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

CA Led Trust Fails to Respond to Notices; ITAT Grants Final Chance and Imposes ₹2,500 Penalty

Avishkar Shikshan Sanstha VS CIT (Exemption)

CITATION: 2025 TAXSCAN (ITAT) 811

The Income Tax Appellate Tribunal (ITAT), Pune bench imposed a fine of ₹2,500 on a trust led by a Chartered Accountant (CA) for failing to respond to multiple notices regarding the registration of a trust. Despite being given a final chance to submit the necessary documents for trust registration, the delay in compliance resulted in a penalty. Avishkar Shikshan Sanstha, the assessee, applied for the registration of a trust in Form 10AB under section 12A(1)(ac)(iii) of the Income Tax Act, 1961.

ITAT Condones 450-Day Delay in Income Tax Appeal Filing Due to Former CA’s Oversight

Redstone Textile Private Limited vs Asst. CIT, Central Circle 5(4)

CITATION: 2025 TAXSCAN (ITAT) 812

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) condoned a delay of 450 days in filing an appeal, attributing it to the negligence of the former Chartered Accountant (CA) in failing to inform the assessee. Redstone Textile Pvt. Ltd., the assessee, was engaged in the textile business and was subjected to proceedings under Section 153C of the Income Tax Act 1961. These proceedings were initiated based on a search and seizure conducted on 17 January 2018 in the case of the Deesan Group. During the course of the search, certain documents relating to the assessee were found at the premises of Deesan Texfab Pvt. Ltd.

CIT(E) Rejected 12AB Registration by Relying on S.13(1)(b): ITAT Restores 12AB Registration Application for fresh adjudication

Shree Nishkalank Mahadev vs Commissioner of Income Tax

CITATION: 2025 TAXSCAN (ITAT) 814

The Ahmedabad Bench of the Income Tax Appellate Tribunal ( ITAT ) restored the matter to the Commissioner of Income Tax (Exemption) [CIT(E)] for fresh adjudication after ruling that the rejection of 12AB registration by invoking Section 13(1)(b) only at the time of assessment and not at time of grant of registration. Shree Nishkalank Mahadev Koliyak (assessee), a trust engaged in religious and charitable activities, had filed an application seeking registration under Section 12AB of the Income Tax Act, 1961.

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ITAT Grants S. 80-IB(10) Deduction for Timely Completed Wings, Holds Remaining Wing to Be Separate Project

Aakash Nidhi Builders & Developers vs ITO – 25(2)(1)

CITATION: 2025 TAXSCAN (ITAT) 813

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has allowed deduction under section 80-IB(10) of the Income Tax Act, 1961, for profits derived from Wings A to F of a housing project completed within the prescribed time limit and held that the additional Wing-G, which was completed later, constitutes a separate project and is not eligible for deduction under the same section. Aakash Nidhi Builders & Developers (assessee), a partnership firm engaged in real estate development, had undertaken a housing project named Aakash Nidhi. The assessee claimed deduction under section 80-IB(10) amounting to Rs. 2,51,07,390 on the entire profit of the project comprising Wings A to G.

Allotments to Relatives Disputed: ITAT Remands Section 80-IB(10) Deduction Claim for Verification

Aakash Nidhi Builders & Developers vs ITO – 25(2)(1)

CITATION: 2025 TAXSCAN (ITAT) 813

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) remanded a matter involving a claim for deduction under Section 80-IB(10) of the Income Tax Act, 1961, for verification of alleged allotments of residential units to relatives of existing flat owners, in possible violation of statutory conditions. Aakash Nidhi Builders & Developers (assessee), a partnership firm engaged in real estate development, claimed full deduction under Section 80-IB(10) for profits derived from a housing project named Aakash Nidhi.

ITAT rejects Price-Rigging Allegations on Penny Stock Transactions Due to Lack of Evidence

Dy. Commissioner of Income Tax vs Sh. Bal Kishan Arora

CITATION: 2025 TAXSCAN (ITAT) 815

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) upheld the benefit of Long-Term Capital Gains (LTCG) on penny stock transactions, rejecting the Revenue’s claims of price rigging due to a lack of concrete evidence and confirming the genuineness of transactions.

The assessee, Bal Kishan Arora, had purchased 50,000 shares of Gold Line Finvest International Ltd. at ₹10 each on 15.01.2013 through a public offer. A year later, between 29.04.2014 and 07.05.2014, the shares were sold through the Bombay Stock Exchange for ₹19,942,030, yielding an LTCG of ₹1,94,02,145.

Relief for Tata Teleservices: ITAT Rules Interest Payments to China Development Bank Exempt Under India-China DTAA

Income Tax Officer vs Tata Teleservices Limited

CITATION: 2025 TAXSCAN (ITAT) 817

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) ruled that interest payments by Tata Teleservices to China Development Bank (CDB) are exempt under Article 11(3) of the India-China Double Taxation Avoidance Agreement (DTAA). Tata Teleservices Limited, the assessee, had made interest payments to CDB during the Assessment Year 2014–15. The Assessing Officer (AO) treated the interest as taxable in India, arguing that the exemption under Article 11(3) of the DTAA was not applicable in this case. The AO raised a demand under Sections 201(1) and 201(1A) of the Income Tax Act, 1961, citing failure to deduct tax at source on these payments.

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No Income Tax Addition can be made Solely Based on Hypothecated Stock Disclosure to Bank: ITAT

Raj Kumar Puglia vs ITO, Ward - 3(4)

CITATION: 2025 TAXSCAN (ITAT) 818

The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) ruled that income additions cannot be made solely based on the difference between stock disclosed to a bank and that recorded in audited accounts. Raj Kumar Puglia, the assessee, filed his return of income on 28.09.2012, declaring Rs. 2,74,604, which was processed under Section 143(1) of the Income Tax Act, 1961. The case was selected for scrutiny, and statutory notices were duly issued. The assessee maintained a cash credit facility with State Bank of India, Sainthia Branch

ITAT Restores Trust’s 12A Registration, Imposes ₹2,500 Cost on CA for Negligence

Godavari Shikshan Mandal, Nashik vs CIT (Exemption), Pune

CITATION: 2025 TAXSCAN (ITAT) 819

In a recent judgment, the Pune bench of the Income Tax Appellate Tribunal (ITAT) restored an application for registration under Section 12A of the Income Tax Act, 1961 of a Trust, while imposing a ₹2,500 cost for the negligence of the Chartered Accountant’s (CA) in ensuring compliance.

