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

SomabhaiMohandas Patel vsIncome Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1666

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) deleted an addition of ₹10.33 lakh under section 69 of IncomeTax Act,1961 for unexplained investment in immovable property, considering the assessee’s retirement benefits and loan support.

The two member bench Dr.BRR Kumar (Vice President) and Siddhartha Nautiyal (Judicial Member) reviewed the assessment order, the CIT(A) order, and the assessee’s submissions and concluded that the addition of ₹10,33,012/- under section 69 for unexplained investment in immovable property was unjustified.

Zenith PublicSchool vs IncomeTax Officer CITATION : 2025 TAXSCAN (ITAT) 1667

The Chennai Bench of Income Tax Appellate Tribunal ( ITAT ) set aside the Commissioner of Income Tax (Appeals)[CIT(A)] order in the case concerning the disallowance of Rs.10.28 lakh interest on loan by a charitable trust as application of income and directed the Assessing Officer (AO) to delete the same.

The two member bench comprising Manu Kumar Giri (Judicial Member) and S.R.Raghunatha (Accountant Member) examined the submissions and records. During FY 2021-22, the assessee claimed loan repayment and interest payments totaling Rs.75,14,899/- as application of income. The assessee had submitted a letter on 18.04.2023 stating that it paid interest on loans taken from Mr. P. Shanmugam along with the principal amount.

SalvantsinghSwarupsingh Palluvs The Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1668

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) allowed an appeal against the disallowance of Rs.6.78 lakh cash deposits under section 69 of Income Tax Act,1961 as unexplained investment, based on agricultural, transportation, and family income.

The two member bench comprising Dr.B.R.R Kumar (Vice President) and Siddhartha Nautiyal (Judicial Member) heard the parties and reviewed the records. It noted that the lower authorities had accepted part of the assessee’s claims and allowed Rs.5,00,000/- based on evidence showing that the deposits came from the assessee’s agricultural and transportation income, his wife’s dairy income, and his son’s savings.

Indra TradingCorporation vsDCIT CITATION : 2025 TAXSCAN (ITAT) 1669

The Ranchi Bench of Income Tax Appellate Tribunal ( ITAT ) partly allowed the appeal and restricted the addition of ₹16.28 lakh for alleged bogus purchases to ₹1.29 lakh by applying a 7.92% gross profit (GP ) rate, holding that the disallowance was not valid as the books of accounts were not rejected

The two member bench comprising Sonjoy Sarma (Judicial Member) and Ratnesh Nandan Sahay (Accountant Member) held that the addition of ₹16,28,109 for alleged bogus purchases was not valid since the books were not rejected and sales were accepted.

Ponnusamy Rajavs The Income TaxOfficer CITATION : 2025 TAXSCAN (ITAT) 1670

The Chennai Bench of Income Tax Appellate Tribunal ( ITAT ) deleted the addition of ₹2.26 lakh made by the Assessing Officer (AO ), based on the Chartered Accountant’s (CA) corrective certificate, where bonus paid to employees had been wrongly reported as dividend in the tax audit report.

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The two member bench comprising S.S Viswanethra Ravi (Judicial Member) and S.R.Raghunatha (Accountant Member) heard both sides and reviewed the records. It noted that the Assessing Officer had disallowed ₹2,26,000 as bonus, treating it as profit or dividend, since the tax audit report had wrongly reported the amount and no supporting evidence was filed during assessment. The CIT(A) had also confirmed the disallowance.

Anubhav Kumarvs ITO CITATION : 2025 TAXSCAN (ITAT) 1671

The Ranchi Bench of Income Tax Appellate Tribunal ( ITAT ) deleted the addition of ₹10.42 lakh under section 69A of Income Tax Act,1961, holding that cash deposits made during the demonetization period were fully explained by prior withdrawals

The two member bench comprising Sonjoy Sarma (Judicial Member) and Ratnesh Nandan Sahay(Accountant Member) after examining the submissions and records, noted that the assessee had withdrawn Rs.14,50,800/- during the year and deposited Rs.10,42,000/- in various bank accounts. Management of cash and bank deposits was solely at the discretion of the assessee.

Bees InfraconPrivate Ltd vs TheITO CITATION : 2025 TAXSCAN (ITAT) 1672

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) deleted the addition of deemed dividend under section 2(22)(e) of Income Tax Act,1961, on loans received from a sister concern, treating the transaction as a business current account with part repayment of interest.

The two member bench comprising Dr.BRR Kumar (Vice President) and T.R.Senthil Kumar ( Judicial Member) considered the submissions and records, including case laws cited by the assessee. It found that the loan received from its sister concern, Sunburg Tradelink Pvt. Ltd., was a current account transaction for business purposes, part of which was repaid with interest after deducting TDS.

Sai EssenDevelopers vs PCIT CITATION : 2025 TAXSCAN (ITAT) 1673

The Pune Bench of Income Tax Appellate Tribunal ( ITAT ) allowed retrospective benefit of 10% tolerance under section 43CA of Income Tax Act,1961 and set aside the section 263 order.

The two member bench comprising Vinay Bhamore (Judicial Member) and Manish Borad (Accountant Member) heard arguments from both sides and reviewed the records, including the paper book and case law submissions. It noted that the assessee was engaged in real estate development and construction and sold residential flats as stock-in-trade.

PravinEngineering Pvt. Ltd vsACIT National E-Assessment Centre CITATION : 2025 TAXSCAN (ITAT) 1674

The Kolkata Bench of Income Tax Appellate Tribunal ( ITAT ) noted that Rs.11.36 lakh paid as directors’ commission was wrongly reported in Form 3CD as profits or dividends and remanded the issue to the Assessing Officer( AO) for fresh examination.

The two member bench comprising Sonjoy Sarma ( Judicial Member) and Ratnesh Nandan Sahay (Accountant Member) at the assessee had clarified that Rs.11,36,000/- paid as directors’ commission was wrongly reported in Form 3CD as bonus or commission to employees. The amount was otherwise payable as profits or dividends under section 36(1)(ii) and did not form part of profits or dividends under that section.

RajeshLaxmichand Jain vs IncomeTax Office CITATION : 2025 TAXSCAN (ITAT) 1675

The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) set aside the Commissioner of Income Tax (Appeals)[CIT(A)] order in a case where a property investment of Rs. 1.10 crore was treated as unexplained under section 69 of Income Tax Act,1961 due to unverified sources.

The two member bench comprising Beena Pillai (Judicial Member) and Arun Khodpia (Accountant Member) observed that for co-purchasers, the addition could not exceed the individual share of the assessee. It noted that the authorities had rejected the assessee’s documents without independent verification. To ensure justice, the tribunal set aside the CIT(A)’s order and sent the case back to the AO to verify the source of investment and decide the matter afresh.

