Accordingly, the ITAT deleted the cash payment additions for all years. The Tribunal upheld the 153C assessments but deleted the cash additions, thus partly allowing the appeals.The Assessee was represented by Bharat Kumar, while Rajesh Kumar Yadav appeared for the Revenue

ITAT Upholds Assessee’s Consistent 70:30 Allocation of Sales Promotion and Financial Expenses Between Revenue and Capital Work-in-Progress

The Tribunal also noted that whether the expenditure is allowed now or capitalized for later years was revenue-neutral, making the deviation by the AO unwarranted. Accordingly, the ITAT set aside the order of the CIT(A) on this issue and directed the AO to follow the consistent 70:30 allocation adopted in prior years, capitalizing 30% of the sales promotion and financial expenses to CWIP and allowing the remaining 70% as revenue expenditure.The assessee was represented by Prateek Jain, while Annavaram Kasuri appeared for the Revenue.

MAT u/s 115JB Inapplicable to Banks: ITAT affirms Deletion of ₹305.49 Cr Penalty on Central Bank

The Tribunal thus set aside the addition, restoring the matter to the AO for fresh adjudication with specific directions for verification and after providing the assessee a reasonable opportunity of being heard. The appeal was accordingly allowed for statistical purposes.The assessee was represented by Prateek Jain, while Annavaram Kasuri appeared for the Revenue.

Salary arrears of Deceased cannot be Taxed on Individual Capacity of Legal Heir : ITAT says NFAC Ignores S. 159

Consultant Failed Him’: ITAT remands ₹18.5L Income Tax Addition on Differently Abled Taxpayer, Condones 600+ days Delay

‘Sexist Assumptions’ in CIT(A) Order: ITAT slams Authority for Ignoring Women’s Expertise, Deletes Sales Commission Disallowance

The Tribunal observed that no manufacturing activity was detected during the search, no machinery or sealing equipment was found, and there was no evidence establishing actual production or clandestine removal of gutkha. Loose papers and materials seized from the appellant’s residence were held insufficient to sustain serious allegations of clandestine manufacture without proper investigation and linkage. In the absence of tangible and reliable evidence, the Tribunal concluded that the demand of ₹49.62 lakh, penalties, and confiscation of goods and cash could not be sustained. Accordingly, the Tribunal quashed the excise duty demand, set aside penalties and confiscation orders, and allowed the appeals with consequential relief to the appellant.

Entity Not Recognized as Manufacturer or Buyer Cannot Claim Excise Duty Refund Regardless of Who Paid: CESTAT

The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that an entity not designated as the manufacturer or the buyer of excisable goods cannot claim a duty refund, even if it physically paid the amount on behalf of the government.

The bench observed that the appellant failed to produce any invoice or document recognised under the Central Excise Act to prove they were the buyers or consumers who bore the duty incidence without passing it on, thereby failing the test of unjust enrichment. Citing Supreme Court precedents including UOI Vs Mahendra Singh and State of Jharkhand & others Vs Ambey Cements, the Tribunal observed that if a statute provides for a thing to be done in a particular manner, it must be done in that manner only.

UP GST Adjudication Without Personal Hearing Set Aside: Allahabad HC Grants 15 Days to Buddha Resorts to File Reply

The Lucknow Bench of Allahabad High Court held that an adjudication order passed under the U.P. Goods and Services Tax Act, 2017 (U.P. GST), without granting a meaningful opportunity of personal hearing, is vitiated for violation of the principles of natural justice and cannot be sustained in law.

The Bench directed that the impugned order be treated as a final notice and granted the petitioner 15 days’ time to submit a further reply, permitting it to raise all jurisdictional and merit-based issues. It was further directed that the adjudicating authority shall fix a date for personal hearing with at least 15 days’ prior notice and thereafter pass a reasoned order in accordance with law.

Non-Compliance Fatal to Clandestine Removal Charge: CESTAT Quashes ₹9.26 Cr Excise Duty Demand for Lack of Evidence and Procedural Lapses

The Kolkata Bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) quashed a ₹9.26 crore excise duty demand against a 100% EOU, holding that the Revenue failed to follow the mandatory procedure under Section 9D before relying on statements to allege clandestine removal and found no corroborative evidence such as transport records, buyers, excess raw materials, or flow of funds to support the charge.

