ITAT Delhi Judgments — March 2026

The Tribunal found that the assessee was unable to file requisite evidences before the Ld. CIT(A) due to the reasons stated. In the interest of justice, the matter was remitted back to the Ld. CIT(A) for fresh adjudication after providing an adequate opportunity of being heard to the assessee.

The Tribunal held that the addition of Rs. 1,10,000/- on account of alleged unexplained cash credit was not justified. The Tribunal noted that the assessee had provided the identity of the creditor, Shri Ram Lal, and that Shri Ram Lal had also confirmed the loan. The Tribunal observed that Shri Ram Lal was even examined by the Assessing Officer. The Tribunal's reasoning was that once the identity and solvency of the creditor are established, and the transaction is found to be genuine, the onus shifts, and the addition cannot be sustained merely on the ground that the AO was not fully satisfied. The ratio decidendi is that the AO cannot make an addition under Section 68 if the assessee has discharged the primary onus of establishing the identity, creditworthiness, and genuineness of the transaction. The Tribunal directed the deletion of the addition of Rs. 1,10,000/-.

The Tribunal held that IPO expenses for an aborted IPO are revenue expenditure allowable under Section 37(1). It also held that gains from foreign exchange and excess provisions are derived from the EOU unit and eligible for Section 10B deduction. The disallowance under Section 14A was limited to the extent of exempt income, and losses on forward contracts were considered normal business losses (hedging) and not speculative. The appeals filed by the assessee were allowed, while the appeals filed by the Revenue were dismissed.

The ITAT held that the AO erred in rejecting the Discounted Cash Flow (DCF) method of valuation used by the assessee, which was certified by a Chartered Accountant. The tribunal emphasized that valuation is not an exact science and the AO cannot arbitrarily reject a recognized valuation method without providing an alternative fair valuation.

The Tribunal held that since the documents (Annexures A-5 and A-1) were 'dumb documents' with no conclusively proven connection to the assessee and not established to be in his handwriting or ownership, additions made based on them were not sustainable.

The Tribunal upheld the CIT(A)'s decision to delete a portion of the addition, finding it based on a correct interpretation of facts. The Tribunal also dismissed the assessee's appeal against the confirmed addition, finding the CIT(A)'s conclusion to be based on a correct understanding of the records.

The Tribunal noted that the CBDT had revised the monetary limit for filing appeals to Rs.60 lakhs. Since the amount in this case was below this revised limit, the appeal was deemed not maintainable.

The Tribunal upheld the CIT(A)'s decision to delete a portion of the addition, finding it based on a correct interpretation of facts. The Tribunal also dismissed the assessee's appeal against the confirmed addition, finding the CIT(A)'s conclusion to be based on a correct understanding of the records.

The Tribunal found that while the assessee's explanation regarding sales was not entirely rebutted, the source of the improved cash deposit was not fully proven. Therefore, a lump sum addition of Rs. 8 lakhs was deemed appropriate. It was also clarified that Section 115BBE applies to transactions on or after 01.04.2017, and the assessee is to be assessed under normal provisions.

The Tribunal held that Section 68 of the Act mandates that unexplained funds should be considered in the year they are credited to the books of account. Since the Rs. 80 lakh was credited on 01.04.1996, the addition for AY 1997-98 was valid.

The Tribunal noted that the CBDT had revised the monetary limit for filing appeals. Given that the tax effect in this case was low and below the revised limit, the appeal was deemed not maintainable.

The Tribunal held that the notice under section 148 was not valid because the approval was not obtained from the specified authority (Principal Chief Commissioner) as mandated by section 151(ii) of the Act, especially since the notice was issued beyond three years from the end of the relevant assessment year.

The Tribunal held that the comparison made by the AO for disallowing the email marketing expenses was not with a like service, as the assessee utilized the sister concern's database, making the comparison with services not including a database inappropriate. Regarding depreciation and interest, the Tribunal noted that keeping assets ready for use is sufficient for depreciation and allowed the claims.

The Tribunal held that the Assessing Officer (AO) had provided adequate opportunities to the assessee, who failed to furnish necessary documents and evidence. Consequently, the AO rightly rejected the books of accounts under Section 145(3) and estimated the gross profit.

