Half-Yearly Income Tax Case Digest: ITAT Decisions 2025 [Part II]

This half-yearly round-up analytically summarizes the key Direct Tax-Income Tax rulings of the Income Tax Appellate Tribunal (ITAT) reported at Taxscan.in during the first half of 2025.

Insufficient Evidence to Prove Loan Creditworthiness: ITAT remands Unexplained Cash Deposits matter for Reconsideration

Mrs. Karunakaran Leela vs ITO CITATION: 2025 TAXSCAN (ITAT) 215

The Chennai Bench of the Income Tax Appellate Tribunal ( ITAT ) remanded the matter concerning unexplained cash deposits for reconsideration observing that the assessee failed to provide sufficient evidence to establish the creditworthiness of certain loan creditors.

Karunakaran Leela, the assessee filed the appeal challenging the addition made by the AO and partially upheld by the Commissioner of Income Tax (Appeals) [CIT(A)]. The case was related to unsecured loans totaling Rs. 120 lakhs claimed by the assessee from 17 creditors which were added to her income by the AO due to doubts regarding the creditors’ creditworthiness.

AO Partially Disallows Property Improvement Costs; ITAT Allows Full Deduction, Accepting Architect’s Valuation

Jatinder Kumar Singla vs The ITO CITATION: 2025 TAXSCAN (ITAT) 216

The Chandigarh Bench of the Income Tax Appellate Tribunal (ITAT) overturned the partial disallowance of property improvement costs claimed by the assessee, directing full allowance based on the architect’s valuation certificate.

Jatinder Kumar Singla, the assessee, filed the appeal against the order dated March 26, 2024, passed by the Additional Commissioner of Income Tax, Coimbatore, for the Assessment Year 2017-18.

Non-Appearance Due to Accounts Team Employee’s Exit from Company: ITAT Imposes ₹5,000 Penalty and Remands Matter

ACME Housing India Private Ltd. vs Assistant Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 217

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) remanded matters to the Commissioner of Income Tax (appeals)[CIT(A)] considering that the non-appearance was due to employees’ exit and imposed Rs. 5000 as a penalty.

ACHE Housing India Private Ltd (assessee) is engaged in the building and development of real estate property. The assessee filed an Income Tax Return (ITR) and claimed depreciation on goodwill of Rs. 40,24,09,376 and several deductions related to delayed payment of TDS and delayed filing of return.

Delay in filing appeal due to pending cases in civil courts and financial struggle: ITAT condones 180 days delay

Shri Abhijit Uttamrao Deshmukh vs ACIT CITATION: 2025 TAXSCAN (ITAT) 218

The Pune Bench of Income Tax Appellate Tribunal (ITAT) condoned the delay of 180 days for delay in filing appeal due to pending cases in civil courts and financial struggle of the assessee.

Abhijit Uttamrao Deshmukh (assessee) individual not filed his Income Tax Return (ITR) and the Assessing Officer ( AO ) noted that the Assessee received an amount of Rs. 10 Crores in transaction of land. Therefore, the AO reopened the assessment proceedings and added Rs. 10 Crore to the total income.

ITAT remits case back to AO over Assessee’s Silence & Lack of Compliance

Rahul Kumar Singh VS AO, Ward-28(2)(1) CITATION: 2025 TAXSCAN (ITAT) 219

In a recent ruling, the Income Tax Appellate Tribunal ( ITAT ) Mumbai Bench, remitted a case back to the Assessing Officer ( AO ) for fresh consideration after the assessee failed to respond to multiple notices and provide critical documentation. Rahul Kumar Singh, appellant-assessee filed a return of income declaring a total income of Rs. 8.11 lakh for the assessment year 2018-19.

The AO had initiated reassessment proceedings after receiving information from the “Insight Portal” and the Central Goods and Services Tax ( CGST ) Department, indicating that the appellant was a beneficiary of fake invoices provided by Himadri Foods Ltd.

No Retrospective Amendment to Section 14A: ITAT Dismisses Revenue’s Plea

Deputy Commissioner of Income Tax vs Welspun Steel Limited CITATION: 2025 TAXSCAN (ITAT) 220

In a significant ruling, the Income Tax Appellate Tribunal (ITAT) Mumbai Bench dismissed the Revenue’s appeal in a case concerning the applicability of Section 14A of the Income Tax Act, 1961. The case highlights key issues regarding the disallowance of expenses incurred for earning exempt income and the retrospective applicability of amendments made by the Finance Act, 2022.

The dispute involved Welspun Steel Limited, the Assessee, which was assessed for the Assessment Year 2015-16. The Assessing Officer (AO) had disallowed INR 7.98 crore under Section 14A, invoking Rule 8D of the Income Tax Rules, 1962. This disallowance was added to the income of the Assessee, Welspun Steel Limited, to compute taxable income under the normal provisions of the Act. Additionally, the AO applied this disallowance while computing the Book Profits under Section 115JB.

ITAT sets aside Income Addition and Capital Gains Tax due to Failure by Authorities to consider Key Evidence on Land’s Municipal Status

Smt. Shanaj vs The ITO CITATION: 2025 TAXSCAN (ITAT) 221

The Jodhpur Bench of Income Tax Appellate Tribunal ( ITAT ) set aside the addition of Rs. 72,14,060 to the assessee’s income and the capital gains tax levied due to the failure of the authorities to consider key evidence regarding the land’s municipal status.

