ITAT Hyderabad Judgments — March 2025

The Tribunal admitted the assessee's claim under Section 158A(1) as the identical question of law was pending before the High Court. The appeals were restored to the Assessing Officer to apply the High Court's decision once it becomes final.

The Tribunal admitted the assessee's claim under Section 158A(3) as both parties acknowledged the identical question of law pending before the High Court for earlier assessment years. The appeal for A.Y. 2017-18 was restored to the Assessing Officer with directions to apply the final decision of the High Court once it is pronounced. The appeal for A.Y. 2018-19 was disposed of mutatis mutandis, applying the same directions.

The Tribunal deleted the addition of Rs.150 crore received as government grant, holding it was not income as the assessee acted as a nodal agency and transferred the funds back-to-back. Issues regarding the disallowance of interest expenses under Section 43B(d) and additions for differences in loan accounts under Sections 68 and 69 were set aside and remanded to the Assessing Officer for re-examination. The addition for unrecorded rental income was partly allowed, directing the AO to restrict it to the unaccounted portion of Rs.4,60,770/-. The AO was also directed to verify and allow the set-off of brought forward business loss and re-compute consequential interest under Sections 234A and 234B.

The Tribunal condoned the delay, finding that the notices were indeed sent to an email ID not provided by the assessee. Consequently, the ex-parte orders of the CIT(A) were set aside, and the matters were remanded for fresh adjudication.

The Tribunal upheld the CIT(A)'s decision to treat the differential amount as sales turnover for the year and restrict the addition to a profit element. However, it modified the CIT(A)'s order by directing the Assessing Officer to compute the income on this differential amount using the assessee's declared Gross Profit (GP) rate of 16.22% for the relevant year, instead of the 15% adopted by the CIT(A).

The Tribunal condoned the delay, finding that improper service of notice by the CIT(A) to an un-registered email ID was a valid reason. It set aside the ex-parte orders and remanded the matters to the CIT(A) for fresh adjudication, directing the assessee to cooperate.

The Tribunal noted that the assessee's explanations regarding the source of bank credits, including realization of credit sales from previous years, repayment from debtors, loans/advances, and other business receipts, were summarily rejected by the lower authorities. The Tribunal held that such plausible explanations could not be brushed aside without proper consideration. Therefore, the matter is remanded back to the Assessing Officer for fresh adjudication, allowing the assessee an opportunity to furnish fresh documentary evidence.

The Tribunal held that for Ground 6(b), foreign exchange gain, if excluded from export turnover for Section 10A computation, must also be excluded from total turnover, relying on Supreme Court judgments. For Ground 6(c), concerning hedging gains, the issue was remanded to the Assessing Officer for verification to determine if these were genuine hedging transactions against export proceeds or speculative in nature, and only then consider the net profit or loss for Section 10A.

The Tribunal held that the provisions of DTAA override the provisions of the Act and Rules. It further held that the filing of Form 67 is a directory requirement and not mandatory, and thus FTC cannot be denied merely due to a delay in filing Form 67. The Tribunal relied on various High Court and ITAT decisions.

The Tribunal held that the present appeal was not maintainable because it was a duplicate appeal against an order already disposed of by the Tribunal. Consequently, the Tribunal dismissed the appeal as being non-est.

The Tribunal held that the assessee had a reasonable and sufficient cause for the delay in filing the appeal before the CIT(A) due to issues beyond their control. Consequently, the delay was condoned, and the appeals were restored to the CIT(A) for fresh adjudication on merits.

The Tribunal permitted the assessee to withdraw the appeal, as the Departmental Representative had no objection. The Tribunal also granted the assessee liberty to seek restoration of the appeal if the settlement under DTVSV, 2024, is not finalized for any reason.

The Tribunal allowed the assessee to withdraw the appeal in view of the settlement achieved under the Direct Tax Vivad Se Vishwas Scheme, 2024, and accordingly dismissed the appeal as withdrawn.

The Tribunal condoned the delay in filing the appeal before the CIT(A), finding sufficient cause because the assessment notices and order were sent to an incorrect email ID, which the Revenue could not disprove. Consequently, both the quantum appeal (against the addition) and the penalty appeal were remitted back to the CIT(A) for de novo consideration on merits after providing the assessee a reasonable opportunity of hearing.

The Tribunal noted that the issue was covered in favor of the assessee by a previous ITAT decision in a similar case. Both parties agreed that the matter should be set aside to the CIT(A) to provide the assessee with an opportunity to explain their case and consider the relevant case law.

The Tribunal partly allowed the assessee's appeals (ITA.Nos.373 & 374/Hyd/2016), deleting substantial portions of additions related to unexplained investments in various properties due to lack of corroborative evidence, non-provision of cross-examination, and DVO reports supporting lower market values. Specifically, the additions for unexplained investment in Muniswamiappa Road property, a major portion of Horamavu property, alleged on-money for Mehdi Garden plots, Prakash V. Goud property, Tayyaba Begum property, and the entire addition for bad debts were deleted. The Revenue's appeal (ITA.No.486/Hyd./2016) was dismissed, upholding the CIT(A)'s deletion of protective additions in the hands of the assessee's wife, as these were considered on a substantive basis in the assessee's own case.

