ITAT Indore Judgments — March 2025

The Tribunal held that the AO's observation that investment in shares generated exempted income was factually incorrect. Since no exempt income was earned during the year, Section 14A of the Act is not applicable. The addition made by the AO was deleted.

The Tribunal held that the CIT(A) did not err in admitting additional evidence. The CIT(A) had explained that the delay in submitting documents to the AO was due to a counsel's mistake, and in the interest of natural justice, the evidence was admitted, remanded to the AO for examination and rebuttal, and then the AO's report was given to the assessee for rejoinder. This process ensured reasonable opportunities for both parties, thus satisfying the principles of natural justice and the spirit of Rule 46A. Therefore, Ground No. 4 of the Revenue was dismissed. Regarding the deletion of the addition of Rs. 4,05,38,902/- on account of partners' capital, the Tribunal found that the AO's addition was based on an arithmetical calculation of the difference between closing and opening balances in Partners' Capital Accounts, plus amounts returned to partners. The assessee provided a summarized chart showing a capital introduction of Rs. 1,56,25,000/- and an interest credit of Rs. 1,29,39,210/-. The Tribunal noted that the CIT(A) had analyzed the documentary evidence for the capital introduction by six partners and found no adverse view warranted. The interest component was an accounting entry and not an inflow of funds, and it was allowable as a deduction under Section 37 read with Section 40(b). Therefore, the addition under Section 68 was not sustainable. The Tribunal upheld the CIT(A)'s order deleting the entire addition of Rs. 4,05,38,902/-.

The Tribunal held that the disallowance of 25% of advertisement expenses was not justified as the Assessing Officer did not point out specific defects. The disallowance was restricted to 5%. For printing and maintenance expenses, the adhoc disallowance was deleted. The disallowance for business promotion expenses was also deleted as the assessee produced the bill and no defect was pointed out by the AO.

The Tribunal noted that the assessee's counsel admitted the appeal was infructuous and the revenue's counsel had no objection. Therefore, the appeal was dismissed.

The Tribunal held that the CIT(A) did not err in admitting additional evidence. The CIT(A) had explained that the delay in submitting documents to the AO was due to a counsel's mistake, and in the interest of natural justice, the evidence was admitted, remanded to the AO for examination and rebuttal, and then the AO's report was given to the assessee for rejoinder. This process ensured reasonable opportunities for both parties, thus satisfying the principles of natural justice and the spirit of Rule 46A. Therefore, Ground No. 4 of the Revenue was dismissed. Regarding the deletion of the addition of Rs. 4,05,38,902/- on account of partners' capital, the Tribunal found that the AO's addition was based on an arithmetical calculation of the difference between closing and opening balances in Partners' Capital Accounts, plus amounts returned to partners. The assessee provided a summarized chart showing a capital introduction of Rs. 1,56,25,000/- and an interest credit of Rs. 1,29,39,210/-. The Tribunal noted that the CIT(A) had analyzed the documentary evidence for the capital introduction by six partners and found no adverse view warranted. The interest component was an accounting entry and not an inflow of funds, and it was allowable as a deduction under Section 37 read with Section 40(b). Therefore, the addition under Section 68 was not sustainable. The Tribunal upheld the CIT(A)'s order deleting the entire addition of Rs. 4,05,38,902/-.

The Tribunal found that the assessee was not given a proper opportunity to be heard and that the rejection of the application was against the principles of natural justice. The Tribunal set aside the order and remanded the case back to the CIT(E) for a fresh decision.

The Tribunal restored the matter back to the file of the CIT(E) for fresh adjudication. The CIT(E) was directed to grant a necessary opportunity of hearing to the assessee and pass an appropriate order, while the assessee was directed to participate in the hearings without seeking unnecessary adjournments.

The Tribunal noted that the assessee regretted the non-compliance and assured that the required donation details were now available and would be submitted. The Tribunal found it just and fair to set aside the impugned order and remand the matter back to the CIT(E) for a fresh decision on a denovo basis after the assessee submits the required details.

The Tribunal held that the enhancement of income by the CIT(A) without providing the assessee with a reasonable opportunity of being heard is illegal and bad in law, violating Section 251(2) of the Act. The addition made by the AO was based on estimation and conjectures.

