The two-member bench comprising Inturi Rama Rao (Accountant Member) and Anikesh Banerjee (Judicial Member) noted that Section 145A mandates that inventory valuation must be adjusted to include the amounts of tax, duty, cess, or fees actually paid to bring the goods to their location and condition.

The tribunal found merit in the assessee's contention regarding the opening stock. It relied on the decision of the Delhi High Court in CIT v. Mahavir Aluminium, which, in turn, followed the Privy Council's ratio that adjustments must be made in the opening stock when the closing stock is revalued.

Savings from Foreign Salary Not Taxable: ITAT deletes Income Tax Notice against Dubai NRI for ₹2 Cr Residential Property Investment

Rajnish Kasturchand Ostwalvs Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 2175

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) deleted the ₹2 crore addition made on a Dubai‑based NRI after observing that the investment in a residential property was fully explained through foreign salary savings that were earned abroad and remitted to India through proper banking channels.

The two-member bench comprising Amit Shukla (Judicial Member) and Girish Agrawal (Accountant Member) observed that the documentary evidence produced formed a complete and credible trail showing that the funds were sourced from foreign salary income remitted through proper banking channels.

The tribunal pointed out that the tax authorities had not brought any material on record to disprove the assessee’s explanation or to show that the investment represented income taxable in India. It explained that rejecting documentary evidence based on suspicion, without conducting any verification using available statutory powers, was not justified.

What You See isn’t What You Pay: ITAT Rules High Tag Prices in Jewellery is Sales Strategy, Not Tax Evasion, Deletes Addition

Begani Jewels vs Asst.Commissioner of Income Tax Central Circle 3(2) CITATION: 2025 TAXSCAN (ITAT) 2176

The Mumbai Bench of the Income Tax Appellate Tribunal ( ITAT ) has held that high/inflated “tag prices” displayed on jewellery items are part of a common sales and marketing strategy in the high-end jewellery business and cannot, by themselves, be treated as evidence of suppressed sales or tax evasion.

The Tribunal noted that the Department did not find any material during search to establish that jewellery was actually sold at the inflated tag prices. Also, it depended on the valuation report prepared by the Department’s own registered valuer, which showed that the market value of jewellery stock was substantially lower than the aggregate tag prices recorded in Cascade. This, according to the ITAT, strongly corroborated the assessee’s explanation that tag prices were not realisable sale prices.

The ITAT also found fault with the Assessing Officer’s methodology of arbitrarily applying a 50% reduction to tag prices and treating the balance as suppressed sales. It observed that this approach led to absurd and commercially unrealistic results, with gross profit margins exceeding 40% on sales and nearly 70% on cost, figures which were completely inconsistent with industry norms.

Owning Multiple Houses Breaks Section 54F Claim: ITAT Clarifies ‘One Residential House’ Rule

Ram Kishore Seth vs IncomeTax Officer CITATION: 2025 TAXSCAN (ITAT) 2177

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) held that the benefit of capital gains exemption under Section 54F of the Income Tax Act, 1961 is not available where the assessee owns more than one independent residential house on the date of transfer of the original asset.

The Bench, comprising Anubhav Sharma, Judicial Member, and S. Rifaur Rahman, Accountant Member, noted that the assessee was earning rental income from multiple independent residential units, each capable of separate residential use and equipped with independent kitchens. It held that for the purposes of Section 54F of the Income Tax Act, 1961, an independent residential unit with basic amenities such as a kitchen constitutes a separate residential house.

Loose Papers, WhatsApp Chats Not Enough: ITAT Quashes S. 69A Additions in Balmukund Group Cases

DCIT vs Balmukund Sponge CITATION: 2025 TAXSCAN (ITAT) 2178

The Kolkata Bench of Income Tax Appellate Tribunal (ITAT), has held that additions for alleged unaccounted income cannot be sustained merely on the basis of loose papers, rough cash jottings, or WhatsApp chats, in the absence of independent corroborative evidence, and has consequently quashed additions made under Section 69A of the Income Tax Act, 1961.

The Bench comprising Rajesh Kumar, Accountant Member and Pradip Kumar Choubey, Judicial Member, observed that the seized documents, on their face, referred to investments and advances and did not establish that the amounts constituted undisclosed income of the assessee. The Bench further ruled that Section 69A of the Income Tax Act, 1961, can be invoked only when unexplained money is found to be owned by the assessee, which was not established in the present case. Therefore, the Bench held that suspicion, however strong, cannot take the place of proof.

Loss from Currency Derivatives Held as Speculative Transaction, Not Business: ITAT Upholds ₹4.05 Cr Foreign Exchange Loss and Brokerage Disallowance

PCL Foods Private Limitedvs Assistant commissioner of income tax CITATION: 2025 TAXSCAN (ITAT) 2184

The Delhi Bench of the Income Tax AppellateTribunal (ITAT) has confirmed the disallowance of foreign exchange losses amounting to ₹4,05,61,649 and ruled that the loss incurred on currency derivatives was speculative and could not be considered part of the core business activity or 'speculation business' for set-off purposes.

The two-member bench comprising MadhumitaRoy(Judicial Member) and Brajesh Kumar Singh (Accountant Member) agreed with the findings of the DRP and the AO, and observed the DRP’s argument that merely incurring a 'speculative transaction' as defined in Section 43(5) did not automatically constitute a 'speculation business' as referred to in Section 28 and Section 73 of the Income Tax Act.

Revision of Assessment Order u/s 263 Not Valid for "Notional Interest" recognized under IND-AS: ITAT Limits Reassessment to Stock Valuation Issue

AVON Cycles Ltd vs ThePCIT-I CITATION: 2025 TAXSCAN (HC) 2708

In a recent ruling on the scope of revisionary jurisdiction under Section 263 of the Income Tax Act, 1961, the Chandigarh Bench of the Income Tax Appellate Tribunal has partly upheld the order of the Principal Commissioner of Income Tax while quashing revisionary directions on multiple issues. The Tribunal held that mere disagreement or re-appreciation of facts cannot justify invoking Section 263 where proper inquiries were already conducted during assessment.

The Bench, comprising Laliet Kumar (Judicial Member) and Krinwant Sahay (Accountant Member), noted that the Assessing Officer had specifically raised queries during the original assessment proceedings regarding TDS deductions and corresponding expenses. The assessee had furnished detailed replies along with challans and returns, which were duly examined. The Tribunal found the finding of the PCIT to be unsustainable in the eyes of law.

ITAT Delhi AnnouncesDedicated Email ID for All Judicial Filings; to be Effective Immediately

The Delhi Benches of the Income Tax Appellate Tribunal (ITAT) issued a formal circular streamlining its digital communication process. In a move to enhance administrative efficiency, a dedicated email address has been established specifically for judicial functions. Going forward, all stakeholders are required to use the following email address: judicial.delhi@itat.nic.in

This email ID is strictly designated for the submission of adjournment applications, consolidation applications, early hearing applications and any other documents pertaining to the functions of the Judicial Section.