Annual Income Tax Case Digest: ITAT Decisions 2025 [Part IX]

Dy. CIT-17(1)vs Late RameshPannalal Ranawat CITATION : 2025 TAXSCAN (ITAT) 1430

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) upheld the Commissioner of Income Tax (Appeals) [CIT(A)] order and ruled that the Assessing Officer's estimations, reliant on a single-day CCTV footage and contradictory statements, were unsustainable without supporting evidence.

The two-member bench, comprising Saktijit Dey (Vice President) and Girish Agrawal (Accountant Member), observed that the AO's sales estimation lacked rational basis, ignoring seasonal fluctuations, holidays, and customer behavior in jewellery trade.

JCIT(OSD) I/C. to DCITCircle1(3)(1) vs Garware Hi-Tech Films Limited CITATION : 2025 TAXSCAN (ITAT) 1431

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) upheld the CIT(A)’s direction to allow Minimum Alternate Tax (MAT) credit of Rs. 29,94,40,364 under Section 115JAA of the Income Tax Act, 1961 and ruled that the revision from the originally claimed Rs. 29,17,19,510 was consequential to the deletion of additions in appellate proceedings.

The two-member bench comprising Narendra Kumar Billaiya (Accountant Member) and Anikesh Banerjee (Judicial Member), observed that the Revenue did not contest the deletion of additions under Sections 35(1) and 41 of the Income Tax Act.

Quilon PoorHome Mundakkal Westvs The CIT CITATION : 2025 TAXSCAN (ITAT) 1432

The Income Tax Appellate Tribunal (ITAT), Cochin Bench, has set aside the rejection of applications under sections 12A and 80G of the Income Tax Act, 1961, citing that the default was procedural and not substantive as the appellant was unable to furnish a certified copy of its 70 year old trust deed within the stipulated time due to genuine and unavoidable delay.

The bench comprising Inturi Rama Rao (Accountant Member) and Sonjoy Sarma (Judicial Member), found that the rejection was due to procedural default, specifically non-furnishing of the certified trust deed, which the assessee now states is ready for submission.

DCIT CC – 7(3)vs M/s. TirupatiDevelopers CITATION : 2025 TAXSCAN (ITAT) 1433

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) upheld the deletion of the addition of Rs. 6,93,00,000 under Section 68 of the Income Tax Act, 1961, and ruled that the loan transaction was genuine, supported by retracted statements, regulatory compliances, and financial records of the lender.

The two-member bench, comprising Kavitha Rajagopal (Judicial Member) and Renu Jauhri (Accountant Member), observed that the CIT(A) thoroughly examined the evidence, including RBI compliances, High Court-sanctioned mergers, and bank records, with no discrepancies identified.

Heaven MahendraShah vs Asst.CIT CITATION : 2025 TAXSCAN (ITAT) 1434

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) ruled that the long-term capital gains (LTCG) from sale of shares allotted pursuant to a demerger scheme were genuine, as the assessee proved genuineness by comprehensive documentary evidence.

The two-member bench, comprising Anikesh Banerjee (Judicial Member) and Renu Jauhri (Accountant Member), observed that the assessee had discharged the primary onus by submitting unchallenged documents proving the genuineness of the demerger and sales.

MayankkumarRameschandra Bhattvs ITO CITATION : 2025 TAXSCAN (ITAT) 1435

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) set aside the addition of ₹15,97,500 made as unexplained cash deposits and directed the Assessing Officer (AO) to conduct a fresh probe after finding strong evidence of identity misuse in a bank account linked to the assessee.

The two member bench comprising Suchitra R.Kamble (Judicial Member) and Makarand V.Mahadeokar (Accountant Member) reviewed the case, including the orders of the lower authorities, the affidavit, RTI replies, bank documents, and an FIR filed alleging identity fraud and misuse of PAN.

Ningaiah Sidduvs The DeputyCommissioner of Income Tax Circle 1(1) & TPS

CITATION : 2025 TAXSCAN (ITAT) 1436

Ningaiah Siddu, The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) condoned a 349-day delay in filing the appeal before the Commissioner of Income Tax (Appeals) [CIT(A)], attributing it to the assessee’s illiteracy, lack of email access, and reliance on a former auditor and restored the ex-parte assessment for verification of deductions claimed under Section 57 of the Income Tax Act, 1961.

The two-member bench, comprising Prashant Maharishi (Vice President) and Keshav Dubey (Judicial Member), observed that notices were issued to an email not belonging to the assessee, and the assessment order was not received by him through other means. The bench noted the assessee’s illiterate status and lack of ITBA access constituted sufficient cause for the delay.

Koti NarasimhaSrinivasVukkurthi vs Income Tax Officer-Ward – 1(1)

CITATION : 2025 TAXSCAN (ITAT) 1437

The Visakhapatnam Bench of Income Tax Appellate Tribunal (ITAT ) addressed the denial of Tax Deducted at Source (TDS) credit on farmers’ sales made through a commission agent and relied on Central Board of Direct Taxes ( CBDT ) to grant full credit

The two member bench comprising Vijay Pal Rao (Vice President ) and S.Balakrishnan (Accountant Member) heard both sides and reviewed the records along with the orders of the tax authorities. It also examined CBDT Circular No. 452 dated 17.03.1986, cited by the assessee counsel, and referred to its earlier rulings, including Thota Venkateswarlu v. ITO and Yegneswari General Traders v. ITO.

Shri SatishSoin vs ACIT CITATION : 2025 TAXSCAN (ITAT) 1438

The Chandigarh Bench of the Income Tax Appellate Tribunal (ITAT) deleted the addition of Rs. 94,59,870 treated as bogus long-term capital gain (LTCG) and ruled that such addition was unsustainable in a search assessment u/s 153A as no incriminating material was found during the search.

The two-member bench comprising Rajpal Yadav (Vice President) and Manoj Kumar Aggarwal (Accountant Member), observed that the AO’s reference to the Kolkata report was theoretical and lacked connection to the assessee’s case.

