ITAT Weekly Roundup
The Round-up of the Income Tax Appellate Tribunal (ITAT) Cases Reported at Taxscan from 29 March 2026 to 4 April 2026.
This weekly round-up encapsulates the key stories related to the Income Tax Appellate Tribunal(ITAT)
reported at Taxscan, from March 29, 2026 to April 4, 2026.
Reopening u/s 147 Unsustainable: ITAT Sets Aside Reassessment Due to Invalid And Irrelevant Reasons Recorded
Shree Vagad Visha Oswal ChovisiMahajan Charitable vs Assistant Director of Income Tax-II(2),
CITATION : 2026 TAXSCAN (ITAT) 340
The Income Tax Appellate Tribunal ( ITAT ) Mumbai Bench has held that reopening of assessment in terms of Section 147 of the Income Tax Act 1961 would not be sustainable when the reasons recorded do not pertain to the assessment year in question.
The ITAT declared the reassessment proceedings as without jurisdiction and quashed the assessment order, allowing the appeal of the assessee.
ITAT Allows Additional Claim u/s 54F on Depreciable Asset, Directs Matter Back for Verification
M/s. Dollar Chunilal Modi HUF vsIncome Tax Officer
CITATION : 2026 TAXSCAN (ITAT) 341
The Income Tax Appellate Tribunal (ITAT) Mumbai Bench held that the assessee is entitled to raise an additional claim for deduction under Section 54F of the Income Tax Act 1961 at the appellate stage even if the claim is not raised in the original return of income.
The ITAT directed that the issue be sent back to the AO for a fresh decision after giving the assessee a reasonable opportunity of being heard by the AO. The appeal was allowed for statistical purposes only.
No TDS Default on LFC Payments Made Under Binding High Court Directions: ITAT Deletes Demand on Payments Raised Against State Bank of India
State Bank of India BhavnagarPara Branch vs Income Tax Officer
CITATION : 2026 TAXSCAN (ITAT) 342
The Income Tax Appellate Tribunal (ITAT) Ahmedabad Bench has held that no liability under Section 201(1) of the Income Tax Act, 1961 can be imposed on an assessee for non-deduction of tax at source on payments of Leave Fare Concession (LFC) if such non deduction is in compliance with interim directions of a High Court.
Relying on the Kerala High Court decision and a coordinate bench ruling, the Bench held that the assessee had no option but to comply with the High Court’s interim directions. Therefore, non-deduction of TDS in such circumstances could not trigger liability under Section 201.
Disallowance u/s 14A Unsustainable Without Recording of Proper Satisfaction: ITAT sets aside Addition of ₹48L against Zee Entertainment
Zee Entertainment EnterprisesLimited vs DCIT C.C.2(4), Mumbai
CITATION : 2026 TAXSCAN (ITAT) 343
The Income Tax Appellate Tribunal (ITAT)Mumbai Bench has held that the disallowance under Section 14A of the Income Tax Act cannot be made without proper satisfaction. The court has provided relief by deleting the addition of ₹48.97 lakhs.
The Bench set aside the appellate order and deleted the sustained addition of ₹48.97 lakhs.
Disallowance to Income due to Non-appreciation of Evidence in Alleged Manipulation of Scrip Share Price Unlawful: ITAT Partly allows Appeal
Innovate Derivatives Pvt. Ltd.vs The ITO
CITATION : 2026 TAXSCAN (ITAT) 344
The Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench, allowed an appeal partly noting sufficient evidence in a case where unlawful disallowance to income was made alleging manipulation of share price of scrip, as the evidence was overlooked by the Assessing Officer (AO)and Commissioner of Income-tax (Appeals) [CIT(A)].
The bench of Narendra Prasad Sinha (Accountant Member) and T.R. Senthil Kumar (Judicial Member) referred to the decision of a Co-ordinate Bench in Rachana Sanjay Shah v. PCIT (2024) and deleted the additions made by the AO. The appeal was partly allowed.
Loans Granted For Non-Agricultural Purposes Not Bar 80P Deduction: ITAT Deletes ₹1.63 Crore Addition
CITATION : 2026 TAXSCAN (ITAT) 345
In a recent ruling, the Income Tax Appellate Tribunal (ITAT), Cochin Bench, held that granting loans for non-agricultural purposes does not disentitle a PrimaryAgricultural Credit Society (PACS) from claiming a deduction under Section80P(2)(a)(i) of the Income Tax Act.
