The tribunal pointed out that all evidence needed to decide the issue was already available on record, and it found no reason to remand the matter. It set aside the findings of the Assessing Officer and the Commissioner of Income Tax (Appeals), as the addition of ₹14.10 lakh had no merit when the deposits were fully recorded in the audited books. The tribunal deleted the addition and allowed the appeal.

The Tribunal held that the seizure material, being preliminary, incomplete, and full of errors, lacked the reliability required to form the sole basis for substantial additions. The Tribunal further held that since the AO's action of relying on the defective seized material to frame the assessment was legally flawed, and the mandatory requirement of independent application of mind by the approving authority under Section 153D was not met, the entire assessment proceedings were liable to be quashed.

CA Ignores ICAI’s Technical Guide on Share Valuation: ITAT finds CA Certificate Defective, upholds Tax on Excess Share Premium u/s 56(2)(viib)

The Income Tax Appellate Tribunal (ITAT) Bench at Rajkot has upheld the addition of ₹3.99 crore made under Section 56(2)(viib) of the Income Tax Act, 1961, holding that the assessee’s Discounted Cash Flow (DCF) valuation was defective and not in conformity with ICAI Valuation Guidelines.

Accordingly, the Tribunal held that the AO was justified in rejecting the DCF report and applying the NAV method. The addition of ₹3.99 crore under Section 56(2)(viib) was therefore upheld. Dismissing the appeal, the ITAT Rajkot Bench ruled that a Chartered Accountant’s report cannot be accepted blindly when it lacks independent reasoning or evidentiary support. The decision reinforces that DCF valuations must be prepared with objectivity, adequate documentation, and adherence to professional standards prescribed by ICAI.

Trust Serving Scheduled Tribes Not Hit by S. 80G(5)(iii): ITAT Remands Matter for Verification

The Rajkot Bench of the Income Tax Appellate Tribunal (ITAT) has set aside the order of the Commissioner of Income Tax (Exemption), Ahmedabad, which had denied approval under Section 80G(5)(iii) to assessee, and remanded the matter for fresh examination.

The ITAT remanded the matter and directed the CIT(E) to examine the ST Notification and verify whether the trust falls within the recognised Scheduled Tribe category (Bhil-Meena) and if it does, approval under Section 80G(5)(iii) should be granted as per law. Further, the assessee was directed to furnish all relevant documents, including the ST Notification and supporting evidence and CIT(E) must provide adequate opportunity of being heard and pass a speaking order. The appeal was allowed for statistical purposes

Goodwill Arising on Amalgamation Qualifies as Intangible Asset Eligible for Depreciation u/s 32(1)(ii) of Income Tax Act: ITAT

The Income Tax Appellate Tribunal (ITAT) Bench at Mumbai upheld the allowability of depreciation on goodwill arising from a scheme of amalgamation, holding that such goodwill constitutes an “intangible asset” eligible for depreciation under Section 32(1)(ii) of the Income Tax Act, 1961.

The ITAT confirmed that the jurisdictional High Court’s ruling in Aditya Birla Nuvo Ltd. is binding and that the principle of stare decisis requires judicial discipline. It thus held that depreciation on goodwill created out of amalgamation must be allowed, and upheld the CIT(A)’s order granting the deduction. For AY 2020–21, since the issue arose from the same amalgamation, the Tribunal applied the same reasoning mutatis mutandis and dismissed the Revenue’s appeal for that year as well.The ITAT accordingly dismissed both appeals filed by the Revenue.

No ‘Royalty’ on Service Fees Paid under Regional Service Agreement: ITAT Dismisses Revenue’s Appeal

The Income Tax Appellate Tribunal (ITAT) Bench at Mumbai held that payments received by the assessee (Singapore-based entity) from its Indian affiliate under a Regional Service Agreement (RSA) cannot be classified as ‘royalty’ either under Section 9(1)(vi) of the Income Tax Act, 1961 or under Article 12 of the India-Singapore Double Taxation AvoidanceAgreement (DTAA).

