ITAT Chennai Judgments — July 2025

The Tribunal held that the addition was made solely based on a clerical mistake in the return, without considering the actual cash flow and availability of opening balance. Therefore, the addition was deleted.

The Tribunal held that once an assessment order is passed and proceedings are concluded, the Assessing Officer cannot withdraw or cancel it to redo the assessment. Relying on High Court decisions, the Tribunal found the reassessment proceedings initiated after the original assessment was completed to be without jurisdiction.

The Tribunal held that once an assessment order is passed and proceedings are concluded, the Assessing Officer cannot withdraw or cancel it to redo the assessment. Relying on High Court decisions, the Tribunal found the reassessment proceedings initiated after the original assessment was completed to be without jurisdiction.

The Tribunal noted that the AO taxed the entire license fee as royalty without proper bifurcation between theatrical and non-theatrical rights. The assessee contended that the agreements clearly bifurcated consideration for theatrical and non-theatrical rights, and the latter should be taxed as royalty, while the former should be excluded. The Tribunal, in the interest of justice, directed the AO to segregate the receipts into theatrical and non-theatrical components based on the agreements. Only the portion attributable to non-theatrical rights should be taxed as royalty after due verification. The AO was also instructed to consider the applicability of the India-Hungary Double Taxation Avoidance Agreement (DTAA), its beneficial provisions, relevant case laws, and CBDT circulars before re-determining taxability. The assessment order was set aside, and the matter was restored to the AO for de novo adjudication, with an opportunity for the assessee to substantiate its claims.

The Tribunal dismissed the Revenue's appeal, affirming the CIT(A)'s decision. It held that the margin agreed under the APA could be adopted as the arm's length profit margin for the assessment year 2015-16 because there was no difference in the assessee's functional profile or the nature of international transactions between the relevant year and the APA period. The assessee's cross-objection, challenging the assessment on grounds of limitation and lack of signature, was dismissed as infructuous.

The Tribunal held that the additions made by the AO were not sustainable due to lack of corroborative evidence and violation of principles of natural justice. The Tribunal concurred with the CIT(A)'s decision to delete the additions.

The Tribunal upheld the Commissioner of Income Tax (Appeals) decision, finding that the additions were not supported by cogent and corroborative evidence. The Tribunal noted that statements relied upon were retracted or lacked sufficient corroboration, and the issue of double taxation was also considered.

The Tribunal held that the capital gains arising from the transfer of assets by a firm to a retiring partner are chargeable to tax in the hands of the firm, not the partner. Since the firm (Amuda LLP) had already settled the tax liability under a scheme, the addition in the hands of the assessee was deleted.

The Tribunal held that the assumption of jurisdiction under Section 148 was bad in law as the escapement of income, after removing duplication, was less than Rs. 50 lakhs, making the notice barred by limitation under Section 149. Consequently, the reassessment order was quashed.

The Tribunal upheld the Commissioner of Income Tax (Appeals) decision, finding that the additions were not supported by cogent and corroborative evidence. The Tribunal noted that statements relied upon were retracted or lacked sufficient corroboration, and the issue of double taxation was also considered.

The Tribunal found that the AO's observations regarding the lack of services and the flow of funds to the trustee's family were factually incorrect. The Tribunal also noted that the CIT(A) erred in relying on statements without allowing cross-examination.

On the first issue concerning the disallowance under Section 14A read with Rule 8D, the Tribunal held that the interest disallowance of Rs.4,00,64,273/- made by the AO under Rule 8D(2)(ii) was unwarranted and directed its deletion. The reasoning was that the assessee's own funds were substantially higher than its investments, creating a presumption that investments were made from own funds, as supported by precedents like CIT v. Reliance Utilities and Power Ltd. and CIT v. Reliance Industries Ltd. The Tribunal also followed its own decision for AY 2012-13. For the disallowance under Rule 8D(2)(iii), the Tribunal directed the AO to verify the assessee's computation based on dividend-yielding investments, as per the Special Bench decision in ACIT v. Vireet Investment (P.) Ltd., and re-compute the disallowance accordingly. The Ld. CIT(A) had already deleted the addition to book profit, which was not contested by the Revenue in the provided text. On the second issue regarding the slump sale of the windmill division, the Tribunal noted the AO's view that the separate deferred consideration for unbilled revenue meant it was not a slump sale. The assessee contended that the Rs.93 crores was a lump sum for the entire division, and the deferred component was merely for quantifying revenue earned up to the transfer date. The judgment excerpt ends before the Tribunal's final decision on this point.

The Tribunal condoned the delay in filing the appeals. It held that the assessee was not given adequate opportunity and remitted the matters back to the CIT(E) for fresh consideration, allowing the assessee a reasonable opportunity to present their case and submit required documents.

