ITAT Mumbai Judgments — September 2025

The Tribunal held that the disallowance under Section 14A cannot exceed the exempt income earned by the assessee. The Ld. Commissioner had correctly restricted the disallowance based on the Hon'ble High Court's decision in the assessee's own case.

The Tribunal held that interest on borrowings for acquiring land for business purposes should be capitalized until the commencement of business, even if the asset is not yet put to use. The addition of interest income was confirmed as conceded by the assessee, but the administrative expenses capitalization was partially allowed.

The Tribunal held that while the AO might be barred from entertaining a claim not made in the return, the appellate authority can consider such claims. Relying on the Sun Engineering Works (P) Ltd. case, the Tribunal directed the AO to allow the deduction under section 54 and recompute capital gains.

The Tribunal held that the Commissioner's decision to restrict the disallowance based on the exempt income earned by the assessee, and considering the High Court's ruling in the assessee's own case, was correct and did not require interference.

The Tribunal condoned the delay of 171 days subject to a payment of Rs. 11,000/-. Considering the ex-parte nature of the impugned order and the circumstances, the Tribunal set aside the order and remanded the case back to the Commissioner for a fresh decision, with an opportunity for the assessee to be heard.

The Tribunal held that the delay in filing Form 67 is not fatal to the claim for foreign tax credit, as Rule 128(9) is directory and not mandatory, and does not prescribe disallowance. The assessment was made under Section 143(1) and not through a regular assessment, and Form 67 was filed before the assessment proceedings concluded.

The Tribunal held that the CIT(E)'s rejection was not justified as the mention of applying funds outside India in the objects clause does not automatically mean a violation of the Act, nor does it preclude the grant of registration. The Tribunal also found merit in the assessee's argument regarding evidence of activities and admitted additional evidence.

The Tribunal noted that the time limit for realization of export proceeds is not a specified date for calculating the Section 10AA deduction. The issue was remitted to the AO for verification of details, similar to a previous order.

The Tribunal partly allowed the appeal. It deleted the addition related to the opening cash balance of ₹14,56,355/-, accepting it as a consistently reported figure in previous years. However, the remaining amount of ₹28,15,600/-, which the assessee attempted to re-characterize as undisclosed business receipts, was held to be liable for taxation as undisclosed income.

The Tribunal condoned the delay of 171 days in filing the appeal, subject to a deposit of Rs. 11,000/-. Considering that the impugned order was ex-parte and for substantial justice, the Tribunal set aside the impugned order and remanded the case to the Ld. Commissioner for a fresh decision after providing a reasonable opportunity of being heard to the Assessee.

The Tribunal held that the CIT(A) is required to decide the appeal on merits and cannot dismiss it for non-prosecution, as per the judgment of the Hon'ble High Court.

The Tribunal acknowledged the assessee's health issues preventing representation. Considering principles of natural justice, the Tribunal decided to remit the issue back to the AO for fresh consideration, directing the assessee to file evidence and the AO to verify it.

The Tribunal found that the rejection was due to a technical mistake in citing the sub-clause, despite the Commissioner's knowledge of the correct provision. The case was remanded back to the Commissioner with directions to treat the application as valid under Section 12A(1)(ac)(iii) and decide afresh after providing a hearing.

The Tribunal held that the capital gains arising from the alienation of shares of Flipkart Singapore by eBay Singapore were not taxable in India. The Tribunal ruled that Article 13(5) of the India-Singapore DTAA, which allocates taxing rights to the State of residence, prevailed over domestic law deeming provisions. The transaction did not fall under other applicable clauses of Article 13.

The Tribunal found that the grounds of appeal and the impugned order in the current case were identical to those in the previously decided ITA No. 2193/Mum/2025. Since an order had already been passed by the Tribunal in the earlier appeal, the present appeal was deemed infructuous and dismissed.

The Tribunal held that Section 43CB is applicable to construction contractors, not real estate developers. It also found that the assessee consistently followed the project completion method, which was accepted by the Revenue in preceding years. Regarding interest income, it was held that there was a direct nexus between the fixed deposit and the loan taken, allowing it to be set off against finance costs. Additions for differences in sale rates of flats were dismissed due to lack of inquiry from purchasers and acceptance of business prerogative. Certain disallowances for expenses were restricted to 15%. The issue of interest on late payment of TDS was remitted to the AO. Disallowance of employee's contribution to ESIC was dismissed based on a Supreme Court decision. The outstanding brokerage issue was remitted to the AO for verification. The donation disallowance was dismissed as not pressed.

The Tribunal held that the assessee had discharged her onus by providing details and documents, including her husband's ITR, bank statements, loan sanction letters, and payment details, which demonstrated that the property purchase and payments were made by her husband from his own sources. The Commissioner had rightly deleted the addition.

The Tribunal held that denial of TDS credit solely because it does not appear in Form 26AS is incorrect. The primary evidence of deduction, coupled with Section 205 of the Income Tax Act and CBDT instructions, mandates allowing the credit.