The Tribunal in the present case noted that the Revenue failed to distinguish this binding precedent on facts or law, and hence, a deduction must be granted.
Leave Encashment Exemption u/s 10(10AA) allowable up to Threshold of Rs. 25L as per CBDT Notification: ITAT Grants Exemption
Satish Chandra Tyagi vsCommissioner of Income Tax
CITATION : 2026 TAXSCAN (ITAT) 346
The Income Tax Appellate Tribunal (ITAT), Delhi Bench, held that an appellant is entitled to claim full exemption of leave encashment under Section 10(10AA) of the Income Tax Act, 1961 in accordance with the revised limit prescribed by CBDT Notification.
The Tribunal held that the appellant was entitled to claim exemption under Section 10(10AA) up to the revised ceiling limit. Accordingly, the Tribunal allowed the appeal of the appellant.
Payment Towards Corporate Guarantee Settlement Allowable as Deductible Business Expenditure u/s 37(1): ITAT
M/s. Escorts Limited vs Addl.CIT
CITATION : 2026 TAXSCAN (ITAT) 347
In a recent ruling, the Delhi Bench of the Income Tax Appellate Tribunal (ITAT) held that a payment made towards the settlement of a corporate guarantee qualifies as a deductible business expenditure under Section 37(1) of the Income Tax Act, 1961, thereby allowing the claimed deduction.
The Bench rejected the Revenue's argument that the assessee undertook no real liability, holding that the liability stood fortified by both the arbitration award and the High Court execution proceedings. Referring to SA Builders Ltd. v. CIT, the Tribunal noted that the “department could not sit in the armchair of a businessman” to decide how business affairs are conducted and that once a guarantee is entered into in earlier years, the liability arising on invocation cannot be disallowed under Section 37(1).
ITAT Upholds ₹5.31 Crore Disallowance on Dividend Stripping u/s 94(7), Holds Provision Extends to Full Dividend, Not Merely Exempt Portion
Punita Kalpesh Patel vs The ACIT
CITATION : ITA No: 2054/Ahd/2025
In a recent ruling, the Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench, has upheld a disallowance of ₹5.31 crore under Section 94(7) of the Income Tax Act, 1961, holding that the provision applies to the entire dividend received by the assessee and cannot be restricted to the exempt portion.
The Tribunal also noted that the assessee's alternative computation of ₹32.76 lakh did not convincingly rebut the AO's detailed transaction-wise analysis and that the burden to establish non-applicability of Section 94(7) lay with the assessee, which had not been satisfactorily discharged. Therefore, the Tribunal upheld the disallowance of ₹5.31 crore and confirmed that Section 94(7) applies to the entire dividend received, not merely the exempt portion.
Deletion of ₹32.67 Cr Unsecured Loans, WIP Estimation & Property Sale Additions Unsustainable Without Proper Verification: ITAT
Income Tax Officer, Ward -23(2)(1) vs Pushpa Construction Company
CITATION : 2026 TAXSCAN (ITAT) 350
The Income Tax AppellateTribunal (ITAT) Mumbai Bench has quashed an order passed by the Commissioner ofIncome Tax (Appeals) [ CIT(A) ] in deleting various additions made and held that the deletion was not sustainable in the absence of verification and examination of facts.
The Tribunal observed that the claim by the assessee to have offered the income in the subsequent years needed verification to avoid double taxation. Similarly, the issue relating to the sale of property was also set aside for further consideration.
SEBI Clean Chit Strengthens LTCG Claim: ITAT Upholds Deletion of ₹2.92 Cr Alleged Penny Stock Addition
Income Tax Officer vs SunitaChaudhary
CITATION : 2026 TAXSCAN (ITAT) 351
The Income Tax Appellate Tribunal ( ITAT ) Mumbai Bench has upheld the deletion of the addition of ₹2.92 crore made towards the alleged bogus long-term capital gains (LTCG) on the basis of a clean chit given by the Securities and Exchange Board of India (SEBI) and earlier rulings in the case of the taxpayer itself.
The ITAT dismissed the Revenue’s appeal and upheld the decision of the CIT(A), observing that the long-term capital gains earned by the taxpayer on the sale of shares of First Financial Services Ltd were genuine in nature and that no addition under Sections 68 and 69C of the Income Tax Act could be made in the absence of any incriminating evidence and in view of the findings of SEBI.
