ITAT Hyderabad Judgments — February 2026

The Tribunal condoned the delay in filing the appeal. It allowed the assessee's claim for deduction of expenses against interest income, following the principle of mutuality. The Tribunal also directed the Assessing Officer to verify and allow credit for self-assessment tax paid by the assessee.

The Tribunal condoned the delay of 200 days, subject to a cost of Rs. 5000/-, and set aside the impugned order of the CIT(A). The matter was remanded to the Assessing Officer for re-adjudication after verifying the additional evidence submitted by the assessee.

The Tribunal held that since the assessee did not receive any sale consideration, no real income accrued to her. Therefore, the addition of capital gains in her hands was unjustified.

The Tribunal held that the reopening of the assessment was based on a re-appreciation of the same facts available during the original assessment, not on any new material. Therefore, the reopening was invalid.

The Tribunal held that the disallowance of the loss was made without basis and on conjectures. The transactions were genuine, conducted on a recognized stock exchange at prevailing market prices, and supported by documentary evidence. Even if the assessee's actions were not prudent, it did not justify disallowing the actual loss incurred.

The Tribunal held that the notice issued under Section 148 of the Act was invalid because the AO considered non-existing or incorrect information to conclude that the escaped income exceeded Rs. 50 lakhs, which was a prerequisite for reopening assessment beyond three years. The AO should have verified the bank account statement before reopening.

The Tribunal held that the penalty under Section 271D cannot be sustained as the AO did not record satisfaction in the assessment order for initiating penalty proceedings. The Supreme Court's decision in CIT vs. Jai Laxmi Rice Mills Ambala City was relied upon, stating that Section 271D and 271E are in pari materia.

The Tribunal held that the notice issued under Section 148 of the Act dated 06/04/2022 was barred by limitation as per the first proviso to Section 149(1) of the Act. Consequently, the assessment order passed by the AO was quashed.

The Tribunal held that the applications were filed within the prescribed time limit. The commencement of activities was stated as 28.03.2024, and the application was filed on 22.09.2024, which is within six months. The prior provisional registration period also provided a deadline of 30.09.2024, making the filing timely.

The Tribunal held that the validity of the assumption of jurisdiction must be tested based on the material available with the AO at the time of issuing the notice under Section 148, not on the ultimately assessed income. The substantial cash withdrawals constituted tangible material indicating potential escapement of income exceeding the Rs. 50 lakhs threshold.

The Tribunal held that the applications were filed within the prescribed time limit. The commencement of activities was stated as 28.03.2024, and the application was filed on 22.09.2024, which is within six months. The prior provisional registration period also provided a deadline of 30.09.2024, making the filing timely.

The tribunal admitted additional evidence in the assessee's appeal concerning unexplained cash credits and remanded the issue to the AO for verification. The revenue's appeal concerning kitchen consumables and professional charges was dismissed, while the ground regarding job work expenses was upheld.

The Tribunal held that the penalty notice was not invalid merely because it did not specify the exact limb of Section 270A, as the Assessing Officer had invoked Section 270A generally. The Tribunal found that the assessee had admitted additional income during the search proceedings, which constituted under-reporting and misreporting of income. The contention that there was no difference between returned and assessed income was rejected as the assessee itself admitted additional income. The Tribunal also held that the penalty was leviable on the admitted additional income from spent solvents and scrap, and the argument regarding estimation was not accepted. Regarding the computation of penalty, the Tribunal noted that the Assessing Officer had computed the penalty on the entire additional income admitted by the assessee, which was Rs.6,77,03,448/-, and the penalty amount confirmed by the CIT(A) was Rs.2,66,77,674/-. The Tribunal found no infirmity in the levy of penalty under Section 270A on the admitted income. The specific grounds regarding computation on purchases or disallowances were not explicitly addressed in the provided excerpt, but the overall confirmation of the penalty suggests these arguments were not accepted. The Tribunal dismissed the appeal.

The Tribunal held that the assessment order was barred by limitation as per Section 153(2) of the Income Tax Act, 1961, as it was passed beyond the prescribed time limit from the date of notice. The extended time limit under Section 153(4) was not applicable as there was no reference to the TPO.

The Tribunal held that the addition related to cash deposits during demonetization, which was claimed to be from petrol sales, was not justified as the AO ignored the assessee's records, including the Form 'C' and stock statements. The addition concerning sundry creditors was remanded to the AO for proper verification, as the explanation that it was a book entry transfer from capital was not presented earlier.