The Tribunal held that the addition in the hands of the assessee was unjustified as the entire investment was made by her husband from his explained sources, and her Form 26AS showed nil investment. The inclusion of her name as a joint owner was for convenience.

The CIT(A) allowed the assessee's claim and deleted the addition, finding that the Assessing Officer failed to conduct independent enquiries or dislodge the documentary evidence provided by the assessee. The Tribunal upheld the CIT(A)'s decision, noting that the Revenue had accepted similar transactions and allowed Section 10(38) exemption for part of the same share purchase in the preceding assessment year. Consequently, the Revenue's appeal was dismissed.

The Tribunal held that the addition made by the AO under Section 68 was not justified as it was based on an unaudited balance sheet, and the audited balance sheet showed a much lower receivable amount from members. The disallowance under Section 40(a)(ia) was deleted as it was a mutual undertaking not carrying out business. The disallowance of expenses due to non-production of evidence was also deleted based on the principle of mutuality.

The Tribunal held that the Ld. Commissioner rejected the application based on a technical mistake of mentioning sub-clause (ii) instead of (iii) under Section 12A(1)(ac) of the Act. For substantial justice, the Tribunal decided to remand the case.

The Tribunal held that the reopening of assessment for AY 2013-14 was invalid as it was done after 4 years without new tangible material and without establishing a failure on the assessee's part to disclose material facts, constituting a change of opinion. For other assessment years, the grounds regarding reopening were also dismissed. The additions for bogus cash sales were deleted for multiple years as they were made without corroborating evidence and based on arbitrary extrapolation. Additions related to interest on unsecured loans were dismissed for AY 2014-15, 2015-16, while for AY 2017-18, 2018-19, and 2019-20, these grounds were also allowed based on findings for AY 2014-15.

The Tribunal held that the reopening of assessment for AY 2013-14 was invalid because it was done after more than four years without new tangible material and without establishing the assessee's failure to disclose material facts. For other assessment years concerning additions for unsecured loans and interest, the Tribunal found that the assessee failed to establish the identity, creditworthiness, and genuineness of the creditors. However, the ad hoc addition for alleged bogus cash sales was deleted due to lack of corroborating evidence and a reasonable nexus with seized material.

The Tribunal held that for disallowances under Section 40(a)(ia), the 30% disallowance is applicable only from 01.04.2015. For Section 14A, it was held that disallowance under Rule 8D(ii) is unwarranted if surplus funds exceed investments, and for Rule 8D(iii), only investments yielding exempt income are considered. Regarding interest-free loans, the Tribunal found that if sufficient interest-free funds are available, no disallowance is warranted for advances to associate concerns, especially if made in the ordinary course of business.

The Tribunal held that the reopening of assessment beyond 4 years was not justified as there was no new tangible material and the AO failed to establish a failure on the part of the assessee to disclose material facts. For the additions related to bogus cash sales, the Tribunal found that the estimation was made without corroborating evidence or a reasonable nexus with seized material.

The Tribunal held that the reopening of assessment for AY 2013-14 was invalid as it was done beyond the 4-year period without new tangible material and without establishing the assessee's failure to disclose material facts. The additions for bogus cash sales were also deleted due to lack of corroborating evidence and arbitrary estimation. However, for other assessment years, the reassessment was deemed valid, and the addition for interest on unsecured loans was upheld, while the ad-hoc addition for cash sales was deleted.

The Tribunal held that the reopening of assessment beyond four years was not justified as there was no new tangible material and the AO failed to establish the assessee's failure to disclose material facts. The additions for interest on unsecured loans and bogus cash sales were also examined. The addition for bogus cash sales was deleted due to lack of corroborating evidence and a mechanical extrapolation. The interest addition was also deleted as the assessee could not establish genuineness and creditworthiness.

The Tribunal held that the assessee deserves another opportunity to explain the reasons for delay with supporting evidence. Therefore, the appeals were set aside to the file of the CIT(A) for fresh adjudication after allowing an opportunity for condonation of delay.

The Tribunal held that the assessee acted as an entry provider, not a beneficiary, and was entitled to commission. The addition under Section 68 was inappropriate. The CIT(A)'s direction to estimate commission at a reasonable rate was upheld.

The Tribunal held that the disallowance under Section 40(a)(ia) to the extent of 30% was applicable from 01.04.2015 onwards, reversing the CIT(A)'s decision. For Section 14A, the Tribunal relied on High Court decisions stating that disallowance is unwarranted if surplus funds exceed investments and that computation for book profit adjustment under Section 115JB should not involve Section 14A. The Tribunal also held that interest disallowance on interest-free advances to associate concerns is not warranted if the assessee has sufficient interest-free funds and the advances are part of normal business operations.

