ITAT Weekly Round-up (12 October - 18 October)
A Round-Up of the Income Tax Appellate Tribunal (ITAT) Cases Reported at Taxscan Last Week.
This weekly round-up encapsulates the key stories related to the Income Tax Appellate Tribunal (ITAT) reported at Taxscan during the previous week, from 12 October 2025 to 18 October 2025.
ESOP Discount Allowable as Business Deduction: ITAT affirms Consistent View in Goldman Sachs Case DCIT vs Goldman Sachs (India)Securities Pvt. Ltd CITATION: 2025 TAXSCAN (ITAT) 1871
The Income Tax Appellate Tribunal (ITAT), Mumbai Bench, upheld the order of the Commissioner of Income-tax (Appeals) [CIT(A)], which had allowed the deduction of Employee Stock Option Plan (ESOP) discount costs for the assessment year 2013-14 and dismissed the revenue’s appeal against Goldman Sachs.
The two-member bench of Shri Om Prakash Kant (Accountant Member) and Shri Raj Kumar Chauhan (Judicial Member) following its own previous decision and a judgment of the Bombay High Court in Income Tax Appeal No. 30 of 2017, held that such payments are compensatory in nature, arising from business exigencies, and not penal in character, thus allowable under section 37(1) of the Income Tax Act.
CIT(A) Must Pass Reasoned Order, Cannot Merely Uphold AO's View: ITAT Restores Rs. 1.86 Cr Addition for Fresh Adjudication Shri Nityanand Pandey vs I.T.O CITATION: 2025 TAXSCAN (ITAT) 1872
The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) set aside the orders of both the Commissioner of Income Tax (Appeals) [CIT(A)] and the Assessing Officer (AO) and remitted the matter for fresh reassessment, observing that the CIT(A) failed to pass a reasoned order on the merits of the case as required by Section 250(6) of the Income-tax Act, 1961.
The two-member bench, comprising Sonjoy Sarma (Judicial Member) and Rakesh Mishra (Accountant Member), observed that the CIT(A) had not adjudicated the appeal of the assessee on its merits.
Bogus Loan Entry: ITAT upholds Reopening under Revised Section 147 Jayantilal Rajmal Seth vs DCIT CITATION: 2025 TAXSCAN (ITAT) 1877
The Mumbai bench of Income Tax Appellate Tribunal (ITAT) held that the reopening of assessment based on information from the Investigation Wing regarding a bogus loan entry from M/s Aneri Fincap Ltd. was valid.
The two-member bench comprising Raj Kumar Chauhan (Judicial Member) and Om Prakash Kant Accountant Member) held that there is no substance in the plea that reassessment proceedings are invalid in law.
Difference Between Stamp Duty Value and Purchase Consideration on Flat Within 10% Tolerance Limit u/s 56(2)(x): ITAT Deletes Rs. 3.31 Cr Income Tax Addition Assistant Commissioner Income Tax vs Deluxe Recycling India PrivateLimited CITATION: 2025 TAXSCAN (ITAT) 1876
The Mumbai bench of Income Tax Appellate Tribunal (ITAT) deleted a 3.31 crore addition on the ground that the difference between the stamp duty and the purchase consideration on the flat was within the 10% tolerance limit under Section 56(2)(x) of the Income Tax Act.
The two-member bench of Sandeep Gosain (Judicial Member) and Girish Agrawal (Accountant Member) held that the assessee is eligible for a 10% tolerance limit under Section56(2)(x)(b)(B). Accordingly, the addition made by the AO is deleted.
Real Expenditure on Goods Received Despite Fictitious Invoices: ITAT Restricts Bogus Purchases Disallowance to 25% Income Tax Officer-19(3)(1) vs Salem Steel Industries CITATION: 2025 TAXSCAN (ITAT) 1878
The Mumbai bench of Income Tax Appellate Tribunal ( ITAT ) restricted bogus purchase allowance to 25% on the ground that there was real expenditure on the goods received even though the invoices were fictitious.
The two-member bench comprising Saktijit Dey (Vice President) and Padmavathy S (Accountant Member) held that there is no infirmity in the order of the CIT(A) in restricting the addition to 25% of the alleged bogus purchases.
