ITAT Mumbai Judgments — September 2025

The Tribunal held that substantial justice should be preferred over technicalities, especially when the delay is non-deliberate and caused by extraordinary circumstances. The Tribunal condoned the delay and restored the matter to the CIT(A) for deciding on merits.

The Tribunal held that the assessee is eligible for the 10% tolerance limit as per Section 56(2)(x)(b)(B) of the Income-tax Act, leading to the deletion of the addition made by the Assessing Officer. The disallowance of depreciation was remitted back to the Assessing Officer for further verification of possession. The disallowance of rent paid was also remitted back to the Assessing Officer for verification of documentary evidence.

The Tribunal held that the initial reassessment order under the unamended provisions became infructuous due to the Supreme Court's decision in Ashish Agarwal. Therefore, the AO was justified in continuing proceedings under the amended framework, culminating in the fresh reassessment order. The challenge to the assumption of jurisdiction under Section 263 was dismissed.

The Tribunal found that the CIT(A) had passed a well-reasoned order by directing a fresh assessment after giving the assessee an adequate opportunity. Therefore, the Tribunal dismissed the assessee's appeal.

The Tribunal held that the income from royalty and fees for technical services should be taxed on a receipt basis, not accrual basis, following established precedents. It also found that an ad-hoc adjustment by the TPO without proper analysis was not justified, and the assessee's transfer pricing analysis should be accepted.

The Tribunal held that the assessee, by providing credit facilities exclusively to its members and not accepting public deposits or offering banking instruments, does not meet the definition of a 'co-operative bank' under Section 80P(4) read with the Banking Regulation Act, 1949. Therefore, the assessee is eligible for deduction under Section 80P(2)(a)(i).

The Tribunal noted that the assessee did not appear for the hearing and that a similar appeal with identical grounds was already pending. Considering the present appeal to be a duplicate, it was rendered infructuous.

The Tribunal noted that as per the latest CBDT Circular and considering the low tax effect, the appeals were liable to be dismissed as withdrawn. Liberty was granted to the Revenue to seek recalling of the order under certain conditions.

The Tribunal acknowledged the delay and directed the Assessing Officer to re-quantify the deemed dividend based on the accumulated profits of the company at the peak of the loan advanced to the assessee.

The Tribunal noted a discrepancy in the order date versus the hearing date. While dismissing grounds 5, 6, & 7 as not pressed, the Tribunal restored the issue of Rs. 70,00,000/- share application money to the AO for verification of affidavits filed by investors.

The Tribunal held that the assessee is eligible for the 10% tolerance limit as per Section 56(2)(x)(b)(B) of the Income-tax Act, leading to the deletion of the addition made by the Assessing Officer. The disallowance of depreciation was remitted back to the Assessing Officer for further verification of possession. The disallowance of rent paid was also remitted back to the Assessing Officer for verification of documentary evidence.

The Tribunal upheld the CIT(A)'s order, which had confirmed the AO's addition. The CIT(A) found that the valuation by the valuation officer was significantly higher (141% of stamp value) than the declared purchase consideration (66% of market value), distinguishing it from cases where the 10% tolerance might apply. The Tribunal found no new facts to deviate from the CIT(A)'s lawful findings.

The Tribunal held that the CIT(A) erred in dismissing the appeals for non-prosecution without granting adequate opportunity, especially considering the Assessee's merger and subsequent lack of records. The matter was restored to the CIT(A) for fresh adjudication on merits.

The Tribunal restored the matter to the CIT(A) for fresh adjudication, allowing the assessee an opportunity to produce evidence explaining the source of cash deposits. The assessee was also directed to produce Jitendra K. Palan for identification of deposits pertaining to the assessee.

The Tribunal held that the CIT(A) erred in dismissing the appeals for non-prosecution without granting adequate opportunity, especially considering the Assessee's merger and subsequent lack of records. The matter was restored to the CIT(A) for fresh adjudication on merits.

The Tribunal dismissed the appeal due to the inordinate and unexplained delay of 2121 days. The Tribunal found no sufficient cause to condone the delay, considering the assessee's conduct in pursuing other remedies first and the public policy behind the law of limitation.

The Tribunal held that the rejection of the first application due to a technical mistake (wrong section) should not be the sole basis for rejecting the second application for delay. The Tribunal condoned the delay and restored the matter to the CIT(E) for adjudication on merits.

The Tribunal held that the payments were for services provided through facilities acquired, owned, and used by the assessee, not for the use or right to use equipment or a process by the Indian company. Therefore, the payments did not constitute royalty under the Act or the DTAA.

The assessee's counsel requested to withdraw the appeal. The tribunal allowed the withdrawal with liberty to file before the appropriate benches.

