The Income Tax Appellate Tribunal (ITAT) in Ahmedabad bench has quashed a major tax addition made against a Gujarat-based company, holding that the tax department cannot subject income that has already been declared and taxed once to a second round of taxation. The bench strongly emphasized that such a practice amounts to illegal double taxation.

The ITAT bench, comprising Siddhartha Nautiyal (Judicial Member) and Annapurna Gupta (Accountant Member), after reviewing the submissions, found the department's position unsustainable. The tribunal noted that the company had provided concrete evidence to prove the genuineness of the transactions, which the revenue department failed to rebut.

DIN Absence: ITAT Remands Matter for Reconsideration Fayaz Ahmed Beig Aali Kadal vs Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 1989

The bench of the Income Tax Appellate Tribunal, Amritsar, remanded the case to the Commissioner of Income Tax (Appeals) [CIT(A)] for fresh adjudication. The Tribunal directed that the issue relating to the absence of a Document Identification Number (DIN) in the assessment order be considered afresh, along with other grounds raised by the assessee under the Income Tax Act, 1961.

The Bench comprising Accountant Member, Manoj Kumar Aggarwal and Judicial Member, Udayan Dasgupta directed the assessee to cooperate fully and submit all relevant documents and evidence before the appellate authority, while also instructing the CIT(A) to ensure that future notices are issued to the correct e-mail address provided in Form No. 35.

The Tribunal further clarified that it had not adjudicated upon the merits of the case and that all legal issues, including the DIN contention, were left open.

ITAT quashes Non-Speaking Ex-Parte Appellate Order, directs de novo Income Tax Assessment Arshad Mohamood Khan vs Income Tax Officer-2(1) CITATION: 2025 TAXSCAN (ITAT) 1991

The Lucknow Bench of Income Tax Appellate Tribunal (ITAT), has set aside Ex-Parte Assessment and Appellate orders for three Income Tax Assessment years, filed by the Assessee with the intention of directing the Assessing Officer to pass Fresh Adjudication in terms of providing Reasonable opportunity of hearing to the Assessee.

After hearing and considering the submissions made by both the parties, and reviewing the available material on record, the bench consisting of Kul Bharat, Vice President and, Accountant member, considered the section 250(6) of the Income Tax Act, 1961, wherein CIT(A) has a statutory duty to pass speaking order on merits of the various grounds of appeal, which in this case was not fulfilled.

Consequently, with further consideration in regards to the submissions made by both the parties, the bench set aside the order passed by CIT(A) and directed the Assessing Officer to pass De Novo Assessment order in accordance with the law after providing reasonable opportunity of hearing to the assessee.

Reconciliation Establishes Cash Deposits as Agency Collections: ITAT Deletes ₹19.04 Lakh Addition u/s 69AShyam Singh Hetta vs ITO, Ward CITATION: 2025 TAXSCAN (ITAT) 1988

The bench of the Income Tax Appellate Tribunal, Chandigarh (ITAT), deleted the addition of ₹19,04,800 made under Section 69A of the Income Tax Act, 1961, holding that the assessee had duly reconciled the cash deposits made during the demonetisation period, establishing them as agency collections on behalf of a company, and therefore could not be treated as unexplained income.

The Tribunal held that once the assessee establishes reconciliation between deposits and corresponding transfers to the principal’s account, the onus shifts to the Revenue to disprove such evidence. Since the Revenue had not produced any contrary material, the explanation of the assessee stood uncontroverted.

The Bench reiterated the settled legal principle that amounts collected by an agent on behalf of a principal cannot be taxed as unexplained income in the agent’s hands when proper reconciliation is available.

Section 50C applicable Only on Transfer of Immovable Property Compared with Stamp Duty Value: ITAT Suvarna Chandrakant Bhojane vs ITO CITATION: 2025 TAXSCAN (ITAT) 1996

The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) ruled that Section 50C of the Income Tax Act,1961 applies only when there is a transfer of immovable property and its value is compared with the stamp duty valuation.

The two member bench comprising Beena Pillai (Judicial Member) and Omkareshwar Chidara (Accountant Member) heard both sides and noted that the issue was whether Section 50C of the Act applied to cash compensation. It observed that the section applied only when immovable property was transferred and its value was compared with the stamp duty valuation.

