ITAT Weekly Round-Up

This weekly round-up analytically summarises the key stories related to the Income Tax Appellate Tribunal (ITAT) reported at Taxscan during the previous week, from 5th October 2025 to 11th October 2025.

Sale of Trust Property to Trustee Below Market Value: ITAT Grants S.11 Exemption after Full Payment

Dr. Kondabolu Basavapunaiah& Dr. Lakshmi Prasad Trust vs Income Tax Officer – Exemption Ward CITATION : 2025 TAXSCAN (ITAT) 1769

The Visakhapatnam Bench of Income Tax Appellate Tribunal ( ITAT ) granted exemption under section 11 of Income Tax Act,1961 to a charitable trust for the sale of property to a trustee initially below market value, after the full market price was ultimately paid.

It held that the CIT(A) erred in denying exemption under section 11, directed the AO to grant the exemption, and allowed the grounds raised by the trust. The tribunal observed that the additional ground of appeal became academic.

Deduction u/s 80JJAA Disallowed for Non-Filing of Form 10DA: ITAT Restores Matter to AO, Treating Lapse as Technical

Akshar Elecinfra Pvt. Ltd. vsThe Deputy Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1770

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) restored the matter to the Assessing Officer (AO), treating the disallowance of deduction under section 80JJAA of Income Tax Act,1961, for non-filing of Form 10DA as a technical lapse.

The two member bench comprising Dr.B.R.R. Kumar (Vice President) and Siddhartha Nautiyal (Judicial Member) considered the submissions and examined the record. It found that the claim under section 80JJAA related to the continuation of deductions already allowed in the preceding two years, for which Form 10DA had been filed.

Cash Deposits Linked to Wife’s Agricultural Land Sale Beyond 8 Km of Municipality, Assessee Claims Not Taxable: ITAT Orders De Novo Adjudication

Rameshwar Dayal vs Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1771

The Income Tax Appellate Tribunal (ITAT), Agra Bench, remanded the matter of cash deposit addition of Rs. 10.05L linked to sale of agricultural land of wife of Ex - Army man for fresh adjudication, where he claims that the land is beyond 8 km of municipality and cannot be subject to capital gain tax.

The bench of M. Balaganesh ( Accountant member) observed that the NFAC had overlooked the evidence furnished and wrongly held that no supporting documents were filed.

Undisclosed Jewellery & Diary Expenses: ITAT Sets Aside Additions, Holds Family Inheritance and Household Withdrawals Sufficient to Explain Sources

Vinay Dugar vs The ACIT CITATION : 2025 TAXSCAN (ITAT) 1773

The Jaipur bench of the Income Tax Appellate Tribunal (ITAT) had set aside Income Tax additions of ₹41.48L under Section 69A and diary additions under section 69C and upheld the family source explanation by the assessee.

The two-member bench of Gagan Goyal (Accountant Member) and Dr S. Seethalakshmi (Judicial Member), based on the findings, held that additions made under Income Tax Sections 69A and 69C were to be deleted and upheld the family source explanation.

Denial of Shri Shirdi Sai Baba Trust Registration due to Lapse of Earlier Counsel: ITAT remands Matter

SHRIDI SAI BABA SUMANGALAMSANSTHA vs CIT CITATION : 2025 TAXSCAN (ITAT) 1774

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has remitted back the matter concerning Shri Shirdi Sai Baba Sumangalam Sanstha, Faridabad, after the Commissioner of Income Tax (Exemption) [CIT(E)], Chandigarh rejected its application for registration under Section 12A of the Income Tax Act, 1961.

The Bench comprising Shri Shamim Yahya (Accountant Member) and Shri Anubhav Sharma (Judicial Member) observed that in the interest of justice, the assessee should be given another opportunity to present its case. The Tribunal noted that the rejection by the CIT(E) was made without proper representation from the assessee and hence warranted a fresh hearing.

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Entire Receipts of Trust cannot be Taxed Solely on Filing of Wrong ITR: ITAT directs to Delete Additions

Society For Creation of Opportunities vs Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1777

In the case of the assessee Society for Creation of Opportunities through Proficiency in English, the AO raised a tax demand of ₹6,51,13,960/- by disallowing the exemption claimed under Section 10(23C)(iiiab) of the Income Tax Act, 1961. The cause for this disallowance was the assessee's failure to file its return in the correct statutory form.

The two-member bench of Annapurna Gupta (Accountant Member) and Siddhartha Nautiyal ( Judicial Member) held that the exemption under Section 10(23C)(iiiab) ought to have been allowed to the assessee.

Denial of Registration u/s 80G: ITAT remands Matter to CIT(E) for Fresh Adjudication on Misinterpretation of Trust Objects and 5% Limit u/s 80G(5B)

Prayatna Charitable Trust vs Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1778

The Ahmedabad bench of Income Tax Appellate Tribunal (ITAT) has set aside the denial of 80G registration, remanding the matter to the CIT(E) for fresh adjudication. The trust’s objects were misinterpreted as religious, whereas they pertained to educational and spiritual activities. It observed that the CIT(E) failed to properly consider the 5% expenditure limit on incidental religious activities under section 80G(5B).

The two-member bench of Annapurna Gupta (Accountant Member) and Siddhartha Nautiyal (Judicial Member) set aside the impugned order passed by the CIT(E) and restored the matter for fresh adjudication.

Trusts Claims Events Like Annadaanam and Pongala were Social-Cultural Gatherings Not Purely Religious: ITAT Directs CIT(E) to Recompute Expenditure

Shree Narayan Cultural Mission vs The CIT(Exemption) CITATION : 2025 TAXSCAN (ITAT) 1779

The Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench, while noting that the trusts claims on events like annadanam and pongala were Social-Cultural gatherings and not purely religious, directed the Commissioner of Income Tax [CIT(E)] to recompute the expenditure for S. 80G purposes.

The Tribunal held that events like Annadaanam and Pongala were not to be automatically categorized as religious, as they also carried strong social and cultural dimensions. Since the trust’s explanations were not considered earlier, the ITAT directed the CIT(E) to recompute and re-examine the expenditure, distinguishing clearly between religious, cultural, and administrative outlays.

ITAT Remands ₹2.81 Cr on Long-Term Capital Gains Addition Granting One More Opportunity to Assessee

Shri Rajendra Ganpat Jagtap vs The Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1780

The bench of the Income Tax Appellate Tribunal, Pune, set aside the ex-parte order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [CIT(A)]. The Tribunal remanded the matter to the appellate authority, directing that the assessee be granted one final opportunity to substantiate his claim in relation to disallowance of expenses on improvement of land against long-term capital gains under the Income Tax Act, 1961.

The Bench comprising Vice President, Rama Kanta Panda and Judicial Member, Vinay Bhamore observed that although the CIT(A) granted three opportunities, the assessee neither filed submissions nor sought adjournment, leading to an ex-parte order. The Tribunal, however, accepted the plea that the assessee could not avail the opportunity due to technical and procedural reasons.

ITAT Dismisses Penalty Appeal as Withdrawn After Opting for Vivad Se Vishwas Scheme

Shri Rakesh Kumar vs The IncomeTax Officer CITATION : 2025 TAXSCAN (ITAT) 1781

The bench of the Income Tax Appellate Tribunal, Raipur, dismissed an appeal concerning penalty under Section 271(1)(b) of the Income Tax Act, 1961. The dismissal followed the appellant’s decision to opt for resolution under the Direct Tax Vivad Se Vishwas Scheme, 2024.

The Bench comprising of Judicial Member, Ravish Sood and Accountant Member, Arun Khodpia ruled that since the appellant had initiated the process of settling the tax dispute through the Direct Tax Vivad Se Vishwas Scheme, the appeal no longer required adjudication on merits.

Contradictory Approach of AO Invalidates S.154 Jurisdiction: ITAT Deletes ₹2.06 Crore Expense Disallowance in Property Developer's Income Tax Appeal

Dosti Realty Limited vs The Dy.CIT, Circle 1(1)(1) CITATION : 2025 TAXSCAN (ITAT) 1782

The bench of the Income Tax Appellate Tribunal, Mumbai, has held that disallowance of ₹2.06 crore under Section 154 of the Income Tax Act, 1961, was unsustainable, as the provision for expenses represented a crystallised liability of the relevant financial year. The Tribunal ruled that the Assessing Officer had exceeded his jurisdiction in invoking rectification powers under Section 154 for such an issue.

The Bench comprising of Saktijit Dey, Vice President and Girish Agrawal, Accountant Member observed that the AO had himself concluded that allowance of the expenses had resulted in under-assessment, which falls within the scope of reassessment under Section 147, not rectification under Section 154. Thus, held that the invocation of Section 154 jurisdiction was invalid.

₹22.01L Cash Deposits from Agricultural Land Sale: ITAT Restores Matter to AO on Ignored Affidavits and Sale Deeds

Jay Singh vs ITO CITATION : 2025 TAXSCAN (ITAT) 1783

The Agra bench of Income Tax Appellate Tribunal (ITAT) has restored the matter to the AO for fresh adjudication as the CIT(A) ignored affidavits on ₹22.01L cash deposits and the sale deed of the agricultural land of the farmer-assessee.

