ITAT Weekly Roundup

This Part I of the weekly round-up encapsulates the key stories related to the Income Tax Appellate Tribunal (ITAT) reported at Taxscan, from February 1, 2026 to February 15, 2025.

Section 54F Deduction under Income Tax cannot be Denied without Examining Construction Evidence: ITAT

Rahulkumar Shntilal Shah vsIncome Tax Officer

CITATION : 2026 TAXSCAN (ITAT) 182

The Income Tax Appellate Tribunal (ITAT), New Delhi Bench, has restored a matter relating to an addition of ₹1,38,66,386 made on account of alleged unaccounted profits from business transactions, back to the file of the Commissioner of Income Tax (Appeals) ( CIT(A) ) for fresh adjudication.

In the light of facts and circumstances, the tribunal restored the matter for both assessment years, back to CIT(A) for fresh adjudication.

Standard Assets Eligible for Deduction u/s 36(1)(viia): ITAT Quashes Income Tax Proceedings against Bajaj Finance

Bajaj Finance Limited vs PCIT

CITATION : 2026 TAXSCAN (ITAT) 183

The Income Tax Appellate Tribunal (ITAT), Pune Bench, upheld that standard assets are eligible for deduction under section 36(1)(viia) and quashed proceedings initiated against Bajaj Finance.

Accordingly, following the order of the Co-ordinate Bench in the assessee’s own case for the preceding assessment year, the Tribunal quashed the proceedings initiated under Section 263 by the PCIT.

₹1.38 Cr Income Tax Addition on Unaccounted Profit from Business Transaction: ITAT Directs Fresh Adjudication by CIT(A)

FORUM SALES PVT. LTD vs DCIT

CITATION : 2026 TAXSCAN (ITAT) 184

The Income Tax Appellate Tribunal (ITAT), New Delhi Bench, has restored a matter relating to an addition of ₹1,38,66,386 made on account of alleged unaccounted profits from business transactions, back to the file of the Commissioner of Income Tax (Appeals) ( CIT(A) ) for fresh adjudication.

In the light of facts and circumstances, the tribunal restored the matter for both assessment years, back to CIT(A) for fresh adjudication.

Additional TP Ground on AE as Tested Party Admissible before ITAT: Bombay HC favours Nivea India

Commissioner of Income Tax vsNivea India Private Ltd

CITATION : INCOME TAX APPEAL NO.2417 OF 2018

The Bombay High Court has upheld the Income Tax Appellate Tribunal’s ( ITAT ) decision allowing Nivea India Private Ltd. to raise an additional transfer pricing ground at the appellate stage.

According to the court, the ITAT had not conclusively accepted the AE as the tested party but had only remanded the matter for proper verification and adjudication by the AO/TPO after granting opportunity to the assessee. The order of the same was passed and it was separately challenged.

Taxpayer Claims Income Declared in ITR Wrong & Belonged to Another Year: ITAT Remands Matter for Verification

Rajiv Pandurang Lembhe vs ITO

CITATION : 2026 TAXSCAN (ITAT) 185

Income Tax Appellate Tribunal (ITAT), PuneBench, has remanded a matter back for verification since the taxpayer/assessee claims that income has been declared incorrectly in the wrong year. The department has alleged unpaid tax liability of INR 4,81,700 according to the return filed by the assessee.

An affidavit is to be provided by the assessee stating that mis-consultation had taken place and the income for AY 2021-22 is incorrect. Additional evidence including financial statement/bank statement is directed to be produced by the assessee.

Residential Status of Ex-Flipkart COO: ITAT Upholds Assessment Treating Him as Resident of India Under Income Tax Act and India-Singapore DTAA

Shri Binny Bansal vs The DeputyCommissioner of Income Tax

CITATION : 2026 TAXSCAN (ITAT) 186

In a recent development, the Bangalore Bench of Income Tax Appellate Tribunal (ITAT) zeroed in on the issue of residential status of Binny Bansal in an appeal arising out of the assessment year 2020-21, where he had challenged the assessment order treating him as a resident of India and taxing his global income.

The order was pronounced on January 9, 2026, by a bench comprising Prashant Maharishi (Vice President) and Keshav Dubey (Judicial Member).

