ITAT Mumbai Judgments — October 2025

The Tribunal noted that the appeals were time-barred by 440 days. Despite notices being sent through RPAD and email, there was no response from the assessee.

The Tribunal noted that the appeals were time-barred by 440 days. Despite notices being sent through RPAD and email, there was no response from the assessee.

The Tribunal noted that the appeals were time-barred by 440 days. Despite notices being sent through RPAD and email, there was no response from the assessee.

The Tribunal noted that the appeals were time-barred by 440 days. Despite notices being sent through RPAD and email, there was no response from the assessee.

The Tribunal held that the penalty under Section 271(1)(c) cannot be levied as the assessee's claim and adjustments were based on a bonafide belief and the issues were debatable, with two possible views. The High Court admitting a question of law further supported the debatable nature of the issue. Therefore, there was no infirmity in the CIT(A)'s order deleting the penalty.

The Income Tax Appellate Tribunal observed that the Ld.CIT(A) failed to consider the assessee's application for admission of additional evidence regarding the sundry creditors. Given this procedural lapse, the Tribunal set aside the CIT(A)'s order and remanded the matter back for fresh adjudication after properly considering the additional evidence.

The Tribunal found that the cash receipts were already included in the total turnover and taxed as business income, and the AO had not rejected the books of accounts. Therefore, making a further addition under Section 68 would lead to double taxation. The Tribunal concluded that the addition was not justified and accordingly deleted it.

The Tribunal held that the delay in filing Form 10AB was on account of bonafide reasons, specifically the serious illness and cancer treatment of a trustee, Mrs. Neeta Neralla, and therefore, the delay ought to have been condoned. The Tribunal also noted that the assessee was already registered under the old regime, and the delay in filing the application for regular registration deserved to be condoned. Regarding the issue of applying funds 'Outside India', the Tribunal referred to the decision in Dedhia Music Foundation (supra) and held that the mere mention of 'Outside India' in the objects clause does not constitute a "specified violation" under section 12AB(4) that would warrant rejection or cancellation of registration. The Tribunal found that the objects clause, as interpreted by the CIT(E), was not justified, and even if funds were applied outside India, exemption under section 11 would not be available for such application, but this does not lead to rejection of registration. The Tribunal admitted additional evidence furnished by the assessee concerning its activities. Consequently, the impugned order of the CIT(E) rejecting the application for registration under section 12AB and recognition under section 80G was set aside, and the matters were restored to the CIT(E) for fresh consideration.

The Tribunal, in the interest of justice, decided to remand the case back to the learned CIT(A) for fresh adjudication on merits. The Tribunal acknowledged the assessee's submission that physical hearings were attended until 2017 and that the transfer to the faceless regime in 2020 might have led to non-receipt of online notices. The Tribunal directed the assessee to make requisite compliance before the CIT(A) and granted an opportunity for the assessee to prove their case. The specific additions made by the AO and confirmed by the CIT(A) were not adjudicated on merits by the ITAT, as the primary issue was the dismissal of the appeal by the CIT(A) on procedural grounds. The Tribunal did not decide the merits of the additions listed in ground 1(A) of the appeal.

The Tribunal held that the CIT(A) passed an ex-parte order without giving the assessee an effective opportunity of hearing, violating principles of natural justice. Therefore, the impugned order was set aside and the case was remanded to the CIT(A) for fresh adjudication.

The Tribunal condoned the delay in filing the appeal, citing the assessee's status as a senior citizen and the lack of proper opportunity to be heard, which violated natural justice. The Tribunal also held that the assessment order and appellate order lacked proper adjudication on merits.

The Tribunal held that the delay and the incorrect section filing were not deliberate but due to technical issues and manpower limitations. Considering the beneficial objects of the trust and CBDT circulars, the Tribunal found the assessee entitled to relief.

