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

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.

Ex Parte Dismissal and Bogus Purchases Addition: ITAT Remands Matter to CIT(A)

Hari KrushnaMachintech vs The Deputy Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 343

The Ahmedabad Bench of Income Tax Appellate Tribunal(ITAT) remanded the matter to the Commissioner of Income Tax(Appeals)[CIT(A)] for a proper review after noting that the appeal was dismissed ex-parte without considering the evidence provided by the assessee, concerning the addition of Rs.11.84 crore for bogus purchases.

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Hari Krushna Machintech Private Limited,appellant-assessee, filed its return of income for the Assessment Year 2012-13 on 29.09.2012, declaring Rs.1,80,65,490/-, which was processed under Section 143(1) of the Act. The Assessing Officer(AO) found that the assessee was involved in bogus purchases worth Rs.11.84 crore in circular trading with other entities. The funds moved between AV Sales, OM Surgical, Dishant Trading, and the assessee, returning to AV Sales.

Non-Consideration of Grounds and Failure to Provide Adequate Hearing: ITAT Restores Matter to CIT(A)

HemantkumarRajendrakumar vs Deputy Commissioner of Income CITATION: 2025 TAXSCAN (ITAT) 344

The Ahmedabad Bench of Income Tax Appellate Tribunal(ITAT) restored the matter to the Commissioner of Income Tax (Appeals) [CIT(A)] for fresh consideration due to non-consideration of grounds and failure to provide adequate hearing.

Hemantkumar Rajendrakumar Shah,appellant-assessee, faced an addition under Section 69A during assessment for taking unaccounted accommodation entries through transactions in shares of M/s. Stampede Capital Ltd.

CIT(A) Disposes Matter After 4-Year Gap Without Proper Hearing: ITAT Orders Fresh Adjudication

M/s. Gold PalaceJewellers vs ACIT Circle-1(1)(1) BangaloreCITATION: 2025 TAXSCAN (ITAT) 345

The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) remanded back for fresh adjudication to the Commissioner of Income Tax (appeals)[CIT(A)] after a delay of four years for disposing of the appeal citing a violation of natural justice.

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Gold Palace Jewellers, (assessee) a partnership firm engaged in the business of dealing in gold and diamond jewelry, filed its income tax return for the assessment year 2017-18, declaring an income of Rs. 24,89,750. The case was selected for scrutiny under the Computer-Assisted Scrutiny Selection (CASS), focusing on the source of cash deposits made during the demonetization period.

AO Erred in Assessing Trust’s ₹ 3.30 Crore Interest-Free Loan & Interest Income: ITAT Orders Fresh Reassessment

Gourishankar EducationSociety vs CIT CITATION: 2025 TAXSCAN (ITAT) 346

The Pune bench of Income Tax Appellate Tribunal (ITAT) directed a fresh reassessment due to the Assessing Officer (AO) erred in assessing the assessee trust’s Rs. 3.30 crore Interest-free loan and interest income. Gourishankar Education Society, (assessee) a trust registered under the Societies Act, 1860, is also registered under Section 12A of the Income Tax Act.

The trust filed its return of income for the Assessment Year (AY) 2013-14, declaring a deficit of Rs. 2,16,73,473. This amount was disclosed after accounting for interest income of Rs. 14,55,213 received from various banks.

ITAT Orders Fresh Adjudication over Alleged Income Concealment due to Violation of Natural Justice

Devendra Kumar Dubeyvs Income-tax Officer CITATION: 2025 TAXSCAN (ITAT) 347

The Agra bench of the Income Tax Appellate Tribunal (ITAT) has ordered a fresh adjudication in a case involving income concealment allegations due to natural justice violation.

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The assessee had filed his income tax returns for the assessment year 2015-16 by declaring a total income of Rs. 2.94 lakhs. The assessing officer (AO) passed the assessment order under section 144 of the Income Tax Act, 1961, making a total addition of Rs. 2.61 lakhs.

Non-Payment of Advance Tax by Senior Citizen: ITAT Sets Aside CIT(A) Order

Hingora Ali Mohd ValiMohd vs The Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 348

The Pune Bench of Income Tax Appellate Tribunal (ITAT)set aside the Commissioner of Income Tax(Appeals)[CIT(A)] order, which had dismissed the appeal under Section 249(4) of Income Tax Act,1961 for non-payment of advance tax, considering the assessee’s senior citizen status and health issues.

Hingora Ali Mohd Vali Mohd, appellant-assessee, appeal was dismissed by the CIT(A) under Section 249(4) for non-payment of advance tax.The paper book showed that the assessee paid ₹4,000 as advance tax on 30.12.2016 and ₹1,750 as self-assessment tax on 07.08.2017, with challans on record.

Advance Payment Not Unexplained Credit: ITAT Deletes ₹2 Cr Addition u/s 68 of Income Tax Act

Deputy Commissioner ofIncome Tax - 1(2)1 vs B. Braun Medical India Pvt Ltd A-Wing CITATION: 2025 TAXSCAN (ITAT) 349

In a recent case, the Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) dismissed an appeal put forth by the revenue, deleting a ₹2 Crore addition made under the provisions of Section 68 of the Income Tax Act, 1961.

