ITAT Ahmedabad Judgments — September 2025

The Tribunal found that the reassessment was initiated beyond three years and the specific escaped income for AY 2017-18 was below the Rs. 50 lakh limit. Therefore, the assumption of jurisdiction was held to be bad in law.

The Tribunal held that proportionate expenditure against interest income may be allowed, subject to the assessee establishing a connection between the expenditure and earning of interest income. The matter was remitted to the Assessing Officer for fresh consideration.

The Tribunal held that the Revenue failed to demonstrate that the assessee's transaction fit the modus operandi of accommodation entry providers, despite the assessee providing evidence of genuine transactions. Therefore, the addition made by the AO was directed to be deleted.

The tribunal found that the assessee, a retired government employee, had substantial funds from retirement benefits and also borrowed ₹4,00,000/- from his daughter-in-law's proprietorship concern. Considering the totality of circumstances, the tribunal concluded that the source of investment was adequately explained and the addition made under Section 69 was not justified.

The Tribunal condoned the 133-day delay in filing the appeal, finding it not deliberate. Noting that the CIT(A) had dismissed the appeal ex-parte, and aligning with previous ITAT decisions on similar facts, the Tribunal remanded the matter back to the Assessing Officer for de-novo consideration, granting the assessee a fresh opportunity to present their case on merits.

The Tribunal held that the amendment to Section 11(3) by the Finance Act, 2022, is prospective and does not apply to accumulations made prior to its effective date. Therefore, the assessee was entitled to utilize the accumulated income in the year immediately following the five-year period.

The Tribunal held that the loan was a current account transaction for business purposes, with the assessee earning interest and having repaid part of the loan with interest and appropriate TDS. Citing various judgments and a CBDT circular, the Tribunal concluded that such business-related transactions, where there is commercial expediency and mutual accounts, do not fall within the ambit of deemed dividend under Section 2(22)(e). Therefore, the addition made by the AO was directed to be deleted.