ITAT Kolkata Judgments — July 2025

The Tribunal held that the dividend income from equity shares was within the exemption limit under Section 115BBDA, and dividend income from mutual funds was exempt under Section 10(35). The adjustment made by the CPC treating it as business income was erroneous and bad in law.

The Tribunal held that the CIT(A) erred by not considering the rectification order under Section 154, which had already resolved the issue of timely filing of Form 10BB and granted the Section 11 exemption. As the assessee's grievance was redressed and the audit report was filed before processing, the CIT(A)'s order was rendered infructuous. Therefore, the assessee was entitled to the Section 11 exemption.

The tribunal held that the CIT(A) erroneously disposed of the appeal by referring to a rectification order instead of the assessment order. The tribunal found that the addition made by the Assessing Officer was unsustainable in law and on facts due to lack of evidence.

The Tribunal, considering the submissions and material on record, found that a net profit rate of 2% would be reasonable. Accordingly, the AO was directed to restrict the estimation to 2% of turnover, and the remaining addition was directed to be deleted.

The Tribunal held that the assessee failed to comply with notices during reassessment and appellate proceedings, leading to an ex parte order by the CIT(A). However, in the interest of justice, the matter was restored to the CIT(A) for de novo adjudication.

The Tribunal noted the assessee's failure to diligently pursue the appeal at various stages and the ex parte nature of previous orders. The appeal was restored to the CIT(A) for fresh adjudication on merits after providing an opportunity of hearing, with a nominal cost imposed on the assessee.

The tribunal condoned the three-day delay in filing the appeal before the CIT(A), stating that technical lapses should not override substantial justice. The order of the CIT(A) was set aside, and the matter was restored for adjudication on merits.

The tribunal observed that both lower authorities failed to properly ascertain the total income of the assessee. Citing principles of natural justice, the ITAT remitted the matter back to the Assessing Officer for a fresh determination of the total taxable income, with a direction for the assessee to cooperate with the proceedings.

The Tribunal held that a revision under Section 263 cannot be invoked against an assessment order that has already been annulled or set aside. The PCIT's revisionary order was deemed null and void due to lack of jurisdiction.

The tribunal held that the discrepancy in cash in hand was due to a genuine clerical mistake where the bank balance was erroneously clubbed with cash. The assessee substantiated the bank balance with documentary evidence.

The ITAT, considering the importance of the additional evidence, decided that the ends of justice would be met by restoring the appeal to the Ld. AO for fresh examination and decision. Consequently, the appeal was allowed for statistical purposes.

The Tribunal upheld the Ld. CIT(A)'s order, dismissing the Revenue's appeals. It found that the assessee's system of accounting involved reducing interest on FDRs from 'work-in-progress', and this income was not shown on the revenue side of the Profit and Loss account, or had already been offered to tax. Therefore, the addition by the AO would lead to double taxation, and the CIT(A)'s decision was reasoned and correct.

The Tribunal noted that the issue of interest levy was pending before the AO for verification. Both parties agreed that the matter should be restored to the AO for verification and adjudication after providing the assessee with a reasonable opportunity of being heard.

The Tribunal permitted the assessee to withdraw the appeal with liberty to seek revival. This was granted because the assessee had opted for the Vivad se Vishwas scheme and the appeal was not pressed at that stage.

The Tribunal held that the interest on FDR was already reduced from the work-in-progress in the assessee's accounts and was not shown in the Profit and Loss account. Therefore, it was not liable to be taxed again. The Tribunal upheld the CIT(A)'s order.

The Tribunal found that the assessee had provided comprehensive details and evidence, including a Section 80G certificate, to the AO during the original Section 143(3) assessment in response to a Section 142(1) notice. The discrepancy in the tax audit report was a mistake rectified by the auditor. Since the AO had duly examined and accepted the claim, the original assessment order was neither erroneous nor prejudicial to the revenue's interest, rendering the PCIT's revisionary jurisdiction under Section 263 invalid.

