ITAT Ahmedabad Judgments — May 2025

The Tribunal noted that the CIT(A) failed to grant proper opportunity of hearing and to produce additional evidence. Consequently, the matters were remanded back to the CIT(A) for proper adjudication on merits after verifying evidence and following principles of natural justice.

The Tribunal condoned the 104-day delay in filing the appeal before it, finding the explanation genuine. It noted that the CIT(A) did not consider the merits of the TDS credit claim. The matter was remanded to the Assessing Officer to verify the TDS credit, especially when deducted in the name of the trustee, and grant credit if the funds were indeed credited to the trust's account.

The tribunal held that the CIT(A) wrongly dismissed the appeal on the ground of delay for AY 2017-18, and thus remanded the matter back for proper adjudication. For AY 2021-22, the tribunal found that certain issues were not properly adjudicated by the CIT(A) and remanded them back.

The Tribunal found that the CIT(A) had not provided the assessee a proper opportunity of hearing, including not allowing the production of additional evidence, thereby violating principles of natural justice. Consequently, both appeals were remanded back to the CIT(A) for fresh adjudication on merits after considering all evidence.

The Tribunal held that the AO erred in making additions on both unaccounted receipts and payments, leading to double taxation. The Tribunal allowed the telescoping of payments against receipts and directed the AO to estimate the profit margin on real estate business at 13%. It also deleted additions not based on incriminating material found during the search.

The Tribunal condoned the delay in filing the appeal before it, finding the explanation genuine. The Tribunal noted that the CIT(A) had not commented on the merits of the case regarding TDS credit. The matter was remanded back to the Assessing Officer.

The Tribunal acknowledged the assessee's claim of technical glitches and a change in management as reasons for the delay in filing Form 10B. It held that the delay was not deliberate and should be condoned, remanding the matter back to the CIT(A) to accept Form 10B and adjudicate the issue appropriately.

For ITA 109/Ahd/2025, the tribunal ruled that the CIT(A) erroneously dismissed the appeal due to delay and remanded the matter back for adjudication on merits. For ITA 110/Ahd/2025, the tribunal found that the CIT(A) had not properly adjudicated certain issues, particularly regarding income from other sources, and thus remanded the case to the CIT(A) for fresh consideration on merits.

The Tribunal upheld the CIT(A)'s order, ruling that the land remained agricultural at the time of sale by the assessee, and its subsequent conversion by the purchaser for industrial use did not alter its agricultural nature for the assessee's transaction. It was noted that the assessee was registered as an agriculturist and the land records showed it as agricultural at the time of purchase.

The Tribunal held that the assessee, a co-operative society, had sufficiently explained the sources of cash deposits. These sources were attributed to trading in quota items and recovery of KCC loans, supported by audited financial statements, bank statements, and other documentary evidence.

The Tribunal held that the assessee, a cooperative society engaged in trading of quota items and providing Kishan Cash Credit (KCC) loans, had sufficiently explained the source of cash deposits. The evidence, including audited financial statements, bank statements, and KCC loan recovery details, supported the assessee's claims.

The Tribunal held that the cash deposits were substantiated by cash sales recorded in the books of account, which were accepted by the AO, and adding them again under section 68 would amount to double taxation. The disallowance of salary expenses was upheld due to non-deduction of TDS.

The Tribunal held that the cash deposits were explained by the cash sales and the AO failed to disprove the genuineness of these transactions or provide concrete evidence for his assumptions. The Tribunal also upheld the disallowance of salary expenses due to the lack of TDS deduction and evidence of employees declaring the income.

The Tribunal held that the assessee was not at fault for not deducting TDS on provisional expenses where the payees were not identifiable, citing various judicial precedents. Regarding depreciation on intangible assets, the Tribunal noted that the cost was recorded from a business transfer agreement and that depreciation had been allowed in the first year of amalgamation, following the principle of consistency.