The Tribunal held that the assessment for AY 2017-18 was abated as of the search date, and therefore, additions could only be made based on incriminating material found in the assessee's own search, not from another party's search. The cross-objections filed by the assessee were allowed.

The Tribunal largely deleted the additions made for unexplained investments, specifically Rs.45,70,000/- for Muniswamiappa Road property, Rs.25,68,822/- out of Rs.37 lakhs for Horamavu village property, and the entire Rs.3.45 crores for Shamshabad plots, citing lack of corroborative evidence and denial of cross-examination. It also deleted the entire Rs.83 lakhs addition for unaccounted bad debts. The Tribunal upheld the addition of Rs.4 lakhs for unexplained investment in one property from Shri Nayeemullah Hussaini. The additional ground regarding the Section 143(2) notice was dismissed as infructuous, and the Revenue's protective appeal against the assessee's wife was dismissed.

The Tribunal deleted additions for unexplained investments totaling Rs.45,70,000/-, Rs.3.45 crores, Rs.4 lakhs, Rs.13 lakhs, Rs.26,46,000/-, and Rs.83 lakhs, primarily due to lack of corroborative evidence, denial of cross-examination opportunity for key witnesses, and discrepancies between sale agreements and registered deeds or DVO valuations. It sustained a part of Rs.37 lakhs unexplained investment to Rs.11,31,178/- based on proportionate cost. The additional ground regarding Section 143(2) notice was dismissed as infructuous, and the Revenue's appeal against the deletion of protective additions was dismissed.

The Tribunal determined that both assessment years (2017-18 and 2018-19) were 'abated' on the date of search, meaning the AO could assess or reassess total income using incriminating material and any other material, thus finding that the CIT(A) erred in applying the 'unabated' principle from Abhisar Buildwell P. Ltd. to delete the additions. However, in separately addressing the assessee's cross-objections, the Tribunal deleted the additions on merits: for depreciation, it held that additions based solely on third-party statements without providing cross-examination violated natural justice; for sub-contract expenses, it held that additions based on inquiry and employee statements, without disproving the assessee's evidence or providing inquiry reports, could not be sustained. The delay in filing cross-objections by the assessee was condoned.

The Income Tax Appellate Tribunal condoned the delay of 197 days in filing the appeal, adopting a liberal approach. However, on merits, the Tribunal found no justifiable reason to interfere with the lower authorities' findings and upheld the addition made under Section 69A for the unexplained cash loan and the rejection of the agricultural income claim, as the assessee failed to substantiate her claims.

The Tribunal held that the assessee had provided evidence of sufficient cash withdrawals from the same bank account prior to the deposits, which could explain the source of the deposited funds. Therefore, the addition sustained by the CIT(A) was deleted.

The Tribunal held that the intimation under Section 143(1)(a) merges with the scrutiny assessment order under Section 143(3) and thus, the appeal against the intimation is infructuous. On merits, the Tribunal decided that disallowing the deduction solely for the delayed filing of the audit report in Form 10CCB is not justified, especially when the report was filed before the assessment order was passed, citing various High Court judgments.

The Tribunal held that the additional evidence filed by the assessee, including gift deeds, loan documents, and bank statements, needs to be verified by the Assessing Officer. The matter was set aside for re-adjudication.

The Tribunal allowed the assessee's claim regarding the outstanding liability to IOC Limited, accepting additional evidence of confirmation and ledger account from IOC Limited, thereby vacating the addition of Rs. 38,14,269/-. However, the Tribunal dismissed the appeal concerning the disallowance of sub-contract payments of Rs. 45,36,282/-, upholding the CIT(A)'s decision, as the assessee failed to provide conclusive evidence that the payments were for actual work executed and not merely advances, despite multiple opportunities. General grounds of appeal were dismissed as not pressed.

The Tribunal held that the assessee was not validly put to notice for the hearings before the CIT(A) despite opting out of email communication. The CIT(A) decided the appeal ex-parte without affording a proper opportunity to be heard. The matter was restored to the CIT(A) for fresh adjudication.

The Tribunal held that the intimation order under Section 143(1)(a) merges with the scrutiny assessment order under Section 143(3) and thus has no independent existence. Furthermore, the Tribunal ruled that filing the audit report in Form 10CCB before the completion of assessment is sufficient for claiming deduction under Section 80IAB, even if filed belatedly, citing various High Court and Supreme Court judgments. Therefore, disallowance based on delayed filing of the audit report is not justified.

The Tribunal considered the facts and permitted the withdrawal of the appeal. The appeal filed by the assessee was dismissed as withdrawn.

The Tribunal held that the Assessing Officer made the addition without proper verification and consideration of the assessee's and group concerns' replies. Crucial facts regarding the nature and origin of the transactions were not ascertained.

The Tribunal held that the filing of Form 67 is directory and not mandatory. Relying on various High Court and Supreme Court decisions, it was determined that a delay in filing Form 67 cannot be a sole ground for denying the Foreign Tax Credit.

