ITAT Chennai Judgments — November 2025

The Tribunal held that the FAA had not considered the additional evidence filed by the assessee. On perusal of the evidence, it was clear that the assessee had adequate sources for the cash deposits, hence the addition sustained by the FAA was deleted.

The Tribunal held that the issue was squarely covered by the judgment of the Hon'ble jurisdictional High Court in SMILE Microfinance Ltd. Vs ACIT. Following the High Court's decision, the Tribunal directed the AO to recompute the income and impose only 30% rate of tax on the amount of Rs. 20,59,556/-, as the transaction was prior to 01.04.2017.

The Tribunal noted a significant delay of 929 days in filing the appeal. The reasons provided for the delay were found to be casual and unsatisfactory, leading to the non-condonation of the delay.

The Tribunal held that the "penal interest" was merely a contractual charge for delayed payment and compensatory in nature, not a penalty for breach of law. Since the borrowing was linked to earning interest income, the deduction was allowable under Section 57(iii) of the Act.

The Tribunal held that the AO lacked jurisdiction under Section 153C as no material found during the search related to the assessee or had a bearing on their total income. Consequently, the assessment orders were quashed.

The Tribunal allowed the assessee's appeal on the legal issue, holding that the Assessing Officer (AO) lacked jurisdiction to invoke Section 153C of the Income Tax Act, 1961. The Tribunal found that no material discovered during the search operation pertained to the assessee, nor was any incriminating material unearthed that had a bearing on the assessee's total income. The AO's satisfaction note was deemed insufficient as it failed to establish a co-relation between the impugned advances and the assessee. The Tribunal relied on the Supreme Court's decision in CIT v. Sinhgad Technical Education Society, stating that the absence of this jurisdictional fact vitiated the AO's assumption of jurisdiction under Section 153C. Consequently, the notices issued under Section 153C and the subsequent assessment orders were quashed as null and void ab initio. The grounds relating to the merits of the additions were rendered academic and left undecided, with additional evidence filed by the assessee not being examined.

The Tribunal held that the Assessing Officer (AO) lacked jurisdiction to issue notices under Section 153C of the Income Tax Act. There was no material found during the search that related to the assessee or had a bearing on their total income, rendering the assessment order void.

The Tribunal allowed the assessee's appeal on the legal issue, holding that the Assessing Officer (AO) lacked jurisdiction to invoke Section 153C of the Income Tax Act, 1961. The Tribunal found that no material discovered during the search operation pertained to the assessee, nor was any incriminating material unearthed that had a bearing on the assessee's total income. The AO's satisfaction note was deemed insufficient as it failed to establish a co-relation between the impugned advances and the assessee. The Tribunal relied on the Supreme Court's decision in CIT v. Sinhgad Technical Education Society, stating that the absence of this jurisdictional fact vitiated the AO's assumption of jurisdiction under Section 153C. Consequently, the notices issued under Section 153C and the subsequent assessment orders were quashed as null and void ab initio. The grounds relating to the merits of the additions were rendered academic and left undecided, with additional evidence filed by the assessee not being examined.

The Tribunal decided both issues in favour of the assessee. Regarding export incentives, while the judgment excerpt does not explicitly detail the final decision on this specific point, it indicates that if Grounds 2.6 & 2.7 (related to export incentives and margins) were decided in the assessee's favour, the primary TP adjustment would be vacated. The Tribunal, in its detailed reasoning on the second issue concerning outstanding receivables, referenced a co-ordinate bench decision in the assessee's own case for AY 2014-15. It held that when the TNMM method is applied as the most appropriate method, the net margin worked out thereunder can take care of notional interest costs. Therefore, no separate adjustment is required for overdue receivables, especially when there is uniformity in not charging interest from AEs or NAEs. The Tribunal directed the Assessing Officer to delete the upward adjustment made towards overdue receivables from Associated Enterprises. The ratio is that TNMM, when applied as the most appropriate method, can encompass notional interest costs, and selective imputation of interest on overdue receivables is not permissible if there's a consistent policy of not charging interest across all parties.

The Tribunal heard both sides and perused the materials. Since the assessee had opted for the Vivad-se-Vishwas Scheme and requested to withdraw the appeal, the appeal was permitted to be withdrawn and was dismissed.