Godavari Shikshan Mandal (assessee), a trust, applied for its registration under Section 12A(1)(ac)(iii) of the Income Tax Act, 1961, on 02.04.2024. The Commissioner of Income Tax (Exemption) ( CIT(E) ), while reviewing the documents of the trust, found some discrepancies and issued notices repeatedly seeking compliance proofs. But the assessee failed to respond to the statutory notices on time.

ITAT Grants Partial Relief on Minor Deposit & Depreciation Claims, Disallows Late ESIC & Commission Payments

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) granted partial relief to the assessee by allowing depreciation at 60%, permitting interest capitalization, and deleting the Section 68 addition for cash deposits in a minor’s bank account, while upholding disallowances for delayed Employees State Insurance Corporation (ESIC) payment and commission expenses.

Kastwel Foundries, the assessee, was involved in the production of ferro and master alloys. It reported a total income of ₹70,20,916 in its income return for the Annual Year (AY) 2012-13. The return was chosen for scrutiny through Computer Selected Scrutiny Selection (CASS). During the scrutiny, the Assessing Officer (AO) made multiple additions, including ₹6,598 for delayed ESIC payments, ₹43,943 for disallowed depreciation, ₹2,16,995 towards interest capitalization, ₹7,57,682 for commission expenses, and ₹31,000 for unexplained cash deposits in a minor’s account.

Transport Firm Withdraws ITAT Appeal After Opting for Vivad Se Vishwas Scheme

Shri Laxmi Road Lines vs Pr.CIT

CITATION: 2025 TAXSCAN (ITAT) 822

The Income Tax Appellate Tribunal (ITAT) Panaji Bench has dismissed an appeal filed by Shri Laxmi Road Lines after the Belagavi-based transport company opted to settle its tax dispute under the Direct Tax Vivad Se Vishwas Scheme(DTVSVS), 2024. The case pertained to an order passed by the Principal Commissioner of Income Tax (Pr.CIT) under Section 263 of the Income Tax Act, 1961 for assessment year 2017-18.

Shri Laxmi Road Lines had challenged the Pr.CIT’s revisionary order through an appeal before the Panaji ITAT bench. However, during proceedings, the assessee submitted a letter dated January 13, 2025 expressing its intention to resolve the dispute through the Vivad Se Vishwas Scheme. The company subsequently filed Form No. 2 under DTVSVS Rules and requested withdrawal of its appeal through another letter dated February 3, 2025.

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ITAT Restores Co-op Society’s Appeal, Orders Fresh Hearing on Rs.1.1 Cr 80P Deduction Denial

The Mercantile Co-op Credit Society Ltd vs ITO-Ward-6

CITATION: 2025 TAXSCAN (ITAT) 823

The Income Tax Appellate Tribunal (ITAT) Panaji Bench has set aside an ex parte order against The Mercantile Co-op Credit Society Ltd., directing the Commissioner of Income Tax (Appeals) [CIT(A)] to re-examine the denial of Rs.1.1 crore deduction under Section 80P of the Income Tax Act, 1961. The Panaji bench ruled that the cooperative society deserved another opportunity to present its case, emphasizing principles of natural justice.

The Belagavi-based credit society had filed its return for assessment year 2017-18 declaring nil income after claiming Rs.1.10 crore deduction under Section 80P, which provides tax relief to cooperative societies. The Assessing Officer (AO) rejected the claim during scrutiny, additionally adding Rs.80.33 lakh as unexplained cash credits under Section 68, resulting in a total assessed income of Rs.1.91 crore. The CIT(A) later upheld partial additions through an ex parte order after the society failed to respond to multiple hearing notices.

ITAT Dismisses Revenue’s Appeal as Tax Effect Falls Below CBDT’s Rs. 60 Lakh Threshold

ITO vs Intime Vanijya Private Limited

CITATION: 2025 TAXSCAN (ITAT) 824

The Income Tax Appellate Tribunal (ITAT) Kolkata bench has dismissed an appeal filed by the Income Tax Department against Intime Vanijya Private Limited, citing that the disputed tax amount of Rs. 7.97 lakh fell below the Rs. 60 lakh threshold prescribed under the Central Board of Direct Taxes (CBDT) Circular No. 09/2024.

The case pertained to Assessment Year 2013-14, where the Assessing Officer had initially made an addition of Rs. 25.80 lakh under Section 68 of the Income Tax Act, 1961, treating certain transactions as unexplained cash credits. The National Faceless Appeal Centre (NFAC) had deleted this addition, prompting the Revenue to appeal before the ITAT.

Mere Confession Of Assessee Not Enough for Conviction Without Credible Evidence: ITAT

Late Sh. Brij KishoreKochar vs Assistant Commissioner of Income Tax Appeal CITATION: 2025 TAXSCAN (ITAT) 821

The Delhi bench of the Income Tax Appellate Tribunal (ITAT) quashed the ₹1.33 Cr addition made by the Assessing Officer (AO), stating that a confession made by the assessee without corroborative evidence cannot justify an addition under Section 69 of the Income Tax Act, 1961.

While conducting a search and seizure at Aerens Group, authorities found documents mentioning Brij Kishore Kochar’s name (assessee). Based on these, the tax department claimed that the assessee made ₹1.77 crore in unexplained cash investments. The assessee initially admitted to these investments. However, the very next day, he retracted this statement, saying it was given under pressure. The tax department still added ₹1.33 crore to his taxable income for 2006-07, which the assessee challenged before the tribunal.

Additions u/s 68/69A Cannot Survive Once Creditor Details Identity, Creditworthiness, and Genuineness Are Proved: ITAT

Income Tax OfficerWard-3(3)(1) vs Arvindbhai R Nanavati HUF 398

CITATION: 2025 TAXSCAN (ITAT) 820

In a recent ruling, the Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench, held that the addition made under Section 68/69A of the Income Tax Act, 1961, could not be sustained once the details of the creditors were verified. The tribunal thus set aside the ₹1.20 crore addition.

The assessee, Arvindbhai R Nanavati, a Hindu Undivided Family (HUF), did not file an income tax return for the Annual Year (AY) 2017-18. During reassessment, the Assessing Officer (AO) noted unexplained credits of ₹1.20 crore in the assessee’s bank account. The assessee declared nil income but could only partially explain loans of ₹1.12 crore from 11 creditors. The AO treated the entire amount as unexplained under Section 69A of the Income Tax Act, 1961.