The Tribunal had observed that the CIT(A) ought to have either verified the circle rates of the agricultural land from the office of the land registering authority to arrive at the correct value of the land, or should have made third-party verification regarding the value of rates of land in the vicinity or neighbourhood, instead of outrightly rejecting the additional evidence filed by the assessee.

Invalid Reopening on Old Loan Balances: ITAT quashes Reopening Based on Balance Sheet Suspicion and Pre-Commencement Loans

M/s. J K V Stonex vs The ITO CITATION : 2025 TAXSCAN (ITAT) 1784

The Jaipur bench of the Income Tax Appellate Tribunal quashed the reopening based on suspicions raised by the balance sheet and old loans. The Tribunal noted that the assessee had not commenced business during the year and that the loans were received through banking channels from identifiable individuals.

The two-membered bench of Rathod Kamlesh Jayantbhai (Accountant Member) and Dr S. Seethalakshmi (Judicial Member) observed that the assessee had not started the business activity; therefore, in view of the Delhi High Court decision in the case of Alankar Promoters LLP VS. ITO, reassessment proceedings under section 68 cannot be justified in the case of the assessee firm. And the Tribunal held that the re-assessment proceedings are not justified in this case, and the appeal of the assessee was allowed.

Technical dismissal of Appeal by FAA for ₹1.42Cr Loss Set-off Claim: ITAT restores to AO for Denovo Adjudication

M/s. Capital Fortunes Pvt. Ltdvs Dy. Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1785

The Hyderabad Bench of the Income Tax Appellate Tribunal (ITAT) set aside the First Appellate Authority’s (FAA) technical dismissal of appeal regarding disallowance of losses of ₹1.42 crore set off claim and restored the matter to the Assessing Officer (AO) for de novo adjudication.

The two member bench of Shri Vijay Pal Rao and Shri Madhusudan Sawdia held that the FAA erred by refusing to examine merits. Further observed that the approach of the First Appellate Authority is not in accordance with the settled principle that genuine claims of the assessee should not be rejected merely on technicalities.

Relief to LIC Mutual Fund: ITAT Sets Aside PCIT's Section 263 Order for Non-speaking Order

LIC Mutual Fund Asset Management Limited vs DCIT-1(2)(1) CITATION : 2025 TAXSCAN (ITAT) 1786

In a ruling in favour of LIC Mutual Fund, the Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) set aside the Principal Commissioner of Income Tax (PCIT)'s revision order under Section 263 of the Income Tax Act, 1961 holding it a "non-speaking order" that failed to address the assessee's detailed rebuttals.

The tribunal viewed that the matter be remitted to the file of the PCIT to allow him to consider the submissions so made by the assessee and pass a speaking order as per law after allowing reasonable opportunity to the assessee.

"Operator and Maintainer" of Infrastructure Eligible for Tax Sops: ITAT Rules in Favour of Mundra

Mundra International Container Terminal Private Limited vs DCIT, Circle 2(1)(1) CITATION : 2025 TAXSCAN (ITAT) 1787

The Income Tax Appellate Tribunal (ITAT) Ahmedabad Bench held that a company which operates and maintains an infrastructure facility is eligible to claim a tax deduction under Section 80-IA of the Income-tax Act, 1961. The decision provides clarity on the scope of eligible activities for the tax incentive, emphasising that the benefit is not restricted only to the entity that develops the infrastructure.

The tribunal comprising Dr. B.R.R. Kumar (Vice-President) and Siddhartha Nautiyal (Judicial Member) found that Mundra International Container Terminal had entered into a sub-concession agreement with Adani Ports and Special Economic Zone Ltd, which in turn had a concession agreement with the Gujarat Maritime Board.

ITAT gives Relief to Widow, Says Order in Dead Husband's Name can be Fixed

Prasanna Prabhakaran vs Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1788

The Income Tax Appellate Tribunal (ITAT) Ahmedabad Bench held that an assessment order passed in the name of a deceased person is not automatically void. The tribunal decided that such an error is a curable irregularity, providing a major relief to a widow who was contesting a tax demand raised against her late husband.

The ITAT bench comprising Siddhartha Nautiyal (Judicial Member) and Narendra Prasad Sinha (Accountant Member), however, took a different view. It meticulously analysed the sequence of events, noting that the legal proceedings were validly initiated while Mr. Prabhakaran was still alive.

ITAT allows S.36(1)(va) Deduction claimed for Employee’s Contribution towards EPF & ESIC remitted belatedly but before Return Filing Due Date

Shree Shivam Attires Pvt. Ltd vs Assistant Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1789

The Income Tax Appellate Tribunal, Raipur Bench, has allowed the deduction claimed by Shree Shivam Attires Pvt. Ltd. towards employees’ contribution to the Employees’ Provident Fund (EPF) and Employees’ State Insurance Corporation (ESIC) that had been deposited belatedly but before the due date of filing the income tax return under Section 139(1) of the Income Tax Act, 1961.

The Bench comprising Arun Khodpia (Accountant Member) and Ravish Sood (Judicial Member) was hearing the company’s appeal for AY 2018–19 against the order of the National Faceless Appeal Centre (NFAC) confirming disallowance under Section 36(1)(va) read with Section 43B. The disallowance of ₹25.81 lakh had been made on the ground that employees’ contributions were not deposited within the due dates prescribed under the respective welfare statutes.

ITAT Backs PCIT’s Revision; Interest on Bogus Loans Can’t Be Allowed as Deduction

Dhanesh Badarmal Jain vs The Principal Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1790

The Income Tax Appellate Tribunal Ahmedabad Bench upheld an order that directed the disallowance of interest on unsecured loans that were already treated as unexplained. The tribunal stated that when the principal loan amount is added back to income as bogus, the corresponding interest claimed as an expense cannot be permitted as a deduction.

The bench comprising Siddhartha Nautiyal (Judicial Member) and Narendra Prasad Sinha (Accountant Member) found that the PCIT had rightly identified a lapse and a wrong conclusion in the assessment order. The tribunal held that the revision order was legally valid and dismissed the assessee’s appeal.

Disallowance of ₹22.18Cr Manpower Service Payment: ITAT Deletes Addition made on Shapoorji Pallonji and Company on Genuine Payments with TDS

DCIT (CC) vs Shapoorji Pallonjiand Company Pvt. Ltd. CITATION : 2025 TAXSCAN (ITAT) 1791

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) dismissed the Revenue's appeal against the Commissioner of Income Tax (Appeals)'s [CIT(A)] order, which had deleted a disallowance of ₹22.18 crore for manpower services paid by Shapoorji Pallonji and Company Pvt. Ltd. for AY 2012-13. The tribunal held the payments were genuine as they were made through banking channels with proper TDS deduction.

The bench of Justice (Retd.) C V Bhadang and Ms. Padmavathy S held that the AO had erred by relying entirely on the investigation report without conducting an independent inquiry. The tribunal noted that the assessee had provided sufficient documentary evidence to prove the genuineness of the transactions. It relied on the assessee's own case decided by the Bombay High Court, which held that additions cannot be made on suspicion alone.

Non-Speaking Order by CIT(A) on Alleged Suppression of Receipts Remanded for Fresh Adjudication: ITAT

Shri Chanki Ramwani vs TheIncome Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1792

The bench of the Income Tax Appellate Tribunal, Raipur (SMC), has remanded a matter back to the Additional/Joint Commissioner of Income Tax (Appeals) [CIT(A)] after finding that the earlier order confirming an addition for suppressed receipts on alleged suppression of business income was non-speaking.

The assessee had filed an affidavit dated 13.01.2025 regarding non-receipt of the CIT(A)’s order and also submitted admit a reconciliation chart of turnover and TDS credits. However, the Tribunal declined to admit these as additional evidence under Rule 29 of the Income Tax Appellate Tribunal Rules, 1963, but allowed the assessee to produce them before the CIT(A) under Rule 46A during remand proceedings.

Fresh Probe Data Warrants Reassessment but Unjustified 5% Income Addition Fails Scrutiny: ITAT

Pradeep Kumar Agrawal vs IncomeTax Officer CITATION : 2025 TAXSCAN (ITAT) 1793

The Raipur bench of the Income Tax Appellate Tribunal, held that the reopening of assessments for three consecutive years was legally sustainable, based on fresh information from the Investigation Wing pointing towards suspicious transactions. However, restricted the additions made by the Assessing Officer (AO), observing that the estimation of income at 5% of deposits was unjustifiable.

The Bench comprising Judicial Member, Ravish Sood and Accountant Member, Arun Khodpia upheld the validity of reopening under Section 147, noting that the information received from the Investigation Wing was fresh material that the AO could act upon. The Bench held that merely on change of opinion, the action by AO cannot be termed illegal.

