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

ITAT Favours JCB India: Rejects Arbitrary Royalty Adjustments, Directs TPO to Follow Advance Pricing Agreement Standards

JCB India Ltd vs ACIT

CITATION: 2025 TAXSCAN (ITAT) 689

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT)set aside an arbitrary transfer pricing adjustment on royalty payments and directed the Transfer Pricing Officer (TPO) to align with the Advance Pricing Agreement (APA) parameters. The assessee, JCB India, is the Indian subsidiary of a multinational company engaged in the manufacturing and trading of construction equipment, spare parts, and components. The company had entered into Technology Transfer Agreements (TTA) with its associated enterprises (AEs) to receive proprietary technology, allowing it to manufacture and sell technologically advanced products.

ITAT Allows Bad Debt Write-Off w/o Proof of Irrevocability, Protects Legitimate Transactions

ACIT vs Goenka Trading

CITATION: 2025 TAXSCAN (ITAT) 690

In a recent case, the Mumbai bench of the Income Tax Appellate Tribunal (ITAT) held that writing off bad debt in the books is enough for deduction, without the need to prove irrecoverability. Goenka Trading, a registered partnership firm, is engaged in diamond and commodity trading, as well as share trading and futures & options transactions. The assessee filed its income tax return, reporting a loss of ₹5.94 crore. The return was selected for scrutiny assessment by the Assessing Officer (AO).

ITAT Quashes PCIT’s Order u/s 263 for Relying on Audit Objection

Vaneet Gupta vs TheITO

CITATION: 2025 TAXSCAN (ITAT) 691

The Chandigarh bench of the Income Tax Appellate Tribunal (ITAT) held that Section 263 of the Income Tax Act, 1961, which empowers the Principal Commissioner of Income Tax (PCIT) to revise assessments, cannot be invoked solely on the basis of an audit objection. In March 2018, the assessee, Vaneet Gupta, was served an income tax notice u/s 148, questioning a ₹1.1 crore investment on a property and ₹43.2 lakh cash deposits in a joint bank account. In response, he explained that the property belonged to his wife and was transferred to him via a sale deed, with payment made at that time. He also clarified that the joint bank account with his wife had already been assessed during the relevant assessment year.

Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here

Denial of Fair Opportunity and Inadequate Evidence Examination: ITAT Restores Matter to AO

Jignesh Shah vs TheAsst.CIT

CITATION: 2025 TAXSCAN (ITAT) 697

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT)restored the matter to the Assessing Officer (AO) after finding that the Commissioner of Income Tax (Appeals)[CIT(A)] had denied the assessee a fair opportunity to present evidence and had failed to adequately examine the provided documents. Jignesh Shah,appellant-assessee,filed his return of income for Assessment Year 2022-23 on 31/12/2022, declaring Rs.64,87,610/- as total income. The case was selected for scrutiny, and multiple notices were issued between 01/06/2023 and 07/03/2024. Despite several reminders, the assessee failed to provide complete information and did not submit crucial documents like loan confirmations and cash deposit reconciliations.

Non-Prosecution of Appeal Due to Non-Issuance of Notices: ITAT Remits Matter to AO

SHRI RAKESH vs ITO,WARD 3(4)

CITATION: 2025 TAXSCAN (ITAT) 693

The Delhi Bench of Income Tax Appellate Tribunal(ITAT) remitted the matter to the Assessing Officer (AO) for fresh adjudication after finding that the appeal was dismissed due to non-prosecution, as the notices were not issued to the updated email address provided by the assessee. Rakesh,appellant-assessee,filed his return for the assessment year 2011-12 under section 148, reporting an income of Rs. 1,58,518 on February 5, 2019. The assessment was finalized under section 144, with the AO classifying a cash deposit of Rs. 78,25,000 as unexplained under section 68 of the Act. The Commissioner of Income Tax(Appeals)[CIT(A)] confirmed the AO’s decision and rejected the appeal of the assessee.

Unexplained Cash Deposit During Demonetization: ITAT deletes Addition, Accepts Mother’s Savings Claim

Shri. Devadass Sureshvs DCIT

CITATION: 2025 TAXSCAN (ITAT) 700

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) deleted addition of Rs.9,00,500/- made by the Assessing Officer(AO) during demonetization, accepting the claim that a significant portion of the deposit came from the assessee’s mother’s lifetime savings. Devadass Suresh, appellant-assessee, filed a return of income on 25.09.2017, declaring Rs.2,99,310/-. During scrutiny, the AO found a cash deposit of Rs.9,00,500/- in the appellant’s Post Office account between 09.11.2016 and 30.12.2016. Since the assessee failed to explain the deposit, the AO treated it as unexplained money under section 69A of the Act.

Estimation of Gross Profit Rate and Unverifiable Purchases: ITAT Upholds CIT(A)’s Decision to Limit GP to 1%

ITO vs NEERAJ KUMAR

CITATION: 2025 TAXSCAN (ITAT) 695

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) upheld the Commissioner of Income Tax(Appeals)[CIT(A)]’s decision to limit the gross profit ( GP ) rate to 1% for the Assessment Year (AY)2012-13, rejecting the assessee’s challenge against the enhanced GP rate and unverifiable purchases. Neeraj Kumar, appellant-assessee, filed a cross appeal against the order dated 03.07.2017 passed by CIT(A) for the Assessment Year 2012-13. The assessment order under section 144 of the Act was passed on 28.03.2016, with the Assessing Officer(AO) rejecting the books of accounts. As a result, the following additions were made: Rs. 39,62,489/- for an enhanced GP rate, Rs. 3,17,76,113/- for unverifiable purchases and sundry creditors, Rs. 1,18,82,031/- for understated sales, Rs. 1,44,925/- for unverifiable expenses, Rs. 1,85,599/- for an unexplained addition to the capital account, and Rs. 6,02,350/- for explained credits in the PNB account.