ShamrockApparels vs Income TaxOfficer CITATION : 2025 TAXSCAN (ITAT) 1439

The Visakhapatnam Bench of Income Tax Appellate Tribunal (ITAT ) remanded the matter to the Commissioner of IncomeTax (Appeals)[CIT(A)] with one final opportunity after noting an adjustment of ₹31.22 lakh made to long-term capital gains in the intimation under Section 143(1) of Income Tax Act,1961.

The two member bench comprising Vijay Pal Rao (Vice President) and S.Balakrishnan (Accountant Member) considered the arguments from both sides and examined the records. It observed that the assessee had not complied with several notices and had failed to respond to multiple communications mentioned in the CIT(A)’s order.

Kushal PrashadSahu vs AssistantCommissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1440

The Income Tax Appellate Tribunal (ITAT), Raipur Bench, has granted relief to a Goods Train Guard with South Eastern Central Railway, directing a fresh assessment after tax authorities denied him credit for Tax Deducted at Source (TDS) worth ₹2.46 lakh. The tribunal noted that Sahu, due to the nature of his job, missed receiving tax notices, leading to an ex-parte assessment that ignored his legitimate tax claims.

The ITAT bench comprising Judicial Member Ravish Sood and Accountant Member Arun Khodpia set aside the assessment and penalty orders, directing the AO to re-examine the case. The tribunal stressed that Sahu must be given a fair opportunity to present his documents, including proof of TDS and eligible deductions.

Meenamani GangaBuilder LLP vsACIT CITATION : 2025 TAXSCAN (ITAT) 1441

The Income Tax Appellate Tribunal (ITAT), Pune Bench, has significantly reduced the tax demand on Meenamani Ganga Builder LLP, ruling that the Income Tax Department could not justify its additions based on alleged "on-money" (undisclosed cash payments) receipts without concrete evidence. The tribunal also rejected the department's attempt to extrapolate the alleged unaccounted income to other transactions, citing a lack of corroborative material.

The ITAT, comprising Vice President R.K. Panda and Judicial Member Astha Chandra, scrutinized the evidence and noted critical gaps in the department's case. The tribunal observed that the sales manager's statement, recorded under Section 131, was not backed by any independent verification from buyers or additional incriminating material. Moreover, the managing partner's denial of on-money receipts was not properly confronted or investigated by the tax authorities.

N K Infra JV vsADIT CITATION : 2025 TAXSCAN (ITAT) 1442

The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) directed the Assessing Officer (A0) to delete surcharge of ₹1,11,269 and cess of ₹4,451 that had been wrongly levied despite the assessee’s income being below ₹50 lakh.

A single member bench comprising Pawan Singh (Judicial Member) reviewed the submissions made by both parties and examined the orders of the lower authorities. It agreed with the assessee counsel’s argument that the surcharge and additional cess were not applicable since both the returned and assessed income were below ₹50 lakh.

Ganraj HomesLLP vs ACIT CITATION : 2025 TAXSCAN (ITAT) 1443

The Income Tax Appellate Tribunal (ITAT), Pune bench, has quashed a ₹14.2 crore tax demand against a real estate firm, ruling that the income tax department failed to provide concrete evidence to prove alleged "on-money" transactions in the firm's real estate projects. The tribunal deleted additions made across three assessment years (2017-18 to 2019-20), holding that the tax authorities relied solely on uncorroborated employee statements and rough notes without examining buyers or partners.

The order brings relief to the real estate sector, where on-money allegations often arise from ambiguous documentation. By insisting on direct evidence and due process, the ITAT has set a clear benchmark for such cases, ensuring taxpayers aren't penalized based on unsubstantiated inferences.

Yogesh HimatlalThakker vs TheIncome-Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1444

The Income Tax Appellate Tribunal Bench at Ahmedabad, has held that the addition of ₹28,03,587 to business income in the case of Yogesh Himatlal Thakker was unwarranted, allowing his appeal and finding that the Commissioner of Income Tax (Appeals) erred in failing to notice a rectification already carried out by the Central Processing Centre (CPC).

The bench, comprising Dr. B.R.R. Kumar (Vice-President) and Shri Siddhartha Nautiyal (Judicial Member), delivered its order on February 11, 2025, in ITA No. 1362/Ahd/2024, relating to the assessment year 2020-21.

TakshashilaEducation vs TheCommissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1445

The Income Tax Appellate Tribunal, Ahmedabad Bench, quashed the ex-parte order passed by the Commissioner of Income Tax (Exemption), National Faceless Appeal Centre, Delhi, rejecting Takshashila Education and Charitable Trust’s application for approval under section 80G(5)(iii) of the Income Tax Act, 1961, and remitted the matter for fresh consideration.

The Tribunal remitted the application to the CIT(E) for reconsideration, directing the department to issue fresh notices and afford the trust an opportunity to be heard. The Trust must comply promptly with any queries and provide complete documentation to support its eligibility for 80G approval.

Sachin BabanShinde vs ITO CITATION : 2025 TAXSCAN (ITAT) 1446

In a recent ruling, the Pune Bench of the Income Tax Appellate Tribunal (ITAT) provided relief to a salaried taxpayer who was wrongly penalised for underreporting income. The tribunal cancelled a penalty of Rs. 1,46,760 imposed by the Income Tax Department acknowledging that the misreporting was not intentional and had occurred due to the fraudulent actions of a tax consultant.

The two-member bench comprising Manish Borad (Accountant Member) and Vinay Bhamore (Judicial Member) observed that the taxpayer was from a technical background and could not be expected to have expertise in tax laws. The tribunal accepted that he had relied entirely on the consultant and had no knowledge of the wrongful claims made in the return.

Indian OverseasBank EmployeesCooperative Credit Society Limited vs Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1447

The Kolkata Bench of Income Tax Appellate Tribunal (ITAT ) rejected the plea to condone a 388-day delay in filing an appeal against disallowance of deduction under Section 80P of Income Tax Act,1961, holding that the death of the Chartered Accountant (CA) was not a valid reason since the society had continued to pursue the matter even after the CA’s demise.

A single member bench comprising Duvvuru RL Reddy (Vice President) considered submissions from both sides and reviewed the condonation petition, the CA’s death certificate issued by the Kolkata Municipal Corporation, and the order passed by the CIT(A).