EngineeringMazdoor Sabha vsACIT CITATION : 2025 TAXSCAN (ITAT) 1676

The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) deleted the addition and allowed the claim of Rs. 2.3 lakh paid as compensation to workers during the strike period.

A single member bench comprising Pawan Singh (Judicial Member) examined the submissions and records and noted that the assessee was a registered trade union. It had paid Rs. 15,000/- each to eight workers and Rs. 10,000/- each to eleven workers during the strike period to support them when wages were not paid. The details of workers, their employers, vouchers, and affidavits of the General Secretary and Treasurer were furnished.

Saif AliMansoor Ali KhanPataudi vs CIT(A) CITATION : 2025 TAXSCAN (ITAT) 1677

The Income Tax Appellate Tribunal (ITAT), Mumbai, has held that a reassessment notice issued under Section 148 of the Income Tax Act, 1961, without valid approval under Section 151, is void ab initio. The Tribunal ruled that since the reopening pertained to an assessment year beyond three years, the mandatory approval of the Principal Chief Commissioner of Income Tax (PCIT) was not obtained, rendering the proceedings invalid.

The Bench comprising of Judicial Member, Pawan Singh and Accountant Member, Renu Jauhri held that since more than three years had elapsed from the end of the relevant assessment year, approval was mandatorily required from the PCCIT under Section 151. As this statutory requirement was not met, the notice under Section 148 was invalid, and the entire reassessment proceedings stood quashed.

Shri T.Radhakrishnan vs TheIncome Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1678

The Chennai Bench of Income Tax Appellate Tribunal ( ITAT ) deleted an addition of Rs. 8,00,000 made by the Assessing Officer (AO), which was treated as ‘income from other sources’ despite being a cash deposit from the sale of casuarina trees.

A single member bench of George George K( Vice President) reviewed the case and material on record. The assessee owned 23 acres of agricultural land in Tamil Nadu and had disclosed Rs.8,00,000/- as agricultural income from the sale of casuarina trees for the assessment year 2015-16. On 03.07.2014, a cash deposit of Rs.8,00,000/- was made in his bank account, which the AO disbelieved and added to income as ‘income from other sources’.

ShreeJainSwetamberTeerapanthMahila Mandal vs CIT (Exemption) CITATION : 2025 TAXSCAN (ITAT) 1679

The Jodhpur Bench of Income Tax Appellate Tribunal ( ITAT ) directed Commissioner of Income Tax(Exemption)[CIT(E)] to grant registration after verifying the trust’s 12A registration under Income Tax Act,1961, which was earlier cancelled for absence of a Rajasthan Public Trust Act (RPT) certificate.

The two member bench comprising Anikesh Banerjee(Judicial Member) and Dr.Mitha Lal Meena (Accountant Member) observed that the assessee’s application under section 12A(1)(ac)(iii) and the cancellation of provisional registration under section 12A(1)(ac)(vi) had arisen due to the absence of the required registration certificate.

Bibhu PrasadSahoo vs Income TaxOfficer CITATION : 2025 TAXSCAN (ITAT) 1680

The Kolkata Bench of Income Tax Appellate Tribunal ( ITAT ) deleted an addition of ₹1.31 lakh treated as unexplained income under section 69A of Income TaxAct,1961 during the demonetisation period and accepted it as rent received in cash.

The two member bench comprising Sonjoy Sarma (Judicial Member) and Rakesh Mishra ( Accountant Member) reviewed the submissions, facts, and CIT(A)’s order. The AO had noted that the assessee submitted income computation and deeds but did not explain cash deposits in three Axis Bank accounts. Deposits in two accounts totaling ₹48,78,233 were accepted, but ₹1,31,465 in the third account was added to income.

Goldman Sachs(India) FinancePvt. Ltd vs Assessment Unit, Income-tax Department

CITATION : 2025 TAXSCAN (ITAT) 1681

The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) granted relief to Goldman Sachs (India) Finance Pvt. Ltd., setting aside the disallowance of Rs. 1.87 crore claimed as Occupancy Expenses and directing the Assessing Officer(AO) to verify the claim afresh for Assessment Year (AY) 2020-21

The two member bench comprising Saktijit Dey (Vice President) and Padmavathy S (Accountant Member) heard the parties and reviewed the records. The CIT(A) noted that the assessee claimed Occupancy Expenses of Rs. 1.87 crore, including depreciation, for space rented from group entity GSISPL under a cost allocation agreement. The AO had disallowed the full amount in AY 2022-23 as the assessee did not provide supporting documents.

M/s PatoBuilders Pvt. Ltd. vsA.C.I.T. CITATION : 2025 TAXSCAN (ITAT) 1682

The Income Tax Appellate Tribunal (ITAT), Ranchi, held that additions made on account of unexplained share application money could not be sustained in respect of identified investors where sufficient details were furnished. The Tribunal further directed that the disallowance of large expenses be restricted to 2.5 percent instead of 10 percent, thereby partly allowing the appeal concerning income tax liability.

The Bench comprising Judicial Member, George Mathan and Accountant Member, Ratnesh Nandan Sahay, held that the share application money received from four identifiable investors could not be added back to the assessee’s income, but sustained the addition for the nine unexplained investors.

Amiya ShankarGhar vs Income TaxOfficer CITATION : 2025 TAXSCAN (ITAT) 1683

The Kolkata Bench of Income Tax Appellate Tribunal ( ITAT) quashed the notice and reassessment order, holding that the reassessment beyond six-year limit for income under ₹50 lakh was invalid.

A single member bench comprising Rajesh Kumar ( Accountant Member) after reviewing the submissions and the record, including the section 148 notice dated 27.7.2022, observed that the reassessment was initiated more than six years after the end of the relevant assessment year, violating section 149(1)(b) of the Act.

Shri VidhyutBoard Credit &Consumers Co-operative Society Limited vs AssistantCommissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1684

The Income Tax Appellate Tribunal (ITAT), Ahmedabad, has ruled that interest earned from deposits with Regional Rural Banks (RRBs) is not eligible for deduction under Section 80P of the Income Tax Act, 1961. However, the Tribunal remanded the second issue of proportionate administrative expenses incurred on deposits with the State Bank of India (SBI) back to the Assessing Officer (AO) for fresh adjudication.

The Judicial Member, Suchitra Kamble dismissed the appellant’s claim for deduction on interest earned from Saurashtra Gramin Bank, holding that reliance on the withdrawn Circular No. 319 was misplaced. The Tribunal held that interest from Regional Rural Banks cannot qualify for deduction under Section 80P of the Income Tax Act.