Understanding Common Mode of Tax Evasion with Practical Scenarios, Click Here

Penalty proceedings u/s 271B for late filing of audit report: ITAT sets aside Pr.CIT’s order for lack of jurisdiction

Shri. KumaraswamyGangadharaiah Kallur vs DCIT

CITATION: 2025 TAXSCAN (ITAT) 696

The Bangalore Bench of Income Tax Appellate Tribunal ( ITAT ) sets aside Principal Commissioner of Income Tax[Pr.CIT]’s order on penalty proceedings under section 271B of Income Tax Act,1961 for late filing of audit report due to lack of jurisdiction. Kumaraswamy Gangadharaiah Kallur, appellant-assessee, filed a return on 28.02.2015, showing an income of Rs. 1,08,58,460/-. The Assessing Officer(AO) accepted this return in an assessment order on 16.12.2016. Later, it was found that the appellant-assessee did not disclose the source of credit card expenses or provide details of investments related to multi-commodity transactions, which required 10% of peak transactions to be invested with the broker.

Ad-hoc Disallowance of Expenses for Lack of Documents: ITAT Upholds CIT(A)’s Deletion of Rs. 5.92 Crore Addition

Assistant CITCircle-2(1)(1) Ahmedabad vs H.V. Infratex Ltd.

CITATION: 2025 TAXSCAN (ITAT) 699

The Ahmedabad Bench of Income Tax Appellate Tribunal(ITAT) upheld the deletion of the Rs. 5.92 crore disallowance made on an ad-hoc basis due to lack of supporting documents. The Revenue-appellant, appealed against the order dated 30.10.2023,passed by Commissioner of Income Tax(Appeals) [CIT(A)] for the Assessment Year 2016-17.In this case, H.V. Infratex Ltd.,respondent-assessee,involved in government civil and construction contracts, filed its return for A.Y. 2016-17 on 17.10.2016, declaring total income of Rs. 49,20,980/- and book profit of Rs. 61,33,174/-.

ITAT Rejects Revenue’s Objection on Additional Evidence, Finds CIT(A) Acted Within Section 250(4) Powers

Assistant CITCircle-2(1)(1) Ahmedabad vs H.V. Infratex Ltd.

CITATION: 2025 TAXSCAN (ITAT) 699

The Ahmedabad Bench of Income Tax Appellate Tribunal(ITAT) rejected the Revenue’s objection regarding the admission of additional evidence by the Commissioner of Income Tax (Appeals) [CIT(A)] and upheld that the CIT(A) acted within its powers under Section 250(4) of the Income Tax Act,1961. The Revenue-appellant, appealed against the order dated 30.10.2023,passed by CIT(A) for the Assessment Year 2016-17.In this case, H.V. Infratex Ltd.,respondent-assessee,involved in government civil and construction contracts, filed its return for A.Y. 2016-17 on 17.10.2016, declaring total income of Rs. 49,20,980/- and book profit of Rs. 61,33,174/-.

Failure to Claim TDS Credit in Return: ITAT Upholds CIT(A) Decision to Allow Credit after Verification

DCIT vs RAVIINTEGRATED LOGISTICS (INDIA) PVT. LTD

CITATION: 2025 TAXSCAN (ITAT) 692

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) upheld the Commissioner of Income Tax(Appeals) [CIT(A)] decision to allow the Tax Deducted at Source (TDS) credit after verifying the corresponding income, despite the failure to claim it in the return. The Revenue-appellant appealed against the order dated 10.07.2024, passed by CIT(A) for the Assessment Year 2022-23. In this case, Ravi Integrated Logistics(India) Pvt.Ltd., respondent-assessee,failed to claim the TDS credit in its return, even though it was reflected in the accounts and Form 26AS. As a result, the Centralized Processing Center (CPC) did not provide the TDS benefit.

Step by Step Guidance for Tax Audit & E-filing, Click Here

Non-Compliance With S.40A(3) in Cash Payments: ITAT Remands Case to CIT(A) With Rs.2,000 Cost

Shree Prithvi SteelRolling Mills Private Limited vs Dy. CIT

CITATION: 2025 TAXSCAN (ITAT) 694

The Jaipur Bench of Income Tax Appellate Tribunal(ITAT) remanded the matter to Commissioner of Income Tax (Appeals) [CIT(A)] due to non-compliance with Section 40A(3) of Income Tax Act,1961 in cash payments, imposing a cost of Rs. 2,000. Prithvi Steel Rolling Mills Private Limited,appellant-assessee, had appealed against the dismissal of its case by the CIT(A) under Section 250 of the Act. The CIT(A) agreed with the Assessing Officer(AO)’s decision to add Rs. 7,49,610 under Section 40A(3) due to non-compliance by the appellant during the appeal process.

ITAT Dismisses Revenue’s Appeal as Reassessment Under Section 147/148 Invalid Due to Third-Party Search Evidence

Deputy Commissioner ofIncome Tax vs Sh. Kailash Chand Hirawat 9

CITATION: 2025 TAXSCAN (ITAT) 698

The Jaipur Bench of Income Tax Appellate Tribunal(ITAT) dismissed the Revenue’s appeal, holding that reassessment under Section 147/148 of Income Tax Act,1961 was invalid due to reliance on third-party search evidence. The Revenue-appellant, appealed against the order passed by Commissioner of Income Tax(Appeals)[CIT(A)] dated 18.07.2024. In this case, Kailash Chand Hirawat, respondent-assessee,was reassessed after the Assessing Officer(AO), in an order dated December 8, 2018, made additions of Rs. 3,61,00,000 and Rs. 17,93,000.

ITAT Quashes PCIT’s Order u/s 263 Against Bharti Airtel, Holds Interest and Penalty on License Fee as Revenue Expenditure

Bharti Airtel Limitedvs Principal CIT

CITATION: 2025 TAXSCAN (ITAT) 703

In a recent ruling, the Delhi Bench of the Income Tax Appellate Tribunal (ITAT) quashed the revisionary order passed by the Principal Commissioner of Income Tax (PCIT) under Section 263 of the Income Tax Act, 1961, against Bharti Airtel Limited. The tribunal held that interest and penalty paid on license fees qualify as revenue expenditure and allowed a deduction under the Income Tax Act.