Ad Hoc 10% TP Adjustment on Technical Services Deleted: ITAT Holds Adjustment Unsustainable, Methodologically Invalid Siemens Aktiengesellschaft vs Assistant Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 1993

The Mumbai bench of Income Tax Appellate Tribunal ( ITAT ) Mumbai has struck down the 10% ad hoc transfer pricing (TP) adjustment made on Siemens AG’s technical service transactions with Indian associates. The Tribunal held that the Transfer Pricing Officer (TPO) failed to apply any of the prescribed methods under Section 92C of the Income Tax Act or Rule 10B of the Income Tax Rules.

Citing the principle that transfer pricing determinations must be based on prescribed methods and objective data, the bench, comprising Beena Pillai (Judicial Member) and Renu Jauhari (Accountant Member), held that the 10% markup was unsustainable.

The Tribunal deleted the entire addition, observing that the TPO’s approach violated both Section 92C and the arm’s length principle. The ruling reinforces that TP adjustments must rest on analysis, not assumption, particularly where the taxpayer has substantiated its methodology.

Royalty and FTS Taxable on Receipt Basis Only: ITAT Follows Consistent Precedent in Favour of Siemens AG Siemens Aktiengesellschaft vs Assistant Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 1993

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has reaffirmed that Siemens Aktiengesellschaft (Siemens AG), a tax resident of Germany, is liable to tax on royalty and fees for technical services (FTS) in India only on a receipt basis, not on accrual.

The Bench, comprising Beena Pillai (Judicial Member) and Renu Jauhari (Accountant Member), emphasised the principle of judicial consistency, observing that once a view has been upheld by the High Court in the assessee’s own cases, the Department is bound to follow it in subsequent years unless reversed by a higher court. The Tribunal rejected the AO’s reliance on Standard Triumph Motors Ltd., observing that it had been distinguished by the Supreme Court in later decisions and that the factual context was different.

Concluding that there was no reason to deviate from established judicial precedent, the Tribunal held that the royalty and FTS income must be taxed only on a receipt basis, as per the DTAA, and that accrual-based taxation would contravene both treaty language and prior binding rulings. The additions made by the AO and confirmed by the DRP were therefore deleted in full.

Trade Payables and Receivables Carried Forward from Earlier Years Not Fresh Credits: ITAT Deletes ₹5.99 Cr total Addition M/s.Arusuvai Food Processors Pvt. Ltd vs The ITO CITATION: 2025 TAXSCAN (ITAT) 1999

The Chennai Bench of the Income Tax AppellateTribunal (ITAT) deleted a total addition of ₹5,99,66,944 made under Section 68 and ruled that Section 68 cannot be invoked for "trade payables" and "trade receivables" that are brought forward balances from earlier years, as they do not represent fresh credits in the relevant assessment year.

The tribunal deleted the additions of ₹20,84,201 (K.C. Food Grains Marketing) and ₹2,17,16,920 (Universal Enterprise). The tribunal observed that ₹20,84,201 was a continuing brought forward balance from the earlier year, making Section 68 inapplicable. In the result, the appeals filed by the assessee for AYs 2015-16 and 2016-17 were allowed.

Unexplained Cash Deposits and Status of Resident Not Verified on Merits: ITAT Remands ₹1.17 Crore AdditionArunbhai Chhaganbhai Patel vs The Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 2004

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) set aside the assessment order passed, and restored the matter to the file of the Assessing Officer (AO) for a detailed review on the merits of the case for the issue of unexplained cash deposits and status of resident.

The two-member bench, comprising Suchitra Kamble (Judicial Member) and Narendra Prasad Sinha (Accountant Member), observed that since the assessment was made ex-parte under Section 144 and the first appeal was also dismissed ex-parte, there appeared to be a genuine difficulty on the part of the assessee.

In the interest of justice and fair play, the Tribunal remanded the entire matter back to the file of the AO with a direction to grant the assessee a proper opportunity of hearing by following the principles of natural justice.

