ITAT Kolkata Judgments — December 2025

The Tribunal found that the discrepancy in sales was due to an auditor's mistake, admitted by the assessee. It held that only the profit element embedded in the undisclosed sales, calculated at the disclosed profit rate of 7.03% (Rs. 3,83,865/-), should be taxed, not the entire sales amount. Accordingly, the addition made by the AO for the full sales amount was deleted.

The Tribunal held that the orders of the lower authorities could not be sustained because the assessee denied the transactions, and the broker confirmed the PAN details were uploaded incorrectly. Therefore, the addition made by the Assessing Officer was deleted.

The Tribunal held that the appeal is barred by limitation, following the decision of the Hon'ble Apex Court in the case of Rajeev Bansal. A co-ordinate bench had also decided a similar issue in favour of the assessee.

The Tribunal observed that the property was booked in 2016 and registered in 2019. Considering the father's advanced age, his retirement history, and the fact that his accumulated salary and pension income was not taxable, the Tribunal accepted the explanation provided by the assessee. Consequently, the Tribunal ruled that the funds for the property purchase and stamp duty were from the father's personal savings.

The Tribunal held that the assessee had not incurred any expenses in relation to earning the exempt income. The CIT(A)'s finding that no disallowance was required was upheld, and the Revenue's appeal was dismissed.

The Tribunal found that the Pr.CIT's invocation of Section 263 based solely on the AO's proposal was not sustainable, citing established jurisprudence requiring the Pr.CIT to apply independent mind and fulfill the twin conditions for revisional jurisdiction. It noted that the Faceless Assessment Unit had accepted the returned income after document verification, and the DVO's valuation was based on an 'illegal referral' and not considered in the original assessment.

The Tribunal upheld the order of the CIT(Appeals) regarding the deletion of the addition of Rs. 7,50,93,750/-. The Tribunal noted that the AO made the addition based on statements of entry operators. However, during the remand proceedings, the assessee filed all necessary details and evidences before the AO, including names, addresses, confirmations of source of funds, bank statements, and audited bank accounts. The Tribunal found that the investors had sufficient funds, and the AO could not point out any deficiency in the documents. The CIT(Appeals) had also recorded a finding of fact that the AO could not bring out any positive material to doubt the genuineness of the transactions. Therefore, the Tribunal found the CIT(Appeals)'s order to be reasoned and speaking, requiring no interference. Regarding the deletion of the addition of Rs. 40,65,679/- as loss on sale of investments, the Tribunal also upheld the CIT(Appeals)'s order. The Tribunal noted that the AO's adverse inference was based on the scrip appearing in the department's penny stock list and the belief that transactions were pre-arranged. However, the CIT(Appeals) observed that no incriminating documents were found during search proceedings. The assessee provided contract notes, proof of transactions on the stock market at prevailing prices through banking channels, and suffered STT, brokerage, etc. The Tribunal relied on the decisions of the Hon'ble Jurisdictional High Court in Samrat Finvestors Private Limited, CIT v. Shreyashi Ganguli, and CIT v. Rungta Properties Private Limited, which held that transactions at prevailing prices, supported by documentation and without incriminating evidence, cannot be treated as non-genuine. The Tribunal found that the AO's conclusion was based on suspicion and the Investigation Wing's report, without specific findings linking the assessee's transactions to any scheme. Therefore, the Tribunal dismissed the revenue's appeal.

The Tribunal condoned the delay in filing the appeal before the CIT(A). It held that if the funds were actually applied by the trust, the deduction should be allowed despite the error in preparing the return. The appeals were restored to the file of JAO for a decision on merits.

The Tribunal held that the late filing of Form 67 is a technical issue and not fatal to the claim of foreign tax credit. The assessee is entitled to the foreign tax credit as per Section 90 of the Act.

The Tribunal condoned the delay in filing the appeal before the CIT(A). It held that if the funds were actually applied by the trust, the deduction should be allowed despite the error in preparing the return. The appeals were restored to the file of JAO for a decision on merits.

The Tribunal held that the additions made to the assessees' income on a protective basis were not justified. Since Mr. Bark Biswas admitted ownership of the cash deposits and these were accounted for in his business, the protective addition in the hands of the employees was deleted.

The Tribunal acknowledged the assessee's mistake as bona fide. It directed the CIT(Exemption) to condone the delay in filing Form 10AB for A.Y. 2025-26 and to consider the application for Section 80G registration as timely, subsequently passing an order on the merits of the case.

