ITAT Mumbai Judgments — October 2025

The Tribunal held that the Assessing Officer's change of accounting method was uncalled for as the project was still under construction. The Tribunal agreed with the assessee's revised computation, which showed a loss for both assessment years.

The Tribunal held that the Assessing Officer's change of accounting method was uncalled for as the project was still under construction. The Tribunal agreed with the assessee's revised computation, which showed a loss for both assessment years.

The Tribunal held that the claim of the revenue regarding cash payment over and above the agreement value was not tenable, especially considering the stamp duty valuation of the property and the fact that the entire payment was made by cheque. The addition made by the AO was deleted.

The Tribunal held that the assessee failed to provide sufficient cause for the inordinate delay of 1370 days in filing the appeal. The explanation provided, citing advice from a tax consultant, was not considered adequate grounds for condoning the delay.

The Tribunal held that the delay in filing Form 10B was condonable, especially since it was filed before the return of income and in line with various High Court and Tribunal decisions.

The Tribunal condoned the delay in filing the appeal before the CIT(A) and remanded the case back to the CIT(A) to decide the issue on merits. The Tribunal directed the CIT(A) to pass a speaking order after giving the assessee an opportunity of being heard.

The Tribunal held that the PCIT's revisionary order was not justified. It noted that the issue of allowing 80G deduction for donations made as CSR expenses is a settled matter, with various judicial precedents supporting the assessee's claim. The Tribunal found that the Assessing Officer had made proper inquiries and taken a plausible view, fulfilling the requirement of examination.

The Tribunal held that providing financial assistance in Indian Rupees within India to Indian students for studies abroad does not constitute application of income outside India. The assessee had also passed a resolution to delete the word 'abroad' from the object clause to clarify its intent.

The Tribunal allowed Ground No. 8 for AY 2007-08, concerning the addition of Rs. 3,61,344/- in respect of loose papers found during the search. The Tribunal held that the mere presence of a stray loose paper bearing the name of a third party ('Roop Sangam'), found amongst unrelated documents, cannot constitute evidence of undisclosed expenditure without corroboration. The explanation that 'Roop Sangam' was a business opposite the assessee's shop and the noting could be from a customer was considered reasonable and unrebutted. Since 'Roop Sangam' was neither a supplier nor a customer, and no corresponding entry was found, the addition was deemed devoid of evidentiary foundation and directed to be deleted. The Tribunal also allowed Ground No. 9 for AY 2007-08, concerning the addition of Rs. 3,59,989/- in respect of Gold Received and Refunded back to M/s. Yash Gold. The Tribunal found that the impugned document represented a quantitative statement of receipt and issue of fine gold, part of the regular manufacturing process, and not a monetary transaction. The figures reflected equivalent quantities, not cash receipts or payments. As the transactions were reconciled with stock balances and involved exchange of equivalent quantities, treating it as unexplained investment or expenditure was unsustainable. The addition was directed to be deleted. The appeals were partly allowed.

The Tribunal condoned the delay subject to a cost of Rs. 5,000/- to the Maharashtra Legal Aid Cell. On merits, the Tribunal directed the AO to verify if the interest/dividend was from co-operative societies, in which case it would be eligible for deduction under Section 80P(2)(d). If from banks, it would be treated as 'Income from other sources'.

The Tribunal held that the assessee had indeed filed a return of income in response to the notice under Section 148, which was not considered by the AO or the CIT(A). Therefore, the Tribunal found that the CIT(A) erred in dismissing the appeal. The matter was remitted to the AO for fresh adjudication.

The Tribunal upheld the Ld. Commissioner's order, finding that the reopening of assessment under Section 147 was bad in law as no independent verification was done by the AO. Furthermore, on merits, the loan was found to be from a different entity, M/s Suraksha Projects Ltd., which was explained and accepted in prior assessments.

The Tribunal condoned the delay of 1312 days subject to a cost of Rs. 55,000/- to be deposited by the assessee. On merits, the Tribunal found that the issues required further adjudication and therefore, remanded the case back to the Assessing Officer.

The Tribunal condoned the delay in filing the appeal. It held that substantial justice should be preferred over technicalities, especially when the delay is bonafide and beyond the assessee's control.

The Tribunal condoned the delay in filing the appeal, considering the genuine reasons provided by the assessee, including the ill health of the managing partner and the unfortunate demise of his wife. The Tribunal emphasized the principle of substantial justice over technicalities.

The Tribunal held that the CIT(A) was justified in deleting the disallowance under Section 14A regarding interest expenditure by relying on the Hon'ble Bombay High Court decision in CIT vs. HDFC Bank Ltd. and further restricted the disallowance under Rule 8D(2)(iii) to the actual expenses. For the disallowance under Section 36(1)(iii), the Tribunal followed the precedent that interest-free advances are presumed to be made out of interest-free funds available with the assessee, thus deleting the disallowance.

The Tribunal condoned the delay subject to a cost of Rs. 5,000/- to the Maharashtra Legal Aid Cell. On merits, the Tribunal directed the AO to verify if the interest/dividend was from co-operative societies, in which case it would be eligible for deduction under Section 80P(2)(d). If from banks, it would be treated as 'Income from other sources'.

