The Bench noted that the assessee had already disallowed all identifiable direct expenses, but the AO failed to identify any specific expenditure from the accounts that had a live nexus with earning exempt income.

The two-member bench comprising Dr. B.R.R. Kumar (Vice-President) and Ms. Suchitra Kamble (Judicial Member), examined whether the authority's activities were in the nature of commerce or trade.

The tribunal noted that the issue was squarely covered by the Supreme Court’s ruling in the assessee's own case, which clarified that the prohibition on commercial activity under Section 2(15) did not apply to statutory bodies performing their legal mandate. It was concluded that there was no change in the factual or legal position that would warrant a different view.

Revenue Failed to Establish Business Transactions as Non-Genuine: ITAT Deletes Addition on Fictitious Sundry Debtors

M/s Brawny Nivesh Pvt. Ltdvs ACIT CITATION: 2025 TAXSCAN (ITAT) 2227

The Delhi Bench of the Income Tax AppellateTribunal (ITAT) deleted an addition of ₹98,56,165 and held that the Assessing Officer (AO) failed to prove that the assessee was a mere name lender or that its sales and purchases were sham entries.

The two-member bench comprising Mahavir Singh (Vice President) and Brajesh Kumar Singh (Accountant Member), noted that the Revenue had not brought any material on record to demonstrate that the trading was non-genuine.

The bench relied on a coordinate bench decision in the case of Fabulous Nivesh Pvt. Ltd., which involved similar facts. The Bench observed the AO did not provide a specific finding or corroboratory evidence to pinpoint any bogus transaction in the relevant year.

Difference Between Purchase Price and FMV u/s 56(2)(viia) Requires Fresh Verification of Asset Realizable Value: ITAT Remits Matter

M/s Brawny Nivesh Pvt. Ltdvs ACIT CITATION: 2025 TAXSCAN (ITAT) 2227

The Delhi Bench of the Income Tax AppellateTribunal (ITAT) set aside orders confirming additions under Section 56(2)(viia) and remitted the matter for de-novo adjudication and observed that the actual realizable value of underlying assets is a critical factor in determining Fair Market Value (FMV).

The two-member bench comprising Mahavir Singh (Vice President) and Brajesh Kumar Singh (Accountant Member) observed that the assessee's valuation formula specifically excluded assets with no realizable value to arrive at a lower FMV.

The tribunal observed that neither the AO nor the CIT(A) had actually verified the assessee’s claim regarding the non-realizability of these specific assets. It held that a summary rejection of the Chartered Accountant’s report without factual verification was unsustainable in law.

ITAT Quashes Assessment Over Contradictory Search Details and Non-Application of Mind, Invalidates Reassessment Proceedings

Optus Developers Pvt. Ltdvs ACIT, CC-32 New Delhi CITATION: 2025 TAXSCAN (ITAT) 2228

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) quashed reassessment orders for Assessment Years (A.Y) 2016-17 and 2019-20 after noting contradictory search details from the notices and assessment orders - as they referred to different and unrelated search actions without any possible connection. Such contradictory facts reflected complete non-application of mind by the Assessing Officer. Thus, the Tribunal quashed the reassessments and allowed the appeals.

The Tribunal consisting of Judicial Member, Anubhav Sharma and Accountant Member, Manish Agarwal, heard and reviewed the matter.

The Tribunal, after considering the submissions made, for the AY 2016-17 stated that the assessee was searched on 17.09.2021, incorrectly treating it as both searched and non-searched person. The assessment order referred to a completely different search on Deepak Aggarwal and Mukesh Kumar dated 17.12.2021, with no explanation connecting the two searches.

Unexplained Cash Credit Addition u/s 68 unsustainable as Advances from Associate Concern Accepted in Earlier Years: ITAT

DCIT, Central Circle 1(4)vs Educo Ventures Pvt. Ltd CITATION: 2025 TAXSCAN (ITAT) 2229

The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) dismissed the Revenue's appeal and held that the provision of Section 68 of the Income Tax Act was not applicable to money received in earlier assessment years that did not represent a fresh credit in the books for the year under consideration.