The Tribunal also emphasized the principle of consistency, noting that in earlier assessment years the Department had accepted the same arrangement as non-taxable service income. The absence of any change in facts or law precluded a different conclusion in subsequent years. The cross-objections filed by the assessee challenging the validity of the assessment order on limitation grounds and levy of interest under Section 234D, were dismissed as infructuous as no taxable income was found to arise in India. Accordingly, the Revenue’s appeals were dismissed, and the CIT(A)’s order was upheld in entirety.

The ITAT remanded the matter and directed the CIT(E) to examine the ST Notification and verify whether the trust falls within the recognised Scheduled Tribe category (Bhil-Meena) and if it does, approval under Section 80G(5)(iii) should be granted as per law. Further, the assessee was directed to furnish all relevant documents, including the ST Notification and supporting evidence and CIT(E) must provide adequate opportunity of being heard and pass a speaking order. The appeal was allowed for statistical purposes.

The Court ruled that the assessment order, demand notice, and penalty notices were vitiated by procedural illegality. Consequently, all impugned notices and orders were set aside, and the matter was remitted to the Assessing Officer to allow BMRCL to file its reply and proceed afresh strictly in accordance with law. Therefore, the petition was allowed.

Kiran Yadav vs The ITO CITATION: 2025 TAXSCAN (ITAT) 2121

The Jaipur Bench of the Income Tax Appellate Tribunal ( ITAT ) confirmed that the development costs related to the construction of a boundary wall and Mitti Bharai (land filling) were allowable as they were not disputed by the revenue authorities and partly allowed long term capital gain (LTCG).

The two-member bench, comprising Dr. S. Seethalakshmi (Judicial Member) and Rathod Kamlesh Jayantbhai (Accountant Member) noted that the assessee had submitted 31 supporting vouchers and confirmations for the expenses related to the boundary wall and Mitti Bharai.

The tribunal observed that these documents were not disputed by the revenue authorities. The bench held that constructing a boundary wall and Mitti Bharai was a reasonable cause to cover and improve a piece of land, and the expenditure incurred, supported by evidence, could not be denied.

Partner’s Expenses Incurred for Business Purposes are Deductible u/ Income Tax: ITAT Grants Relief to Former ICAI President Atul Gupta

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) recently held that expenses incurred by a partner for legitimate business and professional purposes are legitimate deductibles under the Income Tax Act, granting significant relief to Former ICAI President Atul Kumar Gupta against a disputed income of ₹24,00,000.

The Bench noted that Section 28(v) of the Income Tax Act, allows any interest, salary, bonus, remuneration by whatever name received by a partner from the partnership firm to be treated as business income. Consequently, any expenditure incurred by the partner exclusively and solely for the purpose of earning such business income was affirmed by Bench to be an allowable expenditure u/s. 32 and 37 of the Income Tax Act, 1961 Accordingly, the ITAT deleted the disallowance and allowed the deduction of ₹6,76,456, thereby reducing the taxable income from ₹24,00,000 to ₹17,23,544.

DCIT vs M/s Aircom International India Pvt. Ltd CITATION: 2025 TAXSCAN (ITAT) 2123

The two-member bench, comprising S. Rifaur Rahman (Accountant Member) and Anubhav Sharma (Judicial Member) observed that the AO had disallowed the management fee due to a lack of supporting documents (like bills/invoices/advices) and was not satisfied with the nexus between the earnings and the fees paid to the parent company.

The Tribunal found the Revenue's assertion to be without substance since the Revenue could not establish that the assessee was called upon to file specific evidence which were not filed before the AO. The appeal of the Revenue was dismissed.

Assistant Commissioner ofIncome Tax vs Vireet InvestmentsPvt. Ltd. CITATION: 2025 TAXSCAN (ITAT) 2124

The Delhi Bench of the Income Tax AppellateTribunal (ITAT) held that Long-Term Capital Gains (LTCG) derived exclusively from Equity Shares and Equity-Oriented Mutual Funds can only be exempted under section 10(38) of the Income Tax Act.

