ITAT Hyderabad Judgments — August 2025

The Tribunal found that the assessee was genuinely ill and unable to participate in proceedings before the CIT(A). Considering the additional evidence regarding source of deposits (bank statements, confirmations, inter-bank transfers) could not be examined, the Tribunal set aside the CIT(A)'s order and remanded the matter to the AO for fresh adjudication after proper verification and providing the assessee an opportunity of hearing.

The Tribunal condoned both the 70-day delay in filing the appeal before itself and the 1136-day delay in filing before the CIT(A), taking a lenient view due to the assessee's medical condition and the pandemic. The CIT(A)'s order was set aside, and the matter was remanded back to the CIT(A) for adjudication on merits.

The Tribunal condoned the 21-day delay in filing the appeal, accepting the reasons for the delay as beyond the assessee's control. It set aside the CIT(A)'s order and remanded the matter back to the Assessing Officer for re-adjudication, directing verification of the firm's dissolution, the continuation of the business as a proprietorship, and the income declared by the proprietor. The AO was granted liberty to initiate fresh proceedings if the income was not properly declared and was instructed to give the assessee an opportunity of hearing.

The Tribunal found the Assessing Officer's estimation of business income at 2% of total sales to be arbitrary and lacking a justifiable basis. Considering the assessee's average net profit ratio of 1.16% from the preceding three assessment years, the Tribunal modified the estimation of business income to 1.16% of the total turnover of Rs. 9,30,32,829/-, resulting in an assessed income of Rs. 10,79,180/-.

The ITAT set aside the CIT(A)'s order, finding it not in conformity with Section 250(6) as it was dismissed in-limine without deciding on merits. It also noted the AO's arbitrary estimation of income despite the assessee maintaining audited books of accounts. The matter was remanded back to the AO for fresh adjudication, proper verification of records, and providing a fresh opportunity of hearing to the assessee.

The Tribunal held that the addition made by the Assessing Officer on the basis of the seized loose sheets, which contained entries under the head 'Mallikarjun', could not be sustained. The Tribunal found it difficult to ascertain the nature of transactions (sale or purchase) from the document. Although some entries indicated registration and payments by cheque or cash, there was no evidence to match the cheque amounts with the assessee's books of accounts. Furthermore, the Assessing Officer had not provided any evidence to establish that any document was registered as a sale or purchase. In the absence of details regarding the nature of the transaction and the principal parties involved, the basic conditions for charging income tax under Section 4 of the Income Tax Act, 1961, were not satisfied. Consequently, the Tribunal set aside the order of the CIT(A) and directed the Assessing Officer to delete the addition. The Tribunal also noted that the assessee's appeal for AY 2019-20 was allowed, the appeal for AY 2013-14 was partly allowed, and the Revenue's appeal was dismissed. Cross objections of the Revenue were also dismissed.

The Tribunal ruled that the CIT(A) erred in dismissing the appeal for non-prosecution without a decision on merits, which contravened Section 250(6) of the Act. Consequently, the CIT(A)'s order was set aside, and the matter was remanded for fresh adjudication on merits, granting the assessee another opportunity to be heard.

The Tribunal held that Section 14A applies to exempt share of profit from a partnership firm, but the disallowance cannot exceed the exempt income. For the addition under Section 68, the Tribunal, in the interest of natural justice, remanded the issue to the AO for fresh adjudication, allowing the assessee to submit supporting evidence.

The Tribunal acknowledged the assessee's bonafide mistake in uploading the reply to the wrong appeal proceedings and noted the unfair dismissal by the CIT(A). With both parties agreeing on a remand, the Tribunal set aside the CIT(A)'s order and remanded the matter for fresh adjudication after giving the assessee an opportunity to present its case.

The Tribunal found that the CIT(Exemptions) mechanically rejected the application, failing to elaborate on specific deficiencies or provide a reasoned order. The Tribunal set aside the CIT(Exemptions)'s order, remanding the matter for re-adjudication with directions to pass a speaking and reasoned order after affording the assessee a reasonable opportunity of being heard.

The Income Tax Appellate Tribunal (ITAT) dismissed the assessee's appeal as barred by limitation. The assessee sought condonation for a 350-day delay in filing the appeal, claiming her previous CA left without handing over papers, but the ITAT found the submitted affidavit to be a 'bogus document' as it was notarized on a date different from when the appeal was purportedly filed, indicating a lack of 'clean hands'.

