ITAT Mumbai Judgments — September 2025

The Tribunal held that the Form 10-IF was inadvertently filed by the chartered accountant. The assessee had consistently not opted for the new tax regime, as evidenced by its returns for previous and current assessment years. Therefore, the denial of deduction under Section 80P was incorrect.

The Tribunal held that while the quantum proceedings established the purchases as bogus and led to additions of profit embedded therein (12.5%), the penalty order wrongly charged concealment of income instead of furnishing inaccurate particulars. Due to the disconnect between the charge and the findings, the penalty could not be sustained.

The Tribunal dismissed the grounds related to the invalidity of the assessment and violation of natural justice, finding that the assessee had admitted to receiving notices and participating in proceedings. The Tribunal also dismissed the grounds contesting the disallowance of sales promotion expenses, citing legal precedents against such expenses being against public policy.

The Tribunal held that Section 43B is attracted because the assessee, by following Section 145A, effectively claimed a deduction. However, considering the alternative submission, the deduction for VAT is allowable on a payment basis for the year in which payment was made.

The Tribunal dismissed the ground challenging the AO's satisfaction for invoking Rule 8D, confirming that proper satisfaction was recorded. However, it partly allowed the appeal, holding that disallowance under Section 14A read with Rule 8D cannot exceed the amount of exempt income. Accordingly, the Assessing Officer was directed to limit the disallowance to the extent of the exempted income.

The Tribunal held that the amount of Rs. 35,00,000/- was part of a cash flow statement offered for taxation by the Swastik Group before the Settlement Commission, and thus, further addition would amount to double taxation. The addition of Rs. 7,50,000/- was deleted. For ITA No. 4704/M/2023, Rs. 17,00,000/- was deleted as it was already taxed, but Rs. 2,10,000/- was sustained.

The Tribunal held that the amount of Rs. 35,00,000/- was part of a cash flow statement offered for taxation by the Swastik Group before the Settlement Commission, and thus, further addition would amount to double taxation. The addition of Rs. 7,50,000/- was deleted. For ITA No. 4704/M/2023, Rs. 17,00,000/- was deleted as it was already taxed, but Rs. 2,10,000/- was sustained.

The Tribunal held that the benefit of a marginal difference (initially 5%, later enhanced to 10%) between the sale consideration and stamp duty valuation, as provided in Section 50C and Section 56(2)(x), should be applied retrospectively. This benefit is considered curative and beneficial.

The Tribunal held that the assessment orders were not void-ab-initio and upheld the denial of exemption under Sections 11 and 12 due to non-registration and violations. However, it allowed an additional ground related to Section 10(23C)(iiiad) for further examination.

The Tribunal held that the case should be remanded to the Commissioner for a fresh decision on the point of limitation, considering the Assessee's reasons and any affidavit filed. If the delay is condoned, the Commissioner should decide the case on merit.

The Tribunal held that for vacant properties not let out, rental income should be calculated based on the municipal rateable value, following High Court decisions. The addition made by the Assessing Officer was directed to be restricted to the municipal valuation for the relevant period.

The Tribunal found merit in the assessee's contention that the AO passed the order without considering submitted details and evidence. The assessee, a senior citizen, faced personal issues hindering appearance before lower authorities. Therefore, the case was remitted back to the AO for fresh examination on merits.

The Tribunal found merit in the assessee's contention that the AO passed the order without considering submitted details and evidence. The assessee, a senior citizen, faced personal issues hindering appearance before lower authorities. Therefore, the case was remitted back to the AO for fresh examination on merits.

The Tribunal condoned the delay in filing the appeal considering the peculiar facts of the case. The matter concerning cash deposits was restored to the Assessing Officer for fresh adjudication, while grounds related to procedural fairness were allowed.

The Tribunal allowed the additional ground of appeal raised by the assessee concerning the validity of the notice under Section 153C and the AO's assumption of jurisdiction for assessment years 2015-16 to 2020-21. The Tribunal held that no additions could be made under Section 153A (and by implication, 153C) in the absence of incriminating material found during the search. For assessment year 2021-22, the additional ground challenging the Section 153C notice was dismissed as the assessment was completed under Section 143(3) and not under Section 153C. However, on merits, the Tribunal found that the additions under Section 69C for all assessment years were not based on seized or incriminating material but on a statement recorded during a survey action. The Tribunal reiterated that a statement recorded during a survey has no evidentiary value unless corroborated by material evidence, citing S. Khader Khan Son (SC). Since no material evidence was found to support the AO's estimation of unexplained expenditure, the additions were held to be unsustainable and based on presumption. Consequently, all grounds of appeal were allowed, and the additions were directed to be deleted.