The CIT(A) deleted the additions, accepting the assessee's explanation as sufficiently supported by audited financials, bank statements, KCC loan recovery lists, registration certificate, and KCC loan confirmation from the bank. The ITAT upheld the CIT(A)'s decision, finding that the assessee had discharged its burden of proving the source of cash deposits from legitimate trading and loan recovery activities.

The Tribunal held that the plain words of Section 56(2)(x) include 'any immovable property', and agricultural land falls within this definition. However, the Tribunal also noted that if the stamp duty value is disputed, the AO is required to refer the matter to the DVO.

The Tribunal restored the matter to the Assessing Officer for de novo consideration, allowing the assessee to present additional evidence. The appeals related to quantum additions and penalty levies were also restored.

The Tribunal noted that the assessee's counsel did not press grounds challenging the reopening of assessment. The Tribunal, relying on a similar case, decided to restore the matter to the Assessing Officer for de-novo consideration to allow the assessee to produce additional evidence. The penalty appeals were also restored.

The Tribunal held that the CIT(Exemptions) had passed the order without affording adequate opportunity of hearing to the assessee. Relying on judicial precedents, the Tribunal restored both matters to the file of the CIT(Exemptions) for de novo consideration.

The Tribunal restored the matter to the Assessing Officer for de novo consideration, accepting the assessee's request for re-examination of evidence and providing an opportunity to present additional documents, citing judicial precedents for similar cases.

The Tribunal upheld the CIT(A)'s decision to delete the addition, finding that the assessee had discharged its onus by providing extensive documentation proving the identity, genuineness of the transaction (an advance for property sale, not a loan), and creditworthiness of VRR Financial. The amount was transferred through banking channels and subsequently repaid, and the AO failed to conduct an independent inquiry or conclusively rebut the evidence presented by the assessee.

The Tribunal held that once the sale proceeds were accepted as business income by the AO and reflected in the books of accounts, re-taxing the same amount as unexplained cash credit under Section 69A would amount to double taxation. The assessee had provided sufficient documentation to substantiate the cash sales and deposits.

The Tribunal noted that while the assessee admitted to incurring religious expenditure exceeding 5% in prior years, it contended that this was not the case for the impugned year. The Tribunal, considering the issue and the arguments, decided to restore the matter to the CIT for de-novo consideration, allowing the assessee to present further judicial precedents.

The Tribunal held that the CIT(E) acted summarily without inquiry. The inclusion of a religious object does not disqualify the trust if the activities are not wholly or substantially religious, and expenditure on religious purposes is less than 5% of total income.

The Tribunal held that the CIT(E) passed the order without affording adequate opportunity of hearing to the assessee and noted that judicial precedents suggest CBDT circulars cannot unduly restrict assessee rights. Consequently, the matter was restored to the CIT(E) for de novo consideration.

The Tribunal restored the matter to the file of the Ld. CIT(E) for de-novo consideration, allowing the assessee an opportunity to comply with the notices. The CIT(E) is free to pass orders based on available material if non-compliance persists.

The Tribunal restored the matter to the file of the Assessing Officer for de novo consideration. The Tribunal noted that the assessee had filed additional evidence and that the lower authorities had not properly appreciated the evidence. The appeals relating to penalty were also restored.

The Income Tax Appellate Tribunal (ITAT) observed that the CIT(Exemptions) denied registration without providing adequate opportunity of hearing to the assessee. The ITAT also noted that the CIT(Exemptions)'s order itself acknowledged the charitable nature of the trust's objects despite perceived community restrictions. Therefore, the ITAT restored the matter to the CIT(Exemptions) for de novo consideration, mandating that the assessee be given a proper opportunity to respond to specific queries regarding its objects and their applicability.

The Tribunal held that the carpet area as defined under RERA and verified by the local authority through Building Use (BU) permission and engineer's certificate should be considered. The brochure's measurements were for marketing and not definitive.