ITAT upholds Taxability of Capital Gains on Sale of Flipkart Shares by Ex-Flipkart COO, Denies DTAA Relief Under India-Singapore Tax Treaty

Binny Bansal vs The DeputyCommissioner of Income Tax

CITATION : 2026 TAXSCAN (ITAT) 186

The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) dealt with the issue of taxability of capital gains arising from the sale of shares of Flipkart Private Limited held by Binny Bansal in an appeal relating to the assessment year 2020-21.

The order was pronounced on January 9, 2026, by a bench comprising Prashant Maharishi (Vice President) and Keshav Dubey (Judicial Member).

ITAT Rejects Jurisdiction, Limitation and Procedural Challenges Raised by Ex-Flipkart COO Against Final Assessment Order for AY 2020-21

Binny Bansal vs DeputyCommissioner

CITATION : 2026 TAXSCAN (ITAT) 186

The Income Tax Appellate Tribunal (ITAT) at Bangalore heard an appeal pertaining to AY 2020-21, wherein multiple procedural and jurisdictional challenges were raised by Binny Bansal.

The order was pronounced on January 9, 2026, by a bench comprising Prashant Maharishi (Vice President) and Keshav Dubey (Judicial Member).

Entire Income Tax Assessment Must Conclude within 30 Months where TPO Reference Exists: ITAT

Rohde vs Assessment Unit

CITATION : 2026 TAXSCAN (ITAT) 187

The Income Tax Appellate Tribunal (ITAT), Delhi Bench, has held that in cases where the Transfer Pricing Officer (TPO) reference exists, the entire income tax assessment as per Sections 144 and 153 must conclude within 30 months.

The tribunal granted liberty to the parties to get their appeal revived for adjudication if the decision of the Supreme Court on this issue necessitates modification. The bench, consisting of Krinwant Sahay (Accountant) and Yogesh Kumar U.S. (Judicial), disposed of the present appeal, subject to the outcome of the judgment of the larger bench of the Supreme Court in ACIT v. Shelf Drilling Ron Tappmeyer Ltd. Finally, the appeal had been allowed.

Reassessment Beyond 4 Years Without New Material Invalid: ITAT Quashes ₹3.40 Cr S. 80IB(10) Disallowance

Komal Enterprises vs ITO Ward3(3)

CITATION : 2026 TAXSCAN (ITAT) 188

The Income Tax Appellate Tribunal, Mumbai Bench quashed income tax reassessment proceedings against Komal Enterprises holding that a reassessment after the lapse of four years of completion of original assessment without any new material is invalid in law.

The ruling is expected to help assessees in safeguarding themselves similar reassessment proceedings based on “change of opinion”.

ITAT Condones 63 Day-Delayed Appeal due to Hospitalization, Remands ₹67L Income Tax Deduction Claim u/s 80IB

Harish Gaurav vs ADIT CPC

CITATION : 2026 TAXSCAN (ITAT) 189

The Income Tax Appellate Tribunal (ITAT), Jodhpur Bench, condoned a delay of 63 days in filing the appeal and set aside the impugned order of the Commissioner of Income Tax (Appeals) ( CIT(A) ) regarding the disallowance of the deduction claimed for ₹67 Lakh under Section 80IBA of the Income Tax Act, 1961.

Accordingly, the Tribunal condoned the delay of 63 days and held that the CIT(A) was not justified in dismissing the appeal as non-maintainable. The matter relating to disallowance of deduction under Section 80IBA was restored to the file of the Assessing Officer for fresh examination after providing the opportunity of hearing to the appellant.

Statutory Duty of Commissioner to Consider Documents Filed in Paper Book : ITAT Notes Commissioner Dismissed Appeal Without Deciding on Merits

Jora Ram Mali vs ACIT

CITATION : 2026 TAXSCAN (ITAT) 191

The Income Tax Appellate Tribunal (ITAT), Mumbai Bench, allowed appeal as Commissioner of Income Tax (Appeals) (CIT(A)) dismissed appeal without deciding on merits, failing to consider documents filed in paper book, which is a statutory duty to be fulfilled.

To conclude, all matters arising from the different appeals but claiming the same grounds were clubbed and allowed accordingly.