ITAT Reduces S.69A Additions on NRI’s Account to ₹63,133 from ₹2.28 Cr

Somnath Bandopadhaya vs ITO CITATION : 2025 TAXSCAN (ITAT) 1794

The bench of the Income Tax Appellate Tribunal, Ahmedabad, has partly allowed an appeal concerning additions made under Section 69A of the Income Tax Act, 1961. The Tribunal ruled that except for an amount of ₹63,133, the assessee had satisfactorily explained the sources of deposits in his NRE/NRI accounts, thereby setting aside the majority of the additions proposed by the Assessing Officer (AO).

The Bench of Dr. B.R.R. Kumar, Vice President and Suchitra Kamble, Judicial Member observed that the remand reports themselves recorded verification of almost all transactions. The only unexplained entry was for ₹63,133/-, while the rest were adequately substantiated through bank statements and supporting documents.

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Income from House Property: ITAT Admits Additional Evidence, Remits Interest Deduction Claim to AO

Shobha Sundar Babu vs Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1795

The Bangalore bench of Income Tax Appellate Tribunal (ITAT) admitted additional evidence and remitted an interest deduction of ₹53.09 lakh claimed under Section 24(b) to the Assessing Officer (AO).

The two member bench comprising Waseem Ahmed (Accountant Member) and Keshav Dubey (Judicial Member) observed that these additional evidences were filed for the first time before the Tribunal, and the AO had no occasion to examine these additional evidences.

Mechanical and Composite Approval u/s 153D amounts to Non-Compliance: ITAT quashes Search Assessments u/s 153A

Ashish Garg vs DCIT CITATION : 2025 TAXSCAN (ITAT) 1796

The Delhi bench of the Income Tax Appellate Tribunal quashed search assessments under Section 153A, as there was non-compliance with the mandatory sanction requirement under Section 153D.

Based on the precedents the two member bench of Anubhav Sharma (Judicial Member) S. Rifaur Rahman (Accountant Member) quashed the entire proceedings initiated under section 153A.

Non-Mention of Agents’ Names on Bills Not Sufficient to Disallow Commission: ITAT Deletes ₹20.4 Lakh Addition

Deputy Commissioner of Income Tax vs Truform Techno Products Private Limited CITATION : 2025 TAXSCAN (ITAT) 1798

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has ruled that the absence of agents’ names on bills alone cannot justify disallowance of commission or brokerage expenditure, particularly when the assessee has provided corroborative evidence to substantiate the payments.

The bench of Sanjay Garg (Judicial member) and Narendra Prasad Sinha (Accountant Member) stated that the assessee had discharged its onus by producing bank records and TDS details to prove the payments. In the absence of any contrary material or inquiry by the AO, the claim could not be disallowed.

POA Cannot Be Treated as Registered Conveyance for Purpose of Transfer u/s 2(47)(v) and Capital Gain u/s 45: ITAT

Shri Ramesh Kumar vs The Assistant Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1799

The Bangalore Bench of the Income Tax Appellate Tribunal ( ITAT ) has clarified that execution of a Power of Attorney (POA) does not, by itself, constitute a “transfer” of immovable property within the meaning of Section 2(47)(v) of the Income-tax Act, 1961, read with Section 53A of the Transfer of Property Act, 1882 (TPA). Thus, capital gains under Section 45 cannot be levied merely on the basis of a POA or related construction activity in the absence of a registered agreement of sale.

The bench of Waseem Ahmed and Soundararajan stated that the Revenue authorities erred in equating the POA with a written contract of sale. Since there was no registered agreement in AY 2012-13, there was no transfer within the meaning of Section 2(47)(v), and consequently, no capital gains could be taxed in that year.

AO rejects Deduction u/s 10AA due to Delaying filing Form 56F: ITAT rules Forms are Directory, cannot take away Rights

Deputy Commissioner of IncomeTax vs Meghmani Limited Liability Partnership CITATION : 2025 TAXSCAN (ITAT) 1800

The Income Tax Appellate Tribunal ( ITAT ) Ahmedabad bench has dismissed the Revenue’s appeal against the allowance of deduction under Section 10AA of the Income-tax Act, 1961 which was rejected due to delay in filing Form 56F.

The Bench observed that the requirement of filing Form 56F, though necessary for verification, is directory in nature and not mandatory in the strict sense. It was noted that in the present case, the delay was not attributable to the assessee, but to systemic faults in the Department’s portal, as evidenced by multiple failed attempts.

AO Treats ₹36.8L from Share Sale as Bogus as Exemption u/s 10(38) : ITAT Upholds CIT(A)’s Deletion, Rules Sale Genuine

ACIT vs MANISH AGARWAL &SONS CITATION : 2025 TAXSCAN (ITAT) 1801

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) upheld the Commissioner of Income Tax(Appeals)[CIT(A)]’s deletion of an addition where the Assessing Officer (AO) had treated ₹36,85,075 exemption under section 10(38) of Income Tax Act,1961, on the sale of shares as bogus, ruling the sale genuine.

A single member bench comprising of Mahavir Singh (Vice President) examined the submissions and the material on record. It noted that the CIT(A) had carefully considered the issue and found no evidence to suggest that M/s CCL International Limited was involved in penny stock activities or share price manipulation.

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Relief for Titan: ITAT Deletes Rs. 63.18 Crore Transfer Pricing Adjustment, Accepts Product-Mix and Segmental Margin Analysis

Titan Company Ltd vs The Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1802

The Chennai Bench of Income Tax Appellate Tribunal ( ITAT) granted relief to Titan by deleting a Rs. 63.18 crore transfer pricing adjustment, accepting the appellant’s product-mix and segmental margin analysis for Assessment Year(AY) 2014-15.

The two member bench comprising Manu Kumar Giri (Judicial Member) and S.R.Raghunatha (Accountant Member) reviewed the TPO’s order, and found that the TPO had rejected the assessee’s product-mix claims without sufficient data.

Deduction u/s 54F Cannot be Denied for Non-Deposit of Sale Proceeds Before Filing Return: ITAT

Shri Krishnamoorthy Vijayaraghavan vs The Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1803

The Chennai Bench of Income Tax Appellate Tribunal ( ITAT) held that deduction under Section 54F of Income Tax Act,1961, cannot not be denied solely for non-deposit of unutilized sale proceeds before filing the return.

The two member bench comprising George George K (Vice President) and S.R. Raghunatha (Accountant Member) heard both sides and examined the records. It found that the Assessing Officer had denied the deduction under Section 54 only because the assessee had not deposited the unutilized sale proceeds in the Capital Gains Account Scheme before the due date for filing the return. The FAA had upheld this view, stating that details of the new investment were not provided.

Commission Income of Cooperative Society u/s 80P: ITAT Allows Withdrawal of Revenue Appeal as Tax Effect Below Prescribed Limit

Income Tax Officer vs ShaktiMahila Sangh Bahu-Uddeshiya Sahkari Samiti Maryadit CITATION : 2025 TAXSCAN (ITAT) 1804

The Jabalpur Bench of Income Tax Appellate Tribunal (ITAT) allowed withdrawal of Revenue’s appeal in the case concerning commission income of a cooperative society under section 80P of Income Tax Act,1961 as the tax effect was below the prescribed limit.

The two member bench comprising Kul Bharat (Vice President) and Nikhil Choudhary (Accountant Member) considered the matter and noted that the Department had requested withdrawal of the appeal in view of CBDT Circular No. 09/2024 dated 17.09.2024. Since the tax effect was below the prescribed limit, the tribunal allowed the withdrawal of the appeal and dismissed it.

TDS Disallowance u/s 40(a)(ia): ITAT Allows Rs. 23.67L Deduction, Sets Aside First Appellate Order

M/s. Healthware Pvt. Ltd. vs Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1805

The Hyderabad Bench of Income Tax Appellate Tribunal ( ITAT ) allowed a deduction of Rs. 23,67,760 lakh under section 40(a)(ia) of Income Tax Act,1961 for Tax Deducted at Source (TDS) deposited during the year, setting aside the First Appellate Authority’s order.

The two member bench comprising Vijay Pal Rao (Vice President) and Madhusudan Swadia (Accountant Member) considered the submissions and material on record. It noted that the AO, in the scrutiny assessment under section 143(3) dated 05.04.2021, had allowed the deduction of Rs. 23,67,760/- after verifying that it was disallowed in AY 2017-18 and that TDS was deposited during the year under appeal.

Discrepancy Between Purchase Price and Stamp Duty Value of Land u/s 56(2)(x): ITAT Directs AO to Reconsider Using DVO Valuation

Debasis Das vs ITO CITATION : 2025 TAXSCAN (ITAT) 1806

The Kolkata Bench of Income Tax Appellate Tribunal ( ITAT ) sets aside the addition of ₹44,95,500 made under section 56(2)(x) of Income Tax Act,1961, on account of the discrepancy between the purchase price and the stamp duty value of a jointly held property, and directs the Assessing Officer (AO) to reconsider the matter using a fresh valuation from the District Valuation Officer (DVO).

The two member bench comprising Sonjoy Sarma (Judicial Member) and Manjunatha G (Accountant Member) after hearing the parties and reviewing the records and lower authorities’ orders, noted that the assessee and his wife had purchased a plot of land for ₹79,92,000, while the stamp duty authority valued it at ₹1,39,86,000.