The Tribunal noted that the appeal before it was filed with a delay of over four months, which the assessee sought condonation for due to a misunderstanding of the CIT(A)'s order date. The Tribunal, relying on the Supreme Court's decision in Collector, Land Acquisition v Mst. Katiji And Others (167 ITR 471), condoned the delay, finding it to be bonafide and not intentional. The Tribunal observed that the appellate order before it was also passed ex-parte due to the assessee's non-compliance, and none of the issues raised in the grounds of appeal had been adjudicated. Consequently, the CIT(A) could not objectively analyze the facts. In the interest of natural justice and fair play, the Tribunal set aside the appellate order and the assessment order, restoring the entire matter to the Assessing Officer (AO) for de novo assessment. The assessee was granted one final opportunity to present arguments and submissions before the AO, who was directed to provide adequate opportunity of hearing. The Tribunal clarified that this decision did not reflect on the merits of the dispute.

The Tribunal found that the assessee had provided reasonable explanations for non-compliance, including office redevelopment and health issues of the key person. Therefore, the assessee deserves another opportunity to submit necessary documentation for its exemption claim.

The Tribunal held that a technical error in mentioning the wrong section in the initial application does not warrant rejection if the application is otherwise eligible. The Tribunal also noted that having object clauses that permit expenditure outside India is not a bar to registration under Section 80G.

The Tribunal noted that the assessee's submissions regarding the timing of the transactions were not considered by the AO. The Tribunal also observed that a similar transaction was examined in AY 2017-18, where it was concluded that the sale occurred in AY 2018-19. The Tribunal found prima facie merit in the assessee's submissions.

The Tribunal noted that the assessee's submissions regarding the timing of the transactions were not considered by the AO. The Tribunal also observed that a similar transaction was examined in AY 2017-18, where it was concluded that the sale occurred in AY 2018-19. The Tribunal found prima facie merit in the assessee's submissions.

The Tribunal held that penalties under Section 271(1)(c) cannot be levied on additions made based on estimation or presumption without direct evidence of concealment or inaccurate particulars. Since the penalty was based on estimated GP addition and proportionate interest disallowance without such evidence, it was deemed unsustainable.

The Tribunal held that the levy of penalty on an estimated addition of gross profit is unjustified and unsustainable. The assessee had disclosed full particulars, books were audited, and no unrecorded transactions were found.

The Tribunal upheld the CIT(A)'s decision to delete the addition. It held that the AO's conclusion was based on inconclusive and uncorroborated findings, and that the denial of cross-examination violated the principles of natural justice.

The Tribunal upheld the deletion of additions related to capital work in progress, finding it to be an adjustment due to Ind AS. It also upheld the deletion of additions related to deferred income, following its own prior decisions in the assessee's own case. The Tribunal noted that the assessee's appeal was partly allowed and the Revenue's appeal was dismissed.

The Tribunal upheld the deletion of additions related to capital work in progress, finding it to be an adjustment due to Ind AS. It also upheld the deletion of additions related to deferred income, following its own prior decisions in the assessee's own case. The Tribunal noted that the assessee's appeal was partly allowed and the Revenue's appeal was dismissed.

The Tribunal held that the interest expenses of Rs. 48,89,313/- are allowable as a deduction. The reasoning was that the assessee had paid interest on borrowings which were contributed to the capital of a partnership firm, and from this firm, the assessee earned interest income which was offered under the head 'profit and gains from business or profession'. Therefore, in the considered opinion of the Tribunal, the interest paid on borrowings deserves to be allowed from the business income. Even if the assessee had inadvertently claimed the deduction under the head 'income from other sources', the claim under Section 36(iii) was made during the assessment proceedings and should have been allowed. The Tribunal directed the AO to allow the interest of Rs. 48,89,313/- as a deduction from profit and gains from business and profession. No issue was expressly left undecided.

The Tribunal held that the object clause was not objectionable for rejecting Section 12AB registration, especially since it only allowed arrangements conducive to the trust's objects. Relying on a Delhi High Court precedent, the Tribunal directed the CIT(E) to grant registration under Section 12AB and reconsider the application for Section 80G approval afresh, noting that the objectionable clause had since been amended by the Trust.