The Tribunal acknowledged that the assessee failed to comply with notices before the CIT(A) but, considering the principles of natural justice and the assessee's willingness to produce evidence, decided to set aside the CIT(A)'s order. The matter was restored to the CIT(A) for a fresh order on merits after providing the assessee due opportunity of hearing.

The Tribunal condoned the 65-day delay, considering it in the interest of justice. It remanded both issues back to the Assessing Officer for fresh adjudication: to verify the source of the cash deposit from sales proceeds despite being SBNs, and to estimate income using the Net Profit ratio based on the assessee's past history rather than the Gross Profit ratio.

The Tribunal held that the assessment order passed by the AO was invalid because a mandatory notice u/s 143(2) of the Income Tax Act was not issued. This procedural defect vitiated the entire assessment proceedings.

The Tribunal ruled that the special audit reference for AY 2014-15 and 2015-16 was arbitrary, illegal, and void ab initio as it was mechanically made on the last day of the limitation period without objective grounds of complexity, thus quashing those assessment orders. For AY 2017-18, the assessee did not contest the special audit ground, and the Tribunal upheld the Section 69 addition, finding the assessee failed to explain the source of the Rs.6 lakhs payment due to a significant time gap.

The Tribunal ruled that the reference to special audit for AYs 2014-15 and 2015-16 was arbitrary, illegal, and void abinitio, leading to the quashing of those assessment orders as time-barred. However, for AY 2017-18, where the special audit ground was not pressed, the Tribunal upheld the addition of Rs. 6 lakhs for unexplained investment under Section 69, as the assessee failed to substantiate its source.

The Tribunal held that the reference to special audit by the Assessing Officer was arbitrary, illegal, and void ab initio as the conditions for invoking Section 142(2A) were not met. Consequently, the assessment orders for AY 2014-15 and 2015-16 were quashed as being barred by limitation. The addition of Rs. 6 lakhs for AY 2017-18 was confirmed as the assessee failed to establish the source of payment.

The Tribunal held that the sale transaction was complete on the date of execution of the sale deed, applying the doctrine of relation back, thus not taxable in a later assessment year. Regarding partition, it was held that a partition is a division of joint holding into separate enjoyment and not a transfer of property, hence no addition could be made.

The Tribunal held that the effect of registration of a sale deed relates back to the date of execution, meaning the transfer occurred on the date of execution even if registration was later. It was also held that a partition of property does not constitute a transfer of interest, thus not attracting capital gains tax.

The Tribunal found that the CIT (Exemptions) summarily rejected the application without considering the assessee's request for adjournment or the submissions/documents uploaded before the order was passed. The Tribunal set aside the CIT(Exemptions)'s order and remanded the matter for fresh consideration, directing that a reasonable opportunity of being heard be afforded to the assessee.

The Tribunal held that the effect of a registered sale deed relates back to the date of execution, even if registration occurs later, thus taxing the transaction in the year of execution. It was also held that a partition of property, by itself, does not constitute a transfer of rights, title, or interest, as it merely divides joint holdings into separate enjoyments.

The Tribunal remanded the issue concerning lands in litigation to the Assessing Officer for fresh adjudication regarding ownership. For the property transactions, it held that the transfer was complete in the earlier assessment year (2006-07) based on the doctrine of relation back, rendering the later relinquishment deed non-taxable and making Sections 50C and 56(2)(vii)(b) inapplicable for subsequent years. It further ruled that a partition of property does not amount to a 'transfer' for income tax purposes, thereby dismissing Revenue's additions.

The Tribunal found the AO's methodology for disallowing expenses to be arbitrary and lacking a cogent basis, especially when the assessee was in a pre-revenue stage. The Tribunal set aside the matter back to the AO for re-adjudication, directing the AO to provide a reasonable opportunity and consider all documentary evidence as per the mandate of law.

The Tribunal held that the effect of registration of a sale deed relates back to the date of execution, and not the date of registration. It also held that a partition of property is a division of joint holding into individual shares and does not constitute a transfer of right, title, or interest. The ITAT decided to allow appeals by the assessee for statistical purposes and dismiss appeals by the Revenue.

The Tribunal held that the sale deed executed in 2006 and registered later related back to the date of execution, making the transaction taxable in the year of execution and not the year of registration. It also held that a partition of property does not constitute a transfer of right, title, or interest, thus no addition could be made on that count.

The Tribunal held that the registration of a sale deed relates back to the date of execution, irrespective of the later registration date. It also clarified that a partition of property, where parties already have an antecedent title, does not constitute a transfer for tax purposes. The appeals were decided based on these principles.

The Tribunal held that a sale deed's registration date does not determine the year of taxation; it relates back to the execution date. It also held that a partition of property is not a transfer of interest but a division of joint holding, thus not liable for capital gains tax. Additions made based on a combined satisfaction note were deemed invalid if not year-specific.

The Tribunal held that the sale deed's registration date relates back to the execution date, making the transfer taxable in the earlier year. It also ruled that property partition does not constitute a transfer of interest, hence no addition is warranted.