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

ITAT Gives Taxpayer Second Chance to Prove ₹50 Lakh Property Purchase Source

Miteshkumar Dhanjibhai Patel vsIncome Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1505

The Income Tax Appellate Tribunal (ITAT) Ahmedabad has granted a taxpayer another opportunity to explain the source of funds for a ₹50 lakh property purchase made back in 2011. The tribunal set aside earlier tax orders and directed the Assessing Officer to re-examine fresh evidence about the funding arrangement.

Judicial Member Suchitra Kamble and Accountant Member Narendra Prasad Sinha found this approach flawed. They noted that while Miteshkumar failed to explain the source during initial assessment, the appellate authority should have properly examined the fresh evidence instead of summarily dismissing it. The father-in-law's disclosed income appeared sufficient to explain the ₹49 lakh transfer, meriting proper verification.In conclusion, the appeal was allowed for statistical purposes.

ITAT Slams CIT(A) for Skipping Remand Report, Orders Re-Hearing in Rs. 99.5 Lakh Cash Deposit Case

Income Tax Officer vs S3Tradecom Pvt. Ltd CITATION : 2025 TAXSCAN (ITAT) 1506

The Income Tax Appellate Tribunal (ITAT) Ahmedabad bench has set aside an order by the Commissioner of Income Tax (Appeals) for failing to call for a remand report in a case involving unexplained cash deposits of Rs. 99.5 lakh during the demonetisation period. The tribunal directed a fresh hearing, emphasizing the need for a proper fact-finding process.

Judicial Member Siddhartha Nautiyal and Accountant Member Annapurna Gupta presided over the case. They ruled that the CIT(A)’s order could not be sustained and restored the matter for a fresh hearing. The tribunal directed the CIT(A) to reconsider the case after examining the remand report and the pending bank information.The case will now be reheard by the CIT(A) with the additional evidence taken into account.

ITAT Gives Rural Trust Second Shot at 80G Tax Benefits After Portal Confusion

Gram Seva Samaj Vankal vsCommissioner of Income Tax (Exemption) CITATION : 2025 TAXSCAN (ITAT) 1507

The Income Tax Appellate Tribunal (ITAT) Ahmedabad has granted a small rural trust from Surat district, another chance to secure crucial 80G tax-exempt status after its initial application was rejected due to procedural misunderstandings. The tribunal set aside the Commissioner of Income Tax (Exemption)'s rejection order, noting the trust's genuine difficulties in navigating digital tax processes.

The ITAT order directs the CIT(E) to freshly consider the application, this time accounting for the existing 12A approval and giving the trust proper hearing opportunities. The tribunal made clear this wasn't a judgment on the trust's merits but about ensuring fair process. Gram Seva Samaj must now actively participate in the new proceedings and submit all pending documentation.

ITAT Grants Second Chance; Trust's 12AB & 80G Registration Denial Set Aside for Fresh Hearing

Stellin Foundation vs The CIT CITATION : 2025 TAXSCAN (ITAT) 1508

The Income Tax Appellate Tribunal (ITAT) Ahmedabad bench has given a trust, another opportunity to secure tax-exempt registrations under Sections 12AB and 80G(5) of the Income Tax Act. The tribunal set aside earlier rejection orders by the Commissioner of Income Tax (Exemption) and directed a fresh hearing, citing the trust’s undertaking to submit pending documents.

Dr. BRR Kumar and T.R. Senthil Kumar pronounced the order, allowing the appeals for statistical purposes. The trust must now act swiftly to comply with documentation requirements during the fresh hearing to avoid another rejection.

Receiving Gifts Before Wedding Date Cannot Be Treated as Ungenuine Without Proof: ITAT Deletes ₹4.31 Lakh Unexplained Cash Deposit Addition

Manubhai Dahyabhai Bhoi vsIncome Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1509

The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) deleted an addition made by the Assessing Officer (AO), holding that gifts received before a wedding date cannot be treated as ungenuine without contrary evidence.

The two-member bench comprising Dr. BRR Kumar (Vice President) and Siddhartha Nautiyal (Judicial Member) considered the rival submissions and the record. The tribunal observed that a complete list of donors for the wedding gifts was furnished and no defect was pointed out by the AO.

ITAT Gives Taxpayer Second Chance to Prove ₹50 Lakh Property Purchase Source

Miteshkumar Dhanjibhai Patel vsIncome Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1510

The Income Tax Appellate Tribunal (ITAT) Ahmedabad has granted a taxpayer another opportunity to explain the source of funds for a ₹50 lakh property purchase made back in 2011. The tribunal set aside earlier tax orders and directed the Assessing Officer to re-examine fresh evidence about the funding arrangement.

Judicial Member Suchitra Kamble and Accountant Member Narendra Prasad Sinha found this approach flawed. They noted that while Miteshkumar failed to explain the source during initial assessment, the appellate authority should have properly examined the fresh evidence instead of summarily dismissing it. The father-in-law's disclosed income appeared sufficient to explain the ₹49 lakh transfer, meriting proper verification.

ITAT Reduces Disallowance of Foreign Travel Expenses to 25% Due to Partial Documentation

Archi Exim P.Ltd vs The ITO CITATION : 2025 TAXSCAN (ITAT) 1511

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) partly allowed the appeal of the assessee reducing the disallowance of foreign travel expenses to 25% due to partial documentation.

The two member bench comprising Suchitra R. Kamble (Judicial Member) and Makarand V.Mahadeokar (Accountant Member) reviewed the submissions and records and noted that the AO had disallowed Rs.11,10,110/-, which was 50% of the total travelling and boarding expenses of Rs.22,20,220/-, claiming that the Director’s foreign travel to Iran under the CII Business Delegation was not fully supported by documentation.

Non-Issuance of Income Tax Notice u/s 143(2) cannot be Cured u/s 292BB: ITAT

KVRECPL – IRPINFRATECH vs TheAssistant Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1512

The Visakhapatnam Bench of the Income Tax Appellate Tribunal (ITAT) examined whether an assessment finalized under Section 144 of the Income Tax Act, 1961 (Act), without issuance of a mandatory notice under Section 143(2) of the Act, can be upheld or subsequently cured under Section 292BB of the Act, 1961.

The Tribunal Bench comprising Judicial Member Ravish Sood and Accountant Member S. Balakrishnan held that once the assessee had filed a return of income in response to a notice under Section 142(1), the Assessing Officer cannot disregard it.

‘Act of God’ Beats ‘Act of Law’: ITAT Cites Kerala Floods as Valid Reason for Belated ITR, Kozhikode Co-op Society Wins 80P Deduction

Nellikkaparamba Agricultural andWorkers Welfare Co-op. Society Ltd. vs The Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1513

In a ruling that prioritizes empathy over rigid procedural compliance, the Income Tax Appellate Tribunal ( ITAT ), Cochin Bench has allowed a co-operative society to claim an important tax deduction after accepting that the devastating Kerala floods of 2018 were a valid cause for its late income tax filing.

The bench directed the processing centre to amend its earlier rectification order and allow the Section 80P deduction, taking into account the CBDT’s instruction that granted an automatic extension due to the natural disaster.

KSEB is "State": ITAT Rules Cash Payments to Govt. utilities Fall u/s 40A(3) Exception, Deletes Disallowance

Mina Wood Industries vs TheIncome Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1514

The Income Tax Appellate Tribunal ( ITAT ), Cochin Bench has deleted a disallowance made against a business for paying its electricity bill in cash. The tribunal ruled that the Kerala State Electricity Board (KSEB) qualifies as ‘State’ and thus, payments made to it are exempt from the restrictions that normally apply to large cash expenditures under the Income Tax Act.

