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

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) restricted the rental income ₹5,026 and directed the Assessing Officer (AO) to restrict the addition of deemed rental income to the municipal valuation.

The two-member bench comprising Sandeep Gosain (Judicial Member) and Girish Agrawal (Accountant Member) deleted the excessive addition made by the AO respectfully following the jurisdictional High Court and its own binding precedent. The tribunal directed that the income from house property for Flat No. 12B be restricted to ₹5,026 (the municipal valuation for 10 months). The appeal of the assessee was partly allowed.

The Mumbai Bench of the Income Tax Appellate Tribunal ( ITAT ), with respect to the case involving alleged bogus purchase transactions, has set aside the order of the Commissioner (Appeals) and remanded the matter back to the Assessing Officer (AO) for de novo adjudication.

The Bench comprising Shri Narendra Kumar Billaiya (Accountant Member) and Shri Sandeep Singh Karhail (Judicial Member) said that “in the interest of justice and fair play,” the assessee should not be deprived of a reasonable chance to support its claim on merits. Therefore, CIT(A)’s order was set aside and the matter was remanded back to the Jurisdictional Assessing Officer for de novo adjudication.

The bench of the Income Tax Appellate Tribunal (ITAT), Lucknow, has held that once the registration of a charitable trust underSection 12A of the Income Tax Act, 1961, is restored, the trust becomes entitled to claim exemption benefits under Sections 11, 12, and 13 of the Act.

The Bench comprising of Sudhanshu Srivastava, Judicial Member and Nikhil Choudhary, Accountant Member held that since the registration under Section 12A had been restored by the ITAT and not reversed by any superior court, the trust’s income must be assessed under the special provisions of Sections 11, 12, and 13 of the Income Tax Act, 1961.

The Visakhapatnam Bench Income Tax Appellate Tribunal (ITAT) remitted the matter to the Commissioner of Income Tax (Appeals) [CIT(A)] to provide one final opportunity to the assessee to substantiate its claim under Section 80P of the Income Tax Act, noting the assessee's continuous non-compliance with hearing notices in both the original and first appellate proceedings.

The two-member bench, comprising S. Balakrishnan (Accountant Member) and Sandeep Singh Karhail (Judicial Member) remitted the matter back to the CIT(A) "in the interest of justice" for a final opportunity. The appeal of the assessee was allowed for statistical purposes.

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) directed that the addition of Rs. 76.10 lakh on alleged bogus purchases under section 69C of Income Tax ACt,1961 be computed at 5% gross profit on verified purchases.

The two member bench comprising Yogesh Kumar U.S (Judicial Member) and Naveen Chandra (Accountant Member), after considering the facts and nature of the business, modified the CIT(A) order and directed the AO to estimate gross profit at 5% on the admitted purchases of Rs. 30,42,821/-. Accordingly, the appeal was allowed partly.

The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) directed the Assessing Officer (AO) to allow Minimum Alternate Tax (MAT) Credit amounted to ₹12.94 lakh under section 115JAA of the Income Tax Act stating that all requisite details were available on assessment records.

The two-member bench, comprising Duvvuru RL Reddy (Vice President) and Rajesh Kumar (Accountant Member), observing that all necessary information regarding the Minimum Alternate Tax (MAT) credit was already present in the assessment records, directed the Assessing Officer (AO) to allow the assessee's claim for MAT credit under Section 115JAA of the Income Tax Act.

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) deleted the addition of ₹30.65 lakh, deposited during demonetization and claimed as a gift from the deceased grandmother, under Section 69A of Income Tax Act,1961.

A single member bench of Mahavir Singh (Vice President) noted that the key issue was the source of the cash deposits, which the assessee claimed to be a gift. The tribunal found the gift to be genuine and supported by sufficient evidence, establishing the creditworthiness and source of the cash deposits. It, therefore, deleted the addition of Rs. 30,65,000 made under Section 69A of the Act.

Regarding the assessment under Section 115BBE, the appellate tribunal referred to the Madras High Court ruling in SMILE Microfinance Ltd. vs. ACIT (W.P. Nos. 2078 & 1742 of 2020, dated 19.11.2024), which held that the provision applied only to transactions on or after April 1, 2017.

Accordingly the appeal was allowed.

The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) deleted a Tax Deducted at Source (TDS) related disallowance of Rs. 2.92 lakh made under section 40(a)(ia) of Income Tax Act,1961 in respect of referral commission payments of Rs. 13.90 lakh made to five individuals without deducting tax.

The two member bench comprising Saktijit Dey (Vice President) and N.K Billaiya (Accountant Member concluded that the payments did not fall under section 194D. Even if covered under sections 194H or 194C, the provisions were inapplicable as the assessee was an individual and receipts were below the threshold. Therefore, the disallowance under section 40(a)(ia) was unsustainable, and the AO was directed to delete it.

The Income Tax Appellate Tribunal (ITAT) Pune Bench has set a significant precedent in regard to TDS credits on the sale of jointly held ancestral land, addressing a frequently encountered procedural lapse that threatens to burden taxpayers unfairly.

The bench composed of R.K. Panda, Vice President, and Astha Chandra, Judicial Member, concluded that the Revenue cannot enrich itself at the cost of the assessee due to a procedural error by the buyer. They held that, in the absence of any contrary material from the Revenue, the full TDS credited in Form 26AS should be allowed to the assessee since the son had declared and paid taxes on his share but not claimed any TDS.

