ITAT Ahmedabad Judgments — April 2026

The Tribunal held that the reopening of the assessment was invalid because the approval for issuing the notice under section 148 was granted by an authority higher than the one specified by law (Section 151). Therefore, the AO lacked valid jurisdiction to frame the assessment.

The Tribunal found that disallowing the entire contract expense was not justified, as it led to taxing the entire contract receipt. The Tribunal noted the assessee's submission that no contract work was executed and the amount was not received, supported by bank statements. Therefore, the matter was set aside to the AO for verification.

The Tribunal held that the sale deed was declared void by the Civil Court due to fraud and non-payment of consideration. The Tribunal noted that no inquiry was made by the AO from the buyers, nor was any evidence produced for the receipt of sale consideration by the assessee. The mere pendency of an appeal before the High Court did not justify the addition, especially since the sale transaction was declared void.

The Tribunal held that the original assessment order under Section 147 r.w.s. 144 was set aside by the NFAC to the Assessing Officer for re-examination. Consequently, the subsequent order under Section 154 r.w.s. 147 also ceased to survive and the appeal against it became infructuous.

The Tribunal held that the items on which the assessee claimed higher depreciation did not fall under the category of life-saving medical equipment specified in the Income Tax Rules. Therefore, the AO was justified in rectifying the mistake apparent from the record under section 154. The assessee's reliance on a previous High Court decision was not applicable due to differing facts.

The Tribunal held that Section 50 of the Act creates a limited deeming fiction for computation and does not alter the nature of the asset. The CIT(A) correctly considered the Written Down Value (WDV) as on 31.03.2010 as the cost of acquisition because depreciation had been claimed. The claim for cost of improvement was rejected due to lack of evidence. The Tribunal agreed with the CIT(A) that the assessee could not claim depreciation benefits and simultaneously seek indexation on the original cost.

The Tribunal held that since the AO did not make any addition related to the cash and time deposits for which the case was reopened, it was not open for the AO to make an addition on a different issue, such as the disallowance of Section 80P deduction. The Tribunal relied on the Gujarat High Court's decision in Mohamed Juned Dadani.

The tribunal held that the reopening was not sustainable as the assessee had fully disclosed material facts during the original assessment, which had previously found that the assessee had advanced loans to M/s Mehta Finance, not vice-versa. The addition was also not sustainable on merits as no evidence was produced by the AO to show the assessee had taken accommodation entries.

The Tribunal held that the AO made the addition of Rs. 59,97,950/- mechanically without verifying facts or controverting the assessee's submissions. The CIT(A) had rightly noted that the assessment order lacked specific details about the transactions and supporting evidence, hence the addition was unsubstantiated.

The Tribunal found merit in the Department's contention that the CIT(A) had not properly examined the facts regarding unsecured loans and capital introduction. The Tribunal noted discrepancies in the CIT(A)'s reasoning about duplication of additions and the lack of proper verification of evidence for these amounts. The Tribunal restored these issues to the Assessing Officer for de novo consideration.

The Tribunal upheld the order of the CIT(A). It was found that the AO's initial addition was not based on clear evidence, and the assessee provided sufficient documentation like cash book, sales registers, and RTO registrations before the CIT(A) to explain the cash deposits as sale proceeds of tractors. The Tribunal found no infirmity in the CIT(A)'s decision to delete the addition.

The Tribunal acknowledged the assessee's failure to comply with notices from both the AO and CIT(A) without providing valid reasons. However, considering the request for another opportunity, the Tribunal decided to set aside the matter to the CIT(A) for fresh adjudication.

The Tribunal held that the assessee had provided sufficient explanation and evidence for the cash deposits, including savings from a partnership firm, agricultural income, savings of family members, and previous withdrawals from bank accounts. The AO had wrongly rejected the evidence without proper reasoning.

The Tribunal noted that addition under section 69A requires the assessee to be owner of unexplained money and fail to explain its source. After the assessee furnished evidence, the burden shifted to the AO to rebut. The Tribunal found that the CIT(A) correctly held the time deposits to be explained on merits.