The Tribunal held that the Pr. CIT cannot substitute his own view for a possible and plausible view taken by the AO, especially when the AO had consciously decided not to impose penalty after due consideration. The revisionary powers under Section 263 are not meant to seek substitution of a reasoned order.

The Tribunal held that the addition made by the Assessing Officer on the basis of the seized loose sheets, which contained entries under the head 'Mallikarjun', could not be sustained. The Tribunal found it difficult to ascertain the nature of transactions (sale or purchase) from the document. Although some entries indicated registration and payments by cheque or cash, there was no evidence to match the cheque amounts with the assessee's books of accounts. Furthermore, the Assessing Officer had not provided any evidence to establish that any document was registered as a sale or purchase. In the absence of details regarding the nature of the transaction and the principal parties involved, the basic conditions for charging income tax under Section 4 of the Income Tax Act, 1961, were not satisfied. Consequently, the Tribunal set aside the order of the CIT(A) and directed the Assessing Officer to delete the addition. The Tribunal also noted that the assessee's appeal for AY 2019-20 was allowed, the appeal for AY 2013-14 was partly allowed, and the Revenue's appeal was dismissed. Cross objections of the Revenue were also dismissed.

The Tribunal held that the addition made by the Assessing Officer on the basis of the seized loose sheets, which contained entries under the head 'Mallikarjun', could not be sustained. The Tribunal found it difficult to ascertain the nature of transactions (sale or purchase) from the document. Although some entries indicated registration and payments by cheque or cash, there was no evidence to match the cheque amounts with the assessee's books of accounts. Furthermore, the Assessing Officer had not provided any evidence to establish that any document was registered as a sale or purchase. In the absence of details regarding the nature of the transaction and the principal parties involved, the basic conditions for charging income tax under Section 4 of the Income Tax Act, 1961, were not satisfied. Consequently, the Tribunal set aside the order of the CIT(A) and directed the Assessing Officer to delete the addition. The Tribunal also noted that the assessee's appeal for AY 2019-20 was allowed, the appeal for AY 2013-14 was partly allowed, and the Revenue's appeal was dismissed. Cross objections of the Revenue were also dismissed.

The Tribunal held that the addition made by the Assessing Officer on the basis of the seized loose sheets, which contained entries under the head 'Mallikarjun', could not be sustained. The Tribunal found it difficult to ascertain the nature of transactions (sale or purchase) from the document. Although some entries indicated registration and payments by cheque or cash, there was no evidence to match the cheque amounts with the assessee's books of accounts. Furthermore, the Assessing Officer had not provided any evidence to establish that any document was registered as a sale or purchase. In the absence of details regarding the nature of the transaction and the principal parties involved, the basic conditions for charging income tax under Section 4 of the Income Tax Act, 1961, were not satisfied. Consequently, the Tribunal set aside the order of the CIT(A) and directed the Assessing Officer to delete the addition. The Tribunal also noted that the assessee's appeal for AY 2019-20 was allowed, the appeal for AY 2013-14 was partly allowed, and the Revenue's appeal was dismissed. Cross objections of the Revenue were also dismissed.

The Tribunal held that the addition made by the Assessing Officer on the basis of the seized loose sheets, which contained entries under the head 'Mallikarjun', could not be sustained. The Tribunal found it difficult to ascertain the nature of transactions (sale or purchase) from the document. Although some entries indicated registration and payments by cheque or cash, there was no evidence to match the cheque amounts with the assessee's books of accounts. Furthermore, the Assessing Officer had not provided any evidence to establish that any document was registered as a sale or purchase. In the absence of details regarding the nature of the transaction and the principal parties involved, the basic conditions for charging income tax under Section 4 of the Income Tax Act, 1961, were not satisfied. Consequently, the Tribunal set aside the order of the CIT(A) and directed the Assessing Officer to delete the addition. The Tribunal also noted that the assessee's appeal for AY 2019-20 was allowed, the appeal for AY 2013-14 was partly allowed, and the Revenue's appeal was dismissed. Cross objections of the Revenue were also dismissed.