Shanaj,appellant-assessee,filed an appeal challenging the addition of Rs. 72,14,060/- to her income by the Assessing Officer (AO) and the subsequent confirmation of this addition by the Commissioner of Income Tax (Appeals) [CIT(A)]. The main issue in the appeal revolves around the classification of the land in question, with the appellant asserting that the land was situated beyond the municipal limits of Sardarsahar, which would affect the tax implications associated with it.

No Addition can be made in the hands of Assessee based on Retracted Statements: ITAT

Income Tax Officer vs Amar Pratap Steels Pvt. Ltd CITATION: 2025 TAXSCAN (ITAT) 222

In a recent ruling, the Income Tax Appellate Tribunal ( ITAT ), Jaipur Bench, comprising Judicial Member Dr. S. Seethalakshmi and Accountant Member Shri Rathod Kamlesh Jayantbhai, dismissed an appeal filed by the Income Tax Department against Amar Pratap Steels Pvt. Ltd. for the Assessment Year 2010-11.

The tribunal upheld the decision of the Commissioner of Income Tax (Appeals), deleting an addition of ₹1.7 crore made under Section 68 of the Income Tax Act, 1961, related to unexplained cash credits.

Classification of Services as FTS under India-Netherlands Tax Treaty: ITAT Rejects Taxability due to Lack of Technology Transfer

Shell International B.V VS Assistant Commissioner of Income Tax (International Taxation)-1 CITATION: 2025 TAXSCAN (ITAT) 223

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) rejected the taxability of services under the India-Netherlands Tax Treaty, ruling that the services provided did not involve the transfer of technology and , therefore, did not qualify as Fees for Technical Services ( FTS ) under the treaty. Shell International B.V.,appellant-assessee, managed the global recruitment team for the Shell Group under CHR recruitment services, supporting regional hiring and broader talent strategies.

Costs were allocated to Shell entities based on the number of recruitments. The Assessing Officer ( AO ) classified these as fees for technical services, citing the specialized expertise and consultancy provided.

ITAT confirms Tax Exemptions for Gujarat Housing Board u/s. 11&12 of the Income Tax Act

The JCIT vs Gujarat Housing Board CITATION: 2025 TAXSCAN (ITAT) 224

The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT), confirmed tax exemptions for Gujarat Housing Board Under Sections 11 and 12 of the Income Tax Act,1961 and rejected the Revenue’s appeal.

The case relates to multiple assessment years, including 2011-12 and 2015-16 to 2018-19, during which the Revenue had challenged the Gujarat Housing Board’s claim of exemption under the Income Tax Act. The Revenue had earlier taken the matter to the Supreme Court after the Gujarat High Court ruled in favor of the Housing Board, directing the assessment officer to re-examine the exemption claims in light of relevant judicial precedents.

Illiterate Agriculturist Unaware of Complex Tax Proceedings: ITAT Condones 228-Day Delay, Remands Unexplained Cash Credit Matter

Joginder Singh vs The ITO CITATION: 2025 TAXSCAN (ITAT) 225

The Chandigarh Bench of the Income Tax Appellate Tribunal ( ITAT ) condoned a 228-day delay in filing an appeal acknowledging illiterate agriculturists lacked awareness of tax procedures and remanded unexplained cash credit matters for reconsideration.

Joginder Singh, the assessee, an agriculturist residing in Mohali, contested the order dated 10.02.2023, passed by the Commissioner of Income Tax (Appeals) concerning the Assessment Year 2011–12.

ITAT Directs Reassessment of Ex-Parte Dismissal u/s 250 of Income Tax Act: Criticizes Negligence of Non-Compliance of Taxpayers

Amjay Medimax India Pvt.Ltd. vs The Dy.CIT CITATION: 2025 TAXSCAN (ITAT) 227

In a recent case, the Ahmedabad Bench of the Income Tax Appellate Tribunal ( ITAT ) set aside an order passed by the Commissioner of Income Tax (Appeals) [ CIT(A) ], National Faceless Appeal Centre ( NFAC ) in the case of Amjay Medimax India, for the assessment year (AY) 2017-18.

The assessee, Amjay Medimax India Pvt Ltd, declared an income of ₹60 Lakhs. Still, on further assessment following scrutiny by the assessing officer (AO), it was found that it had a total income of ₹7.9Cr. The AO, on this finding, made an addition of ₹2 Cr under Section 68 of the Income Tax Act for unexplained cash deposits. The AO made a disallowance of ₹25 lakhs under Section 14A for expenses found.

No Addition Warranted on Alleged Bogus Purchases When GP Rate Exceeds Genuine Purchases: ITAT

Aashna Diamond vs ACIT CITATION: 2025 TAXSCAN (ITAT) 228

The Income Tax Appellate Tribunal Tribunal ( ITAT ), Mumbai held that no addition by way of disallowance of alleged bogus purchases is warranted when the GP rate exceeds genuine purchases. The assessee is a trader, importer and exporter of diamonds.

The revenue conducted a search and seizure operation on October 3, 2013, at the premises of Rajendra Jain, Sanjay Choudhary, Dharmi Chand Jain, and their associated companies. The authorities claimed that these entities were engaged in issuing bogus sales invoices without actually supplying goods.'