The DCIT vsIngenericTechnologies Solutions Private Limited CITATION : 2025 TAXSCAN (ITAT) 1685

The Income Tax Appellate Tribunal (ITAT), Hyderabad bench has set aside the deletion of income tax additions made towards unexplained cash deposits and alleged cash payments by Ingeneric Technologies Solutions Private Limited and remanded the matter to the Assessing Officer for fresh verification under the Income Tax Act, 1961.

The Bench comprising Vice President, Vijay Pal Rao and Accountant Member, Manjunatha G observed the absence of critical supporting evidence and the failure of the appellant to demonstrate compliance with statutory requirements for tax collected at source and proper documentation.

VardhmanStampings P.Ltd vsPr.Commission CITATION : 2025 TAXSCAN (ITAT) 1686

The Income Tax Appellate Tribunal (ITAT), Ahmedabad, has quashed a revisionary order passed under Section 263 of the Income Tax Act, 1961, by the Principal Commissioner of Income Tax. The Tribunal held that losses arising from foreign currency derivative transactions and exchange rate differences were not speculative in nature but allowable as business expenditure.

The Bench comprising of Accountant Member, Annapurna Gupta and Judicial Member, T.R. Senthil Kumar held that the PCIT’s findings were based on an incorrect appreciation of facts and law. It was observed that the exchange rate difference loss was merely a restatement of creditors’ balances under AS-11 and had been consistently held allowable by the Supreme Court.

Sri GuruThipperudraswamyDevasthana vs The Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1687

The Income Tax Appellate Tribunal (ITAT), Bangalore, has restored an appeal for fresh adjudication after finding that appellate notices were largely issued to incorrect email addresses and that the demise of the appellant’s Chartered Accountant constituted a reasonable cause for non-compliance.

The Bench consisting of Judicial Member, Keshav Dubey and Vice President, Prashant Maharishi, examined the records and noted discrepancies in the email communication for the notices. The Tribunal held that except for one notice, the appellate notices were not served to the correct email ID provided by the appellant in its Form 35. Moreover, the demise of the appellant's chartered accountant was a genuine cause for non-compliance.

Kaycee FinstockPvt Ltd vsDeputy Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1688

The Income Tax Appellate Tribunal (ITAT), Mumbai, has remanded a penalty dispute involving concealment of income and inaccurate particulars under Section 271(1)(c) of the Income Tax Act, 1961, for fresh adjudication after finding that the penalty could not be sustained without verification of the appellant’s continuous loss position.

The Tribunal, comprising Anikesh Banerjee, Judicial Member and Om Prakash Kant, Accountant Member, ruled that while the appellant had accepted and rectified the mistake during assessment proceedings, the question of real tax advantage due to continuous losses and the impact on carry-forward loss needed factual verification.

Balwant Singhvs The DCIT ACIT CITATION : 2025 TAXSCAN (ITAT) 1689

The Chandigarh Bench of the Income Tax Appellate Tribunal ( ITAT ) has held that an unsigned and unregistered agreement to sell has no evidentiary value unless corroborated through an independent inquiry by the Assessing Officer (AO).

The bench of Rajpal Yadav and Krinwant Sahay observed that an unsigned, unexecuted document cannot, by itself, establish ownership or investment. It said that the AO did not produce corroborative evidence of payment or transfer of property and ignored the fact that ownership remained with the seller.

M/s. Joyalukkas(India)Pvt. Ltd.vs Asst. Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1690

The Income Tax Appellate Tribunal (ITAT), Cochin bench, directed the remand of transfer pricing adjustments relating to benchmarking of exports, treatment of Associated Enterprise, and advertisement expenses to the Assessing Officer/Transfer Pricing Officer for fresh adjudication after noting that the adopting bright line method adopted by the Dispute Resolution Panel-2, Bangalore (DRP) is not an approved method for benchmarking the transaction of advertisement expenditure.

The Bench consisting of Rahul Chaudhary, Judicial Member & Inturi Rama Rao, Accountant Member, held that the submissions made by the appellant went to the root of the computation of arm’s length price and benchmarking. It found merit in the contention that Bright Line Test is not an approved method and that advertisement expenditure may not by itself constitute an international transaction.

HP India SalesPvt. Ltd. vs TheJoint Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1691

The Income Tax Appellate Tribunal (ITAT), Bangalore, overturned the Assessing Officer’s allegation of suppressed turnover and bogus discounts, accepting the company’s evidence, including reconciliations, customer ledgers, and program policy documents. The Tribunal upheld the Commissioner of Income Tax(Appeals)’s [CITA(A)] decision that trade discounts and sales adjustments were genuine business practices under the Income Tax Act, 1961.

The Bench of Prashant Maharishi, Vice President and Keshav Dubey, Judicial Member, ruled that the company’s accounting for discounts and recognition of expenses follows established mercantile principles. It was found that the AO did not bring any evidence demonstrating the discounts or expenses were bogus or fraudulent.

Shri Devi Dayalvs The ITO CITATION : 2025 TAXSCAN (ITAT) 1692

The Income Tax Appellate Tribunal (ITAT), Chandigarh, condoned a delay of 38 days in filing an appeal, ruling that the appellant’s explanation of the order being misplaced in the spam folder of his email constituted a sufficient cause under Section 253(5) of the Income Tax Act, 1961.

The Bench comprising of Vice President, Rajpal Yadav and Accountant Member, Krinwant Sahay, examined Section 253(5) of the Income Tax Act, 1961, which empowers the tribunal to admit an appeal after the expiry of the prescribed period if it is satisfied that there was sufficient cause for not presenting it within that period.

DCIT vs SudiptaAjoykumarMukherjee CITATION : 2025 TAXSCAN (ITAT) 1693

The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) upheld the Commissioner of Income Tax( Appeals) [CIT(A)] deletion of Rs. 80 lakh treated as unexplained income for a flat, as no payment was made and no allotment existed.

The two member bench comprising Sandeep Singh Karhail (Judicial Member) and Narendra Kumar Billaiya (Accountant Member) reviewed the orders of the lower authorities and noted that, although the assessee was offered a flat in the Society, she never made the initial 25% payment. The AO did not produce any evidence showing that the assessee had paid any amount, in cash or cheque, or that a flat was actually allotted to her.

Ishvatham vsITO CITATION : 2025 TAXSCAN (ITAT) 1694

The Kolkata Bench of Income Tax Appellate Tribunal ( ITAT ) partly allowed the appeal and restricted the disallowance to 20% in a case where entire business expenses were disallowed despite the assessee being actively engaged in the painting business.