The Tribunal quashed the impugned revisionary order passed by the PCIT under Section 263 of the Act. The Tribunal noted that the factual and legal matrix of the present case was identical to that dealt with by a Coordinate Bench of the ITAT, Mumbai, in the case of KPMG Assurance and Consulting Services LLP for AY 2018-19 (ITA No. 2396/Mum/2025), which had also quashed the revisionary order. The Tribunal found that the PCIT had failed to consider the entire record, including previous assessment orders and reassessment proceedings, as contemplated by Explanation 1(b) to Section 263. The Tribunal also reiterated the principle that the PCIT cannot revise an assessment order merely because a different view could be taken, citing the judgment in CIT vs. Arvind Jewellers. Furthermore, the Tribunal observed that the AO had followed the decision of the Jurisdictional High Court in the assessee's own case for AY 2008-09, which is a valid basis for not making an addition. Therefore, the Tribunal held that no action under Section 263 was justifiable and allowed the grounds raised by the assessee. The operative direction was to quash the revisionary order.

The Tribunal held that the AO had considered the technical and non-technical accounts, tax provisions, and actual tax liability, taking a reasonable view. The Principal CIT failed to specify how the AO's order was erroneous or prejudicial to revenue, and thus the twin conditions for invoking Section 263 were not satisfied.

The Tribunal held that the approval for issuing the notice under Section 148 of the Income Tax Act was obtained from an incorrect authority. Furthermore, the notice was issued beyond the surviving period for completing the reassessment procedure under the new regime, making it void ab initio.

The Tribunal held that penalty cannot be levied on an addition made on an estimate basis when the assessee voluntarily disclosed additional income to buy peace. The penalty order was directed to be deleted.

The Tribunal held that the AO had considered the technical and non-technical accounts, tax provisions, and actual tax liability, taking a reasonable view. The Principal CIT failed to specify how the AO's order was erroneous or prejudicial to revenue, and thus the twin conditions for invoking Section 263 were not satisfied.

The Tribunal held that the Assessing Officer relied on third-party information without corroborative material. The assessee had provided sufficient details to establish the identity, genuineness, and creditworthiness of the lender, thereby discharging the onus under Section 68 of the Act.

The Tribunal condoned the delay, observing that substantial justice should be preferred over technicalities, especially when the order was passed against a deceased person without proper opportunity of hearing for the legal representatives. The matter was restored to the file of the CIT(A) for fresh adjudication.

The Tribunal held that the filing of Form 10IC is directory and delay in filing is condonable, citing various High Court and Tribunal decisions. The assessee's oversight was not a fault preventing the benefit.

The Tribunal held that the CIT(A) erred in confirming the addition. It noted that the Tribunal had previously set aside similar orders for a group concern, and the Settlement Commission had accepted some loans as genuine. The Tribunal found no justification for the disallowance.

The Tribunal noted that the assessee did not represent before the lower authorities and raised legal grounds for the first time. In the interest of justice, the Tribunal remitted the appeals for assessment years 2010-11 to 2015-16 back to the CIT(A) to adjudicate the issue of incriminating materials. For AY 2016-17, the appeal was also remitted for verification of evidence.

The Tribunal held that the CIT(A) erred in confirming the addition. It noted that the Tribunal had previously set aside similar orders for a group concern, and the Settlement Commission had accepted some loans as genuine. The Tribunal found no justification for the disallowance.

The Tribunal noted that the assessee failed to provide necessary documentation to substantiate their claim regarding the interest income and the deduction. The lower authorities also could not properly adjudicate the issue due to lack of evidence.

The Tribunal noted that the assessee did not represent before the lower authorities and raised legal grounds for the first time. In the interest of justice, the Tribunal remitted the appeals for assessment years 2010-11 to 2015-16 back to the CIT(A) to adjudicate the issue of incriminating materials. For AY 2016-17, the appeal was also remitted for verification of evidence.

The Tribunal noted that the assessee did not represent before the lower authorities and raised legal grounds for the first time. In the interest of justice, the Tribunal remitted the appeals for assessment years 2010-11 to 2015-16 back to the CIT(A) to adjudicate the issue of incriminating materials. For AY 2016-17, the appeal was also remitted for verification of evidence.

The Tribunal found that the CIT(A)'s analysis of the comparables was not sufficiently detailed and that the filters used by the assessee for TNMM were not discernable. Therefore, the matter was remitted back to the TPO for fresh analysis.

The Tribunal noted that the assessee did not represent before the lower authorities and raised legal grounds for the first time. In the interest of justice, the Tribunal remitted the appeals for assessment years 2010-11 to 2015-16 back to the CIT(A) to adjudicate the issue of incriminating materials. For AY 2016-17, the appeal was also remitted for verification of evidence.