The Tribunal held that the approval granted under Section 153D was mechanical and lacked application of mind, rendering the entire assessment proceedings void ab initio. Following precedents, the Tribunal quashed the proceedings due to the invalid approval.

The Tribunal noted the assessee's reliance on audited financial statements and the High Court's judgment emphasizing their importance. It also considered the assessee's argument about low margins in a high turnover business, especially during the COVID year.

The Tribunal held that the one-day delay in document submission should be condoned in the interest of justice, as substance should take precedence over form. The revenue cannot deny rightful claims based on minor procedural deficiencies.

The Tribunal upheld the CIT(A)'s decision to delete a portion of the addition, finding it based on a correct interpretation of facts. The Tribunal also dismissed the assessee's appeal against the confirmed addition, finding the CIT(A)'s conclusion to be based on a correct understanding of the records.

The Tribunal held that as per the revised limit for deduction under Section 10(10AA) of the Income Tax Act, notified by CBDT Notification No. 31/2023, the assessee is eligible for the full exemption claimed. The recent budget speech indicated an increase in this limit, and the assessee's claim falls within this revised threshold.

The Tribunal held that the unsecured loans were accommodation entries and the repayment was merely a return of the assessee's own unaccounted money. Therefore, the addition made by the AO under Section 68 was confirmed.

The Tribunal held that the approval granted under Section 153D was mechanical and lacked application of mind, as evidenced by the identical wording of proposals and approvals across years and entities. Consequently, the assessment orders were vitiated.

The Tribunal held that the DRP directions were communicated to the AO on 30.05.2023. As per Section 144C(13), the AO was required to pass the final assessment order within one month from the end of that month, i.e., by 30.06.2023. Since the order was passed on 30.07.2023, it was time-barred.

The Tribunal held that the approval granted under Section 153D of the Income Tax Act, 1961, was invalid due to a lack of application of mind by the approving authority. The Tribunal noted that the wording of the approval for AY 2015-16 was identical across all assessment years under appeal. Crucially, the Tribunal reproduced the approval letter which stated, 'Approval is hereby accorded u/s 153D of the Income Tax Act, 1961 to the draft assessment order in the following case, on the basis of the detailed discussion held with you time to time, information available on record, facts mentioned in the Appraisal Report and relevant seized documents perused by you & brought to the notice of undersigned.' However, the Tribunal found that the approving authority had not perused any seized document/material, as evidenced by the assessee's submission and the content of paragraph 2 of the approval itself, which listed the assessee's income without detailing any specific seized material or discussion. The Tribunal concluded that this mechanical approval, lacking independent consideration, vitiated the assessment orders. Therefore, the assessment orders were quashed on this ground alone. The appeals were allowed.

The Tribunal held that the approval granted under Section 153D was mechanical and lacked application of mind, as evidenced by the identical wording of proposals and approvals across years and entities. Consequently, the assessment orders were vitiated.

The Tribunal held that since the documents (Annexures A-5 and A-1) were 'dumb documents' with no conclusively proven connection to the assessee and not established to be in his handwriting or ownership, additions made based on them were not sustainable.

The Tribunal noted that additions cannot be made solely on the basis of retracted statements, especially when the assessee provides documentary evidence and the suppliers have filed returns. The Tribunal also acknowledged the evidentiary value of statements recorded under Section 132(4) but highlighted that retractions must be supported by strong evidence.

The Tribunal held that IPO expenses for an aborted IPO are revenue expenditure allowable under Section 37(1). It also held that gains from foreign exchange and excess provisions are derived from the EOU unit and eligible for Section 10B deduction. The disallowance under Section 14A was limited to the extent of exempt income, and losses on forward contracts were considered normal business losses (hedging) and not speculative. The appeals filed by the assessee were allowed, while the appeals filed by the Revenue were dismissed.

The Tribunal partly allowed the assessee's appeal by directing a lump-sum disallowance at 5% of the remaining disputed purchases, considering the business activity was admitted and books were not rejected. The Revenue's appeals were dismissed.

The Tribunal held that the provisions of section 167B, read with sections 160 and 164 of the Income Tax Act, were not applicable, and section 115BAC(1A) was relevant. Therefore, MMR was not applicable to the assessee's case.