Income Tax Appeal Withdrawn Due to Opting for DTVSV Scheme: ITAT Dismisses Appeal with Conditional Clause of Revival

Ram Ji Lal vs ITO CITATION: 2025 TAXSCAN (ITAT) 229

The Chandigarh Bench of the Income Tax Appellate Tribunal ( ITAT ) dismissed the appeal filed by the assessee due to opting for resolution under the Direct Tax Vivad Se Vishwas, 2024 ( DTVSV ) Scheme. The tribunal allowed the withdrawal of the appeal while incorporating a conditional clause permitting revival if the benefits under the scheme were not realized due to technical issues.

Ram Ji Lal, the assessee, had filed the appeal challenging the order dated 21.03.2024 passed by the Commissioner of Income Tax (Appeals). The appeal was related to a dispute regarding his income tax assessment for the financial year 2006-07.

CBDT Circular provides Time Extension for Approval of Fund u/s 80G: ITAT Restores matter to CIT(E)

Khidmat-E-Khalq Charitable Trust vs C.I.T. (Exemptions) CITATION: 2025 TAXSCAN (ITAT) 230

The Surat Bench of the Income Tax Appellate Tribunal (ITAT) recently granted relief to an Appellant, approving the delay in application for approval of fund from the date of commencement of activities of the Assessee-trust, in terms of Circular No.7/2024 issued by the Central Board of Direct Taxes (CBDT).

An Income Tax Appeal filed by Khidmat-E-Khalq Charitable Trust against the Commissioner of Income Taxes (Exemptions) ( CIT(E) ); the Assessee sought to impugn an order passed by the CIT(E) rejecting application for approval under Section 80G(5). The application was rejected by the CIT(E) on the grounds that the activities of the assessee-trust commenced on 17.09.2020, requiring them to file application in Form-10AB on or before 30.09.2020 as per the directives of CBDT Circular No.6/2023.

Validity of S.153C Proceedings for AY 2006-07 : ITAT Restores Matter to CIT(A)

Smt. Neelu Sanjay Gupta vs Deputy Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 231

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) restored the matter to the Commissioner of Income Tax(Appeals) [ CIT(A) ] for further scrutiny regarding the validity of proceedings under Section 153C of Income Tax Act,1961 for Assessment Year 2006-07.

Technodot Engineers Ltd.,appellant-assessee, was involved in a search operation under Section 132 of the Act, during which several documents and assets were seized. This led to proceedings under Section 153C of the Act, and the main issue raised by the assessee concerned Assessment Year 2006-07.

Deceased Assessee’s Unexplained ₹15 Lakh Bank Deposit yielding ₹31 Interest: ITAT Remits for de novo Assessment

Kiwans Farsuram Bhamwala vs The ITO CITATION: 2025 TAXSCAN (ITAT) 232

The Surat Bench of the Income Tax Appellate Tribunal ( ITAT ) recently set aside an ex-parte addition ₹15 Lakh held as unexplained Bank Deposit by a deceased assessee, while calling on the Assessing Officer ( AO ) to conduct de novo assessment.

The Assessee, Nayanaben Farsuram Bhamwala had failed to file her returns for the Assessment Year (A.Y.) 2010-11 against which numerous notices and show-cause notices had been issued by the Department.

Not Every Bank Deposit constitutes Income: ITAT remands Agriculturist’s Unexplained Cash Deposit Matter for Reconsideration

Rajwinder Singh vs The ITO CITATION: 2025 TAXSCAN (ITAT) 233

The Chandigarh Bench of the Income Tax Appellate Tribunal ( ITAT ) ruled that not all bank deposits could be presumed as taxable income and remanded two appeals concerning additions of unexplained cash deposits made by agriculturists.

The appeals related to Rajwinder Singh for Assessment Year 2011-12 and Amarjeet Singh for Assessment Year 2012-13, challenging the orders of the Commissioner of Income Tax (CIT(A)) which upheld additions made by the Assessing Officer ( AO ) without addressing the appellants’ submissions.

ITAT Restores 80G Approval Application: Assessee’s Corrected Form 10AB to be Considered

Salaam Social Medical VS Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 236

In a significant ruling, the Income Tax Appellate Tribunal (ITAT), Mumbai Bench, has restored the approval application under Section 80G of the Income Tax Act,1961 filed and directed the Commissioner of Income Tax (Exemption) to reconsider the application based on the corrected Form 10AB.

The appeal, filed by the assessee, Salaam Social Medical Services Foundation, a non-profit organization challenged the rejection of its 80G approval application by the Commissioner of Income Tax (Exemption) , CIT(E) on 5th September 2024. The rejection was based on the grounds that the applicant had failed to regularize its provisional registration under Section 12A, and thus, did not meet the necessary prerequisites for 80G approval.

Addition u/s 40(a)(ia) for Delayed TDS Payment: ITAT upholds CIT(A)’s Deletion based on Net Profit Rate Estimation

The ACIT vs M/s. Vardha Infra Ltd. CITATION: 2025 TAXSCAN (ITAT) 234

The Jodhpur Bench of Income Tax Appellate Tribunal ( ITAT ) upheld the Commissioner of Income Tax(Appeals) [CIT(A)]’s deletion of the addition of ₹13.87 crore under section 40(a)(ia) for delayed Tax Deducted at Source ( TDS ) payment based on the net profit rate estimation, noting that no separate addition could be made once the books were rejected and income was estimated using this method.

The Revenue-Appellant appealed against the order passed by CIT(A) dated 18-01-2024, for assessment year 2017-18. In this case, Vardha Infra Ltd.,respondent-assessee,e-filed its return for AY 2017-18 with NIL income and carried forward losses of Rs. 5.52 crore.