Inadequate Inquiry into Loan Repayment renders Assessment Erroneous: ITAT upholds Revision Jayantilal Rajmal Seth vs DCIT CITATION: 2025 TAXSCAN (ITAT) 1877
The Mumbai bench of Income Tax Appellate Tribunal (ITAT) upheld the revision under section 263 on the ground that the assessment was erroneous as the AO failed to conduct a sufficient inquiry into the loan repayment by the assessee.
The two-member bench comprising Raj KumarChauhan (Judicial Member) and Om Prakash Kant Accountant Member) held that the assessment order suffers from a clear lack of inquiry into a matter which went to the root of the issue. Therefore, the invocation of the revisional jurisdiction by the Ld. PCIT under clause (a) of Explanation 2 to section 263 of the Act is fully justified.
Rs. 20k Incremental Rent Paid to Related Party Disallowed as Excess u/s 40A(2)(b): ITAT Remits for Documentary Verification Assistant Commissioner of Income Tax-4(1)(1) vs Deluxe Recycling IndiaPrivate Limited CITATION: 2025 TAXSCAN (ITAT) 1879
The Mumbai bench of Income Tax Appellate Tribunal remitted a matter of disallowance of incremental rent paid under Section 40(2)(b) to the related party for documentary verification.
The two-member bench of Sandeep Gosain (Judicial Member) and Girish Agrawal (Accountant Member) held that it was appropriate to remit the matter back to the AO for the limited purpose of verification of documentary evidence, to objectively arrive at any excess payment of rent under Section 40A(2)(b).
Survey Income Offered Prior to Amendment to Be Taxed as Business Income, ₹33 Lakh Surrender not Liable to 60% Tax u/s 115BBE: ITAT M/s Yashudev Enterprises vs DCIT-Circle Mandi Gobindgarh CITATION: 2025 TAXSCAN (ITAT) 1881
The bench of the Income Tax Appellate Tribunal (ITAT), Chandigarh, held that income of ₹33 lakh surrendered during a survey conducted before the introduction of the higher tax rate under Section 115BBE of the Income Tax Act, 1961, could not be subjected to the enhanced 60% rate of taxation. The Tribunal ruled that such income, offered prior to the amendment, must be assessed as normal business income and not as deemed income under Section 115BBE.
ITAT Sustains 8% Gross Profit Estimation on Unaccounted Sales due to Non-Cooperation by Assessee Sarthak Ispat Pvt. Ltd vs Asstt. Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 1883
The Raipur Bench of the Income Tax Appellate Tribunal (ITAT) recently upheld an estimation of 8% gross profit (GP) on unaccounted sales after noting that the assessee had failed to cooperate and substantiate its claims against the concerned Assessing Officer’s computation of undisclosed income.
The two-member Bench of Ravish Sood (Judicial Member) and Arun Khodpia (Accountant Member) sustained the 8% GP estimation on unaccounted sales and dismissed this particular ground raised by the assessee.
“Reason to Believe” Must Rest on Correct Facts: ITAT invalidates Reopening Based on Wrong Assumptions The ITO vs Taj Land Developers and Promoters Pvt. Ltd. CITATION: 2025 TAXSCAN (ITAT) 1887
The Bench of the Income Tax Appellate Tribunal (ITAT), Chandigarh, held that a reassessment initiated on the basis of incorrect facts and without application of mind is invalid in law. The Tribunal dismissed the Revenue’s appeal, thereby upholding the order of the Commissioner of Income Tax (Appeals) [CIT(A)] that had quashed the reassessment proceedings against the taxpayer.
The Bench comprising Rajpal Yadav, Vice President and Manoj Kumar Aggarwal, Accountant Member upheld the CIT(A)’s decision, and confirmed that reassessment proceedings initiated on incorrect and unverified facts are void ab initio under Section 147 of the Income Tax Act, 1961.
Bullion Trader’s Demonetisation Cash Deposits Found Genuine: ITAT Deletes ₹9.24 Crore Addition u/s 68 of the Income Tax Act Kashi Nath Seth Sarraf Private Limited vs ACIT CITATION: 2025 TAXSCAN (ITAT) 1885
The bench of the Income Tax Appellate Tribunal (ITAT), Lucknow, has held that cash deposits made during the demonetisation period, which were duly recorded as cash sales in the assessee’s books of account, cannot be treated as unexplained cash credits under Section 68 of the Income Tax Act, 1961. Accordingly, the Tribunal deleted the addition of ₹9.24 crore made by the Assessing Officer.