The Tribunal held that the disallowance of software charges made by the lower authorities was incorrect. Regarding personal gifts, it was decided that these should be considered in the hands of the individual recipients and not the Trust, and that cash gifts below Rs. 50,000/- are not taxable. Consequently, the additions were deleted.

The Tribunal held that the disallowance of software charges made by the lower authorities was incorrect. Regarding personal gifts, it was decided that these should be considered in the hands of the individual recipients and not the Trust, and that cash gifts below Rs. 50,000/- are not taxable. Consequently, the additions were deleted.

The Tribunal observed that the AO wrongly applied the net profit rate to sales turnover instead of total turnover and erred in adding foreign exchange fluctuation gain. It held that the rejection of books was unjustified under Section 145(3) as the AO failed to establish any grounds for unsupported expenses, suppressed sales, or improper stock valuation, merely comparing net profit margins. The Tribunal noted that the assessee's books were maintained properly and accepted in prior assessments, concluding that none of the conditions for book rejection were met.

The Tribunal condoned the delay in filing the appeals. It held that the assessee was not given adequate opportunity and remitted the matters back to the CIT(E) for fresh consideration, allowing the assessee a reasonable opportunity to present their case and submit required documents.

The Tribunal held that the statement recorded u/s. 131 of the Act during the survey was illegal as the conditions for its recording were not met. The addition made solely on the basis of this statement, without corroborative evidence, was also deemed illegal and deleted.

The Tribunal found that the AO's observations regarding the lack of services and the flow of funds to the trustee's family were factually incorrect. The Tribunal also noted that the CIT(A) erred in relying on statements without allowing cross-examination.

The Tribunal found that the AO's observations regarding the lack of services and the flow of funds to the trustee's family were factually incorrect. The Tribunal also noted that the CIT(A) erred in relying on statements without allowing cross-examination.

The Tribunal held that the rejection of the application on purely technical grounds without examining the merits of eligibility is not justified. The Tribunal condoned the delay in filing and remitted the matters back to the CIT(E) for fresh consideration.

The Tribunal condoned the delay in the Revenue's appeal. The judgment then proceeds to discuss various grounds of appeal raised by the assessee concerning transfer pricing, disallowance under Section 14A, R&D expenditure, and Section 80IC deductions, as well as issues related to CSR spend and Section 80G deductions.

The Tribunal held that the rejection of the application on purely technical grounds without examining the merits of eligibility is not justified. The Tribunal condoned the delay in filing and remitted the matters back to the CIT(E) for fresh consideration.

The Tribunal set aside the ex-parte order of the CIT(E) which dismissed the appeal due to non-response from the assessee, attributing the non-response to technical glitches leading to notices being sent to the spam folder. The appeal was restored to the CIT(E)'s file for fresh adjudication.

The Tribunal condoned the 100-day delay in filing the appeal before the Ld. CIT(A) due to COVID-19. It held that the requirement to file Form 67 by the due date under Rule 128(9) of the Income Tax Rules is directory, not mandatory, citing High Court and Tribunal precedents. Since the assessee had filed Form 67 belatedly during assessment proceedings, the Tribunal directed the lower authorities to grant the Foreign Tax Credit.

The Tribunal found that the Ld.CIT(A)'s ex parte order violated natural justice as proper notice was not served. The Tribunal set aside the order and restored the appeal to the Ld.CIT(A) for fresh adjudication after hearing the assessee.

The Tribunal held that the Ld.CIT(A) erred in not condoning the delay. Considering the circumstances and the Supreme Court's order, the delay was condoned. The impugned orders were set aside, and the appeals were restored to the Ld.CIT(A) for adjudication on merits.

The Tribunal held that the disallowance of business consultancy charges was made mechanically by the lower authorities without proper application of mind. The Tribunal also noted inconsistencies in the approach of the CIT(A) regarding similar claims in different assessment years.

The Tribunal found that the AO's observations regarding the lack of services and the flow of funds to the trustee's family were factually incorrect. The Tribunal also noted that the CIT(A) erred in relying on statements without allowing cross-examination.

The Tribunal held that the disallowance of software charges made by the lower authorities was incorrect. Regarding personal gifts, it was decided that these should be considered in the hands of the individual recipients and not the Trust, and that cash gifts below Rs. 50,000/- are not taxable. Consequently, the additions were deleted.

The Tribunal held that the denial of the concessional tax rate solely for the non-filing of Form 10IC due to technical glitches was not acceptable. Procedural requirements should not override substantive benefits, especially when there was substantial compliance.

The Tribunal held that salary income earned for services rendered in China is taxable only in China as per Article 15(1) of the India-China DTAA. The assessee, being a resident of China and having rendered services there, is eligible for this exemption.