The two-member bench comprising Yogesh Kumar U.S. (Judicial Member) and Avdhesh Kumar Mishra (Accountant Member), noted that the CIT(A)'s finding was based on two core facts which was STT was paid on all transactions, and samples of contract notes showed the shares and units were equity shares and units of equity-oriented mutual funds.

FIL India Business &Research Services Pvt. Ltd vsAssessment Unit Income Tax Department CITATION: 2025 TAXSCAN (ITAT) 2125

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) directed the Transfer Pricing Officer (TPO) to re-evaluate the arm's length price (ALP) of an assessee’s international transactions after excluding a company that failed the prescribed turnover filter.

The two-member bench, comprising Satbeer Singh Godara (Judicial Member) and Manish Agarwal (Accountant Member), examined the TPO’s order and the financial statements of the disputed company.

The tribunal held that the inclusion of this company was erroneous and directed the TPO/Assessing Officer (AO) to re-consider the comparables. The Tribunal instructed the TPO/AO to exclude SPT Investment Advisory Services Ltd. and then re-work the resulting adjustment, if any, after properly applying the filters.

M/s. Dabur India Limited vsPr.CIT, Delhi CITATION: 2025 TAXSCAN (ITAT) 2126

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) held that the PCIT erred in setting aside the assessment merely for alleged inadequate enquiries without establishing that the Assessing Officer's (AO) view was unsustainable in law or that the order was prejudicial to the interest of the Revenue.

The two-member bench, comprising S. RifaurRahman (Accountant Member) and Vimal Kumar (Judicial Member), noted that the AO had taken a possible view based on the various documents submitted by the assessee, such as audited financial statements and auditor reports.

The Tribunal found that the PCIT's directions for making fresh enquiries and verification were erroneous since the directions provided no clear findings on how the AO's order was erroneous and prejudicial to the interest of the Revenue.

Sanjay Wahi vs AssistantCommissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 2127

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) ruled that Section 69A of the cannot be invoked to tax commission details found on seized documents, as the provision applies only to unexplained money, bullion, jewelry, or other valuable articles and directed to treat 20% of the gross commission as the income of the assessee.

The two-member bench of S. RifaurRahman (Accountant Member) and Vimal Kumar (Judicial Member) observed that the Revenue authorities invoked Section 69A of the Income Tax Act.

The Tribunal highlighted the conditions for invoking Section 69A, which requires the assessee to be the owner of any money, bullion, jewelry, or other valuable article that was not recorded in the books of account, with an unsatisfactory explanation of its source and acquisition.

Abuchi Infra Ventures Limited vs ITO, Ward 2 (3) CITATION: 2025 TAXSCAN (ITAT) 2128

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) held that an addition of ₹1,11,00,000 made under Section 69 of the Income Tax Act, 1961, was unsustainable and ruled that the investment was duly recorded in the company's books of account and the payment is made through a proper banking channel.

The two-member bench comprising S. Rifaur Rahman (Accountant Member) and Anubhav Sharma (Judicial Member), observed that the assessee had recorded the transaction in its books of account and submitted all relevant information before the CIT(A). The tribunal observed that the investment was recorded in the books and the payments were through a proper banking channel which was acknowledged by the First Appellate Authority. and the AO’s failure to submit a remand report which formed the basis of deletion of addition.

Chander Shekher Saini, vs The ITO CITATION: 2025 TAXSCAN (ITAT) 2129

The Chandigarh Bench of the Income Tax Appellate Tribunal (ITAT) held that the assessee was not entitled to full tax exemption on his entire leave encashment received upon retirement from Punjab State Power Corporation Limited (PSPCL) but only eligible for the exemption for the portion of service rendered under the erstwhile Punjab State Electricity Board (PSEB).

The Single-member bench comprising Laliet Kumar (Judicial Member) confirmed that, based on prior Coordinate Bench decisions, PSPCL could not be treated as the 'State Government' for the purposes of Section 10(10AA) of the Act. The tribunal observed that the service period from April 16, 2010, to the date of retirement under PSPCL did not qualify for the full exemption. The Tribunal noted that PSEB squarely qualified under the provisions of Section 10(10AA) as a State undertaking.