Trader Sold Opening Stock at Discounted Rates Leading to Higher Sales Compared to Previous Years: ITAT deletes ₹32 Lakh Addition

Pawan International vs The ITO CITATION: 2025 TAXSCAN (ITAT) 235

The Chandigarh Bench of the Income Tax Appellate Tribunal (ITAT) deleted the addition of Rs. 32 lakhs made by the Assessing Officer (AO), citing the assessee’s higher sales as a result of the discounted sale of opening stock. Pawan International, the assessee, is a trader of artificial goods and flowers, operating from Ludhiana.

The assessee faced scrutiny regarding cash deposits of Rs. 32 lakhs in its bank account for the assessment year 2017-18. The Assessing Officer (AO) treated these deposits as income from undisclosed sources citing unusually high cash sales compared to previous years.

Cash Deposits during Demonetization: ITAT confirms Addition of ₹1.10 Cr u/s 69A and 115BBE of Income Tax Act

Dharmendra Kumar vs ITO CITATION: 2025 TAXSCAN (ITAT) 237

The Patna bench of the Income Tax Appellate Tribunal ( ITAT ) in the case of Mr Dharmendra Kumar confirmed the addition made by the assessing officer ( AO ) as unexplained income under Section 69A read with Section 115BBE of the Income Tax Act. The assessee moved the appeal against the order passed by the Commissioner of Income Tax (Appeals)[CIT(A)].

The case originated during the demonetisation period, where the AO observed cash deposits worth ₹1.10 Cr in multiple bank accounts belonging to the assessee, Dharmendra Kumar. The AO had initiated proceedings under Sections 147,142(1), and 148 of the Income Tax after discovering unexplained cash deposits through the Asset Information Management System (AIMS) database and the ITBA modules.

Interest-Free Loans to Related Parties: ITAT Dismisses Assessee’s Appeal, Validates PCIT’s Action

HBS View Private Ltd. vs PCIT-8 CITATION: 2025 TAXSCAN (ITAT) 238

In a recent ruling, the Income Tax Appellate Tribunal ( ITAT ), Mumbai Bench, dismissed an appeal and upheld the order passed by the Principal Commissioner of Income Tax ( PCIT ) under Section 263 of the Income Tax Act. The appeal, concerning the assessment year 2018-19, challenged the revisional jurisdiction exercised by the PCIT, who had found the assessment order to be erroneous and prejudicial to the interests of the revenue.

HBS View Private Ltd., the appellant-assessee, contended that the exercise of jurisdiction under Section 263 was improper, arguing that the twin conditions of “error” and “prejudicial to the interest of revenue” were not fulfilled. The appellant claimed that the expenditures in question, although not claimed in the current year, did not affect the revenue’s interests.

ITAT Sets Aside CPC’s Adjustment, allows Pfizer’s Claim u/s 43B

The Capital VS The Deputy Director of Income Tax CITATION: 2025 TAXSCAN (ITAT) 239

In a significant ruling, the Income Tax Appellate Tribunal ( ITAT ), Mumbai Bench, has set aside an adjustment made by the Central Processing Centre ( CPC ) against Pfizer Limited under Section 43B of the Income Tax Act, 1961. The Tribunal’s order, pronounced on December 31, 2024, granted Pfizer’s claim for a deduction of INR 5.3 crore in respect of indirect taxes paid by the company, a decision that came after the company’s appeal against the adjustments made by the CPC in its assessment for the financial year 2022-23.

The dispute in this case revolved around Pfizer’s claim for deductions related to taxes paid under protest and the settlement of tax disputes under various state government amnesty schemes.

ITAT quashes AO’s Order, upholds deduction under Section 80P for Cooperative Credit Society

Samarth Raghuveer SahakariPatsanstha Ltd VS Income-tax Officer CITATION: 2025 TAXSCAN (ITAT) 240

In a significant ruling, the Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has upheld that cooperative credit societies are eligible for deductions under Section 80P of the Income Tax Act. The tribunal’s decision came in response to appeals filed by Samarth Raghuveer Sahakari Patsanstha Ltd. against orders passed by the National Faceless Assessment Centre ( NFAC ) for the assessment years 2017-18 and 2018-19.

The core issue in the appeals revolved around the denial of deductions under Section 80P, a provision aimed at promoting the growth of cooperative societies. Specifically, the appellant society claimed deductions under Section 80P(2)(a)(i) for its income earned from business activities with its members, and Section 80P(2)(d) for interest income earned from deposits with cooperative banks.

ITAT Remands ₹44.9 Lakhs Unexplained Cash Deposits Case to AO: Deliberates on need for Natural Justice in Reassessments

Anantrai Vithalbhai Parmar vs Commissioner of Income Tax (Appeals) CITATION: 2025 TAXSCAN (ITAT) 241

The Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ), in the case of Anantrai Vithalbhai Parmer, remanded the case back to the assessing officer ( AO ) for fresh assessment for the assessment year (AY) 2017-18.

The assessee, Anantrai Vithalbhai Parmer, had deposited ₹12 lakhs in cash in his bank account with the Bank of Baroda during the demonetisation period from November 9 2016 to December 31 2016. The assessee, however, failed to file his return of income as required under Section 139 of the Income Tax Act. A notice per Section 142(1) was issued to the assessee but received no response.

