ITAT Chennai Judgments — May 2025

The Tribunal held that the CIT(E) primarily based the rejection on the current stage of activities without fully considering the trust's objects and future plans. The creation of infrastructure is integral to a charitable project.

The Tribunal held that notional interest income recognized as per IND AS standards, but not actually received or accrued, is not taxable. The addition made on account of notional interest was directed to be deleted.

The Tribunal held that notional interest income recognized as per IND AS standards, but not actually received or accrued, is not taxable. The addition made on account of notional interest was directed to be deleted.

The Tribunal held that the rejection of the revised Form No. 10 solely due to an inadvertent error in the original filing was not acceptable. The revised form was filed before scrutiny selection and the accumulated amount was properly invested as per law.

The Tribunal held that the Ld.CIT(A) erred by not considering the merits of the assessee's submissions. It also noted the assessee's failure to appear before the AO, but set aside the impugned order due to lack of proper opportunity, citing the TIN Box Co. v. CIT case.

The Tribunal held that notional interest income recognized as per IND AS standards, but not actually received or accrued, is not taxable. The addition made on account of notional interest was directed to be deleted.

The Tribunal held that notional interest income recognized as per IND AS standards, but not actually received or accrued, is not taxable. The addition made on account of notional interest was directed to be deleted.

The Tribunal noted that the appeal was a duplicate and therefore infructuous/non-maintainable. Consequently, the appeal was held to be infructuous and allowed to be withdrawn.

The Tribunal set aside the impugned order of the Ld.CIT(A) and restored the assessment to the file of the AO for de novo assessment. The AO was directed to provide a proper opportunity to the assessee to present documents and evidence.

The Tribunal condoned the delay in filing the appeal. Observing that both the AO and CIT(A) passed ex-parte orders and the assessee expressed willingness to produce supporting documents, the Tribunal restored the appeal to the file of the AO for de novo assessment.

The Tribunal found that the transfer of property and the accrual of capital gains took place in AY 2011-12, not AY 2016-17, given the assessee had already received consideration and given possession to the builder in the earlier year. The Tribunal also noted similar cases where no capital gains were added to other land owners. Consequently, the addition made by the AO and confirmed by the CIT(A) for AY 2016-17 was deemed erroneous and deleted.

The Tribunal held that as per Section 153(2) of the Income Tax Act, the reassessment should have been completed within nine months from the end of the financial year in which the Section 148 notice was served, i.e., by 31.12.2018. Since the AO completed the assessment on 04.12.2019, it was beyond the statutory time limit, making the assessment order non-est in law and hence, quashed.

The Tribunal held that the Assessing Officer (AO) failed to provide the assessee with a reasonable opportunity of being heard before passing the rectification orders, which enhanced the assessment. This violation of statutory procedure under Section 154(3) rendered the rectification orders invalid.

The Tribunal noted that the assessee's notices from the AO went into the SPAM folder, and therefore the assessee was unaware and could not reply. Relying on a Supreme Court decision, the Tribunal set aside the Ld.CIT(A)'s order.

The Tribunal held that the source of the cash deposits from relatives and friends was adequately explained with supporting evidence. Therefore, the addition under Section 69A was not sustainable.

The Tribunal condoned the delay in filing the appeal. Considering the assessee's submission of non-receipt of notices due to the business closure and an outdated email ID, the Tribunal set aside the CIT(A)'s ex-parte order and remitted the matter back for fresh adjudication.

The tribunal held that the Addl. CIT(A) was not justified in dismissing the appeal solely on the ground of limitation without considering the reasons for delay and without providing an opportunity of being heard. The tribunal condoned the delay and remanded the matter for fresh adjudication on merits.

The Tribunal held that interest income earned by a co-operative society from another co-operative society is eligible for deduction under Section 80P(2)(d) of the Income Tax Act. They relied on a Supreme Court decision and stated that such deductions are benevolent provisions to be interpreted liberally.

The Tribunal noted that the assessee had mistakenly applied under certain clauses and directed the CIT(E) to consider the applications under the correct provisions. Appeals ITA Nos. 153 & 155 were allowed for statistical purposes, while ITA Nos. 154 & 156 were dismissed.

The Tribunal set aside the impugned order of the Ld.CIT(A) and restored the assessment to the file of the AO for de novo assessment. The AO was directed to provide a proper opportunity to the assessee to present documents and evidence.