The two-member bench, comprising Rajesh Kumar (Accountant Member) and Pradip Kumar Choubey (Judicial Member), observed that the advance was received in earlier years and had already been accepted as genuine in regular assessments.

The Bench held that the AO was not justified in taking a different view on the same set of financial records without new evidence. It further clarified that Section 68 cannot be applied to amounts that were not credited to the books in the current assessment year.

Only Profit Element must be Taxed in unrecorded Business Receipts: ITAT Directs Estimation of Profit at 7% on Cash Receipts

DCIT, Central Circle 1(4)vs Educo Ventures Pvt. Ltd CITATION: 2025 TAXSCAN (ITAT) 2229

The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) that the provision of Section 69A was not applicable to unrecorded cash transactions that represent business receipts found in documents during a survey and held that in such cases, only the profit component of the unrecorded receipts should be brought to tax rather than the entire gross amount.

The two-member bench comprising Rajesh Kumar (Accountant Member) and Pradip Kumar Choubey (Judicial Member) observed that Section 69A applies to physical assets like money, bullion, or jewellery found during a survey that are not recorded in the books.

The Bench noted that unrecorded cash transactions found in documents typically represent unrecorded sales. It concluded that since these transactions represented unrecorded business activity, it would be reasonable and fair to tax only the estimated profit.

Payments by Developer on Behalf of Housing Society Not Taxable as ‘Income from Other Sources’: ITAT

ITO-23(2)(1) vs MIG Co-opHousing Society Group CITATION: 2025 TAXSCAN (ITAT) 2230

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) held that expenditures discharged by a re-developer for statutory fees and site infrastructure did not constitute "Income from other sources" in the hands of the cooperative housing society.

The two-member bench comprising Amit Shukla(Judicial Member) and Arun Khodpia (Accountant Member) applied the "true test" of whether the amount ever reached the assessee as income. It observed that where an obligation diverts income before it reaches the assessee, it was not taxable.

The Bench noted that payments made to government agencies (like MHADA) or for project-related infrastructure in connection with property development fall into the category of diverted income.

Housing Society Not Liable to pay Income Tax if Members Paid Capital Gain: ITAT Remands for verification

ITO-23(2)(1) vs MIG Co-opHousing Society Group CITATION: 2025 TAXSCAN (ITAT) 2230

The Mumbai Bench of the Income Tax AppellateTribunal (ITAT) ruled that the housing society was not liable if members had already paid capital gains and remanded the matter back to the Assessing Officer (AO) to verify whether the taxes on the capital gains were indeed discharged by the society's members.

The two-member bench, comprising Amit Shukla(Judicial Member) and Arun Khodpia (Accountant Member) noted that Income received and offered for taxation by members cannot be justified for taxation in the hands of the society.

The bench observed that if it was taxed in the hands of society it would amount to double taxation. It also noted that double taxation was a violation of fundamental tax principles which cannot be sustained.

Entire Purchase Amount cannot be Disallowed when Sales accepted and Stock Records maintained: ITAT restricts Bogus Purchase addition to 5%

Income Tax Officer vsMukesh Hirachand Sanghvi CITATION: 2025 TAXSCAN (ITAT) 2231

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) restricted a bogus purchase addition to 5% and ruled that the Assessing Officer (AO) cannot treat the entire purchase amount as non-genuine when the corresponding sales have been accepted and the quantitative movement of goods was fully reconciled.

The two-member bench comprising Amit Shukla (Judicial Member) and Arun Khodpia (Accountant Member), observed that the AO had not doubted the sales or found discrepancies in the quantitative stock tally.

The bench noted that payments were made through regular banking channels and the transactions were duly recorded. It observed that the information from the Sales Tax Department merely indicated a default in depositing VAT, which does not conclusively prove goods were not received.