The Tribunal held that the addition made by the AO, as affirmed by the Ld. Commissioner (Appeals), was unsustainable. The Tribunal noted that the assessment proceedings for the AYs under consideration were unabated. It observed that the AO's assessment order did not mention any specific incriminating material for making the addition but relied on the search and seizure operation and post-enquiry. The Tribunal referred to the Delhi High Court judgments in Commissioner of Income Tax v. Harjeev Aggarwal and Smt. Dayawanti Gupta v. CIT, which held that statements recorded under Section 132(4) of the Act do not by themselves constitute incriminating material unless corroborated by other incriminating material found during the search. The Tribunal further noted that the statement made by Mr. Dodhia was subsequently retracted and not supported by any incriminating material found during the search. Crucially, the Tribunal relied on the Apex Court's decision in Abhishar Buildwell Pvt. Ltd., which clearly laid down that in cases of completed/unabated assessments, no addition can be made by the AO in the absence of any incriminating material found during the search under Section 132 or requisition under Section 132A of the Act. Since the addition in the present case was not based on any incriminating material found during the search and seizure operation, the Tribunal deleted the addition. Consequently, the legal ground raised by the Assessee was allowed, and the appeals were allowed on this legal aspect, making it unnecessary to delve into other issues.

The Tribunal held that the CIT(A) erred by not considering the detailed submissions and documentary evidence filed by the assessee. The CIT(A) dismissed the appeal without proper adjudication of the presented material.

The Tribunal held that VAT credit, not claimed as an expense and disclosed as a current asset, is not income. It also found that the commission disallowance was reduced by the CIT(A) to a reasonable extent, and the notional interest deletion was justified as the advance was for a cancelled business transaction.

The Tribunal held that the Principal Commissioner of Income-tax erred in invoking Section 263 of the Act. The Tribunal found that the issues raised by the PCIT, particularly concerning the ESOP expenditure, were thoroughly examined by the Assessing Officer (AO) during the original assessment proceedings. The AO had issued a specific query under Section 142(1) and considered the assessee's detailed reply and documentary evidence before accepting the claim. The Tribunal noted that the AO had taken the most plausible view given the plethora of decisions on ESOP expenditure, and it could not be said that the AO's view was erroneous. The Tribunal distinguished the revenue's reliance on the Goetze (India) Ltd. case, stating that in the present case, the AO's view was plausible and legally sustainable. The Tribunal concluded that the twin conditions for invoking Section 263, i.e., the order being erroneous and prejudicial to the interest of the revenue, were not fulfilled. Consequently, the order of the PCIT was set aside, and the AO's assessment order was restored. The appeal of the assessee was allowed.

The Tribunal held that the addition made by the AO, as affirmed by the Ld. Commissioner (Appeals), was unsustainable. The Tribunal noted that the assessment proceedings for the AYs under consideration were unabated. It observed that the AO's assessment order did not mention any specific incriminating material for making the addition but relied on the search and seizure operation and post-enquiry. The Tribunal referred to the Delhi High Court judgments in Commissioner of Income Tax v. Harjeev Aggarwal and Smt. Dayawanti Gupta v. CIT, which held that statements recorded under Section 132(4) of the Act do not by themselves constitute incriminating material unless corroborated by other incriminating material found during the search. The Tribunal further noted that the statement made by Mr. Dodhia was subsequently retracted and not supported by any incriminating material found during the search. Crucially, the Tribunal relied on the Apex Court's decision in Abhishar Buildwell Pvt. Ltd., which clearly laid down that in cases of completed/unabated assessments, no addition can be made by the AO in the absence of any incriminating material found during the search under Section 132 or requisition under Section 132A of the Act. Since the addition in the present case was not based on any incriminating material found during the search and seizure operation, the Tribunal deleted the addition. Consequently, the legal ground raised by the Assessee was allowed, and the appeals were allowed on this legal aspect, making it unnecessary to delve into other issues.