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ITAT Sets Aside CIT Order Denying 10(23C) Registration, Cites Lack of Opportunity and No Evidence Against Educational Purpose

Aanya LearningFoundation vs Commissioner of IncomeTax (Exemptions)

CITATION: 2025 TAXSCAN (ITAT) 825

The Income Tax Appellate Tribunal (ITAT) Lucknow bench has overturned an order by the Commissioner of Income Tax (Exemptions) that denied registration under Section 10(23C) of the Income Tax Act to Aanya Learning Foundation, citing violation of natural justice principles and absence of material proving non-educational activities. The tribunal directed fresh consideration of the foundation’s application for tax-exempt status. Aanya Learning Foundation, an educational institution based in Rampur, Uttar Pradesh, had applied for registration under Section 10(23C)(vi) in April 2018 shortly after its incorporation. The CIT(E) rejected the application in July 2018, claiming insufficient evidence of educational activities and allegedly affording only one hearing opportunity where the foundation’s adjournment request was denied.

Violation of Natural Justice: ITAT restores Addition on Demonetization Sales for Fresh Adjudication

Anupama Jewellery vsThe Income Tax Officer

CITATION: 2025 TAXSCAN (ITAT) 829

The Cochin Bench of the Income Tax Appellate Tribunal ( ITAT ) restored an addition made on account of demonetization-period sales to the file of the CIT(A) for fresh adjudication, citing violation of natural justice due to an ex-parte dismissal of the assessee’s appeal without addressing the grounds raised. Anupama Jewellery, (assessee) a partnership firm engaged in the jewellery business, filed its return of income for AY 2017–18 declaring income of Rs. 97,310. The Assessing Officer (AO), however, completed the assessment under Section 143(3) and determined a total income of Rs. 23,97,310.

HUF’s Share Transaction Dispute Concluded as ITAT Accepts Vivad Se Vishwas Settlement

Raghav Agarwal (HUF) vs The Income Tax Officer

CITATION: 2025 TAXSCAN (ITAT) 830

Top Stories HUF’s Share Transaction Dispute Concluded as ITAT Accepts Vivad Se Vishwas Settlement [Read Order] The tribunal did not examine the merits of the case, as the matter had been resolved through the government's dispute resolution scheme By Adwaid M S - On April 30, 2025 11:26 am - 2 mins read The Income Tax Appellate Tribunal (ITAT) has dismissed an appeal filed by Karta of Hindu Undivided Family (HUF) after accepting the settlement of a long-pending tax dispute under the Direct Tax Vivad se Vishwas Scheme, 2024. The case involved additions of Rs. 84.85 lakh made by tax authorities regarding long-term capital gains (LTCG) from share transactions claimed as exempt under Section 10(38) of the Income Tax Act, 1961. Raghav Agarwal (HUF) had challenged a reassessment order for the 2015-16 financial year, where the Income Tax Department had treated LTCG (Long Term Capital Gains) of Rs. 84,85,078 as unexplained cash credits under Section 68. The assessee contended that the reopening of assessment was invalid, arguing that the reasons recorded were vague and based on borrowed satisfaction without independent inquiry. The Commissioner of Income Tax (Appeals) had upheld the additions, prompting the appeal before the ITAT.

Order of Appellate Authority Seeking Requisite Information Must be Complied With: ITAT

Gurushri Umedpuri vs CIT(Exemption)

CITATION: 2025 TAXSCAN (ITAT) 837

The Ahmedabad bench of Income Tax Appellate Tribunal (ITAT) has recently imposed costs amounting to ₹5000 on an assessee charitable trust who failed to comply with the order of the Commissioner of Income Tax ( Exemption) seeking requisite information from the assessee. The assessee, Gurushri Umedpuri Gundikhad Kadva Patidar Charitable Trust, filed an application for registration of the trust under Section 12A(1)(ac)(iii) of the Income Tax Act, 1961 on 28.10.2023. The said application was rejected by the CIT (E) for the reason that no compliance was made by the assessee and the documentary evidence as called for by the CIT(E) was not furnished. The provisional registration granted earlier on 07.04.2022 was also cancelled. Aggrieved by the order of the CIT(E) , the assessee preferred the present appeal.

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Validity of ₹95.56 Lakh Addition as On-Money u/s 69A: ITAT Deletes Addition Due to Lack of Proper Verification

Munjal Mrugesh Jaykrishna vs The Deputy Commissioner of Income Tax

CITATION: 2025 TAXSCAN (ITAT) 833

The Ahmedabad Bench of Income Tax Appellate Tribunal(ITAT) deleted the addition of ₹95.56 Lakh as on-money under Section 69A of Income Tax Act,1961, ruling that the addition lacked proper verification. Munjal Mrugesh Jaykrishna,appellant-assessee,filed his income return on 28.05.2016, showing an income of Rs.67,61,690/-. The Assessing Officer(AO), after receiving information about an on-money transaction of Rs.95,56,000/- to Navratna Organizers and Developers Pvt Ltd (NODPL), found that income had escaped assessment. The assessment was reopened under section 147, and on 28.03.2022, the officer added Rs.95,56,000/- under Section 69A of the Act.

Unexplained Investment in Property: ITAT Deletes Rs. 13.73 Lakh Addition After Verifying Source from Fixed Deposits

Uday Ramesh Nayak vs Assistant Commissioner of Income Tax

CITATION: 2025 TAXSCAN (ITAT) 835

The Ahmedabad Bench of Income Tax Appellate Tribunal(ITAT)deleted the Rs. 13.73 lakh addition for unexplained investment in a property purchase after verifying the source from fixed deposits. Uday Ramesh Nayak,appellant-assessee, purchased Flat No. 1604, Zinnia Vasant Oasis, Andheri (East), Mumbai, on 29.08.2017 for Rs. 2,16,50,000/-. The Assessing Officer(AO) found that the appellant did not explain the source of the investment, despite providing an interest certificate. As a result, the AO added Rs. 2,16,06,693/- as unexplained investment under Section 69 of the Act.