Lack of evidence and improper enquiry: ITAT Remands Case to AO for Fresh Examination

Ramchandra Keshav and Company VS CIT(A)-30 CITATION: 2025 TAXSCAN (ITAT) 242

In a recent decision, the Income Tax Appellate Tribunal ( ITAT ), Mumbai Bench, has remanded a case involving the partnership firm, back to the Assessing Officer (AO) for a fresh examination. The case revolves around the addition of Rs. 3.50 crores under Section 69A of the Income Tax Act, 1961, which the AO had assessed as unexplained income due to discrepancies in cash deposits reported during the demonetization period.

Ramchandra Keshav and Company, appellant-assessee, a jewellery trading firm, filed its return of income for the assessment year 2017-18 declaring a total income of 40.5 lakhs. During scrutiny, the AO discovered cash deposits of Rs. 3 crores in Saraswat Co-operative Bank Ltd and 50 lakhs in Deccan Merchants Co-operative Bank Ltd.

Landmark Ruling: ITAT Mumbai Upholds Deduction Claim of Co-op Societies, Clarifies Co-op Banks Are Eligible for Tax Benefits Under Section 80P(2)(d)

ITO- 19(3)(1) 405 vs ShivsahyadriSahakariPathpedhi 118 CITATION: 2025 TAXSCAN (ITAT) 243

In a significant decision, the Income Tax Appellate Tribunal (ITAT) Mumbai has ruled in favor of co-operative societies, allowing them to claim tax deductions under Section 80P(2)(d) of the Income Tax Act, 1961.

The ruling clarifies that co-operative banks, despite being distinct from primary agricultural credit societies (PACS), are eligible for such tax benefits, overturning previous assertions by tax authorities that co-operative banks should be excluded from the scope of these deductions.

Agreement for transfer of operations and movable assets not a ground to deny exemption u/s 11 and 12: ITAT

Deputy Commissioner of Income Tax vs Adarsh Foundation CITATION: 2025 TAXSCAN (ITAT) 244

Lack of specific information or positive evidence to reject Assessee’s Submissions: ITAT deletes ₹48 Lakh Income Tax Addition

Mohamedistiyak Mohamediqbal Patel vs The ITO CITATION: 2025 TAXSCAN (ITAT) 245

The Surat Bench of the Income Tax Appellate Tribunal (ITAT) recently deleted an income tax addition of ₹48,48,356, observing that the concerned Assessing Officer (AO) and precursory Commissioner of Income Taxes (Appeals) ( CIT(A) ) had failed to adduce any specific information and evidence to incriminate the Assessee demonstrating the Assessee’s possession of unexplained income.

Emanating from an Order passed by the CIT(A), the Assessee Mohamedistiyak Mohamediqbal Patel challenged an income tax addition of ₹48,48,356 as ‘unexplained income’ without considering the Short-Term Capital Gains of ₹3,207.07 made by the Assessee from sale of shares of “M/s Comfort Fincap Ltd.” during Assessment Year (A.Y.) 2014-15.

Disallowance of Interest Expenses on Alleged Fund Misuse: ITAT Allows Citing Lack of Nexus Between Borrowed Funds and Personal Investments

Abhaykumar Sevantilal vs ACIT Circle CITATION: 2025 TAXSCAN (ITAT) 246

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) allowed the interest expenses of the assessee on alleged fund misuse citing that lack of nexus between borrowed funds and personal investments.

Abhaykumar Sevantilal (assessee) filed his Income Tax Return (ITR) for the Assessment Years (AYs) 2016-2017 and 2017-2018. The Assessing Officer (AO) selected the cases for scrutiny and the assessment order was passed with some additions which included interest expenses. The AO disallowed the interest expenses due to borrowed funds utilised for personal investments.

Interest Income from Business Investments by Co-operative Society Eligible for Deduction u/s 80P(2)(a): ITAT

Abhinandan Gramin Bigar vs The Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 247

The Pune Bench of Income Tax appellate Tribunal (ITAT) held that interest income from Business investment earned by Cooperative Society is eligible for deduction under section 80(2)(a) of the Income Tax Act.

Abhinandan Gramin Bigar (assessee) is a cooperative society filed its Income Tax Return (ITR) for Assessment Year 2020-2021 declaring NIL income and claimed deduction of Rs. 48,49,699 under section 80P(2)(a)(i) of the Act.

ITAT Grants Trust another opportunity to Rectify Defects in S.12AB Registration Application

Ananvaya Nyasah VS The CIT-Exemption CITATION: 2025 TAXSCAN (ITAT) 249

The Jaipur Bench of the Income Tax Appellate Tribunal ( ITAT ), has granted the trust the opportunity to rectify defects in Section 12AB of the Income Tax Act, 1961, with regard to registration applications. In this case, the assessee, Ananvaya Nyasah, a Jaipur-based trust, had filed appeals challenging the CIT(E)’s rejection of its applications for registration under Section 12AB and approval under Section 80G of the Income Tax Act, 1961.

The Commissioner of Income Tax (Exemptions) [ CIT(E) ] had rejected the applications citing non-registration under the Rajasthan Public Trust Act, 1959, and failure to establish the genuineness of its activities. The rejection also led to the cancellation of the trust’s provisional registration.