PCL Foods Private Limited vs Additional /Joint/Deputy/AssistantCommissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 2130

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) set aside the Transfer Pricing (TP) adjustment related to the sale of traded goods (rice) back to the Dispute Resolution Panel (DRP) for recomputation and held that the DRP's directions to be incomplete regarding the crucial issue of which expenses should be considered 'operating' for margin calculation.

The two-member bench comprising Madhumita Roy (Judicial Member) and Brajesh Kumar Singh (Accountant Member), noted that the DRP, in its directions which had merely observed that bank charges were related to the business transactions of the assessee and therefore should be treated as operating. The tribunal observed that this approach rendered the DRP's order "non-speaking and incomplete."

SRS Panchratan Diamonds Pvt. Ltd vs DCIT CITATION: 2025 TAXSCAN (ITAT) 2131

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) quashed the assessment orders passed under Section 153C for the Assessment Years (AY) 2015-16 and 2016-17, on the fundamental legal ground that the Assessing Officer (AO) had incorrectly recorded a consolidated satisfaction note for multiple Assessment years.

The Tribunal, after considering the conflicting jurisdictional High Court rulings, decided to follow the judgment of the Karnataka High Court in DCIT vs. Sunil Kumar Sharma which was affirmed by the Supreme Court and the jurisdictional Delhi High Court decision in Saksham Commodities Ltd vs. ITO.

Deputy Commissioner of Income Tax vs Niru Dhiren Shah CITATION: 2025 TAXSCAN (ITAT) 2132

The Mumbai Bench of the Income Tax Appellate Tribunal, held that an unverified WhatsApp chat recovered from a third party could not form the basis of an addition under Section 69A of the Income Tax Act, 1961.

The Bench comprising Narender Kumar Choudhry, Judicial Member and Prabhash Shankar, Accountant Member, observed that the WhatsApp screenshot was an unauthenticated rough working that did not bear any signature or verification from any authority. The Tribunal held that the WhatsApp chat was merely a private exchange between the purchaser’s son and his accountant and did not mention the assessee or the specific shop sold. No corroborative evidence of any cash payment was found during the search on the assessee.

Jankey Polymers vs The ITO,Baddi CITATION: 2025 TAXSCAN (ITAT) 2133

The Chandigarh Bench of the Income Tax Appellate Tribunal (ITAT) remanded the matter ₹35,00,000 to the Commissioner of Income Tax (Appeals) [CIT(A)] to allow the assessee to prove the complete fund flow trail of unsecured loans received from three Hindu Undivided Families (HUFs) by linking them to repayment transactions made by one of its partners.

The Single-member bench comprising LalietKumar (Judicial Member) observed that while the lower authorities were correct in confirming the addition based on the material available at that time as the assessee had failed to produce documentary evidence of the entire fund flow. The tribunal observed that the new evidence now placed before the Tribunal could not be ignored.

Somnath Ramdas Jadhav,Mundhekarwadi vs ITO CITATION: 2025 TAXSCAN (ITAT) 2134

The Pune Bench of the Income Tax Appellate Tribunal (ITAT) quashed the entire reassessment proceedings and ruled that proper course action must be under section 153C for reopening based on search but not section 147 of the Income Tax Act.

The two-member bench comprising Manish Borad (Accountant Member) and Vinay Bhamore (Judicial Member) relied on a binding precedent set by a coordinate bench in the case of Vijaykumar Mangilal Chordiya vs. NFAC. The tribunal held that the initiation of proceedings under Section 147 was not in accordance with law and liable to be quashed.

Income Tax Officer vs Ms. Sunita Sanjeev Aeren, AerensBimaldeep Complex CITATION: 2025 TAXSCAN (ITAT) 2135

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) granted substantial relief by confirming the deletion of a Short-term Capital Gain addition of ₹2,53,20,000/- for the Assessment Year (AY) 2011-12 and held that reduction in shareholding due to fresh allotment was not a transfer or relinquishment of right.

