ITAT Kolkata Judgments — September 2026

The Tribunal held that advertisement and sales promotion expenses are recurring in nature and are necessary for sustaining business in a competitive market. It noted that similar expenses were allowed in previous years by the revenue.

The Tribunal held that the assessment proceedings were without jurisdiction because Section 151A of the Act, which governs faceless assessment, became effective from March 29, 2022, while the assessment order was dated March 25, 2022. Therefore, the assessment order could not be sustained.

The Tribunal condoned the delay, finding it to be for bonafide reasons. The Tribunal held that the ex-parte decision by the lower authorities violated Section 250(6) and restored the appeal to the AO for a decision on merits.

The Tribunal condoned the delay in filing the appeal before the ITAT, citing the liberal approach to condoning delays with sufficient cause. The Tribunal also found sufficient cause for the delay in filing the first appeal before the CIT(A) and set aside the CIT(A)'s order.

The Tribunal condoned the delay in filing the appeal, noting that the CIT(A) order was ex-parte and did not decide all grounds on merits. The case was restored to the Assessing Officer for de-novo assessment.

The tribunal held that the reopening of assessment was based on borrowed satisfaction and incorrect facts, as the assessee had not claimed exempt income as stated by the AO. The AO also incorrectly noted that no assessment was framed under section 143(3) when it was.

The Tribunal held that the penalty notice was vague and non-speaking, rendering the penalty proceedings and the consequent order null and void. The AO's failure to specify the limb of Section 271AAB deprived the assessee of a proper opportunity to respond.

The Tribunal held that the University of Calcutta is exempt from the requirement of auditing its books of accounts under Section 44AB as its income is exempt under Section 10(23C)(iiiab). Consequently, no penalty can be levied under Section 271B.

The Tribunal held that for AY 2010-11, since the assessment year was unabated at the time of search, additions under Section 153A could only be made on the basis of seized incriminating material. As neither the AO nor the CIT(A) referred to any seized material, and the AO's basis was merely perusal of bank and audited accounts, the addition was not supported by any seized documents. Therefore, the assessment was considered bad in law and without jurisdiction. The order of the CIT(A) was set aside, directing the AO to delete the addition. For AY 2014-15, the issue was similar to AY 2010-11, and the appeal was allowed accordingly. For AY 2015-16, the Tribunal found that the assessee had furnished all documentary evidence regarding share subscribers, including their ITRs and bank statements. While summons under Section 131 were not complied with by two parties, the Tribunal held that if the assessee provided all evidence and the AO did not conduct further inquiry or point out defects, additions cannot be made solely on the ground of non-compliance with summons. Following the cited precedents, the Tribunal set aside the CIT(A)'s order and directed the AO to delete the addition.

The Tribunal held that the income arising from the rental of shops in Pink Square Mall, Jaipur, should be treated as business income and not income from house property. The Tribunal analyzed the facts in light of the Supreme Court's decision in Karnani Properties Ltd. vs. CIT, which outlines three conditions for rental income to be treated as business income: (1) services rendered should be the result of continuous, organized activities; (2) services should be with a set purpose; and (3) services should be rendered with a view to earn profits. The Tribunal found that the assessee's MoA clearly stated its main object was to establish malls and lease them out, providing a host of services and facilities. The Tribunal noted that the department had accepted rental income as business income in earlier assessment years. The Tribunal also addressed a separate issue concerning the computation of long-term capital gains, accepting the assessee's recomputed indexed cost of acquisition and directing the deletion of the consequent addition of Rs. 10,89,668/-. The appeals were allowed.

The Tribunal held that the reopening of assessment was invalid because the approval for issuing the notice under Section 148 was obtained from the PCIT instead of the Principal Chief Commissioner of Income Tax (PCCIT), as required for reopening beyond three years. Consequently, the assessment and the penalty were quashed.

The Tribunal held that the University of Calcutta is exempt from the requirement of auditing its books of accounts under Section 44AB as its income is exempt under Section 10(23C)(iiiab). Consequently, no penalty can be levied under Section 271B.