ITAT Allows Appeal in Demonetization-Era Case, Finds CIT(A) Order Deficient in Reasoning

Jyoti Santosh Parakh Swaraj Cement Distributors vs ITO

CITATION: 2025 TAXSCAN (ITAT) 826

The Income Tax Appellate Tribunal (ITAT) Pune Bench has allowed an appeal filed by Jyoti Santosh Parakh Swaraj Cement Distributors, setting aside an order by the Commissioner of Income Tax (Appeals) [CIT(A)] that had upheld tax additions related to cash deposits made during the demonetization period. The tribunal found the CIT(A)’s order lacked proper reasoning and directed a fresh examination of the case. The case pertains to assessment year 2017-18, when the assessee’s bank account was flagged for cash deposits totaling Rs. 20.70 lakh during the demonetization window (November-December 2016). The Assessing Officer (AO) had treated the deposits as unexplained income under Section 69A of the Income Tax Act, 1961, after the assessee failed to file returns or respond to notices. The CIT(A) later dismissed the appeal without a detailed analysis, prompting the assessee to approach the ITAT.

ITAT Strikes Down Reassessment: Rs50 Lakh Threshold Not Met for Late Notice

DilipkumarLaxminarayan Lohiya vs Assessment Unit, Income Tax Department CITATION: 2025 TAXSCAN (ITAT) 827

The Income Tax Appellate Tribunal (ITAT) Pune Bench has quashed a reassessment proceeding initiated by the Income Tax Department, ruling that the tax effect in the case did not meet the Rs 50 lakh threshold required for reopening past cases. The decision came in response to an appeal filed against a late reassessment notice, which the tribunal found unsustainable under the current monetary limits set by the Central Board of Direct Taxes (CBDT). Intime Vanijya Private Limited, appellant-assessee challenged the reopening of its assessment for the financial year 2013-14. The assessing officer had issued a notice under Section 148 of the Income Tax Act, 1961, seeking to add Rs 25.80 lakh to the company’s income under Section 68, treating certain transactions as unexplained cash credits. However, the National Faceless Appeal Centre (NFAC) had earlier deleted the addition, observing that the department failed to prove the transactions were accommodation entries.

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ITAT Directs AO to Revisit Penalty Proceedings After Completion of de novo assessment

Krupal Vikrambhai Patel vs The Income Tax Officer

CITATION: 2025 TAXSCAN (ITAT) 836

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has set aside the penalty of Rs. 10.22 lakh imposed under Section 271(1)(c) of the Income Tax Act, after observing that the assessment order had already been remanded for fresh adjudication. Krupal Vikrambhai Patel (assessee), the penalty was levied in respect of additions amounting to Rs. 35,65,526 on account of unexplained investment and cash deposits. The original assessment had been completed ex parte under Section 144 r.w.s. 147 on 07.12.2018.

Additions u/s 69A Set Aside: ITAT Directs Fresh Assessment Allowing Taxpayer to File Additional Evidence

Tosifbhai Tajdin Halani (Individual) 42-43 vs The Dy.CIT

CITATION: 2025 TAXSCAN (ITAT) 832

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has set aside the additions made under Section 69A of the Income Tax Act, 1961, directing the Assessing Officer (AO) to conduct a fresh assessment after allowing the assessee an opportunity to submit additional evidence. Tosifbhai Tajdin Halani, (assessee) had filed a return of income declaring Rs. 39,00,700 for the Assessment Year (AY) 2017–18. The AO made additions under various heads, including unexplained advances of Rs. 57,55,000, cash gifts of Rs. 9,00,000 from father-in-law, unexplained opening cash balance of Rs. 10,45,585, short-term capital gains, and household expenses under Section 69C.

Relief for Adani Power: ITAT Invalidates Revision Order Passed Against Non-Existent Entity

Adani Power Ltd. vs Principal Commissioner of Income Tax

CITATION: 2025 TAXSCAN (ITAT) 831

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has set aside a revision order passed by the Principal Commissioner of Income Tax (PCIT) under Section 263 of the Income Tax Act, after holding that it was issued in the name of a non-existent entity. Adani Power Ltd (assessee) formerly Adani Power Maharashtra Ltd., had filed an appeal against the PCIT’s order dated 30.03.2023 passed for the assessment year 2018–19. The PCIT had invoked revisionary jurisdiction under Section 263 of the Income Tax Act.

ITAT Quashes ₹84 Lakh Addition Made u/s 69A, accepts Assessee’s Explanation on Cheque Discounting for Working Capital

Nirmaladevi Shreegopal Kanodia vs The Income Tax Officer

CITATION: 2025 TAXSCAN (ITAT) 839

The Ahmedabad Bench of the Income Tax Appellate Tribunal ( ITAT ) granted relief to assessee, Nirmaladevi Shreegopal Kanodia by deleting an addition of ₹84,00,669 made under Section 69A of the Income Tax Act, 1961. The Tribunal accepted the assessee’s contention that the impugned transactions were genuine short-term financing arrangements facilitated through post-dated cheques, and not unexplained cash credits or accommodation entries. The case pertains to Assessment Years 2013-14 to 2015-16, during which the Assessing Officer had reopened assessments on the basis of information received through the Income Tax Department’s Insight Portal. According to the department, the assessee had allegedly entered into suspicious financial transactions with known accommodation entry operators, including entities linked to one Sanjay Tibrewal, who was under investigation following a search operation in 2019.

Pharmacy Income Not Separate Business, Exempt u/s 11: ITAT grants Relief to Charitable Hospital

The Bhatia General Hospital vs DCIT (Exemption)-2(1)

CITATION: 2025 TAXSCAN (ITAT) 840

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has ruled that income earned from a pharmacy and chemist shop operated within a hospital is not a separate business activity, but rather an integral and incidental component of providing medical relief. The assessee, Bhatia General Hospital, a registered public charitable trust under Section 12a since 1975, had filed its return for the Assessment Year 2014–15, declaring income earned through its hospital operations, including receipts from an in-house pharmacy and chemist shop. The Assessing Officer (AO), however, treated the income of ₹15.08 crore from the pharmacy division and ₹44.49 lakh from the chemist shop as business income, invoking Section 11(4A), which requires that such income is exempt only if it is incidental to the charitable purpose and separate books are maintained.

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Unexplained Bank Deposits and PMGKY Non-Consideration: ITAT Remands Matter for Final Evidence Submission and Verification

Vishal Vasudevbhai Modi vs The Income Tax Officer

CITATION: 2025 TAXSCAN (ITAT) 834

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) remanded the matter to the Assessing Officer (AO) for fresh examination, directing the assessee to submit final evidence regarding unexplained bank deposits and income declared under the Pradhan Mantri Garib Kalyan Yojana (PMGKY). Vishal Vasudevbhai Modi,appellant-assessee, was picked for scrutiny because of large cash deposits during demonetization. The AO sent several notices asking for an explanation, but the assessee did not respond. So, the AO completed the assessment under Section 144.