The Tribunal noted that the assessee had opted for the Direct Tax Vivad-se-Vishwas Scheme, 2024, and had filed Form-1. The Designated Authority had also issued Form-2, indicating a settlement of the pending tax dispute. The assessee's AR requested to withdraw the appeal. The Tribunal, having heard both sides and perused the materials, permitted the appeal to be withdrawn and accordingly dismissed it. However, the Tribunal clarified that it was open to the assessee to approach the Tribunal with an appropriate application if any prejudice was caused concerning the settlement under the Vivad-se-Vishwas Scheme. The primary finding is that the appeal is dismissed as withdrawn due to the settlement under the scheme.

The Tribunal held that the Assessing Officer (AO) lacked jurisdiction to issue notices under Section 153C of the Income Tax Act. There was no material found during the search that related to the assessee or had a bearing on their total income, rendering the assessment order void.

The Tribunal held that the Assessing Officer (AO) lacked jurisdiction to issue notices under Section 153C of the Income Tax Act. There was no material found during the search that related to the assessee or had a bearing on their total income, rendering the assessment order void.

The Tribunal held that the Assessing Officer (AO) lacked jurisdiction to issue notices under Section 153C of the Income Tax Act. There was no material found during the search that related to the assessee or had a bearing on their total income, rendering the assessment order void.

The Tribunal held that the appeal was not maintainable as the tax effect was below the prescribed monetary limit and no exceptions applied. Therefore, the appeal was liable to be dismissed.

The Tribunal held that the AO's assumption of jurisdiction under Section 153C was not met as there was no tangible material found during the search that related to the assessee and had a bearing on their total income. The statement recorded under Section 131, without corroborative evidence, was insufficient.

The Tribunal noted that the assessee acted as an intermediary for its clients. The applicability of Section 194C depends on whether the assessee acted as a principal or an intermediary, which is a question of fact. The matter was remanded to the AO for fresh examination.

The Tribunal held that the Assessing Officer and CIT(A) failed to properly consider the assessee's explanations and supporting documents, including cash books and jewellery-related transaction proofs. Therefore, the additions were not sustainable.

The Tribunal held that the AO's presumption of unexplained money based solely on an incremental difference in cash deposits between two assessment years is ill-founded and baseless, especially when the sales turnover and cash deposits have increased. The books of accounts were audited and found to be without defects.

The Tribunal held that the Assessing Officer (AO) lacked jurisdiction under Section 153C as no incriminating material related to the assessee was found during the search. The AO's reliance on the assessee's statement without corroboration was deemed flawed.

The Tribunal held that the disallowance of depreciation was partly allowed by restricting it to 50% of the disallowance made by the Assessing Officer. The disallowance of interest expenditure was deleted entirely based on the Supreme Court ruling in SA Builders Ltd. The disallowance of commission payment was also allowed, holding it to be unjustified.

The Tribunal held that the Assessing Officer (AO) lacked jurisdiction under Section 153C as there was no tangible material found during the search that related to the assessee and had a bearing on their total income. The assessee's statement recorded under Section 131, without corroborative evidence, was insufficient to invoke the section.

The Tribunal admitted the additional ground challenging the validity of the assessment order under Section 153A. It held that the assessment order was not in accordance with the law, thereby quashing it as invalid.

The Tribunal held that the CIT(A) had not adjudicated the grounds of appeal adequately and had passed a non-speaking order. The matter was restored to the CIT(A) for readjudication of the ground challenging the legality of the assessment order.

The Tribunal admitted the additional ground challenging the validity of the assessment order under Section 153A. It held that the assessment order was not in accordance with the law, thereby quashing it as invalid.

The Tribunal admitted the additional ground challenging the validity of the assessment order under Section 153A. It held that the assessment order was not in accordance with the law, thereby quashing it as invalid.

The Tribunal admitted the additional ground challenging the validity of the assessment order under Section 153A. It held that the assessment order was not in accordance with the law, thereby quashing it as invalid.

The Tribunal noted that similar issues have been dealt with by coordinate benches and that the timelines for such applications are directory and not mandatory, especially considering the amendments to the Finance Act. The Tribunal directed the CIT(E) to treat the delayed application as having been filed within the prescribed time and decide on merits.

The Tribunal admitted the additional ground challenging the validity of the assessment order under Section 153A. It held that the assessment order was not in accordance with the law, thereby quashing it as invalid.

The Tribunal admitted the additional ground challenging the validity of the assessment order under Section 153A. It held that the assessment order was not in accordance with the law, thereby quashing it as invalid.

The Tribunal admitted the additional ground challenging the validity of the assessment order under Section 153A. It held that the assessment order was not in accordance with the law, thereby quashing it as invalid.

The Tribunal admitted the additional ground challenging the validity of the assessment order under Section 153A. It held that the assessment order was not in accordance with the law, thereby quashing it as invalid.