The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) allowed the full Rs. 8.55 lakh commission paid by a Chartered Accountant (CA) to 14 referral agents for identifying potential insurance customers, holding that the ad hoc 30% disallowance by the Assessing Officer (AO) was unsustainable.

The two member bench comprising Saktijit Dey (Vice President) and N.K Billaiya (Accountant Member) noted that the assessee had paid Rs.28,59,093/- to 14 individuals for identifying potential insurance customers, and there was no dispute about these payments. Despite this, the AO disallowed 30% of the commission on an adhoc basis, without any explanation for the rate chosen. The tribunal held that such disallowance was unjustified and allowed the ground.

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT), in a third-member reference, deleted an addition of ₹190 Crore made under Section 68 ofthe Income Tax Act, 1961, holding that once the disputed amount had already been added in the hands of the share applicant companies, the same income cannot be taxed again in the hands of the assessee company.

The Tribunal's original bench comprising Madhumita Roy (Judicial Member) and Brajesh Kumar Singh (Accountant Member), facing a difference of opinion whereas the judicial member upheld the CIT(A)’s order while the accountant member differed with the view of revenue’s appeal dismissal. The matter was referred to a Third Member- Mahavir Singh (Vice President). Respectfully adhering to the judicial precedents on the doctrine of double taxation, the Tribunal set aside the AO’s order and directed the deletion of the ₹190 Crore addition. The Revenue’s appeal was dismissed.

The Nagpur Bench of Income Tax Appellate Tribunal ( ITAT ) deleted an addition of Rs. 5,30,252 made by the Assessing Officer (AO), holding that agricultural income could not be determined based on assumptions.

A single member bench Narender Kumar Choudhry (Judicial Member) noted that the appellant had submitted comprehensive evidence, including details of agricultural income and expenditure, land holding documents, land revenue receipts, extracts of 7/12, sale receipts for grains and oranges, a letter from the Taluka Agriculture Officer, Chandur Bazar specifying orange production of 10 to 17 metric tonnes per hectare, a report dated 03.06.2016 from the Taluka Agriculture Officer, and statements from local agriculturists to support his claim.

The tribunal held that the AO had ignored this evidence and based his addition on mere assumptions. It further recognized that agricultural production could not be assessed through a fixed formula, as it depended on factors like seed quality, soil, weather, irrigation, and care. In view of these factors, the ITAT deleted the addition. Accordingly, the appeal was allowed.

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) remitted the issue of an addition of ₹29,46,500/- under Section 69A read with Section 115BBE of the Act, which was made on account of cash deposited in bank accounts during the demonetization period (AY 2017-18).

The two-member bench comprising Pawan Singh (Judicial Member) observed the peculiar facts of the case, especially the contention that the addition was confirmed due to the lack of submission and evidence of the source of funds. The matter was restored back to the file of the AO with a direction to allow a fair and reasonable opportunity to the assessee before passing a fresh assessment order.

The Pune Bench of Income Tax Appellate Tribunal ( ITAT ) deleted the addition of ₹21.69 lakh treating credit card payments as unexplained investment under section 69C of Income Tax Act,1961.

A single member bench Manish Borad (Accountant Member) heard the rival contentions and reviewed the records. Consequently, the impugned addition was deleted, the CIT(A) order was set aside, and the appeal was allowed.

The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) restored the matter to the DisputeResolution Panel (DRP) for fresh directions in a case where charter hire charges were treated as royalty instead of presumptive income under section 44BB of Income Tax Act,1961.

In the interest of justice, the tribunal restored the matter to the DRP, directing it to examine all issues raised by the assessee and issue fresh directions to the AO through a speaking order, after giving the assessee an opportunity to be heard.

The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) held that the assessment framed by the Assessing Officer (AO) was invalid and a nullity because the jurisdictional notice under Section 143(2) of the Income Tax Act was not issued by the AO who finally completed the assessment.

The Tribunal, comprising Rajesh Kumar (Accountant Member) and Pradip Kumar Choubey (Judicial Member), quashed the assessment framed by the AO on the ground of lack of jurisdiction. The appeal of the assessee was thus allowed.

Pico CapitalPrivate LimitedvsDeputy Commissioner of Income Tax-8(3)(2) CITATION: 2025 TAXSCAN (ITAT) 1922

The Mumbai bench of Income Tax Appellate Tribunal (ITAT) upheld the ₹7.66 Crore loss as a bad debt deduction under Section 36(1)(vii), recognising the loss as a genuine business loss arising from NSEL’s operational suspension.

The two-member bench of Beena Pillai(Judicial Member) and Girish Agrawal (Accountant Member) relying on coordinate bench decisions in Chowdry Associates v. ACIT (2020), Cello Pens & Stationery Pvt. Ltd. (2022), and Flair Exports Pvt. Ltd. (2022), held that losses arising from NSEL suspension are allowable either as bad debts under Section 36(1)(vii) or as business loss under Section 28(i). Accordingly, CIT(A)’s order was upheld allowing the bad debt claim and dismissing Revenue’s appeal.

Dalmia BharatLtd vs Deputy Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 1923

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) remitted the matter to the Assessing Officer (AO) for a fresh adjudication of the addition made on account of unsecured loans accepted by the company.