IGST Refund on Zero-Rated Exports Not Income: ITAT Remands Matter for Limited Verification of Refund Ledger

M/s Tanyo Exports Pvt Ltdvs Deputy Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 2232

The Mumbai Bench of the Income Tax AppellateTribunal (ITAT) ruled that IntegratedGoods and Services Tax (IGST) refunds on zero-rated exports should not be treated as taxable income, provided they were accounting entries for the recovery of taxes previously paid, and remanded the matter for verification.

The two-member bench comprising Om PrakashKant (Accountant Member) and Anikesh Banerjee (Judicial Member), noted that the assessee produced the "IGST Refundable Ledger" for the period of 01.04.2023 to 31.05.2024 for the first time before them.

The tribunal observed that this specific ledger required factual verification to confirm the assessee's claim that the transactions were duly adjusted through ledger accounts without impacting the Profit and Loss Account.

Breach of Mandatory Time Limits of Seven Days u/s 148A(b) and Three Months u/s 148 Invalidates Reassessment: ITAT

M/s Blackstone OverseasPvt. ltd vs TO, Ward 5(1) Aaykar Bhawan CITATION: 2025 TAXSCAN (ITAT) 2233

The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) quashed a reassessment order. It was held that providing only three days to respond to a notice under Section 148A(b), as against the statutory minimum of seven days, and only thirty days to file a return under Section 148, as against the mandatory three-month period, invalidates reassessment proceedings.

The two-member bench comprising Rajesh Kumar (Accountant Member) and Pradip Kumar Choubey (Judicial Member) observed that it is an undisputed fact that the notice provided only three days for the Section 148A(b) response and only thirty days for the Section 148 compliance.

The bench held that the mandatory time requirement was not a mere formality but a statutory right afforded to the assessee to ensure a fair opportunity of being heard. It further noted that failure to comply with these mandatory requirements rendered the notice itself invalid, and also held that any assessment framed thereafter was also unsustainable in law.

ITAT Reduces 2% Commission Addition on Bank Credits to 1% in Accommodation Entry Matter

M/S MIKESH ENTERPRISES PVTVS DCIT CITATION: 2025 TAXSCAN (ITAT) 2234

The Delhi Bench of the Income Tax AppellateTribunal (ITAT) has restricted the commission income addition made on account of alleged accommodation entries, while upholding the validity of reassessment proceedings under Section 147 of the Income Tax Act, 1961. By doing so, the Tribunal partly allowed the assessee's appeal.

The Tribunal, comprising Satbeer Singh Godara(Judicial Member) and Manish Agarwal (Accountant Member), examined the record and rejected the assessee’s contentions. It was noted that no material had been placed on record to establish that the reassessment proceedings were mechanical or based solely on borrowed opinion.

However, while dealing with the addition on account of commission income, the Tribunal observed that although the authorities had alleged accommodation entry activity, there was no discussion on comparable cases or segment-wise analysis to justify the application of a 2% commission rate.

ITAT Deletes ₹2.70 Crore Income Tax Addition on Alleged Cash Receipts from Property Sale, Cites Lack of Supportive Evidence

Income Tax Officer vs Smt.Sunita Gadde CITATION: 2025 TAXSCAN (ITAT) 2235

The Delhi Bench of the Income Tax AppellateTribunal (ITAT) has upheld the deletion of additions made on account of alleged cash and on-money transactions related to property deals, holding that the additions were unsupported by corroborative material. In this light, the Tribunal proceeded to dismiss Revenue’s appeal.

The Tribunal, comprising Judicial Member Satbeer Singh Godara and Accountant Member Manish Agarwal, noted that the issue relating to alleged cash receipt on sale of property had already been examined and settled in the case of the purchaser. It was held that the addition was not supported by any material evidence. The Bench observed that the foundational allegation could not be revived again.

While dealing with the alleged cash payment for purchase of property, the Tribunal took note of the cancellation deeds placed on record, which demonstrated that the transaction had been legally rescinded. It was held that the Assessing Officer’s observations were untenable.