The Tribunal held that the addition made by the AO, as affirmed by the Ld. Commissioner (Appeals), was unsustainable. The Tribunal noted that the assessment proceedings for the AYs under consideration were unabated. It observed that the AO's assessment order did not mention any specific incriminating material for making the addition but relied on the search and seizure operation and post-enquiry. The Tribunal referred to the Delhi High Court judgments in Commissioner of Income Tax v. Harjeev Aggarwal and Smt. Dayawanti Gupta v. CIT, which held that statements recorded under Section 132(4) of the Act do not by themselves constitute incriminating material unless corroborated by other incriminating material found during the search. The Tribunal further noted that the statement made by Mr. Dodhia was subsequently retracted and not supported by any incriminating material found during the search. Crucially, the Tribunal relied on the Apex Court's decision in Abhishar Buildwell Pvt. Ltd., which clearly laid down that in cases of completed/unabated assessments, no addition can be made by the AO in the absence of any incriminating material found during the search under Section 132 or requisition under Section 132A of the Act. Since the addition in the present case was not based on any incriminating material found during the search and seizure operation, the Tribunal deleted the addition. Consequently, the legal ground raised by the Assessee was allowed, and the appeals were allowed on this legal aspect, making it unnecessary to delve into other issues.

The Tribunal held that the addition made by the AO, as affirmed by the Ld. Commissioner (Appeals), was unsustainable. The Tribunal noted that the assessment proceedings for the AYs under consideration were unabated. It observed that the AO's assessment order did not mention any specific incriminating material for making the addition but relied on the search and seizure operation and post-enquiry. The Tribunal referred to the Delhi High Court judgments in Commissioner of Income Tax v. Harjeev Aggarwal and Smt. Dayawanti Gupta v. CIT, which held that statements recorded under Section 132(4) of the Act do not by themselves constitute incriminating material unless corroborated by other incriminating material found during the search. The Tribunal further noted that the statement made by Mr. Dodhia was subsequently retracted and not supported by any incriminating material found during the search. Crucially, the Tribunal relied on the Apex Court's decision in Abhishar Buildwell Pvt. Ltd., which clearly laid down that in cases of completed/unabated assessments, no addition can be made by the AO in the absence of any incriminating material found during the search under Section 132 or requisition under Section 132A of the Act. Since the addition in the present case was not based on any incriminating material found during the search and seizure operation, the Tribunal deleted the addition. Consequently, the legal ground raised by the Assessee was allowed, and the appeals were allowed on this legal aspect, making it unnecessary to delve into other issues.

The Tribunal, following a coordinate bench's decision for AY 2015-16, held that the matter of corpus donations should be remanded to the CIT(A) to provide the assessee with an effective opportunity to present their case. For the additional grounds concerning AOP assessment, the Tribunal directed the CIT(A) to examine and allow expenditures if exemption u/s 11 was not claimed.

The Tribunal held that the addition made by the AO, as affirmed by the Ld. Commissioner (Appeals), was unsustainable. The Tribunal noted that the assessment proceedings for the AYs under consideration were unabated. It observed that the AO's assessment order did not mention any specific incriminating material for making the addition but relied on the search and seizure operation and post-enquiry. The Tribunal referred to the Delhi High Court judgments in Commissioner of Income Tax v. Harjeev Aggarwal and Smt. Dayawanti Gupta v. CIT, which held that statements recorded under Section 132(4) of the Act do not by themselves constitute incriminating material unless corroborated by other incriminating material found during the search. The Tribunal further noted that the statement made by Mr. Dodhia was subsequently retracted and not supported by any incriminating material found during the search. Crucially, the Tribunal relied on the Apex Court's decision in Abhishar Buildwell Pvt. Ltd., which clearly laid down that in cases of completed/unabated assessments, no addition can be made by the AO in the absence of any incriminating material found during the search under Section 132 or requisition under Section 132A of the Act. Since the addition in the present case was not based on any incriminating material found during the search and seizure operation, the Tribunal deleted the addition. Consequently, the legal ground raised by the Assessee was allowed, and the appeals were allowed on this legal aspect, making it unnecessary to delve into other issues.

The Tribunal held that the object clause was not objectionable for rejecting Section 12AB registration, especially since it only allowed arrangements conducive to the trust's objects. Relying on a Delhi High Court precedent, the Tribunal directed the CIT(E) to grant registration under Section 12AB and reconsider the application for Section 80G approval afresh, noting that the objectionable clause had since been amended by the Trust.