With respect to Section 115BBE of the Income Tax Act, the Tribunal observed that the higher tax rate of 60%, introduced by the Taxation Laws (Second Amendment) Act, 2016, was applicable only from Assessment Year 2018-19, however restricted itself to further expound. Therefore, directed the AO to delete the addition.
Purchase of Shares Accepted in Earlier AYs Cannot be Doubted Upon its Sale: ITAT Quashes ₹9.32 Cr Addition Superdeal Resources Pvt. Ltd vs ITO, Wad 5(1) CITATION: 2025 TAXSCAN (ITAT) 1886
The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) held that investments accepted as genuine in earlier scrutiny assessments cannot be doubted when the shares are subsequently sold and deleted the addition.
The two-member bench comprising Rajesh Kumar (Accountant Member) and Pradip Kumar Choubey (Judicial Member) relied on its co-ordinate bench decision in the case of ACIT Vs Pawanputra Advertising Private Limited and the High Court decision in the case of PCIT Vs. Tulsyan and Sons Private Limited, directing the AO to delete the addition of ₹9,32,00,000. The appeal of the assessee was allowed.
Non-Prosecution not Grounds to Dismiss Income Tax Appeal: ITAT Quashes Ex-Parte CIT(A) OrderSarthak Ispat Pvt. Ltd vs Asstt. Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 1883
The Raipur Bench of the Income Tax Appellate Tribunal (ITAT) recently clarified that failure by an assessee to appear following the institution of prosecution is not a valid ground for the Commissioner of Income Tax (Appeals) ( CIT(A) ) to dismiss an income tax appeal.
The two-member Bench of Ravish Sood (Judicial Member) and Arun Khodpia (Accountant Member) examined the statutory duties imparted on the CIT(A) under Sections 250 and 251 and observed that the order of the CIT(A) was centrally premised on absence rather than on a reasoned appraisal of the record and therefore set aside the ex-parte order relying on the decision of the Bombay High Court in the case of CIT vs. Premkumar Arjundas Luthra (HUF) (2016).
The Raipur Bench of the Income Tax Appellate Tribunal (ITAT) quashed ₹12.34 Lakh addition made by the Assessing Officer (AO) and held that action beyond scope of limited scrutiny was invalid.
The Single Member Bench comprising Partha Sarathi Chaudhury (Judicial Member) observed that the AO's action was without valid jurisdiction. It also held that in the absence of any valid inherent jurisdiction, the addition made by the AO is perverse, arbitrary, and bad in law. The tribunal set aside the CIT(A)'s order and directed the AO to delete the addition. The appeal of the assessee was allowed.
Ignored Evidence and Incorrect Loan Amount: ITAT Quashes ₹74 Lakh Unexplained Investment Addition Gangady Venkatram Reddy vs ITO CITATION: 2025 TAXSCAN (ITAT) 1888
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) remitted the matter back to the Assessing Officer (AO) for fresh examination, noting that the AO passed the order without considering documentary evidence submitted by the assessee and may have added an incorrect loan amount as unexplained investment.
In the interest of natural justice and fair play, the tribunal remitted the appeal back to the AO with a direction to examine the issue on merits, considering all details furnished and calling for any further required details. The appeal of the assessee was allowed for statistical purposes.
Non-Faceless Income Tax Reassessment Notices u/s 148 are Invalid: ITAT Thangamuthu Balakrishnan vs ITO CITATION: 2025 TAXSCAN (ITAT) 1880
The bench of the Income Tax Appellate Tribunal, Chennai, ruled that any reassessment notice issued by a Jurisdictional Assessing Officer (AO) after the introduction of the faceless regime is invalid in law. Emphasising on the binding nature of the CBDT’s e-Assessment of Income Scheme, 2022, the Tribunal held that the issuance of notices under Section 148 of the Income Tax Act, 1961, must mandatorily follow the faceless procedure, and any deviation from it renders the reassessment proceedings void.
The Bench comprising of Judicial Member, S.S. Viswanethra Ravi and Accountant Member, S.R. Raghunatha clarified that the rights of the parties would remain open, with liberty to the Revenue to revive the appeal if the Supreme Court subsequently reverses the Hexaware Technologies Ltd. (2025) decision.
Accordingly, the appeal was allowed in favour of the assessee.