The Tribunal observed that additions cannot be made solely on the basis of retracted statements. The CIT(A) had correctly deleted additions where suppliers provided supporting documents and filed returns, but confirmed additions where suppliers did not respond or file returns.

The Tribunal held that the CIT(A) had rightly deleted the addition related to product development expenses, finding no merit in the revenue's appeals on this issue. Regarding the disallowance under Section 14A, the Tribunal followed the decision in Joint Investment (P) Ltd. v. CIT and its own prior ruling for AY 2008-09, holding that the disallowance cannot exceed the exempt income earned. Therefore, the disallowance under Section 14A was limited to the extent of exempt income. For the issue of losses on forward contracts, the Tribunal relied on a coordinate bench's decision for AY 2013-14 and decisions of the Delhi High Court in PCIT vs. Simon India Ltd and Bechtel India Pvt. Ltd. vs. ACIT. It was held that these losses were incurred in the course of business to hedge against foreign exchange fluctuation risks and were therefore normal business losses, not speculation losses, and were correctly deleted by the CIT(A). The Tribunal did not explicitly address the assessee's grounds regarding IPO expenses and Section 10B deduction, but the overall dismissal of revenue's appeals implies these were decided in favour of the assessee.

The Tribunal observed that additions cannot be made solely on the basis of retracted statements or non-filing of returns by suppliers, especially when payments are made through banking channels and supporting documents are provided. The Tribunal found no infirmity in the CIT(A)'s deletion of additions where the assessee provided documentary evidence.

The Tribunal partly allowed the assessee's appeal by directing a lump-sum disallowance at 5% of the remaining disputed purchases, considering the business activity was admitted and books were not rejected. The Revenue's appeals were dismissed.

The Tribunal held that the approval obtained under Section 153D was invalid as it was a common approval for multiple assessment years, granted mechanically without due application of mind. This vitiates the entire assessment.

The Tribunal found that the CIT(A) had passed an ex-parte order without the assessee appearing for hearing, despite notices being issued. Therefore, the CIT(A)'s order was set aside, and the matter was restored for a fresh decision with an opportunity for the assessee to be heard.

The Tribunal upheld the decision of the CIT(A) to delete the addition. The CIT(A) found that the assessee had satisfactorily explained the source of cash deposits with audited books of account and bank statements, which were reflected in the company's financial statements.

The Tribunal held that the approval granted under Section 153D was mechanical and lacked application of mind, as evidenced by the identical wording of proposals and approvals across years and entities. Consequently, the assessment orders were vitiated.

The Tribunal held that additions cannot be made merely on the basis of a retracted statement, especially when supported by extensive documentary evidence like invoices, bank statements, and TDS compliance. The Tribunal found the Revenue had not discharged its burden to prove the falsity of the purchases.

The Tribunal held that for the remaining disallowance of ₹13,52,382, where the parties concerned (Smt. Payal Agarwal and Shri Mohit Jain) had not filed responses to Section 133(6) notices or their income tax returns, a lump sum disallowance at the rate of 5% of the impugned purchases would be just and proper, with the rider that it shall not be treated as a precedent. The assessee's appeal on this issue was partly allowed. Regarding the Section 69A addition of ₹40,18,132, the Tribunal found that the assessee had duly proved these receipts as income from ticket sales from public on various events and had filed all relevant details. Therefore, the Tribunal saw no reason to interfere with the CIT(A)'s deletion of this addition, and the Revenue's appeal on this point was dismissed. The Tribunal expressly noted that no other ground or argument was pressed.

The Tribunal upheld the CIT(A)'s order, finding that shares were duly allotted and many shareholders were existing ones. Relying on precedents like Lovely Exports, the Tribunal stated that the Revenue could proceed against individual shareholders if their identities were disclosed, finding no infirmity in the lower appellate authority's decision.

The Tribunal partly allowed the assessee's appeal by directing a lump-sum disallowance at 5% of the remaining disputed purchases, considering the business activity was admitted and books were not rejected. The Revenue's appeals were dismissed.