The bench, comprising Judicial Member Keshav Dubey and Accountant Member Inturi Rama Rao, delved into the provisions of Rule 6DD of the Income Tax Rules, which lists exceptions to the cash payment disallowance. They focused on clause (b) of the rule, which explicitly states that no disallowance shall be made for any payment made to the government. The key question was whether KSEB, a state government undertaking, could be considered ‘government’ for this purpose.

ITAT Rebukes CIT(A) for "Lazy" Dismissal, Orders Fresh Hearing on Demonetization Cash Deposits

Prabheesh Nair vs The Income TaxOfficer CITATION : 2025 TAXSCAN (ITAT) 1515

In a sharp critique of appellate procedure, the Income Tax Appellate Tribunal (ITAT), Cochin Bench has set aside an order that dismissed a taxpayer’s appeal without examining the merits of a significant addition related to demonetization cash deposits. The tribunal strongly emphasized that a first appellate authority cannot dismiss an appeal for non-prosecution without first making a genuine attempt to decide the case on its substantive legal grounds.

The ITAT’s order pointed to Section 250(6) of the Income Tax Act, which mandates that the CIT(A) must frame points for determination and provide a detailed discussion in the order. The bench observed that this duty to decide on merits persists even when an appeal is disposed of ex-parte. The tribunal cited a relevant decision from the Hon'ble Bombay High Court to reinforce this legal principle, noting that the first appellate authority is not permitted to take a "lazy" approach by dismissing matters for non-prosecution without a substantive review.

Chit Fund Company's Appeal Dismissed: ITAT Upholds 90% Disallowance for Lack of Evidence on Commission Payments

Notional Chits & Loans Pvt.Ltd. vs Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1516

The Income Tax Appellate Tribunal (ITAT), Cochin Bench has dismissed an appeal filed by a Thrissur-based chit fund company. The tribunal upheld the tax authorities' decision to disallow ninety percent of a massive commission expenditure claim, citing a complete failure by the company to provide any evidence proving the payments were genuine or for business purposes.

Single Member Bench of Inturi Rama Rao (Accountant Member) found the CIT(A)'s order to be well-reasoned and appropriate, concluding that allowing even ten percent of the claim was a reasonable concession under the circumstances.

Not Business Income, But Still Deductible; ITAT Sides with Kerala Co-op Bank, Quashes Tax Demand

Nallepilly Service Co-op. BankLtd vs The Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1517

The Income Tax Appellate Tribunal (ITAT), Cochin Bench has quashed a tax demand levied on a primary agricultural credit co-operative society, holding that interest income it earned from a district co-operative bank is eligible for deduction under the Income Tax Act. The order provides crucial clarity on the nature of such income for co-operative societies.

Accountant Member Inturi Rama Rao, who authored the order, based the decision squarely on a binding precedent set by the jurisdictional Kerala High Court. The tribunal found that the issue was directly covered by the High Court's decision in the case of PCIT v. Peroorkada Service Co-op. Bank Ltd. (2022). In that judgment, the High Court had clearly distinguished the treatment of such interest income. It held that while this interest does not fall under the category of business income eligible for deduction under Section 80P(2)(a)(i), it is nevertheless deductible under a different clause.In conclusion, the tribunal allowed the bank’s appeal, thereby deleting the addition made by the tax department.

ITAT Deletes Disallowances of Public Relations, Shared Services, and Product Registration of BASF India, Citing No Change in Facts or Law

DCIT, 14(1)(1) vs M/s. BASFIndia Limited CITATION : 2025 TAXSCAN (ITAT) 1518

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) dismissed the appeal by revenue regarding the disallowances of ₹55,00,000 on Public Relations expenses, Shared Service (Malaysia), and Product Registration expenses claimed by the assessee for the Assessment Years (AYs) 2014-15 and 2015-16.

The ITAT Bench comprising Sandeep Singh Karhail (Judicial Member) and Girish Agrawal (Accountant Member observed that the facts and the agreement, as well as the nature of expenses, are identical for the year under consideration as they were in earlier years. There is no change in the facts or law, and no new material has been placed before the tribunal.

ITAT Sets Aside Additions on ₹1.46 Cr Demonetisation Cash Deposits and Derivative Losses, Remands for Fresh Adjudication

APR Jewellers (P) Ltd vs IncomeTax Officer CITATION : 2025 TAXSCAN (ITAT) 1519

The Hyderabad Bench of the Income Tax Appellate Tribunal (ITAT) has set aside the additions made on account of cash deposits during the demonetisation period and disallowance of loss on the derivative transactions, and remanded the matter for fresh adjudication after the verification of sales records and transaction nature.

The Bench comprising Vijay Pal Rao (Vice President) and G. Manjunatha (Accountant Member) observed that the authorities below failed to properly verify bills, vouchers, and sales records, and also mischaracterised derivative transactions as share dealings.

Disallowance of Excess Deductions and House Property Loss in Revised Returns: ITAT Sets Aside Order FAA’s Order

Shri Gunapalan Mallinathan vsThe Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1520

The Chennai Bench of Income Tax Appellate Tribunal ( ITAT ) set aside the order of the First Appellate Authority (FAA) and directed the Assessing Officer (AO) to consider the original return while deciding the case involving disallowance of excess deductions and house property loss claimed in revised returns for Assessment Year (AY) 2020-21.

The two member bench comprising George George K (Vice President ) and Amitabh Shukla (Accountant Member) heard both sides and reviewed the records. It noted that the assessee, an ex-employee of BHEL, had filed the original return based on Form 16 but later filed revised returns on wrong advice, increasing deductions and house property loss.

Genuineness of Penny Stocks Share Sale: ITAT Upholds ₹21.72 Lakh Addition as Sham Transaction

Krutik Ashokkumar Parikh-HUF vsIncome Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1521

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT )upheld the addition of ₹21.72 lakh, treating the sale of Karma ISP penny stock shares as a sham transaction.

The two member bench comprising Dr.BRR Kumar (Vice President) and Siddhartha Nautiyal (Judicial Member) reviewed the case and noted several issues with the transaction. The assessee bought Karma ISP shares in April 2010 but paid for them almost eleven months later without any explanation. Karma ISP was known from investigations as a penny stock often used to generate fake long-term capital gains.

90-Day Delay in Filing Form 10AB for S.80G Approval: ITAT Restores Matter to CIT(E) Pending CBDT’s Decision on Condonation

M/s. Unico Charitable Trust vsThe Commissioner of Income Tax (Exemptions) CITATION : 2025 TAXSCAN (ITAT) 1522

The Chennai Bench of Income Tax Appellate Tribunal ( ITAT ) restores matter to the Commissioner of Income Tax (Exemption) [CIT(E)] pending Central Board of Direct Taxes (CBDT)’s decision on condonation in the case of trust, which faced a 90-day delay in filing Form 10AB for Section 80G of Income Tax Act,1961, approval.

The two member bench comprising George George K (Vice President) and Amitabh Shukla (Accountant Member) heard both sides and noted that the assessee had applied to the competent authority under section 119(2)(b) for condonation of delay in filing Form 10AB.

Book profit to be increased by Expenses debited to P&L w.r.t. exempt income, not Disallowance u/s 14A: ITAT

Bombay Oxygen Investments Ltd vsCommissioner of Income-tax CITATION : 2025 TAXSCAN (ITAT) 1523

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has clarified that while computing book profits under Section 115JB of the Income Tax Act (MAT provisions), only the actual expenditure debited to the profit and loss (P&L) account in relation to exempt income can be added back. The disallowance determined under Section 14A read with Rule 8D of the Income Tax Rules cannot be considered for such adjustments.

The tribunal bench of Saktijit Dey, Vice President and Girish Agrawal, Accountant Member allowed the appeal, directing that book profit should only be increased by ₹17.21 lakh, the actual expenditure debited to P&L and not by any disallowance computed under section 14A.

