ITAT Ahmedabad Judgments — December 2025

The Tribunal noted that a co-ordinate bench had already quashed the PCIT's revision order under Section 263. Therefore, the subsequent assessment order and the present appeal against the CIT(A)'s order became infructuous and were dismissed.

The Tribunal held that the proceedings under section 153C were initiated beyond the period of limitation, as the date of receipt of seized documents by the AO of the non-searched person is to be considered as the date of search, and not the date of the original search. Consequently, the assessment order was quashed.

The Tribunal held that the reopening of assessment was not valid as the AO acted on borrowed satisfaction without verifying the information with the assessee's accounts. Furthermore, the addition on merits was not sustainable because the genuineness of the transaction was accepted in the case of M/s.V.Nitin, and no addition was made there. Therefore, the appeal of the Revenue was dismissed and the Cross Objection of the assessee was allowed.

The Tribunal held that the reopening of the assessment was invalid as the AO relied on borrowed satisfaction without independent verification. Furthermore, even on merits, the addition was not sustainable because the payments made by M/s.V.Nitin to the assessee were accepted as genuine in M/s.V.Nitin's case, and no addition was made therein.

The Tribunal held that the reopening of the assessment was not valid as the AO acted on borrowed satisfaction without proper verification. Furthermore, the addition on merits was not sustainable because the payer M/s.V.Nitin accepted the payments as genuine expenditure in its own assessment, and no addition was made on this account. The Tribunal also noted that a co-ordinate bench had previously held similar reopening on identical grounds as bad in law.

The Tribunal upheld the ld.CIT(A)'s order, confirming the addition of Rs. 10 lakhs under Section 69A for unexplained cash deposits. It found no infirmity in the lower authorities' decision, concluding that the assessee failed to provide a satisfactory explanation for the source of the cash.

The Tribunal held that the reasons provided by the assessee for the inordinate delay were vague and general, not inspiring confidence. Despite the assessee's argument about not being aware of the demand and the complexity of their affairs, the Tribunal found no infirmity in the CIT(A)'s order dismissing the appeals due to the gross delay.

The Tribunal upheld the CIT(A)'s decision, finding the reasons provided by the assessee for the extensive delays to be vague, general, and unconvincing. It noted that the assessee was otherwise compliant with statutory obligations and had deliberately chosen not to file appeals despite knowledge of the intimation orders. Consequently, both appeals were dismissed as being barred by limitation.

The Tribunal noted that the assessee produced additional evidence for the first time. In the interest of natural justice, the Tribunal set aside the orders of the lower authorities, remanding the case back to the Assessing Officer for a fresh assessment after providing the assessee an opportunity to present her case with the new documents. A cost of Rs. 10,000/- was imposed on the assessee for the delay.

The Tribunal, relying on Supreme Court judgments in Ashish Agarwal, Rajeev Bansal, and Deepak Steel and Power Limited, along with jurisdictional High Court rulings, held that the initial notices under Section 148 and all subsequent proceedings for all assessment years were time-barred and without jurisdiction. The Supreme Court's explicit directions on calculating the 'surviving time' were deemed to override the procedural provisions of Section 148A(d), and the Assessing Officer failed to adhere to these shortened limitation periods.

The Tribunal held that the CIT(A) correctly invoked Section 273B, considering the existence of a reasonable cause. The cooperative society's operations were in the regular course of business, and there was no intention to evade taxes.

The Tribunal, relying on Supreme Court judgments in Deepak Steel and Power Limited and Rajeev Bansal, held that the initial notice for A.Y. 2015-16, issued on 07.06.2021, was time-barred as it was issued after 01.04.2021. For A.Y.s 2016-17 and 2017-18, the orders under Section 148A(d) and subsequent notices under Section 148, issued on 27.08.2022, were found to be beyond the 'sixty-eight-day surviving limit' from the assessee's reply. Consequently, all reassessment proceedings and assessment orders for the said Assessment Years were quashed and set aside due to being time-barred and without jurisdiction.

The Tribunal held that the reopening proceedings under Section 147 were invalid and void ab initio due to discrepancies in the approval process by the PCIT, specifically the unsigned form for reasons recorded and a separate annexure mentioning commodity trading when the reasons related to LTCG. The assessment order was deemed bad in law.

The Tribunal upheld the order of the ld.CIT(A), finding that the assessee failed to provide any justification for keeping a substantial amount of cash at home from a loan sanctioned for a specific purpose (cold storage). The Tribunal found no reason to interfere with the ld.CIT(A)'s decision.

The Tribunal ruled that the PCIT's direction to verify rental expenses was beyond the scope of the Section 263 show-cause notice, which was limited to additional depreciation and CSR expenses. Furthermore, for the issues of additional depreciation and CSR expenses, the Assessing Officer had already conducted verifications and made disallowances, rendering the PCIT's intervention a mere 'change of opinion' and thus not sustainable. Consequently, the PCIT's order was deemed beyond the provisions of Section 263 and did not survive.

The Tribunal held that the CIT(A) correctly invoked Section 273B of the Act and deleted the penalties, following the jurisdictional High Court and Supreme Court judgments. The society demonstrated a reasonable cause for the transactions, which were genuine and undertaken in the ordinary course of business.