Disallowance of ₹16.84 Lakhs as LC Discounting Charges u/s 36(1)(iii): ITAT Finds Addition Unjustified

BPS Mineral Exports Pvt. Ltd. vs Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 261

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) found the addition of ₹16.84 Lakhs as LC discounting charges under Section 36(1)(iii) of Income Tax Act,1961 to be unjustified. BPS Mineral Exports Pvt. Ltd.,appellant-assessee,engaged in trading various products, filed its return on October 29, 2017, declaring a loss of Rs. 2,14,691/-.

The assessment was finalised at Rs. 15,47,014/- after adding Rs. 17,61,705/- for disallowance under Section 36(1)(iii) due to interest-bearing funds allegedly used for interest-free loans.

CIT(A) has erred in noting the correct facts’: ITAT Remands matter for Fresh adjudication

Dr. C J Desai And Jaswantiben Desai Foundation vs Commissioner of Income Tax (Exemption) CITATION: 2025 TAXSCAN (ITAT) 250

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) set aside the rejection of the 80G application under the Income Tax Act, 1961 by the Commissioner of Income Tax(Exemption) [CIT(E)] due to an incorrect assumption that the trust lacked valid 12A registration.

Dr. C J Desai And Jaswantiben,appellant-assessee, had their application for approval under Section 80G(5)(iii) rejected by CIT(E) as their registration under Section 12A/12AB was denied on 25.08.2024. Referring to CIT(E) vs. Shree Tapeshwar Hanumanji Bajrang Charity Trust, CIT(E) held that Section 12A registration is a prerequisite for approval under Section 80G.

ITAT Condones Delay in Appeal Due to serious dispute among Partners, Remands Case for Fresh Assessment with Costs

M/s. Akshaya Builders Developers Promoters vs ACIT Circle-3(2)(1) Bangalore CITATION: 2025 TAXSCAN (ITAT) 252

The Bangalore bench of the Income Tax Appellate Tribunal ( ITAT ) condoned a 355-day delay in appeal due to a serious dispute among partners and remanded the matter for fresh assessment with costs.

The assessee, M/s. Akshaya Builders Developers Promoters is against the orders passed by the Commissioner of Income Tax ( Appeals ) [ CIT( A ) ] for the assessment years 2017-18 and 2018-19.

ITAT Dismisses Penalty for Disallowance of Deduction u/s 80IA(4), Citing Assessee’s Eligibility as Developer

Income Tax Officer vs M/s. BGSCTPL-MSKEL(JV) CITATION: 2025 TAXSCAN (ITAT) 253

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) dismissed the revenue’s appeal against penalty for disallowance of deduction under Section 80IA(4) of Income Tax Act,1961 citing the assessee’s eligibility as a developer.

The revenue-appellant appealed against the order dated 04.12.2015 for Assessment Year 2010-11,passed by Commissioner of Income Tax(Appeals)[CIT(A)] , arguing that the CIT(A) wrongly deleted the penalty of ₹65,57,761/- under Section 271(1)(c). It contended that the order of the Assessing Officer(AO) should have been upheld and prayed for the restoration of the original order.

Failure to prove Benefit Alone, not grounds for Transfer Pricing Disallowance: ITAT in Bosch Automotive Electronics case

M/s. Bosch Automotive Electronics Indi Private Limited vs DCIT CITATION: 2025 TAXSCAN (ITAT) 254

The Bangalore Bench of the Income Tax Appellate Tribunal ( ITAT ), in the case of Bosch Automotive Electronics, held that the failure to prove benefit alone cannot be accepted as grounds for transfer pricing disallowance of transfer pricing.

The assessee has challenged the additions made by the Transfer Pricing Officer (TPO) and the Assessing Officer (AO), which were upheld by the Dispute Resolution Panel (DRP) for the assessment year 2020-21.

ITAT upholds CIT(A) Order Deleting ₹12.92 Crore Income Tax Addition relying on Past Agricultural Purchases to fix 5.02% Gross Profit

Rajeshbhai Naranbhai Patel vs The A.C.I.T CITATION: 2025 TAXSCAN (ITAT) 255

The Ahmedabad Income Tax Appellate Tribunal ( ITAT ) recently affirmed an order passed by the Commissioner of Income Tax (Appeals) ( CIT(A) ) deleting an income tax addition of ₹12.92 Crore towards the annual income of an agricultural purchaser while determining gross profit at 5.02% based on the gross profit of earlier years.

The decision was given in two income tax appeals filed by Assessee Rajeshbhai Naranbhai Patel, a resident of Vadodara against the Assistant Commissioner of Income Tax and vice versa against the order of the CIT(A) order with regards to the Assessment Year (A.Y.) 2016-17.

ITAT Remands Rs. 1473.8 Crore Unexplained Money Addition for Fresh Assessment due to Lack of Fair Hearing

Shri Alok Dave vs The Income tax Officer CITATION: 2025 TAXSCAN (ITAT) 257

The Delhi Income Tax Appellate Tribunal ( ITAT ) remanded the addition of Rs. 1,473.8 crore as unexplained money for fresh assessment due to a lack of fair hearing.

The assessee, Alok Dev, filed his income tax returns for Assessment Year 2018-19, declaring Rs. 3,33,950 as income. His return was selected for scrutiny under the Computer-Assisted Scrutiny Selection (CASS) system due to high-risk transactions. Despite multiple notices issued by the Assessing Officer (AO), the assessee failed to respond, resulting in an ex parte assessment. The AO assessed Shri Dave’s total income at Rs. 1,474.1 crore, including Rs. 1,473.8 crore as unexplained money under Section 69A of the Income Income Tax Act, 1961, and issued penalty notices separately.

