ITAT Weekly Round-up
The Part II of Round-up of the Income Tax Appellate Tribunal (ITAT) Cases Reported at Taxscan from 1 February, 2026 to 15 February, 2026
SFIO-SEBI Findings on NSEL-CCM Scam Not Enough for additions when Trades are Fully Disclosed: ITAT
Assistant Commissioner of IncomeTax vs Dynamatic Developers Private Limited
CITATION : 2026 TAXSCAN (ITAT) 205
The Income Tax Appellate Tribunal ( ITAT ), Ahmedabad Bench, has held that general findings of the Serious Fraud Investigation Office (SFIO) and SEBI regarding irregularities in NSEL trades and Client Code Modification (CCM) cannot justify additions when the trades and related profits are fully recorded in the books of account.
It held that the related profit from such trades was also already included in the gross profit shown in the profit and loss account. Therefore, making an additional separate addition of the same profit as short-term capital gain leads to double or even triple taxation of the same income.
Only Final Stamp Valuation Determined by Collector Applies u/s 50C: ITAT allows Full Section 54F Exemption
Mahesh Shrivastava vs Income TaxOfficer-3(1)
CITATION : 2026 TAXSCAN (ITAT) 206
In a recent ruling, Income Tax Appellate Tribunal (ITAT), Raipur, held that only the final stamp valuation fixed by the Collector applies under Section 50C of the Income Tax Act, 1961. It deleted a ₹74.5 lakh capital gains addition and held that Section 54F exemption must be based on actual sale proceeds reinvested, not deemed values.
The bench of Partha Sarathi Chaudhury ( judicial member), Avdhesh Kumar ( account member) directed the Assessing Officer to grant full exemption under Section 54F since the cost of the new residential asset was not less than the net sale consideration.
Only Final Stamp Valuation Determined by Collector Applies u/s 50C: ITAT allows Full Section 54F Exemption
Mahesh Shrivastava vs Income TaxOfficer-3(1)
CITATION : 2026 TAXSCAN (ITAT) 206
In a recent ruling, Income Tax Appellate Tribunal (ITAT), Raipur, held that only the final stamp valuation fixed by the Collector applies under Section 50C of the Income Tax Act, 1961. It deleted a ₹74.5 lakh capital gains addition and held that Section 54F exemption must be based on actual sale proceeds reinvested, not deemed values.
The bench of Partha Sarathi Chaudhury ( judicial member), Avdhesh Kumar ( account member) directed the Assessing Officer to grant full exemption under Section 54F since the cost of the new residential asset was not less than the net sale consideration.
Depreciation on Goodwill cannot be Revisited in Later Years Once Allowed in First Year: ITAT
.Ammann India Private Limited vsPrincipal Commissioner of Income Tax – 3
CITATION : 2026 TAXSCAN (ITAT) 208
In a recent ruling, the Income Tax Appellate Tribunal (ITAT), Ahmedabad, has held that once depreciation on goodwill is properly allowed in the first year, subsequent years must continue on the opening Written Down Value (WDV) and it cannot be disturbed unless the WDV itself is proven wrong.
The bench of TR Senthil Kumar (Judicial Member) and Narendra Prasad Sinha (Accountant Member) allowed the assessee’s appeal in full.
Advance Tax Delay Depends on Date of Electronic Payment, Not Credit Date: ITAT Quashes ₹1.23 Cr Interest on Dream11 Parent Co.
CITATION : 2026 TAXSCAN (ITAT) 209
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) recently clarified that for purposes of levying interest on delayed payment of advance tax, the relevant date is the date on which electronic payment is made and not the date on which the amount is credited to the Revenue or the challan is generated.
Referencing judicial precedents, the Tribunal reiterated that where there is no default on the part of the assessee and that there stood no justification for levying interest under Section 234C; the Tribunal accordingly deleted the interest of ₹1.23 crore and allowed Ground 1 and dismissed Ground 2.
Taxpayer Not Well Versed with Income Tax Proceedings: ITAT Gives Final Opportunity, Directs Compliance
Tukaram Dnyaneshwar Bhalekar vsITO
CITATION : 2026 TAXSCAN (ITAT) 210
The Income Tax Appellate Tribunal (ITAT), Pune Bench, gave the assessee-appellant a final opportunity to comply and participate in the proceedings in the interests of justice. The appellant had admitted that they were not well versed with income tax proceedings.