The bench stated it was duty-bound to direct the AO to compute the correct income when the necessary facts such as audited financial notes were already available in the records.

Failure to Issue Mandatory Draft Assessment Order to Non-Resident u/s 144C(1) Invalidates Search Assessment: ITAT Quashes Order

Damandeep Kaur vs The ACITCentral Circle-2 CITATION: 2025 TAXSCAN (ITAT) 2186

The Chandigarh Bench of the Income Tax Appellate Tribunal (ITAT) quashed search assessment and ruled that the Assessing Officer (AO) failed to mandatorily issue draft assessment order to non-resident as stated under Section 144C of the Income Tax Act.

The bench comprising Laliet Kumar (Judicial Member) and Krinwant Sahay (Accountant Member) noted that the Foreign Regional Registration Office (FRRO) and the Black Money Investigation Wing had independently verified and accepted her "Non-Resident" status for the relevant years.

The tribunal observed that once an assessee falls within the definition of an "eligible assessee," the procedure under Section 144C was not merely directory but mandatory.

ITAT Deletes S.56(2)(x) Addition, Finds No Basis for Price Suppression in State Govt Sale

Kanha Villa LLP vs IncomeTax Ward 29(1), Kolkata CITATION: 2025 TAXSCAN (ITAT) 2187

The Kolkata Bench Income Tax Appellate Tribunal (ITAT), set aside an addition made underSection 56(2)(x) of the Income Tax Act, 1961, holding that there was no basis to infer suppression of purchase price in the acquisition of property from a State Government undertaking, thereby deleting the addition made by the assessing authority.

The bench of Judicial Member George Mathan and Accountant Member Sanjay Awasthi observed that the transaction was undertaken with a State Government undertaking and that there was no reason to believe that a State authority would dispose of immovable property at a price lower than the applicable circle rate. The Tribunal held that the allegation of suppressing purchase consideration lacked substance.

CIT(A) Failed to Consider Filed Evidence: ITAT Restores Income Tax Appeal With Cost to PM Relief Fund

Smita Thackeray vs TheDCIT, Circle CITATION: 2025 TAXSCAN (ITAT) 2188

The Mumbai Bench Income Tax Appellate Tribunal (ITAT), has set aside an ex-parte order passed by the National Faceless Appeal Centre and restored an income tax appeal for fresh adjudication, observing that the appellate authority failed to consider the documents filed in the paperbook before dismissing the appeal. The Tribunal directed reconsideration on merits after imposing a monetary cost payable to the Prime Minister Relief Fund.

The Bench consisting of Judicial Member Sandeep Gosain and Accountant Member Om Prakash Kant held that the appellate authority is duty-bound to adjudicate the grounds on merits after considering the documents and submissions on record. The Tribunal restored the matter to the Commissioner of Income Tax (Appeals) with directions to reconsider the evidence and pass a reasoned order after granting adequate opportunity.

ITAT Dismisses Revenue Appeal on ‘Additional Evidence’ Ground, Upholds CIT(A) Direction for Full Form-26AS TDS Credit After Verification

ACIT, Panvel Circle,Panvelvs Gateway Terminals India Pvt. Ltd CITATION: 2025 TAXSCAN (ITAT) 2189

The Pune Bench of the Income Tax Appellate Tribunal (ITAT) dismissed the Revenue’s appeals challenging the order directing verification and grant of full tax deducted at source credit for three assessment years, in accordance with Form-26AS.

The Bench comprising Vice President R. K. Panda and Judicial Member Astha Chandra held that since the appellate authority had merely restored the matter to the AO for verification of the tax deducted at source and directed credit to be allowed only after such verification, the Revenue had no real grievance.

No 115JB Adjustment for Section 14A: ITAT Upholds CIT(A)'s ₹71 Lakh Cap

JCIT (OSD), Circle 2.3.1Mumbai vs Rajesh Estates and Nirman Pvt. Ltd. CITATION: 2025 TAXSCAN (ITAT) 2190

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT), held that no adjustment under Section 115JB relating to disallowance under Section 14A of the IncomeTax Act, 1961 can be made while computing book profit, and upheld the restriction of disallowance to the extent of income exempt under Section 10(2A).

he bench comprising Judicial Member, Amit Shukla and Accountant Member, Vikram Singh Yadav upheld the order of the CIT(A). The Tribunal reasoned that while Section 14A is applicable even where the investment is in a partnership firm whose share of income does not form part of total income under Section 10(2A), the disallowance cannot exceed such income excluded from taxation. The restriction of disallowance to ₹71,04,282 was therefore held justified since the amount represented the share of loss from the partnership firm.