The Tribunal noted that the assessee had mistakenly applied under certain clauses and directed the CIT(E) to consider the applications under the correct provisions. Appeals ITA Nos. 153 & 155 were allowed for statistical purposes, while ITA Nos. 154 & 156 were dismissed.

The Tribunal set aside the impugned order of the Ld.CIT(A) and restored the assessment to the file of the AO for de novo assessment. The AO was directed to provide a proper opportunity to the assessee to present documents and evidence.

The Tribunal held that the income earned from lending activities to both 'A' and 'B' class members is eligible for deduction under Section 80P(2)(a)(i) as business income. Furthermore, interest earned from investments in cooperative banks is also eligible for deduction under Section 80P(2)(d).

The Tribunal held that for Section 2(22)(e) to apply, payments must be loans or advances from accumulated profits to a shareholder for personal benefit. The CIT(A) correctly deleted the addition as the funds were from undisclosed income used for the company's commercial purposes, not accumulated profits or personal benefit to the shareholder.

The Tribunal held that the cash deposits were backed by sales recorded in the assessee's books and the source of cash was duly explained. The Tribunal also found merit in the CIT(A)'s direction to consider travel and legal expenses as application of income.

The Tribunal held that the TPO and DRP erred in recomputing the PLI by considering the gratuity provision as per Section 43B of the Act. The Tribunal directed the TPO to adopt the operating margin computation as furnished by the assessee, accepting the amount of Rs. 1,21,20,183/- as a prior period extraordinary item. Consequently, the upward adjustment of Rs. 83,05,869/- became infructuous as the assessee's PLI of 13.71% would fall within the arm's length range. Regarding the comparable companies, the Tribunal found that TTEC India Customer Solutions Pvt. Ltd. and Tech Mahindra Business Services Ltd. failed to satisfy the turnover and functional similarity filters. The Tribunal directed the TPO to exclude these companies from the comparable list. The ratio decidendi is that prior period extraordinary expenses should not be disallowed for ALP computation under TNMM, and appropriate turnover and functional filters must be applied when selecting comparables.

The Tribunal condoned the 568-day delay in filing the appeal, deeming it unintentional due to technical glitches (notices going to SPAM). Consequently, the Tribunal set aside the ex-parte order of the CIT(A) and remanded the case back to the CIT(A) for fresh adjudication after granting the assessee a proper hearing, in compliance with Section 250(6).

The Tribunal held that the interest income earned by the assessee from the Erode District Central Co-operative Bank is eligible for deduction under Section 80P(2)(d) of the Act, as the bank is a cooperative society. The deduction cannot be denied unless it is shown that the bank is not a cooperative society.

The Tribunal held that for Section 2(22)(e) to apply, it must be conclusively established that payments were loans or advances from accumulated profits, and the shareholder was the beneficial owner. The CIT(A) had allowed the appeal in favour of the assessee.

The Tribunal held that there was a violation of natural justice at both the AO and Ld.CIT(A) levels due to non-receipt of notices. Therefore, the matter was restored to the AO for de novo assessment.

The Tribunal noted that the assessee had mistakenly applied under certain clauses and directed the CIT(E) to consider the applications under the correct provisions. Appeals ITA Nos. 153 & 155 were allowed for statistical purposes, while ITA Nos. 154 & 156 were dismissed.

The Tribunal noted that the Ld.CIT(A) had dismissed the appeals without addressing the merits. Therefore, the Tribunal set aside the ex-parte order and restored the appeals back to the Ld.CIT(A) with a direction to decide them on merits after providing an opportunity to the assessee.

The Tribunal held that the Assessing Officer (AO) failed to provide the assessee with a reasonable opportunity of being heard before passing the rectification orders, which enhanced the assessment. This violation of statutory procedure under Section 154(3) rendered the rectification orders invalid.

The Tribunal set aside the impugned order of the Ld.CIT(A) and restored the assessment to the AO for de novo assessment. The Tribunal granted one more opportunity to the assessee due to the circumstances, while imposing a cost.

The Tribunal noted that the assessee claimed to have submitted evidence, including sales bills and documentation for other crops, which were allegedly not considered. Given the conflicting submissions and the need for proper verification, the Tribunal decided to remit the issue back to the AO.