Verification of Cash Deposits as Trust Income: ITAT Remands Matter to AO

M/s. Bhiwandi Nizampur Nagarpalika College vs Assessing Officer CITATION: 2025 TAXSCAN (ITAT) 258

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) remanded the matter to the Assessing Officer (AO) to verify cash deposits as trust income.

Bhiwandi Nizampur Nagarpalika College,appellant-assessee, an ‘Association of Person’ (AOP), did not file its return of income for the year under consideration. The case was reopened under section 148 of the Act due to substantial cash deposits totaling Rs. 1,63,75,639/- in two bank accounts. Despite non-compliance during the assessment proceedings, the AO passed an order under section 147, 144, and 144B, determining total income at Rs. 13,10,051/- based on a net profit rate of 8% on the deposits.

Rejection of Trust Registration Due to Non-Submission of Required Documents: ITAT Restores Matter to CIT(E)

D S Mittle Charities 15/A vs CIT Exemption 601 CITATION: 2025 TAXSCAN (ITAT) 259

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) restored the matter to the Commissioner of Income Tax(Exemption)[CIT(E)] after rejecting the trust registration application under Section 12AB and approval under Section 80G of Income Tax Act,1961 due to the non-submission of required documents.

D S Mittle Charities,appellant-assessee, had applied for registration under Section 12AB and approval under Section 80G of the Act. During verification, the CIT(E) found that some required documents were missing and asked the appellant to address the deficiencies and provide additional details. Alleging non-compliance with these requests, the CIT(E) rejected both the applications.

Unexplained Cash Credits of Rs. 12.83 Crores Added u/s 68: ITAT Upholds CIT(A)’s Deletion

Deputy Commissioner of Income Tax vs Damodardas Mohanlal Chokshi Opp. Ghadiali Pole CITATION: 2025 TAXSCAN (ITAT) 260

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) upheld the decision of the Commissioner of Income Tax(Appeals) [ CIT(A) ] in deleting the addition of Rs. 12.83 Crores made by the Assessing Officer ( AO ) under Section 68 of Income Tax Act,1961 concerning unexplained cash credits. The revenue-appellant, appealed against the order dated 12.05.2023 for Assessment Year 2017-18 passed by the CIT(A).

In this case,Damodardas Mohanlal Chokshi,respondent-assessee, filed a return declaring income of Rs. 7,95,73,300/- on 16.10.2017. The return was processed under Section 143(1) and selected for scrutiny. A notice under Section 143(2) was issued on 11.09.2018, followed by another notice with a questionnaire on 04.09.2019.

Undervaluation of Closing Stock: ITAT upholds CIT(A)’s decision to delete Rs. 2.92 Crore addition

Deputy Commissioner of Income Tax vs Damodardas Mohanlal Chokshi Opp. Ghadiali Pole CITATION: 2025 TAXSCAN (ITAT) 260

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) upheld the Commissioner of Income Tax(Appeals)[CIT(A)]’s decision to delete the addition of Rs. 2.92 crore made by the Assessing Officer (AO) under Section 69B of Income Tax Act,1961 for alleged undervaluation of closing stock.

The revenue-appellant, appealed against the order dated 12.05.2023 for Assessment Year 2017-18 passed by the CIT(A).In this case,Damodardas Mohanlal Chokshi,respondent-assessee, filed a return declaring income of Rs. 7,95,73,300/- on 16.10.2017. The return was processed under Section 143(1) and selected for scrutiny. A notice under Section 143(2) was issued on 11.09.2018, followed by another notice with a questionnaire on 04.09.2019.

Disallowance of ₹16.84 Lakhs as LC Discounting Charges u/s 36(1)(iii): ITAT Finds Addition Unjustified

BPS Mineral Exports Pvt. Ltd. vs Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 261

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) found the addition of ₹16.84 Lakhs as LC discounting charges under Section 36(1)(iii) of Income Tax Act,1961 to be unjustified.

BPS Mineral Exports Pvt. Ltd.,appellant-assessee,engaged in trading various products, filed its return on October 29, 2017, declaring a loss of Rs. 2,14,691/-. The assessment was finalized at Rs. 15,47,014/- after adding Rs. 17,61,705/- for disallowance under Section 36(1)(iii) due to interest-bearing funds allegedly used for interest-free loans.

Addition of Rs. 21,42,857 u/s 56(2)(vii)(b)(ii): ITAT Allows Appeal for Failure to Refer Valuation to DVO

Bhavnaben Sanjaykumar Mistry vs Income-Tax Officer CITATION: 2025 TAXSCAN (ITAT) 262

The Ahmedabad Bench of Income Tax Appellate Tribunal(ITAT)allowed the appeal filed by the assessee, holding that the addition of Rs. 21,42,857 under Section 56(2)(vii)(b)(ii) of Income Tax Act,1961 could not be sustained due to the Assessing Officer(AO)’s failure to refer the property valuation to the Departmental Valuation Officer(DVO).

Bhavnaben Sanjaykumar Mistry,appellant-assessee, filed the return of income on 20.10.2024, declaring Rs. 14,08,850/-, which was initially accepted by the AO. However, the Principal Commissioner of Income Tax(Pr. CIT) set aside the order on 27.03.2019, directing a de-novo assessment due to the failure to apply Section 56(2)(vii)(b), leading to an underappreciation of Rs. 21,42,857/-. The assessment was completed on 12.12.2019, with an addition of Rs. 21,42,857/- under the same section.

