all customers cannot be considered technical services.

ITAT Upholds Rule of Consistency: Rental Income from Leased Property Taxable as 'House Property', Not 'Business Income The A.C.I.TvsM/s IHDP Globals Pvt Ltd CITATION : 2025 TAXSCAN (ITAT) 1060

The Income Tax Appellate Tribunal (ITAT) New Delhi Bench has reaffirmed the principle of consistency in tax treatment by ruling that rental income earned from leasing property should be taxed under the heading 'Income from House Property' and not as 'Business Income'.

The Tribunal also emphasized that the department had not brought any new facts to justify a departure from the earlier approach. The Bench observed that the mere provision of amenities like lift, parking, and maintenance does not convert rental income into business income if the primary business is not property letting.

The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) allowed Abu Dhabi Commercial Bank to set off losses of its Indian Permanent Establishment (PE) against interest income earned on External Commercial Borrowing (ECB) loans and upheld the concessional tax rate of 5% under the India-UAE tax treaty.

The appellate tribunal clarified that under Article 11(2), income must first be computed under the Income Tax Act, which allows inter-head set-off of losses under Section 71. Since the taxpayer had not claimed any expenses, the interest income remained “gross,” and the set-off of loss was valid.In short,the appeal was allowed.

The Income Tax Appellate Tribunal (ITAT), Delhi Bench has annulled the assessment orders passed against the appellant for Assessment Years 2013–14, 2014–15, and 2019–20, holding that the approval granted under Section 153D of the Income Tax Act was mechanical and invalid.

The Tribunal concluded that the approvals under Section 153D were granted mechanically, without the necessary scrutiny, and hence, the resulting assessment orders were invalid in law. Consequently, the ITAT quashed the assessment orders for all three assessment years and allowed the appeals filed by the assessee.

The Income Tax Appellate Tribunal (ITAT), Delhi Bench, has set aside a revision order issued under Section 263 of the Income Tax Act against the appellant, ruling that no separate disallowance under Section 40A(3) is warranted when income is already assessed by applying a gross profit rate on unaccounted cash purchases.

Further, the Tribunal observed that the AO had duly examined the seized material and applied his mind before estimating income. Since the AO’s view was one of the plausible views supported by various High Courts, the PCIT’s interference under Section 263 was unwarranted. Referring to Malabar Industrial Co. Ltd. (2000) and Max India Ltd. (2007), the bench reiterated that revision under Section 263 cannot be invoked merely because another view is possible.

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has allowed the deduction of prior-period interest expenses for the appellant, holding that there was no loss to the revenue as the lender had already offered the interest income for tax in their returns.

The ITAT bench comprising S. Rifaur Rahman (Accountant Member) and Sudhir Kumar (Judicial Member) agreed with the assessee. The Tribunal acknowledged that though the expenditure technically related to earlier years, the liability had practically crystallised only upon the final rejection of waiver negotiations. Since the company was already in a loss position in earlier years and even in AY 2017–18, there was no tax advantage or revenue loss involved.

The Pune Bench of the Income Tax Appellate Tribunal (ITAT) remanded the matter concerning the addition of unexplained cash deposits under Section 68 of the Income Tax Act, 1961, observing that the Commissioner of Income Tax(Appeals) [CIT(A)] did not provide adequate reasoning or properly examine the discrepancies in the assessee’s cash book and bank accounts.

The tribunal explained the need for a detailed examination of facts and directed the Assessing Officer to reassess the matter after giving the assessee a fair opportunity to explain the discrepancy. The tribunal remanded the case for fresh adjudication and allowed the Revenue’s appeal for statistical purposes.

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT) granted ₹203 crore tax relief to Genpact India under Section 10AA of the Income-tax Act,1961, holding that interest income, foreign exchange gains, and export-linked expenses were eligible for deduction.