Salary Earned for Services Rendered in the U.S. Not Taxable in India: ITAT directs AO to Verify TRC and Grant DTAA Relief Prakash Raman vs Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 1882
The Bench of the Income Tax Appellate Tribunal (ITAT), Chennai, held that salary earned for services rendered abroad is not taxable in India if the assessee is a non-resident, eligible for relief under the India-U.S. Double Taxation Avoidance Agreement (DTAA). The Tribunal directed the Assessing Officer to verify the Tax Residency Certificate (TRC) and, upon confirmation, grant relief under Article 16(1) read with Section 90 of the Income Tax Act, 1961.
The Bench comprising of Judicial Member, Manu Kumar Giri and Accountant Member, Jagadish remanded the matter to the AO for verification with the direction that if, upon verification, the AO finds the TRC, relief under Section 90 read with Article 16(1) of the India-U.S. DTAA must be granted, and the salary income of ₹1,31,04,562 should be excluded from taxable income in India.
Once Assessee Discharges Onus u/s 68, Burden of Proof Shifts to Revenue: ITAT rules Double Taxation Unsustainable in Steel Manufacturer’s Case Deputy Commissioner of Income Tax vs Balajee Loha Pvt. Ltd CITATION: 2025 TAXSCAN (ITAT) 1906
The bench of the Income Tax Appellate Tribunal, Raipur, held that once the assessee had discharged the primary onus under Section 68 of the Income Tax Act, 1961, by furnishing documentary evidence to establish the identity, creditworthiness, and genuineness of the share applicants, the Assessing Officer (AO) was obligated to conduct independent verification before drawing any adverse inference. Therefore, the ITAT deleted the addition of ₹11,54,65,000 made under Section 68 on account of unexplained share capital and premium.
The Bench comprising of Ravish Sood, Judicial Member and Arun Khodpia, Accountant Member observed that the AO’s addition of ₹11.54 crore was based on general assumptions about money-laundering practices without any specific evidence linking the transactions to unexplained income.
Lack of Proof and Documentation for Sub-Contractor Payments: ITAT upholds 20% Disallowance on Expenditure Payments Deputy Commissioner of Income Tax vs Sanjay Gulabrai Kundalia JamnagarKhambhaliya Highway CITATION: 2025 TAXSCAN (ITAT) 1891
The Rajkot Bench of the Income Tax Appellate Tribunal (ITAT) upheld the decision of the Commissioner of Income Tax (Appeals) [CIT(A)] to sustain a 20% adhoc disallowance of direct expenditure for Assessment Year (AY) 2016-17, noting the assessee's failure to fully prove the genuineness of the expenditure claimed.
The Tribunal held that while contracts can be executed with hired vehicles and machinery, there needs to be proper documentation, which the assessee lacked. Observing the inherent defects in the documents and explanations, the Tribunal found no infirmity in the CIT(A)'s conclusion to restrict the disallowance to 20% of the expenditure.
Order Not Invalid Merely Because Passed in Deceased’s Name: ITAT Restores Matter for Fresh Adjudication Late Shri Lakha Singh vs The ITO CITATION: 2025 TAXSCAN (ITAT) 1902
The Bench of the Income Tax Appellate Tribunal, Chandigarh, held that an appellate order cannot be declared invalid merely because it was passed in the name of a deceased assessee, where the appeal itself had been filed under the deceased’s name. However, observing that the Commissioner of Income Tax (Appeals) [CIT(A)] failed to admit additional evidence and did not adjudicate key legal issues, the Tribunal remanded the matter for fresh adjudication.
The Bench comprising Judicial Member, Laliet Kumar and Accountant Member, Manoj Kumar Aggarwal observed that grounds such as the validity of reassessment and service of statutory notice had not been adjudicated, rendering the appellate order incomplete. Thus, the appeal was allowed for statistical purposes.
Solicited Donations Still Voluntary in Nature: ITAT allows Corpus Contributions to Rohilkhand Educational Charitable Trust Rohilkhand Educational Charitable Trust vs DCIT CITATION: 2025 TAXSCAN (ITAT) 1904
The Bench of the Income Tax Appellate Tribunal, Lucknow, has ruled that corpus donations made voluntarily by donors cannot be disallowed merely because the charitable trust solicited them, so long as the donors have specifically earmarked the contributions towards the corpus.
The Bench comprising of Sudhanshu Srivastava, Judicial Member and Nikhil Choudhary, Accountant Member held that corpus donations made by donors, even if solicited, remain voluntary contributions when the donor specifically designates them towards the corpus fund of the trust. Accordingly, it was held that solicited donations earmarked for corpus purposes are voluntary in nature and eligible for exemption under Section 11(1)(d) of the Income Tax Act, 1961.