A single member bench of Rajesh Kumar (Accountant Member) after considering the rival submissions and reviewing the record, observed that the assessee was engaged in the business of painting. During the year under review, the assessee had earned commission income of Rs. 1,23,125 and had incurred various expenses under multiple heads, which were claimed in the profit and loss account.

SavitabenNathalalVadi vs IncomeTax Officer CITATION : 2025 TAXSCAN (ITAT) 1695

The Rajkot Bench of Income Tax Appellate Tribunal ( ITAT ) deleted the addition of Rs. 2,50,000 cash, which had been treated as unexplained, for a 70-year-old depositor, citing the Central Board of Direct Taxes (CBDT) exemption limit during demonetization.

A single member bench of Dr.Arjunlal Saini (Accountant Member) noted that the CBDT had issued instructions and a press release stating that small depositors, including artisans, workers, housewives, and other small taxpayers, would not be questioned for cash deposits up to Rs. 2,50,000 per person during the demonetization period.

Eagle FashionsPrivate Limitedvs The Deputy Director of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1696

The Surat Bench of Income Tax Appellate Tribunal ( ITAT ) condoned the delay and restored the matter to the Commissioner of Income Tax (Appeals)[CIT(A)] in a case where a clerical error in carrying forward opening balances of land, building, and furniture led to an inflated capital gain of Rs.21,14,028/-.

The two member bench comprising Sanjay Garg (Judicial Member) and Bijayananda Pruseth (Accountant Member) considered the rival submissions and noted that the assessee was genuinely contesting the addition of Rs.21,14,028/- as capital gain.

RajyeshwarRetail Trade SystemsPvt. Ltd. vs ACIT CITATION : 2025 TAXSCAN (ITAT) 1697

The Indore bench of the Income Tax Appellate Tribunal ( ITAT ) has remanded six appeals for fresh adjudication as the assessee failed to receive income tax notices due to COVID-19 constraints and an inactive Email.

The two-member bench of Paresh M. Joshi (Judicial Member) and B.M. Biyani (Accountant Member) held that, considering the principles of natural justice and without causing prejudice to the revenue, these matters should be remanded for adjudication afresh, at the risk and responsibility of the assessee.

Maxxis RubberIndia Pvt. Ltd vsPrincipal Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1698

The Income Tax Appellate Tribunal (ITAT), Ahmedabad has granted relief to Maxxis Rubber India Pvt. Ltd. by quashing a revisionary order issued under Section 263of the Income Tax Act, 1961. The Tribunal observed that the Principal Commissioner of Income Tax (PCIT) erred in treating the company’s depreciation claim as excessive, holding that there is no legal requirement to adjust carried forward additional depreciation against the opening written down value of assets.

The Bench comprising Judicial Member, T.R. Senthil Kumar and Accountant Member, Annapurna Gupta, held that there was no error in the assessment order. The Tribunal observed that Section 32(1)(ii) and Section 43(6)(c) of the Income Tax Act, 1961 do not provide for any adjustment of carried forward additional depreciation against the opening written down value.

The DCIT vs M/sHero Cycles Ltd CITATION : 2025 TAXSCAN (ITAT) 1699

The Income Tax Appellate Tribunal (ITAT), Chandigarh Bench, considered the appeal of an assessee regarding its own disallowance under Section 14A of the Income Tax Act, 1961, reiterated that where interest free funds are available in excess of investments, no disallowance under Section 14A can be sustained.

The Bench comprising of Vice President, Rajpal Yadav and Accountant Member, Krinwant Sahay examined the assessee’s claim that its suo moto disallowance was excessive. On the issue of interest disallowance under Rule 8D(2)(ii), the Tribunal observed that Hero Cycles had ample own funds in the form of share capital and reserves, which were far greater than the value of its investments.

VenkateswarluChandu vs DCIT CITATION : 2025 TAXSCAN (ITAT) 1700

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) deleted the addition of Rs. 9.99 lakh made under Section 69C of Income Tax Act, 1961, where cash payments toward credit card bills from agricultural income were treated as unexplained.

A single member bench of Mahavir Singh ( Vice President) observed that the addition of Rs. 9,99,000/- was made solely based on doubt and suspicion, as the explanation for the source of cash payments toward the credit card was rejected without any concrete evidence.

BMW India Pvt.Ltd. vs AssistantCommissioner of income Tax CITATION : 2025 TAXSCAN (ITAT) 1701

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) granted relief to BMW India Pvt. Ltd. by setting aside the Final Assessment Order for Assessment Year 2011-12 as time-barred under section 144C(13) of Income Tax Act,1961 due to delay in giving effect to Dispute Resolution Panel ( DRP) directions.

The two member bench comprising Yogesh Kumar U.S (Judicial Member) and S.Rifaur Rahman (Accountant Member) after hearing the parties and examining the record, noted that following its earlier order dated 25/01/2019, the TPO passed an order on 31/01/2021, and the AO issued a Draft Assessment Order on 15/07/2021.

Silverton Pulpand papersPrivate Limited vs DCIT CITATION : 2025 TAXSCAN (ITAT) 1702

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) directed fresh verification by the Commissioner of Income Tax (Appeals)[CIT(A)] on the addition under section 56(2)(x)(b) of Income Tax Act,1961, where agricultural land purchased by the assessee was wrongly classified as residential by the Stamp Valuation Authority (SVA).

The two member bench Yogesh Kumar U.S (Judicial Member) and Manish Agarwal (Accountant Member) reviewed the record and heard the parties. The assessee contended that the agricultural land purchased was wrongly treated as residential, resulting in higher stamp duty, and that section 56(2)(x)(b) did not apply.

M/s. ChennaiBusiness Tower vsPCIT-4 CITATION : 2025 TAXSCAN (ITAT) 1703

The Chennai Bench of Income Tax Appellate Tribunal (ITAT) has quashed the PCIT's order on the ground that it exceeded the revisionary powers vested in it under Section 263 of the Act. The tribunal held that the rectification order by the AO is neither erroneous nor prejudicial.

The two-member bench ABY T Varkey (Judicial Member) and S. R. Raghunatha (Accountant Member) observed that the present facts and circumstances of the case were identical to the assessee’s own case decided by the coordinate bench of the Tribunal in the A.Y.2009-10. So following the same, the bench held that the PCIT has exceeded the revisionary powers and quashed the order of the PCIT under Section 263 of the Act by allowing the grounds of appeal of the assessee.