The Tribunal allowed the additional ground of appeal raised by the assessee concerning the validity of the notice under Section 153C and the AO's assumption of jurisdiction for assessment years 2015-16 to 2020-21. The Tribunal held that no additions could be made under Section 153A (and by implication, 153C) in the absence of incriminating material found during the search. For assessment year 2021-22, the additional ground challenging the Section 153C notice was dismissed as the assessment was completed under Section 143(3) and not under Section 153C. However, on merits, the Tribunal found that the additions under Section 69C for all assessment years were not based on seized or incriminating material but on a statement recorded during a survey action. The Tribunal reiterated that a statement recorded during a survey has no evidentiary value unless corroborated by material evidence, citing S. Khader Khan Son (SC). Since no material evidence was found to support the AO's estimation of unexplained expenditure, the additions were held to be unsustainable and based on presumption. Consequently, all grounds of appeal were allowed, and the additions were directed to be deleted.

The Tribunal allowed the additional ground of appeal raised by the assessee concerning the validity of the notice under Section 153C and the AO's assumption of jurisdiction for assessment years 2015-16 to 2020-21. The Tribunal held that no additions could be made under Section 153A (and by implication, 153C) in the absence of incriminating material found during the search. For assessment year 2021-22, the additional ground challenging the Section 153C notice was dismissed as the assessment was completed under Section 143(3) and not under Section 153C. However, on merits, the Tribunal found that the additions under Section 69C for all assessment years were not based on seized or incriminating material but on a statement recorded during a survey action. The Tribunal reiterated that a statement recorded during a survey has no evidentiary value unless corroborated by material evidence, citing S. Khader Khan Son (SC). Since no material evidence was found to support the AO's estimation of unexplained expenditure, the additions were held to be unsustainable and based on presumption. Consequently, all grounds of appeal were allowed, and the additions were directed to be deleted.

The Tribunal allowed the additional ground of appeal raised by the assessee concerning the validity of the notice under Section 153C and the AO's assumption of jurisdiction for assessment years 2015-16 to 2020-21. The Tribunal held that no additions could be made under Section 153A (and by implication, 153C) in the absence of incriminating material found during the search. For assessment year 2021-22, the additional ground challenging the Section 153C notice was dismissed as the assessment was completed under Section 143(3) and not under Section 153C. However, on merits, the Tribunal found that the additions under Section 69C for all assessment years were not based on seized or incriminating material but on a statement recorded during a survey action. The Tribunal reiterated that a statement recorded during a survey has no evidentiary value unless corroborated by material evidence, citing S. Khader Khan Son (SC). Since no material evidence was found to support the AO's estimation of unexplained expenditure, the additions were held to be unsustainable and based on presumption. Consequently, all grounds of appeal were allowed, and the additions were directed to be deleted.

The Tribunal allowed the additional ground of appeal raised by the assessee concerning the validity of the notice under Section 153C and the AO's assumption of jurisdiction for assessment years 2015-16 to 2020-21. The Tribunal held that no additions could be made under Section 153A (and by implication, 153C) in the absence of incriminating material found during the search. For assessment year 2021-22, the additional ground challenging the Section 153C notice was dismissed as the assessment was completed under Section 143(3) and not under Section 153C. However, on merits, the Tribunal found that the additions under Section 69C for all assessment years were not based on seized or incriminating material but on a statement recorded during a survey action. The Tribunal reiterated that a statement recorded during a survey has no evidentiary value unless corroborated by material evidence, citing S. Khader Khan Son (SC). Since no material evidence was found to support the AO's estimation of unexplained expenditure, the additions were held to be unsustainable and based on presumption. Consequently, all grounds of appeal were allowed, and the additions were directed to be deleted.

The Tribunal allowed the additional ground of appeal raised by the assessee concerning the validity of the notice under Section 153C and the AO's assumption of jurisdiction for assessment years 2015-16 to 2020-21. The Tribunal held that no additions could be made under Section 153A (and by implication, 153C) in the absence of incriminating material found during the search. For assessment year 2021-22, the additional ground challenging the Section 153C notice was dismissed as the assessment was completed under Section 143(3) and not under Section 153C. However, on merits, the Tribunal found that the additions under Section 69C for all assessment years were not based on seized or incriminating material but on a statement recorded during a survey action. The Tribunal reiterated that a statement recorded during a survey has no evidentiary value unless corroborated by material evidence, citing S. Khader Khan Son (SC). Since no material evidence was found to support the AO's estimation of unexplained expenditure, the additions were held to be unsustainable and based on presumption. Consequently, all grounds of appeal were allowed, and the additions were directed to be deleted.