The Tribunal held that the notice under section 148, dated 30/07/2022, was issued beyond the time limit prescribed by the pre-amended section 149(1)(b) of the Act. The Tribunal found that the fifth and sixth provisos of the amended section 149 could not be applied to extend the limitation period for a notice already barred by the first proviso. Consequently, the reassessment order was quashed for invalid assumption of jurisdiction.

The Tribunal held that the final assessment order was passed beyond the limitation period prescribed under Section 153B of the Income Tax Act. Consequently, the assessment order was quashed.

The Tribunal held that the notice issued under section 153C of the Act was beyond the prescribed limitation period, making it invalid. Consequently, the assessment order passed under section 153C was quashed.

The tribunal admitted additional evidence in the assessee's appeal concerning unexplained cash credits and remanded the issue to the AO for verification. The revenue's appeal concerning kitchen consumables and professional charges was dismissed, while the ground regarding job work expenses was upheld.

The Tribunal held that the penalty order was barred by limitation as it was passed beyond the time prescribed under Section 275(1)(c) of the Income Tax Act. The Tribunal also noted that the assessee's contention regarding the burden of proof and lack of evidence for violation of Section 269ST was valid.

The Tribunal held that the penalty proceedings were initiated beyond the period of limitation. The show cause notice was issued belatedly, and the penalty order was passed after the prescribed time limit.

The Tribunal held that the reopening of assessment after more than four years was invalid as there was no failure on the part of the assessee to disclose material facts. The AO's action was based on suspicion and change of opinion, not on concrete evidence of bogus purchases.

The Tribunal held that the seized material did not conclusively prove violations of Section 269ST, as it lacked transaction-wise and buyer-wise details. Admission of additional income alone is not sufficient for penalty without corroborative evidence.

The Tribunal held that the seized material did not conclusively prove violations of Section 269ST, as it lacked transaction-wise and buyer-wise details. Admission of additional income alone is not sufficient for penalty without corroborative evidence.

The Tribunal held that the provision for warranty, in the facts and circumstances of the case, was not an allowable deduction. The Tribunal reasoned that while warranty is an integral part of the sale of goods and can be a business expense, the crucial aspect is whether the liability has actually accrued or can be ascertained with reasonable certainty. The Tribunal found that the provision made by the assessee was a general provision for warranty and lacked the necessary certainty and ascertainability of the actual liability that would arise. The Tribunal distinguished this from situations where a specific warranty liability could be quantified. Therefore, the Tribunal upheld the disallowance made by the Assessing Officer and confirmed by the CIT(A). The ratio decidendi is that a provision for warranty, to be deductible, must represent an ascertained liability or a liability that can be estimated with a high degree of certainty, and a general provision without such ascertainability is not deductible under Section 37(1). The appeals were dismissed on this issue.

The Tribunal held that the final assessment order was passed beyond the limitation period prescribed under Section 153B of the Income Tax Act. Therefore, the assessment proceedings were quashed as being barred by limitation.

The Tribunal held that the assessee sold her share of the property in her individual capacity, not as HUF, and thus the capital gains were assessable in her hands. The penalty for concealment of income was also upheld.

The Tribunal found that the notice under Section 153C was issued more than 10 months after the completion of the assessment of the searched person, exceeding the permissible time limit. Consequently, the notice and the subsequent assessment order were deemed invalid and void ab initio.

The Tribunal held that the final assessment order was passed beyond the limitation period prescribed under Section 153B of the Income Tax Act. Consequently, the assessment order was quashed.

The Tribunal held that the assessee failed to provide any evidence to support its claim for deduction under Section 80P and also failed to pay the cost imposed for recalling the earlier order. The appeal was filed beyond the limitation period.

The Tribunal held that loose sheets and random notings, without corroborative evidence, lack evidentiary value. The AO failed to establish the ownership of unaccounted cash or to correlate the entries with the assessee's books. Therefore, the conditions for invoking Section 69A of the Act were not met.

The Tribunal held that the assessee sold her share of the property in her individual capacity, not as HUF, and thus the capital gains were assessable in her hands. The penalty for concealment of income was also upheld.

The Tribunal held that loose sheets and random notings without corroborative evidence lack evidentiary value, and the AO failed to establish the genuineness of the alleged bogus expenses or unaccounted money. It also found that the conditions for invoking Section 69A were not met as ownership of unexplained valuable articles or money was not proven.