Mutual Fund Stock-in-Trade Investments Must Be Excluded while Computing Disallowance u/s 14A: ITAT

Hincon Holdings Ltd HinconHouse vs ITO CITATION: 2025 TAXSCAN (ITAT) 2191

The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ), held that mutual fund investments treated as stock-in-trade must be excluded while computing disallowance under Section 14A of the Income Tax Act, 1961, and consequently remanded the matter to the Assessing Officer (AO) for factual verification and fresh computation.

The bench comprising Judicial Member, Sandeep Gosain held that the AO must examine the factual position regarding the nature of investments and recompute the disallowance under Section 14A accordingly. The Tribunal reiterated that for the purpose of computing disallowance under Section 14A read with Rule 8D, only investments yielding exempt income should be considered and investments held as stock-in-trade should be excluded.

Difference in Sales between Ledger and P&L Account Explained by VAT, Service Tax and other receipts: ITAT Deletes ₹13.61 Cr Addition

ITO, WARD 18(1) vs NCRVEHICLES PVT. LTD CITATION: 2025 TAXSCAN (ITAT) 2192

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) deleted an addition of ₹13,61,47,346 made by the Assessing Officer (AO) on account of alleged differences between sales registered in the ledger and those declared in the Profit and Loss (P&L) account. It held that the discrepancy was fully reconciled by statutory taxes and specific service receipts.

The two-member bench comprising Mahavir Singh (Vice President) and Krinwant Sahay (Accountant Member), observed that the assessee had previously submitted sale invoices, purchase invoices, and audited accounts during the assessment.

The tribunal observed that the reconciliation chart was not "new evidence" but merely a summary of data already present in the existing records. The tribunal observed that the Revenue could not find any factual fault in the reconciliation provided.

Interest-Free Funds Presumption: ITAT Deletes ₹28.78 Lakh 14A Interest Disallowance for Co-op Bank

The Bench comprising Manish Borad, Accountant Member, and Vinay Bhamore, Judicial Member, partly allowed the appeal. Examining the financial statements placed before the Tribunal, the Bench recorded that interest-free funds available with the bank stood at approximately ₹20.30 crore as of March 31, 2013 and ₹22.07 crore as of March 31, 2014.

Applying the presumption laid down in Reliance Industries (supra), the Bench held that no interest component could be disallowed under Section 14A when sufficient interest-free funds existed.

11.54% TDS on NRI Share Transfers u/s 112(1)(c)(iii): ITAT Rejects Revenue’s ₹2.37 Crore Default Claim Against Godrej Agrovet

The Income Tax Officer vsGodrej Agrovet Limited CITATION: 2025 TAXSCAN (ITAT) 2194

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT), held that lower deduction rate of 11.54% under Section 112(1)(c)(iii) of the Income Tax Act, 1961 on long-term capital gains arising from share transfers was correctly applied by the non-resident assessee Godrej Agrovet, dismissing the Revenue’s claim that tax should have been deducted at a higher rate, resulting in an alleged default of more than two crore rupees.

Judicial Member Suchitra Kamble and Accountant Member Girish Agrawal affirmed the order of the Commissioner of Income Tax (Appeals) ruling that Section 112(1)(c)(iii) expressly provides for a concessional long-term capital gains tax rate of 10 percent for non-resident shareholders on transfer of shares, and when surcharge and cess are applied the effective tax rate of 11.54% adopted by the assessee was consistent with statutory requirements.

The Tribunal rejected the argument that the assessee failed to consider the computation methodology laid down in the first and second provisos to Section 48, noting that the AO incorrectly applied a higher rate without establishing statutory justification.