Name of Assessee not Mentioned in Seized Documents: ITAT deletes Income Tax Additions

Mahesh Narayan Joglekar vs DCITCC CITATION : 2025 TAXSCAN (ITAT) 1524

The Income Tax Appellate Tribunal ( ITAT ) Mumbai Bench has set aside a series of additions made against assessee Mahesh Narayan Joglekar for Assessment Years (AYs) 2011-12 to 2018-19, ruling that proceedings initiated on the basis of seized documents which did not mention the assessee’s name were unsustainable.

The two-member bench comprising Judicial Member Amit Shukla and Accountant Member Girish Agrawal passed the order in multiple appeals filed by Joglekar challenging reassessment and search assessments framed under sections 147 and 153A of the Income Tax Act, 1961.

Income Tax Assessment framed in Name of Non-Existent Entity is Void Ab Initio: ITAT

M/s. Software ONE India Pvt. Ltdvs ACIT CITATION : 2025 TAXSCAN (ITAT) 1525

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) held that an income tax assessment framed in the name of a non-existent entity is void ab initio.

The two member bench comprising Yogesh Kumar U.S (Judicial Member) and M.Balaganesh (Accountant Member) noted that this question had been settled by the Supreme Court in PCIT vs Maruti Suzuki India Limited, where it was held that issuing a notice in the name of an entity that ceased to exist under a sanctioned amalgamation scheme was invalid and could not be cured by participation.

ITAT Quashes CIT(A) Order for Incorrect Surcharge as CPC Corrects Dividend Tax to 15%

M/s Srijan Family Trust vsIncome Tax officer CITATION : 2025 TAXSCAN (ITAT) 1526

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) allowed the appeal and quashed the Commissioner of Income Tax (Appeals)[CIT(A)] order after noting that the Centralized Processing Center (CPC) had corrected the surcharge on dividend income from 37% to the proper 15% under section 154 of Income Tax Act,1961.

The two member bench comprising Yogesh Kumar U.S (Judicial Member) and Manish Agarwal (Accountant Member) reviewed the submissions and the records. It noted that the assessee had filed an application under section 154 of the Act against the original intimation dated 18/12/2023 for AY 2023-24.

ITAT Deletes IGST Refund Addition Holding Refundable Advance Not Taxable u/s 43B

Ecoenergy Insights Limited, vsACIT CITATION : 2025 TAXSCAN (ITAT) 1527

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) deleted the Integrated Goods and Service Tax (IGST) refund addition, holding that the refundable advance of INR 7,36,09,571 was not taxable under section 43B of Income TaxAct,1961.

The two member bench comprising Satbeer Singh Godara (Judicial Member) and Manish Agarwal (Accountant Member) noted that the assessee had not claimed IGST paid on export of services as an expense, as it was an advance payment refundable after submission of export documents.

ITAT Restricts Addition to 5% Profit on Alleged ₹13.80 Crore Bogus Purchases as Sales Accepted and Books Not Rejected

DCIT vs Metarolls Ispat Pvt. LtdCITATION : 2025 TAXSCAN (ITAT) 1528

The Pune Bench of the Income Tax Appellate Tribunal (ITAT) has held that only the profit element of 5% should be added on alleged bogus purchases of ₹13,80,63,994 made by the assessee and observed that the assessee’s sales were not doubted and its books of account had not been rejected.

The Bench comprising R.K. Panda (Vice President) and Astha Chandra (Judicial Member) noted that in the assessee’s case for Assessment Years 2016-17 to 2019-20, the AO had consistently estimated only 5% profit on such alleged bogus purchases rather than disallowing the entire purchase amount.

Taxability of Industrial promotional subsidy received by Mahindra & Mahindra Limited: ITAT directs de novo Adjudication.

Mahindra & Mahindra Limitedvs Assistant Commissioner of Income tax CITATION : 2025 TAXSCAN (ITAT) 1529

In a recent case, the Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has directed the denovo adjudication regarding the taxability of the claim of disallowance of industrial promotional subsidy received by Mahindra & Mahindra Limited from the government the State Government of Maharashtra under the package scheme of incentives, 2007, to be treated as capital receipt.

The Shri Amit Shukla, Judicial Member and Shri Girish Agrawal, Accountant Member observed that the claim of the assessee is more in respect of the amended definition whereby it has attempted to justify the claim even within the amended definition of income, effective from Assessment Year 2016-17 which has not been elaborately discussed and dealt with by CIT(A) while adjudicating on the issue. The CIT(A) has made observations in respect of certain documents and details which assessee could not furnish and therefore, the matter could not be taken up holistically in absence of such details and documents.

No records to Show Misuse of Activities Inconsistent with Objects: ITAT restores Trust’s Application for Permanent Registration

Bethany Chapel vs The Income TaxOfficer CITATION : 2025 TAXSCAN (ITAT) 1530

The Income Tax Appellate Tribunal (ITAT), Visakhapatnam Bench, comprising Judicial Member Ravish Sood and Accountant Member S. Balakrishnan, dealt with the issue of rejection of a trust’s application for permanent registration under Section 12AB of the Income Tax Act, 1961, on the ground that its activities were allegedly inconsistent with its stated objects.

The Tribunal bench comprising Ravish Sood, Judicial Member, and Balakrishnan S, Accountant Member, observed that the order was cryptic and non-speaking. It noted that there was no analysis on record to substantiate how the activities of the trust were inconsistent with its objects or what information had not been furnished.

Relief to Axis Finance Ltd: ITAT Allows Club Membership Fees for Employees incurred as Business Expense

Axis Finance Limited vs DeputyCommissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1531

In a ruling of the Mumbai bench of the Income Tax Appellate Tribunal (ITAT), which partly allowed the claim of Axis Finance Ltd, it was held that club membership fees for employees incurred by the company amount to business expenses under section 37 of the Income Tax Act, 1961.

The two member bench of Shri Amit Shukla, Judicial Member and Shri Girish Agrawal, Accountant Member relied in the Supreme Court ruling in the case of CIT vs. United Glass Manufacturing Co. Ltd. [2012] and observed that club membership fees for employees incurred by the assessee is business expense under section 37 of the Act.

Factory Land not Exempted from TDS u/s 194IA: ITAT upholds Income Tax Demand u/s 201 and 201(1A)

Kushalava Spinners & GinnersPrivate Limited vs The Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1532

The Income Tax Appellate Tribunal ( ITAT ), Visakhapatnam, while upholding the demand under Section 201(1) and 201(1A) of the Income Tax Act, 1961 for failing to deduct 1% TDS (Tax Deducted at Source). It ruled that the factory land is exempted from TDS under Section 194IA.

The Tribunal bench comprising Ravish Sood, Judicial Member and Balakrishnan S, Accountant Member condoned the delay, holding that it had arisen on account of lapses by the assessee’s earlier counsel. The Tribunal also admitted the additional documents, which included the Land Sale Deed, a Tripartite Agreement, and an Original Purchase Document.

Indusind Bank Share Transactions Explained, No Unexplained Cash Deposits: ITAT Quashes PCIT’s Revision u/s 263

Teena Garg vs PCIT CITATION : 2025 TAXSCAN (ITAT) 1533

The Chandigarh Bench of the Income Tax Appellate Tribunal (ITAT) has held that the share transactions of the assessee were genuine and not bogus long term capital gains (LTCG), and deleted the Principal Commissioner of Income Tax’s (PCIT) revisionary order passed under section 263 of the Income Tax Act, 1961, which had treated the cash deposits and property purchases as unexplained.