The Supreme Court will now hear the matter on 2 July 2025 and decide whether cash refunds are permissible for the reversed transitional credit that was earlier carried forward under GST. The decision is expected to clarify a key issue affecting transitional credit treatment under the GST regime.

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) deleted an addition of ₹16,12,245 made under section 56(2)(x) of the Income Tax Act,1961, holding that the variation between the sale consideration and the stamp duty value was within the permissible 5% threshold and that the lower sale price was justified due to a title dispute.

Further, since the difference between the sale consideration and the stamp duty value was admittedly less than 5%, the tribunal held that the addition under section 56(2)(x) was not justified and directed its deletion. The two member bench comprising Sanjay Garg ( Judicial Member) and Narendra Prasad Sinha ( Accountant Member)allowed the appeal filed by the assessee.

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) held that the bulk disposal of cases by the Income Tax Department amounts to a mechanical and non-judicious approach in granting approvals under Section 153D of the Income Tax Act, 1961.

The ITAT noted that the Addl. CIT had approved 43 cases in a single day, including 14 cases related to Minda Capital and another assessee, Smt Neetu Nayyar. This bulk disposal, the tribunal observed, made it humanly impossible for the authority to apply its mind independently to each case. In conclusion, the ITAT quashed the proceedings initiated under Section 153C read with Section 153A of the Income Tax Act for AYs 2016-17 to 2018-19.

The Income Tax Appellate Tribunal ( ITAT ) in Mumbai has strongly condemned the estimation method used by the Income Tax Department, rejecting a ₹5.39 crore addition made by the Assessing Officer (AO). The tribunal noted that the computation, which was based on bills from just two days, "may impress a student of mathematics but does not make any sense so far as the income tax proceedings are concerned."

Dismissing the Revenue’s appeal, the Tribunal stated that such extrapolations, absent proper verification, cannot form the basis for huge additions under income tax law.

The Income Tax Appellate Tribunal ( ITAT ), Delhi Bench, has held that the Explanation to Section 12AB(4) of the Income Tax Act, 1961, introduced by the Finance Act, 2022, which explains “specified violations” for the purpose of cancelling a trust’s registration, can only be applied prospectively from Assessment Year (AY) 2023-24 onwards and not with retrospective effect.

The ITAT bench noted that the actions of the PCIT demonstrated a predetermined intent to cancel registration, irrespective of legal limitations. Accordingly, the ITAT quashed all orders of cancellation and restored the registration of the three societies, providing them substantial relief.

The Jaipur Bench of the Income Tax Appellate Tribunal (ITAT) allowed the appeal of an individual taxpayer, holding that re-deposited cash from earlier bank withdrawals and cash sales could not be treated as business turnover for computing income under Section 44AD of the Income Tax Act, 1961.

The tribunal held that the CIT(A) was not justified in treating the re-deposited Rs. 33.68 lakh as turnover and applying an 8% income estimate on it. The tribunal allowed the appeal and deleted the addition, ruling that only actual turnover of Rs. 46.27 lakh was eligible for income estimation under Section 44AD.

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) held that only 3 out of 26 gold purchase transactions by Shah Traders were bogus and directed the Assessing Officer (AO) to recompute the addition based on the gross profit margin, rather than disallowing the entire transaction value.

The tribunal explained that since the sales were not disputed and the entire set of transactions was not found bogus, a complete disallowance was not justified. Instead, the tribunal directed that only the profit element embedded in the non-genuine purchases should be added.The tribunal remanded the matter to the AO for fresh computation and allowed the appeal for statistical purposes.

The Kolkata Bench of Income Tax Appellate Tribunal (ITAT ) granted relief to Tega Industries by restricting the Transfer Pricing (TP) adjustment to 0.5% in respect of a corporate guarantee fee, while holding that such a guarantee qualifies as an international transaction under Section 92B of the Income Tax Act,1961.