ITAT Quashes Revisionary Order u/s 263 Against Sabarmati Gas as PCIT Exceeded Scope of Show Cause Notice

Sabarmati Gas Ltd vs ThePr. CIT CITATION: 2025 TAXSCAN (ITAT) 2236

The Income Tax Appellate Tribunal (ITAT) atAhmedabad, has set aside a revisionary order passed under Section 263 of theIncome Tax Act, 1961 after holding that the Principal Commissioner of Income Tax (PCIT) exceeded the scope of the show cause notice by attempting to reopen matters that had already been examined.

The Tribunal, comprising Suchitra Kamble (Judicial Member) and Narendra Prasad Sinha (Accountant Member), examined the records and noted that the show cause notice mentioned only the issues of additional depreciation and deduction under Section 80G. There was no reference to rental expenses in the notice.

The Tribunal further observed that the Assessing Officer had already disallowed a portion of the depreciation in the original assessment itself. Similarly, the issue relating to CSR expenditure and deduction under Section 80G had also been scrutinised. In this light, the Tribunal held that the Principal Commissioner cannot invoke revisionary powers merely because a different view was possible on the same set of facts.

Reopening Invalid Due to Mismatch in Sanctioning Authorities and Lack of Proper Sanction u/s 151: ITAT quashes order

Trinity Enclave Pvt. Ltd vsITO Ward 4(1), Kolkata CITATION: 2025 TAXSCAN (ITAT) 2237

The Kolkata Bench of the Income Tax AppellateTribunal (ITAT) quashed a reassessment order due to the mismatch in sanctioning authorities and lack of proper approval required under Section 151 of theIncome Tax Act.

The Single Member Bench comprising Rajesh Kumar (Accountant Member) observed that having two different sanctioning authorities mentioned for the same approval demonstrates a total non-application of mind.

The Bench held that the assessment framed by the AO on March 30, 2022, was also invalid as the preceding proceedings were conducted without proper jurisdiction. It concluded that the jurisdictional defect regarding the Section 151 sanction was fatal to the Revenue's case.

Final Income Tax Assessment Passed beyond One Month from DRP directions Barred by Limitation: ITAT Quashes order

Eaton Power Quality Pvt vsThe DCIT CITATION: 2025 TAXSCAN (ITAT) 2238

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) quashed a final assessment order because it was issued beyond the statutory period of one month from the end of the month in which the Dispute Resolution Panel (DRP) directions were received.

The two-member bench comprising Aby T. Varkey (Judicial Member) and Amitabh Shukla (Accountant Member) observed that Section 144C was a self-contained provision designed for the speedy disposal of disputes for "eligible assessees".

The tribunal highlighted that the statutory time limit is not a mere formality but a mandatory requirement. It observed that failure to strictly adhere to the limitation period under Section 144C(13) was an illegality.

Interest on Enhanced Land Acquisition Compensation Taxable as 'Income from Other Sources' Post-2010 Amendment: ITAT

Shri Bir Singh vs The I.T.O CITATION: 2025 TAXSCAN (ITAT) 2239

The Income Tax Appellate Tribunal (ITAT), New Delhi, held that interest received on enhanced compensation under Section 28 of the Land Acquisition Act, 1894 was taxable as 'Income from Other Sources' under Section 56(2)(viii) read with Section 145B(1), effective from 01.04.2010.

The Tribunal consisted of Judicial Member, Anubhav Sharma and Accountant Member, Naveen Chandra, heard and reviewed the matter.

The Tribunal, after considering the material on record, held that the language of Section 56(2)(viii) and Section 145B(1) was plain, simple and unambiguous. Followed by the Supreme Court's decision in Sham Lal Narula vs CIT, the Tribunal upheld the CIT(A)'s order to tax the interest with 50% deduction under Section 57(iv).

Notice u/s 148 issued by JAO instead of FAO Invalidates Reassessment: ITAT Quashes Proceedings

CPT ELECY SYSTEM EMPLOYEESCOOPT vs ITO CITATION: 2025 TAXSCAN (ITAT) 2240

The Chennai Bench of the Income Tax AppellateTribunal (ITAT) quashed a reassessment order and ruled that the issuance of a notice under Section 148 by the JAO, rather than the National FacelessAssessment Centre (NFAC), was invalid.