The Bench comprising Vikram Singh Yadav (Accountant Member) and Paresh M. Joshi (Judicial Member) observed that the AO had raised specific queries regarding the alleged bogus LTCG and property transactions, and after considering the assessee’s replies and evidence, consciously accepted her claim. It held that an inadequate inquiry does not empower the PCIT to invoke revision under section 263.

Assessment Beyond Limitation Period Barred u/s 153(2): ITAT Quashes Reassessment and Penalty Against Non-Resident

Smt. Maliha Syeda vs The IncomeTax Officer CITATION : 2025 TAXSCAN (ITAT) 1534

The Hyderabad Bench of the Income Tax Appellate Tribunal (ITAT) has held that where reassessment is not completed within the statutory time limit prescribed under section 153(2) of the Income Tax Act, 1961, the order passed is barred by limitation and quashed the reassessment framed under section 147 and the penalty levied under section 271(1)(c) against the assessee.

The Bench comprising Vijay Pal Rao (Vice President) and G. Manjunatha (Accountant Member) considered the submissions and the material on record and observed that he provision of section 153(2) is clear and categorical, and that once the statutory time prescribed has expired, then the Assessing Officer loses the jurisdiction to pass the reassessment order.

Senior Citizen’s Demonetization ₹10.46L Deposits Explained as Prior Withdrawals: ITAT Sets Aside Cash Deposit Addition u/s 69A

Malti Garg vs The ITO CITATION : 2025 TAXSCAN (ITAT) 1535

The Chandigarh Bench of the Income Tax Appellate Tribunal (ITAT) has held that cash deposits made by the assessee during the demonetization period were explained as being sourced from earlier withdrawals and household savings, and deleted the addition of ₹10,46,500 made under section 69A of the Income Tax Act, 1961.

The Bench comprising Vikram Singh Yadav (Accountant Member) and Paresh M. Joshi (Judicial Member) observed that the AO had ignored the pattern of earlier withdrawals, which showed that an adequate cash balance was available with the assessee at the time of deposit. The Tribunal held that the assessee had explained the source through banking records and the explanation was reasonable. Therefore, the deposits could not be treated as unexplained under section 69A.

Failure to file Mandatory Form 10 B by GUSEC due to Management Change: ITAT remands matter

Gujarat University Startup andEntrepreneurship Council GUSEC vs The ITO CITATION : 2025 TAXSCAN (ITAT) 1536

The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) has remanded the matter to consider the Form 10 B filed belatedly by Gujarat University Startup and Entrepreneurship Council (GUSEC), on finding that the delay and failure in filing occurred due to the change in management.

The two member bench of Dr. BRR Kumar, Vice President and Ms. Suchitra Kamble, Judicial Member viewed that the assessee counsel submitted that there was a change in the management in 2023 (F.Y. 2023-24) and therefore the statutory Form 10B could not be filed within the stipulated date as well as with the return of income. Therefore, the delay was not deliberate or intentional and hence Form 10B should have been taken on record.

ITAT Gives Taxpayer a Costly Second Chance; Rs.10,000 Fine for Negligence, Orders Fresh Hearing on Unexplained Cash Deposits

Gauravkumar Manilal Patel vs TheITO CITATION : 2025 TAXSCAN (ITAT) 1537

The Income Tax Appellate Tribunal ( ITAT ) Surat has granted a fresh assessment opportunity to an individual while imposing a cost of Rs. 10,000 for his non-cooperation with the income tax authorities.

The bench set aside the CIT(A)'s order on the additions and remanded the matter back to the AO for a fresh assessment. The assessee was directed to pay a cost of Rs. 10,000 to the ‘District Legal Services Authority, Surat’ within three weeks and to cooperate fully with the new proceedings.

"Missed Email" Costs Trust Registration, But ITAT Steps In to Ensure Fair Hearing

Shah Manilal Motilal KhadaytaChhatralay and Bhuvan Mandal Gurjar Faliya CITATION : 2025 TAXSCAN (ITAT) 1538

The Income Tax Appellate Tribunal (ITAT) Surat has come to the aid of a trust whose application for registration was rejected after its managing trustee missed critical emails from the tax department. The tribunal set aside the denial, emphasizing that the principles of natural justice must be upheld.

The ITAT set aside the order of the CIT(E) and remanded the matter back to the commissioner. The CIT(E) has been directed to pass a fresh order in accordance with the law after granting the trust a reasonable opportunity of hearing. The tribunal also directed the trust to be more vigilant and to furnish all required details without seeking unnecessary adjournments.

ITAT rules PAN Not Mandatory to Prove Cash Sales, orders Fresh Look at Aadhaar Details

Vijaykumar Jagannath Agarwal vsThe Income Tax Office CITATION : 2025 TAXSCAN (ITAT) 1539

The Income Tax Appellate Tribunal (ITAT) Ahmedabad bench has held that the absence of PAN card details of customers cannot be the sole basis for treating cash sales as unexplained income under Section 69A of the Income Tax Act. The tribunal emphasized that Aadhaar details can serve as valid proof for establishing the genuineness of transactions and directed the Assessing Officer to conduct a fresh verification.

The ITAT restored the matter to the file of the Assessing Officer. It directed the AO to verify the genuineness of the parties using the Aadhaar details provided and to conduct independent inquiries, including issuing notices under Section 133(6), instead of dismissing the evidence outright.

Brought Forward Business Loss Cannot Be Set Off Against Short-Term Capital Gains u/s 50 of Income Tax Act: ITAT

Sabeena Silk Mills vs Income-taxOfficer CITATION : 2025 TAXSCAN (ITAT) 1540

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) held that brought forward business loss could not be set off against short-term capital gains from the sale of depreciated assets under Section 50 of Income Tax Act,1961.

The bench, after examining the facts and relying on the binding ratio laid down by the co-ordinate bench in Everest Kanto Cylinders Ltd. (supra), concluded that the brought forward business loss could not be set off against short-term capital gains computed under Section 50.

Relief for MRF: ITAT Upholds CIT(A) Order Allowing Depreciation and Expenses on Retention Money, Dismisses Revenue’s Appeal

The DCIT vs M/s. MRF Ltd CITATION : 2025 TAXSCAN (ITAT) 1541

The Chennai Bench of Income Tax Appellate Tribunal ( ITAT ) upheld the Commissioner of Income Tax (Appeals)[CIT(A)] order allowing MRF Ltd. to claim depreciation on retention money for capital assets and expenses on retention money withheld on revenue account, and dismissed the Revenue’s appeal for AYs 2013-14, 2015-16, and 2016-17

The appellate tribunal confirmed the CIT(A)’s direction to allow depreciation on retention money for capital assets and retention money withheld on revenue account, and dismissed the Revenue’s grounds of appeal.

Agreement Value at Booking Exceeded Stamp Duty Value: ITAT Deletes ₹38.69L Addition on Sale of 12 Flats as Section 43CA Not Applicable

Bansal Land Developers vs ITO CITATION : 2025 TAXSCAN (ITAT) 1542

The Pune Bench of the Income Tax Appellate Tribunal (ITAT) has deleted an addition of ₹38,69,867 made under section 43CA of the Income Tax Act, 1961, as the agreement value at the time of booking exceeded the stamp duty value and part of the consideration had been received through cheques, making section 43CA inapplicable.

The Bench comprising R.K.Panda (Vice President) and Astha Chandra (Judicial Member) observed that the agreement value at the time of booking was higher than the stamp duty value and part consideration had been received through banking channels, satisfying the statutory conditions. Accordingly, the Tribunal set aside the order of the CIT(A) and directed the deletion of the ₹38,69,867 addition.