Is Trust’s Registration u/s 12A a Prerequisite for Grant of Approval u/s 80(G)(5)(iv)(B)?: ITAT remits Matter

Nisa Foundation vs CIT(Exemption) Ahmedabad

CITATION: 2025 TAXSCAN (ITAT) 838

The Ahmedabad bench of Income Tax Appellate Tribunal (ITAT) has recently rejected an application of an assessee for approval under Section 80G (5)(iv)(B) of the Income Tax Act, 1961 since the order of the CIT(E) rejecting registration under Section 12A(1)(ac)(vi) of the Act, 1961 was set aside and fresh opportunity of being heard was granted to explain the fulfillment of conditions stipulated under the said section. The assessee, Nisa Foundation, is a trust and had filed an application in Form 10AB for registration of the trust u/s.12A(1)(ac)(vi)(B) of the Income Tax Act, 1961 which was rejected by the CIT(E).

ITAT dismisses Appeal as Taxpayer Opts for Settlement under Vivad Se Vishwas Scheme with Liberty to Restore

M/s. Flovel Energy Pvt. Ltd vs ACIT

CITATION: 2025 TAXSCAN (ITAT) 841

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) dismissed an appeal after the assessee opted to settle the pending dispute under the Vivad Se Vishwas Scheme (VSVS), 2024. The Tribunal, while dismissing the appeal as withdrawn, granted liberty to the assessee to seek restoration in case the scheme application does not attain finality. The matter pertains to the Assessment Year 2017–18 and arose from an assessment order issued under Section 143(3) of the Income Tax Act, 1961. The assessee, Flovel Energy Pvt. Ltd, had approached the Tribunal challenging the assessment framed by the Assessing Officer, which was later upheld by the National Faceless Appeal Centre (NFAC).

Rs.14.93 Crores Addition u/s 68 for Share Capital Premium: ITAT Deletes AO’s Addition, Upholds Genuineness of Funds

East Delhi Leasing P.Ltd. vs ITO

CITATION: 2025 TAXSCAN (ITAT) 842

The Delhi Bench of Income Tax Appellate Tribunal(ITAT) deleted the AO’s addition of Rs. 14.93 crores under Section 68 of Income Tax Act,1961,for share capital premium, ruling that the funds came from genuine sources. East Delhi Leasing P. Ltd.,appellant-assessee,filed its return of income on 30.09.2013, declaring Rs. 3,89,400/- as income. The assessment was completed on 29.03.2016, with the AO raising the income to Rs. 14,97,26,462/-. During the assessment, the AO found that the appellant had received Rs. 14.93 crores in share capital from two group companies, issuing shares at Rs. 100 each (Rs. 10 face value and Rs. 90 premium).

Genuineness of Loans u/s 68: ITAT Orders Fresh Verification of Creditworthiness and Transactions

Dushyantsinh Yadvendrasinh Chudasama vs The Dy.Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 843

The Ahmedabad Bench of Income Tax Appellate Tribunal(ITAT) restored the addition of ₹12.83 lakh under Section 68 of Income Tax Act,1961, for fresh verification, as the assessee had submitted Permanent Account Number(PAN), Income Tax Return(ITR), confirmations, and bank statements to prove the creditworthiness of lenders and genuineness of the transactions. Dushyantsinh Yadvendrasinh Chudasama, appellant-assessee, was engaged in trading petrol, diesel, and oil through his proprietorship M/s Rudra Petroleum and was also a partner in M/s Rudra Minerals and M/s Rudra Construction. The assessments for both years were completed under Section 143(3) of the Income-tax Act, 1961.

Disallowance of Interest Payments for Non-Deduction of TDS u/s 40(a)(ia): ITAT Remands Matter to AO for Verification of Form 26A

Dushyantsinh Yadvendrasinh Chudasama vs The Dy.Commissioner of Income Tax

CITATION: 2025 TAXSCAN (ITAT) 843

The Ahmedabad Bench of Income Tax Appellate Tribunal(ITAT) remanded the matter to the Assessing Officer (AO) to verify the submission of Form 26A regarding the disallowance of interest payments under Section 40(a)(ia) of Income Tax Act,1961, for non-deduction of Tax Deducted at Source(TDS). DushyantsinhYadvendrasinhChudasama,appellant-assessee,was engaged in trading petrol, diesel, and oil through his proprietorship M/s Rudra Petroleum and was also a partner in M/s Rudra Minerals and M/s Rudra Construction. The assessments for both years were completed under Section 143(3) of the Income-tax Act, 1961.

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S.43B Disallowance not Applicable When No Deduction Claimed and Liability Reported as Current Liability: ITAT

Dushyantsinh Yadvendrasinh Chudasama vs The Dy.Commissioner of Income Tax

CITATION: 2025 TAXSCAN (ITAT) 843

The Ahmedabad Bench of Income Tax Appellate Tribunal(ITAT)held that disallowance under Section 43B of the Income-tax Act, 1961, is not applicable when no deduction is claimed and the liability is reported as a current liability. Dushyantsinh Yadvendrasinh Chudasama,appellant-assessee,was engaged in trading petrol, diesel, and oil through his proprietorship M/s Rudra Petroleum and was also a partner in M/s Rudra Minerals and M/s Rudra Construction. The assessments for both years were completed under Section 143(3) of the Income-tax Act, 1961.

Unexplained Opening Cash Balance of Rs. 22.19 Lakh u/s 69: ITAT Remands Matter to AO

Dushyantsinh Yadvendrasinh Chudasama vs The Dy.Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 843

The Ahmedabad Bench of Income Tax Appellate Tribunal(ITAT)remanded the matter to the Assessing Officer(AO) for further verification of the unexplained opening cash balance of Rs. 22.19 lakh under Section 69 of Income Tax Act,1961. Dushyantsinh Yadvendrasinh Chudasama,appellant-assessee,was engaged in trading petrol, diesel, and oil through his proprietorship M/s Rudra Petroleum and was also a partner in M/s Rudra Minerals and M/s Rudra Construction. The assessments for both years were completed under Section 143(3) of the Act.