The Assessee, B. Braun Medical India Pvt Ltd, provides health care in the therapeutic segment. In 2021, it filed its return of income, reporting a total loss of ₹11.9 Crores. During the assessment proceedings, the assessing officer (AO) found a liability of ₹2 Crores, which was not substantiated. The AO asserted that the assessee had shown liability concerning a creditor in the name of Santosh Trust.

ITAT Deletes Rs.35 Lakh Addition as Unexplained Cash Credit due to Lack of Legal Basis

Karunamoorthi Kavithavs Assistant Commissioner CITATION: 2025 TAXSCAN (ITAT) 350

The Income Tax Appellate Tribunal ( ITAT ) Chennai Bench ruled in favor of the appellant, setting aside the Rs. 35 lakh addition made under Section 68 of the Income Tax Act, 1961. The tribunal held that the assessing officer had wrongly classified gifts received from her mother and brother as unexplained cash credits without considering the supporting evidence provided by the assessee.

Dr. Karunamoorthi Kavitha ,the appellant, a gynecologist and owner of Vijaya Multispeciality Hospital in Dharmapuri, was subjected to a survey under Section 133A on March 21, 2018. The Income Tax Department found that she had not disclosed rental income from a medical shop and canteen in her tax returns.

ITAT Deletes Rs.12.14 Lakh Addition, Citing CBDT Instruction on Jewellery

Laxmi Nanda KishoreVelegatla vs Deputy Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 351

The Income Tax Appellate Tribunal ( ITAT ) Chennai Bench has ruled in favor of Laxmi Nanda Kishore, setting aside the Rs.12.14 lakh addition made under Section 69 of the Income Tax Act, 1961.

The tribunal found that the Assessing Officer ( AO ) had wrongly classified seized gold and silver jewellery as unexplained investment, ignoring CBDT Instruction No. 1916 (dated 11.05.1994), which allows for certain quantities of jewellery to be considered as explained.

Relief to Indian Oil: ITAT Grants Interest on Excess Tax, Allows Delayed Refund Interest from June 2016

Indian Oil CorporationLtd. vs DCIT-14(2)(1) CITATION: 2025 TAXSCAN (ITAT) 352

The Mumbai Bench of the Income Tax Appellate Tribunal ( ITAT ) granted interest on excess self-assessment tax under Section 244A(1)(b) of the Income Tax Act, 1961, and partially allowed claim for additional interest under Section 244A(1A), restricting it to the period post-01.06.2016.

Indian Oil Corporation Ltd. (IOC) originally filed its income tax return on 24.09.2009 and later revised it, increasing the reported income. After an assessment order was passed on 12.03.2012, the tax department raised a fresh demand of Rs. 619.42 crore.

Unsecured Loan Transaction Duly Substantiated: ITAT upholds Deletion of Addition

Dy. Commissioner ofIncome Tax-1(1) vs Agrawal Global Infratech Pvt. Ltd.CITATION: 2025 TAXSCAN (ITAT) 353

The Raipur bench of the Income Tax Appellate Tribunal ( ITAT ) upheld the decision of the Commissioner of Income Tax Appeals [CIT(A)], which deleted the additions made by the assessing officer (AO) by noting that the transactions were duly substantiated. ‘

In this case, the revenue had appealed against the order of the CIT(A) which had ruled in favor of the assessee.

ITAT deletes CIT(A)’s Penalty for Non-Audit of Accounts Citing Pending Quantum Assessment Appeal

Gopal Agarwal vsIncome-tax Officer CITATION: 2025 TAXSCAN (ITAT) 354

The Agra Bench of Income Tax Appellate Tribunal (ITAT) has set aside the penalty imposed under Section 271B of the Income Tax Act, 1961, for failure to audit accounts, citing the pendency of the quantum assessment appeal before the Commissioner of Income Tax (Appeals) [CIT(A)].

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Gopal Agarwal (assessee), had filed his return of income declaring an income of Rs. 4,28,200/-. The case was selected for scrutiny, and during the assessment proceedings, the Assessing Officer (AO) noted a cash deposit of Rs. 5,21,89,264/- in the assessee’s bank account.

Eligibility for Deduction u/s 80P(2)(d) on Interest Earned from Co-operative Banks: ITAT Grants Deduction

The Sangeet PlazaIFTEX Office Premises vs Commissioner of Income TaxCITATION: 2025 TAXSCAN (ITAT) 355

The Mumbai Bench of Income Tax Appellate Tribunal(ITAT)ruled in favor of the assessee, granting the deduction under Section 80P(2)(d) of Income Tax Act,1961 for interest earned from a cooperative bank.

The Sangeet Plaza IFTEX Office Premises Coop Soc Ltd., appellant-assessee,filed its return, which the Centralized Processing Centre(CPC) processed under section 143(1) and disallowed the deduction under section 80P(2)(d) for interest from a cooperative bank. A rectification request under section 154 was also rejected.