The Tribunal held that the Assessing Officer (AO) did not record any satisfaction, which is a prerequisite for a valid order u/s 148A(d) of the Act for reopening assessment. Therefore, the reopening of assessment was invalid.

The assessee requested to withdraw the appeal before the Kolkata bench due to a technical issue and because the jurisdiction for the case lies with the Amritsar bench. The tribunal dismissed the appeal as withdrawn.

The Tribunal held that the assessment order was bad in law because the notice under section 143(2) was issued by ITO, Ward 44(4), Kolkata, while the assessment itself was framed by ITO Ward 3(3), Kolkata. The Tribunal relied on judicial precedents, including decisions from the Hon'ble Kolkata High Court, which stipulate that the officer who frames the assessment must be the one who issues the jurisdictional notice under section 143(2).

The tribunal noted that the assessee sought to withdraw the appeal, and the revenue did not object. Consequently, the tribunal dismissed the appeal as withdrawn.

The Tribunal agreed that the issue needed to be examined in light of the additional evidences. Accordingly, the Tribunal restored the issue to the file of the AO with a direction to decide the issue afresh after providing a reasonable opportunity of hearing to the assessee.

The ITAT upheld the CIT(A)'s deletion of the addition u/s 68 for unsecured loans, noting that repayment had been made and evidence of genuineness was provided. Consequently, the deletion of interest disallowance u/s 69C was also affirmed. For bogus purchases, the ITAT confirmed the 5% disallowance as a profit element, acknowledging that material was consumed and sales were made. The ITAT found no infirmity in the CIT(A)'s order and dismissed the Revenue's appeal.

The Tribunal held that the delay in uploading the audit report due to a bona fide technical issue should not deny exemption under Sections 11 and 12, especially when the report was signed and available before the due date. The intimation issued was quashed.

The Tribunal found that the CIT(A)'s order was ex parte and dismissed the appeal without considering the assessee's valid adjournment request. In the interest of natural justice and fair play, the Tribunal restored the appeal to the file of the CIT(A) for a fresh decision after providing the assessee a reasonable opportunity of being heard.

The Tribunal upheld the decision of the Ld. CIT(A), finding that the interest on FDRs was already accounted for by being reduced from the work-in-progress and, therefore, had been offered to tax, thus avoiding double taxation. The Tribunal relied on a prior jurisdictional ITAT judgment for AY 2017-18 which had decided a similar issue in the assessee's favour.

The Tribunal condoned the delay in filing the appeal, citing principles of natural justice and the assessee's severe illness. The matter was remitted back to the CIT(Appeals) to decide the appeal on merits.

The Tribunal held that the penalty order was passed beyond the statutory time limit prescribed by Section 275(1)(c) of the Act. The communication of the penalty order to the assessee with a DIN generated much later than the order's date indicated that the order was not passed within the stipulated timeframe and was therefore time-barred.

The Tribunal held that the assessee had received Rs. 7.05 crores, not Rs. 15.05 crores, as an unsecured loan from M/s Juhi Advisory Pvt. Ltd., and this amount was repaid partly in the financial year 2015-2016 and partly in 2016-2017. The loan was advanced from FDR maturities, and the CIT(A)'s decision was upheld following the Gujarat High Court's ruling in Ambe Tradecorp.

The Tribunal upheld the decision of the Ld. CIT(A), dismissing the Revenue's appeal. It found that while the penalty order was dated 31.03.2022, its communication to the assessee occurred on 25.04.2022, with the Document Identification Number (DIN) for the penalty also generated on the later date. This delay in communication and DIN generation rendered the penalty order barred by limitation under Section 275(1)(c) of the Act.

The Tribunal noted a significant delay in filing the appeal, which was condoned. The Tribunal found that the CIT(A) passed an ex-parte order without examining the merits of the case and, in the interest of justice, remanded the matter back to the CIT(A) for fresh adjudication after giving the assessee a reasonable opportunity of being heard.