The two-member bench comprising Mahavir Singh (Vice President) and Krinwant Sahay, (Accountant Member), relied on the binding precedent set by the Delhi High Court in the related case of Snerea Properties Pvt.Ltd. Vs. ACIT. The High Court had previously confirmed that where no part of the title or interest in the property was transferred by the assessee, the income incidence, if any, would fall only on the transacting parties (the transferor and transferee of the shares), and not on the company or the non-transacting shareholder.

Purchases Cannot Be Disbelieved When Books Not Rejected and Payments Made Through Banking Channels: ITAT Deletes ₹12.73 Cr Addition u/s 69C

The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) allowed the appeal filed by Pravesh Kumar Jaiswal for Assessment Year (AY) 2021–22, deleting the addition of ₹12,73,85,064 made under Section 69C read with Section 115BBE of the Income TaxAct, 1961.

The Tribunal relied on consistent judicial precedents, including Axora Resources Ltd. v. ITO (2025), the Tribunal held that when payments are made through banking channels and sales are accepted, purchases cannot be treated as bogus merely because the suppliers were untraceable or non-filers. Accordingly, the ITAT set aside the order of the CIT(A) and directed deletion of the ₹12.73 crore addition under Section 69C of the Income Tax Act, allowing the appeal in favour of the assessee.

Krishna Prabhas Agro Oils Private Limited vs AssistantCommissioner CITATION: 2025 TAXSCAN (ITAT) 2137

The Visakhapatnam Bench of the Income Tax Appellate Tribunal (ITAT) has held that once the books of accounts and the resultant trading results are accepted by the Assessing Officer (AO), a portion of the recorded sale proceeds cannot be recharacterized and taxed again as an unexplained cash credit under Section 68 of the Income Tax Act, 1961.

The two-member bench comprising Manjunatha G. (Accountant Member) and Ravish Sood (Judicial Member) observed that the AO, while framing the assessment, had accepted the audited books of accounts and computed the income based on the returned income, which included the sales proceeds in question. The tribunal relied on precedents, including the ITAT Raipur Bench's decision in Rahul Cold Storage v. ITO which held that receipts forming part of the business turnover and accepted by the AO cannot be taxed again under Section 68 of the Income Tax Act.

ITO vs The Ammunitionfactory co-op. credit society limited CITATION: 2025 TAXSCAN (ITAT) 2138

The Pune Bench of the Income Tax Appellate Tribunal (ITAT) confirmed that interest and dividend income earned by a primary credit co-operative society from investments made with a co-operative bank is eligible for deduction under Section $80P(2)(d)$ of the Income Tax Act, 1961.

The two-member bench comprising Manish Borad (Accountant Member) and Vinay Bhamore (Judicial Member) noted that the assessee was a primary credit co-operative society whose core business was providing credit facilities to its members. The Tribunal relied on the principle that a co-operative bank continues to be a co-operative society registered under the Co-operative Societies Act. It followed binding precedents from the Jurisdictional Mumbai Bench of the ITAT and the Hon'ble Bombay High Court in the case of Annasaheb Patil Mathadi Kamgar Sahkari Pathpedhi Ltd.

M/s. Texo The Builders vsACIT CITATION: 2025 TAXSCAN (ITAT) 2139

The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) ruled that the payments was not made on banking holidays and held that the assessee failed to establish the conditions required for claiming exemption under Rule 6DD(j) thus confirming the disallowance under Section 40A(3) of the Income Tax Act for the Assessment Years 2013-14 and 2014-15.

The Tribunal held that the actual days of payment for transactions like 'Engineer work charges' (₹21,250) and 'Mahaganapathi Steel' (₹2,00,000) were Friday, Tuesday, Wednesday, and Thursday - all regular bank working days. Accordingly, The Tribunal ruled that the assessee’s submissions that the cash payments were made on banking holidays was incorrect. Therefore, the tribunal observed that the payments did not come under the explanation provided under Rule 6DD(j) of the Act.