The two-member bench, comprising Vikas Awasthy (Judicial Member) and Naveen Chandra (Accountant Member), noted that the CIT(A) had deleted the addition of ₹2,17,80,000 merely on the basis of a statement made on behalf of the assessee.

Dalmia BharatLtd vs Deputy Commissioner of Income Tax CITATION:2025 TAXSCAN (ITAT) 1923

The two-member bench comprising Vikas Awasthy (Judicial Member) and Naveen Chandra (Accountant Member) observed the issue of whether the gain on foreign exchange fluctuation was a revenue receipt or capital in nature.

The Tribunal relied on the landmark SupremeCourt decision in the case of Sutlej Cotton Mills Ltd. vs. CIT. , and ruled that any gain arising from cancellation of the forward contract would result in capital gain as it is on account of capital transaction. The Tribunal also accepted the assessee’s submission that the gain had already been adjusted against the machinery’s cost of acquisition in AY 2009-10, and taxing it again in AY 2007-08 would result in double taxation.

SubramaniamSwaminathan Iyer vs The Deputy Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 1927

The bench of the Income Tax Appellate Tribunal (ITAT), Raipur, ruled that an amount recorded as an advance and subsequently paid before the due date of filing the return cannot automatically be treated as a revenue receipt under the IncomeTax Act,1961. Accordingly, the addition of ₹6,12,607 on account of deemed sales tax for fresh verification.

The Tribunal observed that since the amount had been shown as an advance and was reportedly paid before the due date of filing the return, it could not be summarily treated as a revenue receipt under the Income Tax Act, 1961. The Tribunal directed that these documents be duly considered during re-adjudication.

GaniLathifsahib Shakila Banu vs The Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 1925

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) restored the issue of unexplained money addition made under Section 69A back to the file of the Assessing Officer (AO) to allow the assessee to provide evidence, including bank statements, that were previously unavailable.

Considering the new evidence (the bank statement) filed before the Tribunal which was not before the AO, the Bench deemed it proper to remand the entire matter to the file of the Assessing Officer for fresh consideration.

Madan Lal GuptaNear Charampa College vs ITO CITATION: 2025 TAXSCAN (ITAT) 1926

The CuttackBench of the Income Tax Appellate Tribunal (ITAT) deleted an addition of Rs. 15,45,000/- and held that the Assessing Officer (AO) was incorrect in treating a cash deposit as unexplained under the demonetisation period when the bank itself furnished a letter confirming the nature of the deposit.

The tribunal deleted the addition of Rs. 15,45,000 made in respect of the alleged demonetised currency deposit. In the result, the appeal filed by the assessee was partly allowed for statistical purposes.

Madan Lal GuptaNear Charampa College vs ITO CITATION: 2025 TAXSCAN (ITAT) 1926

​​The Cuttack Bench of the Income Tax Appellate Tribunal reduced the estimated income of the assessee to 1% from 1.5% as estimated by the Assessing Officer (AO) due to the varying comparative percentages of profit in earlier years.

In the interest of justice, the Tribunal directed that the income of the assessee be estimated at 1% against the 1.5% estimated by the AO. In the result, the appeal filed by the assessee was partly allowed for statistical purposes.

DCIT vsMangalvani Exports Pvt. Ltd CITATION: 2025 TAXSCAN (ITAT) 1934

The bench of the Income Tax Appellate Tribunal, Kolkata, dismissed the Revenue’s appeal on the ground of low tax effect and consequently rendered the cross-objection filed by the assessee infructuous in a case pertaining to income tax assessment for the Assessment Year 2019-20.

The Bench comprising Sonjoy Sarma, Judicial Member and Rakesh Mishra, Accountant Member held that the tax effect in the present case was below Rs. 60 lakh, the monetary limit specified by the CBDT for filing appeals before the Tribunal. The Bench observed that the Revenue’s appeal did not fall under any of the exceptions provided in the CBDT circulars.

Consequently, the Bench ruled that the appeal filed by the Revenue was not maintainable and therefore liable to be dismissed.

MeenakshiTraders vs The Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 1943

The Chennai Bench of the Income-Tax Appellate Tribunal (ITAT) deleted the disallowance made by the Assessing Officer (AO) and confirmed by the commissioner of the Income Tax (appeals) [CIT(A)] on account of remuneration paid to partners amounting to Rs. 4,45,000.

The Tribunal accepted the assessee’s counsel argument that there is no restriction of payment of remuneration to partners under section 40(b) of the Income Tax Act. The tribunal held that the disallowance on account of remuneration paid to partners made by the lower authorities was not justified.

Therefore, the Tribunal deleted the addition of Rs. 4,45,000. The appeal filed by the assessee was allowed.

Partap Singh vsACIT CITATION: 2025 TAXSCAN (ITAT) 1924

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) restored the issue of an addition of ₹2,27,02,883/- made under Section 68 of the Income Tax Act, 1961, back to the file of the Assessing Officer (AO) to verify the assessee's claim regarding foreign remittances received from Russia.

The two member bench, comprising Mahavir Singh (Vice President) and Krinwant Sahay (Accountant Member) observed that it was not clear from the assessment order or the appellate order as to what verifications were done to confirm the assessee's claim that the credits were receivables for earlier years sales.