Disallowance of Expenditure Written off deleted Without Examining Commercial Rationale and Nature of Loss: ITAT Remands Matter

The Deputy Commissioner ofIncome Tax vs Hubli Scan Centre Pvt. Ltd. CITATION: 2025 TAXSCAN (ITAT) 2195

The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) remanded the matter of a disallowed expenditure write off totaling ₹4,19,61,906 back to the Commissioner of Income Tax (Appeals) [CIT(A)] and ruled that the addition was deleted without sufficiently examining the commercial rationale and whether the loss was capital or revenue in nature.

The two member bench comprising Prashant Maharishi (Vice President) and Keshav Dubey (Judicial Member) noted that the CIT(A) failed to determine if the loss was a revenue loss which was allowable under Section37(1) or Section 28 or a capital loss, which would not be deductible from business income.

The tribunal highlighted the short time lag between the revised agreement (2015) and the settlement (2017), therefore suggested the need to verify if the transaction was a "business rationale" or a "colorable device".

S. 54 Exemption cannot Be Denied Solely for Delay in Property Registration when Capital Gains are Timely Reinvested: ITAT

Indihaf Jamal Mohamed vsThe Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 2196

The Chennai bench of the Income Tax Appellate Tribunal (ITAT) held that relief under Section 54 of the Income Tax Act cannot be denied solely due to delay in registration of the new residential property when the capital gains have been timely reinvested, and remanded the matter back to the Assessing Officer (AO) for fresh verification.

The single-member bench comprising George George K (Vice President) considered the arguments of both sides and examined the material available on record. The tribunal observed that the proceedings before the first appellate authority were completed ex parte and that the documentary evidence produced by the assessee was not properly examined at the assessment stage.

The tribunal pointed out that if the assessee is able to demonstrate that the sale proceeds were invested within the statutory period, the exemption cannot be denied merely due to delay in registration.

Relief to Reliance Power: ITAT rejects Income tax Dept’s Challenge to Reduced S. 14A Disallowance

ACIT-15(3)(1) vs ReliancePower Ltd CITATION: 2025 TAXSCAN (ITAT) 2197

The Mumbai Bench of the Income Tax Appellate Tribunal ( ITAT ) dismissed the Income Tax Department's appeal against Reliance Power Ltd., upholding the relief granted by the Commissioner of Income Tax (Appeals) [CIT(A)] by greatly lowering the disallowance made under Section 14A read with Rule 8D of the Income Tax Act, 1961.

The two-member bench of Amit Shukla (Judicial member) and Arun Khodpia (Accountant member) found that the CIT(A) had correctly applied these settled legal principles while restricting the disallowance. In the absence of any contrary material or binding judicial precedent placed on record by the Revenue, the ITAT dismissed the appeal.

Real Estate Broker’s Excel Sheet Triggers ₹48 Lakh ‘On-Money’ Income Tax Addition: ITAT Gives Relief to Homebuyer

Rajsheel Jitendra Patel vsIncome Tax Officer CITATION: 2025 TAXSCAN (ITAT) 2198

The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) granted relief to a homebuyer after an income tax addition of Rs. 48 lakh was made on the allegation of on-money payment based solely on an Excel sheet recovered from a real estate broker, holding that such third-party material without corroboration could not justify the addition.

After examining the record, the bench comprising Siddhartha Nautiyal (Judicial Member) and Makarand V. Mahadeokar (Accountant Member) observed that the on-money addition was made exclusively on the basis of an uncorroborated Excel sheet recovered from a third party.

The tribunal observed that the seller’s name mentioned in the Excel sheet did not match the seller in the registered sale deed, which seriously affected the credibility of the document. The tribunal also observed that no independent corroborative evidence was produced and that denial of cross-examination of the alleged broker weakened the Revenue’s case.

ITAT Grants Major Relief to SRF Limited, Deletes Major Additions and Treats CER & TUF Subsidy Receipts as Capital

SRF Limited vs ACIT, Circle1, LTU, New Delhi CITATION: 2025 TAXSCAN (ITAT) 2199

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT), has pronounced a common order in the appeals filed by SRF Limited against assessment orders for AY 2011‑12 and AY 2013‑14. The appeals challenged transfer pricing adjustments, corporate tax disallowances, and the denial of additional claims raised during assessment proceedings.

The two-membered bench comprising S. Rifaur Rahman (Accountant Member) and Sudhir Pareek (Judicial Member), following its own earlier orders and High Court rulings, held that CER receipts are capital in nature, not chargeable to tax, and must also be excluded from MAT book profits.