The case is regarding the assessment year 2015-16. Bharti Airtel Limited, the appellant had claimed certain expenditures under the head of revenue expenses, mainly interest and penalty related to paying license fees to the Department of Telecommunications (DoT). The Assessing Officer (AO) accepted the claim in the scrutiny assessment under Section 143(3) of the Income Tax Act. The PCIT invoked revisionary powers under Section 263, stating that the AO’s order was erroneous and prejudicial to the interests of the revenue.

ITAT Admits Additional Evidence, Remands Rs. 17 Lakh Unsecured Loan Case to AO for Fresh Assessment

Takhatsinh F. Dodia vsThe ACIT

CITATION: 2025 TAXSCAN (ITAT) 704

The Surat Bench of the Income Tax Appellate Tribunal (ITAT), set aside an appeal order and remanded the case back to the Assessing Officer (AO) for fresh assessment, admitting additional evidence related to an unsecured loan of Rs. 17 lakh. Coming to the facts of the case, the assessee, Takhatsinh F. Dodia, a resident of Surat, declared an agricultural income of Rs. 31.25 lakhs in his return for the Assessment Year (AY) 2017-18. But later on, the assessee claimed that it was a clerical error and the correct figure was Rs. 3.12 lakh.

Get a Complete Kit of Essential Books for Daily Practice, Click Here

Wrong Clause Selection Not Fatal to Proceedings’: ITAT Grants Fresh Opportunity for 12AA Registration

Sri Sai Sanskar Trustvs CIT (Exemptions)

CITATION: 2025 TAXSCAN (ITAT) 705

The Pune Bench of the Income Tax Appellate Tribunal (ITAT) held that the inadvertent selection of an incorrect clause in an application for registration under Section 12AA of the Income Tax Act, 1961, should not be grounds for outright rejection as it was not fatal to proceedings. In this case, the assessee, Sri Sai Sanskar Trust, had appealed against the denial of registration by the Commissioner of Income Tax (Exemptions).

Natural Justice Prevails: ITAT Grants Assessee Fresh Hearing Opportunity Subject to Rs. 2,000 Cost Payment

Naeemakhtar Fanibandvs I T O

CITATION: 2025 TAXSCAN (ITAT) 706

The Panaji Bench of the Income Tax Appellate Tribunal (ITAT), upheld the principles of natural justice by providing the assessee with another opportunity to present their case before the Commissioner of Income Tax (Appeals) [CIT(A)], along with the condition that the assessee must pay a cost of Rs. 2,000 to the Income Tax Department within one month from the date of receiving the order and submit proof of payment.

In this case, the assessee, Naeemakhtar Faniband, had not filed Income Tax Returns (ITR) for the assessment year (AY) 2015-16. The Assessing Officer (AO) initiated proceedings under Section 147 of the Income Tax Act, 1961, after noticing discrepancies in the market value of a property purchased by the assessee compared to the sale consideration mentioned in the sale deed. The AO issued notices under Sections 148, 143(2), and 142(1) of the Income Tax Act, calling for explanations regarding the sources of investment and cash deposits in the bank account.

Mechanical Approval u/s 153D: ITAT quashes Assessment for Lack of Application of Mind

RAJESH KUMAR GUPTA vsACIT

CITATION: 2025 TAXSCAN (ITAT) 707

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) quashed the assessment, holding that the approval under Section 153D of Income Tax Act,1961 was granted mechanically without due application of mind. Rajesh Kumar Gupta, appellant-assessee, appealed against the assessment order passed on December 13, 2019, under Section 143(3). The Assessing Officer (AO) added Rs. 1,02,00,000 as undisclosed income and Rs. 5,67,68,556 as undisclosed jewelry. The Commissioner of Income Tax(Appeals) [CIT(A)] partly allowed the appeal, leading to the present appeal.

Disallowance of Interest on Loan for Share Acquisition: ITAT Upholds Deduction as Business Expense

Deputy Commissioner ofIncome Tax vs East India Petroleum Limited

CITATION: 2025 TAXSCAN (ITAT) 708

The Hyderabad Bench of Income Tax Appellate Tribunal(ITAT) upheld the deduction of interest on a loan taken for share acquisition, recognizing it as a business expense. The Revenue-appellant appealed against the order passed by Commissioner of Income Tax(Appeals)[CIT(A)] dated 19.08.2024 for the Assessment Year 2018-19. In this case, East India Petroleum Limited,respondent-assessee,provided terminalling services for oil marketing companies at Visakhapatnam Port, Andhra Pradesh. It filed its income tax return on October 30, 2018, for the assessment year 2018-19, declaring an income of ₹31,38,15,690.

Disallowance of Depreciation on Goodwill: ITAT Upholds Claim as Intangible Asset Eligible u/s 32

Deputy Commissioner ofIncome Tax vs East India Petroleum Limited

CITATION: 2025 TAXSCAN (ITAT) 708

The Hyderabad Bench of Income Tax Appellate Tribunal(ITAT) upheld the depreciation claim on goodwill, affirming it as an intangible asset eligible under Section 32 of Income Tax Act,1961. The Revenue-appellant appealed against the order passed by Commissioner of Income Tax(Appeals)[CIT(A dated 19.08.2024 for the Assessment Year 2018-19. In this case,East India Petroleum Limited,respondent-assessee,provided terminalling services for oil marketing companies at Visakhapatnam Port, Andhra Pradesh. It filed its income tax return on October 30, 2018, for the assessment year 2018-19, declaring an income of ₹31,38,15,690.