ITAT fixes FMV of Land at ₹60/sq.m for Capital Gain Calculation, directs AO to Verify Deduction u/s 54

Vasuben Natwerlal Patel vsIncome Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1543

The Surat Bench of the Income Tax Appellate Tribunal (ITAT) has partly allowed the appeal by fixing the fair market value (FMV) of land at ₹60 per sq.m as on 01.04.1981 for capital gain computation and directed the Assessing Officer (AO) to verify and allow deduction under section 54 of the Income Tax Act 1961 after the examination of facts.

The Bench comprising Pawan Singh (Judicial Member) and Bijayananda Pruseth (Accountant Member) directed the AO to adopt ₹60 per sq.m as the FMV as on 01.04.1981. The AO was further instructed to verify the assessee’s claim of deduction under section 54 and allow it if the statutory conditions were satisfied, after granting a proper opportunity of hearing.

SanDisk India not a Taxable DAPE of Western Digital: ITAT Rejects Survey Based Profit Attribution of ₹194.44 Cr under India-US DTAA

Western Digital Technologies Incvs The Dy. Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1544

The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) has held that SanDisk India is not a Dependent Agent Permanent Establishment (DAPE) of Western Digital Technologies Inc. under Article 5 of the India-US Double Taxation Avoidance Agreement (DTAA), and rejected the attribution of ₹194,44,62,000 made based on a survey.

The Bench comprising Soundararajan K(Judicial Member) and Waseem Ahmed (Accountant Member) observed that the material relied upon by the AO and DRP did not demonstrate that SanDisk India was habitually concluding contracts or securing orders for the assessee but, It was noted that SanDisk India was carrying on software development and design support services, and its transactions were already examined and accepted under transfer pricing provisions.

Assessment set aside as AO Failed to Enquire into ₹90.89L Payments: ITAT upholds Revision u/s 263, Making Order Erroneous and Prejudicial to Revenue

Grant Medical Foundation vs CITExemption CITATION : 2025 TAXSCAN (ITAT) 1545

The Pune Bench of the Income Tax Appellate Tribunal (ITAT) has upheld the revisionary order under section 263 of the Income Tax Act, 1961, and held that the Assessing Officer (AO) failed to enquire into payments of ₹90.89 lakh, rendering the assessment order erroneous and prejudicial to the interest of the Revenue.

The Bench comprising R.K. Panda (Vice President) and Astha Chandra (Judicial Member) held that failure to investigate rendered the assessment order erroneous and prejudicial to the interests of the Revenue under Section 263 of the Income Tax Act.

Failure to consider Benefit of working capital adjustment while computing ALP: ITAT Directs re adjudication against Schneider Electric India Pvt ltd

Schneider Electric India PrivateLimited vs ACIT CITATION : 2025 TAXSCAN (ITAT) 1546

The New Delhi bench of the Income TaxAppellate Tribunal (ITAT) directed the re adjudication against the case of Schneider Electric India Private Limited regarding the allegation of failure to consider the benefit of working capital adjustments while computing the ALP.

The two member bench of Shri S Rifaur Rahman, Accountant Member and Shri Vimal Kumar, Judicial Member considered it expedient to restore all the issues placed before the Tribunal back to the file of the TPO/AO for fresh determination of such issues in the light of submissions made and various claims asserted before the Tribunal. It shall be open to the assessee to make such submissions and adduce such evidences as may be considered expedient. The TPO/DRP/AO shall pass fresh order in accordance with law by way of a speaking order”.

Cash Deposits in Joint Account Declared in Wife’s ITR: ITAT Remits Matter as Individual Fails to Explain Source of Cash Deposits

Mahesh Padmnabhrao Kashikar vsITO, Ward-1, Nanded CITATION : 2025 TAXSCAN (ITAT) 1547

The Pune Bench of Income Tax Appellate Tribunal ( ITAT ) remitted a matter involving cash deposits of ₹14,89,425 in a joint bank account declared in the wife’s income-tax return (ITR) after the individual failed to explain the source of funds.

The two member bench comprising Vinay Bhamore (Judicial Member) and Manish Borad (Accountant Member) rejected this contention, stating that the assessee could not shift the entire responsibility onto the authorities without complying with the notices.

Advance Receivables Qualify as Application of Income u/s 11(2): ITAT directs AO to accept Claim

Lala Gauri Mal Butail Trust VSITO-Exemptions Ward CITATION : 2025 TAXSCAN (ITAT) 1548

The Chandigarh Bench of Income Tax Appellate Tribunal ( ITAT )directed the Assessing Officer (AO) to accept the claim that advance receivables qualify as an application of income under Section 11(2) of Income Tax Act,1961.

The two member bench comprising Laliet Kumar (Judicial Member) and Manoj Kumar Aggarwal (Accountant Member) noted that the AO had never disputed the evidence regarding the increase in advance receivables claimed towards the application of income.

Taxpreparer files ITR-U showing Higher Income without Taxpayer’s Knowledge as OTP Shared: ITAT Remands for Verification

Nazneen Parvez Memon vs ITO CITATION : 2025 TAXSCAN (ITAT) 1549

The Pune Bench of Income Tax Appellate Tribunal ( ITAT ) remanded a matter for verification where a tax preparer filed an updated Income Tax Returns (ITR-U) showing higher income without the taxpayer’s knowledge.

A single member bench comprising Manish Borad (Accountant Member) heard the rival contentions and perused the material on record. It noted that the assessee had filed the original return declaring an income of Rs. 5,15,000, paid self-assessment tax, and the return was processed under section 143(1) of the Act.

Public Listed Companies need not to Prove Source of Source of Share Capital u/s 68: ITAT

Vardhman Polytex Ltd vs DCITCentral Circle -1 CITATION : 2025 TAXSCAN (ITAT) 1550

The Chandigarh Bench of Income Tax Appellate Tribunal ( ITAT ) held that public listed companies are not required to prove the source of the source of share capital under Section 68 of Income Tax Act,1961.

The two member bench comprising Laliet Kumar (Judicial Member) and Manoj Kumar Aggarwal (Accountant Member) after reviewing the facts, held that the impugned addition was not justified.

ITAT Deletes Disallowance made by AO without undertaking Independent Inquiry u/s 133(6) of Income Tax Act

Ajitsinh Takhatsinh Baraiya vsIncome Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1551

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) deleted the disallowance of ₹27,92,370/- made by the Assessing Officer (AO) without undertaking an independent inquiry under Section 133(6) of the Income Tax Act,1961.

The two member bench comprising Dr. BRR Kumar (Vice President) and Siddhartha Nautiyal (Judicial Member) reviewed the submissions of both parties and noted that the appellant-assessee claimed that M/s Harsha Engineers Ltd. had deducted ₹27,92,370/- from gross billings of ₹1,70,00,165/- towards PF, ESIC, canteen expenses, bus fare, and deficiency in services, while only ₹1,27,16,61/- was received.

ITAT Deletes Penalty of ₹96,010 on Alleged Bogus Brick Payment after Department Confirms No Pending Supplies

M/S RPK Bricks Manufactures vsITO CITATION : 2025 TAXSCAN (ITAT) 1552

The Amritsar Bench of Income Tax Appellate Tribunal ( ITAT )allows the appeal of the assessee and deletes the penalty of ₹96,010 on an alleged bogus brick payment after the department confirms no pending supplies.

The two member bench comprising Udayan Das Gupta (Judicial Member) and Manoj Kumar Aggarwal (Accountant Member) noted that the assessee had submitted certificates from the concerned department confirming that no bricks were pending against the payments made in FY 1981-82. The assessee also provided ledger extracts from 01-04-1981 to 31-03-1987, showing that the supplies were made in subsequent years.