The Tribunal found that the loans on which interest was disallowed were indeed from prior years, and the Assessing Officer himself acknowledged that no addition could be made for the loans u/s 68 for the current year. The assessee successfully discharged its onus u/s 68 by providing corroborative documentary evidence, and the interest payment disallowed by the Assessing Officer was deleted. Grounds related to the validity of reopening u/s 147/148 were left open as the appeal was allowed on merits.

The Tribunal condoned the delay in filing the appeal, emphasizing substantial justice over technicalities and finding 'sufficient cause' for the ex-parte appearance. The case was remanded back to the CIT(A) for fresh adjudication on merits, providing the assessee another opportunity, but a cost of Rs. 2,000/- was imposed for previous non-cooperation. Both appeals were allowed for statistical purposes.

The Tribunal held that the bad debt claim was allowable as business loss, following precedents regarding NSEL issues. Regarding Section 14A, the Tribunal found the AO's working contrary to judicial pronouncements and deleted the disallowance.

The Tribunal held that the rejection of the first application due to a wrong section cited is not a reasonable cause for the delay in filing the second application. The Tribunal also noted that the CIT(E) did not consider the application on merits. The appeal was allowed for statistical purposes.

The Tribunal noted that as per the latest CBDT Circular and considering the low tax effect, the appeals were liable to be dismissed as withdrawn. Liberty was granted to the Revenue to seek recalling of the order under certain conditions.

The Tribunal held that the amendment to Section 11(3) is prospective and the assessee was entitled to utilize the accumulated funds within the grace period as per the law existing at the time of accumulation.

The Tribunal held that the assessee is eligible for deduction under Section 80P(2)(a)(i). The primary question was whether the assessee is a "co-operative bank" as defined under Section 80P(4). The Tribunal noted that the definition of 'co-operative bank' in Section 80P(4) refers to Part V of the Banking Regulation Act, 1949. The assessee's counsel argued, and the Revenue did not controvert, that the assessee does not accept deposits from the public, nor does it extend facilities to the general public. Its activities are confined to its members, and it does not provide withdrawal facilities through cheques, drafts, or other banking instruments. Therefore, the essential attributes of "banking" under Section 56 of the Banking Regulation Act, 1949, are not satisfied. Consequently, the assessee does not meet the definition of a Co-operative Bank under Section 80P(4). The Tribunal relied on the Supreme Court's decision in Mavilayi Service Co-operative Bank Ltd. v. CIT, which held that income earned by a co-operative society from providing credit facilities to its members is deductible under Section 80P(2)(a)(i), and Section 80P(4) only excludes co-operative banks as defined by the Banking Regulation Act. The Tribunal found the assessee's case squarely governed by Mavilayi and distinct from Citizen Co-operative Society Ltd. v. ACIT. The order of the CIT(A) granting deduction was upheld. The grounds raised by the Revenue were dismissed.

The Tribunal held that the reassessment proceedings were unsustainable in law because the net income likely to have escaped assessment was below the monetary threshold of ₹50,00,000, making the notice under Section 148 invalid beyond three years. Therefore, the appeal was allowed on this ground.

The Assessing Officer treated the assessee's 50% share of the investment in the property as unexplained and made an addition under section 69 read with section 115BBE of the Act. The Commissioner of Income Tax (Appeals) upheld the AO's action. The Tribunal noted that the CIT(A) failed to properly adjudicate upon the assessee's own limited contribution and summarily confirmed the entire share of investment as unexplained.

The Tribunal noted that the assessee is a trader in precious stones and that the issue of bogus purchases from M/s. Rajan Gems had been dealt with by a coordinate bench for AY 2011-12. Citing a High Court precedent, the Tribunal found that the authorities below had not considered the assessee's submissions and evidence.

The Tribunal upheld the CIT(A)'s decision to restrict the addition to 25% of the bogus purchases, noting that the AO had not disputed the receipt of materials or the assessee's sales, and the assessee's accounts were audited.

The Tribunal condoned the delay, finding "sufficient cause" based on communication issues and the principle of substantial justice. The matter was remanded to the CIT(A) for fresh adjudication on merits, with the assessee directed to pay Rs. 5,000 as costs for past non-cooperation.

The Tribunal condoned the delay in filing the appeal. Finding no evidence that notices were properly served on the assessee's e-mail address, the Tribunal restored the issue to the CIT(A) for a fresh decision after providing an opportunity of being heard.

The Tribunal held that the Principal Commissioner of Income Tax (PCIT) cannot legally assume jurisdiction under Section 263 of the Act to revise a final assessment order passed by the Assessing Officer (AO) in accordance with the directions of the Dispute Resolution Panel (DRP). Such an exercise of jurisdiction is invalid.