The Tribunal dismissed the appeal, finding parity of facts with a previous decision of a Co-ordinate Bench in ITA No. 6018/Mum/2024 for AY 2017-18. The Tribunal noted that the assessee had lent money to sister concerns at 8.50% interest and to unrelated parties at 12.00% interest, and failed to provide a satisfactory explanation for this discrimination. The Tribunal clarified that neither the AO nor the Bench was questioning the reasonableness of the expenditure itself, but rather seeking an explanation for the disparity in interest rates charged from related versus unrelated parties. The core issue was whether the transactions with related parties were at arm's length. The Tribunal found that the assessee had failed to justify the lower rate of interest charged from related parties. The decisions relied upon by the assessee were distinguished as they dealt with whether expenses were incurred for business purposes, whereas the present issue concerned the disparity in interest rates between related and unrelated parties. Therefore, the Tribunal found no reason to interfere with the findings of the lower authorities.

The Bench noted that the appeal should have been filed against the intimation order under section 143(1). The assessee's counsel stated that the appeal before the CIT(A) was pending adjudication.

The Tribunal held that the mere non-appearance of creditors or non-existence of companies at a given address after a long time does not automatically make the loans unexplained. The assessee had discharged its onus by providing documentary evidence, and the revenue had not sufficiently pursued the matter.

The Tribunal found that the documentary evidence clearly contradicted the information used by the AO, as the figures in the excel sheet did not match the actual transaction details. The Tribunal concluded that the AO was carried away by the excel sheet without proper verification and made the addition on assumptions and surmises.

The Tribunal held that the addition of Rs. 2,00,00,000 made by the AO on account of unsecured loans from VFPL in AY 2015-16 was unsustainable and deleted it, referencing its decision in a related matter for the same AY. Consequently, the disallowance of Rs. 14,54,492 on account of interest expenses related to these loans was also deleted. For AY 2020-21, the Tribunal noted that it had already deleted the addition related to loans from VFPL in the previous assessment year. Therefore, the addition on account of disallowance of interest to the extent of Rs. 15,47,041 was also deleted. Regarding brought forward losses, the Tribunal directed the AO to re-compute them and allow set-off if any, as this ground was consequential to the other decisions. The Tribunal allowed all the appeals of the assessee.

The Tribunal held that the addition of Rs. 2,00,00,000 made by the AO on account of unsecured loans from VFPL in AY 2015-16 was unsustainable and deleted it, referencing its decision in a related matter for the same AY. Consequently, the disallowance of Rs. 14,54,492 on account of interest expenses related to these loans was also deleted. For AY 2020-21, the Tribunal noted that it had already deleted the addition related to loans from VFPL in the previous assessment year. Therefore, the addition on account of disallowance of interest to the extent of Rs. 15,47,041 was also deleted. Regarding brought forward losses, the Tribunal directed the AO to re-compute them and allow set-off if any, as this ground was consequential to the other decisions. The Tribunal allowed all the appeals of the assessee.

The Tribunal admitted additional evidence presented by the assessee regarding the cost of improvement. However, due to concerns about the authenticity and the need for factual verification, the issue was remitted back to the Assessing Officer for fresh adjudication.

The Tribunal held that the notice u/s 148 of the Act was issued beyond three years and the sanctioning authority should have been the PCCIT, not the PCIT as per Section 151 of the Act. Following the High Court's decision, the sanction was deemed invalid.

The Tribunal held that additions for unexplained personal expenses were not substantiated as the assessee provided details of expenses incurred through various modes and stayed in a company guest house. Regarding capital gains on paintings, the Tribunal found the AO's grounds factually incorrect and directed deletion of the addition.

The Tribunal held that the assessee is entitled to avail deduction under Section 80IA of the Act. The reasoning was based on expert opinions, including one from the Department of Computer Science & Engineering - Indian Institute of Technology, Madras, and another from Dr. Kuldip Singh, Former Member of TDSAT. These opinions concluded that there is no fundamental difference between EDI and internet, and that as the internet evolved, the term EDI was increasingly replaced by 'internet'. The Tribunal found that the services provided by the assessee between August 15, 1995, and March 31, 2000, were indeed EDI services, which qualified as eligible services under Section 80IA(4C) at that stage of internet evolution. The Tribunal applied the principle of substance over form to determine the nature of the services provided. Therefore, the ground of appeal was allowed.