PrimaryAgricultural CreditCo-operative Society Ltd. vs The Income Tax Officer

CITATION : 2025 TAXSCAN (ITAT) 1449

The Bangalore Bench of the Income Tax Appellate Tribunal ( ITAT ) has condoned a delay of 253 days in filing an appeal and observed that the delay was due to the assessee’s location in a backward rural area and the negligence caused by its tax consultant.

The bench comprising Waseem Ahmed (Accountant Member) and Keshav Dubey (Judicial Member) held that it was just and proper to restore the matter to the Assessing Officer (AO) for fresh adjudication. The assessee was directed to cooperate fully and provide all necessary evidence and explanation.

Rani ChannammaCo-operativeCredit Society Ltd vs The Income Tax Officer

CITATION : 2025 TAXSCAN (ITAT) 1450

The Bangalore Bench of the Income Tax Appellate Tribunal ( ITAT ) has set aside an order by the Commissioner of Income Tax (Appeals) ( CITA (A) ) and observed that the appeal filed was inadvertently treated by CIT(A) as one that arose from a rectification order under section 154 of the Income Tax Act, 1961 instead of against an intimation order issued under section 143(1) of the Act.

The Tribunal Bench comprising Waseem Ahmed (Accountant Member) and Keshav Dubey (Judicial Member) noted from records that the CIT(A) had inadvertently passed the order under a mistake that the appeal was against a section 154 rectification rejection.

Sri ShivakumaraSwamy CreditCoop Society Limited vs The Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1448

The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) has held that deposits of Specified Bank Notes (SBNs) made during the demonetisation period cannot be treated as unexplained income under section 69A of the Income-taxAct, 1961, and deleted the addition of ₹17,16,000 made by the Assessing Officer (AO).

The Tribunal Bench comprising Waseem Ahmed (Accountant Member) and Keshav Dubey (Judicial Member) noted that the government notification did not prohibit deposit of SBNs during the window period and, in fact, expressly allowed such deposits up to 30 December 2016.

Shruthi Kishorevs The IncomeTax Officer CITATION : 2025 TAXSCAN (ITAT) 1451

The Bangalore Bench of the Income Tax Appellate Tribunal ( ITAT ), while deleting an addition of ₹10L made as unexplained cash deposit under Section 69A of the Income Tax Act, 1961, held that wedding gifts are customary in Indian culture and are exempted from tax.

The Tribunal Bench comprising Waseem Ahmed (Accountant Member) and Keshav Dubey (Judicial Member) observed that in Indian society, marriage is a socio-cultural event where it is customary to receive gifts, including cash, from relatives and friends.

LSI IndiaResearch &Development Pvt. Ltd vs The Pr. Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1452

The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) ruled that the free of cost equipment of ₹42.89 crore received from group companies was potentially taxable as a perquisite under section 28(iv) of the Income Tax Act, 1961. It upheld the order by the Principal Commissioner of Income Tax (PCIT) under section 263 of the Income Tax Act, 1961.

The Tribunal Bench comprising Waseem Ahmed (Accountant Member) and Keshav Dubey (Judicial Member) held that there was no infirmity in the PCIT’s direction under section 263. It also observed that if the equipment was indeed on a returnable basis, the AO should decide the matter afresh in the light of the Sony India Software Center ruling.

BandigadiChandrappashettyRajashekara vs The Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1453

The Bangalore Bench of the Income Tax Appellate Tribunal ( ITAT ) has granted relief to a taxpayer by condoning a delay of 1,249 days in filing appeals for AY 2015-16, noting that part of the delay fell within the COVID-19 period covered by the Supreme Court’s blanket extension of limitation, while attributing 499 days of the delay to the tax practitioner’s failure to inform the appellant.

The Tribunal Bench comprising Waseem Ahmed (Accountant Member) and Keshav Dubey (Judicial Member) noted that the PCIT had initiated proceedings under section 263 based on a proposal from the Assessing Officer (AO), rather than a suo motu examination of the assessment records, which is a jurisdictional prerequisite under section 263.

Anil GalaNavneet Trust NavneetBhavan vs Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1454

The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) applied a 15% surcharge on the income of a private discretionary trust, as the total income did not exceed ₹2 crores.

The two-member bench comprising Amit Shukla (Judicial Member) and Girish Agrawal (Accountant Member) observed that the issue was already settled by the Special Bench, Mumbai, in Aradhya Jain Trust vs. ITO dated 09.04.2025.

Bhumika NavinPatel vs The ITO CITATION : 2025 TAXSCAN (ITAT) 1455

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) deleted penalty under section 271(1)(c) of Income Tax Act,1961, holding that a legal heir cannot be expected to explain unexplained bank credits of a deceased person when the Assessing Officer (AO) failed to verify the sources.

The two member bench comprising Sanjay Garg (Judicial Member) and Narendra Prasad Sinha (Accountant Member) considered the rival submissions and reviewed the case records. It found that most of the deposits in the bank account of the late Navinbhai Patel were bank transfers, with some small cash deposits.

Heena ParthivThakkar vs ADIT CITATION : 2025 TAXSCAN (ITAT) 1456

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) held that a bonafide error in claiming 15% depreciation instead of the eligible 7.5% on plant and machinery used for less than 180 days did not disqualify the assessee from claiming additional depreciation under Section 32(1)(iia) of Income Tax Act,1961 and accordingly allowed the claim.

The two member bench comprising Dr.B.R.R. Kumar (Vice-President) and Siddhartha Nautiyal (Judicial Member) examined the submissions and records. It noted that the assessee had wrongly claimed 15% depreciation on new plant and machinery used for less than 180 days, instead of the allowable 7.5%, and had admitted the mistake as bonafide. As there was no ineligibility, the appellate tribunal allowed the additional depreciation.

PravinbhaiJethabhai Patel vsIncome Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1457

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) ruled that non-issuance and non-service of notice under section 143(2) of Income Tax Act,1961, renders reassessment order null and void.