Section 56(2)(vii)(c)(ii) Not Applicable to Public Ltd Company for Share Allotment in Amalgamation: ITAT

DCIT vs M/s. RajooEngineers Ltd CITATION: 2025 TAXSCAN (ITAT) 358

The Rajkot bench of the Income Tax Appellate Tribunal (ITAT) has held that the provisions of Section 56(2)(vii)(c)(ii) of the Income Tax Act, 1961, do not apply to share allotments by public limited companies in cases of amalgamation. M/s Rajoo Engineers Ltd., (assessee) is a public limited company engaged in manufacturing plastic extrusion machinery.

During the Assessment Year 2014-15, the company amalgamated with three private limited companies, issuing shares to the shareholders of these companies based on a swap ratio. The Assessing Officer (AO) noted discrepancies in the valuation of shares, claiming the swap ratio was skewed to benefit promoters’ related parties.

AO Accepts Taxpayer’s ITR Without Reflecting Prior Adjustments Made u/s 143(1): ITAT Deletes Deferred Tax Adjustment

GEBBS SolutionsHealthcare vs DCITCITATION: 2025 TAXSCAN (ITAT) 356

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) deleted the deferred tax adjustment, stating that the Assessing officer (AO) accepted the assessee’s Income Tax Return without any adjustments.

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The GEBBS Healthcare Solutions Pvt Ltd (assessee) filed an income tax return for the Assessment Year (AY) 2018-19, declaring an income of Rs. 18.60 crore. The Central Processing Centre (CPC), Bengaluru, issued a proposed adjustment under Section 143(1)(a) related to various claims, including exempt income, deductions, and employee contributions.

Disallowance of ₹96.71 Lakh Foreign Exchange Loss on Import-Export Transactions Without Hedging: ITAT upholds CIT(A)’s Decision

ACIT vs M/s HellaIndia Lighting Ltd CITATION: 2025 TAXSCAN (ITAT) 357

The Delhi Bench of Income Tax Appellate Tribunal(ITAT) upheld the Commissioner of Income Tax Appeals(CIT(A))’s decision on the disallowance of ₹96.71 Lakh foreign exchange loss incurred by the assessee due to import-export transactions without hedging.

The Revenue-appellant appealed against the National Faceless Appeal Centre (NFAC)’s order dated 21.08.2023, which stemmed from the Deputy Commissioner of Income Tax(DCIT)’s order under Section 143(3) for the Assessment Year 2017-18.In this case,Hella India Lighting Ltd,respondent-assessee,reported a loss of Rs. 96,70,990 due to foreign exchange transactions related to imports and exports.

Disallowance of Rs. 3.15 Crore Expenses due to Insufficient Documentation: ITAT Upholds CIT(A) Decision

ACIT vs M/s HellaIndia Lighting LtdCITATION: 2025 TAXSCAN (ITAT) 357

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) upheld the Commissioner of Income Tax(Appeals)[CIT(A)] decision, dismissing the disallowance of Rs. 3.15 crore expenses due to insufficient documentation. The Revenue-appellant appealed against the National Faceless Appeal Centre ( NFAC )’s order dated 21.08.2023, which stemmed from the Deputy Commissioner of Income Tax ( DCIT )’s order under Section 143(3) for the Assessment Year 2017-18.

In this case,Hella India Lighting Ltd,respondent-assessee,engaged in automobile components manufacturing,claimed other expenses of Rs. 3.15 crore, supported by auditor verification and payments made through account payee cheques and bank drafts.

AO Disallows Depreciation over Alleged Double Deduction: ITAT directs Taxpayer to Produce Documents

GEAR Foundation vs TheAssistant Commissioner of Income TaxCITATION: 2025 TAXSCAN (ITAT) 359

The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) directed the assessee to produce supporting documents after the Assessing Officer (AO) disallowed depreciation over alleged double deduction.

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Gear Foundation (assessee) is a trust, filed return of income declaring Nil income. The assessee claimed exemption under section 11 of the Income Tax Act. The assessee claimed depreciation on the assets. The Assessing Officer selected the case for Scrutiny and issued notice to the assessee.

ITAT dismisses Revenue’s Appeal Due to Low Tax Effect under CBDT Circular

ACIT, CIRCLE 10(1) vsHINDUKUSH CONSTRUCTION PVT. LTD CITATION: 2025 TAXSCAN (ITAT) 360

The Delhi Bench of Income Tax Appellate Tribunal(ITAT) dismissed the Revenue’s appeal due to low tax effect under Central Board of Direct Taxes(CBDT) Circular No. 09/2024. The Revenue-appellant,appealed against the order dated 27.02.2024 passed by the CIT(A) for the Assessment Year 2016- 17 where Hindukush Construction Pvt. Ltd. was the respondent-assessee.

The Revenue raised several grounds, contending that the CIT(A) erred in deleting the Rs. 50,00,000/- addition and disallowance under Section 68, as the assessee failed to provide sufficient evidence for the genuineness and creditworthiness of the unsecured loan, referencing the Rupal Jain Vs. CIT (2023) ruling.

Notional Rental value of unsold flat not Taxable under House Property Head: ITAT

Ambuja Neotia HotelVentures Ltd vs DCIT CITATION: 2025 TAXSCAN (ITAT) 361

The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) held that the notional rental value of unsold flat cannot be taxable under house property head. The assessee, Ambuja Neotia Hotel Ventures, had appealed against the order passed by the Commissioner of Income Tax (Appeals) for the assessment year (AY) 2014-15.