Tax on Rental Income of Vacant Flat Limited to Municipal Value: ITAT restricts ₹5,026 as Rental Income Ravi K Sheth vs Deputy Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 1903
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) restricted the rental income ₹5,026 and directed the Assessing Officer (AO) to restrict the addition of deemed rental income to the municipal valuation.
The two-member bench comprising Sandeep Gosain (Judicial Member) and Girish Agrawal (Accountant Member) deleted the excessive addition made by the AO respectfully following the jurisdictional High Court and its own binding precedent. The tribunal directed that the income from house property for Flat No. 12B be restricted to ₹5,026 (the municipal valuation for 10 months). The appeal of the assessee was partly allowed.
CIT(A) Restricts Addition on Alleged Bogus Transactions to 5% Instead of 100%: ITAT Orders De Novo Adjudication on Revenue’s AppealIncome Tax Officer vs Kartik Gunwantrai Shah CITATION: 2025 TAXSCAN (ITAT) 1898
The Mumbai Bench of the Income Tax Appellate Tribunal ( ITAT ), with respect to the case involving alleged bogus purchase transactions, has set aside the order of the Commissioner (Appeals) and remanded the matter back to the Assessing Officer (AO) for de novo adjudication.
The Bench comprising Shri Narendra Kumar Billaiya (Accountant Member) and Shri Sandeep Singh Karhail (Judicial Member) said that “in the interest of justice and fair play,” the assessee should not be deprived of a reasonable chance to support its claim on merits. Therefore, CIT(A)’s order was set aside and the matter was remanded back to the Jurisdictional Assessing Officer for de novo adjudication.
Restored Registration Entitles Charitable Trust to Tax Benefits: ITATRohilkhand Educational Charitable Trust vs DCIT CITATION: 2025 TAXSCAN (ITAT) 1904
The bench of the Income Tax Appellate Tribunal (ITAT), Lucknow, has held that once the registration of a charitable trust under Section 12A of the Income Tax Act, 1961, is restored, the trust becomes entitled to claim exemption benefits under Sections 11, 12, and 13 of the Act.
The Bench comprising of Sudhanshu Srivastava, Judicial Member and Nikhil Choudhary, Accountant Member held that since the registration under Section 12A had been restored by the ITAT and not reversed by any superior court, the trust’s income must be assessed under the special provisions of Sections 11, 12, and 13 of the Income Tax Act, 1961.
Continuous Non-compliance of Taxpayer: ITAT Remits S.80P matter with final OpportunityThe Payakaraopeta Women’s Mutually Aided Coop Thrift vs ACIT CITATION: 2025 TAXSCAN (ITAT) 1893
The Visakhapatnam Bench Income Tax Appellate Tribunal (ITAT) remitted the matter to the Commissioner of Income Tax (Appeals) [CIT(A)] to provide one final opportunity to the assessee to substantiate its claim under Section 80P of the Income Tax Act, noting the assessee's continuous non-compliance with hearing notices in both the original and first appellate proceedings.
The two-member bench, comprising S. Balakrishnan (Accountant Member) and Sandeep Singh Karhail (Judicial Member) remitted the matter back to the CIT(A) "in the interest of justice" for a final opportunity. The appeal of the assessee was allowed for statistical purposes.
Addition of Rs. 76.10 Lakh on Alleged Bogus Purchases u/s 69C: ITAT Directs Addition at 5% GP on Verified Purchases Savitri Jain vs ITO CITATION: 2025 TAXSCAN (ITAT) 1910
The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) directed that the addition of Rs. 76.10 lakh on alleged bogus purchases under section 69C of Income Tax ACt,1961 be computed at 5% gross profit on verified purchases.
The two member bench comprising Yogesh Kumar U.S (Judicial Member) and Naveen Chandra (Accountant Member), after considering the facts and nature of the business, modified the CIT(A) order and directed the AO to estimate gross profit at 5% on the admitted purchases of Rs. 30,42,821/-. Accordingly, the appeal was allowed partly.
Details for MAT Credit u/s 115JAA Available on Assessment Records: ITAT directs to allow ₹12.94 Lakh Credit Shri Ambika Metaliks Pvt. Ltd vs Asst. Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 1914
The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) directed the Assessing Officer (AO) to allow Minimum Alternate Tax (MAT) Credit amounted to ₹12.94 lakh under section 115JAA of the Income Tax Act stating that all requisite details were available on assessment records.