The Tribunal held that the assessee is a company in which the public is substantially interested and therefore, the second proviso to section 68 of the Act is not applicable. The assessee had furnished all necessary documents and evidences to prove the identity, genuineness, and creditworthiness of the investors, and the share premium was justified. The non-compliance of summons u/s 131 by some parties was not a ground for addition.

The Tribunal held that the assessee discharged its burden by providing sufficient evidence for the ₹17 lac transaction, and the authorities below acted on presumption without verifying the evidence, thus deleting the addition. Regarding the salary disallowance, the Tribunal noted that the authorities acted on presumption of excessive salary, asserting that it is the assessee's prerogative to run its business, and deleted this addition as well.

The Tribunal held that since a part of the loan from the same lender was accepted as genuine in the preceding year, and there was no fresh adverse material, the remaining loan and interest could not be disallowed. The reassessment was initiated based on a total amount of ₹66,14,712, but the addition was only ₹25,00,000.

The Tribunal held that the assessee's claim of agricultural income and past savings as the source of the cash deposits was not rebutted by the Department. Considering the assessee's age, remoteness of location, and the nature of transactions, the addition was deemed unsustainable.

The Tribunal held that Dividend Distribution Tax (DDT) is a tax on the income of the company, not on the shareholder, thus avoiding double taxation. It was also held that Section 115-O is outside the scope of DTAA, and DTAA provisions do not apply when DDT is paid.

The tribunal found that the Rs. 20,00,000 was transferred via RTGS from the partner's HSBC account and was duly shown as capital and liability in the firm's balance sheet, supported by the Partnership Deed and P&L Account. The tribunal concluded that it was a genuine capital introduction by the NRI partner and should not be treated as undisclosed income in the hands of the firm.

The Tribunal, in the interest of justice, decided to provide the assessee with another opportunity to present their case and produce necessary details. Consequently, the case file was restored to the Ld. CIT(A) for re-adjudication, with directions to provide adequate opportunity to the assessee.

The Tribunal held that the reason provided for the 388-day delay in filing the appeal, which was the death of the Chartered Accountant, was not cogent as the assessee pursued the matter before the CIT(Appeals) after the demise. Therefore, the delay could not be condoned.

The Tribunal found that the Ld. CIT(A) had dismissed the appeal without considering its merits. Therefore, it restored the issue to the Ld. CIT(A) for fresh adjudication, instructing that the assessee be given a reasonable opportunity to furnish details and evidence. The appeal was allowed for statistical purposes.

The Tribunal dismissed the appeals, upholding the CIT(A)'s decision. It relied on the Special Bench Mumbai Tribunal's ruling that DDT under Section 115-O is a tax on the company's income and not on the shareholder, hence the DTAA provisions are not applicable to it.

The Tribunal held that the Assessing Officer failed to record satisfaction regarding the incorrectness of the assessee's own computation, which is a mandatory prerequisite for invoking Section 14A read with Rule 8D. Consequently, the higher disallowance made by the AO was deleted, while the suo moto disallowance offered by the assessee was retained.

The Tribunal held that the penalty notice issued u/s 274 read with 271(1)(c) was invalid because the Ld. AO failed to strike off the irrelevant limb or indicate the relevant limb, rendering it mechanical and without application of mind. Relying on a High Court decision, the Tribunal quashed the penalty order.

The Tribunal perused the withdrawal application and found it appropriate to allow the assessee to withdraw the appeal. Consequently, the appeal was dismissed as withdrawn.

The Tribunal found that the penalty notice issued under Section 274 read with Section 271(1)(c) was issued in a mechanical manner, without application of mind, as the Ld. AO did not strike off the irrelevant limb or specify the charge. Citing precedent, the Tribunal held such a notice to be invalid, rendering the subsequent penalty order unsustainable.