FTS Classification in Management and Administrative Services: ITAT deletes ALP Adjustment Due to Lack of Technology Transfer

Bio-Red Laboratories(India) P. Ltd vs DCIT

CITATION: 2025 TAXSCAN (ITAT) 845

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) deleted the Arm’s Length Price ( ALP ) adjustment made in respect of payments for AP management and administrative services, holding that the services did not involve a transfer of technology and therefore did not qualify as Fees for Technical Services (FTS) . Bio-Red Laboratories (India) P. Ltd., appellant-assessee, had entered into international transactions during the year, including AP Management Services worth ₹8.71 crore, corporate management services of ₹2.09 crore, and purchase of fixed assets for ₹9.18 crore from its Associated Enterprises (AEs).

ITAT Orders AO to Grant Relief After Exemption Approval u/s 10(23C)(iiiad) Despite Lack of 12A Registration

Smt. Ashrafi Devi Shiksha Samiti vs Income Tax Officer

CITATION: 2025 TAXSCAN (ITAT) 846

The Delhi Bench of Income Tax Appellate Tribunal(ITAT) directed the Assessing Officer(AO) to grant relief after exemption under Section 10(23C)(iiiad) of Income Tax Act,1961, was approved, holding that the benefit could not be denied solely due to lack of registration under Section 12A. Ashrafi Devi Shiksha Samiti, appellant-assessee, was a society running an educational institution named Niranjan Institute of Education Technology. It filed its income tax return on 20th October 2022, declaring Nil income. While processing the return under section 143(1), the Assessing Officer (CPC) proposed an addition of Rs.77,43,697 on the ground that the assessee was not registered under section 12A and therefore not eligible for exemption under sections 11 and 12 of the Act.

ITAT Cuts Estimated 20% Profit Rate to 12.5% in Bogus Purchase Case Calling It Excessive, remanded for Recomputation

Hardev Recycling Private Limited vs Assessment Unit, Delhi

CITATION: 2025 TAXSCAN (ITAT) 848

In a recent decision, the Income Tax Appellate Tribunal (ITAT) Delhi Bench, held that the estimated profit rate of 20% applied on account of unsubstantiated purchases was excessive. The tribunal reduced the rate to 12.5%, granting partial relief to the assessee, and remanded the matter for recomputation.

The assessee, Hardev Recycling Private Limited, was engaged in the business of manufacturing and trading PET flakes (recycled plastic chips). It filed its return of income for the Assessment Year (AY) 2021-22, declaring a total income of 15 lakh.

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ITAT Deletes Rs. 2.72 Crore Penalty as Additions in Quantum Assessment Were Deleted

The Deputy Commissioner of Income Tax vs Pinac Stock Brokers Private Limited CITATION: 2025 TAXSCAN (ITAT) 847

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) deleted the penalty under Section 271(1)(c) of the Income Tax Act, 1961 amounting to Rs. 2.72 crore as quantum assessment was deleted by the ITAT. Pinac Stock Brokers Private Limited (assessee) in this case the Assessing Officer (AO) had imposed the penalty pursuant to additions made in the quantum assessment. The AO imposed a penalty amounting to Rs. 2 Crore.

‘No Change in Facts from AY 2013-14 TDS Ruling’: ITAT Relies on Consistency Principle to Dismiss Revenue’s Appeal

Asstt.CIT (International Taxation) VS Allscripts (India) Pvt. Ltd

CITATION: 2025 TAXSCAN (ITAT) 849

The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) relied on the consistency principle to dismiss the revenue’s appeal, as there was no change in facts from the assessment year (AY) 2013-14 TDS (Tax Deducted at Source) ruling in the assessee’s own case. In this case, the Revenue had appealed against the order of the Commissioner of Income Tax (Appeals) [CIT(A)] for the (AY) 2014-15.

In this case, the Revenue had appealed against the order of the Commissioner of Income Tax (Appeals) [CIT(A)] for the (AY) 2014-15. The Revenue has appealed before the ITAT, as it is dissatisfied with the CIT(A)’s decision to cancel the demand of Rs. 72,20,450, which was raised by the Assessing Officer for a shortfall in TDS on data line charges of Rs. 1,54,44,813 (taxed at 25%) along with interest under Sections 201(1) and 201(1A) of the Income Tax Act, 1961.

CSR Donation to Gujarat CM Swachchta Nidhi Eligible for Section 80G Deduction: ITAT

Gujarat State Financial Services Limited vs Deputy Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 898

The Ahmedabad bench of Income Tax Appellate Tribunal (ITAT) has held that Corporate Social Responsibility (CSR) donations made to the Mukhyamantri Shree Swachchta Nidhi, Gujarat are eligible for deduction under Section 80G Of the Income Tax Act, 1961. The decision was delivered in response to an appeal filed by the assessee against the order of the National Faceless Appeal Centre (NFAC), Delhi, pertaining to the Assessment Year 2020-21.

Delayed Credit of ESI/EPF Amounts: ITAT deletes Penalty on Assessee for Technical Glitches

Tandem Data ProcessingPvt. Ltd. vs ADIT

CITATION: 2025 TAXSCAN (ITAT) 897

The Ahmedabad Bench of the Income Tax Appellate Tribunal ( ITAT ) recently quashed an income tax disallowance, on observing that a one-day delay in crediting employee contributions to the Employees’ Provident Fund (EPF) and Employees’ State Insurance Corporation (ESIC) accounts were caused by server errors and technical glitches. An income tax appeal was filed by Tandem Data Processing Pvt. Ltd. (Tandem) against the order passed by the Commissioner of Income Taxes (Appeals) ( CIT(A) ) arising from the finances of the Assessee during Assessment Year (A.Y.) 2018-19.

CIT(A) Mistakenly Treated Private Company as Cooperative Society u/s 80P: ITAT remands Case

Indian Chain Pvt. Ltdvs DCIT

CITATION: 2025 TAXSCAN (ITAT) 899

The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) set aside the order of the Commissioner of Income Tax (Appeals) [CIT(A)] and directed a fresh examination, observing that Section 80P of the Income Tax Act, 1961, which is meant exclusively for cooperative societies, was mistakenly applied to a private limited company.

The assessee, Indian Chain Pvt. Ltd., had filed its return of income for the Assessment Year (AY) 2020-21. On 24.12.2021, an intimation under Section 143(1) of the Income Tax Act, 1961, was issued by the Deputy Commissioner of Income Tax (DCIT) to the assessee. The assessee, however, claimed that it did not receive this order either in physical form or by email.