The two member bench comprising George Mathan (Judicial Member) and Rakesh Mishra( Accountant Member) after considering the submissions and statutory provisions, held that the corporate guarantee qualified as an international transaction under Section 92B of the Act. However, since the Coordinate Bench had upheld a 0.5% fee in the assessee’s own case for AY 2018-19, the tribunal granted partial relief and directed the TPO/AO to adopt the same rate and delete the excess adjustment.

The Income Tax Appellate Tribunal (ITAT) Delhi Bench ‘F’ has ruled that renovation expenses incurred within the extended deadline set by the Central Board of Direct Taxes (CBDT) are eligible for deduction under Section 54F of the Income Tax Act.

The Tribunal, comprising S. Rifaur Rahman (Accountant Member) and Madhumita Roy (Judicial Member), considered the submissions and the material on record. The bench observed that the CIT(A) had relied on the extended deadlines provided by the CBDT and found that Pittie had utilized the sale proceeds within the permitted time frame. The Tribunal also noted that the CIT(A) had the authority to adjudicate the issue based on the evidence provided. In Conclusion the appeal filed by Revenue was dismissed.

The Income Tax Appellate Tribunal (ITAT) Patna Bench has sent back a case involving cash deposits of ₹2.15 crore during the demonetization period for fresh examination, highlighting that the assessee was not given a proper opportunity to explain his case.

The Tribunal directed the Assessing Officer to re-examine the matter afresh, after providing reasonable opportunity to the assessee to present his case and submit all necessary documents for verification. The assessee was also instructed to fully cooperate and respond to all notices during the remand proceedings.

The Income Tax Appellate Tribunal (ITAT) Delhi Bench has ruled that a protective addition cannot be sustained when the same income has already been assessed in the hands of another entity, thereby preventing double taxation.

In its order, the Tribunal noted that the substantial addition made in the hands of Surya Agrotech Infrastructure Ltd. had already been challenged before the Tribunal in related appeals. The Tribunal observed that the income in question had already been taxed in the hands of Surya Food & Agro Ltd., the flagship company of the group, which had disclosed the income before the Settlement Commission. The Settlement Commission’s order had become final, with both parties accepting it.

The Income Tax Appellate Tribunal (ITAT), Delhi Bench ‘F’, has dismissed the Revenue’s appeal against the deletion of an addition made under Section 2(22)(e) of the Income Tax Act, ruling that the payment in question was a business transaction and not a deemed dividend.

The Tribunal also upheld the CIT(A)’s decision to reduce the disallowance of vehicle expenses claimed by the assessee from 20% to 10%, observing that the AO had made the disallowance without specific evidence of personal use.

The Income Tax Appellate Tribunal ( ITAT ), Pune Bench has ruled that the taxability of employee leave encashment should be bifurcated between Government and Non-Government departments and must be examined separately. Therefore, the impugned order denying exemption under Section 10 (10AA) of the Income Tax Act, 1961 was reversed by the bench.

Accordingly, ITAT ordered that the entire leave encashment amount is exempt from tax, while reversing the denial of exemption by the CPC and NFAC.Vinod Pawar represented the Department while no one appeared for the appellant.

The Kolkata Bench of Income Tax Appellate Tribunal ( ITAT ) granted relief to a Microsoft employee for salary received in the US, holding that a slight delay in filing Form 67 cannot take away Double Taxation Avoidance Agreement (DTAA) benefit.

Accordingly, the Tribunal allowed the claim for FTC and directed the AO to grant the credit in accordance with the law and the applicable DTAA. The tribunal also noted discrepancies in the tax computation regarding capital gains and directed the AO to verify the return and computation and allow appropriate relief. Thus, the appeal was allowed.

CIT(A) Sustains Additions without Considering Virtual Hearing Request: ITAT Remands Matter for fresh Adjudication

Shwas HomesPrivate Limited vs The Asst.Commissioner ofIncome-tax

CITATION : 2025 TAXSCAN (ITAT) 1076

The Cochin Bench of the Income Tax Appellate Tribunal (ITAT) remanded the matter to the Commissioner of Income Tax (Appeals) [CIT(A)] for fresh adjudication, citing the CIT(A)’s failure to consider the assessee’s request for a virtual hearing.