The Tribunal held that the penalty notice was vague and non-speaking, rendering the penalty proceedings and the consequent order null and void. The AO's failure to specify the limb of Section 271AAB deprived the assessee of a proper opportunity to respond.

The Tribunal held that the statement made during the survey has no evidentiary value without corroboration and set aside the addition. It also held that the delay in uploading the tax audit report was a technical breach and a reasonable cause, thus deleting the penalty.

The Tribunal followed a co-ordinate bench's decision involving the same script, which accepted the transactions as genuine. Therefore, the addition made by the Assessing Officer was deleted.

The Tribunal upheld the CIT(A)'s decision, finding no infirmity. The amount represented accumulated losses and was already accounted for in the appropriation section, thus its subsequent recovery could not be treated as fresh income, avoiding double taxation.

The Tribunal held that the addition was made due to a minor discrepancy in the name of the transporter. The assessee had provided confirmation and ledger entries showing the refund of an advance given in an earlier year.

The Tribunal held that the obsolescence of stock is a normal business phenomenon and the assessee had provided details of the written-off stock. The Tribunal also noted that the assessee's return for the current year was filed within the due date, and the auditor had certified the accounts.

The Tribunal held that since no incriminating material was found regarding transportation charges during the search, the AO could not have examined this issue under Explanation 2 to Section 148. Therefore, the PCIT wrongly exercised jurisdiction under Section 263.

The Tribunal held that the cash was received by the assessee on behalf of the company and was duly accounted for in the company's books, which were also confirmed by the company. Therefore, Section 69A was wrongly invoked.

The Tribunal held that the statement made during the survey has no evidentiary value without corroboration and set aside the addition. It also held that the delay in uploading the tax audit report was a technical breach and a reasonable cause, thus deleting the penalty.

The Tribunal held that the penalty notice was vague and non-speaking, rendering the penalty proceedings and the consequent order null and void. The AO's failure to specify the limb of Section 271AAB deprived the assessee of a proper opportunity to respond.

The Tribunal found that the ex-parte order by the CIT(A) violated Section 250(6) of the Act. Consequently, the appeals were restored to the JAO for a decision on merits after providing a reasonable opportunity of hearing.

The Tribunal found that the ex-parte order by the CIT(A) violated Section 250(6) of the Act. Consequently, the appeals were restored to the JAO for a decision on merits after providing a reasonable opportunity of hearing.

The Tribunal held that for AY 2010-11, since the assessment year was unabated at the time of search, additions under Section 153A could only be made on the basis of seized incriminating material. As neither the AO nor the CIT(A) referred to any seized material, and the AO's basis was merely perusal of bank and audited accounts, the addition was not supported by any seized documents. Therefore, the assessment was considered bad in law and without jurisdiction. The order of the CIT(A) was set aside, directing the AO to delete the addition. For AY 2014-15, the issue was similar to AY 2010-11, and the appeal was allowed accordingly. For AY 2015-16, the Tribunal found that the assessee had furnished all documentary evidence regarding share subscribers, including their ITRs and bank statements. While summons under Section 131 were not complied with by two parties, the Tribunal held that if the assessee provided all evidence and the AO did not conduct further inquiry or point out defects, additions cannot be made solely on the ground of non-compliance with summons. Following the cited precedents, the Tribunal set aside the CIT(A)'s order and directed the AO to delete the addition.