Rs 9.30 Lakh Disallowed Due to Clerical Error in Tax Audit Report: ITAT Allows Appeal and Deletes Addition

Henna Industries Pvt Ltd vs The A.D.I.T CITATION : 2025 TAXSCAN (ITAT) 1807

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) allowed the appeal of the assessee and deleted the Rs 9.30 lakh disallowance, that arose due to a clerical error in the Tax Audit Report.

The two member bench comprising Madhumita Roy (Judicial Member) and Naveen Chandra (Accountant Member) considered the submissions and reviewed the relevant records. The assessee had submitted a reconciliation showing that deposits of Rs 57,952, Rs 6,18,078, Rs 81,381, and Rs 1,73,298 were made in April 2022.

Unexplained Deposits of ₹41.02 Lakh Restored to AO: ITAT Cites Illiteracy, Allows Additional Evidence with 5k Costs

Bharatbhai Raghavbhai Jograna vs ITO CITATION : 2025 TAXSCAN (ITAT) 1808

The Ahmedabad bench of Income Tax Appellate Tribunal (ITAT) acknowledged the assessee's illiteracy and restored the assessment involving an unexplained deposit of Rs. 41,02,924 to the Assessing Officer (AO) for fresh consideration.

The two-member bench comprising Siddhartha Nautiyal (Judicial Member) and Narendra Prasad Sinha (Accountant Member) observed the illiteracy of the assessee and the additional evidence presented before the tribunal.

Brokerage Addition of ₹20.30 Lakh by Relying on Rough Jottings Without Corroborative Evidence Unsustainable: ITAT

Divyang Dipakkumar Vyas vs DCIT CITATION : 2025 TAXSCAN (ITAT) 1809

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) deleted the addition of Rs. 20,30,000/- on account of alleged unaccounted brokerage income made by the Assessing Officer (AO), ruling that the addition based solely on rough jottings seized during a search, without any corroborative evidence, was unsustainable.

The bench observed the similarity in the present case no specific transactions, parties, or confirmations were brought on record to establish that the assessee actually received the alleged brokerage income.

Error in Reading Jewellery Sale as Purchase Costs CIT(A); ITAT Orders Fresh Look at Cash Deposit Addition

Nidhiben Mrugeshkumar Shah vsThe ACIT CITATION : 2025 TAXSCAN (ITAT) 1810

The Ahmedabad bench of the Income Tax Appellate Tribunal has set aside an order of the Commissioner of Income Tax (Appeals) after finding that a factual error had crept into the reading of evidence relating to jewellery transactions. The Tribunal directed the matter back to the CIT(A) for fresh adjudication on the addition of cash deposits amounting to Rs. 10,00,100 under section 69A of the Income Tax Act.

The bench, comprising Siddhartha Nautiyal (Judicial Member) and Makarand V. Mahadeokar (Accountant Member), set aside the CIT(A)'s order. It directed the authority to re-adjudicate the matter afresh. The ITAT instructed the CIT(A) to properly consider all the evidence, supply the remand report to Shah for her comments, and then pass a detailed, reasoned order after giving her a fair opportunity to be heard. The tribunal also admitted additional confirmation letters from traders as new evidence for the fresh proceedings. In conclusion, the appeal was allowed for statistical purposes.

Approval u/s 35(1)(ii) For Donee's trust Expired: ITAT Upholds ₹26.25 Lakh Disallowance

Parag Dave vs The Dy. CIT CITATION : 2025 TAXSCAN (ITAT) 1811

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) upheld the disallowance of Rs. 26,25,000 claimed as a deduction u/s 35(1)(ii) of the Income Tax Act, 1961 citing the approval under section 35(1)(ii) for donee’s trust was expired.

The two-member bench, comprising Suchitra Kamble (Judicial Member) and Makarand V. Mahadeokar (Accountant Member) observed that the Shri Arvindo Institute of Applied Scientific Research Trust was earlier approved u/s 35(1)(ii) of the Act, but this approval expired on 31.03.2006.

ITAT Quashes PCIT’s Revision; Cancellation of Land Deal Meant No Taxable Cash Income

Naman Vidyapati Patel vs ThePr.CIT CITATION : 2025 TAXSCAN (ITAT) 1812

The Ahmedabad bench of the Income Tax Appellate Tribunal has set aside the revision order passed by the Principal Commissioner of Income Tax (Central), Ahmedabad under Section 263 of the Income Tax Act, 1961, holding that the cancellation of a land deal meant there was no taxable cash income in the hands of the assessee.

The bench, comprising Sanjay Garg (Judicial Member) and Annapurna Gupta (Accountant Member), allowed the assessee’s appeal and quashed the revision order passed by the PCIT.

No Notice, No Justice: ITAT Sends Homemaker’s Tax Case Back for Fresh Trial

Meenaz Anjum Dayatar vs The ITO CITATION : 2025 TAXSCAN (ITAT) 1813

The Ahmedabad bench of the Income Tax Appellate Tribunal set aside an assessment order against a homemaker and directed the Assessing Officer to conduct a fresh trial after giving her a fair opportunity of hearing. The tribunal observed that the assessee had been denied natural justice as she had not received proper notices and the matter was decided ex parte.

The Bench comprising Siddhartha Nautiyal (Judicial Member) and Makarand Vasant Mahadeokar (Accountant Member) observed that her plea of being unaware of the proceedings due to personal circumstances could not be brushed aside. It therefore restored the matter to the file of the Assessing Officer with directions to decide the case afresh after granting adequate opportunity of hearing and to pass a speaking order in accordance with law. The assessee was also directed to cooperate fully in the proceedings.

Finance Act 2018’s Section 80AC Timely-Filing Requirement Applies Only from AY 2018-19: ITAT allows S.80P Deduction Despite Late ITR

The Dholka Nagaric BachatSahakari Mandali Ltd. vs The Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1814

The Ahmedabad bench of Income Tax Appellate Tribunal (ITAT) held that the deduction under section 80P can be allowed as the amendment to section 80AC came in the year 2018, and it cannot be applied retrospectively.

The tribunal observed that before this amendment, the law did not mandate filing of a return within the prescribed time as a precondition for availing deduction under Section 80P of the Act and held that the deduction under Section 80P(2)(a)(i) cannot be denied to the assessee for AY 2017–18 merely on the ground that the return was not filed within the time prescribed. Accordingly, the disallowance of deduction under Section 80P(2)(a)(i) of the Act of Rs.7,21,430/- was directed to be deleted.

Housing Loan Deduction u/s 80C Disallowed by AO: ITAT Confirms Eligibility of Co-op Credit Society for Deduction

Allavuddin Unmarasab Hurakadli vs National Faceless Assessment Centre CITATION : 2025 TAXSCAN (ITAT) 1815

The Panaji Bench of the Income Tax Appellate Tribunal (ITAT) held that repayment of a housing loan to a cooperative society is qualified for deduction under Section 80C(2)(xviii)(c). ITAT confirmed the eligibility of a cooperative credit society for deduction.

The single bench of Pavan Kumar Gadale (Judicial Member), considering the facts, submissions and certificate referred, held that the assessee is eligible to claim deduction under Section 80Cof the Act towards repayment of housing loan and accordingly directed the assessing officer to delete the disallowance under Section 80C of the Act.

Appeal Filing Delayed by 729 days Due to Death of Counsel and illness: ITAT Condones Delay, Remands LTCG Addition to CIT for Fresh Adjudication

Ms. Rupa Abhay Vyas vs ITO Ward CITATION : 2025 TAXSCAN (ITAT) 1816

The Nagpur bench of Income Tax Appellate Tribunal (ITAT) condoned the delay of 729 days in filing the appeal, holding it to be bona fide and unintentional. The delay was caused by COVID-19disruptions, the death of the previous counsel, and the assessee’s medical condition.

The single bench of Narender Kumar Choudhry (Judicial Member) observed that from the impugned order that the maxim notices for the hearings were issued during the Covid-19 period, except one notice dated 13.03.2023, which remained to be complied with because of the medical reasons stated above and the death of the previous tax Consultant of the assessee. The Tribunal remanded the case to the Commissioner for fresh adjudication in the matter.

Relief for L’Oreal India: ITAT Deletes ₹184.75 Cr Transfer Pricing Adjustment on AMP Expenses Incurred Wholly for India Business

L’Oreal India Private Limited vs DCIT CITATION : 2025 TAXSCAN (ITAT) 1817

L'Oreal India Private Limited (assessee) filed an appeal against the assessment order for AY 2021-22, which was passed in pursuance of the direction of the Dispute Resolution Panel (DRP).

The bench observed that in the absence of any understanding or arrangement for incurring AMP expenses for the brand building of the AE, the provisions of Chapter-X of the Income Tax Act could not be invoked for a transfer pricing adjustment.

Interest on Statutory Deposits Integral to Lending Business, qualifies for Deduction u/s 80P(2)(a)(i): ITAT

Sullia Primary Co-operative Agricultural & Rural Development Bank vs The Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1818

The Bangalore bench of Income Tax Appellate Tribunal (ITAT) held that the Sullia Primary Co-operative Agricultural & Rural Development Bank, the assessee, is eligible for deduction u/s 80P(2)(a)(i), as dealings with nominal or associate members do not violate the principle of mutuality.