The tribunal remanded the matter to the CIT(A) for fresh adjudication in the interest of justice. The tribunal directed that the assessee be afforded meaningful opportunities to present the case. The tribunal directed that the CIT(A) should ensure proper hearing opportunities before passing a new order. The appeal of the assessee was allowed for statistical purposes

The Cochin Bench of the Income Tax Appellate Tribunal (ITAT) condoned a 338-day delay in filing an appeal by The Centre for Management Development, citing the death of the assessee’s auditor as sufficient cause, and remanded the matter to the Commissioner of Income Tax (Appeals) [CIT(A)] for a decision on its merits.

The tribunal condoned the 338-day delay. The tribunal set aside the CIT(A)’s order and restored the appeal to the CIT(A) for adjudication on merits, directing that the assessee be given a meaningful opportunity to be heard. The appeal of the assessee was allowed for statistical purposes.

The Delhi bench of the Income Tax Appellate Tribunal (ITAT) partly allowed an appeal concerning the apportionment of sports broadcast licensing income, where the Assessing Officer (AO) treated the entire amount as royalty.

The tribunal explained that recorded content, such as highlights and replays, still holds value and contributes to overall viewership. The tribunal held that a 10% recorded and 90% live revenue split would be more reasonable. The tribunal directed the AO to apply this revised split while computing royalty income and allowed the appeal for statistical purposes.

The Delhi bench of the Income Tax Appellate Tribunal (ITAT) held that income earned from licensing live sports broadcasts is not taxable as royalty because live broadcasts do not enjoy copyright protection under Indian law.

The tribunal explained that the income related to live sports coverage is not royalty either under the Income Tax Act or the India-USA tax treaty, as there is no copyright in live events. The tribunal directed the AO to exclude income from live broadcasts while calculating royalty income. The tribunal partly allowed the appeal.

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has set aside a transfer pricing (TP) adjustment of Rs. 10.98 crore and ruled that the Assessing Officer (AO) failed to establish an arrangement between the assessee and its associated enterprise (AE) as required under Section 80IA(10) of theIncome Tax Act, 1961.

The tribunal quashed the TP adjustment and affirmed that the assessee’s reported income and Section 10AA deduction were valid. The appeal of the assessee was allowed.

The Delhi Bench of the Income Tax Appellate Tribunal ( ITAT ) has held that capital gains exemption under Section 54F of the Income-tax Act, 1961 is allowable when the assessee invests sale proceeds from a capital asset into a residential property, even if the construction agreement for the new property was entered into prior to the sale.

Upon appeal, both the CIT(A) and the AO denied relief, relying on earlier case law and arguing that since the registration occurred after the two-year period, the exemption was not valid. However, the ITAT noted that the assessee had entered into a construction agreement with Experion Developers on 14.03.2013, much before the sale, and had paid substantial amounts toward construction using both loan and sale proceeds.Accordingly, the exemption under Section 54F was allowed.

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has remanded the matter to the Assessing Officer (AO) for fresh adjudication, directing verification of a Tax Deducted at Source (TDS) credit claim of Rs. 35,493 for Assessment Year (AY) 2020-21. Urmilaben H. Dave Disc Family Trust (assessee), a trust filed its income tax return for AY 2020-21 on 24.10.2020, declaring a total income of Rs. 3,52,130 and claiming a refund of Rs. 30,026. The AO issued an intimation disallowing the TDS credit of Rs. 35,493.

The tribunal remand the matter to the AO with directions to verify the assessee’s claim for TDS credit of Rs. 35,493 for AY 2020-21 and to grant due credit if the funds were credited to the trust’s account. The appeal of the assessee was partly allowed for statistical purposes.