Relying on various high court precedents, the ITAT directed the exclusion of the subsidy from taxable income and book profits.

ITAT Grants Cummins India ₹210 Cr Relief, Deletes ₹12.7 Cr TP Adjustment, Upholds 10AA & 80JJAA Claims Despite One‑Day Delay in Return Filing

Cummins India Limited, VSACIT, Circle-1(1), Pune CITATION: 2025 TAXSCAN (ITAT) 2200

The Pune Bench of the Income Tax Appellate Tribunal (ITAT) has delivered a landmark order in the case of Cummins India Limited, granting the multinational engine manufacturer tax relief of over ₹210 crore for AY 2018‑19.

The two-membered bench of Astha Chandra (Judicial Member) and Manish Borad (Technical Member) deleted ₹12.7 crore TP adjustment, allowed ₹196.96 crore deduction u/s 10AA, allowed ₹60.72 lakh deduction u/s 80JJAA and remanded ₹13.10 crore deduction u/s 35(2AB) for verification.

Books of Account must be Rejected u/s 145(3) before Unexplained Cash Additions: ITAT Deletes ₹64 Lakh Addition

Jamaluddin vs ITO, Ward CITATION: 2025 TAXSCAN (ITAT) 2201

The New Delhi Bench of Income Tax Appellate Tribunal (ITAT) held that the Assessing Officer cannot treat cash deposits as unexplained income without first rejecting the books of account under Section 145(3). Since the assessee had produced complete books which were never rejected, the addition of ₹64 lakh was held unsustainable. Accordingly, the addition and the consequential penalty under Section 271(1)(c) were deleted.

The Tribunal consisted of Judicial Member, Satbeer Singh Godara and Accountant Member, Manish Agarwal, heard and reviewed the matter. After considering the submissions made, the Tribunal stated that the assessee had filed complete books of account during scrutiny, which the Assessing Officer failed to formally reject under Section 145(3). Despite the assessee providing bills, vouchers, and party addresses, the AO made no effort to verify the cash deposits and accepted the AO's action would result in absurdly high profit rates (32.9% for AY 2013-14 and 56.09% for AY 2014-15), as highlighted in the Forum Sales (P.) Ltd. precedent.

Cash Deposits from Sale of Goods cannot be treated as Unexplained when Stock Availability not Disputed: ITAT Deletes Addition

The two-member bench, comprising Dr. B.R.R. Kumar (Vice-President) and Siddhartha Nautiyal (Judicial Member) observed that the cash sales for the year under consideration were comparable to earlier years.

The tribunal noted that the Revenue did not dispute the availability of stock with the assessee to effect such sales. The tribunal observed that If the existence of goods is not in dispute, cash receipts from the sale of those goods cannot be treated as unexplained.

Higher Depreciation on Goods Carriage Vehicles Cannot Be Disallowed at S. 143(1) Stage: ITAT Deletes CPC Adjustment

Vikas Goyal No.521 vs DCITCircle 7(1)(1) Bengaluru CITATION: 2025 TAXSCAN (ITAT) 2204

The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) deleted a disallowance of ₹25,04,890 originally made by the Centralized Processing Centre (CPC) and held that the CPC exceeded its limited mechanical scope by restricting depreciation to 15% when the assessee had claimed 30% for commercial trucks used in his transport business.

The bench, comprising Prashant Maharishi (Vice President) and Shri Keshav Dubey (Judicial Member) observed the restricted nature of "prima facie" adjustments and held that since determining the correct depreciation rate for these vehicles requires documentary evidence and verification of the business nature, it must be addressed in scrutiny proceedings rather than through automated processing.

Interest Income Earned by Cooperative Society from Surplus Funds Invested in Cooperative Banks is Business Income: ITAT

Shree Sharada CreditCooperative Society Limited 2 vs The Income tax Officer CITATION: 2025 TAXSCAN (ITAT) 2205

The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) set aside the orders and ruled that interest income earned by the cooperative society from surplus funds invested in cooperative banks can be allowed as business income and eligible for deduction under section 80P of the Income Tax Act.