The Tribunal held that the initial reporting of Rs. 57,21,300/- as deemed income was an inadvertent arithmetical error, as this amount represented the actual sum applied by the assessee. The Tribunal also found that Form 10BB was the appropriate form as the assessee's gross receipts did not exceed Rs. 5 crores, and therefore the addition made by the CPC was to be deleted.

The Tribunal held that the assessee's claim for exemption from Section 115JB could not be sustained. The Tribunal noted that Clause (vii) of Section 115JB(2) provides for the reduction of profits of a sick industrial company from book profits, ending in the assessment year during which the entire net worth becomes equal to or exceeds accumulated losses. It was an admitted fact that the assessee's net worth had become positive as of March 31, 2009. Therefore, the exclusion of profits of the year under consideration while computing book profits was not correct, as the net worth had already become positive. The Tribunal distinguished the Delhi High Court's decision in DGIT vs. BIFR, stating that it dealt with the withdrawal of concessions after a company became net worth positive, whereas the present case involved a claim for exemption under Section 115JB. The Tribunal found the assessee's contention that the conjoint reading of clause 20E of SS-08 and para 4.4(b) of the BIFR order made exemption mandatory for Section 115JB to be unacceptable. The appeal was dismissed.

The Tribunal held that the sale consideration of shares cannot be considered unexplained cash credit under Section 68 when the purchase of shares in an earlier year was accepted, and the sale occurred on a stock exchange platform through banking channels. The AO failed to establish the assessee's involvement in price rigging or find fault with the submitted documentation.

On the issue of depreciation on the HP Indigo Digital Press Printer, the Tribunal noted the assessee's argument that it cannot work without a computer and relied on the definition of 'computer' under the Information Technology Act, 2000, and High Court decisions. However, the Tribunal found that the lower authorities correctly distinguished the HP Indigo Digital Press Printer as an independent machinery used through a computer, not a computer peripheral or a computer itself. The Tribunal upheld the disallowance of the higher depreciation rate, confirming the CIT(A)'s decision. Regarding the provision for TDS certificates, the Tribunal observed that the provision was for unrecoverable amounts akin to bad debts, even if accounted for as 'Provision for TDS'. The AO had not examined the allowability under Section 36(1)(vii). Therefore, the Tribunal remitted this issue back to the AO for examination under Section 36(1)(vii) and to allow it in accordance with law. Consequently, the adjustment made to book profits under Section 115JB was directed to be deleted. The ground regarding depreciation on assets given on finance lease was dismissed as not pressed. For short credit of TDS, the Tribunal directed the AO to examine the facts and grant credit in accordance with law, keeping in mind Section 205. The ground concerning interest and penalty was deemed consequential. The appeal was partly allowed.

The Tribunal held that the reassessment orders were void ab initio for want of jurisdiction and procedural legitimacy, particularly due to initiation by an officer lacking jurisdiction in contravention of the Faceless Assessment Scheme (Section 151A). Furthermore, the assessment orders were invalidated for non-compliance with CBDT Circular No. 19 of 2019 due to the absence of a valid pre-generated DIN. Consequently, all consequential additions, including those for alleged NOC receipts treated as capital gains and unexplained money under section 69A, were deleted in full. The Tribunal found no merit in the Revenue's appeals, agreeing with the CIT(A)'s finding that only entries specifically identified and linked to the assessee could be considered. The Revenue's attempt to revive these entries was deemed futile. The Tribunal also dismissed the Revenue's grounds concerning Rule 46A. The assessee's appeals were allowed, and the Revenue's appeals were dismissed.

The Tribunal held that the AO was obligated to refer the matter to the DVO when the assessee disputed the stamp duty valuation. The addition made without such reference was considered unsustainable. The order of the CIT(A) was set aside and the issue was remanded to the AO.