The Tribunal held that the Assessing Officer/CPC acted beyond jurisdiction by making the adjustment u/s 143(1)(a) without any arithmetical error in the return and without issuing a notice u/s 143(2). Finding that the assessee had correctly computed its total income, the Tribunal concluded that the adjustment was not sustainable in law. Consequently, the order passed u/s 143(1)(a)(ii) was quashed, and the addition was deleted.

Considering the assessee's submission and their participation in the Vivad Se Vishwas Scheme 2024 with a received Form 4 acknowledgement, the Income Tax Appellate Tribunal dismissed all four appeals as withdrawn.

Considering the assessee's submission and their participation in the Vivad Se Vishwas Scheme 2024 with a received Form 4 acknowledgement, the Income Tax Appellate Tribunal dismissed all four appeals as withdrawn.

Considering the assessee's submission and their participation in the Vivad Se Vishwas Scheme 2024 with a received Form 4 acknowledgement, the Income Tax Appellate Tribunal dismissed all four appeals as withdrawn.

The Tribunal held that the reopening of the assessment was invalid because the Assessing Officer failed to record the assessee's failure to disclose all material information in the reasons for reopening. The proviso to Section 147 requires such disclosure failure for reopening beyond four years.

The Tribunal quashed the assessment, finding the Section 148 notice invalid due to contradictory approval authorities under Section 151, indicating non-application of mind by the AO. Furthermore, the assessment framed by the National Faceless Assessment Centre (NFAC) was without jurisdiction as the provisions of Section 151A, granting NFAC jurisdiction, were not effective at the time the notices were issued.

The Tribunal held that the additions made by the AO were beyond the scope of limited scrutiny and thus without jurisdiction. Consequently, the Tribunal directed the AO to delete the additions.

The Tribunal found merit in the assessee's contention and restored the appeal to the file of the Ld. CIT(A) for fresh adjudication, directing the CIT(A) to consider the assessee's submission.

The Tribunal condoned the delay in filing the appeal, accepting it as bonafide and genuine. It restored the matter to the Assessing Officer, directing a fresh decision after providing the assessee with the statements of the Directors of the allottee companies and affording a reasonable opportunity of being heard.

The Tribunal held that the assessment framed by the National Faceless Assessment Centre was invalid and without jurisdiction. This was because the provisions of Section 151A, enabling faceless assessment for income escaping assessment, were notified on 29.03.2022, subsequent to the case being transferred to the faceless scheme on 11.11.2021. Consequently, the entire proceedings were declared null and void.

Considering the assessee's submission and their participation in the Vivad Se Vishwas Scheme 2024 with a received Form 4 acknowledgement, the Income Tax Appellate Tribunal dismissed all four appeals as withdrawn.

The Tribunal held that the delay in filing Form 10B is a regulatory mechanism and not fatal to the claim of exemption under Section 11, especially when the audit report was obtained within the due date and available before the processing of the return. The Tribunal followed a coordinate bench decision and directed the AO to allow the exemption.

The Tribunal found that the assessee did maintain books of account, which were duly audited under Section 44AB, despite observations that they were not updated at the time of survey. Relying on precedents, the Tribunal held that a penalty under Section 271A is not justified if other provisions like Sections 144/145 can address issues with unreliable accounts, and noted that similar penalties on the assessee in previous years were cancelled. Accordingly, the Tribunal set aside the CIT(A)'s order and directed the Ld. AO to delete the penalty.

The Tribunal held that the addition based on WhatsApp chats was not sustainable without corroborative material, following previous High Court and Tribunal decisions. Similarly, the additions for RTGS and cheque payments were found to be without basis, as the assessee denied the transactions and they were not reflected in the bank account.

The Tribunal ruled that the AO lacked jurisdiction to make additions beyond the specified scope of limited scrutiny without first converting the assessment into a complete scrutiny. Citing a precedent, the Tribunal set aside the CIT(A)'s order and directed the AO to delete the addition of Rs. 17,81,000/- for unexplained investment.

The Tribunal held that the assessment framed by the National Faceless Assessment Centre was invalid and without jurisdiction. This was because the provisions of Section 151A, enabling faceless assessment for income escaping assessment, were notified on 29.03.2022, subsequent to the case being transferred to the faceless scheme on 11.11.2021. Consequently, the entire proceedings were declared null and void.

The Tribunal, after examining the records, found that the assessee had provided sufficient evidence, including cash withdrawals over three years and previous balance sheets, to substantiate the availability of the cash. Consequently, the Tribunal concluded that the addition made by the AO and confirmed by the CIT(A) was incorrect and directed its deletion.

The Tribunal held that the notice under Section 148 was issued beyond the prescribed limitation period as it was served on April 1, 2021, and not on or before March 31, 2021. The Tribunal also noted that the statutory formalities under Section 148A of the Act, as amended by the Finance Act, 2021, were not complied with.