The ITAT observed that the ground No. 1 raised by the assessee was a general one that required no adjudication.

ITAT Directs AO to Consider Fresh Evidence in Unexplained Expenditure Addition u/s 69C

Ambuja Neotia HotelVentures Ltd vs DCITCITATION: 2025 TAXSCAN (ITAT) 361

The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) directed the assessing officer (AO) to consider fresh evidence in the unexplained expenditure addition under section 69C of the Income Tax Act, 1961.

The assessee, Ambuja Neotia Hotel Ventures, had appealed against the order passed by the Commissioner of Income Tax (Appeals) for the assessment year (AY) 2014-15.

Validity of Reassessment Based on AIR Information: ITAT Confirms AO’s Decision

Gajendra Pal SharmaC/o Kashyap & Co. 114 vs The Income-tax Officer Ward – 1(2)CITATION: 2025 TAXSCAN (ITAT) 362

The Delhi Bench of Income Tax Appellate Tribunal(ITAT) upheld the decision of the Assessing Officer (AO) regarding the validity of the reassessment based on Annual Information Return(AIR) information. Gajendra Pal Sharma, appellant- assessee, filed a return of income on July 25, 2012, declaring Rs. 2,34,600 as total income and Rs. 49,500 as agricultural income.

AIR information from the sub-registrar revealed that he purchased a residential property in Ghaziabad for Rs. 90,95,000, including stamp duty, on February 16, 2012, jointly with Meena Sharma.

Addition of ₹1.22 Crore for Cash Deposits During Demonetization: ITAT Upholds CIT(A)’s Deletion

A.C.I.T. vs ShriSachit Kumar AgarwalCITATION: 2025 TAXSCAN (ITAT) 363

The Lucknow Bench of Income Tax Appellate Tribunal(ITAT) upheld the Commissioner of Income Tax(Appeals)[CIT(A)]’s deletion of the ₹1.22 crore addition made under Section 68 of Income Tax Act,1961 for cash deposits during the demonetization period. The Revenue-appellant appealed against the order of the CIT(A).In this case,Sachit Kumar Agarwal,respondent-assessee, was assessed under Section 143(3) of the Act through an order dated December 30, 2019.

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The total income was determined at ₹2,75,41,208, with an additional ₹5,93,000 as agricultural income. The Assessing Officer(AO) added ₹1,22,00,000 under Section 68 for cash deposits made during the demonetization period and increased the gross profit rate, leading to another addition of ₹1,01,54,618.

Gross Profit Rate Increase: ITAT Upholds CIT(A)’s Reduction from ₹1.01 Cr to ₹10.21 Lakh

A.C.I.T. vs Shri SachitKumar Agarwal CITATION: 2025 TAXSCAN (ITAT) 363

The Lucknow Bench of Income Tax Appellate Tribunal(ITAT) upheld the Commissioner of Income Tax(Appeals) CIT(A)’s decision to reduce the gross profit addition from ₹1.01 crore to ₹10.21 lakh. The Revenue-appellant appealed against the order of the CIT(A).In this case,Sachit Kumar Agarwal,respondent-assessee, was assessed under Section 143(3) of the Act through an order dated December 30, 2019. The total income was determined at ₹2,75,41,208, with an additional ₹5,93,000 as agricultural income.

The Assessing Officer(AO) added ₹1,22,00,000 under Section 68 for cash deposits made during the demonetization period and increased the gross profit rate, leading to another addition of ₹1,01,54,618.

ITAT Grants Infrasoft S. 10A Exemption Citing Unit Was Not Converted Export Unit but Newly Established STPI Unit

Deputy Commissioner ofIncome Tax vs Infrasoft Technologies Ltd. CITATION: 2025 TAXSCAN (ITAT) 364

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) granted an exemption under Section 10A of the Income Tax Act, 1961, ruling that the unit in question was not merely a converted export unit but a newly established STPI unit, fulfilling all necessary conditions for the exemption.

Infrasoft Technologies Ltd., the assessee, engaged in the development, sale, and maintenance of software, filed its return of income on 27.11.2006, reporting a total income of Rs. 78,49,428 after claiming an exemption of Rs. 5,88,64,751 under Section 10A of the Income Tax Act.

AO adds Unexplained Investment During Demonetization: ITAT Rules Addition Based on Suspicion Cannot Be Sustained

J.K Jewel Craft vs ITO CITATION: 2025 TAXSCAN (ITAT) 365

The Chennai Bench of Income Tax Appellate Tribunal (ITAT) quashed the addition of Rs. 53.02 lakhs as unexplained investment under Section 69 of the Income Tax Act stating that the addition cannot be sustained on the basis of mere suspicion.

J.K. Jewel Craft, (assessee) a partnership firm engaged in the jewelry business. The Assessing Officer (AO), during the assessment for AY 2017-18, noted that the assessee deposited Rs. 80 lakhs during the demonetization period.