The Tribunal held that the addition made by the AO in the hands of the assessee-firm was not sustainable and directed its deletion. The Tribunal noted that the facts were clear: the firm was dissolved on December 31, 2009/January 1, 2010, and one partner, Shri Suresh Chandra Mantri, continued the business under the same name. Crucially, the Tribunal found that these facts were known to the Income-tax Department, evidenced by multiple scrutiny assessment orders for Shri Suresh Chandra Mantri that acknowledged the dissolution. Furthermore, the AO had previously initiated reassessment proceedings under Section 147 against the assessee-firm for the immediately preceding AY 2017-18 for similar reasons but closed them after accepting the dissolution and takeover by Shri Suresh Chandra Mantri. The assessee had also provided sufficient documentary evidence, including the Cash-Book, Bank-Book, and ITR of Shri Suresh Chandra Mantri, where the Axis Bank transactions were recorded. The Tribunal concluded that there was no justification for making the addition in the hands of the firm solely because the PAN was not updated in the bank's KYC documents. Therefore, the addition was deleted in full, and the assessee's appeal was allowed.

The Tribunal decided on the two grounds raised by the assessee. Ground 1 was dismissed as the assessee did not press it. For Ground 2, concerning the addition of Rs. 18,32,561/- on account of duty drawback, the Tribunal adjudicated on different sub-parts of the duty drawback receipts. Firstly, for duty drawbacks aggregating to Rs. 2,90,217/- (S.No. 3 & 4), the Tribunal held that the export proceeds were received in the previous year 2017-18 relevant to AY 2018-19, and there was a 'reasonable assurance' of receipt. Thus, the addition in AY 2018-19 was upheld. However, to avoid double taxation, the AO was directed to exclude this amount from AY 2019-20. Secondly, for duty drawback of Rs. 44,185/- (S.No. 5), the Tribunal rejected the assessee's argument of lack of 'reasonable assurance' and upheld the AO's addition in AY 2018-19. Similar to the first point, the AO was directed to exclude it from AY 2019-20 to prevent double taxation. Thirdly, for duty drawback aggregating to Rs. 14,98,159/- (S.No. 1 & 2), the Tribunal found merit in the assessee's submission. Only a part advance was received in AY 2018-19, and the substantial portion was not received within the FEMA prescribed period, ultimately realized much later. This indicated a lack of 'reasonable assurance' as per Para 4(1) of ICDS-VII. Therefore, the addition in AY 2018-19 was deleted, and the assessee was justified in offering it for taxation in AY 2019-20 as per Para 4(2) of ICDS-VII. The ratio is that a lack of reasonable assurance regarding realization of export proceeds, coupled with significant delays in receipt, prevents the recognition of duty drawback income in an earlier AY.

The Tribunal observed that the assessee remained non-compliant at both the assessment and first appellate stages. However, to meet the ends of justice, the Tribunal set aside the impugned order and remanded the matter back to the Assessing Officer for a fresh assessment on a denovo basis.

The Tribunal held that the order of the CIT(Exemption) violated principles of natural justice. The assessee undertook to submit all requisite donation details, and thus the matter was remanded back to the CIT(Exemption) for a fresh decision.

The Tribunal, acknowledging the principles of natural justice, remanded the case back to the AO for fresh adjudication. The assessee was directed to pay a cost of Rs. 2,000/- to the Prime Minister National Relief Fund and ensure active participation in subsequent hearings without seeking unnecessary adjournments. The AO is to provide a fresh opportunity of hearing and pass an uninfluenced order.

The Tribunal allowed the withdrawal of the appeal, noting that the revenue did not object to the request. The Tribunal also clarified that the assessee remains free to recall the order if their application under the scheme is rejected.

The Tribunal decided to remand both issues back to the CIT(A) for fresh adjudication. Regarding the first issue concerning the addition of Rs. 39,26,015/- under Section 69A, the Tribunal found it appropriate to restore the entire issue to the CIT(A). The CIT(A) was directed to confront the assessee with the entire issue, including the inconsistency in cash balances between the cash book and the ITR for AY 2016-17. The CIT(A) was also given liberty to seek a remand report from the AO and consider the assessee's submissions. The principle established is that when there are discrepancies and the assessee claims a typographical error, a fresh opportunity for proper adjudication, including verification of evidence and potential remand reports, is warranted. For the second issue concerning the addition of Rs. 6,39,120/- as unrealized rental income, the Tribunal also found it appropriate to remand the issue to the CIT(A). The CIT(A) was directed to consider the assessee's evidence regarding the fulfillment of conditions prescribed in Rule 4 of the Income-tax Rules, 1962, for the benefit of non-taxability of 'unrealized rent' as per the Explanation to Section 23(1). The CIT(A) is to decide this issue afresh after giving necessary opportunities to the assessee and considering the submissions. The Tribunal expressly left undecided the final merits of both grounds, remanding them for reconsideration.