The two member bench comprising Dr.B.R.R Kumar (Vice President) and Siddhartha Nautiyal (Judicial Member) heard both sides and reviewed the records. It was found that the Department did not prove that the notice under section 143(2) dated 11.07.2018 was served to the assessee. The notice was not found on the ITBA or e-filing portal, and the appellant’s requests for it were ignored.

Darbhanga vsM/s TrimurtiConcern Pvt CITATION : 2025 TAXSCAN (ITAT) 1458

The Patna Bench of the Income Tax Appellate Tribunal (ITAT) has remanded to the Assessing Officer (AO) a dispute concerning the disallowance of “outward expenses” in a transport business, after the Revenue flagged doubts over the genuineness of vouchers and records.

Weighing rival submissions, the Tribunal observed that the CIT(A)’s order was broadly well‑reasoned, having recognised transaction‑level realities and documentation constraints typical to the transport trade. Yet, it acknowledged the Revenue’s apprehensions regarding the genuineness of documents.

TrustworthySecurity ServicesPrivate Limited vs PCIT CITATION : 2025 TAXSCAN (ITAT) 1459

The Income Tax Appellate Tribunal, Delhi Bench, has quashed a revisionary order passed under Section 263 of the Income Tax Act, 1961 and held that the facts did not warrant the interference of the Principal Commissioner of Income Tax (PCIT), as the issue of Section 14A disallowance had already been examined by the Assessing Officer during the original assessment.

It was observed by the Two-Member Tribunal Bench of Accountant Member Renu Jauhri and Judicial Member Madhumita Roy that, “Considering the order passed by the Coordinate Bench, we find that in the instant case before us when specific queries were raised by the AO, reply was duly filed by the assessee along with details as asked for which has been duly considered by the Ld. AO in its proper perspective and the return filed by the assessee was then accepted, taking into consideration of the judgment passed by the Hon’ble Delhi High Court in the case of PVIT Vs. Indian Farmers & Fertilizers Co-operative Ltd.”

Usha Patodia vsITO CITATION : 2025 TAXSCAN (ITAT) 1460

In a recent ruling, the Kolkata bench of the Income Tax Appellate Tribunal ( ITAT ) has directed the Assessing Officer (AO) to delete the addition made under Section 115BBE of the Income Tax Act on cash deposits that the assessee had already declared as income under “Other Sources” in the tax return.

It was further noted by the bench of Pradip Kumar Choubey (Judicial Member) and Rajesh Kumar (Accountant Member) that, “In our opinion, the order passed by the ld. Assessing Officer and confirmed by the CIT(A) is totally wrong as the same income cannot be taxed twice.”

Mahendra SinghDasana vs ITO CITATION : 2025 TAXSCAN (ITAT) 1461

The Mumbai bench of Income Tax Appellate Tribunal ( ITAT ) deleted addition of cash withdrawal under Section 69C of the Income Tax Act, 1961, observing that the documentary evidence including gold loan records validated gold loan business, thus there is no unexplained nature in the withdrawal.

The Bench comprising Sandeep Gosain (Judicial Member) and Girish Agrawal (Accountant Member) examined the nature of the gold loan business, bank statements, gold loan accounts, borrower ledgers, customer confirmation letters, alongside other supporting documents furnished by the assessee.

DeputyCommissioner of IncomeTax vs Mehta Emporium Jewellers CITATION : 2025 TAXSCAN (ITAT) 1462

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) ruled that the assessee's explanation for an unsigned loose paper found during search was not convincing and restored the Rs. 75 lakh addition under Section 69A of the Income Tax Act, 1961, to the Commissioner of Income Tax (Appeals) [CIT(A)] for fresh adjudication.

The two-member bench, comprising Beena Pillai (Judicial Member) and Renu Jauhri (Accountant Member), observed that the assessee's explanation that the document may have been received from a customer while giving jewellery for repair and wrapped in paper did not appear convincing.

Ayesha Steels(P) Ltd vs ITO,Ward-3(4)Civic Centre CITATION : 2025 TAXSCAN (ITAT) 1463

The Delhi Bench of the Income Tax Appellate Tribunal ( ITAT ) has set aside an addition of Rs. 1.91 crore made under Section 68 read with Section 115BBE and held that the cash deposits during the demonetization period, were duly recorded as sales in the assessee’s audited books of account, supported by VAT returns and stock records.

The two-member bench comprising Mahavir Singh (Vice President) and Amitabh Shukla (Accountant Member), observed that the cash deposits were included in the sales figures declared in the audited books of account, which were not rejected by the AO.

ShivprakashRamcharan Sharma vs The ITO CITATION : 2025 TAXSCAN (ITAT) 1464

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) remanded the matter for fresh adjudication and directed the CIT(A) to verify the assessee’s claims regarding the sale consideration of an immovable property, which led to additions of Rs. 30,09,925 as capital gain.

The Two-member bench, comprising Dr. B.R.R. Kumar (Vice President) and Suchitra Kamble (Judicial Member), observed that the assessee’s claims regarding the sale consideration required verification.

RameshPoonamchand Bansal RadhaKrishna Textile Market Vs Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1465

The Surat Bench of the Income Tax Appellate Tribunal (ITAT) ruled that the addition of ₹68.07 lakh as unexplained investment under Section 69 of the Income Tax Act, 1961, was justified due to the assessee’s failure to comply with statutory notices and substantiate the claimed stock with credible evidence.

The two-member bench, comprising Suchitra Raghunath Kamble (Judicial Member) and Bijayananda Pruseth (Accountant Member) observed that the assessee’s claim of expenses in M/s Ram Roop Enterprises was unsupported by audited accounts or credible evidence.

The ITO vs RajAutos CITATION : 2025 TAXSCAN (ITAT) 1466

The Chandigarh Bench of the Income Tax Appellate Tribunal ( ITAT ) quashed the reassessment notice issued under Section 148 of the Income Tax Act, 1961, and deleting an addition of Rs. 16,15,47,810 by holding that the reassessment was based on incorrect facts, rendering the proceedings invalid.

