ITAT Chandigarh Judgments — June 2025

The Tribunal found merit in the assessee's contention regarding foreign travel expenditure, noting that the ITSC order was binding and the lower authorities were not justified in making fresh additions. For household expenses, a reasonable estimation was adopted, restricting the disallowance to 75% of the amount added.

The tribunal dismissed the appeal as withdrawn. It was clarified that if the assessee fails to avail the full benefit of the scheme due to technicalities, the appeal can be revived by filing an application under Section 254(2) of the Income Tax Act.

The Tribunal held that the reopening of the assessment under section 147 was valid as the AO had a prima facie belief based on tangible material, especially since the assessee failed to respond to the initial enquiry. On merits, the Tribunal found that the assessee failed to substantiate the source of the entire Rs. 1 crore cash deposit. Only Rs. 51,30,000 was accepted based on registered sale deeds.

The Tribunal held that the CIT(A)'s dismissal of the appeal for non-prosecution without adjudicating on merits violated Sections 250 and 251 of the Income Tax Act and principles of natural justice. The matter was remanded to the AO for a fresh assessment.

The Tribunal held that the foreign travel expenditure additions were not sustainable as the ITSC had already dealt with the matter. For household expenses, the Tribunal restricted the disallowance to 75% of the amount added, granting the assessee a 25% relief.

The Tribunal held that the surrendered amount of Rs. 1.60 crores, derived from business operations, should be taxed as normal business income, not under Section 115BBE. They also ruled that extrapolation of wages and salary should be restricted to the survey date, not the full year.

The Tribunal held that the surrendered amount of Rs. 1.60 crore, being out of business income, should be taxed at normal business rates and not under Section 115BBE. It also held that additions based on extrapolation of wages beyond the survey date were not permissible.

The Tribunal held that an ex-parte order was passed by the CIT(A) without sufficient opportunity for the assessee due to the counsel's medical condition. To provide natural justice, the case was remanded back to the AO for fresh adjudication.

The Tribunal condoned the delay, finding it to be a bonafide human error. The appeal was then dismissed as withdrawn, as the dispute was resolved under the Direct Tax Vivad Se Vishwas Scheme.

The Tribunal held that the CIT(A) erred in rejecting the assessee's application to adduce additional evidence. The Tribunal found that the source of the deposit was the sale proceeds of agricultural land and set aside the orders, deleting the addition.

The Tribunal noted that the assessee sought to withdraw the appeals. The Revenue did not object to this withdrawal. Consequently, the appeals were dismissed as withdrawn.

The Tribunal held that the unregistered and unstamped agreement to sell dated 20.02.2010 was not a valid piece of evidence for determining the transfer date. However, the cost of acquisition as per the registered sale deed was allowed as a deduction. Furthermore, the capital gain was restricted to 50% due to joint ownership.

The Tribunal noted that the Ld. Sr. DR did not object to the withdrawal applications. Consequently, the appeals were dismissed as withdrawn. The assessee was given liberty to revive the appeals by filing a Misc. Application if they failed to avail the scheme benefits due to technicalities.

The Tribunal noted that the assessee filed applications under the Direct Tax Vivad Se Vishwas Scheme and sought to withdraw the appeals. The Revenue did not object. Consequently, the appeals were dismissed as withdrawn.

The Tribunal noted that the assessee had filed applications under the 'Direct Tax Vivad Se Vishwas, 2024' Scheme and sought withdrawal of the appeals. The Revenue did not object to this. Consequently, the appeals were dismissed as withdrawn.

The Tribunal held that statements recorded during a survey under Section 133A do not have independent evidentiary value and are merely corroborative. Furthermore, the AO did not provide an opportunity for cross-examination of Shri Ashok Kumar Gupta, whose statement formed the basis of the addition. Since the statement was recorded behind the assessee's back and not subjected to cross-examination, it could not be used against the assessee.

The Tribunal dismissed the appeal as withdrawn, considering the settlement of dispute under the 'Vivad Se Vishwas Scheme'. It was clarified that the appeal could be revived if the assessee failed to avail the full benefit of the scheme due to technicalities.

The Tribunal found that both assessment and first appellate proceedings were ex parte due to the assessee's non-compliance. In the interest of substantial justice, one more opportunity was granted to the assessee to present their case.

The Tribunal upheld the mercantile system of accounting for the assessee, stating that the AO's reasons for changing the method were not strong and that minor lapses in accounting should not hinder determining true income. Consequently, additions made based on the cash system were not sustainable.

The Tribunal held that employees of state-owned corporations like HVPNL are not considered 'State Government employees' for the purpose of exemption under Section 10(10AA)(i) of the Income Tax Act. The exemption is therefore limited to Rs. 3,00,000 as per Section 10(10AA)(ii).

The Tribunal held that the appeals were dismissed, finding no merit. The CIT(A) had observed that an identical issue was considered for earlier assessment years and accordingly dismissed the appeal for those years.

The Tribunal found that the non-appearance before the lower authorities was not willful and was due to genuine reasons. Therefore, in the interest of justice, the matter was restored to the Assessing Officer for a de novo assessment.

The Tribunal noted that the AO did not examine whether the agricultural land qualified as a 'capital asset' under Section 2(14) and failed to consider Section 50C regarding stamp duty value. Furthermore, the claim for exemption under Sections 54B and 54F was not properly examined. The Tribunal set aside the orders and remanded the issue to the AO for fresh examination.