The two-member bench of Keshav Dubey (Judicial Member) and Waseem Ahmed (Accountant Member) held that the co-operative society is eligible for deduction under Section 80P(2)(a)(i), as dealings with nominal or associate members do not violate the principle of mutuality.

CIT(Appeals)/NFAC Cannot Dismiss Appeals in Limine without Examining Merits: ITAT

Dilip Tripathi vs The Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1819

The Income Tax Appellate Tribunal ( ITAT ) of Raipur Bench, has held that the Commissioner of Income Tax (Appeals) [CIT(A)]/National Faceless Appeal Centre (NFAC) cannot summarily dismiss an assessee’s appeal in limine without examining the merits of the case.

The bench of Partha Sarathi Chaudhary set aside the NFAC’s order and remanded the matter for de novo adjudication, directing the CIT(A)/NFAC to first decide the issue of condonation of delay and then address the substantive grounds of appeal.

Mere Affidavits of Siblings cannot Substantiate Family Property Settlement Claim : ITAT Grants Final Chance to Justify Deposits

Ms. Fehmida Begum vs Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1820

The Hyderabad Bench of the Income Tax Appellate Tribunal (ITAT), while partly allowing the appeal with regards to the cash deposits, observed that mere affidavits of siblings, without a proper documentary evidence or deed, cannot substantiate family property settlement claims.

The bench Vijay Pal Rao and Madhusudan Sawdia agreed in part that, while it accepted the explanation regarding the ₹14 lakh FDR deposit as fully supported by documents and directed deletion of this addition, it found the claim of family settlement unsubstantiated.

No Income Tax Penalty Leviable u/s 271D as Assessee did not Violate Section 296SS: ITAT Dismisses Appeal by Revenue

DCIT vs Tapadiya Construction Ltd. CITATION : 2025 TAXSCAN (ITAT) 1821

In a new development, the Pune bench of the Income Tax Appellate Tribunal (ITAT) dismissed an appeal filed by DCIT, Aurangabad against an order of CIT (A), Pune pertaining to Assessment Year 2019-20. The bench remarked that there are no grounds for penalty to be levied under Section 271D of the Income Tax Act, 1961.

The Bench, comprising of Vinay Bhamore (Judicial Member) and Manish Borad (Accountant Member) laid out that the Assessing Officer (AO) could not corroborate the diary found during the course of search under Section 132 of the Act by bringing any material or record which could prove beyond reasonable doubt that the amount mentioned in it was received during that year. This ruled out probability of levying penalty under Section 271D of the Act.

Neither Taxpayer's Nor DVO's Valuation Acceptable Due to Inadequacy and Locational Differences: ITAT Restores Matter for Revised Valuation

Jayeshkumar Baldevbhai Patel vs The ITO CITATION : 2025 TAXSCAN (ITAT) 1822

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) restored the issue of long-term capital gains addition of ₹2,01,60,785 to the Assessing Officer (AO) for a revised valuation holding that neither the assessee's nor the Departmental Valuation Officer's (DVO) valuation to be acceptable.

The two-member bench comprising Dr. B.R.R. Kumar (Vice-President) and Siddhartha Nautiyal (Judicial Member) rejected the assessee's report as it did not include any comparable sales instances, with the valuer himself stating only "few comparable sale instances are available" but provided no details.

School Fees Deposited in Bank Account Treated as Unexplained Income: ITAT Remits Matter to AO to Examine Exemption u/s 10(23C)(iiiad)

Shobha Welfare Society vs ITO CITATION : 2025 TAXSCAN (ITAT) 1823

The Bangalore Bench of the Income Tax Appellate Tribunal ( ITAT ) remitted the matter to the Assessing Officer (AO) to examine the exemption under section 10(23C)(iiiad) of Income Tax Act,1961, in relation to school fees deposited in the bank account, which were earlier treated as unexplained income.

The two member bench comprising Keshav Dubey( Judicial Member) and Waseem Ahmed(Accountant Member) noted that the assessee society was a non-profit running “Max Muller High School” for economically weaker students and had failed to represent its case before the lower authorities. The assessee counsel explained that frequent management changes had caused the non-representation.

Sugar Company Claims Rs. 14.45 Lakh Interest on FDs against Pre-Operative Expenses: ITAT Allows Set-Off

Shirguppi Sugar Works Limited vs ITO CITATION : 2025 TAXSCAN (ITAT) 1824

The Panaji Bench of Income Tax Appellate Tribunal ( ITAT ) allowed a set-off of Rs. 14.45 lakh interest earned on fixeddeposits (FD) by the assessee against pre-operative expenses.

A single member bench of Pavan Kumar Gadale (Judicial Member) examined the submissions and records. The assessee counsel argued that the CIT(A) erred in upholding the AO’s order and overlooked the appellant’s explanations. Ground no. 3, relating to weighment charges, was not pressed and was treated as withdrawn.

AO Disallows ₹1.75 Crore Donation u/s 35AC: ITAT Allows Deduction, Citing Valid Approval at Time of Donation

NND Ambernath LLP vs ACIT CITATION : 2025 TAXSCAN (ITAT) 1825

The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) allowed a deduction of ₹1.75 crore under section 35AC of Income Tax Act,1961, for a donation to the School of Human Genetics and Population Health, citing a valid approval at the time of donation, which was earlier disallowed by the Assessing Officer (AO).

The Bench held that the subsequent cancellation of SHG&PH’s registration by the Central Board of Direct Taxes (CBDT) on 15/09/2016, even with retrospective effect, did not invalidate the deduction. The Explanation to section 35(1)(ii) clarified that deduction cannot be denied merely because approval was withdrawn after the donation.

ITAT Grants Full TDS Credit of Rs. 13 Lakh on Jointly Held Ancestral Property Sale Following Deductor’s Procedural Error

Nanasaheb Bhagawan Sasar vs Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1826

The Pune Bench of Income Tax Appellate Tribunal ( ITAT ) grants full Tax Deducted at Source ( TDS) credit of Rs. 13 lakh to the assessee on the sale of jointly held ancestral property following the deductor’s procedural error.

The two member bench comprising R.K Panda (Vice President) and Astha Chandra (Judicial Member) considered the submissions of the parties and reviewed the material on record, including the paper book filed by the assessee. It was undisputed that the sold property was jointly held by the assessee and his son, Mr. Amit Sasar, and each received Rs. 6,50,00,000/- from the total consideration of Rs. 13,00,00,000/-.

Delay of 3 Years 5 Months for Filing Appeal: ITAT Condones Delay Citing Covid-19 and Principle of Substantial Justice

Maya Shikshan Pashishan Sansthanvs Income tax Officer CITATION : 2025 TAXSCAN (ITAT) 1827

The Agra Bench of the Income Tax Appellate Tribunal (ITAT) condoned the delay of 3 years and 5 months in filing the first appeal and restored the matter to the Commissioner of Income-tax (Appeals) [CIT(A)] for fresh adjudication on merit.

The two-member bench, comprising S. Rifaur Rahman (Accountant Member) and Sunil Kumar Singh (Judicial Member), noted that the assessee's first appeal was dismissed as barred by limitation.

ITAT Allows Application of S.115BAB Tax Rate, Citing Prior Order Recognizing Assessee as Manufacturer

M/s. Sidhe Petrochemicals (P.)Ltd vs DDIT CITATION : 2025 TAXSCAN (ITAT) 1828

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) allowed the application of the section 115BAB of Income Tax Act,1961, tax rate for the assessee citing a prior assessment order that recognized the company as a manufacturer.

The two member bench comprising Anubhav Sharma (Judicial Member) and Manish Agarwal (Accountant Member) examined the contentions and records and noted that the key issue was whether the assessee qualified as a manufacturer to claim the tax rate under section 115BAB. It observed that the Department, in the 143(3) assessment order dated 11.03.2025, had already recognized the assessee as a manufacturer and applied the section 115BAB rate.

Banking Channel Records and Interest Paid Proves Loan Transaction: ITAT deletes ₹80.94 Lakh Unexplained Money Addition

The Assistant Commissioner ofIncome Tax vs Mahadev Shipbreakers CITATION : 2025 TAXSCAN (ITAT) 1829

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) ruled that clear evidence of a genuine loan transaction, conducted through banking channels and including the payment of interest with TDS, could not be dismissed based on generalized allegations of accommodation entries and deleted the addition of Rs. 80,94,875 made by the Assessing Officer (AO).

The two-member bench, comprising Dr. B.R.R. Kumar (Vice-President) and Siddhartha Nautiyal (Judicial Member), upheld the CIT(A)'s findings. The Tribunal observed that the Revenue failed to bring on record any contrary material to disprove the transaction's genuineness.