Charitable Institution Free to use Accumulated Income up to 5 years without Prior Exhaustion of Current Year’s Income: ITAT

The Income Tax Officer vsUttarPradesh Police and Armed Forces Sahayata Sansthan CITATION : 2025 TAXSCAN (ITAT) 1553

The Lucknow Bench of the Income Tax Appellate Tribunal ( ITAT ) recently ruled that the charitable institution is free to use the accumulated income up to 5years without prior exhaustion of the current year’s income.

The bench of Nikhil Choudhary (AM) and Sudhanshu Srivatsava (JM), therefore, held that a charitable institution has complete freedom to utilize its accumulated income within the permitted five-year window, irrespective of whether the current year’s income has been spent or not.

Individual Fails to Prove Cash Deposits as Land Sale Proceeds by Father: ITAT remits Matter back on Interest of Justice

Rahul Kumar vs ITO CITATION : 2025 TAXSCAN (ITAT) 1554

The Delhi Bench of the Income Tax Appellate Tribunal ( ITAT ) remitted the matter of addition on cash deposits to the Commissioner of Income Tax (Appeals)[CIT(A)] for verifying the genuineness of the transactions.

Accordingly, the bench of Mahavir Singh (VP) remitted the case back to the file of the CIT(A) with directions to adjudicate the matter afresh, after affording the assessee an opportunity to produce relevant documents and evidence to substantiate the claim of land sale proceeds.

₹26 Lakh Shortfall in Permitted TDS: ITAT Directs AO to Allow Full Claim to Schindler India after Verifying Form 26AS

Schindler India Private Limitedvs Deputy Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1555

The Income Tax Appellate Tribunal (ITAT) Mumbai Bench recently directed an Assessing Officer (AO) to allow elevator and escalator manufacturing giant Schindler India Private Limited (Schindler) to claim the entire Tax Deducted at Source (TDS) amount of ₹26,36,208 following due verification of Form 26AS.

After hearing submissions and examining the relevant records, the two-member Bench of the Mumbai Income Tax Appellate Tribunal constituted by Vikram Singh Yadav, Accountant Member and Sandeep Singh Karhail, Judicial Member paid heed to Schindler India’s claim of additional TDS than was permitted.

Pamphlets and Photos of Charity Camps Insufficient to Establish Charity: ITAT Denies S.80G Approval, Holds Trust’s Hospital Runs Commercially

Smt. Vimal Chawla CharitableTrust vs CIT CITATION : 2025 TAXSCAN (ITAT) 1556

The Income Tax Appellate Tribunal ( ITAT ), Chandigarh Bench, has dismissed the appeal of an assessee trust seeking approval under Section 80G(5)(iii) of the Income Tax Act, 1961, holding that the hospital run by the trust functions on a commercial basis rather than as a charitable institution.

The bench of Laliet Kumar (JM) and Manoj Kumar Agarwal (AM) said that while the assessee relied on printed pamphlets and photographs of free health check-up camps, there was no supporting evidence such as patient records, data on the number of beneficiaries, or details of free treatment provided. Such documents, the Tribunal held, “hardly inspire confidence” to establish the existence of genuine charitable activities.

Wrong Reporting of PF/ESI Deposit Dates by Tax Auditor Causes Excess Disallowance: ITAT Directs AO to Verify and Restrict Only to Late Payments

Sunrise Facilitators Pvt. Ltd.vs DCIT Circle CITATION : 2025 TAXSCAN (ITAT) 1557

The Chandigarh Bench of the Income Tax Appellate Tribunal ( ITAT ), in a matter of wrong reporting of PF/ESI employees’ contribution deposit dates by the tax auditor had resulted in a higher disallowance, the AO was directed to verify records.

The bench of Laliet Kumar (JM) and Manoj Kumar Agarwal (AM) noted that the issue of law stood settled against the assessee by the Supreme Court’s ruling in Checkmate Services Pvt. Ltd. v. CIT (2022), which clarified the distinction between employer’s contribution and employees’ contribution.

ITAT upholds Upward Adjustment of Management Support Services on TVS

Deputy Commissioner of IncomeTax vs M/s.TVS Motor Company Limited CITATION : 2025 TAXSCAN (ITAT) 1558

In a recent order, the Chennai bench of the Income Tax Appellate Tribunal(ITAT) upheld the order of the CIT(A) and dismiss all the grounds of appeal raised by the Revenue on the issue of upward adjustment of Rs.17,69,67,000/- on account of management support services. It was observed that the expenses have been governed by a management services agreement dated 29.03.1997 and consequently the assessee has been paying amounts to its holding company SCL.

A two member bench of Shri Aby T Varkey, Judicial Member and Shri Amitabh Shukla, Accountant Member uphold the order of the CIT(A) on the issue of upward adjustments and dismiss all the grounds of appeal raised by the Revenue.

Payments to foreign agents exempt from TDS as income not taxable in India: ITAT

Manisha Kiran Temkar vs ACIT CITATION : 2025 TAXSCAN (ITAT) 1559

The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) allowed the appeal, ruling that payments made to foreign agents for services rendered entirely outside India were not taxable in India and no Tax Deducted at Source ( TDS ) was required.

The two member bench comprising Pawan Singh (Judicial Member) and Padmavathy S (Accountant Member) considered the submissions of both parties and examined the records. It noted that the appellant’s business model was not in dispute.

ITAT allows LTCG Exemption u/s 54 on Sale of Old Flat as Possession of New Flat falls Within Prescribed Period

Payal Kishore Kulchandani vsIncome Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1560

The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) allowed the claim of Long Term Capital Gains ( LTCG )exemption under section 54 of Income Tax Act,1961 on the sale of an old flat, as the possession of the new flat was obtained within the prescribed period.

The two member bench comprising Amit Shukal (Judicial Member) and Reenu Jauhri (Accountant Member) considered the submissions of both parties and the judicial decisions cited by the assessee counsel.

Payments for Multiple Bills Below Rs. 20,000 Each Do Not Attract S. 40A(3) Disallowance: ITAT

Harishkumar Mathuradas Barai vsIncome Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1561

The Rajkot Bench of Income Tax Appellate Tribunal ( ITAT ) ruled that payments for multiple bills, each below Rs. 20,000, do not attract disallowance under section 40A(3) of the Income Tax Act, 1961.

The two member bench comprising Dinesh Mohan Sinha (Judicial Member) and Dr.Arjun Lal Saini (Accountant Member) observed that there was no reason to take a view different from that of the Co-ordinate Bench in the group case of Parsottam Madhavji Bhanusali vs. ITO.

Addition of Rs. 6.75 Lakh Gifts from Sister and Father-in-Law by AO: ITAT Deletes Addition, Accepts Proof of Receipt

Shri Avtar Singh Gill vs DCITCircle CITATION : 2025 TAXSCAN (ITAT) 1562

The Chandigarh Bench of Income Tax Appellate Tribunal ( ITAT ) deleted the addition of Rs. 6.75 lakh gifts from the sister and father-in-law made by the Assessing Officer (AO ), accepting the proof of receipt presented by the assessee.

The two member bench comprising Laliet Kumar (Judicial Member) and Manoj Kumar Aggarwal (Accountant Member) observed that the assessee had adequately established the receipt of gifts before the lower authorities.

Only 10 Cr Disallowed out of Rs. 35cr Depreciation Allowance Claimed by Oriental Insurance Co. Ltd u/s 32 : ITAT restores for Reconsideration

M/s. The Oriental Insurance Co.Ltd vs The ACIT CITATION : 2025 TAXSCAN (ITAT) 1563

The Delhi bench of the Income Tax Appellate Tribunal (ITAT) restored the claim of The Oriental Insurance Co. Ltd under section 32 of the Income Tax Act, 1961, on the disallowance of 10 Crore out of the total depreciation allowance claimed. The tribunal restored the matter for reconsideration.