RNGConstruction Co. vs Addl.Jt. Dy. Asstt. ITO CITATION : 2025 TAXSCAN (ITAT) 1704

The Indore bench of Income Tax Appellate Tribunal (ITAT) quashed the reassessment by the Assessing Officer (AO), holding that no new facts surfaced regarding the Service Tax disallowance under Section 43B of the Income Tax Act, 1961, as these facts were already fully disclosed and were available on the record of the department in the Tax Audit Report.

A two-member bench of Paresh M. Joshi ( judicial member) and B.M. Biyani (accountant member) concluded that these facts of the assessee’s case are identical to the case of Kelvinator decided by the Delhi High Court in favour of the assessee and against the revenue.

DeputyCommissioner of IncomeTax vs Satya Prakash Gupta CITATION : 2025 TAXSCAN (ITAT) 1705

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) dismissed the Revenue’s appeal for the Assessment Year 2013-14, holding that the loss from share trading was a business loss and that the Central Board of Direct Taxes (CBDT) exception for bogus Long Term Capital Gain / Short Term Capital Loss ( LTCG/STCL ) from penny stocks was not applicable.

The two member bench comprising Yogesh Kumar U.S (Judicial Member) and Manish Agarwal (Accountant Member) heard both parties and noted that the assessee declared business loss from share trading through his proprietary concern, M/s Sterling Security Systems, and did not claim any short-term capital loss. The tax effect of the Revenue’s appeal was ₹49,88,400/-, below the limit for filing an appeal before the tribunal as per CBDT Circular No. 09 of 2024.

Shree HanumantPakshigharCharitable Trust vs Commissioner of Income Tax

CITATION : 2025 TAXSCAN (ITAT) 1706

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) directed Commissioner of Income Tax(Exemption)[CIT(E)] to verify whether the assessee had exceeded the 5% limit of income spent on religious activities before rejecting its application for approval under Section 80G(5) of Income Tax Act,1961.

The two member bench comprising Sanjay Garg (Judicial Member) and Narendra Prasad Sinha (Accountant Member) reviewed the contentions and the order of the CIT(E). Section 80G of the Act defines “charitable purpose” and excludes purposes that are wholly or substantially religious.

Lipi JainFamily Trust vs ITO CITATION : 2025 TAXSCAN (ITAT) 1707

The Agra Bench of Income Tax Appellate Tribunal ( ITAT ) ruled that the income of the trust should be taxed at the normal rate instead of the maximum marginal rate, as the sole beneficiary had no taxable income.

A single member bench M Balaganesh (Accountant Member) observed that the issue had already been decided in the assessee’s case for AY 2016-17, where the appeal was allowed, and therefore, the assessee’s grounds for AY 2015-16 were also allowed.

RUPAM DUBEY vsITO-3(3) CITATION : 2025 TAXSCAN (ITAT) 1708

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) deleted the Assessing Officer (AO)’s addition of Rs. 3.5 lakh, holding that the amount received as a gift from the assessee’s daughter was genuine and not unexplained cash under section 68 of Income Tax Act,1961.

A single member bench of Mahavir Singh (Vice President) held that the assessee had satisfactorily explained that the amount in question was a gift from her daughter out of love and affection, and that the daughter had sufficient funds in her account at the time of the gift. Accordingly, the addition made by the lower authorities was not justified. The tribunal deleted the addition and set aside their orders.

Income TaxOfficer vs HarinYogeshkumar Shah CITATION : 2025 TAXSCAN (ITAT) 1709

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) deleted the addition of Rs. 1,17,538/- under Section 68 of Income Tax Act,1961,for penny stock transactions as the assessee incurred a short-term capital loss, not Long Term Capital Gain (LTCG).

The two member bench comprising Siddhartha Nautiyal ( Judicial Member) and Narendra Prasad Sinha (Accountant Member) reviewed the submissions of the Departmental Representative and the records. The AO initially noted that the assessee earned capital gains of Rs. 1,17,538/- from penny stock scrips of VMS Industries Limited and claimed exemption under Section 10(38) of the Act.

ACIT vs M/s.Nuwave E Solutions CITATION : 2025 TAXSCAN (ITAT) 1710

The Delhi bench of the Income Tax Appellate Tribunal (ITAT) dismissed the appeal of the revenue and upheld the CIT(A) order.

The two-member bench of Sudhir Kumar (Judicial Member) and Manish Agarwal (Accountant Member) held that the provision of Section 40(a)(ia) of the Income Tax Act could not be invoked for making disallowances where even a short deduction is made. Accordingly, the appeal raised by the Revenue was dismissed.

HP India Sales Pvt. Ltd. vs TheJoint Commissioner of Income Tax, LTU, CITATION : 2025 TAXSCAN (ITAT) 1711

The Income Tax Appellate Tribunal (ITAT), Bangalore bench, ruled that income received in advance from annual maintenance contracts (AMC) should be recognized over the contract period in accordance with the mercantile system of accounting consistently followed by the assessee. The tribunal also directed that Tax Deducted at Source (TDS) credit must be allowed proportionately with the income recognized.

The Bench consisting of Vice President, Prashant Maharishi and Judicial Member, Keshav Dubey, held that income accrues with the rendering of services under AMC, not merely on invoicing.The Tribunal the assessee had consistently followed this method, no addition could be sustained.

ACIT vs M/s.Nuwave E Solutions CITATION : 2025 TAXSCAN (ITAT) 1712

The Delhi bench of the Income Tax Appellate Tribunal (ITAT) dismissed the appeal of the revenue and upheld the CIT(A) order. The tribunal upheld the exemption under section 10A on software exports and foreign exchangefluctuation gains.

The two-member bench of Sudhir Kumar (Judicial Member) and Manish Agarwal (Accountant Member) upheld that the CIT(A) had rightly held the foreign exchange fluctuation gain as income derived from the export of software. And also the AO’s contradictory approach in treating the same turnover differently was noted as biased.

Liebherr WerkNenzing vs TheAssistant Commissioner of Income-tax CITATION : 2025 TAXSCAN (ITAT) 1713

The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) directed the Assessing Officer (AO) to grant Tax Deducted at Source (TDS) credit of Rs. 9.04 lakh after finding no mismatch with Form 26AS.

The two member bench comprising Raj Kumar Chauhan (Judicial Member) and Vikram Sinngh Yadav (Accountant Member) reviewed the rival contentions and the record. It observed that TDS entries for Adani Petronet Port Ltd. (Rs. 8,86,944), Karaikal Port Pvt. Ltd. (Rs. 3,76,062), and Starlift Services Pvt. Ltd. (Rs. 85,985) were correctly reflected in Form 26AS, matching the amounts claimed by the assessee in its return of income.