The two-member bench comprising Manu Kumar Giri (Judicial Member) and S.R. Raghunatha (Accountant Member) observed that the 2022 Scheme covers assessment, reassessment, and the issuance of notices under Section 148 of the Income Tax Act.

The tribunal noted that the impugned notice was issued on March 30, 2024, well after the 2022 Scheme came into effect. It relied on the Madras High Court, in the case of TVS Credit Services Ltd., which followed the landmark Hexaware Technologies judgment, affirming that faceless issuance was mandatory.

Rule of consistency Prevails: ITAT Rules Percentage completion cannot be forced when Taxpayer follows Project Completion Method

Income Tax Officer vs M/sS.R.K.M Steels CITATION: 2025 TAXSCAN (ITAT) 2241

The Guwahati Bench of the Income Tax Appellate Tribunal (ITAT) dismissed the Revenue's appeal and ruled that the revenue cannot shift a taxpayer from the Project Completion Method to the Percentage Completion Method if the former has been followed consistently and the income is offered to tax.

The Bench, comprising Rajesh Kumar (Accountant Member) and Manomohan Das (Judicial Member) observed that the assessee had already paid approximately ₹90 lakhs in tax on this revenue in subsequent years. The bench noted that restoring the AO's addition would tax the same income twice.

Following the Supreme Court's ratio in Radhasoami Satsang vs. CIT and CIT vs. Excel Industries Ltd, the tribunal noted that the revenue cannot change its stance across different years if the fundamental facts remain the same.

Reassessment based on casual Non-Application of Mind and borrowed Satisfaction: ITAT Quashes Proceedings

Assam Valley Finance andInvestment Pvt vs DCIT CITATION: 2025 TAXSCAN (ITAT) 2242

The Guwahati Bench of the Income Tax Appellate Tribunal (ITAT) held that the AO had reopened the case with a "complete non-application of mind," relying on "borrowed satisfaction" from an investigation report that did not involve the assessee's actual trading brokers.

The two-member bench comprising Rajesh Kumar(Accountant Member) and Manomohan Das (Judicial Member) observed that the AO’s reasons for reopening were "devoid of any merit."

The bench noted that the AO merely reproduced conclusions from an investigation report without independent verification, which constitutes "borrowed satisfaction" rather than a genuine "reason to believe."

Assessment Order Passed on Same Date as S.151A Modified via Notification: ITAT quashes order for lack of jurisdiction

Assam Valley Finance andInvestment Pvt vs DCIT CITATION: 2025 TAXSCAN (ITAT) 2242

The Guwahati Bench of the Income Tax Appellate Tribunal (ITAT) quashed a reassessment order and held that the NFAC lacked the authority to frame an assessment on March 29, 2022, the very same day the "e-assessment of income escaping assessment scheme, 2022" was notified.

The two-member bench, comprising Rajesh Kumar (Accountant Member) and Manomohan Das (Judicial Member) observed that Section 151A provisions were made effective and applicable only from March 29, 2022, when the CBDT notified the new scheme.

The bench held that notices issued by the NFAC prior to this notification (such as the Section 142(1) notice dated February 9, 2022) were issued without the necessary legal authority. It also held that the final assessment order framed on March 29, 2022, could not be sustained as it coincided with the notification date of the very scheme it relied upon for jurisdiction.

Late Fee for Belated TDS Returns prior to 01.06.2015 invalid in absence of enabling Provision u/s 200A: ITAT

PRAKASHCHAND 9 vs The ITO CITATION: 2025 TAXSCAN (ITAT) 2243

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) held that in the absence of an enabling provision under Section 200A of the Act during those periods, the Assessing Officer (AO) lacked the authority to compute or levy late fees while processing Tax Deducted at Source (TDS) statements.