The Tribunal held that for the remaining disallowance of ₹13,52,382, where the parties concerned (Smt. Payal Agarwal and Shri Mohit Jain) had not filed responses to Section 133(6) notices or their income tax returns, a lump sum disallowance at the rate of 5% of the impugned purchases would be just and proper, with the rider that it shall not be treated as a precedent. The assessee's appeal on this issue was partly allowed. Regarding the Section 69A addition of ₹40,18,132, the Tribunal found that the assessee had duly proved these receipts as income from ticket sales from public on various events and had filed all relevant details. Therefore, the Tribunal saw no reason to interfere with the CIT(A)'s deletion of this addition, and the Revenue's appeal on this point was dismissed. The Tribunal expressly noted that no other ground or argument was pressed.

The Tribunal held that the approval granted under Section 153D was vitiated due to non-application of mind, as evidenced by the identical wording of the proposal and approval across assessment years and entities. This mechanical approval fails to meet the statutory requirement of independent verification.

The Tribunal noted that additions cannot be made solely on confessional statements, especially when retracted. The CIT(A) had rightly deleted additions where suppliers provided documentary evidence and filed returns, but confirmed additions where suppliers did not respond or file returns.

The Tribunal held that for the remaining disallowance of ₹13,52,382, where the parties concerned (Smt. Payal Agarwal and Shri Mohit Jain) had not filed responses to Section 133(6) notices or their income tax returns, a lump sum disallowance at the rate of 5% of the impugned purchases would be just and proper, with the rider that it shall not be treated as a precedent. The assessee's appeal on this issue was partly allowed. Regarding the Section 69A addition of ₹40,18,132, the Tribunal found that the assessee had duly proved these receipts as income from ticket sales from public on various events and had filed all relevant details. Therefore, the Tribunal saw no reason to interfere with the CIT(A)'s deletion of this addition, and the Revenue's appeal on this point was dismissed. The Tribunal expressly noted that no other ground or argument was pressed.

The Tribunal held that IPO expenses for an aborted IPO are revenue expenditure allowable under Section 37(1). It also held that gains from foreign exchange and excess provisions are derived from the EOU unit and eligible for Section 10B deduction. The disallowance under Section 14A was limited to the extent of exempt income, and losses on forward contracts were considered normal business losses (hedging) and not speculative. The appeals filed by the assessee were allowed, while the appeals filed by the Revenue were dismissed.

The Tribunal held that IPO expenses for an aborted IPO are revenue expenditure allowable under Section 37(1). It also held that gains from foreign exchange and excess provisions are derived from the EOU unit and eligible for Section 10B deduction. The disallowance under Section 14A was limited to the extent of exempt income, and losses on forward contracts were considered normal business losses (hedging) and not speculative. The appeals filed by the assessee were allowed, while the appeals filed by the Revenue were dismissed.

The Tribunal held that additions cannot be made solely on the basis of a retracted statement recorded under Section 132(4) without corroborative evidence. The opportunity for cross-examination should have been provided.

The Tribunal noted that the assessee had demonstrated before it that it possessed a valid Registration Certificate for the year under consideration, having been registered under Section 12AB since 2002, and that its renewal had been granted vide a certificate dated 24.09.2021 for AY 2022-23 to 2026-27. In light of these facts and documentary evidence, the Tribunal deemed it expedient to restore the matter to the file of the Assessing Officer (AO) for considering the material evidence that would be submitted or had been submitted by the assessee. The Tribunal set aside the impugned order and restored the matter to the AO to decide it afresh. The assessee was directed to present its case before the AO within 60 days from the date of the order. The appeal was allowed for statistical purposes. The Tribunal did not decide on the merits of the additions made by the AO, as the matter was restored for fresh consideration.

The Tribunal held that for the remaining disallowance of ₹13,52,382, where the parties concerned (Smt. Payal Agarwal and Shri Mohit Jain) had not filed responses to Section 133(6) notices or their income tax returns, a lump sum disallowance at the rate of 5% of the impugned purchases would be just and proper, with the rider that it shall not be treated as a precedent. The assessee's appeal on this issue was partly allowed. Regarding the Section 69A addition of ₹40,18,132, the Tribunal found that the assessee had duly proved these receipts as income from ticket sales from public on various events and had filed all relevant details. Therefore, the Tribunal saw no reason to interfere with the CIT(A)'s deletion of this addition, and the Revenue's appeal on this point was dismissed. The Tribunal expressly noted that no other ground or argument was pressed.