The Tribunal held that for AY 2010-11, since the assessment year was unabated at the time of search, additions under Section 153A could only be made on the basis of seized incriminating material. As neither the AO nor the CIT(A) referred to any seized material, and the AO's basis was merely perusal of bank and audited accounts, the addition was not supported by any seized documents. Therefore, the assessment was considered bad in law and without jurisdiction. The order of the CIT(A) was set aside, directing the AO to delete the addition. For AY 2014-15, the issue was similar to AY 2010-11, and the appeal was allowed accordingly. For AY 2015-16, the Tribunal found that the assessee had furnished all documentary evidence regarding share subscribers, including their ITRs and bank statements. While summons under Section 131 were not complied with by two parties, the Tribunal held that if the assessee provided all evidence and the AO did not conduct further inquiry or point out defects, additions cannot be made solely on the ground of non-compliance with summons. Following the cited precedents, the Tribunal set aside the CIT(A)'s order and directed the AO to delete the addition.

The Tribunal held that the addition was made due to a minor discrepancy in the name of the transporter. The assessee had provided confirmation and ledger entries showing the refund of an advance given in an earlier year.

The Tribunal held that the income arising from the rental of shops in Pink Square Mall, Jaipur, should be treated as business income and not income from house property. The Tribunal analyzed the facts in light of the Supreme Court's decision in Karnani Properties Ltd. vs. CIT, which outlines three conditions for rental income to be treated as business income: (1) services rendered should be the result of continuous, organized activities; (2) services should be with a set purpose; and (3) services should be rendered with a view to earn profits. The Tribunal found that the assessee's MoA clearly stated its main object was to establish malls and lease them out, providing a host of services and facilities. The Tribunal noted that the department had accepted rental income as business income in earlier assessment years. The Tribunal also addressed a separate issue concerning the computation of long-term capital gains, accepting the assessee's recomputed indexed cost of acquisition and directing the deletion of the consequent addition of Rs. 10,89,668/-. The appeals were allowed.

The Tribunal found that the school is owned and run by the Bongaon Education Welfare Trust, and the PAN was obtained for administrative purposes. The Tribunal noted that the same income was being taxed twice and directed the AO to re-verify the matter in light of previous orders.

The Tribunal condoned the delay in the assessee's appeal and set aside the orders of the lower authorities. The appeal was remitted back to the Assessing Officer for a fresh assessment after hearing the assessee and verifying the documents filed.

The Tribunal held that the assessee cannot be penalized for the employer's failure to deposit the deducted TDS. The assessee is entitled to claim credit for TDS deducted from their salary.

The Tribunal quashed the notice issued under Section 148, holding that cash withdrawal itself cannot be considered as income for the purpose of issuing such a notice. The reasons recorded for issuing the notice were found to be legally flawed.

The Tribunal condoned the delay in filing the appeal. Considering the ex parte nature of the lower authorities' orders and the assessee's claim of not receiving notices, the matter was restored to the Assessing Officer for fresh adjudication.

The Tribunal found that the appeal was filed within the specified time after the assessment order was served. Therefore, the CIT(A)'s dismissal on grounds of delay was set aside.

The Tribunal held that the management fees constituted business profits and were taxable in UAR due to a permanent establishment there. Following previous rulings and consistent practice, the income was exempt from tax in India as per the DTAA.

The Tribunal upheld the deletion of the addition by the CIT(A), finding that the assessee had provided sufficient evidence, including valuation reports and an affidavit, to establish that the jewellery belonged to his deceased family members and not to him. The AO's disallowance was deemed imprudent given the circumstances.

The Tribunal held that the addition was wrongly made as the difference arose from TDS being deducted on composite invoices (goods and services) and not solely on services. The assessee had duly accounted for all sales in its books.

The Tribunal held that the addition related to M/s. Barbarik Consultancy Private Limited was not sustainable as the assessee provided sufficient documentary evidence. Regarding M/s. Saraff Enterprises, the Tribunal found that the purchases were returned and had a nil effect on income, thus deleting the addition.

The Tribunal admitted additional evidence filed by the assessee, which was not considered by the lower authorities. It found that the case required fresh examination of documents to determine the TDS liability. Therefore, the Tribunal set aside the orders of both the lower authorities.

The Tribunal held that the reopening of assessment was a clear case of change of opinion by the AO, which is impermissible. The Tribunal quashed the reopening of assessment and the subsequent assessment order.