Assessee opts for Vivad se Vishwas Scheme: ITAT allows assessee to withdraw appeal

Gajanand Bhalotia vsACIT CITATION: 2025 TAXSCAN (ITAT) 368

The Ranchi bench of the Income Tax Appellate Tribunal ( ITAT ) allows the assessee to withdraw the captioned appeal as the assessee opts for the Vivad se Vishwas Scheme. The assessee has requested before the ITAT the permission to withdraw the present appeal as the assessee, Gajanand Bhalotia, has opted for the Vivad se Vishwas Scheme of the Department.

The bench, by going through the facts of the captioned appeal filed by the assessee, noted that the assessee has opted for the Vivad se Vishwas Scheme of the Department, which is extended up to 31st March 2025 as the date of the final application.

ITAT sets aside addition of Rs.10 lakhs u/s 69A as Unexplained Cash Deposits During Demonetization

Md. Ilyas ShekhaniAvon Agency vs The Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 369

The Raipur bench of the Income Tax Appellate Tribunal (ITAT) set aside the addition of Rs. 10 lakhs under Section 69A of the Income Tax Act, 1961, as unexplained cash deposits during the demonetization period.

In this case, the assessee is engaged in the business of mobile recharge distribution of Reliance Retail Limited and had filed his return of income for the assessment year 2017-18 on 31.03.2018, declaring an income of Rs. 7,52,800.

Unexplained Cash Deposit During Demonetization: ITAT Directs AO to Decide using CBDT Circular

JB Dairy Farms PrivateLimited vs ITO CITATION: 2025 TAXSCAN (ITAT) 371

The Bangalore Bench of Income Tax Appellate Tribunal (ITAT has directed the Assessing Officer (AO) to reconsider using the Central Board of Direct Taxes (CBDT) circular for the addition of Rs. 1.06 crore as unexplained cash deposits made by the assessee during the demonetization period.

JB Dairy Farms Pvt. Ltd., (assessee) engaged in dairy farming did not file its Income Tax Return for the assessment year (AY) 2017-18. During the assessment proceedings, the AO observed a cash deposit of Rs. 1.06 crore in the company’s Syndicate Bank account, of which Rs. 89 lakh was deposited during the demonetization period.

ITAT sets aside Assessment Orders due to Jurisdictional Lapse in Transfer of Case

Amit Kumar Gupta vsThe Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 366

The Raipur Bench of the Income Tax Appellate Tribunal (ITAT) has set aside the assessment orders for Amit Kumar Gupta for the assessment years 2011-12 and 2012-13, noting a jurisdictional lapse in the transfer of the case.

The tribunal found that the Principal Commissioner of Income Tax (Pr. CIT) in Bilaspur had transferred the assessee’s case from the Income Tax Officer (ITO) in Ambikapur to the ITO in Korba without providing the assessee an opportunity to be heard, as required by law. In this case, the ITO in Korba initiated reassessment proceedings against the assessee under Section 147 of the Income Tax Act, 1961, based on information that the assessee had deposited Rs. 17,05,824 in cash into his bank account during the financial year 2010-11 (relevant to the assessment year 2011-12) but had not filed his income tax return.

ITAT sets aside CIT(A)’s order due to Erroneous Delay Calculation, directs fresh Hearing on Condonation Request

Co-operative CaneDevelopment vs Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 370

The Lucknow bench of the Income Tax Appellate Tribunal (ITAT) set aside the order passed by the Commissioner of Income Tax (Appeals) [CIT(A)] due to an erroneous calculation of the delay in filing an appeal by the assessee.

The assessee has challenged the order passed by the CIT(A) for the assessment year 2019-20, where the CIT(A) had dismissed the appeal on the grounds of a 551-day delay. The assessee, Co-operative Cane Development Union Limited, had filed its income tax return for the assessment year 2019-20, claiming a deduction of Rs. 3,27,99,144 under Section 80P of the Income Tax Act, 1961.

2 Appeals filed by the assessee on same subject matter due to Technical Error: ITAT allows assessee to withdraw Captioned Appeal

Madhu Anil Mark vs The Assistant Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 372

The Raipur bench of the Income Tax Appellate Tribunal (ITAT) allowed the assessee to withdraw the captioned appeal as 2 appeals were filed by the assessee on the same subject matter due to technical error.

The assessee appealed against the order passed by the Joint Commissioner of Income Tax (Appeals), which in turn arose from the order passed by the assessing officer (AO) under Section 144 of the Income Tax Act, 1961. The counsel on behalf of the assessee submitted that the present appeal was dismissed by the JCIT(A), and thus the assessee has appealed before the ITTA for relief. The counsel has requested the ITAT to grant the assessee permission to withdraw the captioned appeal.

ITAT upholds Disallowance of Knitting Charges Under Section 40A(3), allows Set-Off of Carry Forward Losses

M/s. Sri ArumugaCottspin Pvt. Ltd vs ACIT CITATION: 2025 TAXSCAN (ITAT) 373

In a recent ruling, the Chennai bench of the Income Tax Appellate Tribunal (ITAT) upheld the disallowance of ₹88 Lakhs in knitting charges under Section 40A(3) as cash payments exceeding the prescribed limit. The assessee, Sri Arumuga Cottspin Pvt Ltd, a manufacturer of cotton and synthetic yarn, was subjected to a survey under Section 133A.