Lack of Familiarity With Income Tax E-Filing Portal: ITAT Condones 66 Days Delay, Restores Trust Registration

Gurudwara Sahib Shaheed BabaDeep Singhji Trust vs CIT

CITATION : 2026 TAXSCAN (ITAT) 192

The Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench, in a matter relating to trust registration, condoned the delay of 66 days. The delay was caused due to the fact that the appellant-assessee was unfamiliar with income tax litigation and the e-filing portal.

The bench, comprising Narendra Prasad Sinha (Accountant) and T.R.Senthil Kumar (Judicial), imposed a cost of INR 5000/- payable by the assessee to the Income Tax Department within two weeks of receipt of copy of order. The tribunal condoned the delay of 66 days. Due to the production of cost payment challan, CIT(E) was instructed to give one more opportunity of hearing.

ITAT Orders Grant of Foreign Tax Credit as per Rule 128, Holds Procedural Lapses Cannot Cause Double Taxation

Aparna Girish Hebbani vs IncomeTax Officer

CITATION : 2026 TAXSCAN (ITAT) 193

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that foreign tax credit (FTC) cannot be denied merely on the ground of delay in filing Form 67, because the taxes were paid abroad and the income was also offered to tax in India. Hence, the appeal was allowed.

Taking note of the fact that the delay was caused due to genuine hardship, the Tribunal directed the Assessing Officer to grant credit for foreign taxes paid by the assessee. Accordingly, the appeal filed by the assessee was allowed.

ITAT Directs Fresh Examination of Alleged Accommodation Entry Addition Based on Investigation Wing Inputs

Oracle Granito Limited vs TheDCIT

CITATION : 2026 TAXSCAN (ITAT) 194

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has remanded a matter back to the Assessing Officer, holding that an addition made solely on the basis of uncorroborated information received from the Investigation Wing cannot be sustained without granting the assessee a proper opportunity of hearing.

The decision, pronounced on 27 January 2026, was rendered by the Bench comprising Sanjay Garg (Judicial Member) and Annapurna Gupta (Accountant Member).

CIT(A)’s Order is Unjust and Unfair: ITAT Restores ₹14.25 Cr Addition u/s 56(2)(viib) After Rejecting DCF Valuation

Income Tax Officer vs M/s.Quetzal Exim Pvt. Ltd.

CITATION : 2026 TAXSCAN (ITAT) 195

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has allowed the Revenue’s appeal and restored an addition of over ₹14.25 crore made under Section 56(2)(viib) of the Income Tax Act, 1961, holding that the fair market value of shares issued at a high premium was not properly substantiated.

The Tribunal set aside the appellate order and restored the addition made by the Assessing Officer. Accordingly, the appeal filed by the Revenue was allowed.

Reimbursement of Expenses Requires Fresh Examination before Treating as International Transaction: ITAT sets aside Transfer Pricing Adjustment

Corporate Worldwide Stay LLP vsAssessment Unit

CITATION : 2026 TAXSCAN (ITAT) 196

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has set aside a transfer pricing adjustment made in a case involving reimbursement of expenses between associated enterprises. The Bench remanded the matter back to the Assessing Officer for fresh adjudication.

The appeal was accordingly allowed for statistical purposes.

ITAT Orders Re-evaluation of S. 14A Disallowances and Foreign Tax Credits for Bank of India, Dismisses Revenue’s Appeal

Bank Of India vs AssistantCommissioner of Income-tax-2

CITATION : 2026 TAXSCAN (ITAT) 197

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that no disallowance under Section 14A of the Income Tax Act, 1961 could be made in respect of exempt income earned from shares and securities held as stock-in-trade. The Tribunal thereby dismissed the Revenue’s appeal and upheld the relief granted by the Commissioner of Income Tax (Appeals).

In conclusion, the Tribunal dismissed the Revenue’s appeal and partly allowed the assessee’s appeal.

Callous Approach by CIT(A) for Summarily Dismissing Appeal: ITAT Restores Appeal Dismissed Over Mere Clerical Error

Jayshree Narendra Amin vs ITO

CITATION : 2026 TAXSCAN (ITAT) 198

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has set aside an order passed by the first appellate authority under the faceless regime, holding that an appeal cannot be dismissed summarily owing to mere clerical error in Form No. 35 without adjudication on merits.