The two-member bench comprising Rajpal Yadav (Vice President) and Krinwant Sahay (Accountant Member), observed that the AO had relied on erroneous information from the Department’s Insight Portal without verifying it against the assessee’s assessment records.

ITO vs M/sAntriksh Growth FundLtd CITATION : 2025 TAXSCAN (ITAT) 1467

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has invalidated reassessment proceedings initiated and declared the approval granted under Section 151 of the Income Tax Act, 1961, as mechanically sanctioned without due application of mind, rendering the reassessment order void.

The two-member bench, comprising Challa Nagendra Prasad (Judicial Member) and M. Balaganesh (Accountant Member) examined the approval proforma and observed that the AO’s citation of Section 147(C), a non-existent provision, indicated a clear lack of application of mind.

The SouthIndian Bank Ltd vs Dy.Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1468

The Cochin Bench of Income Tax Appellate Tribunal ( ITAT ) dismissed the appeal filed by South Indian Bank Ltd., holding that the Assessing Officer (AO) cannot go beyond the scope of the revision order passed under section 263 of the Income Tax Act,1961 while passing the consequential assessment order.

The two member bench comprising Sonjoy Sarma (Judicial Member) and Inturi Rama Rao (Accountant Member) heard the rival submissions and perused the material on record. It found that the issues raised in the appeal did not arise from the consequential assessment order passed under section 143(3) read with section 263 of the Act. These issues related to additional claims made before the CIT(A) against the assessment order.

Goldman Sachs(India) SecuritiesPvt. Ltd vs Assessment Unit, Income Tax Department CITATION : 2025 TAXSCAN (ITAT) 1469

The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) granted relief to Goldman Sachs by deleting a ₹19.8 lakh transfer pricing adjustment under section 92CA of Income Tax Act,1961 as margins exceeded comparables.

The two member bench comprising Sandeep Singh Karhail (Judicial Member) and Narendra Kumar Billaiya (Accountant Member) considered the submissions of both sides and examined the material on record. Based on discussions with the assessee’s employees during APA proceedings in earlier years, it was noted that these employees had earned carried interest from the GS Group ranging from about ₹1.5 crore to ₹5 crore.

IllabenJayantkumar Doshi vsIncome Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1470

The Rajkot Bench of Income Tax Appellate Tribunal ( ITAT ) directed the Assessing Officer (AO) to correct the erroneous double addition of ₹13.32 lakh in the assessee’s income computation and recompute the taxable income.

A single member bench comprising Dr.A.L.Saini (Accountant Member) heard both parties, reviewed the submissions, documents, and case laws cited, and examined the facts, including the findings of the CIT(A).

Punjab NationalBank vs ITO CITATION : 2025 TAXSCAN (ITAT) 1471

The Chandigarh Bench of Income Tax Appellate Tribunal ( ITAT ) allowed the appeal by Punjab National Bank and deleted the Tax Deducted at Source (TDS) demand of Rs. 7,48,060 for Assessment Year (AY) 2016-17 after accepting complete Forms 15G/15H submitted by the assessee.

The two member bench comprising Laliet Kumar (Judicial Member) and Manoj Kumar Aggarwal (Accountant Member) perused the assessee’s paper book and observed that copies of Form No. 15G/15H containing the requisite details with all columns duly filled were furnished. It noted that similar demands were raised for AYs 2013-14 and 2014-15, where the assessee had submitted similar documents to the CIT(A), who deleted those demands.

Lovely Das vsAddl/JCIT CITATION : 2025 TAXSCAN (ITAT) 1472

The Kolkata Bench of Income Tax Appellate Tribunal ( ITAT ) allows Tax Deducted at Source ( TDS ) credit to the person in whose hands the income is assessable under Rule 37BA of Income Tax Rules,1962.

The two member bench comprising Sonjoy Sarma (Judicial Member) and Rakesh Mishra (Accountant Member) reviewed the case and noted that under Rule 37BA, if income belongs to someone other than the person from whose name TDS was deducted, the TDS credit should be given to the actual income owner, provided proper declaration is made and records are updated.

Hindustan SpimgEngineering Pvtvs Assistant Director of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1473

The Chennai Bench of Income Tax Appellate Tribunal ( ITAT ) condoned delay and remitted the matter to the Assessing Officer (AO ) for verification regarding the disallowance of delayed employee Employee State Insurance ( ESI ) and Provident Fund ( PF ) contributions under section 43B of Income Tax Act,1961.

The two member bench comprising Manu Kumar Giri (Judicial Member) and Padmavathy S (Accountant Member) heard both sides and looked at the records. The assessee filed the original return on 30.10.2018, showing income of Rs. 60,15,699. The return was processed under section 143(1), increasing income to Rs. 89,03,800.

The Birla GroupHolding PrivateLimited vs ACIT, Circle 2(1), Ujjain CITATION : 2025 TAXSCAN (ITAT) 1474

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT ) ruled that partnership firm losses cannot be added back while calculating book profit under section 115JB of Income Tax Act,1961.

The tribunal found the revenue’s reliance on other judgments misplaced, stating that book profit computation under section 115JB must follow the specific provisions of the Explanation strictly. Losses could not be mechanically added back unless explicitly provided for.

Smt. Prema Devivs The DeputyCommissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1475

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) has invalidated assessment proceedings initiated under Section153C of the Income Tax Act, 1961 for Assessment Years (AY) 2008-09 to 2012-13 due to the notices being barred by limitation and lacking valid satisfaction as required under the law.

The Two-member bench comprising Shri S.S. Viswanethra Ravi (Judicial Member) and S. R. Raghunatha (Accountant Member) observed that for AY 2008-09, the notice under Section 153C was issued beyond the permissible six-year period, as the satisfaction note fell outside the statutory limit.

Vaibhav Singhvs ITO CITATION : 2025 TAXSCAN (ITAT) 1476

The Jaipur Bench of the Income Tax Appellate Tribunal (ITAT) has held that the failure to furnish Form No. 67 before the due date prescribed under Section 139(1) of the Income Tax Act does not automatically disentitle an assessee from claiming Foreign Tax Credit (FTC).