The Tribunal noted that both the Assessing Officer and CIT(A) passed ex-parte orders due to the assessee's non-appearance and non-filing of details. Considering the assessee's explanation of frequent foreign visits causing inability to coordinate, and that the AR filed details requiring verification, the matter was remanded back to the Assessing Officer for proper adjudication.

The Tribunal held the reassessment proceedings to be invalid, finding that the AO's "reason to believe" was based on vague information, borrowed satisfaction, and factual inaccuracies, without proper correlation with the assessee's records. The AO failed to establish a direct nexus between the information and the belief of income escapement, or to specify what material facts the assessee had failed to disclose, especially since the relevant loan transactions were disclosed in the assessee's audited accounts. Therefore, the reopening was deemed bad in law, violating the first proviso to Section 147 of the Act.

The Tribunal found that the assessee failed to produce proper confirmations from M/s. Mehta Finance and suppliers during earlier proceedings. Due to insufficient verification and documentation, the Tribunal remanded the case back to the CIT(A) for fresh adjudication after thorough verification of all documents, including confirmations, and providing the assessee a proper hearing.

The Tribunal held that the issue was squarely covered by the decisions of the jurisdictional Gujarat High Court and various benches of the Tribunal. The High Court had previously ruled that similar expenditure incurred for fertility improvement and increasing milk productivity was for business purposes and revenue in nature.

The Tribunal noted that the assessee had not produced confirmation from M/s. Mehta Finance during assessment or appellate proceedings, only a chronology of amounts and commission paid. The ledger account provided was also not considered by the lower authorities. Therefore, the matter was remanded back to the CIT(A) for proper adjudication after verification of documents and obtaining a remand report.

The Tribunal upheld the addition of Rs. 8.00 lakhs, affirming that the assessee failed to provide satisfactory evidence for the source of the cash deposits. The Tribunal found no reason to interfere with the ld. CIT(A)'s order, concluding that the amount could not be considered as deposited from past cash withdrawals or justified as cash-in-hand.

The Tribunal held that the issue was squarely covered by the decisions of the Jurisdictional Gujarat High Court and earlier Tribunal orders, which consistently treated similar expenditures as revenue in nature. The High Court had affirmed that these expenses were for the business purpose of improving milk production and quality.

The Tribunal upheld the Commissioner of Income Tax (Appeals)'s decision, ruling that the expenses were revenue in nature and incurred for business purposes. This decision was based on numerous past judgments by the Jurisdictional Gujarat High Court and co-ordinate benches of the ITAT in the assessee's own case, which consistently held similar expenditures to be revenue.

The Income Tax Appellate Tribunal (ITAT) dismissed the Revenue's appeals, confirming that the "Co-operative and Breed Development Expenses" are revenue expenditure. The Tribunal relied on several previous decisions by the Hon'ble Jurisdictional Gujarat High Court and its own co-ordinate benches, which consistently held these expenses to be revenue in nature for the assessee. Consequently, the disallowances made by the Assessing Officer were deleted.

The tribunal held that the reopening of assessments was bad in law. It found that the AO acted on "borrowed satisfaction" from third-party information without independent application of mind or proper correlation with the assessee's records. The reasons recorded were factually incorrect and vague, initially alleging commission expenses but later making additions for bogus loans, without explaining the discrepancy or demonstrating non-disclosure of material facts by the assessee, who had already disclosed the transactions in audited accounts. Consequently, the reopening was deemed to violate the first proviso to Section 147.

The Tribunal held that the reopening of assessment by the AO was bad in law on multiple counts. It was found that the reasons for reopening were vague, based on borrowed satisfaction, and lacked proper application of mind. Furthermore, since the reopening occurred after four years from the end of the relevant assessment year, it was hit by the first proviso to Section 147 of the Income Tax Act, 1961, requiring a higher threshold of justification which was not met. The Tribunal also noted that the AO had not sufficiently established the necessity for reopening or the non-disclosure of material facts by the assessee.

To avoid further litigation, the assessee offered to settle the dispute by accepting an interest benchmarking rate of 5.35%. The Tribunal found this offer fair and justifiable, directing the AO to apply the 5.35% rate for AY 2017-18, clarifying that this settlement is specific to this year and not binding for other periods or loan transactions.

The Tribunal observed that the assessee failed to provide confirmations from Mehta Finance or the suppliers (Khemchand Sons) during the assessment and first appellate stages. Finding that a thorough verification of these transactions and the assessee's ledger accounts was necessary, the Tribunal remanded the matter back to the CIT(A) for proper adjudication after verifying all documents and providing the assessee an opportunity of hearing.

The Tribunal held that the AO had conducted adequate inquiries and was satisfied with the genuineness of the transactions, which included proof of purchases, corresponding sales, and taxation of profit. The Tribunal concluded that merely not making an addition, when the AO was satisfied after due verification, does not render an order erroneous or prejudicial to revenue. Therefore, the PCIT's exercise of revisionary jurisdiction under Section 263 was held to be bad in law and its order was quashed.