The Tribunal partly allowed the assessee's appeal and dismissed the Revenue's appeal. Specifically, the Tribunal found no infirmity in the CIT(A)'s order allowing deduction under Section 80G for donations made to Reliance Foundation and Shyam Kothari Foundation.

The Tribunal held that the interest disallowance under Rule 8D(2)(ii) was unwarranted as the assessee's own funds were sufficient to cover investments. Regarding disallowance under Rule 8D(2)(iii), the Tribunal directed the AO to re-compute it considering only dividend-yielding investments, following a previous decision.

The Tribunal, relying on precedents from the Madras High Court and Mumbai Tribunal, held that the requirement to file Form 67 under Rule 128(9) of the Income Tax Rules is directory, not mandatory. Since the assessee filed Form 67 with the revised return and before the intimation under Section 143(1) was processed, the FTC claim cannot be denied. The lower authorities were directed to grant the foreign tax credit.

The Tribunal held that the Ld.CIT(A) erred in not condoning the delay. Considering the circumstances and the Supreme Court's order, the delay was condoned. The impugned orders were set aside, and the appeals were restored to the Ld.CIT(A) for adjudication on merits.

The Tribunal found the assessment order to be cryptic and vitiated due to non-application of mind and lack of discussion of evidence. Therefore, the assessment was restored to the AO for a de novo assessment after considering all evidence.

The Tribunal held that the assessee should not be denied legitimate deductions and exemptions. While the exemption under Section 11 might not be available due to registration issues, other deductions should have been considered. The case was restored to the AO to tax only the net income.

The Tribunal set aside the impugned order of the CIT(E) and restored the application to his file, directing him to await the CBDT's decision on the condonation petition. The CIT(E) is to pass an order thereafter. The appeal was allowed for statistical purposes.

The Tribunal held that TDS of Rs. 13,000/- is part of income-tax and should be added to book profits. However, ESI payment of Rs. 1,94,280/- is not to be added as it is not mentioned in Explanation 1 to Section 115JB(2) of the Act. Therefore, the book profit needs to be recomputed.

The Tribunal held that the AO had disbelieved only the opening cash balance but accepted the inflow of cash. It was natural for the family to have past savings of Rs.2,37,000/-, and this amount should be given due credit as out of past savings.

The Tribunal noted that while part of the payment was explained by savings, the larger amount claimed as a loan from City Bank lacked sufficient evidence before the AO. Therefore, the Tribunal set aside the AO's order and remitted the issue back for verification of the loan documents.

The Tribunal held that the assessee could not be faulted for not responding due to non-receipt of notices. Therefore, the matter was restored to the AO for a fresh assessment after providing the assessee with an opportunity to be heard and submit documents.

The Tribunal held that the successor entity is eligible for the deduction under Section 80IA(4)(iii) as the industrial park was approved under the relevant schemes and the transfer was of the entire undertaking. The Tribunal also directed that interest income from fixed deposits, linked to mandatory security requirements for loans, should be considered as derived from the industrial undertaking, but such interest income and related expenditure should be assessed separately.

The Tribunal noted that both the Ld.CIT(A)'s and AO's orders were ex-parte as the assessee did not respond to notices. Citing the Supreme Court decision in TIN Box Co. v. CIT, the Tribunal set aside the impugned order and restored the assessment to the AO for de novo assessment.

The tribunal is hearing the appeal preferred by the assessee. The specific grounds and decision are not detailed in the provided excerpt.

The Tribunal held that the successor entity is eligible for the deduction under Section 80IA(4)(iii) as the industrial park was approved under the relevant schemes and the transfer was of the entire undertaking. The Tribunal also directed that interest income from fixed deposits, linked to mandatory security requirements for loans, should be considered as derived from the industrial undertaking, but such interest income and related expenditure should be assessed separately.

The Tribunal held that the successor entity is eligible for the deduction under Section 80IA(4)(iii) as the industrial park was approved under the relevant schemes and the transfer was of the entire undertaking. The Tribunal also directed that interest income from fixed deposits, linked to mandatory security requirements for loans, should be considered as derived from the industrial undertaking, but such interest income and related expenditure should be assessed separately.

The Tribunal held that the assessee had sufficient interest-free funds, including reserves, surplus, and share application money, to cover the investments and advances made to its subsidiary. Therefore, the presumption is that these were made out of own funds, not business loans.

The Tribunal held that filing of Form 10B is procedural and not mandatory, and the exemption under Section 11 of the Act should not be denied if the report is filed before the assessment is completed. The Tribunal also noted that the CIT(A) erred by rejecting the appeal on a ground not raised by the CPC.