ITAT Ahmedabad Judgments — July 2025

The Tribunal restored the issue of eligibility for deduction u/s 80-IA(4) as a 'Developer' vs. 'Works Contractor' to the CIT(A) for fresh examination, considering project-wise details. The disallowance of preliminary expenses u/s 35D was allowed in favor of the assessee. The ground regarding disallowance of employee's contribution to PF was dismissed. The issue of disallowance u/s 14A was restored to CIT(A). The claim of set off of loss of transferor company was also restored to CIT(A). ITA No.2168/Ahd/2018 was allowed, and other appeals were treated as partly allowed.

The Tribunal held that the additions were made on presumption and not on substantive findings, as the AO did not sufficiently verify the deposit sources. Furthermore, the penalty under Section 271(1)(c) requires culpability from the assessee, which cannot be proven against a deceased individual or their heir, especially when the additions themselves were not conclusively established. The penalty was therefore deemed unsustainable.

The Tribunal held that a fresh claim for deduction, especially for ESOP expenses, cannot be made for the first time during reassessment proceedings if it was not raised in the original return, assessment, or appellate stages, and is not related to the escaped income. The appeal related to reassessment was dismissed.

The Tribunal held that a fresh claim for deduction, not made in the original return or assessment proceedings, cannot be made for the first time during reassessment proceedings under Section 147, especially when it is not related to the escaped income. The appeals filed by the assessee were largely dismissed, with one partly allowed, and appeals by the Revenue were dismissed.

The Tribunal restored the issue of eligibility for deduction under Section 80-IA(4) to the CIT(A) for detailed examination. The disallowance of preliminary expenses was allowed. The ground regarding employee's contribution to PF was dismissed, and the issue of Section 14A disallowance was restored to CIT(A). The claim for set-off of loss of a transferor company was also restored to CIT(A). The penalty levied was deleted, and certain appeals were partly allowed.

The Tribunal held that the penalty under Section 271(1)(c) requires culpability of the assessee, which cannot be established if the assessee is deceased and the additions were based on presumptions rather than conclusive findings. The Tribunal found that the levy of penalty was not sustainable and ordered its deletion.

The Tribunal held that the penalty under Section 271(1)(c) requires culpability of the assessee in concealing income or furnishing inaccurate particulars. Since the assessee had expired before the penalty proceedings and the additions were based on preponderance of probabilities and not conclusive proof, the penalty was not sustainable.

The Tribunal held that the incorrect mention of the clause in the application was not fatal to the registration. The matter was set aside to the CIT(E) to consider the application under the correct clause after providing an opportunity of hearing to the assessee.

The Tribunal held that goodwill arising from amalgamation, if acquired for consideration, constitutes a depreciable capital asset and depreciation thereon is allowable. It also addressed issues related to unabsorbed business loss/depreciation under MAT provisions, CENVAT credit, and disallowances under Section 14A.

The Tribunal held that a fresh claim for deduction not made in original assessment or appellate proceedings, and not related to the escaped income, is not admissible in reassessment proceedings. Therefore, the assessee's appeal was dismissed.

The Tribunal held that the enhancement of income by the CIT(A) was made without providing the assessee with an opportunity of hearing or a specific notice, violating principles of natural justice. Therefore, the matter was remanded back to the Assessing Officer.

The Tribunal remanded the Section 80IA(4) deduction claim (Developer vs. Contractor) and Section 14A disallowance to the CIT(A) for re-examination with specific directions. It allowed the deduction for preliminary expenses under Section 35D and held that an Section 80IA(4) claim, even if not explicitly in the ITR, should be considered if otherwise eligible. The disallowance of delayed employees' PF contribution was upheld, and the penalty under Section 271(1)(c) related to interest on income tax refund was deleted.

The Tribunal restored the issue of eligibility for deduction u/s 80-IA(4) to the CIT(A) for detailed examination, holding that the assessee's claim should not be rejected solely based on the bar under section 80A(5) if otherwise eligible. The disallowance of preliminary expenses was allowed in favour of the assessee. The ground relating to delayed employee's contribution to PF was dismissed as covered by a Supreme Court decision.

The Tribunal held that the objects of the trust were not exclusively for the benefit of a particular religious community but were largely charitable for the general public. It further held that Section 13(1)(b) is applicable at the time of exemption, not at the time of granting registration. Therefore, the denial of registration by the CIT(E) was set aside.

The tribunal noted that the assessee sought multiple adjournments for filing a paper book and did not appoint a representative. In the absence of necessary records and representation, the appeal was liable to be dismissed for non-prosecution.

The Tribunal observed that the assessee was already enjoying exemption under Section 11 and possessed valid registration under Section 12A, as evidenced by consistent intimation orders under Section 143(1). It ruled that the application in Form 10AB was filed under a mistaken belief, rendering the CIT(E)'s rejection of the application infructuous. Consequently, the impugned order was set aside.

