ITAT Weekly Round-up

Accordingly the bench of Suchitra Kamble (Judicial member) and Narendra Prasad Sinha (Accountant member) observed that the CIT(A) had erred in not deciding the jurisdictional issue regarding the validity of issuing notice under Section 148 to a deceased person a legal defect that goes to the root of the proceedings.

Therefore, appellate tribunal, set aside the matter to the CIT(A) with a specific direction to adjudicate the legal ground afresh, ruling that such consideration was necessary before proceeding to merits.

The Bench comprising Duvvuru RL Reddy (Vice President) observed that the assessee had made a statement during the survey, he later filed the return of income without paying the advance tax admitted. The Tribunal noted that except for the stock difference there was no incriminating material found, and held that the issue required proper verification and that the AO must examine all stock records and other details afresh.

Old v/s New Limitation: ITAT Quashes AY 2013‑14 Reopening as Old Regime Bars Reassessment Despite New 10‑Year Rule u/s 149

The DCIT, CentralCircle-2(2) vs ern Agrifurane – Industries Pvt. Ltd. CITATION: 2025 TAXSCAN (ITAT) 2165

In a recent ruling, the Income Tax Appellate Tribunal ( ITAT ), Chennai, has struck down reassessment proceedings against the respondent for Assessment Year (AY) 2013‑14, holding that the notice issued under Section 148 of the Income TaxAct, 1961 was time‑barred.

The two-member bench comprising Aby T. Varkey (Judicial Member) and Amitabh Shukla (Accountant Member) held that since AY 2013‑14 was already barred under the old regime, the Assessing Officer lacked jurisdiction to issue a notice under Section 148 in 2023. The Tribunal highlighted that “the existence of a jurisdictional fact is the sine qua non for the exercise of power,” and that in its absence, any notice issued is void ab initio.

Deemed Dividend u/s 2(22)(e) Inapplicable to Sister-Concern Loans: ITAT Deletes Addition

Addpol ChemspecialitiesPvt. Ltd vs Deputy Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 2166

The two-member bench, comprising SuchitraKamble (Judicial Member), addressed the core legal issue: whether a loan transaction between two sister concerns, where a common shareholder holds a substantial interest in both, can be classified as a deemed dividend in the hands of the borrower company.

The tribunal held that since the loan was to a sister concern, and not directly to the shareholder (Shri Dilip G. Shah) who was the beneficial owner of the shares, the transaction cannot be treated as a deemed dividend in the hands of the assessee company.

UAE Company Earned ₹4+ Cr Interest in India, No ITR Required Despite TDS: Here’s Why

Kisan International TradingFZE vs ACIT CITATION: 2025 TAXSCAN (ITAT) 2167

A UAE-based company earned more than Rs. 4 crore in interest from an Indian entity. Although tax was already deducted at source on this income, the company did not file an Income Tax Return in India.

The Income Tax Department reopened the case on the assumption that not filing an ITR meant income had escaped assessment. The ITAT held that the company was not required to file an ITR at all and therefore the reopening was invalid.

It was concluded that section 115A(5) exempted the assessee from filing an ITR; the AO misread the income, ignored statutory protection, and failed to follow procedure. The reopening under section 147 was therefore invalid.

Provision for Future Expenses Allowable under Matching Principle: ITAT Quashes Reassessment due to Lack of New Material

Wheatons Design PrivateLimited vs ACIT/DCIT CITATION: 2025 TAXSCAN (ITAT) 2168

The Jaipur Bench of the Income Tax Appellate Tribunal ( ITAT ) quashed the reassessment initiated under Section 147/148 and deleted the disallowance of provision for future expenses, holding that the Assessing Officer (AO) had reopened the assessment without any new material and that the provision was allowable under the matching principle consistently followed by the assessee.

The Bench comprising Dr. S. Seethalakshmi (Judicial Member) and Rathod Kamlesh Jayantbhai (Accountant Member) found that the AO had not brought any new information or material to justify reopening, and that the AO acted solely on the basis of suspicion. Therefore, the notice under Section 148 was held to be invalid.