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The survey revealed cash deposits of ₹19.02 Crore made during the demonetisation period. The company claimed that such deposits were from cash sales of clothes, which were recorded in its books and reflected in revised VAT returns files before the survey.

TPO cannot introduce new adjustment in current AY without consistency from prior years for identical transactions: ITAT

IQVIA AnalyticsServices Pvt. Ltd vs The Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 387

The Bangalore Bench of the Income Tax Appellate Tribunal ( ITAT ) ruled that the Transfer Pricing Officer ( TPO ) cannot introduce a new adjustment in the current assessment year ( AY ) if no such adjustment was made in prior years for identical transactions, explaining the principle of consistency in transfer pricing assessments.

IQVIA Analytics Services Pvt. Ltd., formerly known as IMS Health Analytics Services Pvt. Ltd., is an assessee that provides sales and marketing analytics and business consulting services in the pharmaceutical and healthcare sectors.

CPC Adds Amount Already Included in Taxable Income: ITAT Deletes Erroneous ₹19,253 Double Addition

HPL MERCANTILE PVT.LTD vs ASSISTANT DIRECTOR OF INCOME TAX CITATION: 2025 TAXSCAN (ITAT) 386

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) deleted an erroneous addition of Rs. 19,253 made by the Centralized Processing Center (CPC) after finding that the amount had already been included in the taxable income.

HPL Mercantile Pvt. Ltd., the assessee, had filed its Income Tax Return (ITR) for Assessment Year (AY) 2021-22, declaring a total income of Rs. 61,81,971 and opting for a concessional tax rate under Section 115BAA of the Income Tax Act, 1961.

Addition of Rs. 55 Lakh as Undisclosed Income Based on Retraction: ITAT deletes Addition

Sh. Harish Jain vs TheACIT CITATION: 2025 TAXSCAN (ITAT) 389

The Jaipur Bench of Income Tax Appellate Tribunal ( ITAT ) deleted the addition of Rs. 55 lakh as undisclosed income, ruling that the addition could not be made solely on a retracted statement without corroborating evidence.

Harish Jain,appellant-assessee,was part of a search and seizure operation on 07.09.2017 related to the Resonance Group, Kota. Following the search, his case was transferred to the Central Circle-Kota. The assessee, who earned income from salary, house property, and other sources, filed a return of income on 18.07.2018, declaring Rs. 15,67,000.

ITAT deletes Rs. 3 lakh Income Addition, Finds proportionate Income already disclosed in return

Harish Jain vs TheACIT CITATION: 2025 TAXSCAN (ITAT) 389

The Jaipur Bench of Income Tax Appellate Tribunal ( ITAT ) deleted the Rs. 3 lakh income addition, ruling that the proportionate income was already disclosed in the tax return.

Harish Jain, appellant-assessee, was searched under section 132 of the Income Tax Act. During the search, a rent agreement document for House No. 175 Rajiv Gandhi Nagar, Kota, between Shri Umesh Kumar and the appellant was seized. The agreement, covering the period from May 1, 2014, to April 30, 2015, showed a total rent of Rs. 9,50,000, with Rs. 2,50,000 paid upfront and the rest paid in three installments by January 2015.

Unexplained Loans of Rs. 4.28 Crore: ITAT upholds CIT(A) Decision to delete Addition

Deputy Commissioner ofIncome Tax vs Harsh Stock Portfolio Pvt. Ltd. CITATION: 2025 TAXSCAN (ITAT) 390

Read More: The Jaipur Bench of Income Tax Appellate Tribunal(ITAT) upheld the Commissioner of Income tax(Appeals)[CIT(A)]’s decision to delete the Rs. 4.28 crore addition under section 68 of Income Tax Act,1961 for unexplained loans, finding the loans were repaid within the same year and conducted through banking channels.

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The Revenue-appellant,appealed against the order dated 25/06/2024 for the assessment year 2011-12, passed by the CIT(A), following an appeal against the assessment order dated 28.12.2018 under section 147 read with section 143(3) of the Act by the Assessing Officer(AO).

ITAT Deletes ₹1.36Cr Addition as Travel Agent’s Demonetization Deposits proved as Business Income

Shri Jai Singh vsIncome Tax Officer CITATION: 2025 TAXSCAN (ITAT) 391

In a recent ruling, the Lucknow Bench of the Income Tax Appellate Tribunal ( ITAT ) overturned a tax demand related to ₹1.36 crores in cash deposits made during the demonetisation period by the assessee.

The Assessee, Jai Singh, a travel agent, deposited a total of ₹1.36 Cr in old currency notes into his bank accounts during the demonetisation period. The tax authority classified these deposits as unexplained income under Section 69A of the Income Tax Act, 1961. This led to an increase in his assessed taxable income to ₹1.41 crore.

ITAT Orders Reassessment in ₹1.8 Cr Capital Gains Case, directs AO to Review E-Notices and Deductions u/s 54 of Income Tax Act

Shri Badri Narayananvs The Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 392

Read More: The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) directed the assessing officer (AO) to reassess the appellant’s case, a dispute on capital gains taxation for the assessment year(AY) 2016-17.