The Tribunal found that the lower authorities' ex-parte orders lacked proper enquiry and sufficient opportunity for the assessee to be heard. Consequently, the case was remanded back to the Assessing Officer for de novo adjudication, allowing the assessee one final opportunity to furnish all supporting evidence, subject to payment of Rs.10,000/- as costs for previous non-compliance.

The Tribunal condoned the delay in filing the appeal after finding the reasons bonafide. The Tribunal noted that the assessee had opted for the Vivad-se-Vishwas Scheme and thus the appeal filed by the Revenue was liable to be dismissed as withdrawn.

The Tribunal admitted the additional ground challenging the validity of the assessment order under Section 153A. It held that the assessment order was not in accordance with the law and quashed it as invalid.

The Tribunal admitted the additional ground challenging the validity of the assessment order under Section 153A. It held that the assessment order was not in accordance with the law, thereby quashing it as invalid.

The Tribunal upheld the order of the lower authorities, agreeing that the AO had carefully considered the facts and correctly interpreted the law. Since the assessee provided no evidence to defend its case and was absent, the appeal was dismissed.

The Tribunal admitted the additional ground challenging the validity of the assessment order under Section 153A. It held that the assessment order was not in accordance with the law, thereby quashing it as invalid.

The Tribunal noted that the assessee's status as director was in dispute, with evidence suggesting continued directorship until a later date than initially assessed. The matter was restored to the AO for fresh examination.

The Tribunal held that the outright rejection of foreign AEs as the tested party on the ground that a foreign AE can never be a tested party is not sustainable, especially in light of the Hon'ble Madras High Court's decision in Virtusa Consulting Services (P.) Ltd. The Tribunal noted that there is no definition of 'tested party' in Indian transfer pricing provisions, but OECD and UN Manuals provide guidance. The tested party is generally the one to which a transfer pricing method can be applied most reliably, for which reliable comparables can be found, and which is the least complex. The selection of a tested party depends on two factors: the least complex entity and the availability of reliable comparables. The lower authorities failed to undertake this exercise. Therefore, the Tribunal remitted the issue to the TPO/AO to ascertain which entity (assessee or foreign AEs) is the least complex and can be treated as the tested party, and if foreign AEs qualify, whether reliable data and suitable comparables are available. The assessee is directed to submit relevant evidence. These grounds of appeal are allowed for statistical purposes.

The Tribunal held that the valuation report from the statutory auditor was not permissible under Rule 11UA. However, it also found that the CIT(A) erred in rejecting the NAV method solely based on the market value of land instead of book value.

The Tribunal held that notices issued by the jurisdictional Assessing Officer after the CBDT notification mandating faceless assessment were invalid. The Supreme Court's dismissal of the revenue's SLP in a similar case affirmed this position.

The Tribunal held that notices issued by the JAO after the mandatory faceless scheme notification were invalid. Consequently, the assessment order based on these invalid notices was also vitiated.

The Tribunal upheld the CIT(A)'s decision, following the Karnataka High Court's ruling that cumulative brought forward losses or unabsorbed depreciation should be considered for set-off under Section 115JB. The Revenue's appeal was dismissed.

The Tribunal held that the valuation report from the statutory auditor was not permissible under Rule 11UA. However, it also found that the CIT(A) erred in rejecting the NAV method solely based on the market value of land instead of book value.

The Tribunal held that the valuation report from the statutory auditor was not permissible under Rule 11UA. However, it also found that the CIT(A) erred in rejecting the NAV method solely based on the market value of land instead of book value.

The Tribunal held that the reassessment proceedings were initiated merely on a change of opinion by the Assessing Officer, as the same set of facts and documents were already examined during the original assessment. Therefore, the reassessment order was unsustainable.

The Tribunal held that a recent amendment to Section 80G (Finance (No.2) Act, 2024) introduced clause (iv) which allows applications to be made at any time after commencement of activities, effectively removing the stringent time limits. Following this amendment and a previous decision, the Tribunal directed the CIT(E) to treat the application as filed under the new clause (iv)(B) and decide on merits.

The Tribunal held that the valuation report from the statutory auditor was not permissible under Rule 11UA. However, it also found that the CIT(A) erred in rejecting the NAV method solely based on the market value of land instead of book value.

The Tribunal held that the CIT(Exemptions) failed to provide the assessee with an opportunity to be heard before rejecting the application, violating principles of natural justice. Additional evidence was admitted, and the matter was remitted back to the CIT(Exemptions).