Unexplained Cash Credit Addition of ₹1.77 Cr: ITAT Remands Matter for Verification of Agricultural Income and Submitted Evidence Jigar Patel vs The Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 2003

The Ahmedabad Bench of the Income Tax Appellate Tribunal Remanded the matter for verification of Agricultural Income and evidence submitted by the assessee in the case involving unexplained cash credit addition of ₹1.77 Crore.

The tribunal noted that the materials on record clearly indicated that neither the AO nor the CIT(A) had at all considered the evidences filed by the assessee including that of agricultural income and the receipts given by the assessee while earning the agricultural income.

The tribunal held that the issue required proper verification in light of the submitted evidence and the matter was consequently remanded back to the file of the Assessing Officer with a direction to grant the assessee a fresh opportunity of hearing. In the result, the appeal filed by the assessee was partly allowed for statistical purposes.

Deletion of ₹11.54 Crore Addition on Unsecured Loans: ITAT Partially Restores Addition Citing Lack of Proof for Creditworthiness Assistant Commissioner of Income Tax vs Jayantilal Babulal Shah CITATION: 2025 TAXSCAN (ITAT) 2002

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) partially restored a significant addition of unexplained cash credits which had been deleted by the Commissioner of Income Tax (Appeals) [CIT(A)] and ruled that there was lack of proof for creditworthiness.

The tribunal observed that the settled legal principle that the mere fact that an amount has been received through banking channels does not prove the genuineness of the transaction. The tribunal held that the CIT(A) erred in granting relief observing that for these specific parties where creditworthiness was not proved.

The tribunal restored the addition for the parties where the assessee failed to prove creditworthiness. In this result the appeal of the Department was partly allowed.

Addition for Unsecured Loans Without PAN: ITAT Grants Partial Relief and Remands Matter for Verification of Submitted Documents Assistant Commissioner of Income Tax vs Jayantilal Babulal Shah CITATION: 2025 TAXSCAN (ITAT) 2002

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) granted partial relief and remanded the matter for verification of submitted documents for the issue of addition of unsecured loans without PAN.

The two-member bench comprising Dr. B.R.R.Kumar (Vice President) and Siddhartha Nautiyal (Judicial Member) granted immediate relief for specific loans where the assessee had furnished replies in response to Section 133(6) notices.

Crucially, with respect to the remaining unsecured loans taken from other parties falling within this ₹2.84 crore bracket, the tribunal restored the matter to the file of the Assessing Officer for fresh consideration.

Penalty Liability on Legal Heirs: ITAT Upholds Liability u/s 159 and Restores Matter to AO to Verify Inherited EstateLate Jagdish vs Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 2001

The Jaipur Bench of Income Tax Appellate Tribunal ( ITAT ) restored the matter to the Assessing Officer (AO ) to verify the extent of the estate inherited by the legal heir while upholding the penalty liability under Section 159 of Income Tax Act,1961.

Since the precedent cited by the assessee had already been overruled, the tribunal found no merit in the argument and upheld the penalty. However, as the counsel could not confirm whether the legal representative had inherited any estate of the deceased and its extent, the tribunal restored the matter to the AO to determine the value of the estate, if any, available to meet the liability.

The appeal was accordingly disposed of with these directions.

Denial of 80G Approval for Non-Commencement of Activities and Expiry of Registration: ITAT Remits Matter to CIT(E) Chandra Prakash Vashistha vs The ITO CITATION: 2025 TAXSCAN (ITAT) 2008

The Jaipur Bench of Income Tax AppellateTribunal ( ITAT) remitted the matter to the Commissioner of Income Tax (Exemption) [CIT(E)] after finding that the rejection of approval under section 80G(5)(iii) of Income Tax Act,1961,was based on the expiry of the earlier provisional registration and non-commencement of activities.

The two member bench comprising Narinder Kumar (Judicial Member) and Rathod Kamlesh Jayantbhai (Accountant Member) noted that the CIT(E) had not examined the assessee’s submissions or the CBDT Circulars dated 03.06.2022 and 24.05.2023 while deciding the application for approval under section 80G(5).

Considering this lapse, the tribunal found it appropriate to remit the matter to the CIT(E) for fresh adjudication in light of the said circulars and in accordance with law, after giving the assessee an opportunity of being heard.