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Revised Disallowance Claim u/s 14A should be Backed by Revised Certificate by Auditor in Form 3CA: ITAT

Gujarat State Financial Services Limited vs Deputy Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 898

In a recent decision, the Ahmedabad bench of Income Tax Appellate Tribunal ( ITAT ) has held that any revised disallowance claim under Section 14A of the Income Tax Act must be supported by a revised auditor’s certificate in Form 3CA, failing which the revised claim is liable to be rejected. The assessee company had filed its return of income declaring ₹493.41 crores and suo moto disallowed ₹14.31 crores under Section 14A read with Rule 8D, in relation to dividend income of ₹78.65 crores claimed exempt under Section 10(34). During assessment proceedings, the Assessing Officer initially proposed a further disallowance of ₹296.35 crores but later accepted the assessee’s original disallowance and passed the assessment order accordingly.

Capital Gain Exemption Documents Not Submitted During Initial Proceedings but Before Tribunal: ITAT Remands Case for Fresh Assessment

Syed Hussain Syed Asifvs The Assistant Commissioner of Income Tax

CITATION: 2025 TAXSCAN (ITAT) 903

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) recently remanded a case relating to a ₹2.75 crore capital gains exemption claimed where the assessee failed to submit the requisite documents during the initial proceedings, but did so before the appellate tribunal only. The decision was given against an Income Tax Appeal filed by Syed Hussain Syed Asif, proprietor of Alpha Medicals in Hosur. Syed had declared a total income of ₹14,63,060 and claimed an exemption of ₹2,54,57,551 after selling his 9,600 sq ft property for ₹2.75 crore.

ITAT Dismisses Income Tax Appeal After Opting for Vivad Se Vishwas Scheme

Shri Salman Abdulrazak Patel vs The Assistant Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 900

The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) dismissed the assessee’s appeal as withdrawn following a formal opt-in to the Direct Tax Vivad Se Vishwas Scheme, 2024, with liberty to restore. The assessee, Salman Abdulrazak Patel, had filed an appeal challenging the appellate order dated 07.11.2023 for the Assessment Year (AY) 2010–11. During the proceedings before the Tribunal, the assessee submitted a written request to withdraw the appeal on the ground that he had opted for the Direct Tax Vivad Se Vishwas Scheme, 2024.

No Addition u/s 153A for Completed Assessments without Incriminating Material Found During Search: ITAT

Saurabh Agrotech Pvt.Ltd. vs DCIT

CITATION: 2025 TAXSCAN (ITAT) 904

The Jaipur Bench of the Income Tax Appellate Tribunal (ITAT) held that additions under Section 153A of the Income Tax Act, 1961 cannot be made in respect of completed assessments unless incriminating material is found during a search, and accordingly deleted the addition made to Saurabh Agrotech Pvt. Ltd.’s income on account of Dharmada (charity collections). Saurabh Agrotech Pvt. Ltd., the assessee, engaged in the business of oil manufacturing and trading, filed its return for Assessment Years 2010-11 and 2012-13, declaring income that was assessed under scrutiny proceedings. A search was later conducted on the Data Group, of which the assessee was a part, on 14.10.2015. Following the search, assessments were reopened under Section 153A and additions were made, including Rs. 6.52 lakh in AY 2010–11, treating Dharmada collections as part of the assessee’s taxable income.

Unexplained Cash Deposits during Demonetization: ITAT Directs AO to Verify Books of Accounts and Cash Sales of Diamond and Gold Dealer

M/s. V N Exports vsThe ACIT

CITATION: 2025 TAXSCAN (ITAT) 906

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) restored the matter to the Assessing Officer (AO) for fresh verification of books of accounts and cash sales of Diamond and Gold Dealer in the dispute involving cash deposit during demonetization. V.N. Exports (assessee), a dealer in diamond, gold jewellery, and bullion, filed its return of income for the Assessment Year 2017-2018 declaring a total income of Rs. 38,61,982. The AO observed during the demonetization period in November 2016, the assessee deposited Rs. 1.24 crore in cash in its bank account. The assessee submitted that the cash was from legitimate cash sales made on 8th November 2016, between 8:30 PM and midnight. The Assessing Officer treated the cash deposits as unexplained income under Section 69A of the Income Tax Act, 1961.

Reopening Based on Mere Change of Opinion Invalid: ITAT Quashes ₹4.96 Crore Income Tax Addition

GCK Stock PrivateLimited vs The ITO

CITATION: 2025 TAXSCAN (ITAT) 908

The Jaipur Bench of the Income Tax Appellate Tribunal (ITAT) quashed the reassessment proceedings, ruling that the reopening of assessment based on a mere change of opinion was invalid under the Income Tax Act, 1961. GCK Stock Private Limited, a securities trading company, had originally filed its return for the Assessment Year 2015-16, disclosing income of Rs. 3,77,390, which was accepted in a scrutiny assessment completed under Section 143(3) in December 2017. Based on information from SEBI and the Investigation Wing, the Assessing Officer (AO) reopened the case under Section 148A(d) in July 2022, alleging that the assessee had engaged in pre-arranged reversal trades in illiquid stock options, leading to an artificial loss of Rs. 4.96 crore.

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Share Capital Received from Previous AY Cannot Be Taxable as Unexplained Cash Credit: ITAT Deletes Addition u/s 68

Jai Bhola Trading Co.Pvt. Ltd. vs IT Ward 9(3)

CITATION: 2025 TAXSCAN (ITAT) 901

The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) held that share capital received from previous Assessment Years could not be treated as unexplained cash credit under Section 68 of the Income Tax Act, 1961. The assessee, Jai Bhola Trading Co. Pvt. Ltd., issued shares during AY 2012–13 at ₹100 each, raising ₹1.43 crore. Of this, ₹1.33 crore was received in earlier AYs, and ₹10 lakh was received in AY 2012–13 from Para Bepar South Pvt. Ltd.

The case was selected for scrutiny under the Computer Assisted Scrutiny Selection (CASS) system. During the assessment, the Assessing Officer (AO) sent notices and issued summonses to the directors of the investing company under section 143 of the Income Tax Act, 1961. In response to the notices, the assessee clarified that ₹1.33 crore was not relevant to the year under consideration, having been received in prior years. For the ₹10 lakh received during AY 2012-13, the assessee furnished supporting documents including share application forms, ITRs, PANs, and bank statements.