Exemption u/s 11 cannot be Denied for Vague Charitable Purpose in Form 10 when Fund Utilisation Proven: ITAT
Senior Citizen Santacruz(Paschim) Sanstha vs Commissioner of Income Tax
CITATION : 2026 TAXSCAN (ITAT) 352
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) allowed the assessee's appeal and held that the Assessing Officer should grant exemption under Section 11(2) of Income Tax Act, 1961 as a vague mention in Form 10 cannot be the basis for denying the benefits of accumulation.
The Tribunal observed that the accumulation cannot be allowed to exceed the objects of the trust, and the assessee had substantiated the utilization of the funds. Thus, the bench held that procedural defaults should not be allowed to override substantive compliance.
ITAT Invalidates Reopening Based on Audit Objection as Change of Opinion, Upholds Deletion of ₹6.60 Cr Interest Disallowance u/s 36
DCIT vs Sharada Erectors PrivateLimited 11/1
CITATION : 2026 TAXSCAN (ITAT) 353
The Income Tax AppellateTribunal (ITAT) Pune Bench has held that reassessment proceedings initiated on the sole reason of an objection raised in the audit is a mere change of opinion and is not valid in law. The Tribunal accordingly upheld the deletion of a disallowance of ₹6.60 crore made in respect of interest under Section 36(1)(iii) of the Income Tax Act, 1961.
The Tribunal comprising R.K. Panda [Vice President] and Vinay Bhamore [Judicial Member] held that the AO had already scrutinized the issue of interest disallowance in the original assessment itself by asking detailed explanations. It further noted that audit objections merely pointing out perceived errors do not constitute valid grounds for reopening.
Bank Interest Earned by Credit Co-operative Society Eligible for Deduction u/s 80P as Business Income: ITAT
M/s. Basaveshwaranagar Credit Cooperative Society Ltd. vs The ITO, Ward – 6(2)(1)
CITATION : 2026 TAXSCAN (ITAT) 354
The Income Tax AppellateTribunal (ITAT) Bangalore Bench has held that deduction under Section80P(2)(a)(i) of the Income Tax Act, 1961 cannot be denied to a credit co-operative society on the interest income earned on deposits with banks, treating it as income earned on business activity.
The Tribunal comprising Prashant Maharishi [Vice-President] and Keshav Dubey [Judicial Member] held that the surplus funds invested in banks were not liabilities payable to members, but constituted business funds temporarily parked to earn interest and such interest income is attributable to the business of the assessee and eligible for deduction under Section 80P(2)(a)(i).
Taxpayer’s Father’s Dairy Found during Search falls into “Dumb Document”: ITAT says ‘No Addition’ Can be Made’
Vikas Agarwal vs ACIT, CentralCircle
CITATION : 2026 TAXSCAN (ITAT) 355
The Income Tax Appellate Tribunal (ITAT), Delhi Bench, held that the appellant’s father’s dairy found during search and seizure under Section 132 of the Income tax Act, 1961 falls into the category of dumb documents and no addition can be made based on such dumb document.
The appellate tribunal held that such documents fall within the category of “dumb documents”, and it is a settled principle that no addition can be made solely on their basis without independent corroboration.
Loan Repayment through Bank does Not Prove Genuineness of Bogus Unsecured Loan: ITAT Dismisses appeal of Global Stainless
CITATION : 2026 TAXSCAN (ITAT) 356
The Income Tax Appellate Tribunal (ITAT),Delhi Bench, held that unsecured loans treated as bogus under Section 68 of the Income Tax Act, 1961 cannot be legitimized merely because they were repaid through banking channels.
The Tribunal relied on the decision in J.K. Global, where held that repayment of such loans does not cure the defect of lack of genuineness, as the transactions themselves were found to be non-genuine.
Addition u/s 145(3) and S. 69A due to Failure to Prove Genuineness of Purchases and Cash Deposits: ITAT upholds Additional
CITATION : 2026 TAXSCAN (ITAT) 357
The Income Tax Appellate Tribunal (ITAT), Delhi Bench, held that where the assessee fails to substantiate the genuineness of purchases, maintain proper books of accounts, and explain cash deposits, the rejection of books under Section 145(3) and 69A additions were upheld by the Tribunal.
The Tribunal held that the appellant failed to discharge the burden cast upon him to prove the genuineness of transactions and correctness of accounts. Accordingly, the rejection of books of accounts under Section 145(3) and estimation of income was found to be justified.