EmergencyCharitable Trust vsCIT (Exemption) CITATION : 2025 TAXSCAN (ITAT) 1714

The Income Tax Appellate Tribunal (Agara Bench) held that a mere clerical error in quoting an incorrect section of the Income Tax Act cannot be grounds for the rejection of a trust’s application for registration. The Tribunal emphasized that a rightful claim cannot be denied due to a technical oversight, setting aside the order of the Commissioner of Income-Tax(Exemption).

The Tribunal, comprising Judicial Member Sunil Kumar Singh and Accountant Member Brajesh Kumar Singh, found merit in the trust’s arguments. The bench referred to settled law that a mistake in stating the correct legal position should not lead to the rejection of an application.

Ashok KumarGoyal vs JCIT/Addl.CIT CITATION : 2025 TAXSCAN (ITAT) 1715

The Income Tax Appellate Tribunal (ITAT), Agra Bench, has set aside an ex-parte order that confirmed a major addition against an assessee, criticizing the complete absence of any reasoning in the decision. The Tribunal granted a final opportunity for the case to be heard on its actual merits.

The ITAT Bench comprising Sunil Kumar Singh (Judicial Member) and Brajesh Kumar (Accountant Member) ruled that the failure to provide any reasoning was a fundamental violation of the principles of natural justice. In the interest of fairness, it set aside the CIT(A)’s order and remanded the matter for a fresh hearing.

The DCIT vsChiripal IndustriesLtd CITATION : 2025 TAXSCAN (ITAT) 1716

The Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench, has dismissed the Revenue’s appeal and allowed the Cross Objection providing a dual relief to the taxpayer. The Tribunal upheld the deletion of a disallowance of over ₹4.82 crore under Section 80-IA of the Income Tax Act, 1961, and also confirmed that disallowance under Section 14A cannot exceed the actual exempt income earned during the year.

The Tribunal, comprising Judicial Member T.R. Senthil Kumar and Accountant Member Annapurna Gupta, affirmed the CIT(A)’s decision. On the Section 80-IA issue, the Tribunal relied on its own earlier orders in the assessee’s own cases for AYs 2014-15 and 2016-17. It held that since the power plant was transferred as part of a court-approved amalgamation, the assessee was entitled to “step into the shoes” of the amalgamating company and claim the deduction.

Gandharv Singhvs Income-taxOfficer CITATION : 2025 TAXSCAN (ITAT) 1717

The Income Tax Appellate Tribunal (ITAT), Agra Bench, has set aside an ex-parte order passed by the Commissioner of Income Tax (Appeals) and condoned a mere nine-day delay in filing an appeal. The Tribunal remanded the matter back to the CIT(A) for a fresh hearing on the merits of the case.

The ruling underscores the judiciary's consistent stance that technicalities should not overshadow the need to deliver substantial justice, especially when the delay is minimal and sufficiently explained. The order was pronounced by a bench comprising Sunil Kumar Singh (Judicial Member) and Brajesh Kumar Singh (Accountant Member) .

Mr. BhivrajMohanlal Jain vsCommissioner of Income Tax (Appeals) CITATION : 2025 TAXSCAN (ITAT) 1718

The Nagpur Bench of Income Tax AppellateTribunal ( ITAT ) deleted an addition under section 69 of Income Tax Act,1961 in an alleged accommodation entry share sale, finding that the actual profit was only Rs. 842.

A single member bench of Narendra Kumar Choudhry (Judicial Member) considered the facts of the case and the arguments of both parties. It noted that a search had been conducted on Shri Rajkumar Modi, Director of M/s. Fincop Group, on 11.10.2018.

QLAR IndiaPrivate Limited vsThe DCIT CITATION : 2025 TAXSCAN (ITAT) 1719

The Kolkata Bench of Income Tax Appellate Tribunal ( ITAT ) ruled that the disallowance of warranty provisions under section 37(1) of Income Tax Act,1961, was a debatable issue and could not be made through a rectification order under section 154, which applies only to clear and obvious mistakes.

The two member bench comprising Pradip Kumar Choubey (Judicial Member) and Rajesh Kumar (Accountant Member) after considering the submissions and reviewing the record, concluded that the allowability of warranty provisions was a debatable issue and fell outside the scope of section 154 of the Act. It noted that section 154 applies only to clear and obvious mistakes, not issues where two opinions are possible or which require detailed reasoning.

MicrosoftCorporation (India) P.Ltd. vs Deputy Commissioner of Income-Tax

CITATION : 2025 TAXSCAN (ITAT) 1720

The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) quashed Rs 549 crore tax demand made on Microsoft India. The income tax assessment order was held invalid due to a breach of the statutory timeline for passing the final order as mentioned under section 144C(13) of the Income Tax Act.

The two-membered bench of Vikas Awasthy ( Judicial Member) and Brajesh Kumar Singh (Accountant Member) had a difference of opinion in the matter as to whether to allow the appeal or not. After hearing the appeal, the Judicial Member allowed the legal issue raised in the appeal and consequently upheld the order of CIT(A). The Accountant Member opined otherwise and wrote a separate order dismissing the appeal of the assessee.

VitthaldasNathubhai Shah vs ThePr.CIT-3 CITATION : 2025 TAXSCAN (ITAT) 1721

The Income Tax Appellate Tribunal ( ITAT ), Ahmedabad Bench, has quashed the revisionary order passed by the Principal Commissioner of Income Tax (PCIT) under section 263 of the Income Tax Act, 1961.

The Tribunal held that the AO had issued detailed notice, obtained replies, and verified supporting documents before accepting the claim under section 80GGC. Importantly, no specific material from the search connected the assessee’s donation to the alleged racket. The Tribunal distinguished cases cited by the PCIT, noting that in those matters, incriminating material or anomalies in donation records existed, unlike the present case.

DSP AdikoHoldings Pvt. Ltd. vsDy. CIT-Circle 2(1)(1) CITATION : 2025 TAXSCAN (ITAT) 1722

The Income Tax Appellate Tribunal (ITAT), Mumbai, has ruled in favour of DSP Adiko Holdings Pvt. Ltd. by allowing a deduction of ₹5 crore as bad debt or business loss on account of an irrecoverable loan advanced to Shri Ramalinga Raju.

The Income Tax Appellate Tribunal Bench, comprising Judicial Member Shri Amit Shukla and Accountant Member Ms. Padmavathy S, accepted the assessee’s contention. It held that once a loan has been advanced during the course of business and is subsequently found to be partly irrecoverable under a court decree, the balance must be treated as a bad debt or business loss.