The Tribunal found that the notice issued under Section 148 of the Act was indeed never served on the assessee, as confirmed by the e-filing portal records. Consequently, the assessment framed by the Assessing Officer was held to be invalid and time-barred, and thus quashed.

The Tribunal held that the reopening of assessment was invalid. On the first issue, it found that the AO relied on the report from the DDIT (Investigation) Wing without recording his own satisfaction as to how income had escaped assessment. The reasons recorded were merely a reproduction of the DDIT's report, constituting 'borrowed satisfaction', which is not permissible as per the judgments of the Delhi High Court in Sarthak Securities Co. (P.) Ltd. and Meenakshi Overseas (P.) Ltd., and the Bombay High Court in Shodiman Investments (P.) Ltd. The Tribunal noted that the AO did not demonstrate a live link between tangible material and the formation of the belief that income had escaped assessment. On the second issue, the Tribunal found that the facts were similar to a previous decision where reopening was quashed for non-disposal of objections. Therefore, the reopening of assessment was quashed on both legal grounds. Consequently, the appeals of the Revenue became infructuous and were dismissed, while the appeals of the assessee were allowed.

The Tribunal held that the reopening of assessment was invalid as it was based on borrowed satisfaction from the DDIT (Investigation) and not on the AO's independent application of mind. Consequently, the assessment order was quashed.

The Tribunal held that the reopening of assessment was invalid as it was based on borrowed satisfaction from the DDIT (Investigation) and not on the AO's independent application of mind. Consequently, the assessment order was quashed.

The Tribunal condoned the delay in filing the appeals for both the assessee and the Revenue, finding the reasons to be bonafide and genuine. Regarding the addition under Section 69A, the Tribunal held that the impounded documents were not found from the assessee's premises, nor did they bear his name, signature, or handwriting. Consequently, these documents were considered 'dumb documents' and did not fall within the purview of Section 69A. The Tribunal also noted that the presumption under Section 292C of the Act could not be applied as the documents were not found from the assessee. Therefore, the addition made by the AO and sustained by the CIT(A) under Section 69A was set aside, and the AO was directed to delete the addition. On the issue of estimating profit on alleged undisclosed battery sales, the Tribunal, while acknowledging that the CIT(A) had rightly identified the receipts as unrecorded battery sales, modified the GP rate directed by the CIT(A) from 12.5% to 10%. However, since the primary addition under Section 69A was deleted, the grounds related to the GP rate became infructuous. The Tribunal dismissed the Revenue's appeals and partly allowed the assessee's appeals.

The Tribunal held that the addition made under Section 69A was not sustainable as the seized documents were not found with the assessee and did not establish ownership or source. The Tribunal also reduced the GP rate to 10% for the undisclosed battery sales.

The Tribunal held that the addition made under Section 69A was not sustainable as the seized documents were not found with the assessee and did not establish ownership or source. The Tribunal also reduced the GP rate to 10% for the undisclosed battery sales.

The Tribunal condoned the delay in filing the appeals for both the assessee and the Revenue, finding the reasons to be bonafide and genuine. Regarding the addition under Section 69A, the Tribunal held that the impounded documents were not found from the assessee's premises, nor did they bear his name, signature, or handwriting. Consequently, these documents were considered 'dumb documents' and did not fall within the purview of Section 69A. The Tribunal also noted that the presumption under Section 292C of the Act could not be applied as the documents were not found from the assessee. Therefore, the addition made by the AO and sustained by the CIT(A) under Section 69A was set aside, and the AO was directed to delete the addition. On the issue of estimating profit on alleged undisclosed battery sales, the Tribunal, while acknowledging that the CIT(A) had rightly identified the receipts as unrecorded battery sales, modified the GP rate directed by the CIT(A) from 12.5% to 10%. However, since the primary addition under Section 69A was deleted, the grounds related to the GP rate became infructuous. The Tribunal dismissed the Revenue's appeals and partly allowed the assessee's appeals.

The Tribunal held that the addition made under Section 69A was not sustainable as the seized documents were not found with the assessee and did not establish ownership or source. The Tribunal also reduced the GP rate to 10% for the undisclosed battery sales.

The Tribunal held that the addition made under Section 69A was not sustainable as the seized documents were not found with the assessee and did not establish ownership or source. The Tribunal also reduced the GP rate to 10% for the undisclosed battery sales.