Principal Officer of University to Verify ITR & File Income Tax Appeal: ITAT dismisses Rajiv Gandhi University’s Case for Procedural Defect
M/s. Rajiv Gandhi University ofHealth Sciences vs The ACIT (Exemptions)
CITATION : 2026 TAXSCAN (ITAT) 358
The Bangalore Benchof the Income Tax Appellate Tribunal (ITAT) has held that only the Principal Officer authorised under law can verify and file an income tax appeal as per rule 47(1) & 45(3) of Income Tax Rules, 1962; ITAT accordingly dismissed an appeal filed by Rajiv Gandhi University of Health Sciences as not maintainable due to the procedural defect.
The ITAT Bench held that since the appeal was not verified and filed by the competent Principal Officer as required under law, the appeal was not maintainable and liable to be dismissed as infructuous.
ITAT Deletes Interest on TDS Delay, Upholds No Default Where Cheque Submitted Within Due Date
M/s. Mumbai Metro PolitianRegion Development Authority vs Deputy Commissioner of Income Tax
CITATION : 2026 TAXSCAN (ITAT) 359
The Income Tax AppellateTribunal (ITAT) Mumbai Bench has struck down the imposition of interest underSection 201(1A) of the Income Tax Act, 1961 observing that there has been no default on the part of the taxpayer in tendering the cheque for the TDS payment within the due date.
The Tribunal relied upon the Supreme Court judgment in the case of the CIT vs. Ogale Glass Works Ltd., and Circular No. 261 issued by the CBDT dated the 8th of August, 1979, to affirm that the payment is deemed to have been made on the date the cheque is tendered and provided the cheque is not dishonored.
ITAT Upholds BSNL VRS Compensation as Retrenchment, Allows Complete Income Tax Exemption u/s 10
Meghmala Sudhir Pathak vs IncomeTax Officer
CITATION : 2026 TAXSCAN (ITAT) 360
The Income Tax Appellate Tribunal (ITAT) Pune Bench has held that compensation received by employees of Bharat Sanchar Nigam Limited (BSNL) under the Voluntary Retirement Scheme (VRS), 2019 qualifies as retrenchment compensation and is fully exempt from tax under Section 10(10B) of the Income Tax Act 1961.
The Bench comprising Manish Borad [Accountant Member] observed that the VRS scheme was in substance a retrenchment exercise under a government-approved revival plan. Further, it held that such compensation falls within the ambit of Section 10(10B). It also reaffirmed that appellate authorities can admit new claims to determine correct tax liability.Accordingly, all appeals were allowed.
No Income Tax Addition on Gross Cash Deposits Without Verification: ITAT Sets Aside ₹9.32 Cr Addition, Grants Final Opportunity to Substantiate Claim
Tulshidas Chandrabhan Jejurkarvs ITO
CITATION : 2026 TAXSCAN (ITAT) 361
The Income Tax Appellate Tribunal (ITAT) Pune Bench has set aside the addition of ₹9.32 crore made in the assessment of income tax for the reason of unexplained cash deposits. It held that without proper verification of the nature of the transaction, the addition cannot be sustained.
The Bench comprising R.K. Panda (Vice President) and Vinay Bhamore (Judicial Member) remanded the case for fresh consideration with a direction to the assessee to fully cooperate and furnish details.
Partial Disallowance of Business Expenses Justified Despite Minimal Business Activity: ITAT Reduces Disallowance to Fixed Amount
BSM Developers Pvt. Ltd. vs ACIT
CITATION : 2026 TAXSCAN (ITAT) 362
The Income Tax Appellate Tribunal (ITAT) DelhiBench has allowed the appeal of the assessee in part and has restricted the amount of disallowance of business expenses to a fixed amount of ₹1,00,000.
It was held by the Tribunal that instead of going into the details of each expense, a reasonable approach would be to restrict the disallowance to a lump sum of ₹1,00,000. Therefore, a substantial relief of ₹19.71 lakh was allowed to the assessee.
Capital Gains of Spanish Investor from Sale of Shares of Real Estate Companies Not Taxable in India under India-Spain DTAA: ITAT in Merrill Lynch Case
DCIT(IT)-3(2)(1), Mumbai vsMerrill Lynch Capital Markets Espana SA SV.
CITATION : 2026 TAXSCAN (ITAT) 363
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) held that capital gains of a Spanish investor from sale of shares of real estate companies are not taxable in India under the India-Spain DTAA, as such gains fall under the residuary provision and are taxable only in the country of residence.
The tribunal held that the gains from sale of shares of real estate companies are not taxable in India under Article 14(4) and upheld the order of the Commissioner (Appeals). The tribunal dismissed the appeals filed by the Revenue.
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