Know How to Investigate Books of Accounts and Other Documents, Click Here

Reassessment u/s 147 on Mere Change of Opinion Invalid: ITAT

Rahul Bajpai vs TheAssistant Commissioner of Income Tax

CITATION: 2025 TAXSCAN (ITAT) 709

In a recent judgement, the Raipur bench of the Income Tax Appellate Tribunal (ITAT) held that reassessment cannot be done based on a mere change of opinion under section 147 of the Income Tax, 1961. The assessee, Rahul Bajpai, purchased a property for ₹4,11,000, a value that is significantly lower than its fair market value (FMV) of ₹3.75 crore.

Diamond Cash Sales Duly Recorded in Books: ITAT upholds Deletion of Rs. 1 Cr Addition

The DCIT vs RadhikaDiamonds, Vadodara

CITATION: 2025 TAXSCAN (ITAT) 710

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) upheld the deletion of a Rs. 1 Crore addition under Section 68 of the Income Tax Act, ruling that the Diamond cash sales were duly recorded in the books of accounts and supported by sufficient evidence. Radhika Diamonds (assessee) engaged in the business of trading and manufacturing of diamond jewelry, loose diamonds and silver wholesale to customers. The assessee filed return of income for the assessment year 2017-18 on declaring a total income of Rs. 65,790.

AO Relied on Bank Account Not Admitted by Taxpayer: ITAT Quashes Rs. 4 Crore Addition

Amitsingh VrajrajsinghBhadoriya vs The Income Tax Officer

CITATION: 2025 TAXSCAN (ITAT) 711

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) quashed an addition of over Rs. 4 crore after observing that the Assessing Officer (AO) had relied on a bank account which was not owned by the assessee. Amitsingh Vrajrajsingh Bhadoriya (assessee) engaged in the business of mattress trading. The AO made an addition of Rs. 4,00,82,154 under Section 69A of the Income Tax Act, 1961. This addition was based on the cash deposits made by the assessee.

ITAT Upholds Additions for Unexplained Cash Credit and Delayed PF Payments, Grants Partial Relief on Foreign Travel Expenses

Shridev Procon Limitedvs Deputy Commissioner of Income Tax

CITATION: 2025 TAXSCAN (ITAT) 712

The Income Tax Appellate Tribunal, Ahmedabad Bench, had delivered a ruling allowing partial deductions for foreign travel expenses claimed by the appellant while disallowing a portion on the grounds of personal use. Shridev Procon Limited, appellant-assessee had challenged the disallowance of travel expenses, an addition under Section 68 of the Income Tax Act, disallowance under Section 36(1)(va) related to provident fund (PF) contributions, and interest expense disallowances. A major point of contention in the appeal was the disallowance of Rs.35.60 lakh in foreign travel expenses incurred for business purposes.

Want a deeper insight into the Income Tax Bill, 2025? Click here

CSR Expenditure Eligible for 80G Deduction: ITAT

ACIT-3(3)(1) vs SikkaPorts and Terminals Ltd.

CITATION: 2025 TAXSCAN (ITAT) 713

The tribunal noted that while the amount spent is mandatory, companies can choose where to donate By Adwaid M S - On April 5, 2025 7:25 am - 2 mins read The Income Tax Appellate Tribunal ( ITAT ) Mumbai recently delivered a significant ruling, allowing companies to claim deductions under Section 80G for Corporate Social Responsibility (CSR) expenditures.

The decision came in appeals filed by the Revenue against Sikka Ports and Terminals Ltd. for Assessment Years 2018-19 and 2020-21. Sikka Ports and Terminals Ltd had donated Rs.33.85 crore to Reliance Foundation and Shyam Kothari Foundation. Both are registered under Section 80G. The company claimed a 50% deduction on these donations. Tax officials argued CSR spending is mandatory and not voluntary donations. They said such expenses should not qualify for deductions.

ITAT quashes Assessment over Lack of Independent Verification in S.153D Approval

Mainee Steel WorksPvt. Ltd vs DCIT

CITATION: 2025 TAXSCAN (ITAT) 714

The Delhi Bench of Income Tax Appellate Tribunal(ITAT) quashed the assessment against the assessee, holding that the approval granted under Section 153D of Income Tax Act,1961, was mechanical and lacked independent verification. Mainee Steel Works Pvt. Ltd.,appellant-assessee,was engaged in renting construction scaffolding equipment and earning rental income from properties in Noida, Uttar Pradesh. A search and seizure operation was conducted on November 19, 2018, at its premises, leading to notices under Section 153A for multiple assessment years. The assessee filed returns, and assessments for unabated years 2013-14 to 2017-18 were completed under Section 143(3) read with Section 153A of the Act.

Vivad Se Vishwas Scheme 2024 opted by Assessee: ITAT dismisses Appeal as Withdrawn

Priti Mishra vs TheAssistant Commissioner of Income Tax

CITATION: 2025 TAXSCAN (ITAT) 716

The Allahabad Bench of the Income Tax Appellate Tribunal (ITAT), dismissed an appeal filed by a resident of Clive Road, Civil Lines, Allahabad, after she opted to settle her tax dispute under the Vivad Se Vishwas Scheme, 2024. The assessee, Priti Mishra, has appealed before the ITAT against the order passed by the Commissioner of Income Tax (Appeals) [CIT(A)] for the assessment year 2017-18, in which the latter upheld the penalty of Rs. 86,774 imposed under Section 270A of the Income Tax Act, 1961.

AO Failed to Consider Rule 6DD Exceptions in Cash Deposit Disallowance: ITAT Remits Case for De Novo Assessment

Joy Thomas vs TheIncome Tax Officer - Ward -1

CITATION: 2025 TAXSCAN (ITAT) 717

The Cochin bench of the Income Tax Appellate Tribunal (ITAT) remanded the matter back for de novo assessment as the bench observed that the assessing officer (AO) and the Commissioner of Income Tax (Appeals) [CIT(A)] failed to consider the Rule 6DD exceptions in cash deposit disallowance. The assessee has appealed against the order passed by the CIT(A) for the assessment year (AY) 2020-21.

