ITAT Weekly Round-up[July 26th - August 1st]

This weekly round-up analytically summarises the key stories related to the Income Tax Appellate Tribunal (ITAT) reported at Taxscan during the previous week, from July 26th, 2025 to August 1st, 2025.

Addition u/s 69C for Alleged Bogus Purchases: ITAT Restricts Disallowance to 8% Citing Accepted Sales and Audited Records 

Ramjibhai Kesaraji Patel vs Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 1358

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) restricted the disallowance to 8% under section 69C of Income Tax Act,1961, for alleged bogus purchases, citing accepted sales and audited records, and partly allowed the appeal.

The two member bench comprising Dr.B.R.R. Kumar (Vice President) and Suchitra Kamble (Judicial Member) examined the submissions and documents on record, including VAT invoices, bank statements, and audited books. It noted that the Assessing Officer (AO) had not disputed the sales. However, doubts were raised about the genuineness of some suppliers, based on their past record as accommodation entry providers.

ITAT Allows LTCG Exemption u/s 10(38) as Inherited Shares Were Held Long-Term, Deletes STCG Addition 

Paresh Manubhai Desai vs Income Tax Officer Ward CITATIO: 2025 TAXSCAN (ITAT) 1359

The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) deleted the Short Term Capital Gains (STCG) addition and allowed Long Term Capital Gains ( LTCG ) exemption under Section 10(38) of Income Tax Act,1961, holding that the shares sold were inherited and held for more than one year.

The two member bench comprising Beena Pillai (Judicial Member) and Renu Jauhri (Accountant Member) heard both sides and found that the reconciliation and transmission certificate showed the shares were inherited and sold after one year. The assessee qualified for LTCG exemption under section 10(38). The tribunal deleted the addition of short term capital gains made by the AO.

Mismatch in Form 26AS Led to ₹15.43 lakh Addition: ITAT Remands Matter to AO for Verification

 Detective And Security Services vs The DCIT CITATION: 2025 TAXSCAN (ITAT) 1360

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) remanded the matter to the Assessing Officer (AO) for verification, after noting that an addition of ₹15.43 lakh was made due to mismatch in Form 26AS.

The two member bench comprising Dr.BRR Kumar (Vice President) and Suchitra Kamble (Judicial Member) considered the submissions of both sides and examined the material on record.

ITAT Dismisses Duplicate Appeal Filed by Bajaj Hindusthan Sugar Challenging PF Disallowance as Withdrawn 

Bajaj Hindu sthan Sugar Limited vs Deputy Director of Income-tax, CPC CITATION: 2025 TAXSCAN (ITAT) 1361

The Mumbai Bench of Income Tax AppellateTribunal ( ITAT ) dismissed as withdrawn a duplicate appeal filed by Bajaj Hindusthan Sugar Limited challenging the disallowance of delayed employees Provident Fund (PF) contribution.

The two member bench comprising Narendra KumarBillaiya (Account Member) and Anikesh Banerjee (Judicial Member) had heard the DR and examined the material on record. The assessee had filed its return under Section 139(1) of the Act, which was processed under Section 143(1), and an addition had been made by disallowing the delayed deposit of employees contribution to the PF.

ITAT rejects Revenue's Claim: ₹3.8 Crore 'Unaccounted Income' Addition Based on Mere Name Similarity 

Deputy Commissioner of Income Tax vs M/s Mayura Saria Pvt. Ltd  CITATION: 2025 TAXSCAN (ITAT) 1362

The Income Tax Appellate Tribunal (ITAT), Rajpur bench, has dismissed the tax department's appeal challenging the deletion of a ₹3.81 crore addition made against the appellant ruling that the addition based solely on similarity between the company name and an unrelated "Mayura Yogesh" mentioned in third-party search records was unsustainable.

Judicial Member Ravish Sood and Accountant Member Arun Khodpia, in their order, emphasized that the revenue could not produce any evidence such as signatures, documents, or direct statements linking the company to Mayura Yogesh. The tribunal noted that the AO's reasoning that since the company had dealings with Sky Alloys, any "Mayura Yogesh" transactions must belong to it was speculative. The company also submitted affidavits confirming it had no employee or associate named Mayura Yogesh.

ITAT rules in Favor of Jaggery Trader, holds No 40(a)(ia) Disallowance Where Tax already Paid on Interest Income 

Kudale AgroGoods vs Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 1363

The Income Tax Appellate Tribunal (ITAT), Pune bench, has ruled in favor of a jaggery products trader, holding that no disallowance under Section 40(a)(ia) of the Income Tax Act, 1961, can be made for interest payments where the recipient NBFCs hKudale Agro Goods vs Income Tax Officerad already declared and paid taxes on the income. The tribunal partially allowed the appeal, directing the Assessing Officer (AO) to verify claims related to one lender while deleting additions for three others.

The order underscores that where the recipient has disclosed income and paid taxes, disallowance under Section 40(a)(ia) becomes redundant. This balanced approach ensures fairness while upholding tax compliance objectives.The ruling provides relief to the jaggery trader while clarifying that disallowance under Section 40(a)(ia) cannot be mechanical.