SubramaniamSwaminathan Iyer vs The Deputy Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 1927

The bench of the Income Tax Appellate Tribunal (ITAT), Raipur, upheld the disallowance of ₹15,000 made on account of donation expenses, as the assessee had failed to reconcile the difference between the amount debited in the Profit and Loss Account and the amount offered to tax, thereby justifying the addition made by the Assessing Officer (AO) under the Income Tax Act, 1961.

The Tribunal upheld the addition made by the AO. Accordingly, the Tribunal confirmed the disallowance of ₹15,000.

SubramaniamSwaminathan Iyer vs The Deputy Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 1927

The bench of the Income Tax Appellate Tribunal (ITAT), Raipur, ruled that an amount recorded as an advance and subsequently paid before the due date of filing the return cannot

automatically be treated as a revenue receipt under the IncomeTax Act, 1961. Accordingly, the addition of ₹6,12,607 on account of deemed sales tax for fresh verification.

The Tribunal observed that since the amount had been shown as an advance and was reportedly paid before the due date of filing the return, it could not be summarily treated as a revenue receipt under the Income Tax Act, 1961. The Tribunal directed that these documents be duly considered during re-adjudication.

Kamlesh KumarKesharwani s The Assistant Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 1928

The bench of the Income Tax Appellate Tribunal (ITAT), Raipur, has restricted the addition to the differential margin between the Gross Profit (GP) declared by the assessee and the benchmark rate of 10% adopted as the industry average for rice trading, affirming that a full disallowance of such purchases was not justified when the corresponding sales were accepted by the Revenue authorities.

The Tribunal endorsed the CIT(A)’s finding that a seed capital was essential to sustain the rotation of funds involved in bogus billing. The Bench also noted that the average GP in the rice trading business typically varied between 3% and 10%, depending on market conditions.

MuthiahLakshmanan vs The Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 1942

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) has remitted the assessment to the file of the Commissioner of Income Tax (Appeals) [CIT(A)] for fresh consideration for the case involved significant additions totaling approximately ₹68.45 Lakh for the Assessment Year (AY) 2011-12.

The two-member bench, comprising S.S. Viswanethra Ravi (Judicial Member) and Ratnesh Nandan Sahay (Accountant Member), after considering the submissions and the undertaking in the affidavit, noted that the AY 2011-12 was an old assessment year and deemed it proper to remand the matter for fresh adjudication on merits

M/s. MITHRA vsThe Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 1935

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) remanded to the Assessing Officer (AO) to verify the factual claim that the cost of the depreciated assets had not been claimed as application of income in the past.

The two-member bench, comprising George George K (Vice President) and S.R. Raghunatha (Accountant Member), observed that Section 11(6), inserted with effect from 01.04.2015, clearly states that depreciation won't be allowed if the cost of acquisition has been allowed as an application of income.

MeenakshiTraders vs The Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 1943

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) deleted an addition of ₹1,83,248 and held that the Assessing Officer (AO) was incorrect to restrict the allowance of interest paid to partner's capital merely because the partnership firm commenced its operations part-way through the financial year.

The Tribunal noted that the interest was paid on the capital to the respective partners as on the last day of the financial year. It was concluded that the restriction of interest only for five months based on the date of business operations was not justified. The tribunal ruled that the law permits the deduction of interest paid on partner’s capital irrespective of the commencement date of the business and deleted the disallowance

MaharajaAgrasen Trust vs ITO CITATION: 2025 TAXSCAN (ITAT) 1936

The Cuttack Bench of the Income Tax Appellate Tribunal (ITAT) held that the intimation issued under Section 143(1) of the Income Tax Act was invalid and liable to be quashed, as the provision does not permit the disallowance of applied funds of a charitable trust.

The Single Member Bench, comprising George Mathan (Judicial Member)observed that the assessee was admittedly registered as a charitable trust. The Tribunal noted that if the CPC desired to make any adjustments in the intimation under Section 143(1), it was only possible to make adjustments that are specifically permissible under that section.

Tavleen Resorts& SPA Pvt.Ltd vs DCIT CITATION: 2025 TAXSCAN (ITAT) 1931

The Bench of the Income Tax Appellate Tribunal, Delhi, has held that assessments framed under Section 153A ofthe Income Tax Act, 1961, based on mechanical approval under Section 153D, are invalid in law. The Tribunal found that the Additional Commissioner of Income Tax (Addl. CIT) had accorded omnibus and perfunctory approval to multiple draft assessment orders without application of mind, thereby vitiating the assessments.

The Bench comprising of Pradip Kumar Kedia, Accountant Member and Vimal Kumar, Judicial Member observed that the approval granted by the Addl. CIT was a mere “ technical approval,” issued without any discussion or scrutiny of the material facts of each assessment year. The Tribunal held that Section 153D was enacted as a statutory safeguard to ensure supervisory oversight and to prevent arbitrary assessments in search cases.

M/s Exel Rubber(P) Ltd vs ACIT CITATION: 2025 TAXSCAN (ITAT) 1937

The Hyderabad Bench of the Income Tax Appellate Tribunal (ITAT) quashed the reassessment notices issued under Section 148 of the Income Tax Act for Assessment Years (AYs) 2015-16 to 2019-20 due to invalid sanction and failure to satisfy section 149 of the Income Tax Act.