The two-member bench of Vikas Awasthy, Judicial Member and M. Balaganesh, Accountant Member restored the Ground No. 2 and 2.1 raised by the assessee to the file of AO for consideration in the light of decision taken in earlier years.

AO Relies on Erroneous Software Data for Addition, Ignored Submissions on OPD/IPD Classification: ITAT directs Fresh Adjudication

M/s Sibia Healthcare Pvt. Ltd vsDCIT-Central Circle -1 CITATION : 2025 TAXSCAN (ITAT) 1564

The Income Tax Appellate Tribunal (ITAT), Chandigarh bench has remanded a case involving additions made on account of alleged undisclosed hospital receipts, directing the Assessing Officer (AO) to re-examine the impounded data and undertake a fresh assessment.

The Bench comprising Judicial Member Laliet Kumar and Accountant Member Manoj Kumar Aggarwal held that the entire addition was based on data generated from the hospital’s software, which prima facie did not provide correct information.

Snack Vendor’s Cash Deposits verified via Books and Sale Records: ITAT Deletes Addition, Orders Re-computation

Ms. Reena vs ITO CITATION : 2025 TAXSCAN (ITAT) 1565

The Income Tax Appellate Tribunal (ITAT), Chandigarh “B” Bench has deleted an addition relating to unexplained cash deposits made by a snack vendor, holding that the deposits were duly supported by books of account and property sale records, and directed the Assessing Officer (AO) to re-compute the income after verification.

The Bench comprising of Judicial Member Laliet Kumar and Accountant Member Manoj Kumar Aggarwal observed that the assessee had placed sufficient evidence on record to demonstrate the availability of funds for the impugned deposits.

Real Estate Firm’s EDC Payments to HUDA is of Contractual Nature, Liable to TDS u/194(c): ITAT

DCIT vs M/s Ireo Grace RealtechPrivate Limited CITATION : 2025 TAXSCAN (ITAT) 1566

The Income Tax Appellate Tribunal (ITAT), Delhi Bench allowed the Revenue’s appeals in a case concerning non-deduction of tax at source on External Development Charges (EDC) paid to the Haryana Urban Development Authority (HUDA).

The Bench comprising Judicial Member Satbeer Singh Godara and Accountant Member Naveen Chandra held that the issue was already settled by the jurisdictional Delhi High Court in Puri Construction Pvt. Ltd.

ITAT Applies Test of Human Probabilities, Rejects ₹84.8 Lakh Penny Stock LTCG Claim as ‘Unnatural and Pre-Arranged’

Smt. Chitra Avdhesh Mehta vs ITO CITATION : 2025 TAXSCAN (ITAT) 1567

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) upheld the addition of Rs. 84,79,100 after rejecting the assessee’s claim of long-term capital gains (LTCG) on penny stock transactions, holding that the gains were unnatural and pre-arranged.

The two-member bench comprising Shri Sandeep Gosain (Judicial Member) and Shri Om Prakash Kant (Accountant Member) observed that the assessee was not a regular investor and had entered into such transactions only to claim exempt LTCG.

Income Tax Assessment against Company Dissolved and Struck Off u/s 560(5) of Companies Act Held Invalid: ITAT

Dazzle Developers P. Ltd. vsIncome Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1568

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) held that an income tax assessment made against a company dissolved and struck off under Section 560(5) of the Companies Act,2013 was invalid.

A single member bench of Vikas Awasthy (Judicial Member) heard both sides and examined the orders of the authorities below. The assessee had challenged the validity of the notice issued under Section 148 and the consequent assessment.

Seven Adjacent Residential Units on Same Floor Constitute ‘One Residential House’ u/s 54 of Income Tax Act: ITAT

Saroj Rani vs I.T.O CITATION : 2025 TAXSCAN (ITAT) 1569

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) ruled that seven adjacent residential units on the same floor in a complex constitute “one residential house” under Section 54 of the Income Tax Act,1961.

The two member bench comprising Madhumita Roy (Judicial Member) and Naveen Chandra (Accountant Member) examined the submissions and reviewed the material on record. The appeal involved the partial denial of deduction under Section 54 of the Act on long-term capital gains arising from the sale of a residential house in Punjabi Bagh, Delhi, for ₹2,70,60,000.

Section 269SS intended to curb Black Money, does not extend to Genuine Final Consideration: ITAT quashes ₹20 Lakh Penalty

Bhaskar Thattaruthodiyil Nair vsThe Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1570

The Income Tax Appellate Tribunal (ITAT), Cochin Bench, has set aside a penalty of ₹20 lakh levied under Section 271D of the Income Tax Act, 1961, in a property transaction case, ruling that cash received as final consideration at the time of registration does not violate Section 269SS of the Income Tax Act.

The bench, comprising Judicial Member Satbeer Singh Godara and Accountant Member Amarjit Singh, found merit in the assessee’s argument. Referring to coordinate bench rulings including Ramkumar Reddy Satty v. ACIT (2024) and R. Dhinagharan (HUF) (2023), the Tribunal reiterated that Section 269SS is intended to curb the circulation of black money through cash advances in property deals. It does not extend to genuine final consideration paid in cash at the time of registration in front of the Sub-Registrar.

Addition on Excess Cane Price and Concessional Sugar Sale Remands for want of Evidence: ITAT directs Fresh Adjudication

Shri Ganesh Sahakari SakharKarkhana Ltd vs DCIT CITATION : 2025 TAXSCAN (ITAT) 1571

The Income Tax Appellate Tribunal (ITAT), Pune, remanded appeals, considering (i) excess sugarcane price paid to members and (ii) sale of sugar at concessional rates to members by a cooperative sugar factory on want of evidence.

The Bench comprising R.K. Panda Vice President and Astha Chandra Judicial Member, observed that in view of the statutory amendment under Section 155(19), directed the Assessing Officer to verify the assessee’s documentary evidence, including cane payment records, government notifications, and cooperative resolutions, and to compute any disallowance afresh with reference to levy price instead of market price.

Documentary Evidence Clears Loan Trail: ITAT Quashes ₹1.63 Crore Addition u/s. 68, Appeal Allowed

Ravi Kumar vs Dy. Commissionerof Income Tax CITATION : 2025 TAXSCAN (ITAT) 1572

The Income Tax Appellate Tribunal (ITAT), Delhi Bench deleted an addition made under Section 68 of the Income Tax Act, 1961, holding that the impugned sum received from a private company was a repayment of earlier deposit and not an unexplained cash credit.

The Bench comprising Judicial Member Challa Nagendra Prasad and Accountant Member Avdhesh Kumar Mishra held that the assessee had satisfactorily demonstrated the source of the impugned funds.

Manufacturer’s 80IC Deduction Allowed: ITAT Declares Audit Report Filing Directory, allows Assessee’s Appeal

Bhagwan Precision vs ACIT CITATION : 2025 TAXSCAN (ITAT) 1573

The Income Tax Appellate Tribunal (ITAT), Delhi Bench allowed an appeal against denial of deduction under Section 80IC of the Income Tax Act, 1961, declaring that filing of an audit report along with the return is directory in nature, not mandatory, provided the report is furnished before completion of assessment.

The Bench comprising of Judicial Member Satbeer Singh Godara and Accountant Member S. Rifaur Rahman observed that the assessee had claimed deduction under Section 80IC in the original return filed under Section 139(1).

Interest/Dividend Income received from co-operative bank is deemed to have received from cooperative society: ITAT Allows Deduction u/s 80 P to TN Special Police

Tamilnadu Special PoliceEmployees Cooperative vs The Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1575

In a recent Chennai bench of the Income Tax Appellate Tribunal (ITAT) has held that interest/dividend Income received from co-operative bank is deemed to have received from cooperative society and allowed deduction under section 80 P of the Income Tax Act, 1961.