The Jaipur Bench, comprising Dr. S. Seethalakshmi (Judicial Member) and Shri Rathod Kamlesh Jayantbhai (Accountant Member), agreed with Singh. Referring to its earlier rulings in Juan Miguel Guerrero Ferrer v. DCIT and Rajesh Kumar Lakhran v. ITO, the Tribunal reiterated that neither Section 90 nor the DTAA stipulates that late filing of Form 67 would nullify an FTC claim. Rule 128, the bench observed, is procedural and cannot override substantive treaty rights.

Darius SamMotashaw vs ACIT CITATION : 2025 TAXSCAN (ITAT) 1477

The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) deleted the unexplained cash credit addition of ₹2.85 lakh under section 68 of Income Tax Act,1961,due to the Assessing Officer’s (AO) failure to verify the broker documents.

A single member bench of Sandeep Gosain (Judicial Member) heard the counsels of both parties, reviewed the materials on record, and examined the orders passed by the authorities.

JayshreebenJayantibhai Palsanavs ITO, Ward-1(9) CITATION : 2025 TAXSCAN (ITAT) 1478

In a major relief to minor investors, the Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench, has allowed the appeal of the assessee and held that the rebate under Section 87A of the Income Tax Act, 1961, is available even when the assessee’s total income comprises short-term capital gains (STCG) taxable under Section 111A, provided the total income does not exceed ₹7,00,000 and the assessee has opted for the new tax regime under Section 115BAC(1A).

The Tribunal observed that neither Section 87A nor Section 111A contained any express restriction for AY 2024-25, and the prospective amendment in the Finance Act, 2025 effective AY 2026-27 confirmed the absence of such a bar for the year under appeal. It held that Section 87A operates independently under Chapter VIII and applies to total tax computed, regardless of whether it arises from slab or special rates, provided the income threshold is met.

Mrs. Surekha vsThe Income TaxOfficer CITATION : 2025 TAXSCAN (ITAT) 1479

The Income Tax Appellate Tribunal (ITAT), Bangalore Bench, has held that once the death of an assessee and the particulars of the legal representative are duly updated on the Income Tax e-filing portal, such updation constitutes sufficient intimation to the Income Tax Department.

The Bench stated that even the filing of an appeal in such cases through the online system is only possible if the legal representative’s details are already recorded. The Tribunal held that issuing a notice under Section 148A(b) after such updates and proceeding to complete assessment under Section 147 amounted to a fatal jurisdictional defect.

DhanasekaranRamasamy vs IncomeTax Officer CITATION : 2025 TAXSCAN (ITAT) 1480

The Income Tax Appellate Tribunal ( ITAT ), Chennai Bench, has partly allowed an appeal in a case involving additions under Section 69 of the Income Tax Act, 1961 on the ground of unexplained investments, holding that certain sums invested in property were satisfactorily explained as sourced from personal savings and brother’s gift.

The Bench held that ₹7.20 lakh shown as an opening balance in the partnership ledger could not be taxed in the relevant year.

ITO vsUniglobal Papers Pvt.Ltd. CITATION : 2025 TAXSCAN (ITAT) 1481

The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) has dismissed the Revenue’s appeals for three assessment years and held that in the absence of any incriminating material found during the search, no additions can be made in unabated assessments under section 153A of the Income Tax Act, 1961.

The bench comprising Pradip Kumar Choubey (Judicial Member) and Rajesh Kumar (Accountant Member) agreed with the CIT(A)’s findings and relied on the Supreme Court’s ruling in Pr. CIT v. Abhiser Buildwell (2023), where the court reiterated that in non-abated/completed assessments under section 153A, no addition can be made without incriminating material found during a search.

Umia CharitableTrust 301 vs CIT CITATION : 2025 TAXSCAN (ITAT) 1482

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has condoned the delay in filing an appeal after finding that the impugned order had been sent by the department was to the assessee’s spam folder, and remanded the matter to the Commissioner of Income Tax (Exemptions) (CIT(E)) for fresh consideration of its application for the registration under section 12AB of the Income Tax Act, 1961.

The Bench comprising Sandeep Gosain (Judicial Member) and Prabhash Shankar (Accountant Member) observed that there was no effective service of the order on the assessee and relied on the principles laid down by the Supreme Court in Land Acquisition Collector vs. Mst. Katiji (1987), where the court condoned the delay and admitted the appeal for hearing on merits.

The AhmedabadEngineeringManufactures vs The CIT (Exemption) CITATION : 2025 TAXSCAN (ITAT) 1483

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has upheld the order of the Commissioner of Income Tax (Exemptions) (CIT(E)) rejecting the 12AB registration as its objects were for the benefit of its members and employees or ex-employees only, and not for the public at large.

The Bench, comprising Suchitra Kamble (Judicial Member) and Narendra Prasad Sinha (Accountant Member), found that the objects were not aimed at the general public but at a specific section of society. It agreed with the CIT(E) that such objects could not be termed charitable under section 2(15).

Niraj SarjuMandal vs DCITCentral Circle CITATION : 2025 TAXSCAN (ITAT) 1484

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT ) quashed the notice under section 148 of the Income Tax Act,1961 and reassessment proceedings, as the Assessing Officer (AO) reopened the assessment beyond three years without proper approval from the Principal Chief Commissioner or equivalent authority.

A single member bench of Pawan Singh (Judicial Member) examined the arguments and orders carefully. It found that the case was reopened after more than three years from the end of the assessment year.

Income TaxOfficer vs SarlaMurli Teckchandaniv CITATION : 2025 TAXSCAN (ITAT) 1485

The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) citing documentary and third-party evidence, upheld the Commissioner of Income Tax(Appeals)[CIT(A)]’s order deleting the ₹4.24 crore addition made under Section 68 of Income Tax Act,1961, for unexplained cash credit received from the assessee’s brother.

The two member bench comprising Justice (RETD.) C.V.Bhadang (President) and Vikram Singh Yadav (Accountant Member) considered the submissions and examined whether the respondent-assessee had satisfactorily explained the source of ₹4,24,97,520.