The Tribunal held that the assessment orders were not void-ab-initio and upheld the denial of exemption under Sections 11 and 12 due to non-registration and violations. However, it allowed an additional ground related to Section 10(23C)(iiiad) for further examination.

The Tribunal held that the assessment orders were not void-ab-initio and upheld the denial of exemption under Sections 11 and 12 due to non-registration and violations. However, it allowed an additional ground related to Section 10(23C)(iiiad) for further examination.

The Tribunal held that since the disallowances forming the basis of the penalty were deleted in the quantum proceedings, the penalty under Section 270A could not be sustained. The CIT(A)'s order confirming the penalty was set aside.

The Tribunal held that the AO had made adequate inquiries regarding the Section 80G deduction claim, including the CSR expenditure. Therefore, the PCIT's order under Section 263 was not justified.

The Tribunal held that the Assessing Officer (AO) took a plausible view on ESOP expenditure and that the PCIT erred in assuming jurisdiction. Regarding CSR expenditure, the Tribunal found it to be a debatable issue outside the purview of Section 263 revision, but disallowed a portion as it pertained to a different assessment year.

The Tribunal condoned the delay in filing the appeal, citing miscommunication as the reason, and referred to the Supreme Court's decision in Collector, Land Acquisition v Mst. Katiji. The Tribunal decided to remand the case back to the AO for de novo assessment, emphasizing the principles of natural justice.

The Tribunal condoned the delay in filing the appeal. However, it found that the exception clause cited by the Revenue was not applicable to the case. Consequently, the appeal was dismissed in limine due to low tax effect, and the merits of the grounds were not considered.

The Tribunal held that the CIT(A) cannot dismiss an appeal for non-prosecution and is bound to decide the appeal on merit. Therefore, the case was remanded to the CIT(A) for a just and proper decision.

The Tribunal held that the mistake in selecting the sub-clause was a technical one and not fatal. The CIT(E) was directed to consider the application for registration under section 12A(1)(ac)(iii) and grant registration if other conditions are met. Both appeals were restored to the CIT(E) for fresh consideration.

The Tribunal held that the mistake in selecting the sub-clause was a technical one and not fatal. The CIT(E) was directed to consider the application for registration under section 12A(1)(ac)(iii) and grant registration if other conditions are met. Both appeals were restored to the CIT(E) for fresh consideration.

The Tribunal held that the Revenue's appeal was not maintainable due to low tax effect, as it did not fall under any of the exceptions provided in CBDT Circular No. 5/2024. Consequently, the appeal was dismissed in limine without going into the merits of the other grounds.

The Tribunal held that since the revisional order u/s 263 passed by the PCIT was already quashed by a coordinate bench, the subsequent assessment order passed u/s 143(3) r.w.s 263, which was the subject of the current appeal, also deserved to be quashed. Thus, the CIT(A)'s order was upheld.

The Tribunal held that the receipts were not in the nature of royalty as per Indian tax law and the India-UK DTAA. It also found that the conditions for a DAPE were not met, as the distributor did not have the authority to conclude contracts or habitually secure orders for the assessee.

The Tribunal condoned the delay in filing the appeal, finding it not deliberate. It noted that the CIT(A) passed the ex-parte order without proper notice to the correct email address, violating the Principle of Natural Justice. Therefore, the matter was remanded back to the CIT(A) for fresh adjudication on merits, providing the assessee a proper opportunity of hearing.

The Tribunal held that for issues concerning transfer pricing adjustments on interest on CCDs (Grounds 1-3), the matter should be restored to the AO/TPO. The Tribunal noted that the CIT(A) had deleted the adjustment based on previous ITAT decisions and the Bombay High Court's ruling in India Debt Management. However, the Revenue argued that the facts were distinguishable due to the availability of INR denominated data. The Tribunal, in the interest of justice, set aside the CIT(A)'s order and restored the matter to the AO/TPO to re-examine the issue de novo, considering the convertibility factor and minimizing differences between comparable transactions, including INR denominated loan interest transactions. For issues concerning the classification of legal and professional expenses, advertisement and sales expenses, and commission and brokerage expenses (Grounds 4-6), the Tribunal noted that the controversy was covered by the Tribunal's directions in the assessee's own case for AY 2016-17 and 2017-18. The Tribunal restored these issues to the AO for verification. The AO is to determine if the expenses are directly connected to the real estate project. Expenses attributable to pre-construction or construction activities are to be capitalized as work-in-progress, while general administrative or selling expenses are to be allowed as revenue expenditure. The CIT(A)'s findings on these issues were set aside.