The Single Member bench comprising Prashant Maharishi (Vice President) observed that the legislature used the phrase "attributable to" in Section 80P(2)(a)(i), which has a wider legal meaning than "derived from". This covers receipts from sources beyond the actual conduct of primary business.

The tribunal observed that the interest income so derived or the capital, if not immediately required to be lent to the members then the said interest income is attributable to the profits and gains of the business of providing credit facilities to its members only.

Assessment Void Without Jurisdictional 143(2) Notice: ITAT Quashes ₹1.11 Cr Share Premium Addition u/s 68

Riddhiman Realcon LLP(Formerly Riddhiman Realcon Pvt. Ltd.) vs ITO, Ward 9(3) CITATION: 2025 TAXSCAN (ITAT) 2206

The Kolkata Bench of Income Tax Appellate Tribunal (ITAT) ruled that an assessment framed without issuance of a mandatory notice under Section 143(2) of the Income Tax Act, 1961 by the jurisdictional Assessing Officer (AO) is invalid in law, and consequently, quashed an addition of ₹1.11 crore made towards alleged unexplained share capital and share premium under Section 68 of the Act.

The bench comprising Rajesh Kumar, Accountant Member and Pradip Kumar Choubey, Judicial Member, allowed the appeal, ruling that issuance of a notice under Section 143(2) of the Income Tax Act, 1961 by the AO who frames the assessment is mandatory and not a procedural formality.

The tribunal observed that the notice had been issued by a non-jurisdictional officer and no fresh notice was issued after the case was transferred to the jurisdictional AO.

No Escapement of Income Where Tax Paid on Consolidated Profits: ITAT Quashes ₹16.06 Cr Double Additions

The ITO vs Kanji AmbabhaiCotton Industries CITATION: 2025 TAXSCAN (ITAT) 2207

The Rajkot Bench of Income Tax Appellate Tribunal (ITAT) held that where income arising from business transactions has already been offered to tax on a consolidated basis, no further additions can be sustained on the same transactions in the hands of another entity merely due to the existence of a separate Permanent Account Number (PAN). The Tribunal ruled that such additions result in double taxation without any real escapement of income under the Income Tax Act, 1961.

The Bench comprising Dinesh Mohan Sinha, Judicial Member, and Arjun Lal Saini, Accountant Member, dismissed the Revenue’s appeal and upheld the order of the Commissioner of Income Tax (Appeals).

The Tribunal held that the additions were based solely on information received from banks and represented a mechanical reproduction of data without examining whether the income had already been taxed. It concluded that making additions again in the hands of M/s Kanji Ambabhai Cotton Industries amounted to double addition on the same set of transactions, resulting in no real loss to the Revenue.

ITAT Upholds Deletion of S.68 Share Premium Addition for 14 Investors as Verification Compliance Satisfied

Talentube Entertainment PvtLimited vs The Income Tax Officer Ward-16(1)(5) CITATION: 2025 TAXSCAN (ITAT) 2208

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) affirmed that the deletion of additions made under Section 68 of the Income Tax Act, 1961 was proper because verification of share premium received from 14 investors satisfied statutory requirements.

The Bench comprising Judicial Member, Anikesh Banerjee and Accountant Member, Girish Agrawal upheld the Commissioner of Income Tax (Appeals)’s deletion of Rs.4,25,01,740 relating to 14 investors. The Tribunal held that all three conditions prescribed under Section 68 of theIncome Tax Act, 1961 stood satisfied for the 14 investors on the basis of documentary evidence and verification, and that suspicion alone could not justify additions without further enquiry.

Wrong Section Code Cannot Justify Rejection of S. 12A Registration: ITAT Remands Matter and Condones 18-Day Delay

Chintpurni Mandir (BrahamAkhara) vs The Commissioner of Income Tax (Exemptions), Chandigarh CITATION: 2025 TAXSCAN (ITAT) 2209

The Amritsar Bench of Income Tax Appellate Tribunal (ITAT) condoned an 18-day delay in filing the appeal and held that Section 12A of the Income Tax Act, 1961 registration cannot be rejected solely for selecting an incorrect section code in the application. Accordingly, the matter was remanded to the CIT(E) for fresh consideration or to allow rectification, and the appeal was allowed for statistical purposes.