The bench, consisting of R.K. Panda (Vice-President) and Astha Chandra (Judicial Member), ruled in favour of the assessee to grant one opportunity to substantiate the assessee’s case through the filing of requisite documents so that the matter be decided on fact and law. The assessee had no liberty for further adjournment and must submit the details on the appointed date. In conclusion, the appeal was allowed for statistical purposes.
Income Tax Addition Solely Based on Pendrive Data Seized from Third Party not Sustainable: ITAT Quashes Order
Jayantilal Jesaram Purohit vs DCIT
CITATION : 2026 TAXSCAN (ITAT) 211
The Income Tax Appellate Tribunal (ITAT), Mumbai Bench, recently held that in situations where income tax addition has been made solely based on documents/materials seized from third parties, the orders are to be quashed. The data, in the present case, had been retrieved from a pendrive from a third party.
The bench, comprising Arun Khodpia (Accountant) and Sandeep Gosain (Judicial), allowed the appeal that had been clubbed earlier from three appeals and deleted the additions made.
PCIT(A)'s Change in Opinion from AO’s Reassessment Overruled : ITAT Reiterates Safe Harbour Rules of 10%, Invokes ‘Law Prospicit Non Respicit’
Anil Agrawal vs AssistantCommissioner of Income
CITATION : 2026 TAXSCAN (ITAT) 212
The Income Tax Appellate Tribunal (ITAT), Raipur Bench, placed reliance on several judgments and held that if the difference between Stamp Duty Valuation and actual consideration of a property is less than 10%, then it should be ignored.
Partha Sarathi Chaudhary (Judicial Member) and Avdesh Kumar Mishra (Accountant Member) while considering this matter through the Raipur Bench of ITAT held that the appeal stands allowed. The stay application by the assessee has also been dismissed as withdrawn.
Trust Deed Clause on Funds Utilization Outside of India Rectified by Amendment and Undertaking: ITAT Sets Matter for Review by CIT(E) on Merits
Your Neighbourhood ChurchAssociation vs CIT(E)
CITATION : 2026 TAXSCAN (ITAT) 213
The Income Tax Appellate Tribunal (ITAT), Mumbai Bench, sent a matter back to the Commissioner of Income Tax-Exemption (CIT(E)) regarding utilisation of funds outside India clause in a trust deed which disqualifies it for registration.
The bench, consisting of Bijayananda Pruseth (Accountant Member) and Sandeep Gosain (Judicial Member), set aside the impugned order and restored the file back to the CIT(E) to examine afresh on merits. The tribunal made note of the fact that reasonable opportunity has been given to the assessee-appellant and further adjournment on any frivolous grounds shall not be entertained. Conclusively, the appeal was allowed for statistical purposes.
Extrapolation Not Permitted in Income Tax Search Assessment Proceedings: ITAT rules Order Unsubstantiated, allows Appeal
Sh. Anup Kumar Aggarwal vs ACIT
CITATION : 2026 TAXSCAN (ITAT) 214
The Income Tax Appellate Tribunal ( ITAT ), Chandigarh Bench, has recently held an order which had extrapolated reasonings unsubstantiated. The tribunal is of the opinion that extrapolation is not permitted in income tax search assessment proceedings.
Therefore, considering such contentions, the two-member bench of ITAT allowed the appeal filed by Anup Kumar Aggarwal. The bench included Rajpal Yadav (Vice-President) and Manoj Kumar Aggwarwal (Accountant Member).
Penalty to be Levied on Tax Amount Sought to be Evaded: ITAT Reduces Penalty u/s 271(1)(c) After Adjusting TDS and Self-Assessment Tax
Niripraj Singh Sohal vs ITO Ward6(1) Ludhiana
CITATION : 2026 TAXSCAN (ITAT) 215
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that while penalty under Section 271(1)(c) of the Income Tax Act, 1961 was rightly leviable in a case of non-filing of return, the quantum of penalty must be restricted to the tax actually sought to be evaded.
The appeal was thus partly allowed. The order was pronounced by a Bench comprising Mahavir Singh (Vice President) and Renu Jauhri (Accountant Member).