The two-member bench, comprising Duvvuru RL Reddy (Vice President) and Rajesh Kumar (Accountant Member), observing that all necessary information regarding the Minimum Alternate Tax (MAT) credit was already present in the assessment records, directed the Assessing Officer (AO) to allow the assessee's claim for MAT credit under Section 115JAA of the Income Tax Act.
Cash Deposits of ₹30.65 Lakh During Demonetization Claimed as Gift from Deceased Grandmother: ITAT Deletes Addition u/s 69A Priyanka vs ITO CITATION: 2025 TAXSCAN (ITAT) 1911
The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) deleted the addition of ₹30.65 lakh, deposited during demonetization and claimed as a gift from the deceased grandmother, under Section 69A of Income Tax Act,1961.
A single member bench of Mahavir Singh (Vice President) noted that the key issue was the source of the cash deposits, which the assessee claimed to be a gift. The tribunal found the gift to be genuine and supported by sufficient evidence, establishing the creditworthiness and source of the cash deposits. It, therefore, deleted the addition of Rs. 30,65,000 made under Section 69A of the Act.
Regarding the assessment under Section 115BBE, the appellate tribunal referred to the Madras High Court ruling in SMILE Microfinance Ltd. vs. ACIT (W.P. Nos. 2078 & 1742 of 2020, dated 19.11.2024), which held that the provision applied only to transactions on or after April 1, 2017.
Accordingly the appeal was allowed.
TDS on Referral Commission: ITAT Rules S.194D Not Applicable, Deletes Disallowance of Rs. 2.92 Lakh u/s 40(a)(ia)Bhavesh Karamshi Thakkar vs CIT CITATION: 2025 TAXSCAN (ITAT) 1909
The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) deleted a Tax Deducted at Source (TDS) related disallowance of Rs. 2.92 lakh made under section 40(a)(ia) of Income Tax Act,1961 in respect of referral commission payments of Rs. 13.90 lakh made to five individuals without deducting tax.
The two member bench comprising Saktijit Dey (Vice President) and N.K Billaiya (Accountant Member concluded that the payments did not fall under section 194D. Even if covered under sections 194H or 194C, the provisions were inapplicable as the assessee was an individual and receipts were below the threshold. Therefore, the disallowance under section 40(a)(ia) was unsustainable, and the AO was directed to delete it.
Buyer’s TDS Error on Joint Ancestral Property Won’t Deny Father Full Credit: ITATNanasaheb Bhagawan Sasar vs Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 1826
The Income Tax Appellate Tribunal (ITAT) Pune Bench has set a significant precedent in regard to TDS credits on the sale of jointly held ancestral land, addressing a frequently encountered procedural lapse that threatens to burden taxpayers unfairly.
The bench composed of R.K. Panda, Vice President, and Astha Chandra, Judicial Member, concluded that the Revenue cannot enrich itself at the cost of the assessee due to a procedural error by the buyer. They held that, in the absence of any contrary material from the Revenue, the full TDS credited in Form 26AS should be allowed to the assessee since the son had declared and paid taxes on his share but not claimed any TDS.
ITAT Allows Full Rs. 8.55 Lakh Commission Paid by CA to Referral Agents, Holding Ad Hoc 30% Disallowance UnsustainableBhavesh Karamshi Thakkar vs Dy. CIT CITATION: 2025 TAXSCAN (ITAT) 1909
The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) allowed the full Rs. 8.55 lakh commission paid by a Chartered Accountant (CA) to 14 referral agents for identifying potential insurance customers, holding that the ad hoc 30% disallowance by the Assessing Officer (AO) was unsustainable.
The two member bench comprising Saktijit Dey (Vice President) and N.K Billaiya (Accountant Member) noted that the assessee had paid Rs.28,59,093/- to 14 individuals for identifying potential insurance customers, and there was no dispute about these payments. Despite this, the AO disallowed 30% of the commission on an adhoc basis, without any explanation for the rate chosen. The tribunal held that such disallowance was unjustified and allowed the ground.
Income Already Taxed in Share Applicant Companies: ITAT Deletes ₹190 Crore Share Capital Addition citing Double TaxationACIT vs Double Plus Software Pvt. Ltd CITATION: 2025 TAXSCAN (ITAT) 1915
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT), in a third-member reference, deleted an addition of ₹190 Crore made under Section 68 of the Income Tax Act, 1961, holding that once the disputed amount had already been added in the hands of the share applicant companies, the same income cannot be taxed again in the hands of the assessee company.