The Tribunal restored the matter to the CIT(E) for fresh adjudication, directing the CIT(E) to provide a hearing opportunity. The assessee was also directed to ensure participation without seeking unnecessary adjournments.

The Tribunal noted that the assessee's prior application for registration under Section 12AB was rejected, which is a prerequisite for 80G approval. However, considering the undertaking by the assessee's AR to provide all necessary details, the Tribunal set aside the impugned order and remanded the matter back to the CIT(E) for a fresh decision on a de novo basis.

The Tribunal found it fit to remand the matter back to the CIT(A) for adjudication afresh, considering the principle of natural justice. The CIT(A) was directed to provide a necessary opportunity of hearing to the assessee.

The Tribunal held that registration under Section 12AB is a prerequisite for obtaining approval under Section 80G. Since the assessee did not possess the 12AB registration, its application for 80G approval was rightly rejected.

The Tribunal granted the request of the assessee to withdraw the appeal, as the departmental representative did not object. The Tribunal also clarified that the assessee is free to recall the order if their application under the scheme is rejected.

The Tribunal condoned the delay in filing the appeals, referencing a previous ITAT order where similar delays due to management issues were accepted. The Tribunal directed the CIT(A) to decide the appeals on their merits after condoning the delay.

The Tribunal condoned the delay in filing the appeals, referencing a previous ITAT order where similar delays due to management issues were accepted. The Tribunal directed the CIT(A) to decide the appeals on their merits after condoning the delay.

The Tribunal condoned the delay in filing the appeals, referencing a previous ITAT order where similar delays due to management issues were accepted. The Tribunal directed the CIT(A) to decide the appeals on their merits after condoning the delay.

The Tribunal condoned the delay in filing the appeals, referencing a previous ITAT order where similar delays due to management issues were accepted. The Tribunal directed the CIT(A) to decide the appeals on their merits after condoning the delay.

The Tribunal condoned the delay in filing the appeals, referencing a previous ITAT order where similar delays due to management issues were accepted. The Tribunal directed the CIT(A) to decide the appeals on their merits after condoning the delay.

The Tribunal condoned the delay in filing the appeals, referencing a previous ITAT order where similar delays due to management issues were accepted. The Tribunal directed the CIT(A) to decide the appeals on their merits after condoning the delay.

The Tribunal condoned the delay in filing the appeals, referencing a previous ITAT order where similar delays due to management issues were accepted. The Tribunal directed the CIT(A) to decide the appeals on their merits after condoning the delay.

The Tribunal condoned the delay in filing the appeals, referencing a previous ITAT order where similar delays due to management issues were accepted. The Tribunal directed the CIT(A) to decide the appeals on their merits after condoning the delay.

The Tribunal condoned the delay in filing the appeals, referencing a previous ITAT order where similar delays due to management issues were accepted. The Tribunal directed the CIT(A) to decide the appeals on their merits after condoning the delay.

The Tribunal condoned the delay in filing the appeals, referencing a previous ITAT order where similar delays due to management issues were accepted. The Tribunal directed the CIT(A) to decide the appeals on their merits after condoning the delay.

The Tribunal held that the CIT(A) should have adjudicated the grounds on merit as per the provisions of Section 250(6). Considering the principle of natural justice and the legal heir's age, the matter was remanded to the CIT(A) for fresh adjudication.

The Tribunal granted permission to withdraw the appeal as the assessee intended to pursue the resolution under the "Sabka Vishwas Scheme". The appeal was dismissed as withdrawn.

The Tribunal allowed the assessee's request to withdraw the appeal, dismissing the appeal as withdrawn. The assessee was granted liberty to file a recall application if their scheme application was rejected.

The Tribunal, considering the principle of natural justice and fair play, decided to remand the matter back to the CIT(E) for a fresh adjudication. The CIT(E) is to provide an opportunity for hearing and pass an appropriate order.