Income TaxOfficer vsMahipalsinh Manharsinh Gohil CITATION : 2025 TAXSCAN (ITAT) 1723

The Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench, has dismissed the Revenue’s appeal and upheld the Commissioner (Appeals) finding that 0.7% of bank deposits transferred to Vodafone West Ltd. represented the assessee’s taxable commission income, while the balance deposits were not treated as unexplained after remand examination.

The tribunal accepted the Vodafone letter and the remand officer’s factual analysis that the assessee operated in e-top-up distribution with a 0.7% commission. In the absence of contradictory material the Bench declined to overturn the CIT(A)’s computation. The Tribunal emphasized that the AO’s original omnibus addition without such inquiry was inappropriate.

JanakSureshbhai Patel vs IncomeTax Officer CITATION : 2025 TAXSCAN (ITAT) 1724

The Income Tax Appellate Tribunal, Ahmedabad Bench, has directed the Assessing Officer to re-examine the assessee’s claim of exemption under Section 54F for AY 2012-13 after giving a fresh opportunity of hearing, holding that exceptional personal circumstances justified a reconsideration of evidence. The appeal was allowed for statistical purposes.

The Appellate Tribunal recorded the factual narrative contained in the CIT(A) order, which acknowledged that the assessee and her family were severely distressed because the 14-year-old grandson was diagnosed with malignant brain tumours and undergoing treatment. The Bench accepted that these were exceptional and compelling reasons for non-compliance in the earlier proceedings.

P. Maneklal andCo. vs The DCIT CITATION : 2025 TAXSCAN (ITAT) 1725

The Income Tax Appellate Tribunal (ITAT), Ahmedabad, has deleted an addition of ₹4,78,500 made under Section 69A of the Income Tax Act, 1961, on alleged unaccounted gold stock. The Tribunal accepted the assessee’s reconciliation supported by invoices and GST data, holding that the excess stock found during a survey was duly explained.

The Bench of Dr. B.R.R. Kumar (Vice President) and Shri Siddhartha Nautiyal (Judicial Member) observed that the invoices and payments were made before the survey date and reflected in GST data filed in August 2018 and February 2019. The omission in the stock register was a clerical oversight, not an undisclosed transaction.

ShreeGopinathji JyotipithFoundation vs The Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1726

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has set aside orders of the Commissioner of Income Tax (Exemptions) [CIT(E)], which had rejected Shree Gopinathji Jyotipith Foundation’s applications for registration under Section 12AB and approval under Section 80G(5) of the Income Tax Act, 1961.

The Tribunal observed that the CIT(E) summarily dismissed the applications on account of non-compliance without considering that the trust could not respond due to the absence of its consultant.

DeputyCommissioner ofIncome-tax vs Shree Vallabh Seva Kendra CITATION : 2025 TAXSCAN (ITAT) 1727

The Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench, has ruled that Shree Vallabh Seva Kendra, a charitable trust, is not eligible for exemption under Section 10(23C)(vi) of the Income Tax Act, 1961, for the assessment year 2018–19.

The ITAT Bench comprised Dr. B.R.R. Kumar, Vice-President, and Ms. Suchitra Kamble, Judicial Member, allowed the Revenue’s appeal, upholding the denial of exemption under Section 10(23C)(vi) of the Income Tax Act to Shree Vallabh Seva Kendra.

DeputyCommissioner of IncomeTax vs Surat Road King CITATION : 2025 TAXSCAN (ITAT) 1728

The bench of the Income Tax Appellate Tribunal, Mumbai, held that depreciation on trucks registered in the names of partners but purchased and used by the partnership firm is allowable, thereby upholding the relief granted to Surat Road King by the Commissioner of Income Tax (Appeals) [CIT(A)] in an income tax assessment dispute.

The Bench comprising of Vice President, Saktijit Dey and Accountant Member, Narendra Kumar Billaiya upheld the Commissioner’s order, holding that ownership for depreciation under Section 32(1) of the Income Tax Act, 1961 extends to those who have invested in and used the asset, regardless of registration.

WadhwagroupHoldings PrivateLimited vs ACIT CITATION : 2025 TAXSCAN (ITAT) 1729

The Mumbai Bench of the Income Tax Appellate Tribunal, in a common order for cross appeals concerning Assessment Year 2020-21, granted substantial relief to Wadhwagroup Holdings by deleting tax disallowances aggregating ₹2,13,03,85,960. The Tribunal dealt with issues relating to subleasing expenses, reversal of flat sales, project construction costs, interest expenditure, classification of common area maintenance (CAM) charges, and deemed rental income under the Income Tax Act, 1961, and ruled largely in favour of the assessee.

The Bench comprising VicePresident, Saktiijit Dey and Accountant Member, Narendra Kumar Billaiya on the issue of subleasing expenses,held that the assessee’s arrangement of leasing small units collectively to large tenants was a prudent commercial decision taken to keep Raghuleela Mall operational. It observed that commercial expediency of a businessman cannot be questioned by the revenue, and accordingly upheld the deletion of the disallowance of ₹1,67,71,848 made under Section 57(iii).

ShringarDevelopers PrivateLimited vs ITO CITATION : 2025 TAXSCAN (ITAT) 1730

The bench of the Income Tax Appellate Tribunal, Mumbai, has ruled that no disallowance under Section 14A of the Income Tax Act, 1961 can be made when net taxable interest income exceeds the interest expenditure, and further held that interest on borrowed capital invested in a partnership firm must be allowed as business expenditure.

The Bench comprising Vice President, Saktijit Dey and Accountant Member, Narendra Kumar Billaiya observed that the assessee had paid interest of ₹41,04,638 while earning taxable interest of ₹48,53,903, thereby resulting in positive net taxable income.

Spectra MotorsLimited vs ACIT CITATION : 2025 TAXSCAN (ITAT) 1731

The Income Tax Appellate Tribunal (ITAT), Mumbai bench has set aside an addition under Section 68 of the Income Tax Act, 1961, related to the sale of old cars. The bench ruled that proper transfer of ownership documents and verification by the RTO further confirmed the genuineness of the transactions, justifying the deletion of the addition.

The Bench comprising of Saktijit Dey, Vice President and Narendra Kumar Billaiya, Accountant Member observed that once the AO accepted the sales, treating a part of it as unexplained cash credit was not justified. The bench noted that the sale of old cars in exchange for new ones, along with proper transfer of ownership documents, established the genuineness of transactions.

Mining Officervs The DeputyCommissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1732

The Raipur bench of the Income Tax Appellate Tribunal, has ruled that compounding fees collected from illegal mining, transportation, and storage of minerals constitute a ‘transfer of rights’ and consequently attract Tax Collection atSource (TCS) under Section 206C(1C) of the Income Tax Act, 1961.