ITAT Deletes Penalty of Rs. 1.5 Lakh u/s 271B for Delayed Tax Audit Due to Managing Partner’s Demise

T.J. Mathai andCompany vs The Income Tax Officer

CITATION: 2025 TAXSCAN (ITAT) 718

The Cochin bench of the Income Tax Appellate Tribunal (ITAT) deleted the penalty of Rs. 1.5 lakhs imposed under Section 271B for delayed tax audit due to the demise of the managing partner. Coming to the facts of the case, the assessee firm did not file its income tax return for assessment year (AY ) 2014-15 under Section 139(1) of the Income Tax Act, 1961. The assessing officer (AO) issued a notice under Section 148 on 30.03.2021, making the firm to file its return on 13.04.2021, declaring a total income of Rs. 37,41,790. The assessment was completed on 24.03.2022 under Section 144 of the Income Tax Act, accepting the declared income but imposing a penalty under Section 271B for the delayed submission of the tax audit report.

How to Audit Public Charitable Trusts under the Income Tax Act Click Here

Violation of Natural Justice: ITAT Sets Aside CIT(A)’s Ex-Parte Order Passed without Notice to Assessee

Sandha And AssociatesP Ltd vs Income Tax Officer

CITATION: 2025 TAXSCAN (ITAT) 720

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT), in a recent ruling has set aside an ex-parte order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [CIT(A)](NFAC), after finding that the assessee had not been issued any notice before the order was pronounced.

The Tribunal remanded the matter back to the CIT(A) for de novo adjudication, directing that a reasonable opportunity of being heard be granted to the assessee. The case concerns the assessment year 2017–18. The assessee, Sandha and Associates Private Limited, challenged the ex parte order passed by the CIT(A), asserting that the order was passed without any intimation and that no opportunity was provided to present submissions or documents in defence.

AO adds Rs. 30 crore as Unexplained Investment: ITAT restores matter in Interest of Justice with Penalty

M/s. SamartthaDevelopers vs ITO

CITATION: 2025 TAXSCAN (ITAT) 720

The Pune Bench of the Income Tax Appellate Tribunal (ITAT) remanded the matter back to the Assessing Officer (AO) in interest of justice with penalty in a case where an addition of Rs. 30 crore was made as unexplained investment. Samarttha Developers (assessee) is a partnership firm purchased 11 immovable properties for consideration of Rs. 28,62,78,460 made investments amounting to Rs. 30 crore that were not properly explained during the assessment. The AO issued notice to the assessee. The assessee failed to comply with notices and therefore, the AO made an addition of Rs. 30 Crore under section 69 of the Income Tax Act.

Income Tax Addition for Turnover Mismatch Set Aside Due to Lack of Evidence: ITAT Deletes Disallowance under Section 40A(3) as Income was Estimated

Nishant Jain vs TheAssistant Commissioner of Income Tax

CITATION: 2025 TAXSCAN (ITAT) 719

In a recent ruling, the Raipur Bench of the Income Tax Appellate Tribunal (ITAT) partly allowed appeals for multiple assessment years by holding that where income is assessed on an estimated basis, separate disallowances, such as those under Section 40A(3), are not sustainable. The assessee, Nishant Jain, a civil contractor engaged in government infrastructure projects, had filed appeals for Assessment Years (AY) 2014–15, 2017–18, and 2018–19. The additions made by the lower authorities varied for each year and were based on distinct grounds. Regarding AY 2014–15, the Assessing Officer (AO) made an addition of ₹1.36 crore, citing a mismatch between the turnover as reflected in Form 26AS and the assessee’s books of account. According to the AO, the assessee failed to reconcile the discrepancy attributable to mobilization and machinery advances. The CIT(A) upheld the addition, stating that the assessee failed to furnish sufficient evidence showing that the difference had been accounted for in subsequent years.

PCIT Revision Order: ITAT Rules Assessment Order not erroneous, Rules Unexplained Money matter Properly Verified

ChandrakantVallabhbhai vs The PCIT, Central Circle-1

CITATION: 2025 TAXSCAN (ITAT) 721

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) quashed the revisionary order passed by the Principal Commissioner of Income Tax (PCIT), ruling that the assessment order was not erroneous. Chandrakant Vallabhbhai Koladia (assessee) had filed his return of income for Assessment Year 2018-19 declaring a total income of Rs. 1,23,69,720. Based on the survey findings, the assessee disclosed an additional income of Rs. 55,14,000 in his return.

No Possession, No Taxation: ITAT Deletes Capital Gains Addition u/s 2(47) of Income Tax Act

Sandesh VasantraoPawar vs The Income Tax Officer

CITATION: 2025 TAXSCAN (ITAT) 724

The Pune bench of the Income Tax Appellate Tribunal (ITAT) has remanded a matter back to the Assessing Officer for fresh verification in a case involving alleged capital gains based on a cancelled development agreement. The assessee, Sandesh Vasantrao Pawar, a resident of Satara running a small gift article shop, entered into a Joint Development Agreement (JDA) in 2013, along with seven other co-owners, to develop a piece of land. The agreement was executed with M/s Shri Nath Builders Promoters Pvt. Ltd., whereby the landowners would receive a share in the built-up area instead of transferring development rights. The Assessing Officer later reopened the case under section 147, claiming income had escaped assessment, and issued a notice under section 148.

ITAT Deletes Rs.22.93 Lakh Penalty on Builder, Cites Auditor’s Mistake & Lack of Intent to Evade Tax

Silver Oak BuildconPrivate Limited vs ACIT, Circle – 6, Pune

CITATION: 2025 TAXSCAN (ITAT) 722

The Income Tax Appellate Tribunal (ITAT), Pune Bench, has cancelled a penalty of Rs.22.93 lakh that was imposed on Silver Oak Buildcon Private Limited, a construction company based in Pune. The penalty was levied under Section 270A of the Income Tax Act for alleged under-reporting of Rs.37 lakh related to unpaid service tax and Rs.11,556 related to delayed Provident Fund payments. The company had disclosed these liabilities in its tax audit report. The ITAT observed that the omission from the income tax return was not an act of concealment or misreporting but a genuine mistake by the tax auditor. All dues were paid later, and the company accepted the tax demand without dispute, indicating no intention to evade tax.

