ITAT Ahmedabad Judgments — August 2025

The Tribunal noted that the assessee had previously been granted provisional registration under section 12A(1)(ac)(vi) of the Act. The Tribunal found that the issue was whether the assessee could apply for final registration under a different sub-clause if provisional registration was under another. The Tribunal decided to set aside the matter to the CIT(E).

The Tribunal held that the additions were made on the basis that GPCL had made bogus purchases, but the ITAT had already deleted such additions for GPCL. There was no finding that GPCL made bogus purchases from the assessee, nor was there any doubt cast on the assessee's purchases or stock.

The assessee sought permission to withdraw the appeal as registration was granted. The Departmental Representative had no objection. Therefore, the Tribunal accepted the prayer for withdrawal.

The Tribunal held that the basis for the addition (bogus purchases by GPCL) had been deleted by a coordinate bench of the Tribunal in GPCL's own case. Furthermore, there was no specific finding by the AO that the assessee had made bogus sales. The purchases made by the assessee were not doubted, making the sales to GPCL also not suspect.

The Tribunal held that in the interest of justice, the assessee should be given an opportunity to present their case before the CIT(A). The appeals were restored to the CIT(A) for fresh decision, subject to the assessee depositing Rs. 5,000/- in each case to the Prime Minister's National Relief Fund.

The Tribunal held that the carry forward of unabsorbed depreciation is governed by Section 32(2) of the Income Tax Act, not Section 80. Section 32(2) allows such depreciation to be carried forward irrespective of whether the return was filed within the due date. Therefore, the AO's rectification order was quashed.

The Tribunal directed the Assessing Officer to adopt the valuation report from other co-owners' cases, considering the assessee's 15% share and providing an opportunity for hearing. The addition of Rs. 63,53,312/- was to be reassessed based on this valuation.

The Tribunal noted that in the case of GPCL, the Tribunal itself had deleted additions related to bogus purchases. The AO's basis for additions to the assessee was the alleged bogus purchases by GPCL. Since this basis was not established and had been deleted in GPCL's own case, the additions made to the assessee were unjustified.

The Tribunal held that the assessee's stand that deposits were out of cash sales could not be rebutted by the lower authorities. The AO's addition was made mechanically without appreciating the details. For the second issue regarding accommodation entries, the Tribunal directed the AO to conduct further examination.

The Tribunal held that the AO failed to examine the details of transactions provided by the assessee and made additions solely based on information from the Investigation Wing. The addition was not sustainable as the AO did not identify specific suspicious entries.

The Tribunal held that the PCIT's assumption of jurisdiction under section 263 was not valid. The assessment order was not erroneous or prejudicial to the revenue, as the AO had conducted inquiries and applied his mind to the issue before accepting the assessee's claim.

The Tribunal held that the PCIT's revision order was beyond the scope of the 'limited scrutiny' assessment. The assessing officer had conducted the assessment based on the limited scope, and the PCIT could not introduce new issues for revision under Section 263.

The Tribunal held that the Assessing Officer failed to properly verify the assessee's contention that the transactions belonged to other persons, despite the assessee providing names and PANs. The matter was restored to the AO for de novo assessment to verify these claims.

The Tribunal noted the assessee's failure to fully disclose facts during assessment but emphasized that the tax department should charge tax only on real income. The Tribunal restored the issue to the AO for de novo assessment, directing verification of details and calling for information from third parties and banks.

The Tribunal restored both appeals to the file of the Ld.CIT(A) for a fresh decision, providing the assessee another opportunity to present their case. This restoration is conditional upon the assessee depositing a cost of Rs.5,000/- for each appeal to the Prime Minister's National Relief Fund.

The Tribunal held that since the purchases made by GPCL from the assessee were not found to be bogus by higher authorities, the additions made by the AO for bogus sales were unsustainable. The basis for the impugned additions in the assessee's case had ceased to exist.

The Tribunal held that while the initial explanation lacked corroboration, the deceased status of the husband and the ledger confirmation from the brother were considered sufficient, especially given the assessee's status as a non-filer with no identified income source. The addition was deleted.

The Tribunal noted the ex-parte nature of prior orders and that the bank account was joint with the assessee's father, who claimed the deposits were from his agricultural income. Considering this, the case was restored to the Assessing Officer for de-novo consideration.

The Tribunal found the assessee's explanation plausible, particularly regarding the loans from her deceased husband and the ledger confirmation from her brother. It noted the Revenue failed to prove any income-generating activity by the assessee. Consequently, the addition of Rs. 11.75 lakhs was deleted, and the corresponding penalty under Section 271(1)(c) was also deleted.

The CIT(A) and subsequently the Tribunal held that the AO was not justified in substituting the DCF method with the NAV method merely due to a subsequent divergence between projections and actuals. Valuation is an exercise by experts, and their report cannot be discarded without proving perversity or mala fides, especially when shares were issued to existing group entities without doubt on their identity or creditworthiness. The addition made by the AO was deleted.

The Tribunal condoned the delay of 70 days considering the assessee's explanation and bonafide belief in pursuing an alternate remedy. It was held that the source of investment in the property was fully explained and the addition made by the CIT(A) was not sustainable.

The CIT(A) found that the bank account cited by the AO for the alleged accommodation entry did not pertain to the assessee. The Tribunal affirmed this, concluding that the AO's satisfaction for reopening the assessment under Section 147 was a 'borrowed belief' due to failure to verify crucial facts and dispose of assessee's objections, thus rendering the reassessment void ab initio. On merits, the Tribunal agreed that no addition was warranted as the accommodation entry was not conclusively proved against the assessee.