Bogus Purchase Addition Without Adequate Verification: ITAT Restores ₹8.79 Lakh Matter to AO for Re-adjudication with Opportunity to Taxpayer

 Asiatic Industries vs ITO CITATION: 2025 TAXSCAN (ITAT) 1364

The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) restored the matter involving bogus purchase addition of Rs. 8.79 lakh to the Assessing Officer (AO) for fresh adjudication and held that the addition was made without adequate verification, directing the assessee to produce the suppliers before the AO.

The single-member bench, comprising George Mathan (Judicial Member), observed that the AO had issued notices under Section 133(6) but did not exercise powers under Section 131 to summon the suppliers, despite the assessee's operational business and running ledger accounts.

Professional Fees Disallowance: ITAT Deletes ₹27 Lakh Addition, Rules Mere Unserved Notices u/s 133(6) Insufficient for Disallowance

 Devika Builde state Pvt. Ltd vs ITO CITATION: 2025 TAXSCAN (ITAT) 1365

The Jaipur Bench of the Income Tax Appellate Tribunal (ITAT) deleted the disallowance of professional fees amounting to Rs. 27,00,000 and ruled that mere return of notices under Section 133(6) as unserved does not warrant disallowance without concrete adverse findings.

The two-member bench, comprising Dr. S. Seethalakshmi (Judicial Member) and Rathod Kamlesh Jayantbhai (Accountant Member), observed that the assessee had discharged its onus by providing unchallenged documentary evidence, including confirmations, bank records, and auditor certificates, with no discrepancies pointed out.

Addition u/s 143(1) Without Prior SCN Invalid: ITAT Deletes ₹4.20 Cr Adjustment, Citing Procedural Lapse 

M/s ShreeMaheshwari Vidyalaya vs ITO, Ward-1(3) CITATION: 2025 TAXSCAN (ITAT) 1366

The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) deleted the disallowance of Rs. 4,20,23,463 under Section 143(1) of the Income Tax Act, 1961, and ruled that the adjustment was invalid as no prior show cause notice was issued to the assessee.

The two-member bench, comprising Rajesh Kumar (Accountant Member) and Pradip Kumar Choubey (Judicial Member), observed that the assessee had filed the audit report on time and there was no delay in submitting Form 10B.

Disallowance of ₹58.83 Lakh u/s 57 Deduction for Lack of Evidence: ITAT Remands Matter to AO 

Waseem Alam vs ITO CITATION: 2025 TAXSCAN (ITAT) 1367

The Patna Bench of Income Tax Appellate Tribunal ( ITAT ) remanded the matter to the Assessing Officer (AO )after examining the disallowance of a ₹58.83 lakh deduction claimed under Section 57 of Income Tax Act,1961, for lack of evidence.

The two member bench comprising Sonjoy Sarma (Judicial Member) and Rakesh Mishraj (Accountant Member) reviewed the case and found that the ₹58.83 lakh deduction under Section 57 was disallowed because the assessee had not given enough proof that the expenses were made solely to earn the income.

₹1.5 Crore Treated as Unexplained Cash Credit u/s 68: ITAT Upholds CIT(A)’s Deletion of Addition

 DCIT vs United Tech Ventures Pvt Ltd. CITATION: 2025 TAXSCAN (ITAT) 1368

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) upheld Commissioner of Income Tax(Appeals)[CIT(A)]’s order deleting a ₹1.5 crore addition treated as an accommodation entry under Section 68 of Income Tax Act,1961.

The two member bench comprising T.R.Senthil Kumar (Judicial Member) and Annapurna Gupta (Accountant Member) heard both sides and reviewed the records. It found that the assessee had clarified no loan was received from the Dishman Group and that ₹1.5 crore was actually given as a loan to United Polyfab Gujarat Limited. The AO rejected the confirmations for lack of contra‑signatures and added the amount under Section 68.

Disallowance of ₹24.22 Lakh Towards ESI/PF u/s 36(1)(va): ITAT Condones Delay, Remands Matter to CPC for Verification

 Smt. Veena Agarwal vs Dy. C.I.T CITATION: 2025 TAXSCAN (ITAT) 1369

The Lucknow Bench of Income Tax Appellate Tribunal ( ITAT ), condoned the delay in filing an appeal against a disallowance of ₹24.22 lakh towards Employees’ State Insurance/Provident Fund (ESI/PF) under Section 36(1)(va) of Income Tax Act,1961 and remanded the matter to the Centralized Processing Centre( CPC ) for verification.

The two member bench comprising Subhash Malguria (Judicial Member) and Anadee Nath Misshra (Accountant Member) observed that no one appeared for the assessee at the hearing. It heard the Departmental Representative and reviewed the records. The issue was that the CPC had disallowed ESI/PF payments, stating they were not made on time.

Failure to Examine Notional Rent on Unsold Flats u/s  23(5): ITAT Upholds PCIT’s Revision u/s 263 

Shree Infra vs Principal Commissioner of Income Tax-1 CITATION: 2025 TAXSCAN (ITAT) 1370

The Surat Bench of Income Tax Appellate Tribunal ( ITAT ) upheld the Principal Commissioner of Income Tax (PCIT)’s revisionary order under Section 263 after finding that the Assessing Officer(AO) failed to examine notional rent on unsold flats under Section 23(5) of Income Tax Act,1961, in a completed real estate project.

The two member bench comprising Siddhartha Nautiyal (Judicial Member) and Bijayananda Pruseth (Accountant Member) reviewed the submissions and examined the record. It found that the Assessing Officer had not made any inquiry about section 23(5) of the Act or asked the assessee for an explanation on this issue.