 Clear all Your Doubts on RCM, TCS, GTA, OIDAR, SEZ, ISD Etc... Click Here

Exemption u/s 11 and 12 for Charitable Trusts Can’t Be Denied on Mere Technical Errors : ITAT

ITO (Exemption Ward)vs Savitribai

CITATION: 2025 TAXSCAN (ITAT) 725

In a recent ruling, the Income Tax Appellate Tribunal (ITAT) Pune bench held that the exemption under sections 11 and 12 of the Income Tax Act, 1961, cannot be denied for mere procedural defaults if the assessee meets all substantive conditions. Savitribai Phule Shikshan Prasarak Mandal, a trust running educational institution, claimed exemption of ₹4.85 crore under section 10(23C) of the Income Tax Act, 1961 for the Assessment Year 2019–20.

The tribunal agreed with the CIT(A) that denying the exemption on procedural grounds was unfair and against natural justice. The CPC’s rejection was found to be unjustified.

AO Adds Rs. 5.38 Lakh as Unexplained Cash Deposit: ITAT Confirms Rs. 48,000 Addition as Taxpayer Fails to Prove Source

Shri Balineni KishoreBabu vs Income Tax Officer Ward 14(2)

CITATION: 2025 TAXSCAN (ITAT) 730

The Hyderabad Bench of the Income Tax Appellate Tribunal (ITAT) confirmed Rs. 48,000 as assessee failed to prove source of deposits in the case where the Assessing Officer (AO) had made an addition of Rs. 5.38 lakh as unexplained cash deposits. Shri Balineni Kishore Babu (the assessee), a Chartered Accountant by profession, had filed his return of income for AY 2017-18, declaring an income of Rs. 5,22,840. The return was selected for scrutiny under CASS due to high-value cash deposits during the demonetization period.

ITAT Remands Ecoboard Industries’ Appeals for Fresh Decision observing Consultant’s Error and Financial Distress

Ecoboard IndustriesLtd vs DCIT, Circle-1(1)

CITATION: 2025 TAXSCAN (ITAT) 727

The Pune bench of the Income Tax Appellate Tribunal (ITAT) condoned the delay and remanded the appeals filed by Ecoboard Industries’ observing consultant’s error and financial distress, while stating that rejecting substantive claims on technicalities could compromise the delivery of justice. The assessee, Ecoboard Industries Ltd., is engaged in the manufacturing of particle boards using bagasse (a by-product of sugar processing).

The bench observed that litigants derive no advantage from delayed appeals and that rejecting substantive claims on technicalities could compromise the delivery of justice. The Tribunal thus set aside the case by remanding all matters to the CIT(A) for a fresh decision. It also advised the assessee to remain vigilant and avoid unnecessary adjournments. To Read the full text of the Order CLICK HERE

ITAT quashes Penalty on Depreciation Claim: Section 271(1)(c) Not To be Applied for Honest Mistakes

Sahajanand MedicalTechnologies vs Deputy Commissioner of Incometax, Circle-2(1)(2) CITATION: 2025 TAXSCAN (ITAT) 728

The Surat bench of the Income Tax Appellate Tribunal (ITAT), in a recent ruling, gave relief to the assessee, setting aside a penalty imposed under Section 271(1)(c) of the Income Tax Act, 1961. This case is on a matter relating to the assessment year 2006–07. The dispute lay in two primary issues: first, the incorrect claim of additional depreciation on machinery; second, the method adopted by the company in depreciating leasehold improvements. During assessment proceedings, it was discovered that the assessee had claimed 20% additional depreciation on plant and machinery purchased in the second half of the financial year, whereas, under the Income Tax provisions, only 10% was allowable if the asset was put to use for less than 180 days. Additionally, the company had amortised leasehold improvements over five years, claiming 20% depreciation instead of the standard 15%.

Cash Deposits during demonetization: ITAT remands matter to consider Evidence

Aryavysya Seva Sanghamvs Income Tax Officer

CITATION: 2025 TAXSCAN (ITAT) 734

The Hyderabad Bench of the Income Tax Appellate Tribunal (ITAT) remanded a matter back to the Commissioner of Income Tax (Appeals) [CIT(A)] to consider evidence in a case involving cash deposits during the demonetization period. Aryavysya Seva Sangham, (assessee) an Association of Persons (AOP), was taken up for scrutiny based on data analytics under “Operation Clean Money.” The Assessing Officer (AO) found that the assessee had made substantial cash deposits amounting to Rs. 40,43,330/- in bank accounts during the demonetization. The assessee did not file return of income and therefore the AO issued notice to file return of income. The assessee failed to furnish return of income and therefore the AO completed the assessment by assessing total income of Rs. 34,66,350 as unexplained money under Section 69A of the Income Tax Act, 1961.

ITAT Sets Aside CIT(A) Order for Violating Rule 46A(3) in Admitting Fresh Evidence without AO’s Examination

ITO vs RajivgandhiGrameen Bigarsheti Path Sanstha Marydit

CITATION: 2025 TAXSCAN (ITAT) 729

In a recent decision, the Pune bench of the Income Tax Appellate Tribunal held that when fresh evidence is admitted at the appellate stage, the Assessing Officer must be given an opportunity to examine it under Rule 46A(3) of the Income Tax Rules, 1962. The assessee, Rajivgandhi Grameen Bigarsheti Path Sanstha Marydit, is a cooperative society engaged in providing credit facilities to its members. For the assessment year 2017-18, it did not file its return of income. The case was selected for scrutiny based on significant cash deposits made during the demonetization period.