The Bench, consisting of Judicial Member, Udayan Dasgupta and Accountant Member, Manoj Kumar Aggarwal, heard and reviewed the matter.

The Tribunal held that registration cannot be rejected merely for mentioning a wrong section code, which is a curable defect. It also relied on the decision of of IIT Ropar Technology Business Incubator Foundation in ITA 612/Asr/2024 dated 20th August 2025and Society For Technology Business Incubator vs. CIT(E) in ITA 1134/Chd/2024, stating that Applications filed timely with wrong section codes cannot justify rejection and the CIT(E) should inform the assessee of such errors and allow rectification rather than rejecting applications on technical grounds.

Company Entitled to TDS Credit Even When Corresponding Income Taxed Elsewhere: ITAT Allows Rs. 3.41 Lakh TDS Credit

Haddock Propbuild Pvt Ltdvs The I.T.O ward CITATION: 2025 TAXSCAN (ITAT) 2210

The New Delhi Bench of Income Tax Appellate Tribunal (ITAT) held that an assessee was entitled to claim TDS credit as reflected in Form 26AS, even if the corresponding income had been offered to tax in the hands of another entity. The court directed the Assessing Officer to allow TDS credit of ₹3.41 lakh to the assessee.

The Tribunal, consisting of Judicial Member, Challa Nagendra Prasad and Accountant Member, Naveen Chandra, directed the Assessing Officer allow the credit after verifying that the sister concern has not claimed the corresponding TDS.

Ancillary Software Support Not a Fee for Technical Services: ITAT Drops ₹48.27 Cr Income Tax Addition Under India-Singapore DTAA

CA(Singapore) PTE Ltd vsThe Assistant Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 2211

The Mumbai Bench Income Tax Appellate Tribunal (ITAT), has ruled that receipts from ancillary software support services linked to the distribution of software licences cannot be characterised as Fee for Technical Services (FTS) under Article 12 of the Double Taxation Avoidance Agreement (DTAA) between India and Singapore. Accordingly, the Tribunal deleted the addition of ₹48.27 crore made in the assessment by treating such receipts as taxable technical fees.

The Bench comprising Judicial Member, Suchitra Kamble and Accountant Member, Girish Agrawal ruled that the support receipts were intrinsically linked to the software licences and amounted to ancillary services covered under the agreements placed on record.

The Tribunal noted that the authorities did not demonstrate how the services ‘made available’ technical knowledge enabling customers to apply the technology independently, nor did they rebut the contractual evidence showing obligation to provide maintenance and active support as part of the software distribution relationship.

Survey Statement alone cannot Justify Bogus Purchase Additions: ITAT Deletes ₹3.60 Cr Addition u/s 68

DCIT vs Kay BouvetEngineering Limited N-3 CITATION: 2025 TAXSCAN (ITAT) 2212

The Pune Bench of the Income Tax Appellate Tribunal (ITAT) has held that additions under Section 68 of the Income Tax Act, 1961 cannot be sustained solely on the basis of statements recorded during a survey under Section 133A of the Income Tax Act, 1961.

The Bench of R. K. Panda, Vice President, and Astha Chandra, Judicial Member, dismissed both the appeals of Revenue and upheld the deletion of the addition of ₹3.60 crore,observing that the AO had accepted the assessee’s audited books of account, quantitative records, and banking transactions. Subsequently, no discrepancies were pointed out in the sales or purchase figures.

Political Party Denied Section 13A Exemption for Non-Compliance: ITAT Directs Income Taxable at 6% Commission Rate

Public Political Party vsDCIT, Central Circle-31 CITATION: 2025 TAXSCAN (ITAT) 2213

The Assessee, Public Political Party, a Registered Unrecognized Political Party (RUPP) under Section 29A of the Representation of the People Act, 1951, filed appeals and stay applications against orders of the CIT(Appeals), Delhi, challenging assessment orders passed under Sections 147/144/143(3) of the Income-tax Act, 1961 for assessment years 2015-16 to 2022-23. All eight appeals were heard together by the Tribunal.

The Tribunal consisted of Judicial Member, Anubhav Sharma and Accountant Member, Amitabh Shukla, heard and reviewed the matter.