The two-member bench, comprising Manu Kumar Giri (Judicial Member) and S.R. Raghunatha (Accountant Member), observed that while Section 234E was introduced on July 1, 2012, the power to compute this fee while processing TDS returns under Section 200A was not granted until June 1, 2015.

The tribunal observed that prior to June 1, 2015, there was no statutory mechanism available for the Department to determine or impose late fees and relied on precedents from the Madras High Court, specifically the cases of M/s. Sri Rujula International and M/s. True Blue Voice India Private Limited, which established that such levies were invalid for the period in question.

Notices to suspend activities and Maintain Status Quo Not Seizure: ITAT Rules closing stock cannot be valued at Nil, Remands for valuation

Srinivasulu Metri vs DCIT CITATION: 2025 TAXSCAN (ITAT) 2244

The Bangalore Bench of the Income TaxAppellate Tribunal (ITAT) ruled that administrative notices directing a taxpayer to suspend mining activities and maintain status quo did not constitute a legal seizure or confiscation of property. It was also held that the closing stock cannot be valued at Nil for tax purposes.

The two-member bench comprising Laxmi PrasadSahu (Accountant Member) and Soundararajan K (Judicial Member) observed that the letters dated March 4, March 22, and March 24, 2011, only directed the assessee to "suspend mining activities temporarily" and "maintain status quo" regarding the stocked ore.

It was concluded that the authorities below erred in using the word "seized" when only a suspension of activity had occurred. The bench held that the ownership had not transferred to the government by the end of the financial year, the closing stock could not be valued at Nil.

On-Money Addition Unsustainable for Post-Search Property Purchase: ITAT Deletes ₹23 Lakh Unexplained Investment Addition

Dushyantbhai RanchhodbhaiPatel vs The Dy. Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 2245

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) deleted the ₹23 lakh addition made under Section 69 of the Income Tax Act, 1961 as unexplained investment in a post-search property purchase. The material found in the search cannot be applied to transactions executed after the search date and thus, the addition was held unsustainable and the assessee’s appeal was allowed.

The Tribunal consisted of Judicial Member, Sanjay Garg, heard the matter and after considering the submissions made, stated that the impugned addition made by the Assessing Officer was not sustainable in the eyes of law. Consequently, the addition of Rs. 23,00,000/- was deleted.

Form 10BB Requirement is Directory, Not Mandatory: ITAT Holds Late Filing Cannot Deny S. 11 Exemption

Kinkini vs Income TaxOfficer CITATION: 2025 TAXSCAN (ITAT) 2246

The Jaipur Bench of the Income Tax Appellate Tribunal (ITAT) has held that delay in filing the audit report in Form 10BB cannot be used as a ground to deny exemption under Section 11 of the Income Tax Act, 1961, especially when the form was available on record before processing of the return.

The Tribunal, comprising Annapurna Gupta (Accountant Member), examined the issue and noted that the due date for filing the return for the relevant assessment year was November 30, 2023, while the audit report was filed on March 31, 2024. It was further noted that the intimation under Section 143(1)(a) was issued only on December 19, 2024, by which the audit report was already available on record.

The Tribunal turned to several decisions of coordinate benches and the Gujarat High Court, including CIT (Exemption) v. Laxmanarayan Dev Shrishan Seva Khendra and Parul Mahila Pragati Mandal v. ITO (Exemption). This led to an observation that filing of Form 10BB is a procedural requirement and denying exemption due to late filing would result in denial of a substantive right.

Consolidated Approval u/s 153D for Multiple Taxpayers and Years in a Mechanical Manner: ITAT Invalidates Search Assessment

Reshmi Jain, Karishma Jain,Karan Jain vs DCIT CITATION: 2025 TAXSCAN (ITAT) 2247

The Guwahati Bench of the Income Tax AppellateTribunal (ITAT) quashed search assessments and held that providing consolidated approval for multiple taxpayers and years in a mechanical manner is legally unsustainable and vitiates the entire search assessment.

The two-member bench, comprising Rajesh Kumar (Accountant Member) and Manomohan Das (Judicial Member) observed that the Addl. CIT issued a single letter of approval for ten individuals and entities across seven assessment years each.