Relief to SpiceJet: ITAT Dismisses Income Tax Department Appeals on Supplementary Rent Disallowance

Deputy Commissioner of Income Tax vs Spicejet Limited CITATION : 2025 TAXSCAN (ITAT) 1095

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) ruled that supplementary rent payments are exempt from tax in India under Section 10(15A) of the Income Tax Act, 1961, and not subject to disallowance under Section 40(a)(i) of the Income Tax Act. SpiceJet Limited (assessee), a company faced scrutiny for AY 2020-21 and AY 2021-22. The Assessing Officer (AO) disallowed Rs. 1,16,32,302 and Rs. 11,66,32,06,064 for AY 2020-21, and Rs. 643,80,46,168 for AY 2021-22, on account of supplementary rent and maintenance reserve.

The Assessing Officer (AO) alleged these payments constituted royalty and required tax deduction at source under Section 40(a)(i) of the Income Tax Act.

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has quashed an aggregate tax addition of ₹85.88 lakh, observing that the proceedings under Section 153C of the Income Tax Act, 1961 were initiated on the basis of documents that merely “pertained to” the assessees, but did not “belong to” them. A search and seizure operation was carried out by the Income Tax Department at the premises of the Navneet Dawar Group.

The Bench also rejected the Revenue’s reliance on Section 292C under the Act, which created a presumption regarding seized documents, which would be applicable only against the person from whom the materials are actually found and seized. In the absence of any corroborative evidence linking the alleged on-money transactions to the income of the assessees, ITAT allowed the appeals and directed deletion of the additions aggregating ₹85.88 lakh.

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) denied a deduction under Section 54F of the Income Tax Act, 1961, citing that it cannot be claimed for a residential property purchased in the name of the assessee’s mother.

Therefore the tribunal upheld the disallowance of the deduction claim under section 54F of the Income Tax Act. Thereby the tribunal affirmed the order of the CIT(A). The tribunal dismissed the assessee’s appeal.

Thiruvenkitam Veeriah Reddiar (assessee), represented through his legal heir Beena Veeriah Reddy, filed his income tax return for the Assessment Year (AY) 2020-21 on 15th February 2021, declaring a total income of Rs. 12,12,490.

The tribunal observed that no prejudice would be caused to the assessee and also observed that if the assessee substantiated the claim during the remand proceedings no addition would be warranted. Therefore, the tribunal upheld it and dismissed the assessee’s appeal. The appeal of the assessee was dismissed.

The Surat Bench of the Income Tax Appellate Tribunal (ITAT) partly allowed the appeal in a case concerning the addition of cash deposits made during the demonetization period, ruling that cash on hand in the real estate business is not unusual and cannot be entirely taxed as unexplained simply due to its deposit timing.

The tribunal ruled that a reasonable disallowance of 25% of the disputed Rs. 7.54 lakh (i.e., Rs. 1.88 lakh) would be sufficient to meet the ends of justice. It also held that the higher tax rate under Section 115BBE did not apply for the assessment year in question, as per various coordinate bench rulings. The tribunal directed the AO to delete Rs. 5.65 lakh and retain only Rs. 1.88 lakh as disallowed, partly allowing the appeal.

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) recently upheld an order of the Commissioner of Income Tax Appeals ( CIT(A) ) where it was held that the taxability of a loan received by the assessee is not in his hand and cannot be treated as a deemed dividend under Section 2(22)(e) of the Income Tax Act, 1961.

Thus, the ITAT confirmed the decision of the CIT(A) and the corresponding grounds of appeal stood dismissed, partly allowing the appeal of the revenue.

NTT GlobalNetworks PrivateLimited vs PCIT CITATION : 2025 TAXSCAN (ITAT) 1412

The Mumbai bench of Income Tax Appellate Tribunal (ITAT) in its recent ruling allowed the appeal of NTT Global Networks Pvt. Ltd., quashing the revisionary order of the Principal Commissioner of Income Tax (PCIT) which had denied deductions claimed towards Corporate Social Responsibility (CSR) donations under Section 80G of the Income Tax Act, 1961.