The order was pronounced on January 27, 2026 by a Bench comprising Sanjay Garg (Judicial Member) and Annapurna Gupta (Accountant Member).

ITAT Remands S. 14A Disallowance on Mutual Fund Investments for Fresh Verification, partly allowing Kirloskar Pneumatic’s Appeal

Kirloskar Pneumatic CompanyLimited vs DCIT

CITATION : 2026 TAXSCAN (ITAT) 199

The Pune Bench of the Income Tax Appellate Tribunal (ITAT) has restored the issue of disallowance under Section 14A of theIncome Tax Act, 1961 to the Assessing Officer, partly allowing an appeal by Kirloskar Pneumatic Company Limited.

Accordingly, the appeal was partly allowed and the impugned order was set aside to such extent.

Charitable Trust’s Income Tax Exemption Disallowed by CPC without Prior Intimation: ITAT Restores Matter to AO

Shree Tarak Guru Jain GranthalyaGuru Pushkar Marg Shastri Circle vs DCIT

CITATION : 2026 TAXSCAN (ITAT) 200

The Income Tax Appellate Tribunal(ITAT), Jodhpur Bench, held that denying exemption claimed by charitable trust under Section 11 during processing by the Central Processing Centre (CPC) without issuing prior intimation to the assessee, was not in accordance with law.

In the light of facts and circumstances, the tribunal restored the matter to AO for fresh examination of the claim of exemption under section 11. Accordingly, both the appeals were restored to the file of the Assessing Officer for de novo adjudication.

Agricultural Land is at 2.75 Km from Municipal Limit as per Google Map: ITAT quashes Capital Gain Addition

Anish Vishnoi New Bus StandBaloda Bazar vs Income Tax Officer

CITATION : 2026 TAXSCAN (ITAT) 201

The Raipur Bench of the Income Tax Appellate Tribunal ( ITAT ) has quashed a long-term capital gains addition after holding that the land sold by the assessee was a rural agricultural land situated beyond the prescribed municipal limit. The tribunal relied on Google Map distance and Patwari certification.

It was observed that “once it has been decided that the nature of land is an agricultural land, for which, question does not arise for LTCG, when the entire transaction pertains to agricultural land which is outside the purview of taxation, in such scenario, the issue of receiving ‘on money’ itself becomes academic and ceases relevance.”

ITAT Deletes Additions Made Solely on Basis of Third-Party Information, Grants Relief to Assessee

Priyanka Sandeep Runwal vs Dy.CIT Central Circle-4(1)

CITATION : 2026 TAXSCAN (ITAT) 202

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has deleted additions made solely on third-party information without independent verification by the Assessing Officer, finding it unsustainable in the eyes of law.

Relying upon the Supreme Court precedent in Andaman Timber Industries v. CCE, the Tribunal deleted the additions made in the reassessment proceedings and allowed the appeal filed by the assessee.

Selective Comparison of Expense Heads across AYs Cannot Justify Disallowance without Evidence: ITAT

ITO, Ward-1(3)(4) vs WizcraftEntertainment Agency Private Limited

CITATION : 2026 TAXSCAN (ITAT) 203

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that an Assessing Officer cannot make ad hoc disallowances merely by selectively comparing higher expenses under certain heads across assessment years.

The Tribunal noted that the AO found no defects in the assessee’s supporting documents and did not prove the expenses were bogus or non-business. It held that higher spending alone cannot justify a percentage-based disallowance without evidence, and therefore upheld deletion of the ₹15.77 crore ad hoc addition.

Political Donation Deduction Cannot be Denied on General Presumptions Alone: ITAT allows S. 80GGC Claim

The Assistant Commissioner ofIncome Tax vs Anuj Prakash Gupta

CITATION : 2026 TAXSCAN (ITAT) 204

The Income Tax Appellate Tribunal ( ITAT ), Raipur Bench, has held that deduction claimed for political donations under Section 80GGC of the Income Tax Act, 9161 cannot be denied merely on the basis of general allegations or presumptions arising from third-party investigations.

Since the Assessing Officer failed to bring any proper material establishing that the assessee derived any backdoor benefit or that the donation was a sham, the deletion of the addition by the CIT(A) was upheld.

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