The Tribunal held that the application of the 20% threshold under Section 2(15) is relevant for assessment of income under Section 11, not for the stage of approval under Section 80G. Organizing conferences does not inherently imply commercial intent.

The Tribunal found that the assessee had not produced sufficient evidence for undisclosed sales and disallowed expenses, remitting these matters back to the Assessing Officer for verification. The assessee's cross-objection was dismissed as infructuous.

The Tribunal held that the disallowance of Rs. 2,48,36,404/- was mentioned in the reasons for selection of the case, and therefore, the CIT(A) should have adjudicated the claim of disallowances of capital expenditure written off u/s 37(1) on merit. The matter is remitted to the CIT(A).

The Tribunal held that the AO had arbitrarily considered the average cash balance instead of the actual cash balance available on 07.11.2016. Since the cash withdrawal from the bank was properly accounted for in the cash book, the source of the deposit was explained.

The Tribunal held that concealment of income must be assessed with reference to the return filed under Section 153A, not the original return under Section 139. Since the assessee offered additional income in the revised return filed under Section 153A, which was accepted by the AO, no concealment could be made out.

The Tribunal held that a loose sheet without corroboration is a 'dumb document' and cannot be the sole basis for additions. It also found that differences in net profit arose from stock revaluation and forex treatment, which were explained. The Tribunal upheld the lower authorities' decision on the applicability of the 4th proviso to Section 153A.

The Tribunal held that in the interest of justice and considering the principles of natural justice, the assessee deserves another opportunity to present its case before the CIT(E). The Tribunal set aside the order passed by the CIT(E) and remitted the matter to his file for a fresh decision on the application under Section 12A(1)(ac)(iii). The assessee was directed to cooperate and appear before the CIT(E). Similarly, for the application under Section 80G, the matter was restored to the file of the CIT(E) for fresh consideration in line with the directions given for the Section 12A appeal. The ratio is that procedural fairness and an opportunity to be heard are paramount, especially when factual submissions regarding charitable activities need substantiation. The appeals were allowed for statistical purposes.

The Tribunal held that the provisions of Section 56(2)(viib) of the Act, concerning consideration for issue of shares, apply only to residents and not to non-residents, thus deleting the addition made on this ground. For the disallowance of expenses under Section 40(a)(i), the matter was remanded to the Assessing Officer for verification.

The Tribunal held that the provisions of Section 56(2)(viib) of the Act, concerning consideration for issue of shares, apply only to residents and not to non-residents, thus deleting the addition made on this ground. For the disallowance of expenses under Section 40(a)(i), the matter was remanded to the Assessing Officer for verification.

The Tribunal held that a loose sheet without corroboration is a 'dumb document' and cannot be the sole basis for additions. It also found that differences in net profit arose from stock revaluation and forex treatment, which were explained. The Tribunal upheld the lower authorities' decision on the applicability of the 4th proviso to Section 153A.

The Tribunal held that goodwill arising from amalgamation, when accounted for as per the purchase method under AS-14, is an intangible asset eligible for depreciation under Section 32 of the Act. The 5th proviso to Section 32(1) was found not applicable to newly generated goodwill.

The Tribunal held that goodwill arising from amalgamation, when accounted for as per the purchase method under AS-14, is considered a purchased intangible asset eligible for depreciation under Section 32 of the Income Tax Act. The 5th proviso to Section 32(1) was found not applicable to newly created goodwill.

The Tribunal held that concealment of income must be assessed with reference to the return filed under Section 153A, not the original return under Section 139. Since the assessee offered additional income in the revised return filed under Section 153A, which was accepted by the AO, no concealment could be made out.

The Tribunal held that in the interest of justice and considering the principles of natural justice, the assessee deserves another opportunity to present its case before the CIT(E). The Tribunal set aside the order passed by the CIT(E) and remitted the matter to his file for a fresh decision on the application under Section 12A(1)(ac)(iii). The assessee was directed to cooperate and appear before the CIT(E). Similarly, for the application under Section 80G, the matter was restored to the file of the CIT(E) for fresh consideration in line with the directions given for the Section 12A appeal. The ratio is that procedural fairness and an opportunity to be heard are paramount, especially when factual submissions regarding charitable activities need substantiation. The appeals were allowed for statistical purposes.

The Tribunal held that additions under Section 153A are not permissible without incriminating material found during the assessee's search, citing Supreme Court and High Court precedents. Consequently, the impugned additions were deleted.