The Tribunal cited the CBDT circular dated 31.03.2021 and the TOLA, 2020, which specifically extended the deadline for donations under Section 80G for FY 2019-20 to 30 June 2020, making the April 2020 donation eligible. Accordingly, the appeal was allowed.

Hanning MotorsIndia Pvt.Ltd vsThe Dy.CIT CITATION : 2025 TAXSCAN (ITAT) 1413

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT), in a recent ruling set aside the order Commissioner of Income Tax (Appeals) ( CIT(A) ) that had summarily dismissed an appeal challenging the computation of income without allowing the set-off of brought forward business losses and unabsorbed depreciation.

The Tribunal observed that the CIT(A) has dismissed the appeal without rendering any findings on the merits of the case. which is against the principles of natural justice and the failure of the CIT(A) to decide the issues on merits has resulted in an improper disposal of the appeal, necessitating a remand. Accordingly, the appeal was allowed for statistical purposes.

ChandreshLuniya vs The ITO CITATION : 2025 TAXSCAN (ITAT) 1414

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) has quashed a Rs. 12.56 lakh tax addition against a share trader, holding that frequent client code modifications (CCMs) alone cannot establish tax evasion without concrete evidence of collusion or undisclosed income. The ruling emphasizes that reopening assessments after four years requires proof of the assessee's failure to disclose material facts, not just suspicion.

The verdict serves as a reminder for tax authorities to build stronger documentary cases when challenging breaking transactions, while reassuring traders that bona fide market operations won't be penalized based on theoretical assumptions alone. For now, Luniya's derivative losses stand as originally declared, with the ITAT refusing to let suspicion substitute for substance in tax enforcement.

Shakeel AbdulAzeez Mohammad vsThe Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1415

The Pune Bench Income Tax Appellate Tribunal (ITAT) has set aside an income addition of Rs.72.18 lakh against a Jalgaon resident, ruling that the CIT(A) committed a "serious jurisdictional error" by failing to adjudicate a crucial legal challenge against the validity of reassessment proceedings initiated through a third-party search. The tribunal emphasized that appellate authorities cannot ignore substantive legal grounds while deciding tax appeals.

the order serves as a procedural win for taxpayers facing additions based on indirect investigations. It underscores that appellate authorities cannot sidestep technical challenges to an AO's jurisdiction, even when dealing with substantive tax disputes. The case will return to the CIT(A), who must now confront the Section 148 vs 153C debate head-on while also considering Mohammad's agricultural income evidence, a second chance most appellants don't get due to strict ITAT norms on additional evidence.

Tanaji ParilalGawade vs ITO CITATION : 2025 TAXSCAN (ITAT) 1416

The Pune Bench of Income Tax Appellate Tribunal (ITAT) reduced a tax demand on a plot seller by 77%, ruling that cash deposits in rural land transactions can't be entirely treated as unexplained income when supported by business records. The tribunal adopted a pragmatic approach by estimating income at 10% of turnover instead of upholding the department's blanket additions.

For Gawade, the decision converts a potentially crippling tax demand into a manageable liability. For the department, it serves as a reminder that non-compliance with procedural formalities doesn't automatically justify maximum additions, especially when basic business records exist. The 10% estimation standard may influence similar cases involving cash-heavy micro-developers, though the tribunal carefully limited its ruling to the specific facts of this decade-old assessment.

HMG EngineeringPvt. Ltd vs ITO,Ward (1)(1)(4) Income Tax Department

CITATION : 2025 TAXSCAN (ITAT) 1417

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has set aside the reassessment order and declared the reopening of the assessment for Assessment Year (AY) 2012-13 after 4 years with the same set of facts as bad in law.