 Know Tax Planning Real Estate Transactions Click here

ITAT Directs Reconsideration of School’s Tax Exemption Denial, Cites Lack of Proper Hearing

Shaan EducationSociety vs CIT (Exemption)

CITATION: 2025 TAXSCAN (ITAT) 733

The Income Tax Appellate Tribunal (ITAT), Pune Bench, has set aside an order passed by the Commissioner of Income Tax (Exemption), Pune, which had denied tax exemption registration under Section 12AA of the Income Tax Act, 1961. The petitioner, Shaan Education Society, runs Guardian School in Pune and is registered under the Maharashtra Public Trusts Act, 1950. It filed an application on 29 March 2024 in Form 10AB seeking regular registration under clause (iii) of Section 12A(1)(ac) of the Income Tax Act. The trust had previously been granted provisional registration. To verify the genuineness of its activities, the Commissioner issued a notice through the ITBA portal on 24 May 2024, in response to which the trust submitted the required documents and details.

Reassessment without Tangible Material Invalid: ITAT deletes Rs.10 Lakh Cash Credit Addition

M/s. Shroff PropertiesPvt. Ltd vs ITO

CITATION: 2025 TAXSCAN (ITAT) 736

The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) deleted an addition of Rs. 10 lakh made under Section 68 of the Income Tax Act, 1961, holding that the reassessment was carried out without any tangible material. M/s. Shroff Properties Pvt. Ltd., (assessee) filed return of income for the Assessment Year 2010-11. The case was reopened under Section 147 based on information received from the Investigation Wing alleging accommodation entries from M/s. Canary Tradecom Pvt. Ltd., which was stated to be a Jama Kharchi company.

ITAT gives Second Chance to Fruit Trader in Rs.28 Lakh Demonetization Case Over Procedural Lapses

Salim Ali Darugar vsITO.Ward 2(1)

CITATION: 2025 TAXSCAN (ITAT) 732

The Income Tax Appellate Tribunal (ITAT), Panaji Bench, has granted relief to a fruit trader by remanding the matter back to the Commissioner of Income Tax (Appeals) [CIT(A)] for fresh adjudication in a case involving cash deposits of Rs.28.01 lakh made during the demonetization period. Salim Ali Darugar, a resident of North Goa and engaged in retail fruit trading, had filed the appeal against the order of the CIT(A) which upheld the addition made under Section 69A of the Income Tax Act. The Assessing Officer had initiated proceedings under Sections 143(2) and 142(1) based on data from the ITBA system indicating significant cash deposits in bank accounts during the financial year 2016–17, particularly in the demonetization window. The assessee had made cash deposits aggregating to Rs.28,01,500(28.01 Lakh).

Relief to Owner of Taj Hotel Group: ITAT Sets Aside Income Tax Reassessment action Initiated

The Indian HotelsCompany Limited vs Additional Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 737

In a ruling in favour of the owner of Taj Hotel Group, the Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has set aside a reassessment action initiated under the Income Tax Act, 1961.

According to the assessee, Indian Hotels Company Limited, a scrutiny assessment was carried out for the assessment year in question in accordance with 143(3) of the Income-tax Act, 1961. that four years following the conclusion of the relevant evaluation year, the assessment was revisited. As a result, the Assessee contended that in order for a reopening to be legitimate, the Assessing Officer had to unequivocally assert that the Assessee had not completely and honestly disclosed all relevant information required for its evaluation. But in the notice for reopening, the Assessing Officer neglected to do so.

ITAT sets aside CIT(A) Order, Rules Genuine Delay Explanation Must Be Considered for High-Value Tax Disputes

Vishal InfraglobalPvt.Ltd. vs The DCIT Gandhinagar Circle Gandhinagar

CITATION: 2025 TAXSCAN (ITAT) 741

The Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench “C”, has set aside the orders passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, which had dismissed appeals filed by Vishal Infraglobal Pvt. Ltd. on grounds of delay. The Tribunal held that where plausible and bona fide explanations for delay are provided, such appeals ought to be heard, especially when significant tax additions and penalties are involved. Vishal Infraglobal Pvt. Ltd., a company engaged in executing government contracts, had not filed its return of income for Assessment Year 2018–19. Based on third-party financial data indicating transactions of over Rs.16.15 crore, the Assessing Officer reopened the assessment under Section 147 and completed it ex-parte under Section 144, determining a total income of Rs.3.47 crore. The AO also initiated penalty proceedings under Section 270A and subsequently levied a penalty of Rs.56.38 lakh

ITAT upholds deletion of Cash Addition, Accepts Joint Family Status & Sale Proceeds as Source

The DCIT vs ShriInderpal Singh

CITATION: 2025 TAXSCAN (ITAT) 738

The Income Tax Appellate Tribunal (ITAT), Chandigarh Bench, has dismissed the appeal filed by the Revenue and upheld the order of the Commissioner of Income Tax (Appeals) [CIT(A)] deleting the addition of Rs.1,00,12,500(1 crore) made under Section 69 of the Income Tax Act, 1961. The Tribunal accepted the explanation provided by the assessee regarding the cash found in lockers, recognizing it as part of joint family funds and traced to the sale proceeds of a property owned by a family member.

The respondent, Inderpal Singh, proprietor of Goodwill Elektro Controls, Ludhiana, was subjected to a search and seizure operation on 28 November 2018. During the course of the operation, cash amounting to Rs.1,00,12,500 was found in Locker Nos. 41 and 42 maintained at SBL Sarabha Nagar, Ludhiana, in the names of Inderpal Singh and his wife, Raminder Kaur. The Assessing Officer treated the cash as unexplained and made an addition under Section 69, citing inconsistency in the assessee’s statements and the absence of documentary evidence linking the cash to a legitimate source.