The two member Shri George George K, Vice President and Shri Amitabh Shukla, Accountant Member held that interest/dividend income received from co-operative bank is deemed to have been received from cooperative society since it has been registered under the Tamil Nadu Co-operative Societies Act.

Failure to consider Benefit of working capital adjustment while computing ALP: ITAT Directs re adjudication against Schneider Electric India Pvt ltd

Schneider Electric India PrivateLimited vs ACIT CITATION : 2025 TAXSCAN (ITAT) 1576

The New Delhi bench of the Income Tax Appellate Tribunal(ITAT) directed the re adjudication against the case of Schneider Electric India Private Limited regarding the allegation of failure to consider the benefit of working capital adjustments while computing the ALP.

The two member bench of Shri S Rifaur Rahman, Accountant Member and Shri Vimal Kumar, Judicial Member considered it expedient to restore all the issues placed before the Tribunal back to the file of the TPO/AO for fresh determination of such issues in the light of submissions made and various claims asserted before the Tribunal. It shall be open to the assessee to make such submissions and adduce such evidences as may be considered expedient. The TPO/DRP/AO shall pass fresh order in accordance with law by way of a speaking order”.

“Own” in S.54F of Income Tax Act means Absolute Ownership: ITAT Clarifies Jointly-Owned Properties Not a Bar to Exemption

DCIT vs Ajay Goel CITATION : 2025 TAXSCAN (ITAT) 1577

The Delhi bench of the Income Tax Appellate Tribunal (ITAT) recently deliberated an appeal relating to the applicability of exemption under Section 54F of the Income Tax Act, 1961, and the correctness of the indexed cost of acquisition claimed on certain share transactions.

The Delhi bench of the Income Tax Appellate Tribunal (ITAT) recently deliberated an appeal relating to the applicability of exemption under Section 54F of the Income Tax Act, 1961, and the correctness of the indexed cost of acquisition claimed on certain share transactions.

Section 115BBE of Income Tax Act Applies on Transactions On or After 01.04.2017 Only: ITAT

DCIT vs Resoursys Telecom CITATION : 2025 TAXSCAN (ITAT) 1578

The Income Tax Appellate Tribunal (ITAT), Delhi, held that the provisions of Section 115BBE of the Income Tax Act, 1961, are applicable only to transactions made on or after 01 April 2017. Accordingly, in appeals concerning additions made on account of cash deposits treated as unexplained money under Section 69A, the Tribunal examined the applicability of Section 115BBE and ruled that it could not be invoked retrospectively for earlier assessment years.

The bench comprising Judicial Member Satbeer Singh Godara and Accountant Member Naveen Chandra observed that neither the Revenue nor the assessees could establish their case conclusively. While the Revenue could not dismiss the business explanation, the assessees failed to reconcile the cash deposits with specificity before the Assessing Officer.

Income Tax Notices sent to Old E-mail Address, Made Ex-parte Addition u/s 69A: ITAT Restores Matter to AO

Vikram Tatyaba Chatur vs ITO CITATION : 2025 TAXSCAN (ITAT) 1579

The Income Tax Appellate Tribunal (ITAT), Pune, has set aside an assessment order sustaining additions under Section 69A of the Income Tax Act, 1961, on account of unexplained cash deposits. The Tribunal relied on evidence relating to email communication, which revealed that notices were sent to an old email address of the assessee, thereby depriving him of the opportunity to present his case.

The Tribunal bench comprising R. K. Panda Vice President and Astha Chandra Judicial Member held that the assessee had been denied an adequate opportunity to explain the nature and source of the deposits due to notices being served at the incorrect email address. The matter was restored before the AO with directions to provide one final opportunity to the assessee to substantiate his case.

Expenses on Interiors and Utility Connections for Residential Property Qualify as Cost of Acquisition u/s 54: ITAT

Venkatraman JayashreePriyadharshini vs The Assistant Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1580

The Income Tax Appellate Tribunal (ITAT), Chennai, has ruled that expenditure incurred on interior works and essential utility connections can be treated as part of the cost of acquisition of a new residential property and thereby qualify for exemption under Section 54 of the Income Tax Act, 1961.

The Bench comprising S.S. Viswanethra Ravi Judicial Member and Amitabh Shukla Accountant Member, noted that the appellant had produced a valuation report dated March 16, 2020, from VJPS Developer. The report confirmed the expenditure on interior works and utility connections.

Stock Exchange and Demat Records Prove Share Transactions: ITAT deletes Additions u/s 153A

Vikram Biharisaran Khandelwal vsDCIT CITATION : 2025 TAXSCAN (ITAT) 1581

The Income Tax Appellate Tribunal (ITAT), Mumbai examined whether additions towards disallowance of interest expenditure, capital gains, and estimated commission expenses made under Section 153A of the Income Tax Act, 1961, were sustainable in light of documentary evidence furnished by the assessee.

The Bench comprising B.R. Baskaran, Accountant Member and Sunil Kumar Singh, Judicial Member on the issue of interest expenditure, applied the principle laid down by the Bombay High Court in Reliance Utilities and Power Ltd. (313 ITR 340), holding that own funds are presumed to be used first for making interest-free advances.

Reassessment against Struck-Off Company Void-Ab-Initio: ITAT Relies on Zauba Corp and MCA Records Confirming Strike-Off Status

Vinpack Agro Pvt. Ltd vs IncomeTax Officer CITATION : 2025 TAXSCAN (ITAT) 1582

The Income Tax Appellate Tribunal ( ITAT ), Ahmedabad ruled that the reassessment against struck-off company is void-ab-initio. The tribunal confirmed the strike off of the company from Zauba Corp and MCA records.

The Bench comprising Dr. BRR Kumar, Vice President and Ms. Suchitra Kamble, Judicial Member, held that the assessment proceedings were unsustainable in law. It observed that Zauba Corp records clearly indicated the company’s struck-off status as of 2012, which was further corroborated by the Ministry of Corporate Affairs’ order in 2013.

Revenue Ignores Registry’s Defect Memo and Reminders sent by Registry: ITAT dismisses Revenue’s Appeal

Addl. C.I.T vs Shri Vijay Pandey CITATION : 2025 TAXSCAN (ITAT) 1583

The Income Tax Appellate Tribunal (ITAT), Lucknow, dismissed the Revenue’s appeal relating to penalty under Section 271D of the Income Tax Act, 1961, after noting that the Registry had issued a defect memo and repeated reminders which remained unaddressed. The Tribunal, however, granted liberty to the Revenue to seek restoration of the appeal once the defects are cured.

The Bench comprising Kul Bharat Vice President and Anadee Nath Misshra Accountant Member noted that the appeal filed by the Revenue continued to suffer from defects despite several reminders and sufficient opportunities. Observing that the requirement of filing a revised Form 36 was not complied with, the Bench held that the defective appeal could not be entertained.

Section 56(2)(vii)(b)(ii) does Not Apply to Land Purchase Made Prior to 1st April 2014: ITAT deletes Addition

Smt. Vimla Tripathi vs TheIncome Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1584

The Income Tax Appellate Tribunal (ITAT), Lucknow bench, deleted the addition made under Section 56(2)(vii)(b)(ii) of the Income Tax Act, 1961, holding that the provision is prospective and applies only to transactions on or after 1 April 2014. Since the assessee’s agricultural land was purchased prior to this date, the Tribunal held that the addition was without legal basis.

The Tribunal held that the provisions of Section 56(2)(vii)(b)(ii) were not applicable as the purchase was completed before 1 April 2014. It was further observed that the registered sale deed and bank statements of the assessee, establish that consideration had indeed been paid for the land purchase, thereby disproving the Revenue’s claim that the transaction was without consideration.

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