Non‑Filing of Form 3CFA With Return u/s 115BBF: ITAT Sets Aside Order and Remands Matter to AO for Fresh Adjudication 

Ramesh Shankarrao Wagh vs Jurisdictional Officer CITATION: 2025 TAXSCAN (ITAT) 1371

The Pune Bench of Income Tax Appellate Tribunal ( ITAT ) set aside the order and remanded the matter to the Assessing Officer (AO) after finding that the denial of Section 115BBF of Income Tax Act,1961, benefit was due to non‑filing of Form 3CFA with the return.

The two member bench comprising Vinay Bhamore (Judicial Member) and Dr.Dipak P.Ripote (Accountant Member) heard both sides and reviewed the records. It noted that the assessee had filed the return for A.Y. 2020-21 declaring income of ₹32,80,490 and claimed the benefit under Section 115BBF, but had not filed Form No. 3CFA with the return.

Cash Sales Substantiated During Demonetization: ITAT Upholds ₹1.32 Cr Deletion of Cash Deposit Addition 

Ankur vs Jain ITO CITATION: 2025 TAXSCAN (ITAT) 1374

The Delhi Bench of the Income Tax Appellate Tribunal ( ITAT ) has upheld the Commissioner of Income Tax (Appeals) [ CIT(A) ] order, deleting an addition of Rs. 1.32 crore made by the Assessing Officer ( AO ) under Section 68 of the Income Tax Act, 1961, for cash deposits made during the demonetization period in the Assessment Year 2017-18.

The two-member bench, comprising Mahavir Singh (Vice President) and Amitabh Shukla (Accountant Member), observed that the assessee had provided substantial evidence, including tax-audited books, VAT returns, and sale registers, to substantiate the cash sales

Notice u/s 148 Issued After Expiration of 3 Years Without Permission From Pr. Chief Commissioner: ITAT Rules proceedings Invalid for Statutory Violation 

ANKITA LOKSHGOYAL vs INCOME TAX OFFICER CITATION: 2025 TAXSCAN (ITAT) 1375

The Delhi Bench of the Income Tax Appellate Tribunal ( ITAT ) has invalidated reassessment proceedings as the Assessing Officer’s (AO) failure to comply with statutory requirements under Section 151, which mandates prior approval from the Principal Chief Commissioner of Income Tax for reassessment actions initiated after three years.

The Bench observed that as per Section 151(ii), approval for such cases must be obtained from the Principal Chief Commissioner or, in their absence, the Chief Commissioner of Income Tax. The AO’s reliance on approval from the Pr. CIT was deemed non-compliant with the statutory mandate.

Failure to Dispose Objections Before Assessment: ITAT Rules Reassessment Proceedings Void 

Anita Jha vs DCIT CITATION: 2025 TAXSCAN (ITAT) 1376

The Delhi Bench of the Income Tax Appellate Tribunal ( ITAT ) has ruled that reassessment proceedings initiated under Section 148 of the Income Tax Act, 1961, by the Assessing Officer (AO) as void due to procedural irregularities.

The two-member bench, comprising Vikas Awasthy (Judicial Member) and S. Rifaur Rahman (Accountant Member), observed that the assessee had filed objections via the e-portal. It also observed that no record showed the AO disposing of these before the assessment order.

ITAT Allows Exemption u/s 11 to Temple, Holds 28-Day Delay in Filing Form 10BB Not Fatal 

Sri Ramalingeswara Swamy vs Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 1377

The Hyderabad Bench of the Income Tax Appellate Tribunal (ITAT) Hyderabad Bench has allowed an appeal filed by Sri Ramalingeswara Swamy Temple and held that a 28-day delay in filing the audit report in Form 10BB should not deny the temple exemption under Section 11 of the Income Tax Act, 1961.

The bench held that while filing the audit report on time is ideal, a minor delay should not be fatal if the report is available to the assessing officer before the order is passed. The tribunal noted that the assessee had also filed a condonation petition for the delay, which was pending adjudication. The ITAT held that the lower authorities erred in denying the exemption and directed the AO to allow the claim under Section 11 of the Income Tax Act.

Assessee's Off-Market Share Purchase by Cheque Differs Materially from Facts Relied Upon by Single Bench: ITAT overrides Single Bench

 ACIT vs Rohan Agarwal CITATION: 2025 TAXSCAN (ITAT) 1378

The Delhi bench of the Income Tax Appellate Tribunal (ITAT) overruled the decision of the single bench of ITAT by noting that the assessee's off-market share purchase made by cheque was found to differ materially from the facts relied upon by the single bench.

The bench noted that the taxpayer also bought shares off-market, but did so by cheque, and no negative statement was mentioned anywhere in the records. So, the facts of this case are significantly different from the earlier one.

ITAT Grants Assessee One More Opportunity to Substantiate Claims regarding S.69A in interest of Justice

 S.S.S. Export vs The Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 1379

The Income Tax Appellate Tribunal (ITAT), Chennai, has allowed the appeal of S.S.S. Exports and remanded the case back to the Commissioner of Income Tax (Appeals) for a fresh hearing. The dispute centred around cash deposits totaling Rs. 17.05 lakh made during the 2016 demonetisation period, which the Assessing Officer (AO) had treated as unexplained income under Section 69A of the Income Tax Act, 1961.