The bench held that such a "ritualistic formality" or "rubber stamping" fails the legal standard, as it is humanly impossible to judiciously appraise the records of so many cases simultaneously. It also observed that section 153D explicitly requires approval "in respect of each assessment year".

Third-Party Ledger Entry Insufficient Basis for Tax Addition: ITAT Deletes ₹5.5 Lakh Addition under section 69A

Mr. Bipin Agarwal vs Asst.CIT CITATION: 2025 TAXSCAN (ITAT) 2248

The New Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) held that third-party seized ledger entries alone cannot justify additions under Section 69A without proof of the assessee’s possession or ownership of cash, wherein no cash was found, and the ₹5.5 lakh addition was based only on CFM Group’s ledgers. Thus, the addition was deleted.

The Tribunal consisted of Judicial Member, Yogesh Kumar U.S and Accountant Member, Manish Agarwal, heard and reviewed the matter.

The Tribunal, after considering the submissions made, pointed out that no cash was found in the assessee's possession. The addition was made solely based on documents seized from CFM Group showing alleged receipt of ₹5,50,000/-, which the assessee consistently denied. The addition was made without further inquiry.

Assessment quashed without granting Liberty of Reopening to AO: ITAT rectifies order as per SC Judgement

DCIT, Central Circle vs M/sOswal Apparels Pvt CITATION: 2025 TAXSCAN (ITAT) 2249

The Chandigarh Bench of the Income TaxAppellate Tribunal (ITAT) ruled that failing to provide the Assessing Officer (AO) liberty to initiate reassessment proceedings, as held by the Supreme Courtin the Abhisar Buildwell case, constituted a rectifiable error.

The two-member bench, comprising Laliet Kumar(Judicial Member) and Krinwant Sahay (Accountant Member) observed that the Supreme Court in Abhisar Buildwell concluded that in the absence of incriminating material, the AO cannot reassess completed assessments but these assessments can be reopened under Sections 147 or 148 of the Income Tax Act.

Unauthenticated Excel Sheets and Emails Sent by Lenders deemed "Dumb Documents" for interest Addition: ITAT quashes order

Orris InfrastructurePvt.Ltd vs Assistant Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 2250

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) held that loose papers, printouts, or emails not forming part of the assessee’s regular books and lacking independent corroboration were merely dumb documents and cannot justify additions. It quashed a series of assessment orders.

The two-member bench comprising Mahavir Singh (Vice President) and Krinwant Sahay (Accountant Member) examined the nature of the evidence relied upon by the Revenue and the assessee’s contention.

The tribunal observed that the attached files were unsigned, unauthenticated, and did not form part of the statutory records of either the assessee or the third parties.

Satisfaction Note Lacked Reference of Income Escapement in the Form of Assets Worth ₹50 Lacs: ITAT quashes Reassessment Beyond 6 Yrs

The DCIT vs SubramaniamKathiresan CITATION: 2025 TAXSCAN (ITAT) 2251

The Chennai Bench of the Income Tax AppellateTribunal (ITAT) ruled that the AO must record a "Satisfaction Note" expressly stating that they possess evidence of escaped income which was represented in the form of an asset, worth ₹50 lakhs or more for those specific years.

The two-member bench comprising Aby T. Varkey (Judicial Member) and Jagadish (Accountant Member) observed that while the note mentioned "cash transactions" and "repayment of cash loan along with interest," it contained nothing regarding the escaped income being in the form of an asset worth ₹50 lakhs or more.

Relying on the precedent set by the GauhatiHigh Court in Goldstone Cements Ltd., the tribunal concluded that the Satisfaction Note did not meet the essential jurisdictional facts required for the 9th year.

ITAT Restricts Commission Income to 0.15% for Accommodation Entry Provider, Deletes S. 68 Additions

Ram Prakash Bhatia WZ-77 vsDCIT Central Circle-05 Delhi CITATION: 2025 TAXSCAN (ITAT) 2252

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that where an assessee is found to be merely an accommodation entry provider, the entire bank credits cannot be brought to tax under Section 68 of the Income Tax Act, 1961 and only the commission income earned from such activities is liable to be assessed.