The Tribunal held that the assessee is an NRI and the funds for property purchase were legitimate remittances from abroad to his NRE account through banking channels. Citing various precedents and the intent of relevant Income Tax Act sections, the Tribunal concluded that money brought into India by non-residents for investment from non-taxable foreign sources is not liable to tax in India. Therefore, the additions made by the AO under Section 69 and confirmed by CIT(Appeals) were deemed unsustainable.

The Tribunal held that there was a merit in the assessee's claim of inadvertently selecting the wrong section code and that the assessee did not have a proper opportunity to be heard. The matter was restored to the CIT(E) for de-novo consideration.

The Tribunal held that the surplus from the surrender of ULIPs is taxable under 'Income from other sources' and not 'Capital gain'. However, considering a recent Mumbai Tribunal decision, the matter was set aside to the AO for fresh consideration.

The Tribunal held that although the quantum issue was decided against the assessee, the penalty for furnishing inaccurate particulars of income should not be levied automatically. The assessee had consistently treated the receipts as corpus donations for many years, disclosed all facts, and acted under a bona fide belief. Relying on judicial precedents, the Tribunal considered this not a fit case for penalty.

The Tribunal held that there was an inadvertent error in filing the form and that the assessee did not get an opportunity to be heard. Following a coordinate bench decision, the matter was restored to the CIT(E) for de novo consideration.

The Tribunal condoned the delay in filing the appeal. However, considering the assessee's failure to provide satisfactory explanations or evidence during assessment and appellate proceedings, and the fact that the assessee did not respond to notices, the previous order was not interfered with initially. Subsequently, due to the assessee's ill health and demise, the matter was restored to the Assessing Officer for de novo consideration.

The Tribunal held that the failure to file Form 10B electronically along with the return, when it was filed later, constitutes a procedural defect and not a fatal flaw. The denial of exemption under Section 11 solely on this ground was deemed incorrect.

The Tribunal held that the CIT(A) was correct in deleting the additions made by the AO. The assessee had provided a gift deed and other evidence for the capital addition, and sufficient documentation for the diamond sales, discharging her initial burden.

The Tribunal held that the PCIT's invocation of Section 263 was based on an incorrect factual premise and a difference of opinion, not a demonstrable error prejudicial to revenue. It noted that the issue of depreciation on goodwill had been adjudicated in favor of the assessee in earlier years by a coordinate bench, and other issues were adequately examined by the AO.

The Tribunal held that the interests of justice would be served by giving the assessee an opportunity to present their case. The impugned orders were set aside, and the matter was restored to the CIT(E) for a fresh decision.

The Tribunal found that the assessee consistently valued closing stock including interest cost, and the business model was unique (landowner, not developer). The AO's estimation of gross profit was without basis and not legally tenable, especially since a lower GP was accepted in prior years for the same project.

The Tribunal held that in the interest of justice, the assessee should be given an opportunity to present its case. The impugned orders were set aside and the matter was restored to the file of the CIT(E) for fresh decision.

The Tribunal condoned the delay in filing the appeal, citing the assessee's semi-literate status and the potential injustice if the matter was not examined on merits. The Tribunal also noted that the Assessing Officer had incorrectly treated entire bank deposits as income without considering debit transactions and directed the matter to be set aside to the Assessing Officer for fresh adjudication.

The Tribunal held that the lower authorities did not provide adequate opportunity for cross-examination and did not consider the evidence filed by the assessee. Therefore, the matter was restored to the Assessing Officer for de-novo consideration.

The Tribunal recalled its earlier order on the limited issue of taxability of interest and miscellaneous income. Following its own precedent for the preceding year (A.Y. 2015-16), the Tribunal held that such income is to be taxed as 'income from business and profession' and not 'income from other sources'.

The Tribunal condoned the delay in filing the appeal before the CIT(A) and observed that the CIT(A) and AO erred in not providing an opportunity to the assessee. The matter was set aside to the AO for fresh consideration.