The ITAT, comprising S.S. Viswanethra Ravi (Judicial Member) and Accountant Member Shri Jagadish, by relying on the principles of natural justice, directed the CIT(A) to reconsider the case afresh after evaluating the assessee’s evidence. The appeal was allowed for statistical purposes.

ITAT Restores Appeal Dismissed by NFAC for Non-Compliance & Grants Assessee One Final Opportunity in Interest of Justice

 Mehinder Sharma vs Assistant Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 1380

The Delhi bench of the Income Tax Appellate Tribunal (ITAT) restores an appeal dismissed by the National Faceless Assessment Centre (NFAC) for non-compliance & grants the assessee one final opportunity in the interest of justice.

The bench noted that the NFAC had dismissed the appeal in non-compliance, but in the interest of justice, the bench restored the matter to NFAC and directed the latter to give one last opportunity to the assessee to substantiate their claim and decide the issue as per fact and law.

ITAT: Mere Disagreement with AO’s View Doesn’t Justify Revision Under Section 263 

Godrej Agrovet Limited vs Principal Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 1381

The Mumbai bench of Income Tax Appellate Tribunal (ITAT), has partially allowed the appeal of Godrej Agrovet Limited, effectively setting aside the revisionary order passed by the Principal Commissioner of Income Tax (PCIT) under Section 263 of the Income Tax Act, 1961. While agreeing that a mistake had occurred in one aspect, the Tribunal ruled that the Assessing Officer (AO) had indeed conducted due diligence on two other contested issues, and therefore, the PCIT's intervention was unjustified.

The bench consisting of Amarjit Singh (Accountant Member) and Sandeep Singh Karhail, (Judicial Member) noted that the AO had specifically queried the matter, and the assessee had provided detailed explanations supported by agreements, past assessments, and relevant case laws. Hence, the ITAT ruled that the AO had exercised sufficient scrutiny and application of mind. It was concluded that while the deduction under Section 35CCC had indeed been wrongly allowed in excess due to oversight, the AO had conducted adequate inquiry on the other two issues. As a result, the Tribunal upheld the PCIT’s revision only in part, offering partial relief to the assessee.

Non-compliance With Amended Provisions of S.148A and S.151: ITAT Invalidates Reassessment Notice Issued After 5 Years 

Shri Vamanrao Ramalingam Ar cot L/R by Smt. Sangeetha Vamanrao vs Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 1382

The Hyderabad Bench of the Income Tax Appellate Tribunal (ITAT) invalidated a reassessment notice issued for the Assessment Year (AY) 2014-15, citing non-compliance with the amended provisions of Sections 148A and 151 of the Income Tax Act, 1961.

The Tribunal found that the AO neither followed the Section 148A procedure nor obtained approval from the Principal Chief Commissioner or Principal Director General, as required for a notice issued after five years from the end of AY 2014-15.

Notice Issued in wrong Email Id: ITAT Grants Opportunity to Substantiate Cash Deposit and Property Purchase 

Vinayak Bahiru Medge vs Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 1383

The Pune Bench of the Income Tax Appellate Tribunal ( ITAT ) restored the matter with an opportunity to substantiate the source of cash deposits of Rs. 37,14,640 and the purchase of an immovable property worth Rs. 34,40,000 due to a notice was issued to wrong email Id.

The two-member bench, comprising Astha Chandra (Judicial Member) and Rama Kanta Panda (Vice President), observed that the assessee’s non-compliance before the CIT(A) was due to notices being sent to an incorrect email ID.

Penalty Matter Remanded: ITAT Directs AO to Give Effect to Quantum Appeal Before Deciding 

The Co. op Credit vs The DCIT CITATION: 2025 TAXSCAN (ITAT) 1384

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has remanded the penalty proceedings under Section 271(1)(c) of the Income Tax Act, 1961, for the Assessment Year (AY) 2016-17, directing the AO to pass an order after giving effect to the quantum appeal in the case of The Co-op Credit Society of VIS Limited.

The two-member bench, comprising T.R. Senthil Kumar (Judicial Member) and Narendra Prasad Sinha (Accountant Member), reviewed the materials on record, including the quantum order of the Co-ordinate Bench.

Commission on Accommodation Entries Restricted to 2.5%: ITAT Delhi Upholds CIT(A) Order

 Sh. Vinay Sharma vs DCIT CITATION: 2025 TAXSCAN (ITAT) 1385

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has upheld the Commissioner of Income Tax (Appeals) [CIT(A)]’s order, restricting the commission on accommodation entries provided by the assessee to 2.5% of the total entries.

The bench found the 2.5% rate reasonable, given the facts of the case, including the scale of transactions and the lack of evidence to support a lower commission. It concluded that the 2.5% commission was appropriately applied to the accommodation entries provided to M/s. NKG Infrastructure Ltd.

Disallowance u/s 14A Cannot Be Added Back While Computing Book Profits u/s 115JB of Income Tax: ITAT 

M/s Sky AMA Infra Private Limited vs DCIT CITATION: 2025 TAXSCAN (ITAT) 1386

The Chandigarh Bench of the Income Tax Appellate Tribunal (ITAT) has ruled that disallowance under Section 14A cannot be added back while computing book profits under Section 115JB of the Income Tax Act, thereby deleting the adjustment of Rs. 79.21 lakh.