The Tribunal held that the reassessment was initiated based on generalized statements without sufficient material against the assessee. It also noted that the assessee was not given an opportunity to cross-examine or rebut the statement, which was the sole basis for the additions.

The Tribunal held that the re-assessment notice and resultant order should be set aside and quashed, following the Supreme Court's decisions in the cases of Rajeev Bansal and Ashish Agarwal, where concessions were made regarding the assessment year.

The Tribunal held that for AY 2015-16, the deletion of the addition of Rs. 2,19,08,711 made under Section 69C was justified. The Ld. CIT(A) correctly observed that while WhatsApp chats can have evidentiary value, the specific chats recovered pertained only to AY 2018-19 and 2019-20. There was no direct or corroborative evidence found for the instant year (AY 2015-16) to support the claim of cash interest payments. Extrapolating findings from subsequent years without specific evidence for the current year was not sustainable. Therefore, the addition was deleted. For AY 2019-20, regarding the disallowance under Section 14A, the Tribunal concurred with the principle laid down by the Special Bench in Vireet Investment (P.) Ltd. that only investments yielding exempt income during the relevant year should be considered for computing the average value of investment. The matter was restored to the Ld. AO for recalculation of the disallowance, ensuring it did not exceed the exempt income earned. The disallowance computed on the basis of average investment yielding exempt income was to be followed, but not exceeding the exempt income earned. Thus, the ground of appeal was partly allowed.

The Tribunal held that the assessee, by providing credit facilities exclusively to its members and not accepting public deposits or offering banking instruments, does not meet the definition of a 'co-operative bank' under Section 80P(4) read with the Banking Regulation Act, 1949. Therefore, the assessee is eligible for deduction under Section 80P(2)(a)(i).

The Tribunal held that the bad debt claim was allowable as business loss, following precedents regarding NSEL issues. Regarding Section 14A, the Tribunal found the AO's working contrary to judicial pronouncements and deleted the disallowance.

The Tribunal found that there was a reasonable cause for the assessee's inability to present an effective representation before the Ld. CIT(A). Therefore, the matter was restored back to the file of the Ld. CIT(A) for a fresh decision, with a cost of Rs. 2,000/- imposed on the assessee.

The Tribunal noted that the assessee is a trader in precious stones and that the issue of bogus purchases from M/s. Rajan Gems had been dealt with by a coordinate bench for AY 2011-12. Citing a High Court precedent, the Tribunal found that the authorities below had not considered the assessee's submissions and evidence.

The Tribunal held that the notice u/s 148 was issued beyond the period of limitation as prescribed by Section 149 of the Income Tax Act, 1961, making the reassessment proceedings illegal and void ab initio.

The tribunal acknowledged the death of the assessee and considered the non-compliance as bonafide, genuine, and unintentional. The court decided to remand the case back to the AO for fresh decision.

The Tribunal found that there was a reasonable cause for the assessee's inability to present an effective representation before the Ld. CIT(A). Therefore, the matter was restored back to the file of the Ld. CIT(A) for a fresh decision, with a cost of Rs. 2,000/- imposed on the assessee.

The Tribunal held that the donation was made when the institution had a valid approval. The subsequent withdrawal of approval with retrospective effect would not invalidate the assessee's claim for deduction, as per the Explanation to Section 35(1)(ii) of the Act and various judicial precedents.

The Tribunal held that the income from royalty and fees for technical services should be taxed on a receipt basis, not accrual basis, following established precedents. It also found that an ad-hoc adjustment by the TPO without proper analysis was not justified, and the assessee's transfer pricing analysis should be accepted.

The Tribunal condoned the 50-day delay in filing the appeal, finding sufficient cause due to bonafide conduct and lack of negligence. The Tribunal set aside the CIT(A)'s order and restored the matter back for fresh adjudication.

The Tribunal condoned the delay in filing the appeal, citing the principle of substantial justice over technicalities, and admitted the appeal to be heard on merits. The matter was restored to the CIT(A) for a fresh decision on the condonation of delay application. A cost of Rs. 2,000/- was imposed on the assessee for non-cooperation.

The Tribunal held that the CIT(A) erred in dismissing the appeals for non-prosecution without granting adequate opportunity, especially considering the Assessee's merger and subsequent lack of records. The matter was restored to the CIT(A) for fresh adjudication on merits.

The Tribunal noted that the revenue authorities admitted the total sales figure and that the cash deposit claimed to be out of sales and cash in hand was accepted as a genuine source of income.

The Tribunal condoned the delay in filing the appeal, citing the principle of substantial justice over technicalities, and admitted the appeal to be heard on merits. The matter was restored to the CIT(A) for a fresh decision on the condonation of delay application. A cost of Rs. 2,000/- was imposed on the assessee for non-cooperation.