The Tribunal held that the loose sheets/data from the laptop, which primarily detailed cash receipts and payments related to business transactions like scrap sales, did not constitute an 'asset' as defined in the Explanation to Section 149(1) (which includes immovable property, shares, loans, etc.).

The tribunal also observed that the data did not constitute 'entries in the books of account'. The tribunal also noted that a second notice u/s 148 was issued after the first one was dropped due to the AO's failure to issue a notice u/s 143(2) within the stipulated time limit.

Samtel IndiaLimited vs Asst. CIT CITATION: 2025 TAXSCAN (ITAT) 1932

The Bench of the Income Tax Appellate Tribunal, Delhi , has ruled that reassessment initiated merely on the basis of an audit objection without any new tangible material amounts to a mere change of opinion and is, therefore, invalid under Section 147 of the Income Tax Act, 1961.

The Bench comprising Manish Agarwal, Accountant Member and Vikas Awasthy, Judicial Member, observed that no fresh tangible material had come to the AO’s notice after the original assessment. Relying on the judgment of the Supreme Court in CIT v. Kelvinator of India Ltd. (2010), the Tribunal reiterated that the AO has no power to review a concluded assessment under the guise of reassessment. It was held that reassessment must be based on fresh tangible material, and any attempt to revisit issues already examined amounts to a mere change of opinion, which is not permissible under the law.

iSAT AfricaLimited FZC vs The Deputy Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 1940

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) held that payments received by UAE-based iSAT Africa Ltd. for providing VSAT bandwidth and network connectivity to BT Global Communications India Pvt. Ltd. did not constitute royalty under Section 9(1)(vi) or Article 12 of the India–UAE DTAA, as no right to use equipment or process was transferred.

The two-member bench of Padmavathy S (Accountant Member) and Raj Kumar Chauhan (Judicial Member) further followed the decision of Reliance Jio Infocomm Ltd., holding that the retrospective amendments under Section 9(1)(vi) cannot override treaty provisions unless incorporated into the DTAA.

Since the assessee’s services were rendered and utilised outside India, and it had no PE in India, the income could not be taxed in India either as royalty or business profits.

Devendra Kumarvs Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 1938

The Delhi bench of Income Tax Appellate Tribunal (ITAT) deleted Rs. 8.68 Lakh presumptive income addition under Section 44AD, holding that the AO exceeded its jurisdiction when the matter was only taken up for a limited scrutiny assessment.

Placing reliance on Weilburger Coatings India Pvt. Ltd. and the CBDT instructions, the bench of Satbeer Singh Godara (Judicial Member) held that the AO had exceeded his jurisdiction by making an addition on an issue not forming part of the limited scrutiny mandate. Since the addition was made contrary to the procedural safeguards and CBDT directions, it was declared invalid in law.

Accordingly, the Tribunal deleted the addition of Rs. 8,68,799 and allowed the assessee’s appeal in full.

Thane ZillaVidyasevak Sahakari Patpedhi Ltd vs Commissioner of IncomeTax CITATION: 2025 TAXSCAN (ITAT) 1953

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) held that a co-operative society is entitled to a deduction under Section 80P(2)(d) of the Income Tax Act in respect of interest earned from deposits with a co-operative bank.

The two-member bench comprising Kavitha Rajagopal (Judicial Member) and Renu Jauhri (Accountant Member), allowing the assessee's appeal, held that the assessee is entitled to a deduction under Section 80P(2)(d) in respect of interest amounting to Rs. 94,12,725/- received on deposit with the Thane District Central Co-Operative Bank.

Hapag LloydIndia Private Limited vs Pr. CIT CITATION: 2025 TAXSCAN (ITAT) 1949

The Mumbai Bench of Income TaxAppellate Tribunal ( ITAT ) quashed the Principal Commissioner of Income Tax ( PCIT )’s revision order in Hapag Lloyd matter and restored the assessment, holding that CorporateSocial Responsibility ( CSR ) donations to an entity with valid section 80G of Income Tax Act,1961, approval were eligible for deduction.

The two member bench comprising Saktijit Dey(Vice President) and Arun Khodpia (Accountant Member) after considering the submissions and records, noted that co-ordinate benches had settled this issue in several cases, including RPG Life Sciences, Elan Pharma, Stulz-CHSPL, and Vistex Asia Pacific. It held that the exercise of power under section 263 was invalid, quashed the revision order, and restored the assessment. Accordingly the appeal was allowed.

Income TaxOfficer vs Ellora Hitech Infra Venture Private Limited CITATION: 2025 TAXSCAN (ITAT) 1955

The Mumbai bench of Income Tax Appellate Tribunal (ITAT) remanded the matter relating to unexplained cash addition of Rs. 2.05 crore under Section 69 for fresh verification of the source of share application money to the AO. The tribunal upheld the revenue appeal.

The two-member bench comprising Kavita Rajagopal (Judicial Member) and Renu Jauhri (Accountant Member) opined that the issue had not been properly examined during the assessment proceedings or during the appellate proceedings. The Tribunal restored the issue to the AO for fresh consideration.

Mr. RamkrushnaNarayan Kanzode vs Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 1954

The Nagpur Bench of the Income Tax Appellate Tribunal (ITAT) granted relief to an auto driver assessee in a case involving the disallowance of ₹34.77 lakh towards long-term capital gains.