The two-member bench comprising Rajpal Yadav (Vice President) and Manoj Kumar Aggarwal (Accountant Member) observed that the AO correctly applied Rule 8D for disallowance under normal provisions, as the assessee failed to prove no expenses were incurred.

Failure to Deduct TDS on Expenses u/s 40(a)(ia): ITAT Sets Aside Ex Parte Order, Remands Matter for Fresh Adjudication 

Anup Nayak vs CIT(A) CITATION: 2025 TAXSCAN (ITAT) 1387

The Kolkata Bench of Income Tax Appellate Tribunal ( ITAT ) sets aside an ex parte order of the Commissioner of Income Tax (Appeals)[CIT(A)] in a case involving failure to deduct Tax Deducted at Source ( TDS ) on dumper hire charges, lease rent, and loan interest, which led to disallowance of expenses under Section 40(a) of Income Tax Act,1961.

The two member bench comprising Sonjoy Sarma (Judicial Member) and Rakesh Mishra (Accountant Member) heard the DR and reviewed the records. It noted that the CIT(A) passed an ex parte order because the assessee did not appear despite repeated notices.

Denial of S.80G Due to Religious Nature of Objects: ITAT Remits With One More Opportunity Citing Only Two Notices and Natural Justice

 Dharti Ekta Charitable Trust vs CIT CITATION: 2025 TAXSCAN (ITAT) 1388

The Surat Bench of the Income Tax Appellate Tribunal (ITAT) remitted the matter for fresh adjudication with one more opportunity citing Natural Justice in the case involving Denial of section 80G for alleged Religious nature of objects.

The two-member bench comprising Suchitra Raghunath Kamble (Judicial Member) and Bijayananda Pruseth (Accountant Member) observed that the assessee could not adequately plead its case before the CIT(E) due to limited notices and the ex parte order passed without reviewing the same-day submission.

Reassessment Invalid Due to Lack of New Tangible Material and Credible Information: ITAT Quashes ₹33.81 Lakh Addition 

Nazar Impex Pvt. Ltd. vs Income Tax Officer Ward-1(1)(3) CITATION: 2025 TAXSCAN (ITAT) 1389

The Surat Bench of the Income Tax Appellate Tribunal (ITAT) ruled that the reassessment under Section 147 of the Income TaxAct, 1961, was invalid due to the lack of new tangible material and credible information and quashed the Rs. 33.81 lakh addition as commission income.

The bench held that reopening without new tangible material violated established principles, as reaffirmed by jurisdictional High Court rulings. It concluded that the notice under Section 148 was invalid and quashed the reassessment order under Section 144 read with Section 147 of the Income Tax Act.

Ex-Parte Appellate Order Without Reasonable Opportunity: ITAT Restores Rs. 2.55 Cr Matter for Fresh Adjudication 

M/s Gemini Dyeing and Printing Mills Pvt Ltd, vs The Asst. Commissioner of Income tax ,Circle 7(1)(1), Mumbai CITATION: 2025 TAXSCAN (ITAT) 1390

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) restored the matter to the Commissioner of Income Tax (Appeals) [CIT(A)] for de novo adjudication and held that the ex-parte appellate order violated principles of natural justice by not providing the assessee a reasonable opportunity to be heard.

The two-member bench comprising Narendra Kumar Billaiya (Accountant Member) and Anikesh Banerjee (Judicial Member) observed that the CIT(A) disposed of the appeal ex-parte without affording the assessee a reasonable opportunity to present its case or examining the merits.

ITAT Quashes Part of Income Tax Addition u/s 69A on Cash Deposits During Demonetization Based on Sales Evidenc 

M/s Manglam Sales Corporation vs Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 1391

The New Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has partly deleted an income tax addition of ₹59,78,000 made under Section 69A of the Income Tax Act, 1961, on cash deposits during the demonetization period. The Tribunal noted that the deposits were explained by the assessee through sale records and Value Added Tax (VAT) returns and sustained only ₹2,53,000 as unexplained cash.

The Bench comprising Mahavir Singh (Vice President) and Brajesh Kumar Singh (Accountant Member) deleted the addition to the extent of ₹57,25,000 and sustained the balance ₹2,53,000 under Section 69A due to lack of sufficient supporting documents.

Housewife Taxpayer Not Complied to Notices for Stock Transaction: ITAT Remits ₹11.16 Lakh Unexplained Income Matter with 10k Costs

Anupam Shailesh Syal vs ITO CITATION: 2025 TAXSCAN (ITAT) 1392

The Surat Bench of the Income Tax Appellate Tribunal (ITAT) remitted to the Commissioner of Income Tax (Appeals) [CIT(A)] for fresh adjudication, imposing a cost of ₹10,000 for non-compliance with statutory notices.

The two-member bench comprising Suchitra Raghunath Kamble (Judicial Member) and Bijayananda Pruseth (Accountant Member), observed that the assessee’s non-cooperation with statutory notices was undisputed.

Satisfaction Note by the AO for S.153C Assessment Need to Be Recorded for Each AY: ITAT Quashes ₹2.11 Crore Addition Citing Combined Satisfaction Note

 Subhash Jivraj Jain vs ACIT CITATION: 2025 TAXSCAN (ITAT) 1393

The Pune Bench of the Income Tax Appellate Tribunal (ITAT) ruled that the satisfaction note under Section 153C of the Income Tax Act, 1961, must be recorded separately for each assessment year and quashed the Rs. 2.11 crore addition citing the invalidity of a consolidated satisfaction note.