The Tribunal held that the appeal of the assessee is allowed. The Tribunal considered the totality of the facts and circumstances and was of the considered view that it was not a fit case for the levy of penalty under Section 272A. The assessee had demonstrated bonafide reasons for non-compliance. The Tribunal noted that the CIT(A) had already set aside the assessment order to the AO for fresh assessment after considering the assessee's submissions regarding non-compliance and on merits. Therefore, the penalty order under Section 272A(1) was set aside. The ratio decidendi is that genuine and bonafide reasons for non-compliance with statutory notices, especially when demonstrated by the assessee and considered by the appellate authority in setting aside the assessment, can lead to the deletion of penalty under Section 272A.

The Tribunal held that providing financial assistance in Indian Rupees within India to Indian students for studies abroad does not constitute an application of income outside India. The Tribunal found the assessee's explanation and resolution to delete 'abroad' from the object clause sufficient.

The Tribunal ruled that the Assessing Officer had conducted a thorough inquiry into the ESOP deduction claim. It clarified that the alleged 'recovery' was merely TDS funding, not a reimbursement of ESOP cost. The Tribunal held that the PCIT's revisional order under Section 263 was unsustainable as the original assessment was neither erroneous nor prejudicial to the revenue, affirming that ESOP discount is an allowable business expenditure under Section 37(1).

The Tribunal found that the CIT(A)'s analysis of the comparables was not sufficiently detailed and that the filters used by the assessee for TNMM were not discernable. Therefore, the matter was remitted back to the TPO for fresh analysis.

The Tribunal condoned the significant delay in filing the appeal before the CIT(A), citing the principles of substantial justice and liberal interpretation of 'sufficient cause'. The matter was remitted back to the CIT(A) for adjudication on merits.

The Tribunal held that the AO's order allowing the CSR expenditure as a deduction under Section 80G was not erroneous nor prejudicial to the interest of the revenue. The Tribunal relied on various decisions of coordinate benches supporting the allowability of such deductions.

The Tribunal condoned the delay in filing the appeals, finding the assessee's explanation for non-receipt of notices to be genuine and beyond their control. The ex-parte orders of the CIT(A) were set aside, and the appeals were remitted back for fresh adjudication.

The Tribunal acknowledged that there was a reasonable cause preventing the assessee from effective representation before the CIT(A). Therefore, the Tribunal set aside the impugned order and restored the matter to the file of the CIT(A) for fresh adjudication, granting one more opportunity to the assessee.

The Tribunal held that failure to furnish recorded reasons for issuing a reopening notice, when sought by the assessee, renders the reassessment order bad in law. The court emphasized that such procedural compliance is a jurisdictional issue and cannot be implied.

The Tribunal held that since the notice under Section 148 was issued beyond three years from the end of AY 2017-18, the approval should have been obtained from the Principal Chief Commissioner as per Section 151(ii). As the approval was obtained from the Commissioner, the reassessment proceedings were invalid.

The Tribunal held that the differential amount between the stamp duty value and the sale consideration was not more than the 10% "safe harbour" tolerance limit, which is applicable retrospectively. Therefore, the benefit of this limit could not be denied to the Assessee.

The Tribunal noted that the assessee did not represent before the lower authorities and raised legal grounds for the first time. In the interest of justice, the Tribunal remitted the appeals for assessment years 2010-11 to 2015-16 back to the CIT(A) to adjudicate the issue of incriminating materials. For AY 2016-17, the appeal was also remitted for verification of evidence.

The Tribunal condoned the delay subject to a cost of Rs. 5,000/- to the Maharashtra Legal Aid Cell. On merits, the Tribunal directed the AO to verify if the interest/dividend was from co-operative societies, in which case it would be eligible for deduction under Section 80P(2)(d). If from banks, it would be treated as 'Income from other sources'.

The Tribunal noted that the assessee did not represent before the lower authorities and raised legal grounds for the first time. In the interest of justice, the Tribunal remitted the appeals for assessment years 2010-11 to 2015-16 back to the CIT(A) to adjudicate the issue of incriminating materials. For AY 2016-17, the appeal was also remitted for verification of evidence.

The Tribunal found that while the assessee claimed to be a joint owner for convenience, she failed to substantiate the source of Rs. 20,00,000/- in her name. However, considering the peculiar facts and the lack of clarity on her husband's case, the Tribunal remanded the issue back to the AO for fresh verification.

The Tribunal noted that the CIT(A) had passed an ex-parte order because the assessee failed to file any response or submissions despite several opportunities. Considering the peculiar facts and circumstances, the Tribunal deemed it appropriate to remand the matter back to the CIT(A) for fresh adjudication on merits. The assessee was directed to make requisite compliance before the CIT(A). The Tribunal allowed the appeal of the assessee for statistical purposes. The specific findings on each ground of appeal were not detailed as the matter was remanded. The issue of levying interest under Sections 234B and 234C was implicitly to be decided by the CIT(A) upon remand.

The Tribunal held that the computation provisions for capital gains under Section 55(2)(ac) were incapable of application to the OFS transaction, and the amended provisions could not be applied retrospectively. It further ruled that bonus shares could not be treated as having a nil cost of acquisition and that the fair market value as on January 31, 2018, should be considered the cost of acquisition.