As for the issue of non-commencement of activities, the bench observed that the impugned order did not contain any detailed discussion on the matter.

Shortest Road Distance Measurement to Ascertain Agricultural Land Sale: ITAT drops Addition by Rs 73.3 LakhsKanchanben Maheshbhai Patel vs The ITO CITATION: 2025 TAXSCAN (ITAT) 2005

The Surat Bench of Income Tax Appellate Tribunal (ITAT), has reduced the tax amount by dropping an addition by Rs. 73.3 Lakhs, in a dispute regarding the sale of Agricultural land whereby the Road Distance Measurement Method was preferred over Aerial Method for the Assessment year 2012-13.

The Tribunal deemed the ground regarding penalty proceedings under section 271(1)(c) of the Income Tax Act, 1961 since only initiation had occurred. Therefore, the ground is pre-mature and does not require adjudication.

Purchases Attributed to Other Entities: ITAT Deletes ₹2.27 Crore Addition Citing AO's Acceptance of Facts in Remand Report The Assistant Commissioner of Income Tax vs Shri Ganesan Anbuselvam CITATION: 2025 TAXSCAN (ITAT) 2006

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) deleted an addition of ₹2,27,76,680 towards alleged unaccounted purchases made under Section 69C of the Income Tax Act, 1961 and affirmed that the transactions belonged to two separate recreation clubs and not the individual assessee.

The two-member bench, comprising Manu Kumar Giri (Judicial Member) and S. R. Raghunatha (Accountant Member), noted that the AO’s own findings in the remand report supported the assessee’s contention that the additions were based on a "mistaken identity of transactions belonging to separate legal entities."

The Tribunal held that since the purchases to the extent of ₹2.27 Crore were correctly shown as purchases by the two separate entities in their own Form 26AS, they could not be taxed in the assessee's hands. The appeal filed by the Revenue was accordingly dismissed.

Relief for Warner Bros: ITAT Rules Film Distribution Income Not ‘Royalty’ Under India-US DTAA Warner Bros Distributing Inc vs Assistant Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 2012

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) granted partial relief to Warner Bros Distributing Inc. in a case concerning the taxability of its film distribution income and interest on income tax refund.

The two-member bench comprising Vikram Singh Yadav (Accountant Member) and Sandeep Singh Karhail (Judicial Member) relied on its earlier decision in the assessee’s own case for assessment year 2006-07 and explained that payments for film distribution are specifically excluded from the definition of royalty under section 9(1)(vi) of the Act. Hence, it held that such income could not be taxed as royalty either under the Act or the DTAA.

ITAT Upholds ₹5.48 Lakh Brokerage Addition, Finds Seized Records Reflected Mock Trading, Not Unexplained Income Pradeep Jain vs The DCIT CITATION: 2025 TAXSCAN (ITAT) 2009

The Jaipur Bench of Income Tax Appellate Tribunal ( ITAT ) upheld the Commissioner of Income Tax (Appeals)[CIT(A)]’s decision restricting the addition to ₹5.48 lakh as brokerage income, holding that the seized records reflected mock trading and not unexplained income.

The bench found no error in the CIT(A)’s order, which restricted the addition to Rs. 5,48,526 as brokerage income from mock trading and deleted the remaining addition. Both appeals, filed by the assessee and the department, were dismissed.

CSR Expenditure Eligible for S. 80G Deduction if Supported by Donation Receipts and 80G Certificates: ITAT Delhi Duty Free Service [P] Ltd vs The Dy. CI.T CITATION: 2025 TAXSCAN (ITAT) 2007

The Delhi Bench of the Income Tax Appellate Tribunal ( ITAT ) has held that Corporate Social Responsibility (CSR) expenditure is eligible for deduction under Section 80G of the Income Tax Act, 1961, provided the assessee furnishes valid donation receipts and 80G certificates from registered entities.

The ITAT remitted the issue to the Assessing Officer for verification of the requisite documents, directing that if the assessee produces valid donation receipts and 80G certificates issued by the donee entities, the deduction should be allowed in accordance with law.

The Tribunal made it clear that CSR expenses cannot be disqualified from deduction solely because they are statutorily mandated, provided the donations fulfill the parameters of Section 80G.