The two-member bench, comprising R.K. Panda (Vice President) and Astha Chandra (Judicial Member), observed that the AO’s satisfaction note for Section 153C was consolidated for multiple AYs. It also observed that a consolidated note vitiates the proceedings.

Disallowance in Unabated Assessment Without Incriminating Material: ITAT Upholds Deletion of ₹16.29 Lakh Penalty u/s 271(1)(c) 

Income Tax Officer vs Micro Plan tea Limited CITATION: 2025 TAXSCAN (ITAT) 1394

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) upheld the deletion of penalty under Section 271(1)(c) of the Income Tax Act, 1961 and held that adhoc disallowance in an unabated assessment without incriminating material found during search does not justify penalty.

The two-member bench, comprising Amit Shukla (Judicial Member) and Renu Jauhri (Accountant Member), observed that the assessment under Section 153C was for an unabated year, and no incriminating material was found to prove the expenses were not genuine or business-related.

CPC Adjustments on Exempt Income and Disallowances Invalid: ITAT Deletes ₹5.95 Cr Additions, Citing Technical Glitches and Lack of Judicial Application 

3i Infotech Limited vs DCIT CITATION: 2025 TAXSCAN (ITAT) 1395

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) ruled that adjustments made by the Central Processing Centre (CPC) under Section 143(1) of the Income Tax Act, 1961, were invalid due to technical glitches and deleted the Rs. 5.95 crore additions.

The two-member bench, comprising Amit Shukla (Judicial Member) and Renu Jauhri (Accountant Member), observed that the adjustments were made due to the CPC system glitches.

Unaccounted Cash Sales Reconciled with Invoices and Stock: ITAT Upholds Deletion of ₹30 Lakh Addition u/s 69C 

Deputy Commissioner of Income Tax vs Mehta Emporium Jewellers CITATION: 2025 TAXSCAN (ITAT) 1396

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) upheld the deletion of the Rs. 30,01,023 addition under Section 69C of the Income Tax Act, 1961 and ruled that the assessee's reconciliation of unaccounted cash sales with sales invoices and stock registers was satisfactory, and no discrepancies were pointed out by the Assessing Officer.

The two-member bench, comprising Beena Pillai (Judicial Member) and Renu Jauhri (Accountant Member), observed that the assessee had furnished detailed reconciliation before both the Investigation Wing and during assessment proceedings, including cash invoices and stock registers.

Bogus Purchase Addition Restricted to 12.5% Gross Profit: ITAT Upholds CIT(A)’s Order, Citing Judicial Precedent

 Deputy Commissioner of Income-tax vs S. Rasiklal and Co CITATION: 2025 TAXSCAN (ITAT) 1397

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) upheld the Commissioner of Income Tax (Appeals) [CIT(A)] order restricting bogus purchase addition to 12.5% of gross profit and dismissed the Revenue's appeal, relying on the Hon'ble Bombay High Court precedent.

The two-member bench, comprising Narendra Kumar Billaiya (Accountant Member) and Anikesh Banerjee (Judicial Member), observed that the assessee had not appealed against the 12.5% addition confirmed by the CIT(A).

Disallowance of Agricultural Income in Revisionary Proceedings: ITAT Deletes Addition, Confirms 88.62 Acres under Cultivation Including Eucalyptus Trees 

Rajeswar Thakur vs ACIT CITATION: 2025 TAXSCAN (ITAT) 1398

The Cuttack Bench of the Income Tax Appellate Tribunal (ITAT) deleted the disallowance of agricultural income in revisionary proceedings under Section 263 of the Income Tax Act, 1961, and ruled that the assessee had adequately proven ownership and cultivation of 88.62 acres of land, including eucalyptus trees, with no adverse findings by the Assessing Officer.

The bench held that the disallowance in revisionary proceedings was unsustainable. The bench concluded that the agricultural income was genuine and adequately supported by evidence. The appeals of the assessee were allowed.

Section 14A Disallowance Restricted to Exempt Income Investments: ITAT Upholds CIT(A)’s Order, Rejects Retrospective Amendment Application 

Joint Commissioner of Income-tax vs Gateway Distriparks Ltd CITATION: 2025 TAXSCAN (ITAT) 1399

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) ruled that disallowance should be restricted to investments that actually yielded exempt income, rejecting the Revenue’s contention for retrospective application of the Explanation inserted by the Finance Act, 2022.

The two-member bench, comprising Narendra Kumar Billaiya (Accountant Member) and Anikesh Banerjee (Judicial Member), observed that the remaining investments did not yield any exempt income during the year.

Foreign Exchange Loss Allowed as Revenue Expenditure: ITAT Deletes Disallowance Citing Non-Capitalization

 Macrotech Developers Limited vs DCIT CITATION: 2025 TAXSCAN (ITAT) 1400

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) deleted the disallowance of foreign exchange loss amounting to Rs. 1,12,449 and ruled that such loss arising from revenue transactions should be allowed as deductible expenditure, absent capitalization to project costs under relevant accounting standards.