The assessee claimed that he was an auto driver having education up to 7th class only and works for pick up and drop off of school children from their school and back, and the assessee does not even have any email ID and does not understand much about technology, and that is why the assessee sought for physical notice instead of sending notice by the Commissioner through email.

The single bench of Narender Kumar Choudhry (Judicial Member) remanded the instant case to the Commissioner for decision afresh, by affording a reasonable opportunity of being heard to the assessee.

GhanshyamArjanbhai Patel vs The ITO CITATION: 2025 TAXSCAN (ITAT) 1948

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) allowed the assessee’s claim for interest deduction under section 57 of Income Tax Act,1961 after verifying payments and interest earned.

The appellate tribunal noted that the parties whose details were not filed had no loans during the assessment year, and the opening balances confirmed that 12% interest was paid. The tribunal held that the assessee had proven the deduction claimed under section 57.

The LifeEternal Trust vs CIT CITATION: 2025 TAXSCAN (ITAT) 1947

The Pune Bench of Income Tax Appellate Tribunal ( ITAT ) remanded the matter to the Commissioner ofIncome Tax (Exemption)[CIT(E)] for fresh consideration after the denial of Section 80G of Income Tax Act,1961, approval due to excess ‘pooja expenses’.

The two member bench comprising Vinay Bhamore (Judicial Member) and Manish Borad (Accountant Member) heard both sides and reviewed the material on record, including the additional evidence submitted. It was explained that many of the expenses were not related to religious activities and were wrongly classified under “pooja expenses” due to an accounting error. The assessee also submitted detailed financial statements and a breakup of these expenses to support the claim.

Since the details had not been produced before the CIT (E) earlier, the Tribunal set aside the order and remanded the matter back for fresh examination. It directed the CIT (E) to reconsider the application under section 80G(5) after reviewing the new evidence and giving the assessee a fair opportunity of hearing.

JakhadEnterprise LLP vs Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 1945

The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) restored the matter to the Commissioner of Income Tax (Appeals) [CIT(A)] in the matter, where a disallowance of Rs. 18.76 crore was made for non-deduction of Tax Deducted at Source ( TDS ) under section 194Q of Income Tax Act, 1961.

The appellate tribunal observed that the assessee had been non-compliant before both the AO and the CIT(A), and that the CIT(A) had upheld the disallowance ex-parte. Considering the submissions, the tribunal restored the issue to the file of the CIT(A) to provide the appellant one more opportunity to present its case, in line with natural justice.

AnandmangalInvestment & Finance Pvt Ltd vs Income-tax Officer CITATION: 2025 TAXSCAN (ITAT) 1957

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) allowed the appeal of the assessee, observing that the unsecured loan was carried forward from an earlier year and not taken in the impugned assessment year.

The two-member bench comprising Vikram Singh Yadav (Accountant Member) and Anikesh Banerjee (Judicial Member) held that no fresh loan was taken during the impugned year; rather, the balance was merely carried forward in the name of M/s Revathy Resorts Pvt. Ltd. In these circumstances, the addition of Rs.2.50 crores sustained by the authorities is unjustified and directed to delete the addition.

The DyCommissioner of Income Tax vs Sathyabama Ramachandran CITATION: 2025 TAXSCAN (ITAT) 1956

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) deleted the addition of Rs.1,98,86,210 and ruled that the amount received by the assessee for a reduction in her profit-sharing ratio in a LimitedLiability Partnership (LLP) did not constitute Goodwill or a transfer of capital assets and was therefore not taxable.

The Tribunal noted that the amendments to Section 45(4) and the insertion of Section 9B by the Finance Act, 2021, which bring profits/gains from money or capital assets received on the reconstitution of a specified entity under the tax net, were prospective in nature, effective from AY 2021-22, and thus did not apply to the present case (AY 2017-18). It was concluded that the addition of Rs.1,98,86,210 made by the AO was rightly deleted by the CIT(A).

KK 168Naripalli Primary Agri. Cooperative Society Limited vs The IncomeTax Officer CITATION: 2025 TAXSCAN (ITAT) 1950

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) remitted the issue regarding the disallowance of the Section 80P deduction back to the file of the Commissioner ofIncome Tax(Appeals) [CIT(A)] for fresh consideration due to the Chief Commissioner of Income Tax (CCIT) order on delayed filing of the Income Tax Return (ITR) was pending.

The two-member bench, comprising S.S. Viswanethra Ravi (Judicial Member) and Ratnesh Nandan Sahay (Accountant Member), observed that the CIT(A) was not justified in dismissing the appeal of the assessee pending the decision of the CCIT on the condonation petition.

SriVenugopalakrishna Credit vs ITO CITATION: 2025 TAXSCAN (ITAT) 1959

The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) remitted the matter back to the Assessing Officer (AO) to verify the actual expenditure incurred by the assessee to earn interest income from investments made with banks and allowed the claim for deduction under Section 57 of the Act.

The Tribunal observed that it is a well-established principle that an assessee is entitled to deduct the expenses incurred in earning income taxable under the head "Income from Other Sources" under the provisions of Section 57 of the Act.

The bench held that the assessee cannot be denied the benefit of deducting the costs incurred in earning the interest income from the co-operative bank under Section 57, subject to the assessee substantiating the claim with adequate evidence.