The tribunal held that since no return was filed voluntarily and the assessment was framed as a best judgment assessment under section 144 due to non-compliance, the mandatory notice under section 143(2) was not required for the validity of the assessment.

The Tribunal condoned the delay, noting the assessee's charitable work and the general confusion surrounding amended provisions. It held that the applications for final approval should be considered after the grant of provisional approval, not from the commencement of activities, and set aside the CIT(E)'s orders.

The Tribunal condoned the delay in filing appeals, set aside the orders of the CIT(E), and restored the matters back to the CIT(E) for fresh adjudication. The Tribunal found that the CIT(E)'s interpretation of the time-bar provisions for Section 80G was impractical and clarified that applications for final approval can only be made after provisional approval is granted.

The Tribunal condoned the delay in filing the appeals, set aside the orders of the CIT(E), and restored the matters for fresh adjudication. The Tribunal held that the application for final approval under Section 80G should be considered after provisional approval, not from the date of commencement of activities, acknowledging the confusion surrounding amended provisions.

The Tribunal condoned the delay in filing appeals, set aside the CIT(E)'s orders, and restored the matters for fresh adjudication. The Tribunal found that the interpretation of the time limit for 80G approval by the CIT(E) was impractical and that there was confusion regarding the amended provisions.

The Tribunal noted that Section 80A(5) and 80AC of the Income Tax Act do not necessarily bar a deduction under Section 80P if a return is not filed, unlike other Chapter VI-A deductions. Following precedent, the Tribunal found it appropriate to remand the issue for fresh examination.

The Tribunal held that merely treating the income as per the assessee's own understanding, which was reflected in the audited books of accounts, cannot be considered as furnishing inaccurate particulars of income or concealment of income under section 271(1)(c). Therefore, the penalty was not sustainable.

The Tribunal held that the CBDT notification, although retrospective, could not grant exemption for amounts pertaining to periods before its effective date. Relying on the Kerala High Court's decision in Ramesan P. A. vs. Union of India, the Tribunal found that revising the upper limit is a policy decision of the executive and courts cannot mandate retrospective revision for periods prior to the notification.

The Tribunal held that the property sold was a capital asset as no evidence was produced to show otherwise. However, regarding the capital gains, the Tribunal found merit in the co-ownership claim and restored the issue to the Assessing Officer (AO) for verification of the assessee's share. For the penalty, the Tribunal deleted it, noting that the assessment was completed and no prejudice was caused to the revenue.

The Tribunal held that the assessee failed to provide evidence to prove the property was not a capital asset, thus dismissing that ground. However, regarding the co-ownership claim, the Tribunal found merit and restored the issue to the AO for verification. For the penalty, the Tribunal held that since the assessment was completed and no prejudice was caused to the revenue, the penalty was not leviable and directed its deletion.

The Tribunal condoned the delay in filing the appeal. The assessee provided evidence that a travel agent misused his bank account for depositing cash while the assessee was abroad for studies. Therefore, the cash deposits could not be treated as the assessee's unexplained income.

The Tribunal held that the CIT(A) rightly set aside the assessment order to the file of the Assessing Officer for a fresh assessment. The assessee failed to raise objections before the Assessing Officer during the assessment proceedings, thus losing the opportunity as per the GKN Driveshafts case. However, for the cause of justice, a fresh assessment was deemed necessary.

The Tribunal noted that the CIT(A) passed an ex-parte order without granting a proper opportunity of being heard. The Tribunal found that the Assessing Officer and CIT(A) did not consider the details related to agricultural income.

The Tribunal condoned the delay in filing the appeal after finding the assessee's explanation reasonable and bona fide. Considering the principles of natural justice and the assessee's claim of not being aware of proceedings before the CIT(A), the Tribunal restored the matter to the Assessing Officer for fresh adjudication.