The Tribunal held that if exemption u/s 11 is denied, income should be assessed on commercial principles, considering profit or loss. The AO erred in assessing gross receipts without allowing deductions for expenditure, as this was a mistake apparent from the record.

The Tribunal held that if exemption u/s 11 is denied, income should be assessed on commercial principles, considering profit or loss. The AO erred in assessing gross receipts without allowing deductions for expenditure, as this was a mistake apparent from the record.

The Tribunal held that while there was evidence of suppressed turnover, the estimations made by the AO and CIT(A) were arbitrary. It directed the AO to estimate 25% of the quantified turnover as suppressed turnover and estimate net profit at 15% on this suppressed turnover.

The Tribunal held that while there was evidence of suppressed turnover, the estimations made by the AO and CIT(A) were arbitrary. It directed the AO to estimate 25% of the quantified turnover as suppressed turnover and estimate net profit at 15% on this suppressed turnover.

The Tribunal held that the addition of Rs. 40 lakhs was unsustainable as the seized documents were not recovered from the assessee, no independent corroborative evidence was produced, and the assessee was not given an opportunity to cross-examine the persons whose statements were relied upon.

The Tribunal held that while there was evidence of suppressed turnover, the estimations made by the AO and CIT(A) were arbitrary. It directed the AO to estimate 25% of the quantified turnover as suppressed turnover and estimate net profit at 15% on this suppressed turnover.

The Tribunal noted that while the assessee had a history of filing returns and deriving income from various sources, he failed to provide irrefutable evidence to substantiate the availability of cash in hand on the dates of deposit. Therefore, the Tribunal, through estimation, sustained the addition to the extent of Rs.2,65,375.

The Tribunal held that the assessee had sufficient cash in hand as of November 8, 2016, which was evidenced by the cash book and accounted for the deposits made after November 9, 2016. The Tribunal found that the AO and CIT(A) incorrectly presumed that the assessee received cash from sundry debtors after November 8, 2016, and disallowed the source without considering the available evidence.

The Tribunal observed that the assessee's audited profit of 2.2% on sales of Rs. 7.56 crores could not be summarily discarded. However, the AO's rejection of books of account was also not entirely without merit. The Tribunal found substance in the assessee's contention that cash deposits were from regular business transactions.

The Tribunal noted that the delay in filing Form 10 was condoned by the CIT(Exemptions) and that the donor details were not filed before the AO due to justifiable reasons, and the CIT(A) failed to consider the submitted donor details. Therefore, the matter was restored to the AO for readjudication.

The Tribunal allowed the appeal concerning the addition made under Section 69A for cash deposits, finding that the assessee's sales proceeds from the liquor business could explain the source of these deposits. However, the appeal was dismissed regarding the disallowance of the Section 80C deduction due to the assessee's failure to provide supporting evidence.

The Tribunal held that if exemption u/s 11 is denied, income should be assessed on commercial principles, considering profit or loss. The AO erred in assessing gross receipts without allowing deductions for expenditure, as this was a mistake apparent from the record.

The Tribunal found substance in the assessee's claim that the investment was sourced from its bank account. However, as the assessee failed to substantiate this claim before the lower authorities, the matter was set aside to the AO for re-adjudication.

The Tribunal upheld the penalty on the addition of Rs. 31,29,215/- for unexplained income from jewellery sale and the Rs. 61,00,000/- addition for unexplained unsecured loans. However, the appeal was partly allowed, implying the penalty on the share sale issue might not have been upheld.

The Tribunal held that while there was evidence of suppressed turnover, the estimations made by the AO and CIT(A) were arbitrary. It directed the AO to estimate 25% of the quantified turnover as suppressed turnover and estimate net profit at 15% on this suppressed turnover.

The demolition was part of the sale transaction and not an independent event. The cost of the demolished structure is directly linked to the transfer consideration and is deductible under Section 48. The extinguishment of rights in the building constitutes a transfer. The CIT(A)'s denial of the indexed cost was upheld by the AO and Pr. CIT based on technical grounds, but the Tribunal found contradictions in the CIT(A)'s findings.

The Tribunal held that the assessment order was barred by limitation as per Section 153 of the Income Tax Act. The period of exclusion for handing over seized materials was calculated, and it was found that the AO passed the order beyond the extended time limit.