The Tribunal relied on Delhi High Court decision in Commissioner of Income Tax Delhi-Xi vs Indian National Congress (I) and others decided on 23 March, 2016 vide ITA 145/2001 stating that Section 13A compliance was mandatory and voluntary contributions not meeting these requirements constitute taxable income as "income from other sources" under Section 56(1). The High Court had ruled that filing audited accounts was mandatory, not directory, and expenditure deductions were disallowed upon non-compliance.

Based on the admitted commission arrangement of 5-7%, the Tribunal directed taxation of 6% of total donations as "income from other sources" under Section 56(1). Accordingly, the appeal was partly allowed and the stay applications filed by assessee were dismissed.

Search Assessment Invalid Without Incriminating Evidence: ITAT Quashes Section 153A Additions

RMS Diversified Pvt. Ltd.vs DCIT, Central Circle CITATION: 2025 TAXSCAN (ITAT) 2214

The New Delhi Bench ofIncome Tax Appellate Tribunal (ITAT) quashed additions made under Section 153A of the Income Tax Act, 1961, due to absence of incriminating material seized during search and held such additions in unabated years to be invalid. Accordingly, the assessee’s appeals were allowed and the Revenue’s appeals were dismissed.

The Tribunal consisted of Judicial Member, Anubhav Sharma and Accountant Member, Krinwant Sahay, heard and reviewed the matter.

After considering the submissions made, it found that no incriminating material seized during search was relied upon by the Assessing Officer in any assessment year.

The Tribunal also observed for AY 2015-16, unsecured loans from 10 parties were treated as suspicious by questioning identity and creditworthiness, not based on incriminating material. For AY 2017-18, additions on unsecured loans were made by examining penny stock transactions and relying on assessment of M/s SW Consultants Pvt. Ltd., not on seized material. The Tribunal further relied on the Supreme Court’s decision in PCIT Vs. Abhishar Buildwell, 454 ITR 212 (SC) stating that for unabated years, additions under Section 153A can only be made based on incriminating material found during search.

Publicising Donor Names for Religious Events Not Convert Donations into Business Income: ITAT

Shri Krishna Janmashtmi vsIncome Tax Officer CITATION: 2025 TAXSCAN (ITAT) 2215

The Delhi Bench of the Income Tax AppellateTribunal (ITAT) ruled that the presence of donor names on publicity material, at event sites, or on constructions is merely an acknowledgment of contributions and does not convert voluntary donations into commercial or business receipts.

The two-member bench comprising Anubhav Sharma(Judicial Member) and Manish Agarwal (Accountant Member), examined whether these receipts were donations for trust objectives or business receipts. The tribunal held that any benefit derived by the donor was not commercial in nature and also held that since no profit motive existed behind these receipts, they could not be converted into commercial considerations.

IEA Inapplicable to Income Tax Proceedings: ITAT Rejects Challenge to Electronic Data Lacking S.65B Certification

Purushttam Lal Soni vsAsst. Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 2216

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) heard a batch of seven appeals and ruled that Indian Evidence Act did not apply to the Income Tax Proceedings and held that it did not render seized Electronic data inadmissible even with a lack of section 65B Certificate of the Evidence Act.

The two-member bench, comprising Satbeer Singh Godara (Judicial Member) and Shri Manish Agarwal (Accountant Member) held that it is a settled position of law, supported by the Supreme Court in Chuharmal v. CIT.

The tribunal noted from the above case that the rigours of the Evidence Act do not apply to Income Tax proceedings. The tribunal noted that while the principles of the act may apply, the technical requirements like the Section 65B certificate are not strictly mandatory for tax authorities.

ITAT Directs Lumpsum 8% Tax Rate on Unexplained Cash Receipts and Payments for Alleged Accommodation Entry Business

Purushttam Lal Soni vsAsst. Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 2216

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) directed a lumpsum of 8% tax rate on unexplained cash receipts and payments for alleged accommodation entry business considering the excessive amount of addition by the lower authorities.

The two-member bench, comprising Satbeer Singh Godara (Judicial Member) and Manish Agarwal (Accountant Member), noted that the assessee had not filed any specific material to rebut the correctness of the seized data.

The tribunal noted that there was no evidence on record indicating a specified commission income or comparable instances for this segment. The tribunal noted that assessing the entire gross amount of receipts and payments as unexplained income would be excessive in the context of a commission based activity.