ITAT Chennai Judgments — August 2025

The Tribunal condoned the delay in filing the appeal. While acknowledging some evidence for gifts from family, the Tribunal found the source for a portion of the investment to be unexplained. They directed the AO to restrict the addition to Rs. 14,00,000/-, allowing a portion of the claimed personal savings.

The CIT(A) deleted the additions, holding that entries in a third party's seized material, not in the assessee's handwriting and lacking corroborative evidence, cannot be used to make additions. The tribunal upheld this decision, emphasizing the need for cogent evidence to link the assessee to the entries.

The Tribunal held that while the assessee's claim of past withdrawals as the source of deposit needs substantiation, considering her status as a senior citizen living alone, the addition made by the AO was restricted to 50% of the amount confirmed by the FAA. The Tribunal also ruled that the tax rate for prior transactions should be 30% as per section 115BBE of the Act, not 60%.

The Tribunal noted that the appeal was initially blocked pending the outcome of the Corporate Insolvency Resolution Process (CIRP) before the NCLT. The Tribunal directed the Revenue to ascertain the stage of NCLT proceedings and inform the Tribunal upon completion. However, subsequent hearings saw no appearance from the assessee, and the Revenue was unable to provide the requested information regarding the NCLT proceedings or whether the tax arrears were part of the company's dues submitted to the NCLT. Given the lack of information on the moratorium's status and the tax arrears' inclusion in the creditor list, and considering Section 156A of the Income Tax Act, 1961 (introduced w.e.f. 01.04.2022, dealing with modification/revision of demand notices in light of adjudicating authority orders under IBC), the Tribunal decided to restore the matter to the Assessing Officer (AO). The AO is directed to ascertain the outcome of the NCLT proceedings and proceed in accordance with the law after providing the assessee with an opportunity of hearing. The appeal is disposed of accordingly. The Tribunal did not decide the merits of the grounds raised by the assessee.

The Tribunal upheld the CIT(A)'s direction to treat scrap sales as operating income, noting it relates to the core business. Regarding interest on debentures, the Tribunal directed the AO/TPO to verify if the debentures were in INR and then adopt the average SBI PLR for FY 2011-12 as the ALP.

The Tribunal upheld the CIT(A)'s direction to treat scrap sales as operating income, aligning with previous tribunal decisions. Regarding interest on debentures, the Tribunal noted the CIT(A)'s direction to verify the currency denomination and adopt SBI PLR if denominated in INR.

The Tribunal held that the receipts from the sale of MLFPS scrips are capital in nature and not taxable. The Tribunal relied on previous decisions of various High Courts and ITATs, and also considered the amendment to Section 2(24)(xviii) of the Income Tax Act, 1961.

The Tribunal held that the receipts from the sale of MLFPS scrips are capital in nature and not taxable as revenue. The FAA's order was upheld, and the grounds raised by the Revenue were dismissed.

The Tribunal condoned the delay of 384 days in filing the appeal, finding sufficient cause. The Tribunal observed that the revision order under Section 263 was quashed by the ITAT, rendering the subsequent order giving effect to it infructuous. Therefore, the impugned order of the AO and the order of the FAA were set aside.