The two-member bench, comprising Pawan Singh (Judicial Member) and Prabhhash Shankar (Accountant Member), observed that the assessee had provided details of the loss, which arose from revenue consulting charges not allocated to project costs.

ITAT Rules in Favor of Co-op Society: Bank Interest Income Eligible for 80P Deduction

 Shree Mahaveer Dhamani Vikas Society Limited vs The Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 1401

The Pune Bench of Income Tax Appellate Tribunal (ITAT) held that interest income earned by primary co-operative societies from bank deposits qualifies for tax deduction under Section 80P(2)(a)(i), overturning the tax department's classification of such income as taxable "other sources" revenue. The ruling reinforces the beneficial interpretation of tax provisions meant to support rural financial institutions.

Judicial Member Vinay Bhamore and Accountant Member Dr. Dipak P. Ripote sided with the society, relying on the Andhra Pradesh High Court's Vavveru Co-operative Rural Bank judgment (2017) which held that interest income remains "attributable to" a co-op's main business when derived from surplus funds. The tribunal emphasized the critical difference between the facts in Totagars - where funds belonged to members - and the present case where deposits originated from the society's own operational surplus.

ITAT Strikes Down Reassessment Due to Wrong Authority’s Approval, Co-op Society Wins Appeal 

M/s. Arthbharti Nagari Sahakari vs The Income Tax Officer CITATION: 2025 TAXSCAN (ITAT) 1402

The Pune Bench of Income Tax Appellate Tribunal (ITAT) quashed reassessment proceedings against a cooperative credit society after finding the tax department used an unauthorized officer's approval to initiate the case. The ruling emphasizes strict compliance with hierarchical approval requirements under income tax laws.

Judicial Member Vinay Bhamore and Accountant Member Dr. Dipak P. Ripote identified a fatal flaw in the proceedings, the reassessment approval came from a Principal Commissioner when the law mandated Principal Chief Commissioner's authorization for cases beyond three years. The tribunal relied on the Bombay High Court's Holiday Developers verdict (2024) which struck down similar proceedings for identical procedural lapses.

Income Tax Dept Could not Place alleged accommodation entries which led to Addition u/s 69A: ITAT dismisses Appeal 

The Income Tax Officer vs Nimit Agarwal CITATION: 2025 TAXSCAN (ITAT) 1403

The Income Tax Appellate Tribunal (ITAT), Ahmedabad bench, dismissed the Revenue’s appeal challenging the deletion of an addition of ₹3.62 crore made under Section 69A of the Income Tax Act, 1961.

The bench held that the Income Tax Department had failed to substantiate its allegations of unexplained accommodation entries, which formed the basis of the reassessment proceedings.

Income from Revocable Trust Taxable in Settlor’s Hands, Not Trust: ITAT Grants Relief Under India-UAE DTAA 

Green Maiden vs The Assistant Commissioner of Income Tax CITATION: 2025 TAXSCAN (ITAT) 1404

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) deleted the addition made by the Assessing Officer (AO) in the hands of the trust and ruled that the income from investments is taxable in the settlor’s hands and exempt under the India-UAE Double Taxation Avoidance Agreement (DTAA).

The two-member bench, comprising Sandeep Singh Karhail(Judicial Member) and Vikram Singh Yadav (Accountant Member), observed that the trust deed establishes revocability, making the income taxable in ADIA’s hands.

ITAT Remands Capital Gains Dispute to AO: Faults Revenue on Legal Oversight, Upholds Principles of Justice 

Shri Harwant Singh Grewal vs The ITO, Ward 7(4), Ludhiana. CITATION: 2025 TAXSCAN (ITAT) 1405

The Chandigarh Bench of the Income Tax Appellate Tribunal (ITAT) has remanded the matter of capital gains taxation involving agriculturist Harwant Singh Grewal back to the Assessing Officer (AO) for a fresh assessment. The Tribunal found that both the AO and the Commissioner of Income Tax (Appeals) [CIT(A)] had failed to consider foundational legal issues, leading to an erroneous assessment and unjust tax burden.

Setting aside the assessment order, the Bench observed that quasi-judicial authorities are respected not on account of their power to legalize injustice on technical grounds but because they are capable of removing injustice. It further directed that the AO must reframe the assessment after giving due opportunity to the assessee and consider all legal provisions, including Sections 2(14), 48, 50C, 54B, and 54F. The assessee is also permitted to submit any fresh material in support of his case during the reassessment.

Issue of Registration u/s 12A Income Tax Act is Invalid as Registration has Already been granted: ITAT

Bhaba vs CIT(Exemption) CITATION: 2025 TAXSCAN (ITAT) 1406

The Kolkata Bench of the Income Tax Appellate Tribunal ( ITAT ) dismissed an appeal filed by Bhaba, a Kolkata-based charitable entity, as infructuous. The tribunal held that since the Commissioner of Income Tax (Exemptions) had already granted the organisation registration under Section 12AB of the Income Tax Act, 1961, any pending issue regarding an earlier application under Section 12A had become redundant.

The bench, comprising George Mathan (Judicial Member) and Sanjay Awasthi (Accountant Member), noted that the subsequent granting of registration under Section 12AB had effectively resolved the issue raised in the appeal. The order of approval under Section 12AB clearly acknowledged the appellant's eligibility, with clause 11 of the approval order leaving no ambiguity about the status of recognition.