Final Assessment Orders Passed u/s 144C(13) r.w.s. 153 are Without Jurisdiction: ITAT Quashes Proceedings following Judicial Precedent
AECOM India P. Ltd vs DeputyCommissioner of Income Tax
CITATION : 2026 TAXSCAN (ITAT) 216
The Delhi Bench of the Income Tax Appellate Tribunal has quashed the final assessment orders for Assessment Years 2010-11 and 2011-12 on the ground that they were barred by limitation under Section 144C(13) read with Section 153 of the Income Tax Act, 1961.
It was observed that both parties can revive the appeals in case the Supreme Court reverses the law laid down in Roca Bathroom Products P. Ltd.
No Seized Documents Supporting Findings of AO: ITAT Mumbai Deletes Estimated Additions on alleged
Subhkaran & Sons 11 vsDeputy Commissioner of Income Tax
CITATION : 2026 TAXSCAN (ITAT) 217
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has deleted additions made on account of alleged accommodation entries and circular trading, holding that no further income could be estimated in the absence of any incriminating material.
The order was pronounced by the Bench comprising Sandeep Gosain (Judicial Member) and Girish Agrawal (Accountant Member) on 06 January, 2026.
Interest u/s 220(2) Unsustainable Where Income Tax Demand Arose Only Through Subsequent Rectification Order: ITAT
Samsara Shipping Pvt. Ltd vsIncome Tax Officer
CITATION : 2026 TAXSCAN (ITAT) 218
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that interest under Section 220(2) of the Income Tax Act, 1961 cannot be levied for a period during which no enforceable income tax demand existed.
Holding that the assessee could not be made to suffer for a mistake committed by the Assessing Officer, the Tribunal directed the deletion of interest. The appeal filed by the assessee was accordingly allowed.
Once Exercised, Section 115BAB Option Applies to Subsequent Years: ITAT Allows 15% Concessional Tax Rate
Satara Engineering Projects andEquipments Private Limite vs DCIT
CITATION : 2026 TAXSCAN (ITAT) 219
The Pune Bench of the Income Tax Appellate Tribunal (ITAT) has held that once a manufacturing company validly exercises the option for concessional taxation under Section 115BAB of the Income Tax Act, 1961 in the first eligible year, the benefit cannot be denied in subsequent years merely because the return of income is filed late.
The order was pronounced by a bench comprising Vinay Bhamore (Judicial Member) and Manish Borad (Accountant Member) on 06th January, 2026.
ITAT Quashes Reopening of Assessment against WBEIDC, Holds it was Based on Mere Change of Opinion
Electronics Industry DevelopmentCorporation Limited vs Commissioner of Income Tax
CITATION : 2026 TAXSCAN (ITAT) 220
The Income Tax Appellate Tribunal (ITAT) at Kolkata has set aside the reassessment proceedings initiated against West Bengal Electronics Industry Development Corporation Limited, holding that the reopening was based solely on a mere change of opinion. This amounted to a review of the original assessment, which was found impermissible by the Bench.
The Tribunal, comprising Rajesh Kumar (Accountant Member) and Pradip Kumar Choubey (Judicial Member), concluded that the Assessing Officer lacked jurisdiction to reopen the assessment. The mandatory condition for reopening, i.e. existence of new ‘tangible material’ was not satisfied. Accordingly, the reopening as well as the consequential reassessment orders were quashed.
lTAT Grants Relief to Tata AIG on Co-Insurance Fees, Employee Bonus Write-Back and Dividend Exemption
DCIT vs TATA AIG GENERALINSURANCE COMPANY LIMITED
CITATION : 2026 TAXSCAN (ITAT) 221
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has dismissed the Revenue’s appeal challenging multiple reliefs granted to Tata AIG General Insurance Company Limited, as the issues raised were squarely covered by earlier decisions in the assessee’s own case.
Finding no infirmity in the order of the CIT(A) and noting that the Revenue failed to bring any contrary judicial precedent on record, the Tribunal dismissed the appeal in its entirety.
Unsecured Loans Amounting to Rs. 6 Cr from Unreliable Companies in Dispute: ITAT Rejects Appeal Following AO's Remand Report
CITATION : 2026 TAXSCAN (ITAT) 222
The Income Tax Appellate Tribunal (ITAT), Mumbai Bench, rejected an appeal by the Department, whose dispute concerns the deletion of the INR 6,00,00,000/- addition made under Section 68 of the Income Tax Act, 1961 (the Act).
The bench, comprising M.V. Mahadeokar (Accountant Member) and Saktijit Dey (Vice-President), upheld the deletion made by the CIT(A) to the addition made under Section 68 and dismissed the appeal.