The Tribunal held that the assessee had sufficiently demonstrated the creditworthiness of the loan creditors by providing their bank statements, which showed the source of funds received by the creditors. The Tribunal found that the creditors had received funds through banking channels from identified parties before advancing them to the assessee, thus establishing the genuineness of the transaction. Therefore, the addition made by the AO and confirmed by the CIT(A) was not sustainable.

The Tribunal condoned the 170-day delay, finding sufficient cause in the legal heir's circumstances and the difficulty in obtaining old financial records. The Tribunal also noted that the CIT(A) had dismissed the appeal due to a 20-day delay without condoning it, and given the ex-parte assessment order and potential for new evidence, the matter required reconsideration.

The Tribunal held that the ITC reversal claim was proportionate to the project completion and directed deletion of the disallowance. For written-off advances, the Tribunal restored the issue to the AO for fresh adjudication after providing the assessee an opportunity to prove the business nature of the advances. The disallowance of expenses treated as CSR was upheld as they were found to be for charitable activities.

The Tribunal held that the mismatch, if arising from a bona fide and rectifiable error in VAT filing, requires proper verification. The Tribunal found that the corrected VAT Audit Report, presented by the assessee, was not duly examined by the lower authorities.

The Tribunal held that the business loss discrepancy was a clerical error and ordered its deletion. Regarding the cost of improvement, the Tribunal found that while some payment evidence was lacking, the fact of encroachment and the necessity of compensation payments were established. The CIT-DR examined the evidence and did not dispute the justification for payments.

The Tribunal held that once the source of funds in the bank account is undisputed, additions cannot be made solely on the ground of cash withdrawals, especially when they are for business distribution. The Tribunal condoned the delay in filing the appeal due to the assessee's rural nature and lack of technical expertise. The addition under Section 69C was deleted, but the interest income ground was dismissed as not pressed.

The Tribunal held that the reassessment proceedings initiated under section 147 were bad in law due to a fundamental legal infirmity. The reopening was based on generalized information without specifying the exact nature of income escaping assessment and lacked independent application of mind by the Assessing Officer.

The Tribunal held that a portion of the cash deposits was explained by earlier withdrawals from the same bank account and another portion by marriage gifts. However, the amounts claimed from agricultural income and family savings were not substantiated with evidence. Therefore, the addition was partly sustained.

The Tribunal observed that the tax effect was indeed below Rs. 60 lakhs and that the Revenue did not dispute the applicability of the CBDT circular. Therefore, following the circular and Section 268A of the Income Tax Act, the appeal was dismissed.

The Tribunal noted that while the assessee was eligible for the beneficial DTAA rate, it failed to produce the Tax Residency Certificate (TRC) and Form 10F for the relevant period. Therefore, the matter was set aside to the TDS-AO to provide another opportunity to the assessee to submit the required documents.

The Tribunal held that notices were sent to an incorrect email ID, preventing the assessee from appearing before the CIT(A). Consequently, the appeal was dismissed ex-parte, violating principles of natural justice. The case was remanded to the CIT(A) for proper adjudication.

The Tribunal held that TDS income and credit must be considered in the hands of the same person. Since the TDS was made on sales by agriculturists/farmers, not the assessee's own sales, the TDS was wrongly deducted in the assessee's PAN, and credit could not be claimed.

The Tribunal held that while there was a significant delay in filing Form 10B and subsequent appeals, the technicality of delay should not override the interest of justice. Relying on judicial precedents, the Tribunal condoned the delay in filing Form 10B and directed the AO to process the return considering the exemption claim.

The Tribunal held that changing the assessee's status from AOP/BOI to Co-operative Society during processing under section 143(1) was beyond the scope of permissible adjustments. Such a change requires a thorough examination, which is not permitted under section 143(1).

The Tribunal held that the Assessing Officer's additions under Section 68 were not adequately verified, particularly concerning the status of supplier's VAT registration and business activity. It was also established that only the profit element embedded in the sales, not the entire sales value, can be taxed when books of account are not rejected.