The Tribunal noted that procedural lapses should not defeat substantive rights and directed the assessee to seek condonation of delay from the CBDT under Section 119(2)(b) of the Act. Subsequently, the CIT(Exemptions) was directed to consider the application for regular registration on its merits, providing due opportunity of being heard.

The Tribunal held that the error was purely technical, not intentional, and the Revenue had itself granted provisional registration based on the wrong code. Emphasizing that procedural defects should not defeat substantive rights for charitable institutions, the Tribunal set aside the CIT(E)'s order. It remanded the matter, directing the CIT(E) to allow the assessee to file a fresh application with the correct section code and adjudicate it on merits.

The Tribunal condoned the delay in filing the appeal, accepting the reason of incorrect email communication. It held that sending notices and the order to a wrong email ID violated principles of natural justice, thus denying the assessee a proper opportunity. Consequently, the matter was remanded to the Ld. CIT(E) for fresh adjudication, directing them to provide a reasonable opportunity to the assessee.

The Tribunal held that the addition made by the Assessing Officer on the basis of the seized loose sheets, which contained entries under the head 'Mallikarjun', could not be sustained. The Tribunal found it difficult to ascertain the nature of transactions (sale or purchase) from the document. Although some entries indicated registration and payments by cheque or cash, there was no evidence to match the cheque amounts with the assessee's books of accounts. Furthermore, the Assessing Officer had not provided any evidence to establish that any document was registered as a sale or purchase. In the absence of details regarding the nature of the transaction and the principal parties involved, the basic conditions for charging income tax under Section 4 of the Income Tax Act, 1961, were not satisfied. Consequently, the Tribunal set aside the order of the CIT(A) and directed the Assessing Officer to delete the addition. The Tribunal also noted that the assessee's appeal for AY 2019-20 was allowed, the appeal for AY 2013-14 was partly allowed, and the Revenue's appeal was dismissed. Cross objections of the Revenue were also dismissed.

On the issue of basic customs duty adjustment, the Tribunal held that while differences in import composition and duty may affect margins, the burden is on the assessee to demonstrate this with verifiable data. Citing the DRP's observation that the assessee provided no data on differences in import reliance or duty expenditure compared to comparables, and that the industry is significantly import-dependent, the Tribunal found the assessee's computation based on only three out of eight comparables insufficient for a reliable comparison. The relied-upon judicial precedents were distinguished as not having issues of incomplete data. Therefore, the grounds related to basic customs duty were dismissed. On the issue of interest on trade receivables, the Tribunal followed a co-ordinate bench decision which held that when an assessee has significant interest-free payables to AEs, no adjustment is warranted on receivables. The adjustment made by the TPO/AO was deleted. On the issue of interest on ECB, the Tribunal found that the loan agreement clearly indicated the ECB was for capital goods purchase and expansion, not working capital as concluded by the TPO. The TPO's contradictory approach was deemed unsustainable. The Tribunal agreed that ECBs for capital expenditure require different benchmarking than for working capital, citing judicial precedents. The adjustment made by the TPO/AO was set aside, and the matter was restored to the AO/TPO for re-examination based on the loan's purpose, applicable RBI guidelines, and cited judicial precedents. The assessee was directed to furnish supporting documents. No issue was expressly left undecided.

The Tribunal condoned the delay of 147 days, citing the unusual circumstances and the need for a justice-oriented approach. The Tribunal rejected the assessee's contention that the reassessment proceedings were void ab initio. However, considering the peculiar circumstances and the earlier submission of documents, the Tribunal restored the issue of addition to the file of the Assessing Officer for fresh examination.

The CIT(A) treated Rs. 5,70,000 as unexplained expenditure under section 69C and the balance Rs. 12,30,000 as unexplained expenditure for AY 2017-18. Additionally, GP of Rs. 1,62,345 was added on total unaccounted purchases. The Tribunal noted that the assessee failed to provide evidence regarding the source of payments and upheld the CIT(A)'s approach.

The Tribunal found that the CIT(E)'s rejection order was non-speaking, lacked specific findings on the assessee's submissions, and failed to point out defects or offer an opportunity to rectify them. The Tribunal set aside the impugned order and restored the matter to the Ld. CIT(E) for fresh adjudication, directing a reasoned order to be passed after providing proper opportunity to the assessee.