Taxpayer Yet to Prove Source of Deposit from Property Sale to Father: ITAT Remands Cash Deposit Matter for Verification

The Chandigarh Bench of the Income Tax Appellate Tribunal (ITAT) has remanded the to the file of the Assessing Officer (AO) for fresh adjudication in the case involving addition of ₹42,20,000 made as unexplained income after the assessee failed to prove the source of a cash deposit in his bank account during the Financial Year 2012-13.

The tribunal observed that the assessee needed to submit all documents to prove the source and his entitlement to the amount of ₹42.20 lacs. The bench deemed it appropriate to provide a final opportunity to the assessee and set aside the orders of the lower authorities.The Tribunal directed the Assessing Officer to examine the newly filed documents afresh and conduct a detailed verification. The appeal of the Assessee was allowed for statistical purposes.

Shital Nilesh Parakh vs ITO CITATION: 2025 TAXSCAN (ITAT) 2141

The Pune Bench of the Income Tax Appellate Tribunal (ITAT) partly allowed the appeal of a by estimating agricultural expenditure towards onion cultivation at ₹22,37,554 out of gross sales of ₹89,50,214 and set aside the Commissioner of Income Tax (Appeals) [CIT(A)] estimation of 35%.

The two-member bench comprising Manish Borad(Accountant Member) and Vinay Bhamore (Judicial Member) considered the totality of the facts and arguments. The Tribunal decided to adopt a middle ground to estimate the expenses towards agricultural operations. The Tribunal observed that it was appropriate to estimate the expenses at ₹22,37,554 approximately of the gross receipts for the period under consideration. This estimation was significantly higher than the assessee's claimed 21% but lower than the CIT(A)'s 35%.

The Visakhapatnam Bench of the Income Tax Appellate Tribunal (ITAT) has held that once the books of accounts and the resultant trading results are accepted by the Assessing Officer (AO), a portion of the recorded sale proceeds cannot be recharacterized and taxed again as an unexplained cash credit under Section 68 of the Income Tax Act, 1961.

The two-member bench comprising Manjunatha G. (Accountant Member) and Ravish Sood (Judicial Member) observed that the AO, while framing the assessment, had accepted the audited books of accounts and computed the income based on the returned income, which included the sales proceeds in question. The tribunal relied on precedents, including the ITAT Raipur Bench's decision in Rahul Cold Storage v. ITO which held that receipts forming part of the business turnover and accepted by the AO cannot be taxed again under Section 68 of the Income Tax Act.

ITAT Deletes ₹37.87L Addition After AO Accepts Turnover Reconciliation: Holds CIT(A)’s Remand of 144 Order Improper

Monika Jain vs ITO Ward 6(1) CITATION: 2025 TAXSCAN (ITAT) 2143

No Transfer Order from Delhi AO to Jaipur AO: ITAT Quashes 153C Assessment for Lack of Territorial Jurisdiction

The Tribunal therefore set aside the issue of computation and remanded the matter to the AO with a direction to verify the indexed cost of acquisition and recompute the capital gains in accordance with law. The appeal was thus partly allowed for statistical purposes.

The Tribunal held that the issue required verification of the assessment order and appellate order in the brother’s case to confirm whether the addition was already accepted there. Accordingly, the Tribunal set aside the CIT(A)’s order and remanded the matter to the AO, directing him to verify the assessment records of the brother. If the addition has been accepted by the brother, the AO must delete the ₹4 lakh addition sustained by the CIT(A) in the assessee’s hands.The appeal was thus partly allowed for statistical purposes.The Revenue was represented by Rajat Datta.

ITAT Restores 10(23C)(vi) Exemption to Education Trust: Finds No Evidence of Personal Benefit or Misuse of Funds

VAT Accepted Books Cannot Be Rejected Without Defects: ITAT Deletes Bogus Purchase Addition After AO Makes No Independent Inquiry