Income Tax Assessment Order u/s 153A Found Non-Est in Eyes of Law: ITAT upholds Assessee’s Appeal

Vasudev Garg vs DCIT CITATION : 2025 TAXSCAN (ITAT) 1830

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has quashed the assessment order passed under section 153 A of the Income Tax Act, 1961, holding it as not valid in the eyes of law. It was ruled that there is no procedure for obtaining the field authorities' affidavit in support of the respective orders under the provisions of the Act.

The bench, presided over by Satbeer Singh Godara (Judicial Member) and Rifaur Rahman (Accountant Member), found no merit in the arguments presented by the Revenue. It held that there is no such procedure of getting the field authorities affidavit in support of their respective orders under the provisions of the Act that has been stated in the case records.

Non-verification of Confirmation, Invoice and Payment Details of Creditor Liability: ITAT Restores ₹34.45 Cr Addition to AO

Ginni Filaments Ltd vs DCIT CITATION : 2025 TAXSCAN (ITAT) 1831

The Agra Bench Income Tax Appellate Tribunal (ITAT) restored the matter of an addition of Rs. 34,45,60,149/− to the Assessing Officer (AO) for fresh consideration, after noting that documentary evidence, such as confirmations, sample invoices, and bank statements showing subsequent payments to creditors, had been submitted for the first time before the Tribunal.

The two-member bench, comprising S. Rifaur Rahman (Accountant Member) and Sunil Kumar Singh (Judicial Member), observed that the assessee had filed a paper book containing confirmations, sample invoices, and bank statements showing subsequent payments to creditors.

Non-Filer Gets a Second Chance as ITAT Sets Aside Tax Demand, Asks AO to Reconsider Unexplained Cash Deposits

Mahesh Kumar Sharma vs Income-tax Officer CITATION : 2025 TAXSCAN (ITAT) 1832

The Agra Bench of the Income Tax Appellate Tribunal (ITAT) set aside an ex parte assessment order and directed the Assessing Officer to reconsider unexplained cash deposits after giving the assessee a proper opportunity of hearing. The Tribunal was hearing the appeal of Mahesh Kumar Sharma against the order of the Commissioner of Income Tax (Appeals), NFAC, Delhi, which had earlier dismissed his first appeal without representation.

The bench, comprising Sunil Kumar Singh (Judicial Member) and S. Rifaur Rahman (Accountant Member), allowed the appeal for statistical purposes. They set aside the orders of both the lower authorities and remanded the matter back to the file of the Assessing Officer. The ITAT directed the Assessing Officer to pass a fresh order after considering the submissions and explanations that Sharma will now provide regarding the cash deposits. The tribunal also explicitly directed Sharma to be diligent and cooperative in the fresh proceedings to ensure an expeditious disposal of the case.

ITAT Revives 'Mummified' Appeal, Orders CIT(A) to Inject 'Soul' with a Reasoned Order

Veena Singh vs Income-tax Officer CITATION : 2025 TAXSCAN (ITAT) 1833

The Agra Bench of the Income Tax Appellate Tribunal (ITAT) set aside an ex parte order of the Commissioner of Income Tax (Appeals) and directed a fresh adjudication with a speaking order, observing that absence of reasoning had “mummified” the spirit of the decision. The Tribunal was hearing the appeal of Veena Singh against the order of the CIT(A), NFAC, Delhi, which had dismissed her first appeal without entering into the merits.

The Bench comprising M. Balaganesh, Accountant Member, and Sunil Kumar Singh, Judicial Member, directed the CIT(A) to adjudicate the appeal afresh on merits after affording opportunity of hearing to the assessee. The assessee was also directed to cooperate in the proceedings.

ITAT allows Assessee’s Plea of Farmhouse Construction from Funds Derived from Agricultural Activities, terms income “Undisclosed”

Ashok Parshad Gupta vs DCIT,Central Circle CITATION : 2025 TAXSCAN (ITAT) 1834

The Delhi Bench “A” of the Income Tax Appellate Tribunal (ITAT) has accepted the assessee’s claim that the construction of a farmhouse was funded through agricultural income and past savings, while holding that such funds, reflected in seized documents, constituted “undisclosed money” taxable under Section 69A of the Income Tax Act, 1961.

The Tribunal concluded that while the assessee’s claim of agricultural funding was plausible, the unrecorded nature of transactions rendered the amount undisclosed for tax purposes. It thus directed that only such cash components be treated as unexplained money under Section 69A, not as unexplained investments under Section 69.

ITAT Restores ₹7.73 Lakh Cash Deposit Addition to verify if Old Pan Deposits were Included in ITR Filed with New Pan

Manju Agarwal vs Income TaxOfficer CITATION : 2025 TAXSCAN (ITAT) 1835

The Agra Bench Income Tax Appellate Tribunal (ITAT) restored the appeal involving an unexplained cash deposit addition of Rs. 7,73,760/- to the Assessing Officer (AO) for fresh adjudication and directed to verify if the bank account transactions linked with the assessee's old PAN were already included in the Income Tax Return (ITR) filed with the new PAN.

The single-member bench, comprising M. Balaganesh (Accountant Member) , noted that it was not in dispute that the assessee had filed her return of income with the new PAN.

Scrap Dealer Wins Rs. 6.77 Cr Tax Battle as ITAT Accepts Bank Reconciliation, Rejects Dept's 'Mechanical' Approach

DCIT vs Bharat Varshney CITATION : 2025 TAXSCAN (ITAT) 1836

The Agra Bench of the Income Tax Appellate Tribunal (ITAT) dismissed a revenue appeal and upheld the deletion of an addition of Rs. 6.77 crore made under section 68 of the Income Tax Act against a scrap trader. The Tribunal found that the Assessing Officer had mechanically treated the difference between bank credits and book receipts as unexplained income without appreciating the reconciliation furnished by the assessee.

The Bench comprising (Accountant Member) M. Balaganesh and (Judicial Member) Sunil Kumar Singh upheld the CIT(A)’s order. The Tribunal noted that the reconciliation matched with the bank statements and that the Assessing Officer had adopted a mechanical approach in making the addition without considering the nature of bank entries. It held that the omission in the audit report could not be a ground to discard cogent evidence.

ITAT Raps CIT(A) for Skipping Merits, Restores Trader’s Appeal for Fresh Hearing

Virendra Kumar Jain vsIncome-tax Officer CITATION : 2025 TAXSCAN (ITAT) 1837

The Agra Bench of the Income Tax Appellate Tribunal (ITAT) set aside an ex parte order of the Commissioner of Income Tax (Appeals) and directed a fresh hearing, criticising the appellate authority for failing to examine the merits of the case.Virendra Kumar Jain, who carried on business under the name M/s Shri Vidhya Sagar Traders, had filed his return of income for the assessment year 2018-19 declaring Rs. 13.28 lakh.

The Bench comprising Balaganesh, Accountant Member, and Sunil Kumar Singh, Judicial Member, remitted the matter back to the CIT(A) for fresh adjudication on merits after affording opportunity of hearing to the assessee. The assessee was directed to cooperate in the proceedings, and the CIT(A) was instructed to pass a speaking and reasoned order.

Disallowance of Vehicle Running and Club Expenses under Income Tax Act: ITAT upholds Assessee’s Claims as Allowable Expenditure

Dalmia (Bros) Pvt. Ltd vs DCIT CITATION : 2025 TAXSCAN (ITAT) 1838

The Income Tax Appellate Tribunal (ITAT) Bench at Delhi, allowed the claims of assessee with respect to vehicle running and club expenses, as opposed to the order of CIT (A).

The Bench, headed by Satbeer Singh Godara (Judicial Member), and S. Rifaur Rahman (Accountant Member) considered the rival submissions and material available on record. The bench observed that the assessee has submitted details before lower authorities that vehicle maintenance and club expenditures were allowed to the employees of the assessee as prerequisites. Adhering to the erstwhile decision of CIT (A) in AY 2013-14, the bench was inclined to allow the above claim of the assessee as “incurred for the purposes of business and these were incurred as a matter of commercial expediency and exigency to the business of the assessee.”

Fertilizer Dealer's 'October Spike' in Sales Saves the Day as ITAT Deletes Rs. 2.45 Cr Demonetization Addition

DCIT vs Surendra Kumar Gautam CITATION : 2025 TAXSCAN (ITAT) 1839

The Agra Bench of the Income Tax Appellate Tribunal (ITAT) dismissed a revenue appeal and upheld the deletion of an addition of Rs. 2.45 crore made on account of cash deposits during the demonetization period. The case revolved around large cash deposits made by a fertilizer trader in October 2016, which the Assessing Officer had treated as unexplained income under section 69A of the Income Tax Act.

The Bench comprising Sunil Kumar Singh (Judicial Member) and M Balaganesh (Accountant Member), however, found no merit in the revenue’s objections. It observed that the assessee had a consistent track record of depositing cash in banks even before demonetization and that the October surge was in line with past patterns. The Tribunal held that the Assessing Officer’s doubts were based on conjecture and ignored the stock registers and quantitative details available on record. It further noted that minor omissions in the audit report could not override cogent documentary evidence produced by the assessee.