The Tribunal held that the CIT(A) did not provide adequate opportunity to the assessee, especially considering the assessee's semi-literate status, and that the ex-parte order was not properly passed on merits. Therefore, the matter was remanded back to the CIT(A).

The Tribunal held that the reopening was based on conjectures and surmises without independent application of mind, as the department had previously given a 'No Objection' for the amalgamation leading to the shares. The documentary evidence for share transactions was not disproved. The addition related to 'DLC Exports Ltd.' was also deleted for lack of evidence.

The Tribunal held that the reassessment proceedings were not valid because the AO was unclear whether the escaped assessment related to 'losses' or 'profits'. The AO failed to apply his mind independently and verify information received from the Investigation Wing. Since the assessee had not claimed any loss in its return, such a disallowance could not be made.

The Tribunal held that the CIT's action under Section 263 was not justified as it was passed without considering the evidence and the department's own stance in similar cases involving co-purchasers, thus violating the principle of consistency. The AO had conducted proper enquiry.

The Tribunal held that the CIT's action under Section 263 was not justified as it failed to consider the evidence presented by the assessees and the department's consistent view in similar cases. The Tribunal also noted that no prejudice was caused to the revenue.

The Tribunal noted that the CIT(A) had passed an ex-parte order and failed to dispose of the appeal on merits. To ensure natural justice, the Tribunal remanded the matter back to the CIT(A) for fresh adjudication.

The Tribunal condoned the delay in filing the appeal, holding that the notice under Section 148 was not validly served upon the assessee within due date. Consequently, the assessment passed under Section 147 was deemed void ab initio.

The Tribunal held that the CIT(A) was correct in deleting the addition. The assessee provided sufficient documentation, including VAT returns, sales records, and stock details, which were accepted by the VAT department and the AO. The cash sales were offered to tax, and adding them again as unexplained credit would amount to double taxation.

The Tribunal held that in the absence of any corroborative material, an inference that cash was transmitted and received back cannot be drawn solely from a loose paper found during a search. The Tribunal also found that the disallowance of expenses related to Section 80IC deduction was not substantiated as the expenses were incurred at the Head Office and their apportionment to the unit was not properly explained. Therefore, both the addition and the disallowance were deleted.

The Tribunal held that the addition of Rs. 7 Crores was not sustainable due to the lack of corroborative material linking the loose paper to any actual transaction of the assessee. Similarly, the disallowance under Section 80IC was also not upheld due to improper allocation of expenses.

The Tribunal held that the completion certificate required under Section 80-IB(10) should be issued by a registered architect/engineer/supervisor and not necessarily by the local authority. The appeal related to quantum addition was partly allowed, and the penalty appeal was allowed for statistical purposes.

The Tribunal held that the interpretation of 'completion certificate' under Section 80-IB(10) and its relation to local authority approval versus architect's certification was crucial. For ITA No. 598/Chandi/2024, the issue was remitted back to the AO for fresh adjudication due to factual verification needs. For ITA No. 599/Chandi/2024, the penalty appeal was consequential and also restored to the AO.

The Tribunal held that while in some cases quantum additions might be set aside due to disproportionate punishment, a penalty of Rs. 10,000 for negligence in income tax proceedings is not disproportionate.

The Tribunal held that the reopening of assessment was bad-in-law, as it was based on a change of opinion and lacked tangible material. The AO's actions constituted an arbitrary exercise of power under Section 147, as the same material was available during the initial assessment.

The Tribunal held that the seized documents did not establish that the transactions belonged to the assessee. The assessee was a salaried employee and had no business income. The CIT(A) had correctly deleted the additions, and the Revenue's appeals were dismissed on merit.

The Tribunal held that the interpretation of 'substantially finance' prior to AY 2015-16 was governed by judicial decisions which considered lower percentages as substantial. The Tribunal noted that Rule 2BBB and CBDT Circular 01/2015, which prescribed a 50% threshold, were not applicable for AY 2012-13.

The Tribunal held that the CIT(E) had dismissed the appeals without considering the material on record and without providing an opportunity of hearing. Thus, the matter was remitted back for fresh adjudication.

The Tribunal condoned the delay in filing the appeal. The Tribunal held that the CIT(A) had passed the order without affording a proper opportunity of hearing to the assessee.

The tribunal held that the reopening of the assessment under Section 147 was invalid as it was based on a mere change of opinion without any fresh tangible material, making it bad in law. Consequently, the assessee's appeal on the legal ground regarding the invalid reopening was allowed, rendering other grounds infructuous.

The Tribunal held that for the amount of Rs. 1,18,61,000/-, the assessee had established the source of source and proved the identity, creditworthiness, and genuineness of the transactions. The repayment in subsequent years was also noted. For the amount of Rs. 2,25,000/-, the assessee could not furnish evidence, thus the addition was confirmed.

The Tribunal held that the seized documents and excel sheets did not conclusively prove that the transactions belonged to the assessee. The assessee, being a salaried employee, had managed the group's finances, but no personal business activity or unexplained assets were found. The CIT(A)'s deletion of additions was upheld.

The Tribunal held that the CIT(E) dismissed the appeals ex-parte without considering the material on record or the merits of the case, and without providing an opportunity of hearing. The Tribunal emphasized the importance of providing a fair hearing.

The tribunal accepted the prayer of the Ld. AR and dismissed the appeal as withdrawn. Liberty was granted to the assessee to seek revival if the settlement fails.