Sapna Sameer vsITO CITATION : 2025 TAXSCAN (ITAT) 1486

The Kolkata Bench of Income Tax Appellate Tribunal ( ITAT ) remanded a case for fresh assessment where cash deposits of about ₹10 crore in the assessee’s bank account were treated as unexplained.

The two member bench comprising Sonjoy Sarma (Judicial Member) and Rakesh Mishra (Accountant Member) noted that the assessee was not properly represented before both the AO and the CIT(A). The assessee counsel sought a remand, while the departmental representative supported the CIT(A)’s order.

BhaveshbhaiHaribhai Kanani vsIncome Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1487

The Rajkot Bench of Income Tax Appellate Tribunal (ITAT) held that audit under section 44AB is not required and penalty under section 271B of the Income Tax Act,1961 is not leviable when no books of account are maintained.

A single member bench of Dr.A.L Saini (Accountant Member) heard both parties, reviewed the submissions, documents, case laws, and the findings of the CIT(A). It noted that the assessee had filed the return under section 44AD, under which maintaining books of account was not required. Since no books were maintained, no penalty could be imposed under section 271B.

Sonali Dhawanvs ITO,International Tax CITATION : 2025 TAXSCAN (ITAT) 1488

The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) directed the Assessing Officer (AO) to verify the taxpayer receipt and allow full credit where the Tax Deducted at Source (TDS) credit was denied due to a Form 26AS mismatch.

The two member bench comprising Sandeep Gosain (Judicial Member) and Vikram Singh Yadav (Accountant Member) noted that data may not always reflect in Form 26AS due to technical or other reasons. Where the assessee provided proper evidence, she could not be denied the TDS credit, subject to verification.

Anila NarendraSangani vs IncomeTax Officer CITATION : 2025 TAXSCAN (ITAT) 1489

The Rajkot Bench of Income Tax Appellate Tribunal ( ITAT ) partly allowed an appeal and held that the penalty under section 271(1)(b) of Income Tax Act,1961 for multiple defaults is reduced to one, limiting the levy to Rs. 10,000 for the Assessment Year (AY )2013-14.

A single member bench Dr. A.L. Saini (Accountant Member) noted that the assessee, being illiterate and a farmer, had relied on his tax consultant, who failed to respond to the first notice during assessment. Since the assessee complied with subsequent notices, the tribunal held that the penalty under section 271(1)(b) should be imposed for one default only.

ITO – 41(1)(3)vs Pravin ManilalPanchal CITATION : 2025 TAXSCAN (ITAT) 1490

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has upheld the order of the Commissioner of Income Tax (Appeals) ( CIT(A) ) restricting disallowance on alleged bogus purchases to 12.5% and held that only the profit element embedded in such transactions is taxable when sales and manufacturing activity are not disputed.

The Single bench comprising Pawan Singh (Judicial Member), reiterated that in cases where the sales are accepted and the manufacturing activity is not in dispute, only the profit element embedded in the alleged bogus purchases can be brought to tax.

Manoj JairamdasBhojwani vsIncome-tax Officer CITATION : 2025 TAXSCAN (ITAT) 1491

The Income Tax Appellate Tribunal (ITAT), Agra Bench, has set aside an ex-parte order passed by the Commissioner of Income Tax (Appeals) [CIT(A)] and directed a fresh hearing, noting that the CIT(A) failed to discuss the merits of the case. The bench pitched the importance of adhering to the principles of natural justice and providing a fair opportunity to the assessee.

The ITAT bench, comprising Judicial Member Sunil Kumar Singh and Accountant Member Brajesh Kumar Singh, observed that while the assessee had been unresponsive to multiple notices issued by the CIT(A), the appellate authority was still required to evaluate the case on its merits. The tribunal noted that the CIT(A)’s order lacked any substantive discussion or reasoning, which rendered it unsustainable in law.

HMA AgroIndustries Limited vsDCIT Central Circle CITATION : 2025 TAXSCAN (ITAT) 1492

The Income Tax Appellate Tribunal (ITAT), Agra Bench, has slammed the tax department for issuing a show-cause notice late at night and giving just one day to respond, calling the rushed process unfair and against natural justice.

The tribunal set aside an order holding HMA Agro Industries Limited as an "assessee in default" for alleged TDS lapses and directed a fresh hearing, emphasizing that taxpayers must get reasonable time to defend their case.

Urmila RajendraMundra vs IncomeTax Officer CITATION : 2025 TAXSCAN (ITAT) 1493

The Jaipur Bench of the Income Tax Appellate Tribunal (ITAT) has deleted the penalty imposed under section 270A of the Income Tax Act, 1961, and held that mere disallowance of the capitalized interest does not amount to misreporting of income, but amounts to only ‘under-reporting’.

The Bench comprising Narinder Kumar (Judicial Member) and Rathod Kamlesh Jayantbhai (Accountant Member) observed that there was no finding by the AO or the CIT(A) to establish that the assessee had concealed income or furnished inaccurate particulars with the intent to mislead. The Tribunal noted that all material facts were on record and the disallowance arose from a legal interpretation, not from suppression or falsification of facts.

M/s. Udai LalMahabir Prasad vsThe ITO CITATION : 2025 TAXSCAN (ITAT) 1494

The Jaipur Bench of the Income Tax Appellate Tribunal (ITAT) has imposed a cost of ₹2,000 on M/s. Udai Lal Mahabir Prasad for failing to explain the delay in filing its appeal and remanded the disallowance issue to the Assessing Officer (AO) for fresh adjudication.

The bench comprising Narinder Kumar (Judicial Member) and Rathod Kamlesh Jayantbhai (Accountant Member) noted that there was no convincing explanation or supporting evidence for the delay, and therefore agreed that the delay was unexplained.

Income TaxOfficer vs Alwar Maltand Agro Foods CITATION : 2025 TAXSCAN (ITAT) 1495

The Income Tax Appellate Tribunal (ITAT), Jaipur Bench, has held that payments made by a liquor manufacturing company to brand owners under the head “Franchise Expenses” do not constitute “fees for technical services” or “royalty” under Section 194J of the Income Tax Act, 1961, and therefore do not attract tax deduction at source (TDS) provisions.