The Tribunal remanded most Section 80IA(4) and Section 14A disallowance issues to the CIT(A) for fresh adjudication, with specific directions to examine project-wise details for 80IA(4) and limiting Section 14A disallowance to exempt income. The claim for preliminary expenses under Section 35D was allowed. Disallowance for delayed Provident Fund contributions was dismissed, being covered by a Supreme Court decision (Checkmate Services Pvt Ltd). The set-off of losses of a transferor company was remanded to CIT(A) for re-examination. The penalty under Section 271(1)(c) concerning interest on income tax refund was deleted as the tax liability had not attained finality.

The Tribunal held that the assessment order was passed u/s 144B and the certificate u/s 12AA was not before the AO or considered by the CIT(A). Therefore, the matter was remanded to the AO for proper verification of documents and adjudication.

The Tribunal held that penalty under Section 271(1)(c) requires the assessee's culpability in concealing income or furnishing inaccurate particulars. Since the assessee died before the penalty proceedings, he could not explain the source of deposits or prove his non-culpability. As the quantum additions were based on preponderance of probabilities rather than conclusive proof, the Tribunal found it unjustified to burden the legal heir with penal consequences for the deceased's acts or omissions.

The Tribunal held that the assessee had inadvertently claimed excess depreciation and also failed to claim additional depreciation in the original return. However, considering the bonafide mistake and the legal provisions, the appeal was allowed.

The tribunal restored the issue of developer vs. contractor status for Section 80-IA(4) deduction to the CIT(A) for detailed examination. The disallowance of preliminary expenses was allowed in favour of the assessee. The ground regarding employees' contribution to PF was dismissed as covered by a Supreme Court decision. The issue of set off of loss of a transferor company was also restored to CIT(A). The appeal concerning penalty for not offering tax on interest on refund was allowed, and the penalty was deleted.

The Tribunal held that the penalty under Section 271(1)(c) requires culpability of the assessee in concealing income or furnishing inaccurate particulars. Since the assessee had expired before the penalty proceedings and the additions were based on probabilities, not conclusive proof, the penalty could not be sustained. The Legal Heir cannot be burdened with the penalty for the acts/omissions of the deceased assessee.

The Tribunal held that the reassessment order was null and void due to the non-issuance and non-service of the mandatory notice under Section 143(2) of the Income Tax Act. The Revenue failed to provide any evidence of such notice being served.

For ITA No.1228/Ahd/2019, the Tribunal held that a fresh claim for ESOP expenses could not be introduced for the first time during reassessment proceedings under Section 147, dismissing the assessee's appeal. For ITA No.855/Ahd/2017, the disallowance under Section 14A was upheld (limited to exempt income), but the assessee's fresh claim for ESOP expenses at the appellate stage was allowed based on higher court precedents, resulting in a partly allowed appeal. The Revenue's appeal (ITA No.1126/Ahd/2017) against the CIT(A)'s order regarding Section 36(1)(viii) deduction, Section 14A restriction, and capital loss set-off was dismissed. The assessee's appeal (ITA No.138/Ahd/2018) against an order under Section 154, including a fresh ESOP claim, was dismissed as claims beyond a mistake apparent from record are not maintainable in such an appeal.

The Tribunal noted that the assessee operates a mineral water business with significant cash sales and reviewed the historical cash balances. After examining the bank account and the assessee's affairs, the Tribunal concluded that no addition under Section 69A was warranted for the cash deposits.

The Tribunal held that the incorrect mention of the specific clause in the application was not fatal. It acknowledged that the assessee was eligible for registration under a different clause and that the intention of the legislation is not to preclude such trusts from obtaining final registration. The matter was set aside.

The Tribunal held that while the CIT(A) correctly noted the discrepancy between the declared turnover and cash deposits, the verification of the adjustment of these advances to revenue in the subsequent year was inadequate. Considering the nature of the business and partial confirmation of advances, the Tribunal directed an estimation of income at 8% of the disputed amount, reduced by income already offered in the subsequent year, to avoid double taxation.

The Tribunal found that the assessee had not been given adequate opportunity to submit its documents and explanations. Therefore, the matter was remanded to the CIT(E) to consider the application afresh after considering the submissions.

The Tribunal condoned the delay of 19 days, finding the explanation reasonable. It set aside the ex-parte orders and directed the Ld. CIT(E) to grant one more opportunity for hearing and consideration of the registration applications.

The Tribunal held that the disallowance under Section 80IA was rightly deleted by the CIT(A) based on previous orders of the Tribunal. The restriction of disallowance under Section 14A to the extent of dividend income was also upheld. The cross-objection regarding TUFS subsidies was admitted and set aside for fresh adjudication.