The appellant, Badri Narayanan, had filed his income tax return for the AY 2016-17 in March of 2018, declaring a total income of ₹4.3 Lakhs. This return was processed under Section 143(1) of the Income Tax Act. It was noted by the authority that the assessee had sold a property for an amount of ₹5.52 Crore, which led to the reassessment of the assessee’s account under Section 148.

ITAT deletes Addition of Rs. 25 Lakh as Unexplained Cash Credits, Finds Loan from Promoters Genuine

Mahadev Dairy Pvt.Ltd. vs Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 393

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) deleted the addition of Rs. 25 lakh as unexplained cash credits, ruling that the loan from the assessee’s promoters was genuine.

Mahadev Dairy Pvt. Ltd.,appellant-assessee,appealed against the order dated 30.09.2019 passed by CIT(A) for the Assessment Year 2014-15 which included proceedings under section 143(3) of Income Tax Act.The case was called twice, but no one appeared on behalf of the assessee. Therefore, the proceedings were conducted ex-parte.

Reimbursement of Expenses Not Taxable as FTS Under Article 13(4) of India-UK Treaty: ITAT

Dy. CIT (IT)-3(1)(2) vs Jefferies International Ltd CITATION: 2025 TAXSCAN (ITAT) 394

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) held that reimbursement of expenses is not taxable as FTS under Article 13(4) of the India-UK Treaty.

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The assessee, Jefferies International Ltd. is a corporate entity that is a tax resident of the UK and has a subsidiary in India, Jefferies India Private Ltd. (JIPL). It was observed by the assessing officer (AO) that the assessee had provided administrative support services to the Indian subsidiary during the year under consideration.

Payment for Administrative Support Services Do Not Qualify as Fees for Technical Services Under India-UK DTAA: ITAT

Dy. CIT (IT)-3(1)(2)vs Jefferies International Ltd CITATION: 2025 TAXSCAN (ITAT) 394

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) held that payments received in lieu of administrative support services do not qualify as fees for technical services under the India-UK double tax avoidance agreement (DTAA).

The assessee, Jefferies International Ltd., is a corporate entity that is a tax resident of the UK and has a subsidiary in India, Jefferies India Private Ltd. (JIPL). The assessing officer (AO) observed that the assessee had provided administrative support services to the Indian subsidiary during the year under consideration.

Disallowance of Depreciation Due to Lack of Evidence for Machinery Installation: ITAT Restores AO’s Order

Asst. Commissioner ofIncome Tax vs M/s. Mithra Kyokuto Special Purpose Vehicles Company Pvt Ltd CITATION: 2025 TAXSCAN (ITAT) 397

The Visakhapatnam Bench of Income Tax Appellate Tribunal (ITAT)restored the order of the Assessing Officer (AO) by disallowing the depreciation claim of ₹2,66,81,164 due to the lack of evidence for the installation of machinery.

The Revenue-appellant appealed against the order dated 24.04.2019 passed by CIT(A) for the assessment year 2012-13. In this case, Mithra Kyokuto Special Purpose Vehicles Company Pvt Ltd.,respondent-assessee,engaged in manufacturing tippers and concrete mixtures, filed its income tax return on November 30, 2012, reporting a loss of ₹3,12,52,199. The return was processed under section 143(1), and the case was later selected for scrutiny.

Non-compliance with Statutory Notices Leads to Penalties and Additions: ITAT Restores Matter to CIT(A)

Mauli Nagari SahakariPatsanstha Maryadit vs The Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 395

The Pune Bench of Income Tax Appellate Tribunal(ITAT) restored the matter to the Commissioner of Income Tax(Appeals)[CIT(A)] after non-compliance with statutory notices led to penalties and additions for unexplained cash deposits.

Mauli Nagari Sahakari Patsanstha Maryadit,appellant-assessee, was reassessed for not filing a return and depositing ₹4.67 crore in banks and cooperative societies. Due to non-response to notices, the Assessing Officer(AO) finalized the assessment under Section 147, read with Sections 144 and 144B, determining the income at ₹4.67 crore. A penalty of ₹40,000 was imposed under Section 271(1)(b), and ₹1.44 crore under Section 271(1)(c) of the Act.

Denial of Exemption u/s 54 for Lack of Documents: ITAT Sets Aside CIT(A) Order

Shri Manoj Kumar vsThe Assistant Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 396

The Bangalore Bench of Income Tax Appellate Tribunal ( ITAT ) set aside the Commissioner of Income Tax ( Appeals )[CIT(A)] order on the denial of exemption under Section 54 of Income Tax Act,1961 due to lack of supporting documents.

Manoj Kumar Ekambaram Arcot,appellant-assessee,filed his income tax return on 30/09/2015. The case was selected for scrutiny due to large deductions claimed under sections 54B, 54C, 54D, 54G, and 54GA. The assessee did not reply to the notices, leading to a show-cause notice for penalty.

Penalty u/s 270A for Under-Reported Income: ITAT Restores Matter to CIT(A)

M/s. Mono Steel(India) Ltd VS Deputy Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 398

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) restored the matter to the Commissioner of Income Tax (Appeals)[CIT(A)] for fresh consideration in a case involving a penalty under Section 270A of Income Tax Act,1961 for under-reported income, after the appeal was dismissed ex-parte without considering the relief granted in the quantum proceedings.