Income TaxOfficer vs Bhupesh Sevantilal Shah CITATION: 2025 TAXSCAN (ITAT) 1952

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) dismissed the revenue’s appeal and upheld the deletion of penalty under Section 271(1)(c) on the confirmed addition of 7.5% of bogus purchases amounting to Rs. 42.37 lakh.

The two-member bench comprising Saktijit Dey (Vice President) and Narendra Kumar Billaiya (Accountant Member) held that estimating the profit without bringing any cogent material evidence on record, penalty under Section 271(1)(c) of the Act cannot be levied for filing inaccurate particulars of income.

AllavuddinUnmarasab Hurakadli v. National Faceless Assessment Centre,ITA No. 229/PAN/2025(A.Y. 2016-17)

The Income Tax Appellate Tribunal (ITAT) Panaji recently ruled in favour of a taxpayer who had claimed a deduction under Section 80C ofthe Income TaxAct, 1961, for repayment of a housing loan taken from a cooperative credit society.

The Tribunal noted that the documentary evidence regarding the repayment of the housing loan and the flow of funds from the pigmy deposit account needed proper verification. In the interest of justice, it remanded this issue back to the Assessing Officer for fresh adjudication. The AO was directed to provide adequate opportunity to the assessee to produce all relevant details and to pass an order afresh after examining the evidence.

Thus, the addition of Rs. 4,81,109 under Section 69C was not deleted outright but was sent back for reconsideration. The ITAT partly allowed the appeal.

Haroon Shaikhvs ITO CITATION: 2025 TAXSCAN (ITAT) 1967

The bench of the Income Tax Appellate Tribunal (ITAT) Pune, observing that the assessee was engaged in the transportation of livestock on a commission basis and not in retail trading, the Tribunal restricted the profit estimation to 1.5% of turnover, thereby partly setting aside the additions made by the lower authorities under the Income Tax Act, 1961.

The Tribunal Bench of Dr. Manish Borad, Accountant Member held that while the AO did not explicitly reject the books of accounts under Section 145(3), his observations implicitly questioned the correctness of the declared results. However, the Tribunal found merit in the assessee’s explanation and supporting evidence showing that the activity involved transportation of livestock and poultry products on commission, not retail trading.

Thus, the Tribunal held that the application of an 8% net profit rate was unjustified.

Sunita Salhotravs Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 1965

The Bench of the Income Tax Appellate Tribunal, Delhi, held that reassessment notices issued on or after April 1, 2021, for Assessment Year (A.Y.) 2015-16 are barred by limitation and must be dropped. Accordingly, the Tribunal quashed the notice issued under Section 148 ofthe Income TaxAct, 1961, and set aside the reassessment order.

The Tribunal noted that in Rajiv Bansal, the Additional Solicitor General had made a categorical statement before the Supreme Court that all notices for A.Y. 2015-16 issued on or after April 1, 2021, would have to be dropped. The Tribunal further observed that under the erstwhile Section 149 of the Income Tax Act, the limitation period for issuing notice expired on March 31, 2022, and that the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 (TOLA) did not extend this period for A.Y. 2015-16.

Shree Ram GopalTemple Trust vs CIT CITATION: 2025 TAXSCAN (ITAT) 1960

The Chandigarh Bench of the Income Tax Appellate Tribunal (ITAT) ruled that the temple governed by the Himachal Pradesh Hindu Public Religious Institutions and Charitable Endowments Act, 1984 (HPPRICE), was not required to furnish a traditional trust deed and directed the Commissioner of Income Tax (Exemptions) [CIT(E)] to grant registration.

The Tribunal concluded that the registration could not be denied for want of a trust deed when the institution is governed by a special statute. The tribunal directed the CIT(E) to grant the impugned permanent registration to the assessee. In the result, the appeal filed by the assessee was allowed.

Dy.Commissioner of Income Tax vs Smt. Sama Yashodha CITATION: 2025 TAXSCAN (ITAT) 1962

The Hyderabad Bench of the Income Tax Appellate Tribunal (ITAT) restored the penalty levied under Section 221(1) of the Income Tax Act, 1961, for the Assessment Year (AY) 2007-08 due to the non-payment of tax liability.

The tribunal noted that the CIT(A) deleted the penalty during the appellate proceedings, a revised computation was admitted by the CIT(A) showing no tax payable, thereby implying that the provisions of Section 249(4) were not applicable and there was no default under Section 140A of the Income Tax Act.

Mohamed Akbarvs I.T.O CITATION: 2025 TAXSCAN (ITAT) 1963

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) directed that only the unutilized amount of the Capital Gains Deposit Scheme, and not the entire capital gains, should be added to the assessee's total income.

The Bench held that the AO was "not correct" in adding the entire capital gains to the total income of the assessee. The Tribunal ruled that only the unutilized amount should be added to the total income of the assessee. In the result, the appeal filed by the assessee was partly allowed.

Rathi Gajendranvs I.T.O CITATION: 2025 TAXSCAN (ITAT) 1964

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) restored the appeal for fresh adjudication of a legal issue regarding the validity of the reopening of the assessment stating that this legal ground was never raised before the lower authorities for the Assessment Year (AY) 2015-16.