The tribunal relied on the Supreme Court’s decision in CIT v. Kelvinator of India Ltd. [2010], which clarified that after the amendment reassessment under Section 147 requires a tangible “reason to believe” that income has escaped assessment. The tribunal quashed the reassessment order and stated that it was unnecessary to discuss the merits of the case since the reopening itself was bad in law. The appeal of the assessee was allowed.

Hinduja GlobalSolutions vs DCITCITATION : 2025 TAXSCAN (ITAT) 1418

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has dismissed the Revenue’s appeals and upheld the Commissioner of Income Tax (Appeals) [CIT(A)] order that deleted disallowances related to payments for broadband and bandwidth charges rejecting TDS claim.

The tribunal upheld the CIT(A)’s findings, observing that the decisions were grounded in precedents from the Bombay High Court in UTV Entertainment Television and Madras High court in Skycell communications services for the bandwidth charges. The tribunal affirmed that broadband and bandwidth charges do not attract TDS as royalty under section 195 of the Income Tax Act. The appeal of the Revenue was dismissed.

Aruna Kishor Foundation B-203 vsCIT(Exemption) Vejalpur Ahmedabad

CITATION : 2025 TAXSCAN (ITAT) 1420

The Ahmedabad Bench of the Income Tax Appellate Tribunal ( ITAT ) has set aside the orders of the Commissioner of Income Tax (Exemption) [ CIT(E) ] citing that the application for income tax deduction under Section 80G of income tax act, 1961 was rejected without independent scrutiny.

The two-member bench comprising Suchitra R. Kamble (Judicial Member) and Makarand V. Mahadeokar (Accountant Member) observed that the CIT(E)’s rejection of the Section 12AB application lacked verification of whether the exemptions were claimed under Sections 11, 12, or 10(23C) of the Income Tax Act.

UmeshbhaiRamanlal Shah vsIncome Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1421

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) restored the matter to the Assessing Officer (AO) after noting that cash deposits of ₹18.32 lakh were treated as unexplained under Section 69A of Income Tax Act,1961,without examining debit entries or considering additional evidence submitted by the assessee.

The two member bench comprising T.R.Senthil Kumar (Judicial Member) and Narendra Prasad Sinha (Accountant Member) noted that the AO treated the entire cash deposit of ₹18.32 lakh as unexplained without verifying the bank statement or checking debit entries.

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Dinesh Kumar Mishra vs ITO CITATION : 2025 TAXSCAN (ITAT) 1422

The Raipur Bench of the Income Tax Appellate Tribunal ( ITAT ) remitted the matter to the Commissioner of Income Tax (Appeals) [ CIT(A) ] ruling that notices were sent to an incorrect email ID which was not mentioned in Form 35 constitute a sufficient cause for non-compliance.

The two-member bench comprising Partha Sarathi Chaudhury (Judicial Member) and Arun Khodpia (Accountant Member), observed that the CIT(A)’s use of an incorrect email ID resulted in an ex-parte order that violated natural justice principles.

Oracle FarmsLLP vs DCIT CITATION : 2025 TAXSCAN (ITAT) 1423

The Delhi Bench of the Income Tax Appellate Tribunal ( ITAT ) allowed the admission of additional evidence under Rule 29 of the ITAT Rules, 1963, to substantiate the genuineness of a business advance and remanded the addition of Rs. 30 crore as unexplained credit under Section 68, to the Assessing Officer (AO) for fresh adjudication.

The two-member bench comprising Shamim Yahya (Accountant Member) and Sudhir Kumar (Judicial Member), observed that the additional evidence submitted under Rule 29 was relevant for adjudication.

SwatiIndustries vs The DCITCentral Circle-3 CITATION : 2025 TAXSCAN (ITAT) 1424

The Chandigarh Bench of the Income Tax Appellate Tribunal (ITAT) has ruled that the Rs. 1.60 crore surrendered during a survey constitutes normal business income, dismissing the Revenue’s contention that it should be taxed as unexplained income under Section 115BBE of the Income Tax Act, 1961.