The Tribunal allowed Ground 1 (disallowance under Section 40(a)(ia)) for AY 2013-14, following the jurisdictional High Court's decision that the proviso is prospective from AY 2015-16. For grounds relating to Section 14A disallowance and Section 115JB adjustment, the Tribunal dismissed the revenue's appeal, largely following earlier precedents and Special Bench decisions.

The Tribunal restored both the assessment and penalty orders to the jurisdictional AO for fresh adjudication on merits. This decision was made considering the assessee's illiteracy and the legal heir's explanation of lack of awareness leading to non-compliance during the various proceedings, ensuring due opportunity for the assessee.

The Tribunal held that disallowance under Section 14A and Rule 8D(ii) is not warranted if the assessee's surplus funds exceed investments. It also held that disallowance of interest on interest-free advances to associate concerns is not justified when the assessee has sufficient interest-free funds and such advances are made in the ordinary course of business.

The Tribunal, considering the assessee's illiteracy and lack of awareness, decided to restore the assessment and penalty orders to the jurisdictional AO for fresh adjudication. The assessee was directed to cooperate with the AO.

The Ld. Commissioner and the Tribunal, relying on various judicial precedents including the Bombay High Court, deleted the full addition under Section 68. They concluded that the assessee was a provider of accommodation entries, not the beneficiary of the entire amount, and directed the AO to estimate commission income at 1% of the total debit transactions.

The Tribunal found that the Ld.CIT(A) dismissed the appeals without providing a specific show cause notice or a clear opportunity for the assessee to present reasons and evidence for the delay. Therefore, the Tribunal set aside the orders and remanded the matters back.

The Tribunal held that the reopening of assessment for AY 2013-14 was not justified as it was beyond the period of 4 years and without any new tangible material, constituting a mere change of opinion. For other assessment years, the Tribunal found that the additions on account of bogus cash sales were not based on incriminating material and were arbitrary. Additions on account of interest on unsecured loans were upheld for certain years where scrutiny assessment was not done.

The Tribunal noted the AO failed to conduct independent verification to establish unaccounted cash with the assessee. It ruled that when the assessee denies a transaction, the onus shifts to the revenue to prove the use of unaccounted cash for trading. As the revenue provided no such evidence, the addition under Section 69 was deemed unsustainable.

The Tribunal held that the disallowance under Section 40(a)(ia) for AY 2013-14 is to be restricted to 30%, considering the proviso applicable from 01.04.2015. For disallowances under Section 14A, the Tribunal followed established judicial precedents, stating that disallowance is warranted only to the extent of income yielding exempt income and that a presumption of investment from interest-free funds arises when they are available.

The Tribunal partly allowed the appeal for AY 2013-14, affirming the CIT(A)'s deletion of disallowance under Section 14A and interest-free loans, but allowing revenue's appeal on Section 40(a)(ia) based on a High Court decision. For other assessment years, appeals were dismissed following consistency with the lead case.

The provided judgment text is incomplete and ends abruptly before the tribunal's decision on Ground No. 3 regarding the inclusion or exclusion of various receipts from core shipping activities under the tonnage tax scheme. Therefore, the tribunal's holding cannot be ascertained from the given text.

The Tribunal held that the AO failed to conduct adequate enquiry. The AO should have investigated the matter by recording statements from the assessee's sons and examining the source of cash sales of the company. The addition was deleted due to lack of proper enquiry.

The Tribunal held that the reassessment notice issued on 29/07/2022 was barred by limitation under Section 149 of the Act and was not protected under TOLA. Therefore, the notice was quashed, and the entire assessment proceedings were deemed bad in law.

The Tribunal held that the notice issued under Section 148 for Assessment Year 2015-16 on 27.04.2022 was barred by limitation as it was issued after the expiry of six years from the end of the assessment year. Therefore, the notice and subsequent reassessment proceedings were quashed.

The Tribunal held that the PCIT erred in invoking revisionary jurisdiction under Section 263. The Tribunal found that the assessee had adequately explained the disallowance of provision for doubtful debts, and the AO had accepted these explanations. Regarding the insurance claim, the Tribunal found that the assessee had correctly reduced it from the block of assets for depreciation purposes, in line with Section 32 read with Section 43(6)(c). Therefore, the PCIT's order was set aside, and the AO's order was sustained.

The Tribunal held that the reopening of assessment beyond four years was not justified as there was no new tangible material and the AO failed to establish non-disclosure of material facts by the assessee. Consequently, the reassessment proceedings were quashed. For subsequent assessment years, the grounds related to reopening were dismissed, while additions for bogus cash sales were deleted due to lack of corroborating evidence.

The Tribunal held that the PCIT's order under section 263 was not sustainable as the AO had conducted a proper inquiry and applied his mind to the issues raised. The revision was not permissible merely because the PCIT held a different opinion or considered the inquiry inadequate. The Tribunal found that the AO's order was neither erroneous nor prejudicial to the interests of the Revenue.