Inadvertently Claimed Tax Exemption u/s 11/12A Instead of 10(23C)(via): ITAT Upholds JCIT(A) Relief as Form 10BB Filed Within Time

 DCIT Exemptions vs B P Poddar Foundation For Education CITATION: 2025 TAXSCAN (ITAT) 1407

The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) has upheld the order of the Joint Commissioner of Income Tax (Appeals) in favor of B.P. Poddar Foundation for Education. The Tribunal dismissed the Revenue’s appeal, confirming that the charitable trust was entitled to exemption under Section 10(23C)(via) despite an initial filing error, as the requisite Form 10BB was subsequently filed within the permissible period per CBDT Circular No. 16/2024.

The ITAT, comprising George Mathan (Judicial Member) and Sanjay Awasthi (Accountant Member), ruled in favor of the assessee. The bench observed that The trust held a valid and subsisting registration under Section 10(23C)(via) for the relevant assessment year. The error in section selection and the form used was clearly inadvertent and non-malicious.

Indexation from Date of Agreement, Not Possession: ITAT Grants Relief to NRI Assessee in Long-Term Capital Gains Dispute 

Braj Kishore Singh vs Assessing Officer Internatinal Tax Ward 4(2)91) CITATION: 2025 TAXSCAN (ITAT) 1408

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has ruled in favour of non-resident Indian (NRI) Braj Kishore Singh, directing the Assessing Officer (AO) to consider the date of property acquisition as the date of agreement to sale, not the date of possession, for calculating the indexed cost of acquisition. This decision aligns with established precedents and offers critical clarity on the interpretation of Section 48 of the Income Tax Act, 1961.

The ITAT Bench comprising Ms. Padmavathy S (Accountant Member) and Shri Raj Kumar Chauhan (Judicial Member) disagreed with the DRP's conclusions. After extensive deliberation and citing a series of binding precedents, the Tribunal ruled that the date of agreement to sale, in this case, 16 November 2007, marked the beginning of the assessee’s holding period.

ITAT Deletes ₹3 Crore Addition Made on Cash Deposits During Demonetization: Upholds Gold Jewellery Firm’s Sales as Genuine 

Income Tax Officer vs Ankit Gold Ltd CITATION: 2025 TAXSCAN (ITAT) 1409

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has upheld the deletion of a ₹3.02 crore addition made under Section 68 of the Income Tax Act. The case involved Ankit Gold Ltd., a gold jewellery manufacturer and wholesaler, whose cash sales during the demonetization period were initially treated by the Assessing Officer (AO) as unexplained cash credits. The Tribunal, after carefully reviewing the facts and the documentary evidence, found that the cash deposits were duly recorded in the books, backed by legitimate sales, and thus could not be treated as unaccounted income.

The ITAT Bench comprising Dr. B.R.R.Kumar (Vice President) and Siddhartha Nautiyal (Judicial Member) upheld the CIT(A)’s decision. The Tribunal observed that the AO failed to show any material inconsistency or defect in the books that justified invoking Section 68.The sales had already been recorded and profit taxed,adding the same amount under Section 68 would be tantamount to double taxation. The ITAT ruled that the cash sales were genuine and supported by credible evidence. As a result, the appeal by the Revenue was dismissed.

ITAT Gives Relief to Assessee in PAN Mix-Up Case: Remands Matter Back to AO with Cost Condition

Avdhesh vs ITO CITATION: 2025 TAXSCAN (ITAT) 1410

The Income Tax Appellate Tribunal (ITAT), Indore Bench, has allowed an appeal filed by one Avdhesh Baggad of Dhar district. The case, which involved a substantial addition of ₹12.56 lakh under Section 69A of the Income Tax Act, 1961, was remanded back to the Assessing Officer (AO) for fresh adjudication. While granting the relief, the bench imposed a cost of ₹7,000 on the assessee, to be paid to the Prime Minister’s National Relief Fund (PMNRF), citing multiple procedural lapses on his part.

The division bench comprising B.M. Biyani (Accountant Member) and Paresh M. Joshi (Judicial Member) acknowledged the substantial merit in the assessee’s claim. However, it also criticized the procedural lapses, non-participation in prior hearings, delayed appeal, and confusion over PAN usage.

Interest on Enhanced Compensation is Contingent, Not Taxable Under Section 56(2)(viii) of the Income Tax Act: ITAT

 Anant ChanguMokal vs National Faceless Assessment Centre CITATION: 2025 TAXSCAN (ITAT) 1411

The Income Tax Appellate Tribunal (ITAT), Pune bench, has held that interest received on enhanced compensation is contingent in nature and, therefore, not taxable under Section 56(2)(viii) of the Income Tax Act, 1961. The decision came in the case of Anant Changu Mokal, whose rural agricultural land was compulsorily acquired by the government.

The Pune Bench of the Tribunal, comprising Judicial Member Vinay Bhamore and Accountant Member Dr. Dipak P. Ripote, noted that the land acquired was undisputedly rural agricultural land, qualifying for exemption under Section 10(37). The assessee’s claim that the interest was received under Section 28 of the Land Acquisition Act, which forms part of the enhanced compensation, was supported by documentary evidence. It was held that the appeal filed by the Maharashtra government against the award was still pending before the Bombay High Court. This made the interest income contingent and uncertain.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates