ITAT Delhi Judgments — January 2026

The Tribunal noted that its earlier order in identical appeals (ITA Nos. 4524/Del/2024 & 4482/Del/2024) had already upheld the CIT(A)'s findings deleting similar cash deposit additions. In that prior decision, the Tribunal observed that the assessee, a cooperative society engaged in milk supply and manufacturing, had significant sales (Rs. 175 crores for AY 2016-17 and Rs. 190.75 crores for the preceding year) and corresponding cash deposits (Rs. 127.84 crores for AY 2016-17 and Rs. 110.07 crores for the preceding year). The Tribunal found that the assessee had submitted various documents demonstrating its business model, where a majority of sales (70-75%) were through cash, which were then deposited. The earlier order concluded that the assessee had demonstrated the source of cash deposits and that the CIT(A) had thoroughly analyzed the facts, thus there was no reason to disturb the CIT(A)'s findings. Consequently, the Revenue's grounds were dismissed in the prior appeals. The Tribunal also noted that one of the present appeals (ITA No. 4468/Del/2024 for AY 2017-18) appeared to be a duplicate of an earlier rejected case (ITA No. 4482/Del/2024). Therefore, both present appeals were dismissed.

The Tribunal noted that while the assessee failed to rebut the findings of unaccounted transactions, the AO's estimation of 4% commission was based on conjectures. The Tribunal reduced the addition to 1% of the commission and directed recalculation. Additionally, the applicability of Section 115BBE was questioned based on a court ruling.

The Tribunal acknowledged the possibility of communication gaps and deemed it appropriate to restore the appeal to the Assessing Officer for fresh adjudication in the interest of justice. The assessee was granted three effective opportunities for hearing.

The Tribunal noted that its earlier order in identical appeals (ITA Nos. 4524/Del/2024 & 4482/Del/2024) had already upheld the CIT(A)'s findings deleting similar cash deposit additions. In that prior decision, the Tribunal observed that the assessee, a cooperative society engaged in milk supply and manufacturing, had significant sales (Rs. 175 crores for AY 2016-17 and Rs. 190.75 crores for the preceding year) and corresponding cash deposits (Rs. 127.84 crores for AY 2016-17 and Rs. 110.07 crores for the preceding year). The Tribunal found that the assessee had submitted various documents demonstrating its business model, where a majority of sales (70-75%) were through cash, which were then deposited. The earlier order concluded that the assessee had demonstrated the source of cash deposits and that the CIT(A) had thoroughly analyzed the facts, thus there was no reason to disturb the CIT(A)'s findings. Consequently, the Revenue's grounds were dismissed in the prior appeals. The Tribunal also noted that one of the present appeals (ITA No. 4468/Del/2024 for AY 2017-18) appeared to be a duplicate of an earlier rejected case (ITA No. 4482/Del/2024). Therefore, both present appeals were dismissed.

The Tribunal condoned the delay in filing the appeal before the CIT(A)/NFAC, citing the principle that technicalities should not obstruct substantial justice. The appeal was restored to the CIT(A)/NFAC for fresh adjudication.

The Tribunal held that the possibility of communication gaps at various levels could not be ruled out. In the larger interest of justice, it was deemed appropriate to restore the assessee's appeal back to the CIT(A)/NFAC for fresh adjudication. The CIT(A)/NFAC was directed to provide three effective opportunities of hearing to the appellant. The appeal was allowed for statistical purposes. The specific merits of the additions made under section 147 were not decided by the Tribunal.

The Tribunal held that the assessment order was bad in law because the ITO did not have the pecuniary jurisdiction to issue the notice under section 143(2) of the Income Tax Act, 1961, as the returned income exceeded the prescribed limit for an ITO. The Tribunal followed its previous decisions and judicial precedents, stating that a jurisdictional defect in the initial notice cannot be cured.

The Tribunal held that the lower authorities erred in law and on facts by assessing the cash deposits made by the individual/karta in his personal account as income of the assessee/HUF. The Tribunal condoned the delay in filing the appeal based on the reasons stated in the assessee's petition, citing the case of Collector, Land & Acquisition vs. Mst. Katiji & Others.

The Tribunal noted that while the assessee's explanation regarding cash deposits from regular business sales was not entirely convincing, the AO could not have summarily rejected it. Therefore, a lumpsum addition of Rs. 6.05 lakhs was considered appropriate. Regarding section 115BBE, it was held that the provision applies only to transactions on or after 01.04.2017.

The Tribunal acknowledged that the rejection was based on identical grounds for both 80G and 12A. The Tribunal decided to restore the matter to the CIT(E) for fresh consideration after providing the assessee with an opportunity to be heard and submit necessary details.

The Tribunal held that the delay of 168 days in filing the appeal before the CIT(A)/NFAC should be condoned. The Tribunal relied on the Supreme Court's decision in Collector, Land & Acquisition vs. Mst. Katiji & Others (1987) 167 ITR 471 (SC), which established that technical aspects should yield to the cause of substantial justice. The Tribunal reasoned that the assessee had explained the reasons for the delay, and the Departmental Representative could not dispute these explanations. Consequently, the delay was condoned, and the assessee's appeal was restored to the CIT(A)/NFAC for fresh adjudication. The taxpayer was directed to plead and prove its case at its own risk and responsibility in the consequential proceedings. The appeal was allowed for statistical purposes.

The Tribunal held that the interest received under Section 28 of the Land Acquisition Act is part of enhanced compensation and not taxable as income from other sources. The Tribunal relied on Supreme Court decisions affirming this position.

The Tribunal found that the entire addition was not sustainable. Considering the assessee's cash flow and withdrawals, a lumpsum addition of Rs. 1 lakh was deemed appropriate to cover shortfalls. The applicability of Section 115BBE was also questioned regarding transactions after 01.04.2017.

The Tribunal condoned the delay in filing the appeals in the larger interest of justice. Considering potential communication gaps at various levels, the Tribunal restored the matters back to the Assessing Officer for a fresh adjudication.

Relying on the precedent set in Collector, Land & Acquisition vs. Mst. Katiji & Others, the Tribunal held that technical aspects should yield to substantial justice. The delay in filing the appeal before the CIT(A) was condoned.

The Tribunal condoned the delay in filing the appeals in the larger interest of justice, acknowledging the possibility of communication gaps. Consequently, the matter was restored back to the Assessing Officer for fresh adjudication.

The Tribunal noted that the CIT(A) had also proceeded ex-parte against the assessee. Considering the possibility of communication gaps, the Tribunal decided to restore the appeal to the CIT(A) for fresh adjudication. The assessee was given three effective opportunities to plead their case.

The Tribunal observed that the appeal fell under the category of low tax effect appeals as per CBDT circulars. Therefore, the appeal was dismissed on this ground.

The Tribunal acknowledged that the rejection was based on identical grounds for both 80G and 12A. The Tribunal decided to restore the matter to the CIT(E) for fresh consideration after providing the assessee with an opportunity to be heard and submit necessary details.

The Tribunal held that the AO could not have summarily rejected the assessee's explanation and that a lumpsum addition of Rs. 2,12,780/- would be just and proper, not to be treated as a precedent. For assessment under section 115BBE, it was held that the provision is effective only for transactions on or after 01.04.2017.

The Tribunal held that the impugned final assessment order was barred by limitation as per Section 153 read with Section 144C of the Act. Consequently, the assessment order was quashed.

The Tribunal held that interest under Section 28 of the Land Acquisition Act is part of enhanced compensation and not taxable as income from other sources, following Supreme Court decisions. The Tribunal found the lower authorities' reliance on other High Court decisions to be misplaced.

The Tribunal acknowledged that the assessee is in the advertising and printing business and that sourcing from unregistered dealers is possible. While the sales were not questioned, the book entries for purchases were rejected to the extent of alleged bogus purchases.

The Tribunal held that while the assessee did not sufficiently prove the source of the cash deposit, the AO could not have summarily rejected the explanation linking the deposits to regular business sales. Therefore, a lumpsum addition of Rs. 5 lakhs was deemed appropriate.

The Tribunal held that the assessee was not afforded adequate opportunity to furnish documents to establish ownership of the purchased property. Therefore, the issue was restored to the Assessing Officer for fresh verification, with directions for both parties to provide necessary information and evidence.

The Tribunal observed that the Ld. CIT(A) dismissed the appeals due to non-compliance by the assessee. However, considering the merits and the fact that the assessee sought information under RTI, the Tribunal decided to set aside the impugned orders. The appeals were allowed for statistical purposes to provide a fresh opportunity of hearing.

The Tribunal observed that the Ld. CIT(A) dismissed the appeals due to non-compliance by the assessee. However, considering the merits and the fact that the assessee sought information under RTI, the Tribunal decided to set aside the impugned orders. The appeals were allowed for statistical purposes to provide a fresh opportunity of hearing.

The Tribunal observed that the Ld. CIT(A) dismissed the appeals due to non-compliance by the assessee. However, considering the merits and the fact that the assessee sought information under RTI, the Tribunal decided to set aside the impugned orders. The appeals were allowed for statistical purposes to provide a fresh opportunity of hearing.

The Tribunal held that the impugned reassessment was a non-est in the eyes of law. This decision was based on two primary grounds. Firstly, the Section 143(2) notice was issued by the ITO, Ward-63, New Delhi, whereas the assessment itself was framed by the ACIT, Circle-63(1), New Delhi. The Revenue failed to demonstrate the jurisdiction of the ITO to issue such a notice in relation to the assessment framed by a different authority. Secondly, the Revenue could not provide any evidence of a transfer of jurisdiction from the ITO to the ACIT, which would have empowered the latter to frame the impugned assessment. Consequently, the Tribunal quashed the assessment. All other pleadings were rendered academic. The Revenue's appeal was dismissed, and the assessee's cross-objection was allowed.

The Tribunal noted a variation and divergence in the issues on the basis of which the case was reopened, the reasons for reopening, and the conclusions drawn in the orders. It held that such an action of 'change of goalpost' vitiates the assessment proceedings, citing various High Court decisions.

The Tribunal observed that the Ld. CIT(A) dismissed the appeals due to non-compliance by the assessee. However, considering the merits and the fact that the assessee sought information under RTI, the Tribunal decided to set aside the impugned orders. The appeals were allowed for statistical purposes to provide a fresh opportunity of hearing.

The Tribunal noted that the assessee made no compliance before the Assessing Officer or the CIT(A) despite opportunities. The CIT(A) had also confirmed the Assessing Officer's order. Since no details were provided to the Tribunal either, no infirmity was found in the CIT(A)'s order.

The Tribunal noted that the assessee also failed to represent themselves before the Tribunal, indicating a lack of interest in pursuing the appeal. The conduct of the assessee was not appreciated, and costs were imposed. However, to meet the ends of justice, the appeal was remitted back to the CIT(A) for a fresh hearing.

The Tribunal held that the penalty paid to SEBI was an expenditure incurred for the purpose of business to avoid litigation and protect reputation, and thus allowable under Section 37(1). The Tribunal also found that the cash credit was explained and genuine, as the lender company had substantial revenue and was not linked to the alleged entry operator.

The Tribunal ruled that the transfer pricing adjustment was unwarranted as the interest had already been disallowed under Section 94B, preventing double taxation. The appeal on concessional tax rates was also allowed, stating that the delay in filing Form 10-IC was a procedural issue, particularly considering COVID-19 related extensions, and did not forfeit the assessee's right to the lower tax rate.

The Tribunal held that the reassessment proceedings were bad in law due to procedural irregularities and lack of independent application of mind by the AO. Furthermore, the Tribunal found that the assessee had discharged its initial onus under Section 68, and the AO failed to discharge the shifted onus to prove the genuineness of the transaction or the creditworthiness of the creditor.

The Tribunal acknowledged that the assessee could not appear before the First Appellate Authority, potentially due to reasons beyond their control. To ensure a fair hearing and prevent miscarriage of justice, the Tribunal decided to remit the matters back to the First Appellate Authority.

The Tribunal acknowledged that the assessee could not appear before the First Appellate Authority, potentially due to reasons beyond their control. To ensure a fair hearing and prevent miscarriage of justice, the Tribunal decided to remit the matters back to the First Appellate Authority.

The Tribunal acknowledged that the assessee could not appear before the First Appellate Authority, potentially due to reasons beyond their control. To ensure a fair hearing and prevent miscarriage of justice, the Tribunal decided to remit the matters back to the First Appellate Authority.

The Tribunal held that the existence of 40 diaries seized from an employee of MEPL, coupled with the employee's statement accepting cash sales to the assessee, established unaccounted purchases. Consequently, the assessee's declared trading results could not be accepted, and the invocation of Section 145(3) of the Act by the lower authorities was upheld. Regarding the profit rate, the Tribunal noted that while the AO applied a GP rate, in cases of unrecorded sales, a net profit rate should be applied. The Tribunal further observed that the purchases were of packing material, not Pan Masala itself, and the revenue did not claim that Pan Masala was sold out of books through these cash purchases. Therefore, applying the GP declared from the sale of packed Pan Masala to unrecorded purchases of packing material was inappropriate, as the profit element on packing material is substantially lower. The Tribunal directed the lower authorities to apply a net profit rate of 3% on the alleged undisclosed cash purchases of INR 8,31,30,000/-. The grounds of appeal were thus partly allowed.

The Tribunal acknowledged that the assessee could not appear before the First Appellate Authority, potentially due to reasons beyond their control. To ensure a fair hearing and prevent miscarriage of justice, the Tribunal decided to remit the matters back to the First Appellate Authority.

The Tribunal held that the addition made by the AO was based on surmises and lacked sufficient evidence. The WhatsApp message was a private communication between two independent entities and did not directly implicate the assessee company. Furthermore, there was no corroborating evidence found during the search to support the receipt or utilization of such cash by the assessee.

The Tribunal condoned the delay and admitted the appeal. The primary issue revolved around the validity of the reassessment proceedings, specifically whether the AO had the proper jurisdiction and followed the correct procedure. The assessment order was passed for an AOP, while the reopening was initiated under the status of an individual. This discrepancy rendered the reassessment order invalid.

The Tribunal dismissed both grounds raised by the Revenue. Regarding the first ground concerning bogus purchases, the Tribunal noted that the AO made the addition primarily because several parties did not respond to notices under Section 133(6). However, the Tribunal found that two major parties had responded and provided relevant information. The Tribunal relied on the decision in ACIT vs. Sonicwall Technology System Ltd. (ITA No. 3860/Mum/2019), which held that non-response to Section 133(6) notices is not conclusive proof of a transaction being non-genuine, especially when the assessee has provided all available information. The Tribunal also referred to the Bombay High Court's decision in PCIT vs. Vaman Intl. P. Ltd., stating that the burden is on the Revenue to demonstrate that the income belongs to the assessee, and the AO should investigate further and allow cross-examination if doubts exist. The Tribunal found no reason to disturb the Ld. CIT(A)'s findings. Regarding the third ground concerning non-deduction of TDS on freight payments, the Tribunal observed that the AO had specifically recorded reasons to accept the assessee's explanation on page 9 of the assessment order, making the Revenue's ground misleading. Consequently, both appeals filed by the Revenue were dismissed.

The Tribunal, relying on a coordinate bench's decision which followed earlier precedents, held that the expenditure claim against consultancy income, declared as income from other sources, should be allowed. The revenue could not provide any distinguishing features or higher judicial pronouncements to counter this.

The Tribunal held that the issue of ESOP expenses is no longer res integra, as the Delhi High Court, in the case of Lemon Tree Hotels, has decided in favor of the assessee. The Tribunal noted that the pendency of an SLP before the Supreme Court does not negate the High Court's decision, which applies with full force as it has not been stayed. Therefore, ESOP expenses are considered allowable under Section 37(1) of the Act.

The Tribunal held that the AO and CIT(A) erred in invoking Section 68/69A when the assessee had declared the source of cash deposits as sales in their books of accounts. The Tribunal found no material to support the contrary view of the lower authorities.

The Tribunal dismissed both grounds raised by the Revenue. Regarding the first ground concerning bogus purchases, the Tribunal noted that the AO made the addition primarily because several parties did not respond to notices under Section 133(6). However, the Tribunal found that two major parties had responded and provided relevant information. The Tribunal relied on the decision in ACIT vs. Sonicwall Technology System Ltd. (ITA No. 3860/Mum/2019), which held that non-response to Section 133(6) notices is not conclusive proof of a transaction being non-genuine, especially when the assessee has provided all available information. The Tribunal also referred to the Bombay High Court's decision in PCIT vs. Vaman Intl. P. Ltd., stating that the burden is on the Revenue to demonstrate that the income belongs to the assessee, and the AO should investigate further and allow cross-examination if doubts exist. The Tribunal found no reason to disturb the Ld. CIT(A)'s findings. Regarding the third ground concerning non-deduction of TDS on freight payments, the Tribunal observed that the AO had specifically recorded reasons to accept the assessee's explanation on page 9 of the assessment order, making the Revenue's ground misleading. Consequently, both appeals filed by the Revenue were dismissed.

The Tribunal held that interest received on enhanced compensation under Section 28 of the Land Acquisition Act is taxable as 'income from other sources' under Section 56(2)(viii) of the Income Tax Act, following amendments made in 2010. The assessee's claim for exemption under Section 10(37) was found unsustainable as it pertains to compensation, not interest.

The Tribunal upheld the findings of the Ld. CIT(A) regarding the deletion of the addition of Rs.9,94,000/-. The Tribunal referred to a coordinate bench decision confirmed by the Hon'ble Jurisdictional High Court, which found that the genuineness of similar entities could not be established by departmental authorities, and the concerned entity proved the genuineness of share application money and share premium received. The Tribunal concluded that the assessee company was not a paper company and thus upheld the CIT(A)'s deletion. Regarding the disallowance of bad debts of Rs.2,75,00,000/-, the Tribunal upheld the Ld. CIT(A)'s finding that the assessee had provided documents, addresses, and PAN of the parties in respect of whom bad debts were claimed. Therefore, the deletion of this addition was also upheld. The appeal by the Department of Revenue was dismissed.