The Tribunal found that the nature of payments, supported by separate profit and loss accounts for each brand, reflected profit-sharing arrangements under business contracts rather than technical or managerial service fees. It noted that scrutiny assessments under S.143(3) for AYs 2013–14 and 2014–15 had accepted the claim, and the Revenue had not disputed earlier relief granted to the assessee.

Satya PalKhurana vs ACIT CITATION : 2025 TAXSCAN (ITAT) 1496

The Income Tax Appellate Tribunal (ITAT), Delhi Bench has set aside the assessment for Satya Pal Khurana, directing the Assessing Officer (AO) to re-evaluate the fair market value of a shop sold under distress circumstances for capital gains calculation.

The appeal was partly allowed for statistical purposes, with the matter remanded for fresh adjudication. Tax professionals note this decision as an important clarification: when a property’s sale is forced under exceptional conditions, standard stamp duty valuations may not apply, and actual market realities must be considered in capital gains calculations.

M/s ShagunJewellers (P) Ltd vsDy. CIT CITATION : 2025 TAXSCAN (ITAT) 1497

The Income Tax Appellate Tribunal ( ITAT ), Delhi Bench has directed deletion of income taxadditions made on account of alleged interest payments connected with supposed cash loans.

Taking cognizance of this precedent, the present Bench found that circumstances in the years under appeal were identical. It held that additions could not survive in the absence of concrete material linking the assessee with cash-based interest payments. Respectfully following its earlier ruling in the assessee’s own case, the Tribunal directed deletion of the impugned additions across all three assessment years.

Ms.ComalRamachandran Gayathrivs The Deputy Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1498

The Chennai Bench of the Income Tax Appellate Tribunal ( ITAT ) has allowed the appeal by the assessee by restricting the addition of demonetization cash deposits to 50% and held that the applicable rate of tax is 30% under section 115BBE of the Income Tax Act, 1961, not 60%.

The Bench comprising George George K(Vice President) and Padmavathy S (Accountant Member) noted that the assessee could not substantiate the entire claim with evidence, but some part of the business was acknowledged.

M/s. K.K.Tourist Home vs Dy.Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1499

The Cochin Bench of the Income Tax Appellate Tribunal (ITAT) has upheld the search assessments search assessments framed under section 153A of the Income Tax Act, 1961 and dismissed the assessee’s appeals challenging the validity of the proceedings, the approval of the Joint Commissioner of Income Tax (JCIT), and additions linked to incriminating material seized during the search operations.

The Bench, comprising Sonjoy Sarma (Judicial Member) and Inturi Rama Rao (Accountant Member), observed that the search assessments were legally valid, the JCIT had granted proper approval after due consideration, and the additions were based on incriminating material found during the search.

The JointCommissioner of IncomeTax vs ZF Wind Power Coimbatore Pvt CITATION : 2025 TAXSCAN (ITAT) 1500

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) has held that receipts from scrap sales, when linked to regular manufacturing activity, are to be treated as operating income for transfer pricing purposes. The Tribunal upheld the order of the Commissioner of Income Tax (Appeals) (CIT(A)), treating ₹26,18,539 earned from the sale of packing material as income from an operating nature.

The Bench comprising George George K (Vice President) and S.R. Raghunatha (Accountant Member) observed that scrap sales arising from the course of manufacturing are part of operational activity and cannot be excluded for computing margins under transfer pricing. The Tribunal found that the CIT(A) was justified in treating the scrap sale receipts as operating income.

SubramaniamMohan Sundaram vsPCIT (Central)-2 CITATION : 2025 TAXSCAN (ITAT) 1501

The Chennai Bench of Income Tax Appellate Tribunal ( ITAT ) sets aside Principal Commissioner of Income Tax (PCIT) order directing reassessment of investments and fixed deposits under Section 263 of Income Tax Act,1961, holding that the Assessing Officer (AO) had properly verified details and the order was not erroneous or prejudicial to revenue.

Relying on judicial precedents, the tribunal observed that Section 263 can be invoked only if the AO’s order is both erroneous and prejudicial to revenue. In this case, both conditions were not met. The bench held that the PCIT wrongly invoked Section 263, and therefore, the order under Section 263 was set aside.

Institute ofDriving &Traffic Research vs Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1502

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) deleted the addition of ₹25.50 lakh made for non-electronic filing of Form 10 and directed the Assessing Officer (AO ) to allow the deemed application of income.

The two member bench comprising Yogesh Kumar U.S (Judicial Member) and S.Rifaur Rahman (Accountant Member) heard both sides and noted that in its earlier order dated 03.01.2023, it had directed the AO to consider both the manually filed Form No. 10, which was submitted on time, and the electronically filed form, and decide the matter as per law. That order had become final as the Department had not challenged it.

AsianetSatellite CommunicationsLtd vs Asst. Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1503

The Cochin Bench of Income Tax Appellate Tribunal ( ITAT ) granted relief to Asianet Satellite Communications Ltd., allowing deduction of interest on delayed statutory payments, including Tax Deducted at Source (TDS), service tax, and entertainment tax, as a business expenditure.

The two member bench comprising Soundararajan K (Judicial Member) and Inturi Rama Rao (Accountant Member) considered whether interest paid on belated payment of entertainment tax, service tax, and TDS was a business expense. It noted that the Supreme Court in Mahalakshmi Sugar Mills held that interest or statutory charges paid in a compensatory nature were allowable under Section 37(1).

Travel FoodServices DelhiTerminal 3 Pvt.Ltd. vs ACIT CITATION : 2025 TAXSCAN (ITAT) 1504

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) applying the consistency principle, deleted the disallowance of INR 17.95 lakh royalty expenses made by the Assessing Officer (AO).

The two member bench comprising Mahavir Singh (Vice President) and Manish Agarwal (Accountant Member) heard both parties and reviewed the record. It noted that in AYs 2012-13 to 2015-16, the CIT(A) had deleted similar disallowances after holding that the Southern Switchgear Ltd. case did not apply and that the facts were closer to the Delhi High Court ruling in Sharda Motor Industrial Ltd., where royalty payments were treated as revenue expenditure.