The tribunal restored the matter to the file of the Commissioner (Appeals) for de novo adjudication. The tribunal held that the CIT(A) erred in deciding the appeal without awaiting crucial information from the bank and without calling for a remand report from the AO.

The ITAT condoned the 207-day delay in filing the appeal, noting the assessee's semi-literate status and lack of legal knowledge. The matter was remanded to the CIT(A) for de novo adjudication, providing the assessee an opportunity to be heard regarding the nature of the land. A cost of ₹5,000/- was imposed on the assessee for non-compliance at prior stages, payable to the Prime Minister Relief Fund, as a condition for the hearing.

The Tribunal held that the assessee provided extensive evidence, including detailed cash flow statements and sales records, to substantiate that the cash deposits were from regular business sales and consistent with past trends. The books of account were audited and not rejected, and the addition resulted in double taxation. Therefore, the addition under Section 68 was unsustainable.

The Tribunal held that mistakenly choosing the wrong clause for registration application is not fatal to the application. The Tribunal set aside the order of the CIT(E) and remitted the issue back for considering a rectified application under the correct clause.

The Tribunal observed that additional evidence regarding the source of funds (Rs.49,00,000/- from the father-in-law to the wife's bank account, who was the first buyer) was submitted to the CIT(A), including the father-in-law's ITR. The CIT(A) rejected this evidence without calling for a remand report from the AO. The Tribunal found the CIT(A) erred and remanded the matter back to the Assessing Officer to examine the additional evidence and re-adjudicate.

The Tribunal noted that the quantum appeal for the same assessment year was restored to the Assessing Officer for de-novo assessment. Consequently, the penalty levied u/s 271(1)(c) was deleted, with a direction to consider initiating penalty proceedings during the de-novo assessment.

The Tribunal accepted the assessee's request to withdraw the appeal. The appeal was dismissed as withdrawn because the subsequent grant of Section 80G(5) registration resolved the original grievance.

The Tribunal observed that neither the assessee nor his Authorized Representative appeared for multiple scheduled hearings and no adjournment requests or evidence were filed. Consequently, finding no merits in the grounds raised due to the lack of supporting details before lower authorities and the Tribunal, the appeal was dismissed for non-prosecution.

The Tribunal acknowledged the assessee's non-compliance but, considering its charitable activities and the Ld. CIT(DR)'s no objection, decided to set aside the matter. The assessee was granted one final opportunity to submit all required documents to the Ld. CIT(E) for re-adjudication, subject to depositing a cost of Rs. 5,000/- to the Prime Minister's National Relief Fund within 15 days. The appeal was allowed for statistical purposes.

The Tribunal observed that the CIT(Exemptions) failed to consider the assessee's valid registration under Section 12A(1) for AY 2022-23 to 2026-27, which is a relevant fact for Section 80G approval. Considering this omission and the interest of natural justice, the Tribunal set aside the CIT(Exemptions)'s order. The matter was restored for de novo consideration, instructing the CIT(Exemptions) to grant a due opportunity of hearing and consider all relevant facts, including the existing Section 12A(1) registration.

The Tribunal noted that the assessee has opted for the Vivad Se Vishwas Scheme and filed Form No. 1. Consequently, the appeal filed by the assessee was dismissed.

The Tribunal condoned the delay of 19 days, satisfied with the explanation provided by the assessee. The Tribunal set aside the ex-parte orders and directed the Ld. CIT(E) to grant one more opportunity of hearing to the assessee for registration.

The Tribunal noted the assessee's repeated failure to provide supporting evidence or explanations for the cash deposits despite opportunities. Consequently, the case was remanded to the Assessing Officer for a de-novo assessment, with a cost of Rs. 2,000/- imposed on the assessee, to be deposited into the "Prime Minister Relief Fund." The assessee was directed to cooperate fully with the AO.

The Tribunal noted that the assessee-trust had indeed failed to produce substantial documents before the CIT(E). Considering the Ld. Counsel's prayer for an opportunity, the Tribunal decided to remand the matter back to the CIT(E) for fresh consideration of the application, allowing the assessee to submit further explanations.

The Tribunal condoned the delay of 53 days, imposing a cost of Rs. 10,000 on the assessee. The Jurisdictional Assessing Officer was directed to provide the assessee with another opportunity for a hearing and to pass a fresh assessment order on merits.

The Tribunal restored the matter of quantum additions to the Assessing Officer for de-novo consideration, granting the assessee another opportunity to produce supporting documents. The ground challenging the Section 148 notice was dismissed as not pressed. Consequently, the penalty appeal under Section 271(1)(c) was also restored to the Assessing Officer.