ITAT Upholds 6% Profit Estimation on Alleged Bogus Diamond Purchases, Dismisses Cross Appeals
Income Tax Officer vs RajatDiamond Exim Pvt. Ltd
CITATION : 2026 TAXSCAN (ITAT) 223
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has upheld the estimation of profit on alleged non-genuine diamond purchases and dismissed cross appeals filed by both the assessee and the Revenue. The Bench held that once sales are accepted, the entire purchases cannot be disallowed and neither can the receipts be taxed again under Section 68 of the Income Tax Act, 1961.
It was observed that although the assessee failed to conclusively establish the identity of the suppliers, and this required estimation of income rather than wholesale disallowance. In light of all observations, the Tribunal held that the application of a uniform gross profit rate of 6% was reasonable and justified.
Depreciation On Goodwill allowable Where Excess Consideration Paid For Business Acquisition: ITAT
Kovalam Resort Private Limitedvs DCIT
CITATION : 2026 TAXSCAN (ITAT) 224
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that depreciation can be claimed on the goodwill that arises as a result of a business acquisition where the consideration paid is in excess of the value of the tangible assets.
The case was remanded to the Assessing Officer to recalculate the depreciation on tangible assets using the DVO values and also to allow depreciation on goodwill.
Gift From Mother out of FD Maturity Cannot Be Treated As Unexplained Investment: ITAT Deletes ₹1.75 Cr Addition u/s 69
Nevin H. Bharwani vs Income TaxOfficer (International Taxation)
CITATION : 2026 TAXSCAN (ITAT) 225
The Mumbai Bench of the Income Tax Appellate Tribunal has held that the amount received as a gift from the mother from the maturity of fixed deposits cannot be regarded as unexplained investment under Section 69 of the Income-tax Act, 1961. The Tribunal, thus, deleted the addition of ₹1.75 crore holding that the assessee had satisfactorily explained the source of funds.
The Bench comprising Justice Kavitha Rajagopal [Judicial Member] Prabhash Shankar, [Accountant Member] held that the authorities below erred in ignoring verified bank records and concluded that the ₹1.75 crore investment was fully explained. Accordingly, the addition under Section 69 was deleted. However the Tribunal sustained a separate addition relating to amounts received from the assessee’s sister due to lack of supporting evidence.
LTCG From Share Sale cannot Be Treated as Unexplained Income u/s 68: ITAT
Mr. Jay Hansraj Chheda vs IncomeTax Officer Ward 19(2)(1)
CITATION : 2026 TAXSCAN (ITAT) 226
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that long term capital gains arising from the sale of shares cannot be taxed as unexplained income under Section 68 of the Income Tax Act just on suspicion and general investigation reports. The Mumbai Tribunal deleted an addition of Rs.3.98 crores and held that the assessee proved the genuineness of the transactions through documentary evidence.
Accordingly, the ITAT upheld the deletion of the addition of ₹3.98 crores under Section 68 as well as the deletion of the estimated commission addition under Section 69C.
Power Charges Provision Based On Actual Bills Not A Contingent Liability: ITAT Rejects CPC Disallowance u/s 143(1)
Grindwell Norten Limited vsDeputy Commissioner of Income-tax
CITATION : 2026 TAXSCAN (ITAT) 227
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) considered the issue regarding the allowance of a provision created toward payment of bills in power charges supported by invoices in allowing a request under Section 143(1) of the Income-tax Act, 1961 in the return-processing stage.
Accordingly, the Tribunal set aside the adjustment made by the CPC and remanded the issue to the Assessing Officer allowing the assessee an opportunity to do a limited verification.
ITAT Restores Matter Regarding Disallowance of PF/ESI, Calls for Remand Report by AO
CITATION : 2026 TAXSCAN (ITAT) 229
The Income Tax Appellate Tribunal ( ITAT ), Hyderabad Bench, restored a matter concerned with the disallowance of PF/ESI. The tribunal called for a remand report to be submitted by the Assessing Officer (AO).
ITAT restored the matter to CIT(A) and referred the Checkmate Services Pvt. Ltd. case. The two member bench, comprising Vijay Pal Rao (Vice-President) and Madhusudan Sawdia (Accountant Member) also called for a remand report on the disputed issues from the AO. Conclusively, the appeal was allowed for statistical purposes on 06.02.2026.
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