The Tribunal's original bench comprising Madhumita Roy (Judicial Member) and Brajesh Kumar Singh (Accountant Member), facing a difference of opinion whereas the judicial member upheld the CIT(A)’s order while the accountant member differed with the view of revenue’s appeal dismissal. The matter was referred to a Third Member- Mahavir Singh (Vice President). Respectfully adhering to the judicial precedents on the doctrine of double taxation, the Tribunal set aside the AO’s order and directed the deletion of the ₹190 Crore addition. The Revenue’s appeal was dismissed.
ITAT Deletes Addition of Rs. 5,30,252, Holds Agricultural Income cannot be Determined on Assumptions Mr. Sanjay Deokisan Lakhotiya vs Deputy Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 1908
The Nagpur Bench of Income Tax Appellate Tribunal ( ITAT ) deleted an addition of Rs. 5,30,252 made by the Assessing Officer (AO), holding that agricultural income could not be determined based on assumptions.
A single member bench Narender Kumar Choudhry (Judicial Member) noted that the appellant had submitted comprehensive evidence, including details of agricultural income and expenditure, land holding documents, land revenue receipts, extracts of 7/12, sale receipts for grains and oranges, a letter from the Taluka Agriculture Officer, Chandur Bazar specifying orange production of 10 to 17 metric tonnes per hectare, a report dated 03.06.2016 from the Taluka Agriculture Officer, and statements from local agriculturists to support his claim.
The tribunal held that the AO had ignored this evidence and based his addition on mere assumptions. It further recognized that agricultural production could not be assessed through a fixed formula, as it depended on factors like seed quality, soil, weather, irrigation, and care. In view of these factors, the ITAT deleted the addition. Accordingly, the appeal was allowed.
Cash Received from Members of Society is Source of deposit: ITAT Remits ₹29.46 Lakh Matter for filing Evidences Dahisar Gramin Bigar Sheti Sahakari Pat Sanstha Maryadit vs ACIT CITATION: 2025 TAXSCAN (ITAT) 1913
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) remitted the issue of an addition of ₹29,46,500/- under Section 69A read with Section 115BBE of the Act, which was made on account of cash deposited in bank accounts during the demonetization period (AY 2017-18).
The two-member bench comprising Pawan Singh (Judicial Member) observed the peculiar facts of the case, especially the contention that the addition was confirmed due to the lack of submission and evidence of the source of funds. The matter was restored back to the file of the AO with a direction to allow a fair and reasonable opportunity to the assessee before passing a fresh assessment order.
Credit Card Payments Treated as Unexplained Investment u/s 69C:ITAT Deletes ₹21.69 Lakh Addition Mahendra Prakash Pawar vs Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 1907
The Pune Bench of Income Tax Appellate Tribunal ( ITAT ) deleted the addition of ₹21.69 lakh treating credit card payments as unexplained investment under section 69C of Income Tax Act,1961.
A single member bench Manish Borad (Accountant Member) heard the rival contentions and reviewed the records. Consequently, the impugned addition was deleted, the CIT(A) order was set aside, and the appeal was allowed.
Charter Hire Charges Disputed as Royalty Instead of Presumptive Income: ITAT Restores Matter to DRP for Fresh Directions Celestial Limited Vision vs Assistant Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 1912
The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) restored the matter to the Dispute Resolution Panel (DRP) for fresh directions in a case where charter hire charges were treated as royalty instead of presumptive income under section 44BB of Income Tax Act,1961.
In the interest of justice, the tribunal restored the matter to the DRP, directing it to examine all issues raised by the assessee and issue fresh directions to the AO through a speaking order, after giving the assessee an opportunity to be heard.
Assessment Framed Without Jurisdictional Notice u/s 143(2) Invalid: ITATSurya Agro products Pvt. ltd vs Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 1916
The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) held that the assessment framed by the Assessing Officer (AO) was invalid and a nullity because the jurisdictional notice under Section 143(2) of the Income Tax Act was not issued by the AO who finally completed the assessment.
The Tribunal, comprising Rajesh Kumar (Accountant Member) and Pradip Kumar Choubey (Judicial Member), quashed the assessment framed by the AO on the ground of lack of jurisdiction. The appeal of the assessee was thus allowed.
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