ITAT Allows Gifts from Sisters, Rules Tax Dept Can't Reject Them Merely for 'Lack of Scrutiny' on Donors

Sharad Maheshwari vs Income TaxOfficer CITATION : 2025 TAXSCAN (ITAT) 1840

The Agra Bench of the Income Tax Appellate Tribunal (ITAT) set aside additions made on account of gifts received by an assessee from his sisters, holding that the tax department cannot reject such transactions merely because the donors were not subjected to scrutiny assessments.

Single Member Bench comprising Accountant Member M. Balaganesh, allowed the assessee’s appeal and deleted the combined addition of over Rs. 17 lakh, providing a clear win for the taxpayer and reiterating the principles governing the taxation of gifts from relatives.

Rural Infrastructure Tax & Dead Rent Disallowance u/s 43B: ITAT Remands to AO for Fresh Verification of Legitimacy and Correctness

The Income Tax Officer vs M/sRPJ Minerals Private Limited CITATION : 2025 TAXSCAN (ITAT) 1842

The Jabalpur bench of Income Tax Appellate Tribunal (ITAT) remanded the matter relating to statutory disallowances under section 43B to AO for fresh verification on the grounds of legitimacy and correctness.

The two member bench comprising Kul Bharat (Vice President) and Nikhil Choudhary (Accountant Member) held to restore the matter back to the file of the AO so that the assessee may furnish the necessary evidence in this regard.

Belated ITR Not a Bar: ITAT allows 80P Deduction Claim, Remands Matter to AO for Fresh Adjudication

The Somalwar Academy EducationSocieties Employees Co-op. Credit Society Mar vs DCIT (CPC) CITATION : 2025 TAXSCAN (ITAT) 1843

The Nagpur bench of Income Tax Appellate Tribunal (ITAT) held that the deduction under Section 80P cannot be denied solely for belated filing and directed the AO to examine the claim and determine the tax liability accordingly.

The single bench of Narender Kumar Choudhry (Judicial Member), in view of the judgment of the Hon'ble Kerala High Court, directed the AO to examine the claim of the assessee and to determine the tax liability accordingly.

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Rejection of 12AB Registration for Overseas Fund Use: ITAT Restores Matter to CIT(E) for Fresh Adjudication

Discover Ekam Foundation vs ITO CITATION : 2025 TAXSCAN (ITAT) 1844

The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) restored the matter to Commissioner of Income Tax(Exemption)[CIT(E)] for fresh adjudication after assessee’s application for registration under section 12AB of Income Tax Act1961 was rejected due to intended overseas fund use

The two member bench comprising Sandeep Gosain(Judicial Member) and Prabhash Shankar (Accountant Member) observed that the assessee had submitted a detailed affidavit and a revised Memorandum of Association, along with supporting documents filed with the Ministry of Corporate Affairs, showing that the objects had been amended.

Profit from Shop Sale Disputed as Business or Capital Gain: ITAT Remits Matter to AO to Verify and Reconsider Partners Salary

Dew Drop Properties vs Joint ofCommissioner Income Tax Gurgaon CITATION : 2025 TAXSCAN (ITAT) 1846

The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) remitted the matter to the Assessing Officer (AO) to examine whether the profit from the sale of a shop should be treated as business income or short-term capital gain and to reconsider the disallowance of partners’ salary.

The two member bench comprising Sandeep Gosain (Judicial Member) and Girish Agrawal (Accountant Member) reviewed the records and the orders of the lower authorities, including the tabular details submitted by the assessee counsel.

Transfer of Income Tax Jurisdiction Without issuing Order u/s 127 Held Invalid: ITAT quashes Entire proceedings

Ramesh Kumar Gupta vs ITO CITATION : 2025 TAXSCAN (ITAT) 1847

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has quashed assessment proceedings holding that the transfer of jurisdiction between Assessing Officers without a valid order under Section 127 of the Income-tax Act, 1961, is invalid and renders the entire proceedings void.

The bench, depending on the Delhi High Court’s ruling in Raj Sheela Growth Fund (P) Ltd. v. ITO, said that where jurisdiction is shifted from one Assessing Officer to another not otherwise vested with jurisdiction under Sections 120 or 124, an order under Section 127 is mandatory. In the absence of such an order, the succeeding officer does not acquire lawful jurisdiction.

EPF/ESI Contributions must Be Deposited within Statutory Due Date: ITAT Rejects Plea of Technical Glitches, Disallows Deduction

M/s Tangerine Design PrivateLimited vs CPC-ITR CITATION : 2025 TAXSCAN (ITAT) 1848

The Delhi Bench of the Income Tax Appellate Tribunal ( ITAT ) has reiterated that employees’ contributions to EPF/ESI must be deposited strictly within the statutory due dates prescribed under the relevant Acts, and any delay irrespective of being for one or two days renders the claim for deduction inadmissible.

Following the Apex Court’s ruling, the bench of Sudhir Kumar (Judicial member) and Manish Agarwal (Accountant member) upheld the disallowance made by the CPC and sustained by the CIT(A), observing that “technical glitches” could not be a ground to extend the due date or relax the statutory requirement.

Foreign Exchange Loss on Outstanding Import Liabilities Allowed Considering Mercantile Accounting Method Followed: ITAT Deletes Addition

Donyi Polo Timbers Pvt. Ltd vs ITO CITATION : 2025 TAXSCAN (ITAT) 1849

The Income Tax Appellate Tribunal ( ITAT ), Delhi Bench has deleted an addition of ₹1.19 crore made on account of disallowance of foreign exchange fluctuation loss, holding that the assessee was consistently following the mercantile system of accounting and recognition of outstanding foreign currency liabilities at year-end rates was in line with accepted accounting standards.

The bench of Satbeer Singh Godara (Judicial member) and S. Rifaur Rahman (Accountant member) illustrated that if a liability of US$1,000 remained unsettled across years, it must be restated annually at prevailing rates, leading to a real incremental liability irrespective of actual settlement. Since the assessee had consistently followed this method, the foreign exchange loss could not be treated as merely notional.

‘It is not the duty of the tax authorities to direct how a business should be handled’: ITAT deletes Addition by AO on Account of Low GP Rate.

DCIT vs D&Y Technologies Pvt. Ltd CITATION : 2025 TAXSCAN (ITAT) 1850

The Income Tax Appellate Tribunal ( ITAT ), Delhi Bench has held that tax authorities cannot sit in the armchair of a businessman and direct how business should be conducted, while deleting an addition made by the Assessing Officer (AO) on account of low Gross Profit (GP) rate.

The Tribunal dismissed the Revenue’s appeal and confirmed the deletion of the addition, confirming that a fall in profits alone cannot justify rejection of accounts unless supported by cogent evidence.

Mandatory Filing of ITR within S. 139(1) Time Limit for Claiming Exemption u/s 11 Applicable Only From AY 2018-19, Not AY 2014-15: ITAT

All India Spices Exporters Forumvs Income Tax Officer Exemption Ward CITATION : 2025 TAXSCAN (ITAT) 1851

The Cochin Bench of the Income Tax Appellate Tribunal ( ITAT ) has held that the requirement to file a return of income within the time limit prescribed under Section 139(1) of the Income Tax Act, 1961, for claiming exemption under Section 11, is applicable only from Assessment Year (AY) 2018-19 onwards, and not to earlier years such as AY 2014-15.

The bench of Inturi Rama Rao (Accountant member) and (Rahul Chaudhary (Judicial member) set aside the CIT(A)’s order and restored the matter for fresh adjudication, directing that the claim of exemption should not be rejected merely on account of late filing of return.

Reassessment on Demonetization Cash Deposits already Examined in Original Assessment Held Void ab Initio: ITAT

Mr. Mithilesh Jagdeo Singh vsITO CITATION : 2025 TAXSCAN (ITAT) 1852

The Mumbai bench of Income Tax Appellate Tribunal (ITAT) has held that reconsideration of demonetisation period cash deposits already examined in the original assessment during the reassessment is void ab initio.

The single bench of Narender Kumar Choudhry (Judicial Member) held that the issue, which has already been examined in original assessment proceedings, cannot be reopened in the reassessment proceedings and thus the reassessment proceedings under Section 147 of the Act are unsustainable, which would entail the assessment order passed in consequence thereof as invalid, being void and ab initio.

Income Tax Commissioner adjudicates Penalty Order instead of Re-assessment Order: ITAT Remands Sale Consideration Challenge for Reconsideration

Chandrakant Gajanan Paradhi vsITO CITATION : 2025 TAXSCAN (ITAT) 1853

The Nagpur bench of the Income Tax Appellate Tribunal (ITAT) remanded the sale consideration matter to the Commissioner, as it had adjudicated the penalty order instead of the re-assessment order.

The single bench of Narender Kumar Choudhry (Judicial Member) held that it would be proper to remand the instant case to the file of the Commissioner for decision afresh, suffice to say by providing reasonable opportunity of being heard to the Assessee. Thus, the case is, accordingly, remanded to the file of Commissioner for decision afresh.