The Tribunal condoned the delay in filing the appeals, referencing a previous ITAT order where similar delays due to management issues were accepted. The Tribunal directed the CIT(A) to decide the appeals on their merits after condoning the delay.

The Tribunal condoned the delay in filing the appeal and allowed the assessee's request to withdraw the appeal, as they had opted for the 'Vivad se Vishwas Scheme'.

The Tribunal noted that two facts were clearly discernible from the assessment order. Firstly, none of the notices issued by the AO reached the assessee, and the departmental inspector reported that the assessee was not residing at the given address. The last notice was served on the assessee's daughter. Secondly, prior to the assessment, the AO had issued a query letter dated 14.03.2017, to which the assessee responded with a clear submission that the cash was withdrawn on 11.08.2016 and re-deposited on 16.11.2016. This same explanation was filed before the CIT(A). While the CIT(A) noted another explanation regarding the sale of vegetables, the Tribunal accepted the assessee's submission that this was a generalized explanation and not the direct source of the deposit. The Tribunal found that the assessee's primary explanation of withdrawal and re-deposit remained untested by the AO due to the failure of notice service. Therefore, the Tribunal decided to give the assessee one more opportunity to represent her case before the AO. The issue was accordingly remanded to the file of the AO for adjudication afresh, with directions for the AO to provide opportunities and the assessee to comply diligently. The AO was instructed to pass a judicious order without being influenced by his earlier order. No issue was expressly left undecided.

The Tribunal held that the AO had erroneously used the tax audit report of a prior year (AY 2016-17) to make the addition for the current AY 2017-18. The assessee had demonstrated that no such purchase was made in the relevant year and that the tax audit report for AY 2017-18 was not required.

The Tribunal held that the impugned order rejecting the application for registration was not justified. It acknowledged the assessee's plea of a bonafide oversight and the need for an opportunity to present all details.

The Tribunal held that the CIT(Exemption) had not provided sufficient opportunity to the assessee to furnish all the required documents. The CIT(Exemption) also failed to provide a proper opportunity of being heard before passing the impugned order.

The Tribunal noted the submissions of both the assessee and the revenue. The assessee contended that the penalty under Section 271(1)(c) is consequential to the addition made in the assessment order, and since the appeal against the assessment order (Quantum Appeal) is pending before the CIT(A), the penalty appeal should also be remanded for fresh adjudication based on the outcome of the Quantum Appeal. The revenue's representative agreed with this submission. In view of the consensus between the parties, the Tribunal restored the matter to the file of the CIT(A) for adjudication afresh based on the outcome of the assessee's Quantum Appeal. The appeal was allowed for statistical purposes.

The Tribunal held that the assessee's non-compliance and failure to provide necessary documentary evidence justified the Assessing Officer's estimation of income. The claim for deduction under Section 80P was also denied due to the non-filing of the return.

The Tribunal held that the assessee's non-compliance and lack of documentary evidence justified the Assessing Officer's estimation of income. Since no return was filed, the benefit of Section 80P was not available.

The Tribunal, considering the submissions of both parties and upholding the principles of natural justice and fair play, decided to remand the matter back to the file of the CIT(A) for fresh adjudication. The Tribunal found merit in the assessee's contention regarding the improper service of notices, which led to an ex-parte order. The CIT(A) is directed to provide the assessee with a necessary opportunity of hearing and pass an appropriate order. The assessee is also directed to ensure participation in the hearings and avoid seeking unnecessary adjournments. The Tribunal noted that if the assessee fails to comply, the CIT(A) shall be at liberty to pass an appropriate order in accordance with the law. The appeal was allowed for statistical purposes.

The Tribunal found merit in the assessee's submission regarding the non-service of notices. Adhering to the principles of natural justice, the Tribunal remanded the matter back to the CIT(A) for a fresh adjudication.

The Tribunal held that the CIT(A) failed to properly consider the assessee's compliance with requisitions and incorrectly dismissed the appeal as not admitted. The Tribunal set aside the CIT(A)'s order.

The Tribunal found that the CIT(A) had passed the order ex-parte without giving the assessee adequate opportunity, despite the assessee's counsel being overburdened during a busy period. Therefore, the Tribunal set aside the impugned order and remanded the matter back to the CIT(A) for fresh adjudication on merits.

The Tribunal remanded the matter back to the CIT(A) for fresh adjudication. The CIT(A) was directed to provide the assessee with an opportunity of hearing to present their case on the delay and merits.