The Tribunal held that the addition made by the AO under Section 69A of the Act was patently wrong and could not be sustained. The documents seized were not from the assessee's premises, did not bear the assessee's name or signature, and did not specify whether the amounts were loans or deposits. These were considered 'dumb documents' and did not fall within the purview of Section 69A, which applies to money, bullion, etc., where the assessee is the owner and fails to offer a satisfactory explanation. The Tribunal also noted that the presumption under Section 292C of the Act could not be taken against the assessee as the documents were not found from their possession. The Tribunal found the CIT(A)'s theory of addition on the peak balance to be unreasonable and unplausible. Consequently, the Tribunal set aside the order of the CIT(A) and directed the AO to delete the addition as sustained by the CIT(A). For the subsequent grounds concerning battery sales, the Tribunal upheld the CIT(A)'s finding that the receipts were unrecorded battery sales but modified the GP rate to 10%, dismissing the grounds as infructuous. The Revenue's appeals were dismissed as they raised similar issues already decided.

The Tribunal held that the approval for reopening the assessment by the Principal Commissioner of Income Tax (PCIT) was mechanical and lacked application of mind, as evidenced by a mere 'yes I am satisfied' endorsement. Consequently, the reopening was deemed invalid.

The Tribunal held that the reopening of assessment was invalid as it was based on borrowed satisfaction from the DDIT (Investigation) and not on the AO's independent application of mind. Consequently, the assessment order was quashed.

The Tribunal held that the reopening of assessment was bad in law due to the incorrect authority granting approval under Section 151. Furthermore, for AY 2016-17, the notice period was insufficient, rendering the proceedings invalid.

The Tribunal held that the addition made under Section 69A was not sustainable as the seized documents were not found with the assessee and did not establish ownership or source. The Tribunal also reduced the GP rate to 10% for the undisclosed battery sales.

The Tribunal upheld the order of the CIT(A), finding that the CIT(A) had correctly deleted the additions. The Tribunal noted that the CIT(A) had considered the genuineness of loans/advances and the accounting of payments, and that no incriminating documents were found during surveys.

The Tribunal held that the payment made to M/s Bhagwati Mechanical Services could not be treated as bogus. The assessee, a contractor, had engaged M/s Bhagwati Mechanical Services as a sub-contractor and made payments after deducting TDS under Section 194C, which were deposited. The assessee had provided details of payments to 24 sub-contractors, including M/s Bhagwati Mechanical Services, for the assessment year in question and other years, demonstrating a pattern of regular business dealings. The assessee also submitted TDS returns and copies of accounts of the sub-contractor. The Tribunal found that the assessee had furnished all necessary details to the authorities below. Therefore, the mere fact that the recipient had not filed its return of income was not sufficient grounds to deem the expenditure as bogus. The Tribunal set aside the order of the CIT(A) and directed the AO to delete the addition. The ratio decidendi is that an assessee's compliance with TDS provisions and provision of verifiable details regarding sub-contractors should not be negated solely due to the recipient's non-filing of income tax returns, especially when such payments are part of a consistent business practice across multiple assessment years.

The Tribunal upheld the order of the CIT(A) and dismissed the revenue's appeal. The Tribunal found that the Assessing Officer relied on the statement of Sri Girdhari Lal Goenka, which was later retracted and thus had no evidentiary value. The assessee had provided relevant documentary evidence, including audited accounts, bank statements, Income Tax Returns, loan confirmation statements, and source of funds, in response to summons under section 133(6) and notices under section 131 of the Act. The Tribunal noted that all loan transactions were conducted through banking channels and that all lender companies possessed sufficient net worth to advance the loans. The Tribunal also observed that the assessee had submitted documents such as Lender's Letter, Loan Confirmation, Bank Statement of the Lender, Income Tax Acknowledgment of the Lender, Audited Financials of the Lender, and NBFC Certificate issued by the RBI. The Tribunal concluded that there was no infirmity in the CIT(A)'s order and deleted the addition of Rs. 6,28,00,000 made under section 68 of the Act. The Tribunal's reasoning was based on the sufficiency of documentary evidence provided by the assessee to establish the identity, creditworthiness, and genuineness of the loan transactions, and the lack of corroborative evidence for the revenue's claims, particularly the retracted statement. The ratio decidendi is that when an assessee provides substantial documentary evidence establishing the identity, creditworthiness, and genuineness of loan transactions, and the transactions are routed through banking channels, additions under section 68 based on unsubstantiated allegations or retracted statements are not sustainable.

The Tribunal held that the reopening of assessment was bad in law due to the incorrect authority granting approval under Section 151. Furthermore, for AY 2016-17, the notice period was insufficient, rendering the proceedings invalid.

The Tribunal held that the AO exceeded his jurisdiction by making an addition on an issue not covered by the limited scrutiny without converting it to a complete scrutiny. The assessment order was quashed as bad in law and without jurisdiction.