The Bench comprising Judicial Member, Ravish Sood and Accountant Member, Arun Khodpia observed that the appeals were squarely covered by its earlier judgment in District Mining Officer, Bemetara v. DCIT (TDS), Raipur (supra). Relying on that precedent, the bench held that compounding fees collected from illegal miners and transporters are calculated as multiples of royalty, clearly falling within the ambit of “transfer of rights” envisaged under Section 206C(1C) of the Income Tax Act.

DeputyCommissioner of IncomeTax vs Peyusha Shukla CITATION : 2025 TAXSCAN (ITAT) 1733

The bench of the Income Tax Appellate Tribunal, Raipur, quashed the reassessment order on procedural grounds, holding that the notice under Section 143(2) of the Income Tax Act, 1961 was issued beyond the prescribed time limit.

The Bench comprising of Judicial Member, Ravish Sood and Accountant Member, Arun Khodpia held that issuance of a valid and timely notice under Section 143(2) is a sine qua non for a valid reassessment. Since the notice in this case was issued on 20 November 2021, beyond the statutory cut-off of 30 June 2021, the assessment order dated 30 March 2022 stood vitiated.

Shri VeeraswamyJotheeswaran vsThe Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1734

The Chennai bench of the Income Tax Appellate Tribunal (ITAT) ruled that interest on enhanced compensation can be considered as part of compensation.

The single-member bench of George George K (Vice-President), based on the judicial pronouncements, held that interest received on enhanced compensation partakes the character of compensation, which is entitled to exemption under Section 10(37) of the Income Tax Act as well as the RFCTLARR Act.

Lakhmi ChandKhushiramani vsIncome Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1735

The Agra bench of Income Tax Appellate Tribunal (ITAT) remanded the matter to CIT(A) based on the ruling that liability under Section 249(4)(b) depends on the assessee’s own Income, not assessed Income.

The two-member Bench of Sunil Kumar Singh (Judicial Member) and Brajesh Kumar Singh (Accountant Member) held that the CIT(A) erred in dismissing the appeal of the assessee, on the ground that the assessee had failed to fulfil the mandatory and essential conditions by not paying the advance tax, which was payable by him, if no return of income was filed by the assessee for admission of appeal before the CIT(A) as per section 249(4)(b) of the Income Tax Act.

Shri Hamid Khanvs Income TaxOfficer CITATION : 2025 TAXSCAN (ITAT) 1736

The Delhi Bench of the Income Tax Appellate Tribunal ( ITAT ) has strongly criticised the Assessing Officer and Commissioner of Income Tax (Appeals) [CIT(A)] for erroneously treating an assessee’s sale of immovable property as if it were a purchase transaction. It deleted the addition of Rs. 40 lakhs.

The bench of Mahavir Singh (Vice President) deleted the addition in entirety. It further criticised the approach of the Revenue authorities, observing that mechanical confirmation of additions without fact-based analysis undermines the fairness of assessment proceedings.

Mrs. NidhikaRehani vs ACIT CITATION : 2025 TAXSCAN (ITAT) 1737

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has ruled that mere omission of a transaction in the Tax Audit Report cannot justify an addition when the assessee’s books of account are properly maintained and the Assessing Officer (AO) fails to demonstrate any undisclosed source of funds.

The Tribunal partly sustained additions relating to cash deposits during demonetization, observing that while ₹25.5 lakh was supported by contemporaneous cash book balances, ₹2.5 lakh remained unexplained due to inconsistencies with available denominations.

Shyam MetalicsAnd Engery Ltd vsDCIT CITATION : 2025 TAXSCAN (ITAT) 1738

The Kolkata bench of Income Tax Appellate Tribunal ( ITAT ) held that the AO erred in disallowing ₹1.89 Cr penalty and other expenses. The bench remanded ₹73.26 Lakh UIL penny-stock loss for fresh examination.

The two member bench of Pradip Kumar Choubey ( Judicial Member) and Rajesh Kumar (Accountant Member) held that there was prima facie merit in the assessee’s plea that the correct quantum of loss incurred on sale of shares of UIL was Rs.73,26,040/- and the lower authorities had grossly erred in disallowing the entire gross short term capital loss of Rs.1,89,53,757/-. The AO was directed to delete the excess loss of Rs. 1,16,27,717/- incorrectly disallowed.

Winner TradecomPvt. Limited vsIncome Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1739

The bench of the Income Tax Appellate Tribunal, Kolkata, set aside the addition of ₹15,00,000 made under Section 68 of the Income Tax Act, 1961, holding that the Assessing Officer (AO) failed to discharge the initial burden of proving the alleged unexplained credit and that the reassessment proceedings were invalid.

The Bench of Vice-President (KZ), Duvvuru RL Reddy, held that the AO had not discharged the initial burden of establishing the existence of the transaction between the assessee and M/s Sankalp Vincom Pvt. Limited. NO supporting material was provided to substantiate the allegation.

Income TaxOfficer vsZaiullabddin Gousaheb Kochargi CITATION : 2025 TAXSCAN (ITAT) 1740

The bench of the Income Tax Appellate Tribunal, Mumbai , has set aside an appeal involving unexplained cash deposits and remanded the matter back to the Assessing Officer for fresh adjudication. The dispute pertained to additions under the Income Tax Act, 1961 arising from cash deposits linked to the assessee’s egg trading business.

The Bench comprising Accountant Member, Narendra Kumar Billaiya and Judicial Member, Sunil Kumar Singh observed that while the assessee had not fully complied during the assessment stage, the CITA(A) also did not verify the genuineness of the suppliers’ details nor ensured a remand report was obtained from the AO.

Yogesh AshokMundade vs NationalFaceless Appeal Centre CITATION : 2025 TAXSCAN (ITAT) 1741

The bench of the Income Tax Appellate Tribunal, Mumbai, has held that the reassessment notice issued under Section 148 of the Income Tax Act, 1961 beyond the permissible period of limitation was void ab-inito. The Tribunal quashed the notice and set aside the consequential reassessment proceedings, providing relief to the assessee in an income tax dispute linked to the Kartick Mohan Prasad investment scheme.

The Bench comprising Judicial Member, Sandeep Singh Karhail and Accountant Member, Narendra Kumar Billaiya observed that the time limit for reopening the assessment for AY 2014–15 expired on 31 March 2021, and under TOLA, the outer limit extended only till 30 June 2021. Any notice issued beyond this date was barred and relied on the recent Supreme Court ruling in Union of India v. Rajeev Bansal (2024).