No Deemed Dividend on Business Advances between Holding and Subsidiary Companies u/s 2(22)(e): ITAT

Prestige Holiday ResortsPrivate vs DCIT, Circle CITATION: 2025 TAXSCAN (ITAT) 2169

The Income Tax Appellate Tribunal (ITAT), Mumbai Bench, delivered a ruling upholding relief granted by the CIT(A) on multiple contentious issues including deemed dividend, depreciation on time-share assets, and commission expenditure.

The Bench noted that “ownership” under Section 32 includes not just legal title but effective control and use of an asset for business, citing the principle laid down by the Supreme Court in Mysore Minerals Ltd. v. CIT (1999). Hence, the depreciation disallowance was dismissed as untenable.

Relief to Anil Ambani: ITAT deletes Addition based on BUP ID, Says it’s just Internal Identifier Not Bank A/c

The two-member bench comprising Om Prakash Kant (Accountant Member) and Raj Kumar Chauhan (Judicial Member), examined the assessment records and noted that the AO had issued notices under sections 143(2) and 142(1) of the Income Tax Act. It was further observed that the AO specifically asked the assessee to support the claim of depreciation on goodwill with documentary evidence. The tribunal observed that the assessee for the notices issued by the AO filed a detailed reply.

Relief to Aditya Birla Sun Life Insurance: ITAT Quashes Reassessment Notice u/s 148 Issued Beyond Statutory Time Limit Under New Regime

Aditya Birla Sun LifeInsurance Co. Ltd vs Dy. CIT-5(3) CITATION: 2025 TAXSCAN (ITAT) 2172

In a recent ruling in the case of Aditya Birla Sun Life Insurance Co. Ltd., the Mumbai Bench of the Income Tax Appellate Tribunal has held that reassessment proceedings initiated beyond the statutory limitation period and without approval from the correct specified authority are invalid in law under the post-Finance Act, 2021 regime.

The decision was rendered by the Bench comprising Saktijit Dey (Vice-President) and Padmavathy S (Accountant Member), who examined whether the jurisdictional conditions prescribed under the amended reassessment framework had been met. The Tribunal reiterated that compliance with sections 148, 148A and 151 of the Income Tax Act, 1961 is a requirement and not a mere procedural formality.

Relief for Vodafone West Ltd: ITAT Deletes Disallowance of Depreciation on Passive Infrastructure Transfer, Rules it to be a Valid Gift

Vodafone West Limited.(formerly known as Vodafone Essar Gujarat Limited) vs Deputy Commissioner ofIncome Tax Circle - 4(1)(2) CITATION: 2025 TAXSCAN (ITAT) 2173

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) set aside the disallowance of depreciation amounting to ₹31.60 crores on Passive Infrastructure ("PI") assets and ruled that the transfer of assets to a group company was a valid gift under section 47(iii) of the Income Tax Act.

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The two-member bench comprising Vikram Singh Yadav (Accountant Member) and Sandeep Singh Karhail (Judicial Member) held that the transfer qualified as a 'gift' and could not be regarded as a transfer for the purpose of Section 2(47) of the Act in terms of Section 47(iii) of the Act. Respectfully following the decision of the Co-ordinate Bench in the sister concern's case, the tribunal found no reason to interfere with the finding that the transfer qualified as a 'gift'.

Vodafone West Ltd Gets Relief: ITAT Deletes Disallowance of Roaming Charges, Citing Binding Precedent on Non-Deduction of Tax

Vodafone West Limited(formerly known as Vodafone Essar Gujarat Limited) vs Deputy Commissioner ofIncome Tax Circle - 4(1)(2) CITATION: 2025 TAXSCAN (ITAT) 2173

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) deleted the disallowance of roaming charges amounting to ₹64,81,13,995 claimed by ruling that the non-deduction of tax on these payments did not warrant a disallowance under sections 40(a)(ia) and 40(a)(i) of the Income Tax Act, 1961.

The two-member bench comprising Vikram Singh Yadav (Accountant Member) and Sandeep Singh Karhail (Judicial Member) held that the issue was no longer res integra and had been decided in favor of the assessee by its Co-ordinate Bench in the assessee's own case for the preceding assessment year (2009-10). That decision followed an earlier ruling of the Co-ordinate Bench in the case of the assessee's sister concern, Vodafone East Ltd.