The Tribunal condoned the delay in filing the appeal before the ITAT due to the genuine reasons of death of family members. The Tribunal also noted that the CIT(A) dismissed the appeal ex-parte due to non-appearance. Considering the substantial additions and the circumstances preventing appearance, the Tribunal restored the matter to the Assessing Officer for de-novo consideration in the interest of justice.

The ITAT dismissed the appeal as defective and not maintainable. It found that the Form No. 36 named impermissible respondents, the Statement of Facts was verbose and irrelevant, and the Grounds of Appeal were numerous, argumentative, and lacked specific grievance against the CIT(A)'s order, thus violating Rule 8 of the Income-tax (Appellate Tribunal) Rules, 1963.

The Tribunal upheld the additions made by the Assessing Officer, affirming the Ld. CIT(A)'s decision to dismiss the appeal. It found that the assessee's claim of genuine share transactions lacked evidence, noting the significant mismatch between the number of shares purchased and sold, and the failure to demonstrate that the omission of income was unintentional or the purchase genuine.

The Tribunal condoned the delay, holding that the assessee had shown sufficient cause. The Tribunal restored the matter to the Assessing Officer for a fresh assessment after providing the assessee with an opportunity of hearing.

The Tribunal found that the AO's information was vague and general, lacking specific transaction details, and the AO failed to correlate it with the assessee's assessment records. It concluded that the reasons recorded for reopening were factually incorrect and did not establish a 'reason to believe' for income escapement, thus deeming the reassessment bad in law and quashing the assessment order.

The Tribunal noted that the assessee had not claimed deduction under Section 80P and the core issue was whether the income was real income or diverted by overriding title. The Tribunal found that the AO had not properly examined the factual position regarding real income and diversion of income. Therefore, the matter was set aside for de novo assessment.

The Tribunal held that the reopening of the assessment was bad in law as it was done after the expiry of four years from the end of the relevant assessment year without satisfying the conditions of the first proviso to Section 147 of the Income Tax Act. The assessee had disclosed material facts, and the AO should have sought further information during the original assessment.

The Tribunal noted that the assessee consistently conducted business in cash as a potato dealer. It found that the revenue authorities failed to verify the bank statements, which could have substantiated the assessee's claim regarding the source of cash. The Tribunal concluded that no addition was warranted.

The tribunal held that the re-opening of assessment after four years was bad in law as the conditions stipulated in the first proviso to Section 147 of the Act were not satisfied. The assessee had disclosed all material facts necessary as per law, and the AO failed to act on information received for four years. Consequently, the re-opening and the consequential assessment framed under Section 143(3)/147 were quashed for both assessment years.

The Tribunal ruled that the PCIT's revision order was unsustainable. It observed that the allowability of Section 80G deduction for CSR expenses was a debatable issue with divergent views among various Tribunal benches. Therefore, the AO's view was a plausible one, and the PCIT could not invoke Section 263 to revise an order on a debatable issue.

The Tribunal observed that the rejection was based solely on technical non-compliance without any adverse findings on the trust's charitable nature or genuine activities. Citing the benevolent intent of exemption provisions and Supreme Court precedents, the Tribunal set aside the CIT(E)'s order and remanded the matter back for fresh adjudication on merits, with directions to provide the assessee adequate opportunity to be heard and furnish all required documents.

The Tribunal agreed that the assessee was not given a proper opportunity of hearing before the CIT(A) as notices were sent via email contrary to his instructions. Consequently, the Tribunal restored the matter to the CIT(A) for fresh adjudication after granting the assessee a due opportunity to be heard.

The Tribunal noted that the assessee, a cooperative bank in liquidation, had substantial liabilities (particularly towards DICGC) that exceeded its assets and income. The issue of whether the income was 'real' or diverted by overriding title was not properly examined by the AO.

The Income Tax Appellate Tribunal held that the lower authorities' finding that the assessee failed to substantiate his claim was incorrect. It noted that the assessee had provided sufficient evidence, including HUF bank statements and ITR, proving the cash was deposited in the HUF's account. Therefore, the addition made to the assessee's income was not justified and was directed to be deleted.

The Tribunal held that the CIT(A) was correct in deleting the addition. The Assessing Officer had accepted the sales leg of the business but disputed the purchase leg without proper inquiry or rebuttal of the assessee's evidence. The cash withdrawals were found to be explained and linked to the business activity.

The tribunal acknowledged that Section 270A provides for two distinct defaults with different penalty rates: underreporting and misreporting. However, the Assessing Officer failed to specify the exact default, issuing notices and levying penalty for both simultaneously. Citing judicial precedents, the tribunal held that such vague notices or orders render the penalty void ab initio, as they vitiate the assessee's right to a fair hearing. Consequently, the penalty of Rs. 10,61,360/- levied under Section 270A was directed to be deleted.

The Tribunal held that since the assessee had not earned any exempt income during the year, the disallowance under section 14A was not sustainable. Regarding depreciation, the Tribunal noted that depreciation on the same assets was allowed in the initial year of acquisition and, following the principle that depreciation once allowed cannot be disturbed in subsequent years, upheld the deletion of disallowance.

The Tribunal held that government grants received for specific purposes, like salary and NCC activities, which were not utilized for those purposes and not refunded, cannot be accumulated. The non-utilization leads to stockpiling rather than using funds for the designated purpose.