The Tribunal upheld the decision of the CIT(A) that the addition made under Section 69A was not tenable. This was because the transactions were recorded in the assessee's books of account and bank statements, and the conditions for invoking Section 69A were not met.

The Tribunal found that the assessee's reconciliation showed no actual difference in purchases, with the discrepancy arising from the net purchase accounting. However, due to procedural issues like ex-parte orders and the Commissioner (Appeals) not considering evidence, the matters were restored to the AO for fresh adjudication.

The Tribunal found that the additions were based on conjecture and surmises without corroborative evidence. The Tribunal held that only net profit can be added in cases of unrecorded sales and that a retracted statement has no evidentiary value.

The Tribunal held that the management fees constituted business profits and were taxable in UAR due to a permanent establishment there. Following previous rulings and consistent practice, the income was exempt from tax in India as per the DTAA.

The Tribunal found that the assessee's reconciliation showed no actual difference in purchases, with the discrepancy arising from the net purchase accounting. However, due to procedural issues like ex-parte orders and the Commissioner (Appeals) not considering evidence, the matters were restored to the AO for fresh adjudication.

Regarding Ground No. 1, the Tribunal noted that the facts of the assessee are identical to those considered in its own previous appeals for AYs 2017-18, 2018-19, 2020-21, and 2021-22, which were decided in favour of the assessee. The Tribunal also referred to the Supreme Court's decision in CIT v. Jindal Steel & Power Ltd. and the Calcutta High Court's decision in Pr. CIT v. Rungta Mines Ltd., which dealt with similar issues concerning the determination of the claim under Section 80-IA for captive power plants. The Tribunal found that the issue is squarely covered by these decisions. Therefore, the downward adjustment made by the TPO was deleted. Regarding Ground No. 3, the Tribunal, respectfully following the decisions in Hyundai Motors, India Cements, and Eris Life Sciences Ltd., held that the amount received under the MEIS is taxable as a revenue receipt due to the amended provisions of Section 2(24)(xviii). Thus, this ground raised by the assessee was dismissed. Ground No. 4 was not pressed by the assessee and was therefore dismissed. The appeal was partly allowed.

The Tribunal noted that Ground No. 1 was not pressed by the assessee and was therefore dismissed. Regarding Ground No. 2, the Tribunal observed that the facts in the present case were identical to those in the assessee's own case for AY 2020-21, which was decided in favour of the assessee by a coordinate bench. This decision, in turn, relied on previous pronouncements including those from the Calcutta High Court and the Supreme Court in the case of Jindal Steel & Power Ltd. The Tribunal found that the assessee's method of benchmarking the arm's length price (ALP) of power transferred from its captive power plant to its non-eligible units using the Average Annual Landed Cost (AALC) of power procured from the State Electricity Board (SEB) as an internal CUP was appropriate. The Tribunal reasoned that the SEB's rate for supplying electricity to industrial consumers should be considered the market value for computing deductions under Section 80-IA. Consequently, the Tribunal set aside the orders of the DRP, TPO, and AO, directing the deletion of the downward adjustment of Rs. 22,11,08,243/-. Ground No. 2 was allowed.

The Tribunal held that the notice issued under Section 148 of the Income Tax Act was beyond the period of limitation for AY 2018-19, as the approval for reassessment was obtained from the Principal Commissioner instead of the Principal Chief Commissioner. Consequently, the reassessment order was quashed.

The Tribunal held that the notice issued under Section 148 of the Income Tax Act was beyond the period of limitation for AY 2018-19, as the approval for reassessment was obtained from the Principal Commissioner instead of the Principal Chief Commissioner. Consequently, the reassessment order was quashed.

The Tribunal held that the approval for reopening the assessment under Section 148 was obtained from an inappropriate authority (JCIT under Section 151(2) instead of PCIT/CIT under Section 151(1)) as the reopening was beyond four years from the end of the assessment year. Consequently, the notice under Section 148 and the assessment order were quashed.