The two-member bench, comprising S.S. Viswanethra Ravi (Judicial Member) and Ratnesh Nandan Sahay (Accountant Member), noted that the legal issue concerning the assessment's reopening was raised for the first time before the Tribunal. In the interest of justice, the Tribunal decided to restore the issue to the file of the CIT(A).

M/s VashishtAlloys vs DCIT Circle Yamuna Nagar CITATION: 2025 TAXSCAN (ITAT) 1961

The ChandigarhBench of the Income Tax Appellate Tribunal (ITAT) quashed the reassessment proceedings initiated under Section 147 of the Income Tax Act, 1961, which had resulted in an addition of ₹80.59 Lakh for the Assessment Year (AY) 2010-11.

The Bench concluded that such passive reliance on third-party intelligence would render the reopening invalid as it reflected merely a ‘reason to suspect’ rather than ‘reasons to belief’." It held that the reassessment proceedings lacked the underlying material required for the formation of a belief that income had escaped assessment.

The tribunal quashed the reassessment order, ruling that the assessee succeeds on legal grounds. The appeal filed by the assessee was allowed.

DCIT vsPavankumar Bachhraj Chandan CITATION: 2025 TAXSCAN (ITAT) 1982

In a significant ruling that reinforces the primacy of documentary evidence over general allegations, the Income Tax Appellate Tribunal (ITAT) in Mumbai has shielded an individual investor from a substantial tax demand. The tribunal held that when share transactions are conducted through the stock exchange, supported by verifiable documents and banking channels, the tax department cannot arbitrarily treat the resulting capital gains as bogus based on mere suspicion and unsubstantiated presumptions.

The ruling was delivered by a bench comprising Narender Kumar Choudhry (Judicial Member) and Prabhash Shankar (Accountant Member). This decision provides a clear reminder to the tax authorities that while tackling evasion is paramount, additions must be based on specific, incriminating evidence linked to the assessee, and not on broad generalizations that overlook compliant transactional documentation.

The Income Tax Appellate Tribunal (ITAT) in Ahmedabad bench has quashed a major tax addition made against a Gujarat-based company, holding that the tax department cannot subject income that has already been declared and taxed once to a second round of taxation. The bench strongly emphasized that such a practice amounts to illegal double taxation.

The ITAT bench, comprising Siddhartha Nautiyal (Judicial Member) and Annapurna Gupta (Accountant Member), after reviewing the submissions, found the department's position unsustainable. The tribunal noted that the company had provided concrete evidence to prove the genuineness of the transactions, which the revenue department failed to rebut.

The bench of the Income Tax Appellate Tribunal, Amritsar, remanded the case to the Commissioner of Income Tax (Appeals) [CIT(A)] for fresh adjudication. The Tribunal directed that the issue relating to the absence of a Document Identification Number (DIN) in the assessment order be considered afresh, along with other grounds raised by the assessee under the Income Tax Act, 1961.

The Bench comprising Accountant Member, Manoj Kumar Aggarwal and Judicial Member, Udayan Dasgupta directed the assessee to cooperate fully and submit all relevant documents and evidence before the appellate authority, while also instructing the CIT(A) to ensure that future notices are issued to the correct e-mail address provided in Form No. 35.

The Tribunal further clarified that it had not adjudicated upon the merits of the case and that all legal issues, including the DIN contention, were left open.

The Lucknow Bench of Income Tax Appellate Tribunal (ITAT), has set aside Ex-Parte Assessment and Appellate orders for three Income Tax Assessment years, filed by the Assessee with the intention of directing the Assessing Officer to pass Fresh Adjudication in terms of providing Reasonable opportunity of hearing to the Assessee.

After hearing and considering the submissions made by both the parties, and reviewing the available material on record, the bench consisting of Kul Bharat, Vice President and, Accountant member, considered the section 250(6) of the Income Tax Act, 1961, wherein CIT(A) has a statutory duty to pass speaking order on merits of the various grounds of appeal, which in this case was not fulfilled.

Consequently, with further consideration in regards to the submissions made by both the parties, the bench set aside the order passed by CIT(A) and directed the Assessing Officer to pass De Novo Assessment order in accordance with the law after providing reasonable opportunity of hearing to the assessee.

The bench of the Income Tax Appellate Tribunal, Chandigarh (ITAT), deleted the addition of ₹19,04,800 made under Section 69A of the Income Tax Act, 1961, holding that the assessee had duly reconciled the cash deposits made during the demonetisation period, establishing them as agency collections on behalf of a company, and therefore could not be treated as unexplained income.

The Tribunal held that once the assessee establishes reconciliation between deposits and corresponding transfers to the principal’s account, the onus shifts to the Revenue to disprove such evidence. Since the Revenue had not produced any contrary material, the explanation of the assessee stood uncontroverted.

The Bench reiterated the settled legal principle that amounts collected by an agent on behalf of a principal cannot be taxed as unexplained income in the agent’s hands when proper reconciliation is available.

The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) ruled that Section 50C of the Income Tax Act,1961 applies only when there is a transfer of immovable property and its value is compared with the stamp duty valuation.

The two member bench comprising Beena Pillai (Judicial Member) and Omkareshwar Chidara (Accountant Member) heard both sides and noted that the issue was whether Section 50C of the Act applied to cash compensation. It observed that the section applied only when immovable property was transferred and its value was compared with the stamp duty valuation.