The two-member bench comprising Rajpal Yadav (Vice President) and Krinwant Sahay (Accountant Member), observed that the survey revealed evidence of suppressed scrap sale prices, as noted in the assessee’s surrender letter.

DoddaballapurPlanning Authorityvs ITO CITATION : 2025 TAXSCAN (ITAT) 1425

The Bangalore Bench of the Income Tax Appellate Tribunal ( ITAT ) has ruled a valid registration under Section 12A of the Income Tax Act, 1961 is mandatory to claim exemptions under Sections 11 and 12 of the Income Tax Act.

The two-member bench comprising Laxmi Prasad Sahu (Accountant Member) and Keshav Dubey (Judicial Member) observed that registration under Section 12A is a precondition for claiming exemptions under Sections 11 and 12 of the Income Tax Act.

DCIT, CentralCircle-2(2), vsAryan Mining and Trading Corporation Limited

CITATION : 2025 TAXSCAN (ITAT) 1426

The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) recently upheld the order of the Commissioner ofIncome Tax (Appeals) [CIT(A)], bringing clarity to the contentious issue of disallowance under Section 14A read with Rule 8D of the Income Tax Rules. The appeal, filed by the Department against Aryan Mining and Trading Corporation Limited, challenged the CIT(A)’s direction to restrict disallowance only to investments that actually yielded exempt income during the relevant financial year.

After hearing both sides, the ITAT bench comprising Pradip Kumar Choubey (Judicial Member) and Rakesh Mishra (Accountant Member) sided with the assessee and upheld the order of the CIT(A). The Tribunal observed that the AO had mechanically applied Rule 8D without examining whether the investments actually yielded exempt income. As per established law, including the judgment in REI Agro Ltd. vs DCIT and its affirmation by the Calcutta HighCourt, only those investments which generate exempt income in the relevant financial year can be considered for disallowance under Rule 8D.

Vivrn FoodsPrivate Limited vsThe Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1427

The Raipur Bench of the Income Tax Appellate Tribunal (ITAT) held that Form 10ID must be filed within the due date specified under Section 139(1) for availing for the concessional tax rate under Section 115BAB of the Income Tax Act.

The two-member bench comprising Partha Sarathi Chaudhury (Judicial Member) and Arun Khodpia (Accountant Member), observed that the assessee filed Form 10ID on 21.09.2024 was after the due date of the first return filed on 24.02.2022 for the assessment year 2022-23.

The AssistantCommissioner ofIncome Tax vs Pandyan Grama Bank CITATION : 2025 TAXSCAN (ITAT) 1428

The Chennai Bench of the Income Tax Appellate Tribunal ( ITAT ) has affirmed eligibility for deduction under Section 80P of the Income Tax Act, 1961, by recognizing assessee’s status as a co-operative society under Section 22 of the Regional Rural Bank (RRB) Act, 1976.

The two-member bench, comprising Viswanethra Ravi (Judicial Member) and S. R. Raghunatha (Accountant Member) observed that Section 22 of the RRB Act clearly designates RRBs as co-operative societies for the purposes of the Income Tax Act.

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SubramaniyamKulandhaivel vs TheIncome Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1429

The Chennai Bench of the Income Tax Appellate Tribunal(ITAT) restored the appeal of an assessee, Subramaniyam Kulandhaivel, which had been dismissed ex-parte by the National Faceless Appeal Centre (NFAC). The Tribunal expressed concern over the assessee’s repeated non-compliance but nevertheless chose to allow one final opportunity for him to present his case, albeit with a cost of ₹25,000.

The ITAT consisting of George George K. (Vice President) and S.R. Raghunatha (Accountant Memeber) clarified that the assessee must furnish proof of payment within one month from the date of the order. It also directed the AO to give a reasonable opportunity to the assessee but warned the latter against seeking unnecessary adjournments or failing to cooperate.