The Tribunal held that the expenditure incurred by the assessee for fertility improvement programs and strengthening the co-operative structure was revenue in nature. This was based on the consistent view of the Gujarat High Court and previous Tribunal orders in the assessee's own case, which held such expenses to be for the business purpose and aimed at improving productivity and efficiency.

The ITAT held that the denial of exemption under Section 11 was not justified because the delayed filing of Form 10B is a procedural defect, not a substantive condition, and the audit report was already available on record before the Section 143(1) intimation. Relying on multiple High Court and ITAT precedents, the Tribunal confirmed that exemption cannot be denied solely on account of delayed filing of Form 10B.

The Tribunal found that the 80G(5) rejection was solely based on the pending Section 12A registration matter, which had previously been remanded to the CIT(E). Consequently, the Tribunal remanded the 80G(5) application back to the CIT(E) for fresh adjudication after the Section 12A issue is resolved.

The Tribunal condoned the delay in filing the appeal, accepting the assessee's explanation as reasonable given the circumstances of her husband's demise and her domestic role. On the merits of the case, the Tribunal found that the assessee had sufficiently explained the source of the cash deposits from earlier withdrawals, and therefore, ordered the deletion of the impugned addition under Section 69A.

The Tribunal condoned the delay, finding sufficient justification. It held that the assessee's explanation for cash deposits, primarily being redeposits of prior withdrawals for medical emergencies and some small loans, was plausible and disregarded by lower authorities. The impugned addition was, therefore, ordered to be deleted.

The Tribunal upheld the CIT(A)'s deletion of protective additions under Sections 69A and 69C, reasoning that substantive additions were made in Shri Mukesh Vaghela's case and the net negative incremental peak for AY 2021-22 was Nil. For unaccounted scrap sales, the Tribunal affirmed the CIT(A)'s recomputation of sales to Rs.2,17,18,610/- and the application of a 41.55% profit rate, confirming an addition of Rs.90,24,083/- under Section 69A. Consequently, the Tribunal dismissed all three appeals, affirming the CIT(A)'s decisions.

The Tribunal dismissed the assessee's appeal, affirming that the 1% estimation of net profit by the AO was legally valid due to the assessee's non-compliance in filing the original or timely belated return and failure to provide required details. It further held that the assessee was not eligible for the deduction under Section 80P due to the non-filing of the return as mandated by Section 80AC.

The Tribunal held that the excess stock represented business income and should be taxed as such. They further held that set-off of brought forward losses and depreciation against this income should be allowed, and Section 115BBE was not applicable for AY 2015-16.

The Tribunal dismissed the Revenue's appeals against the CIT(A)'s deletion of protective additions under Sections 69A and 69C, as substantive additions were already adjudicated in a related party's case (Shri Mukesh Vaghela) with NIL incremental net negative peak. The Tribunal also affirmed the CIT(A)'s recomputation of unaccounted scrap sales to Rs.2,17,18,610/- for AY 2021-22 and confirmed the addition of Rs.90,24,083/- as profit at a 41.55% rate, agreeing with the CIT(A)'s rationale. All three appeals, including the assessee's procedural challenges, were ultimately dismissed.

The Tribunal held that GST paid during the year, and not claimed in earlier years, should not be disallowed under Section 43B. It also held that late payment charges paid as interest to creditors for delayed payments are allowable as business expenditure under Section 37.

The tribunal found the reassessment proceedings invalid because the Section 148 notice was issued beyond the three-year limitation period from AY 2016-17's end, and the escaped income (Rs. 30,34,398/-) was below the Rs. 50 lakh threshold required for extended limitation. Furthermore, the sanction for reopening was obtained from an incorrect authority (PCIT instead of PCCIT/CCIT) as per Section 151(ii) of the amended Act.

The Tribunal upheld the CIT(A)'s deletion of protective additions related to unexplained money and expenditure for the assessee, as substantive additions were already made in Shri Mukesh M. Vaghela's case and the net negative incremental peak for AY 2021-22 was NIL for him. Regarding unaccounted scrap sales, the Tribunal affirmed the CIT(A)'s re-computation of sales to Rs.2,17,18,610/- and confirmed the addition of profit at 41.55% of these sales, resulting in an addition of Rs.90,24,083/- for the assessee. The Tribunal also dismissed the Revenue's argument regarding the applicability of Section 115BBE.

The Tribunal found that the assessee booked the flat after the search on the developer and the booking was subsequently cancelled with a full refund. As the transaction occurred post-search, the alleged on-money could not be attributed to the assessee. Consequently, the addition was deleted.

The Income Tax Appellate Tribunal found that the Ld. CIT(A) erred by not adjudicating the legal grounds pertaining to the jurisdiction under Section 147, non-compliance with Section 144B, and invocation of Section 144. The Tribunal set aside the CIT(A)'s order to this extent and remanded the matter back to the Ld. CIT(A) for de novo adjudication of these specific legal issues.

The Assessing Officer (AO) made an addition of the entire interest received (Rs. 9,64,603/-) without considering the corresponding interest expenditure incurred by the assessee. The Tribunal held that the AO was not justified in making this addition.