Taxpayer Not Property Owner, Only POA Holder: ITAT Remands Rs. 4.73 Crore LTCG Addition Matter

Shri Thirupathi RaoNaineni vs Income Tax Officer

CITATION: 2025 TAXSCAN (ITAT) 743

The Hyderabad Bench of the Income Tax Appellate Tribunal (ITAT) remanded a matter involving Long-Term Capital Gain (LTCG) addition of Rs. 4.73 crore after the assessee claimed that he was not the owner of the property sold but merely a General Power of Attorney (GPA) holder. Shri Thirupathi Rao Naineni (assessee) had not filed return of income for the Assessment Year 2017–18. Based on information received the case was reopened by the Assessing Officer (AO) as the assessee had reportedly sold two immovable properties jointly with three co-owners for Rs. 5.94 crore and Rs. 5.89 crore, while the fair market value as per stamp duty valuation was Rs. 9.90 crore and Rs. 9.82 crore respectively.

ITAT quashes CIT(A)’s Ex Parte Penalty Orders Due to Wrong Email Service

Sunita AshokbhaiSharma vs The I.T.O

CITATION: 2025 TAXSCAN (ITAT) 744

In a recent decision, the Rajkot Bench of the Income Tax Appellate Tribunal (ITAT) condoned delay and set aside the Chief Commissioner of Income Tax (Appeals) (CIT(A)) ex parte order in penalty matters after finding that notices were sent to the wrong email. Sunita Ashokbhai Sharma (assessee) faced three separate penalty orders for non-compliance with notices and procedural lapses under Sections 271(1)(b), 271A, and 271F of the Income Tax Act, 1961. These penalties were levied in connection with the assessment proceedings for the year 2015-16.

Tax Planning For NRIs Click here

ITAT allows Rs. 6.47 Crore Lease Rent Expense as Deduction Citing Lessee’s Right to Claim Depreciation

DCIT-2(3)(1) VS NTTGlobal Data Centres Cloud Infrastructure India Pvt. Ltd. CITATION: 2025 TAXSCAN (ITAT) 745

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) upheld the order of the Commissioner of Income Tax (Appeals) [CIT(A)], which allowed depreciation as an alternative claim on finance lease rental payments citing Lessee’s right to claim depreciation. The Tribunal, relying on its coordinate bench’s prior ruling and the Karnataka High Court decision in Cisco Systems Capital (India) Pvt. Ltd., ruled that the lease rent of Rs. 6.47 crore is allowable as revenue expenditure.

Capital Gains arising on Mutual Fund Investments of Non Residents not Taxable in India: ITAT

Anushka Sanjay Shah vsITO

CITATION: 2025 TAXSCAN (ITAT) 746

In a landmark ruling, the Mumbai bench of the Income-Tax Appellate Tribunal (ITAT) has held that in view of Article 13 of DTAA between India and Singapore, the Capital Gains arising on mutual fund investments in hand of non residents is not taxable in India. Anushka Sanjay Shah , the assessee against the order of the Income-tax Officer Int. Tax Ward 4(2)(1), Mumbai [“AO”] dated 21.12.2024 passed u/s. 143(3) r.w.s. 144C(13) of the Income-tax Act, 1961 [ “Act”]. It was argued that the DRP erred in endorsing the order of the AO to assess the capital gains on mutual fund units arising from are taxable in India thereby affirming the addition of Rs. 1,35 66,368 made by the AO. The DRP and AO erred in holding that the short term capital gains on capital gain on debt fund of Rs.88,75,230/- and short term capital gain on equity fund of Rs.46,91,140/- under the head income from capital gain is taxable in India and benefits of Article 13(5) under the India -Singapore treaty are not applicable to the assessee.

Cash Deposits during Demonetization: ITAT directs Normal 30 % Tax Rate citing S. 115BBE not Retrospective

Manjulaben MadhubhaiHapani vs The ITO

CITATION: 2025 TAXSCAN (ITAT) 750

The Surat Bench of the Income Tax Appellate Tribunal (ITAT) ruled that the higher tax rate introduced under Section 115BBE could not be applied retrospectively in the case involving cash deposit during demonetization. Manjulaben Madhubhai Hapani, (assessee) filed her return of income declaring total income of Rs. 2,38,920 and agricultural income of Rs. 6,92,062. The AO found that the assessee had deposited Rs. 11,43,500 in her bank accounts during the demonetization period.

Tax Planning For Trusts and cooperation Societies Click here

Cash Deposits During Demonetization from Amul Parlour Sales: ITAT Accepts Source, Deletes Rs. 27.37 Lakh Addition

Rajnikant VithaldasPatel vs Income Tax Officer

CITATION: 2025 TAXSCAN (ITAT) 747

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) deleted an addition of Rs. 27,37,800 and ruled that the cash deposits made during the demonetization period were explained as arising from regular cash sales at the assessee’s Amul Parlour. Rajnikant Vithaldas Patel (the assessee), engaged in the business of retail trading in milk and milk products through an Amul Parlour, had deposited cash in his bank account during the demonetization.

ITAT upholds invocation of revisional jurisdiction u/s 263 by PCIT: Twin Conditions of “Error” and “Prejudice to the Interest of Revenue” Satisfied

Starshine Land vs PCIT

CITATION: 2025 TAXSCAN (ITAT) 751

The Mumbai bench of Income Tax Appellate Tribunal (ITAT) recently upheld the invocation of revisional jurisdiction under Section 263 of the Income Tax Act, 1961 by the Principal Commissioner of Income Tax (PCIT), on being certain that the requisite twin conditions of “error” and “prejudice to the interest of revenue” had been duly satisfied. The PCIT observed that the Assessing Officer made an error by not making the addition of income accrued to the assessee company on unsold inventories under the head “Income from House Property”. It was further observed that the Assessing Officer failed to make sufficient inquiries without application of mind and passed the reassessment order.

Support our journalism by subscribing to Taxscanpremium. Follow us on Telegram for quick updates