Reopening u/s 147 Must Be Based on Specific and Clear Grounds, Not Borrowed Satisfaction: ITAT Quashes ₹68L Addition

ACIT vs M/s Delightful Estate Developers LLP

CITATION: 2025 TAXSCAN (ITAT) 902

The assessee, Delightful Estate Developers LLP, filed its return for the Annual Year (AY) 2017-18, declaring nil income. Later, in May 2018, tax authorities conducted a search on the Banka Group. During this search, they discovered that Mukesh Banka and his companies were involved in providing accommodation entries. The tax department alleged that the assessee had received ₹68 lakh in such bogus loans from five shell companies linked to the Banka Group.

Relief to Toyota Boshoku: ITAT Rules Royalty Payments to Parent Company Justified, Rejects Dept’s NIL Valuation Claim

Toyota Boshoku Automotive India Private Limited. vs The Dy. Commissioner of Income Tax

CITATION: 2025 TAXSCAN (ITAT) 909

The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) rejected the tax department’s adjustment that benchmarked royalty payments to NIL, ruling that Toyota Boshoku Automotive India’s payments to its parent company in Japan were justified and consistent with past assessments. Toyota Boshoku Automotive India Pvt. Ltd., the assessee, engaged in manufacturing automotive components, paid Rs. 29.43 crore in royalty to its Japanese parent, Toyota Boshoku Corporation, for the use of technical know-how. The Transfer Pricing Officer (TPO) disregarded the payment, stating that the assessee functioned as a contract manufacturer for Toyota Kirloskar Motors Ltd. (TKML), so it should not have incurred royalty costs, which were instead deemed more appropriately payable by TKML.

CA Misses 143(1) Intimation due to Engagement in Foreign Tax Filings: ITAT Condones 38-Day Delay in Income Tax Appeal

M/s. Saviynt IndiaPvt. Ltd vs The Deputy Commissioner of Income Tax

CITATION: 2025 TAXSCAN (ITAT) 905

The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) condoned a 38-day delay in filing an appeal by Saviynt India Pvt. Ltd., holding that the delay was due to a genuine misapprehension by the company’s Chartered Accountant (CA) who was engaged in foreign tax filings and failed to recognize the finality of an intimation under Section 143(1) of the Income Tax Act, 1961. Saviynt India Pvt. Ltd., the assessee, filed its return of income for Assessment Year 2021–22, declaring a total income of Rs. 21.8 crores. The Centralized Processing Centre (CPC), Bangalore, issued an intimation under Section 143(1) proposing an adjustment of Rs. 5.43 crores, treating GST refunds as taxable income. The company submitted a response, stating that the GST refund was not claimed as an expense and hence was not taxable.

ITAT Allows Rs. 1.3 Crore LTCG Exemption to Husband-Wife Despite Sale of 2 Properties

Smt. Tejal Kaushal Shah vs Income Tax Officer

CITATION: 2025 TAXSCAN (ITAT) 910

In a recent case, the Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has allowed the Long-Term Capital Gain (LTCG) tax exemption of Rs. 1.3 Crore granted to the husband and wife despite considering the sale of the 2 properties, which ultimately was for the purchasing of joint property. Tejal Kaushal Shah, the appellant/assessee, is an individual who filed her income return, stating her complete income. After the assessee’s case was chosen for review, the assessee received the appropriate notices. After claiming the benefit of indexation, the assessee sold immovable property and showed a long-term capital gain (LTCG) of Rs. 1,30,30,729, according to the Assessing Officer. The assessee also claimed an exemption under section 54 of the Income Tax Act for the new property acquired through a deed of transfer.

Fruit Seller Delayed Filing Appeal Against Rs. 78 Lakh Addition Due to COVID-19: ITAT Remands Matter

Mohd. Farooque Mohd.Rafique vs ITO

CITATION: 2025 TAXSCAN (ITAT) 907

The Pune Bench of the Income Tax Appellate Tribunal (ITAT) has remanded a case involving a Rs. 78.39 lakh addition made to the income of a fruit seller, condoned a delay due to the severe impact of COVID-19 on the assessee and his family. Mohd. Farooque, (assessee) a fruit seller operating on a commission basis filed his income tax return for AY 2018-19, declaring an income of Rs. 8,21,210. The case was selected for limited scrutiny by the Assessing Officer (AO). The assessee did not respond to the notices or participate in the assessment proceedings. The AO observed that the assessee reported a commission income of Rs. 19,70,000 after deducting expenses of Rs. 11,48,790, resulting in a net profit of Rs. 8,21,210. However, based on Statement of Financial Transactions (SFT) data, the AO noted cash deposits aggregating to Rs. 9,79,93,295 in the assessee’s bank accounts.

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Transfer Pricing adjustment unwarranted u/s 92BA If Deduction Not claimed u/s 80IA: ITAT Deletes Addition

Sanghi Industries Limited & DCIT

CITATION: 2025 TAXSCAN (ITAT) 913

The Hyderabad Bench of the Income Tax Appellate Tribunal (ITAT) has held that where no deduction is claimed under Section 80IA of the Income Tax Act, 1961, the transfer pricing adjustments under Section 92BA pertaining to specified domestic transactions are unwarranted. Sanghi Industries Limited (assessee), a major cement manufacturer, operates a captive power unit eligible for deduction under Section 80IA. The assessee transferred power from the eligible unit to its own cement unit and disclosed the transaction in Form 3CEB. However, the assessee did not claim deduction under Section 80IA due to business losses. The case was referred to the Transfer Pricing Officer (TPO), who held that the internal CUP method applied by the assessee was incorrect and proceeded to benchmark the transaction using average rates charged to third parties.

Mere Non-Appearance of Directors Cannot Justify Additions When Documentary Compliance is Complete: ITAT

Income Tax Officer vs Mandvi Salts & Logistics Pvt. Ltd.

CITATION: 2025 TAXSCAN (ITAT) 911

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) ruled that mere non-appearance of directors does not justify additions under Section 68 of the Income Tax Act, 1961, when the assessee has furnished complete documentary evidence establishing the genuineness of the transactions.

Mandvi Salts & Logistics Pvt. Ltd., the assessee, had received Rs. 5 crores in share capital and premium from two private companies during the Assessment Year 2012–13. The AO treated the amount as unexplained income under Section 68, citing the absence of personal appearance of the directors of the investing companies, despite the assessee furnishing PAN details, share application forms, bank statements, audited financials, and confirmations from both subscribers.

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