ITAT Jabalpur Judgments — June 2026

The Tribunal held that the penalty under Section 270A was not sustainable. It reasoned that the mistake in claiming exemption appeared bona fide and that making an incorrect claim in law does not automatically amount to furnishing inaccurate particulars of income.

The Tribunal held that the AO erred in not considering the jurisdictional High Court's judgment, which supported adopting a net profit rate on undisclosed sales, rather than adding the entire amount. The rejection of the rectification application was therefore incorrect.

The Tribunal held that the reopening of assessment was bad in law as there was no fresh tangible material and the assessee had disclosed all material facts during the original assessment. The proviso to Section 147 of the Act was applicable.

The Tribunal held that the AO exceeded the scope of limited scrutiny by investigating debtors, which was not the original purpose. The AO also failed to obtain the necessary approval to convert the scrutiny to complete. Therefore, the addition was not sustainable.

The Tribunal held that the assessee's appeal ground regarding the cost of acquisition was partly allowed for statistical purposes. The Tribunal found that the denial of exemption for the second house construction was based on divergent reasons by the AO and CIT(A), and that the adjudication suffered from non-compliance with Rule 46A. The Tribunal noted that while the plot acquisition was outside the time limit for exemption, the construction cost incurred within the prescribed period could still qualify. The Tribunal set aside the denial of exemption and remitted the issue to the AO for verification of construction expenses, directing them to deal with it in accordance with the preceding paragraphs. The Tribunal dismissed the Revenue's ground no. 2, holding that the agreement to sell transaction complied with the first and second provisos to section 50C(1) of the Act, and the benefit of retrospective application of the first proviso to section 50C was available. The Tribunal also held that the sale consideration noted in the registered transfer/sale deed executed by the assessee was to be considered. The Tribunal found that the part consideration documented in the agreement was received through account payee cheques, and these details travelled to the registered sale deed. Therefore, the Revenue's ground no. 2 was dismissed.

The Tribunal held that the assessee's appeal ground regarding the cost of acquisition was partly allowed for statistical purposes. The Tribunal found that the denial of exemption for the second house construction was based on divergent reasons by the AO and CIT(A), and that the adjudication suffered from non-compliance with Rule 46A. The Tribunal noted that while the plot acquisition was outside the time limit for exemption, the construction cost incurred within the prescribed period could still qualify. The Tribunal set aside the denial of exemption and remitted the issue to the AO for verification of construction expenses, directing them to deal with it in accordance with the preceding paragraphs. The Tribunal dismissed the Revenue's ground no. 2, holding that the agreement to sell transaction complied with the first and second provisos to section 50C(1) of the Act, and the benefit of retrospective application of the first proviso to section 50C was available. The Tribunal also held that the sale consideration noted in the registered transfer/sale deed executed by the assessee was to be considered. The Tribunal found that the part consideration documented in the agreement was received through account payee cheques, and these details travelled to the registered sale deed. Therefore, the Revenue's ground no. 2 was dismissed.

The Tribunal held that interest under sections 234A and 234B should be deleted as the seized cash was with the Revenue. For section 234C, interest was to be recomputed only for defaults before the cash seizure.