No Addition Can Be Made in Completed/Unabated Assessments Without Incriminating Material: ITAT

DCIT vs Raja Shelters Pvt. Ltd CITATION : 2025 TAXSCAN (ITAT) 1855

The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) upheld the Commissioner of Income Tax (Appeals) [CIT(A)] order that deleted an addition of Rs. 15,00,000 made under Section 68 of the Income-tax Act, 1961 ruling that no addition can be made in completed assessments without incriminating material.

The Tribunal observed the crucial conclusion of the Supreme Court in Abhisar Buildwell, which mandates that no addition can be made in respect of completed or unabated assessments in the absence of any incriminating material found during the search under Section 132 of the Income Tax Act.

Protective Addition Made for Taxpayer Firm: ITAT Restores Matter to CIT(A) with One More Opportunity

Kanishka F&B vs Income TaxOfficer CITATION : 2025 TAXSCAN (ITAT) 1858

The Visakhapatnam Bench of the Income Tax Appellate Tribunal (ITAT) restored the appeal to the Commissioner of Income Tax (Appeals)[CIT(A)] with one more opportunity to the assessee citing that the addition was made on protective basis.

The two-member bench, comprising S. Balakrishnan (Accountant Member) and Sandeep Singh Karhail (Judicial Member) observed that the main grievance of the assessee was the addition made on a protective basis.

Huge Cash Sale in a Particular Month cannot be a reason for treating it as Undisclosed Income: ITAT

Cumin Infotech Private Limitedvs ITO CITATION : 2025 TAXSCAN (ITAT) 1859

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) held that merely having a huge cash sale in a particular month cannot be a valid reason to treat such receipts as undisclosed income.

Judicial Member Shri Challa Nagendra Prasad observed that the Assessing Officer had not recorded any finding disputing the purchases, sales, or cash in hand, nor pointed out any defect in the books of account. The AO had also failed to explain why the assessee’s explanation that deposits were from sales proceeds was rejected.

Penalty u/s 271(1)(c) Invalid when Notice Fails to Specify Charge and Irrelevant Limb not Struck Off: ITAT

Smt.Dayawanti vs DCIT CITATION : 2025 TAXSCAN (ITAT) 1860

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that penalty proceedings under Section 271(1)(c) of the Income Tax Act, 1961, are invalid when the Assessing Officer (AO) issues a vague and stereotyped notice without specifying the exact charge or striking off the irrelevant portion, whether for concealment of income or furnishing of inaccurate particulars.

The Tribunal Bench of Yogesh Kumar U.S. (Judicial Member) and Avdhesh Kumar Mishra (Accountant Member) examined the notice issued under Section 274 read with Section 271 of the Income Tax Act and found it to be a stereotyped form, where the AO failed to indicate the specific charge and did not strike off the irrelevant portion.

Income Tax Reassessment Notice u/s 148 against Dead Person is Null and Void: ITAT

Sulochana Devi Bagaria vs ITO CITATION : 2025 TAXSCAN (ITAT) 1861

The Kolkata Bench Income Tax Appellate Tribunal (ITAT) held that the reassessment proceedings initiated against a deceased person were bad in law and all consequent actions were null and void.

The Tribunal noted that the CIT(A) also did not take steps to initiate proceedings against the legal representative as prescribed under Section 159 of the Act. The tribunal set aside the reassessment proceedings. The appeal of the assessee was allowed.

No Assumption of Jurisdiction allowable for Income Tax Reassessments without issuance of Notice u/s 143(2): ITAT

M/s Suncity Niketan Pvt. Ltd vsITO CITATION : 2025 TAXSCAN (ITAT) 1862

The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) has ruled that reassessment proceedings initiated without issuance of a mandatory notice under Section 143(2) of the Income Tax Act, 1961 are invalid and without jurisdiction.

The Bench, comprising Shri Sanjay Garg (Judicial Member) and Shri Sanjay Awasthi (Accountant Member), further held that the reassessment was unsustainable since the mandatory notice under Section 143(2) of the Income Tax Act was never issued. Referring to the Supreme Court ruling in Hotel Blue Moon (supra), the Bench reiterated that the issuance of notice under Section 143(2) is a sine qua non, “a fundamental precondition” for assuming jurisdiction to make an assessment or reassessment. Absence of such notice renders the entire proceedings null and void.

Lack of Familiarity with Income Tax Online Portal: ITAT sets aside Ex parte Order, Imposes Rs.1L cost

Manicam Narayanan vs TheAssistant Commissioner of Income Tax CITATION : 2025 TAXSCAN (ITAT) 1863

The Income Tax Appellate Tribunal ( ITAT ), Chennai Bench has set aside an ex parte income tax assessment order passed under Section 144 of the Income Tax Act, 1961, while imposing a cost of ₹1 lakh on the assessee for non-compliance.

The Bench of George George K (Vice President) and S.R. Raghunatha (Accountant Member) noted that the AO and the NFAC had indeed issued statutory notices, but the assessee consistently failed to respond. However, taking into account the affidavit explaining the lack of technical familiarity with the e-filing system, the ITAT accepted that there was a reasonable cause for the delay and condoned it in the interest of justice.

Shobha Builders Provide Self-Contained Flats, Expenses on Modular Kitchen, Wardrobes are Optional Luxuries: ITAT Narrows S. 54F Deduction

Kundoly Krishnakutty Sunil vsIncome Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1864

The Cochin Bench of the Income Tax Appellate Tribunal (ITAT) has held that expenses incurred by a taxpayer on optional interior fittings such as modular kitchens, wardrobes, air conditioners, and furnishings cannot be treated as part of the cost of acquisition of a residential house for the purpose of claiming deduction under Section 54F of the Income Tax Act, 1961.

The Tribunal observed that while some portion of the expenses could qualify as essential to make the property livable, most items listed such as modular kitchen (₹5.99 lakh), wardrobes (₹4.50 lakh), bathroom shower (₹94,000), AC units, sofa upholstery, curtains, and housewarming expenses were optional comforts and not necessary for basic living.

Accounting Method Consistently Followed with ICAI Guidance Note Cannot Be Disturbed: ITAT Upholds Deduction of Lease Equalization Charges

Delfin Finance P. Ltd vs ITO CITATION : 2025 TAXSCAN (ITAT) 1865

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that the accounting method consistently and properly followed in accordance with the Institute of Chartered Accountants of India (ICAI) Guidance Note cannot be disturbed by the tax authorities.

The Bench comprising Satbeer Singh Godara (Judicial Member) and S. Rifaur Rahman (Accountant Member) disagreed with the CIT(A)’s reasoning.

Mere Claim of Higher Gratuity Exemption Claim through Revised ITR Does Not Amount to Misreporting: ITAT deletes Penalty

Chundayil Kalam Girijadevi vsThe Income Tax Officer CITATION : 2025 TAXSCAN (ITAT) 1866

The Cochin Bench of the Income Tax Appellate Tribunal (ITAT) held that a mere claim of higher exemption on gratuity through a revised return does not constitute “misreporting of income” under Section 270A of the Income Tax Act, 1961.

The bench of Rahul Chaudhary (Judicial Member) and Inturi Rama Rao (Accountant Member) held that a mere claim of higher gratuity exemption in a revised return, based on a bona fide belief, does not amount to misreporting of income under Section 270A(9). The penalty levied by the Assessing Officer is unsustainable.

Share Capital and Member Deposits Wrongly Clubbed: ITAT Remands Matter Back to AO for De Novo Verification

Keezhuparamba ServiceCo-operative Bank Ltd vs Assessment Unit, NFAC CITATION : 2025 TAXSCAN (ITAT) 1867

The Cochin Bench of the Income Tax Appellate Tribunal ( ITAT ) has remanded the case of Keezhuparamba Service Co-operative Bank Ltd. back to the Assessing Officer (AO) for de novo adjudication, after finding that the authorities below had wrongly clubbed member deposits with the assessee’s share capital while making additions under Section 68 of the Income Tax Act, 1961.

The ITAT set aside the NFAC’s order and remanded the matter to the AO for fresh examination. The AO has been directed to verify, de novo, the distinction between share capital and member deposits based on the assessee’s audited financials.

Cybersecurity Software Sale Not Taxable as FTS: ITAT Rules Payments Outside Scope of S. 9(1)(vii) and India-Ireland DTAA as No Human Interface Involved

Forcepoint InternationalTechnology Limited Vs. The ACIT CITATION : 2025 TAXSCAN (ITAT) 1868

The Delhi Bench of the Income Tax Appellate Tribunal ( ITAT ) has held that payments received from Indian distributors for sale of cybersecurity software cannot be taxed in India as ‘Fees for Technical Services’ (FTS) either under Section 9(1)(vii) of the Income-tax Act, 1961 or under Article 12 of the India–Ireland Double Taxation Avoidance Agreement (DTAA), as there was no element of human involvement in the transaction.

The bench of Anubhav Sharma ( Judicial member) and Naveen Chandra (accountant member), confirming the principle laid down in Bharti Cellular Ltd and affirmed by the Supreme Court, reiterated that the expression “technical services” under Section 9(1)(vii) necessarily contemplates human involvement or interaction.

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