The Tribunal held that the rental income should be treated as 'Income from house property' based on the principle of consistency, as the Revenue had accepted this classification in multiple prior and subsequent assessment years. The Tribunal distinguished the case from Chennai Properties & Investments Ltd. by noting the assessee's diversified income sources.

The Tribunal held that since the additions were made on an estimated basis, penalty under Section 271(1)(c) is not leviable. The Tribunal followed its own previous decisions and the decisions of the jurisdictional High Courts.

The Tribunal held that the TDS entries as reflected in Form 26AS for the mentioned entities were duly reflected and claimed by the assessee in its return. Therefore, there was no mismatch as pointed out by the CPC.

The Tribunal held that the Assessing Officer (AO) failed to record satisfaction regarding the incorrectness of the assessee's voluntarily offered disallowance, which is a mandatory requirement under section 14A(2) of the Act before invoking Rule 8D. Therefore, any disallowance in excess of the assessee's suo motu disallowance could not be sustained.

The Tribunal noted that the assessee did not comply with notices and failed to provide sufficient evidence. While the lower appellate authority upheld the additions, the Tribunal, considering natural justice and lack of proper adjudication due to non-compliance, decided to remand the matter back to the AO for de novo assessment.

The Tribunal held that the assessee had provided sufficient explanation and documentation, including an agency agreement and RBI circulars, to demonstrate that the cash deposits were from his regular business activities as a business correspondence agent. The Tribunal found no reason to treat the deposits as unexplained.

The Tribunal held that the AO's allowance of deduction under Section 80G for CSR expenditure was in line with settled legal principles and jurisdictional tribunal decisions. Therefore, the PCIT's order under Section 263 was not sustainable as the assessment order was neither erroneous nor prejudicial to the revenue.

The Tribunal held that the assessee failed to provide adequate details and evidence to substantiate its purchases from the identified parties. Information from the Sales Tax Department indicated that these business activities involved bogus invoices. Mere confirmations or bank statements were insufficient to prove actual movement of goods or genuine transactions.

The Tribunal found that the CIT(A) issued notices to the email address of a deceased former CA and failed to send notices to the email address provided by the assessee. Therefore, the matter was remanded to the CIT(A) for fresh adjudication, ensuring adherence to the principles of natural justice.

The Tribunal held that the provision for cost of construction was a legitimate business liability estimated with reasonable certainty and incurred in subsequent years, thus allowing the deduction. However, the provision for tenant dispute was considered a contingent liability as the outcome of the litigation was uncertain.

The Tribunal noted the assessee's repeated non-compliance before the AO and CIT(A). However, it observed that the AO had brought the entire sale consideration of Rs. 78,00,000 to tax as short-term capital gains without clarity on the basis of information received or how this conclusion was reached. The Tribunal emphasized that even in a best judgment assessment, the AO must act judiciously and base the decision on available material. It was found that the AO either lacked complete information or failed to consider it properly, particularly regarding the allowance for cost of acquisition and indexation. Consequently, the Tribunal restored both matters, the addition of Rs. 78,00,000 and the addition of Rs. 9,06,000, to the file of the AO. The AO is directed to ascertain the correct facts, cost of acquisition, and period of holding to determine the appropriate tax. The assessee is granted one more opportunity to attend proceedings and provide necessary documentation. The ratio decidendi is that a best judgment assessment requires judicious application of available material, and where such application is questionable, the matter should be remanded for proper adjudication, especially when capital gains computation is involved.

The Tribunal held that the assessee had discharged the initial onus by producing relevant documents. It further noted that no manipulation was proven against the assessee and that similar additions in related cases were deleted. The Tribunal followed the jurisdictional High Court's decisions over non-jurisdictional ones.

The Tribunal held that the Assessing Officer (AO) was not required to conduct further inquiry as the issue of CSR expenditure being eligible for deduction under Section 80G was settled by various ITAT decisions. Therefore, the AO's order was neither erroneous nor prejudicial to the revenue.

The Tribunal held that the addition was based on presumption and conjecture, as there was no direct evidence of payment or allotment. The assessee had not made any initial payment and later resigned from society membership.

The Tribunal allowed the assessee's request to withdraw the appeal, as the Departmental Representative (DR) did not object.