Penalty Not Maintainable When Assessment Order No Longer Exists: ITAT

Bharat Vanmalibhai Modiya vs ITO CITATION: 2025 TAXSCAN (ITAT) 263

The Mumbai Bench of Income Tax Appellate Tribunal(ITAT) ruled that the penalty imposed under section 271(1)(c) of Income Tax Act,1961 was not maintainable since the assessment order no longer existed.

Bharat Vanmalibhai Modiya,appellant-assessee,appealed against the order dated 24.04.2024 passed by Commissioner of Income Tax(Appeals)[CIT(A)] for the assessment year 2010-11.The assessee requested condonation of delay in filing the appeal, supported by an affidavit. After considering the arguments and the principles from the Land Acquisition Collector Vs. Mst. Katiji & Ors. case, which favored substantial justice over technicalities in cases of non-deliberate delay, the delay was examined.

ITAT Dismisses Duplicate Appeal Due to Online and Physical Filing

Buckman Laboratories (India) P. Ltd. vs DCIT CITATION: 2025 TAXSCAN (ITAT) 264

In a recent ruling, the Income Tax Appellate Tribunal (ITAT) Chennai Bench, dismissed a duplicate appeal filed by Buckman Laboratories (India) Pvt. Ltd. for the Assessment Year 2018-19.

The appeal arose from an order passed by the Commissioner of Income Tax (Appeals) at the National Faceless Appeal Centre (NFAC), Delhi, dated July 22, 2024. The appeal had been filed against an assessment order framed by the Assessing Officer under Section 143(3) read with Section 144B of the Income Tax Act on April 22, 2021.

Non-appearance due to COVID pandemic: ITAT quashes ex parte order citing sufficient ground for non-compliance

Ahmednagar Auto and Engineering Association vs ITO CITATION: 2025 TAXSCAN (ITAT) 265

The Pune bench of the Income Tax Appellate Tribunal (ITAT) quashed the ex parte order of the Assessing Officer (AO) accepting that the COVID-19 pandemic was a reasonable and sufficient cause for the non-compliance.

Ahmednagar Auto and Engineering Association (assessee) is a non-profit association that filed Income Tax Return (ITR) and declared Nil income. The Assessing officer (AO) selected the case for complete scrutiny. Therefore, the AO issued notices to the assessee.

ITAT Quashes PCIT’s Revision Order on Alleged Bogus Purchases Citing AO’s Plausible View Backed by ITO Report and VAT Returns

Ajay Kalishchandra Bohra 1 vs Principal Commissioner of Incometax CITATION: 2025 TAXSCAN (ITAT) 266

Ajay Kalishchandra Bohra (assessee) is a proprietary concern of M/s Ashutosh Industries. The assessee’s case was reopened on the basis of ITO information. The information related to survey action in the case of M/s Union Polypack. It was recorded that the accountant of Polypack made a statement that they made bogus purchases from the assessee’s proprietary concern.

The Assessing Officer (AO) issued notice to the assessee in the reassessment proceedings. The assessee filed a reply with financial statements, bank account statements, VAT returns details of sales made to M/s Unique Polypack, and several other documents. Therefore, the AO accepted the explanation of the assessee and passed an assessment order without making any additions.

AO adds unsecured loans as unexplained credit citing lenders’ lack of creditworthiness: ITAT confirms genuineness by copies of ITR, bank statements

Abhaykumar Sevantilal Sanghavi vs ACIT Circle CITATION: 2025 TAXSCAN (ITAT) 267

The Ahmedabad of the Income Tax Appellate Tribunal ( ITAT ) confirmed the genuineness of the lenders by examining the copies of ITR, bank statements and deleted the addition made by the Assessing Officer (AO).

Abhaykumar Sevantilal (assessee) filed his Income Tax Return ( ITR ) for the Assessment Years (AYs) 2016-2017 and 2017-2018. The Assessing Officer (AO) selected the cases for scrutiny and the assessment order was passed with some additions which included unsecured loans as unexplained credit.

Celebrate Life vs CIT CITATION: 2025 TAXSCAN (ITAT) 268

In a recent ruling, the Income Tax Appellate Tribunal (ITAT), Mumbai, allowed a charitable trust, Celebrate Life, to refile its application for registration under Section 12AB of the Income Tax Act,1961. The decision came after the trust’s original application was rejected due to an inadvertent error in the section code mentioned in the application.

The case pertains to the assessment year 2022-23. The trust had applied for registration under Section 12AB, which grants tax exemptions to charitable and religious institutions. However, the application was rejected by the Commissioner of Income Tax (Exemptions) on the grounds that the trust had mistakenly filed under the wrong sub-clause.

ITAT Dismisses Appeals as Withdrawn Under Direct Tax Vivad se Vishwas Scheme

BRR Securities Private Ltd vs DCIT CITATION: 2025 TAXSCAN (ITAT) 269

In a recent order, the Income Tax Appellate Tribunal (ITAT), Delhi Bench dismissed two appeals for the assessment years 2015-16 and 2016-17. The appeals were directed against the orders of the Commissioner of Income Tax (Appeals) New Delhi, dated May 22, 2024.

During the hearing, the appellant’s counsel, Shilpi Jain, Chartered Accountant, informed the Tribunal that the issues under dispute in the appeals had already been settled under the provisions of the Direct Tax Vivad se Vishwas Scheme, 2024.

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