Accordingly, the Tribunal, comprising Sudhir Kumar (Judicial Member) and Manish Agarwal (Accountant Member) directed the Assessing Officer to compute commission income at the rate of 0.15% on total credit entries, thereby allowing a batch of appeals partly.

S. 153C cannot be invoked against Searched Person: ITAT Rules Assessment required u/s 153A, dismisses Revenue Appeal

DCIT vs Arun Kumar Pillai CITATION: 2025 TAXSCAN (ITAT) 2253

The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) ruled that the Assessing Officer (AO) must initiate proceedings under Section 153A for searched persons and held that Section 153C was reserved for individuals other than the searched person. It dismissed the Revenue's appeal.

The two-member bench comprising Laxmi Prasad Sahu (Accountant Member) and Keshav Dubey (Judicial Member) observed that the assessee’s residence was covered under the search and panchanamas were drawn in his name, he was a "searched person".

Relying on the Karnataka High Court precedent in DCIT vs. Sunil Kumar Sharma, the bench held that the distinction between a 'searched person' and 'other person' was misinterpreted by the Revenue.

ITAT Holds PLR Applicable for Benchmarking Interest on Rupee-Denominated CCDs, Deletes ₹9.35 Crore TP Adjustment

Cinepolis India Pvt. Ltd.vs Additional / Joint/ Deputy / Assistant Deputy Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 2254

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that interest paid on rupee-denominated convertible debentures cannot be benchmarked using LIBOR-based rates and must instead be tested against domestic prime lending rates.

Before the Tribunal, comprising Madhumita Roy (Judicial Member) and Renu Jauhri (Accountant Member), the assessee contended that the issue was covered by the Special Bench decision in Hyderabad Infratech (P.) Ltd., wherein it was held that interest on rupee-denominated debentures must be benchmarked using domestic lending rates and not LIBOR. It was further argued that the CCDs and interest payments were entirely INR denominated and therefore could not be equated with foreign currency loans.

Relying on the ratio laid down by the Special Bench, the Tribunal held that the interest paid on rupee-denominated CCDs must be benchmarked using domestic prime lending rates. Since the interest rate paid by the assessee was within the arm’s length range, the transfer pricing adjustment made by the Assessing Officer was found to be unsustainable.

Penalty for ‘Inaccurate Particulars’ Sustained: ITAT upholds ₹12.45 Lakh Levy on Stock Broker

Classic Share & StockBroking Services Limited vs Deputy Commissioner of Income-tax, Central Circle7(1) CITATION: 2026 TAXSCAN (ITAT) 101

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has upheld the levy of penalty under Section 271(1)(c) of the Income Tax Act, 1961, holding that the charge of furnishing inaccurate particulars of income was clearly communicated to the assessee and that no prejudice was caused merely because the initial penalty notice was in a printed format.

The Bench comprising Sandeep Gosain, Judicial Member and Girish Agrawal, Accountant Member dismissed the appeal and upheld the penalty. The Tribunal held that the assessment order had clearly recorded satisfaction for initiation of penalty for furnishing inaccurate particulars of income and that the assessee was made fully aware of the charge against it.

Interest-Free Advances from Share Capital Don not Attract Notional Tax: ITAT

ACIT vs SIP InfotechLimited CITATION: 2026 TAXSCAN (ITAT) 102

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) ruled that notional interest cannot be brought to tax where an assessee advances interest-free funds to its director out of its own interest-free share capital and free reserves.

The Bench comprising Justice (Retired) C.V. Bhadang, President, and Vikram Singh Yadav, Accountant Member, dismissed the Revenue’s appeal. Relying on the principle laid down by the Supreme Court in Shoorji Vallabhdas & Co., the Tribunal held that income tax is levied only on real income and not on hypothetical or notional income.