Mono Steel (India) Ltd,appellant-assessee,was involved in manufacturing and resale of angle channels ingots. During the assessment, the Assessing Officer ( AO ) noticed that the appellant-assessee’s power plant division showed a net profit of 67.16%, much higher than the 2.77% net profit from its steel business. The assessee claimed a deduction under Section 80-IA for the power plant division, but the steel division, which was linked to it, showed much lower profits, raising concerns of tax evasion.

ITAT sets aside PCIT’s Section 263 Order, Holds Bank of Maharashtra’s ₹1137 Crore Deduction for Bad and Doubtful Debts

Bank of Maharashtra1501 vs PCIT CITATION: 2025 TAXSCAN (ITAT) 399

The Pune bench of the Income Tax Appellate Tribunal (ITAT) has set aside the Principal Commissioner of Income Tax (PCIT) revision order under Section 263 of the Income Tax Act, 1961, in the case of Bank of Maharashtra for the Assessment Year (AY) 2018-19. The tribunal ruled that the Assessing Officer’s (AO) assessment order was not erroneous, even if it was prejudicial to the interest of revenue.

The assessee, Bank of Maharashtra, a public sector bank, filed its income tax return for AY 2018-19, declaring a total loss of ₹1,612.29 crores under standard provisions. The return was processed under Section 143(1), and later, after scrutiny selection, a full assessment under Section 143(3) read with Section 144B was conducted. The AO determined the profits under Section 115JB at ₹6911.69 crores, which was later rectified to ₹2191.38 crores through an order under Section 154.

CIT(A) failed to consider Factual Mistake Committed by CPC: ITAT Directs AO to Delete Adjustment of Rs. 3.09 Crore

Landis +Gyr Limited vsDCIT, Cir.1(1) CITATION: 2025 TAXSCAN (ITAT) 685

The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) directed the assessing officer to delete the adjustment of Rs. 3.09 crores as the Commissioner of Income Tax (Appeals) [CIT(A)] failed to consider the factual mistake committed by the Centralized Processing Centre (CPC). The issue in this case is that the CPC flagged a mismatch involving a GST adjustment of Rs. 5.74 crore, which the system erroneously treated as an item falling under Section 28 of the Income Tax Act (income chargeable under business profits). The CIT(A) upheld the CPC’s adjustment, noting that the assessee had failed to correct the error in Form 3CD and that the auditors had incorrectly reported the amount.

Timely Payment of Appeal Fee: ITAT Remands Case to CIT(A) for Fresh Adjudication After Condoning 5-Day Delay

Falguni AjayPanchmatia vs Assistant Commissioner of Income-tax CITATION: 2025 TAXSCAN (ITAT) 686

The Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) remanded the matter back to the Commissioner of Income Tax (Appeals) [CIT(A)] for de novo meritorious adjudication after condoning a delay of 5 days in filing the appeal noting the timely payment of appeal fees. The assessee, Falguni Ajay Panchmatia, had appealed against the order passed by the CIT(A) under Section 143(3) of the Income Tax Act, 1961 for the assessment year (AY) 2014-15.

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The ITAT remanded the matter back to the CIT(A) and directed the latter to condone the delay of 5 days and to take up the matter for de novo meritorious adjudication on the grounds raised by the assessee at the first appellate stage. The order also stated that the assessee should be given a reasonable opportunity to be heard and to make any further submissions. In conclusion, the grounds raised by the assessee were allowed for statistical purposes.

Assessment Proceedings u/s 151A and SCN Passed without Jurisdiction: ITAT quashes NFAC’s orders

MD Mahimud SK vs ITO CITATION: 2025 TAXSCAN (ITAT) 687

The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) quashed the orders passed by the National Faceless Assessment Centre’s orders as the latter observed that the assessment proceedings under Section 151A of the Income Tax Act, 1961, as well as the show cause notice (SCN), were issued without jurisdiction. In this case, the assessee, Md. Mahimud SK, appealed against the orders of the NFAC and the Commissioner of Income Tax (Appeals) [CIT(A)], which had upheld additions of Rs. 21,06,182 to his income for assessment year (AY) 2015-16 on account of unexplained credits in his bank accounts.

Proper compliance on part of Assessee during Assessment Stage: ITAT Remands Case for Denovo Adjudication

Udaylal Hiralal JainShop No.8 vs Income-tax Officer CITATION: 2025 TAXSCAN (ITAT) 688

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) remanded the case for fresh adjudication after noting the assessee’s compliance. In this case, the assessee, Udayal Hiralal Jain, had appealed against the order by the Commissioner of Income Tax (Appeals) [CIT(A)] under Section 147 of the Income Tax Act, 1961 for the assessment year 2016-17.

The appeal filed by the assessee was dismissed by the CIT(A) by noting that the assessee remained non-compliant even after being provided with multiple opportunities. The assessee did not bring any material on record in support of the grounds of appeal or to refute the findings of the Assessing Officer (AO).

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