ITAT Mumbai Judgments — January 2026

The Tribunal held that the assessee had provided sufficient documentary evidence, including loan confirmations, bank statements, and income tax returns of creditors, to establish the identity, creditworthiness, and genuineness of the loan transactions. Therefore, the addition made by the AO was unjustified.

The Tribunal found that the AO relied solely on third-party information without independent investigation and failed to provide specific findings on documentary evidence. The addition was reduced to 1% of sales only to avoid revenue leakage.

The Tribunal held that both the assessment order and the CIT(A) order were passed ex parte without effective adjudication on merits. Considering the principles of natural justice and substantial justice, the matter deserved to be examined afresh. Therefore, the Tribunal set aside the impugned orders and restored the matter to the Assessing Officer for fresh adjudication.

The Tribunal held that the Assessing Officer proceeded on the footing that the purchase parties were accommodation entry providers. However, the sales declared by the assessee were not doubted, nor were there adverse findings regarding quantitative details, stock consumption, or realization of sale proceeds. The Revenue's case was not that trading activity or purchases did not occur, but that the assessee obtained purchase bills from non-genuine parties to regularize purchases from other sources. In such a scenario, disallowing the entire purchase amount would result in taxing gross receipts rather than real income. It is a settled principle that when sales are accepted as genuine, corresponding purchases cannot be treated as entirely non-existent. The benefit derived by the assessee is limited to suppression of profit or savings on taxes and margins, not the entire purchase value. The CIT(A) correctly appreciated this and restricted the addition to the profit element embedded in the purchases, estimated at 20%, which was neither excessive nor unreasonable. The Revenue failed to provide material to demonstrate that purchases were not effected or that the CIT(A)'s estimation was arbitrary. Therefore, the Tribunal found no infirmity in the CIT(A)'s approach.

The Tribunal held that the additions made by the AO and confirmed by the CIT(A) cannot be sustained. The AO initiated proceedings under section 153C and made additions based primarily on Shri Imran Ansari's statement and an alleged Excel sheet. Crucially, the AO did not provide a copy of the Excel sheet to the assessee, nor did the assessment order reproduce relevant entries or provide date-wise details linking the alleged payments to the assessee. The additions were made based on a general statement explaining the modus operandi without cogent, independent evidence specifically identifying the assessee as having made the alleged payments. The Tribunal noted that it has consistently held in several decisions arising from the Rubberwala Group search that additions cannot be sustained merely on the basis of third-party statements and uncorroborated data, especially when the assessee denies the payment, no independent corroborative evidence is produced, and the opportunity for cross-examination is not provided. Following the decision in Praveen Khetaram Purohit and other similar cases, the Tribunal found that the lack of independent material, failure to confront the assessee with the Excel sheet, and denial of cross-examination rendered the additions unsustainable. Therefore, the additions were deleted. The appeals filed by the assessee were allowed.

The Tribunal held that the satisfaction under section 153C was recorded in FY 2021-22, limiting the block of ten assessment years to AY 2012-13. Therefore, proceedings for AY 2009-10 and 2010-11 under section 153C were without jurisdiction.

The Tribunal dismissed the Revenue's appeal, affirming the CIT(A)'s order. The Tribunal held that the assessee trust is a revocable trust within the meaning of sections 61 to 63 of the Act. Consequently, the income arising from the trust is not chargeable to tax in the hands of the trust but in the hands of the Security Receipt Holders. The Tribunal further held that the assessee cannot be assessed as an Association of Persons, and section 164 has no application. The reasoning was based on the statutory mandate under SARFAESI Act and RBI guidelines, the trust deed provisions, and consistent judicial precedents from coordinate benches of the Tribunal. The Tribunal noted that the legislative intent, reinforced by later amendments and CBDT clarifications, treats securitisation trusts as pass-through entities. The CIT(A) was found to have correctly appreciated the statutory scheme, trust deed, and binding precedents.

The Tribunal held that the additions made by the AO and confirmed by the CIT(A) cannot be sustained. The AO initiated proceedings under section 153C and made additions based primarily on Shri Imran Ansari's statement and an alleged Excel sheet. Crucially, the AO did not provide a copy of the Excel sheet to the assessee, nor did the assessment order reproduce relevant entries or provide date-wise details linking the alleged payments to the assessee. The additions were made based on a general statement explaining the modus operandi without cogent, independent evidence specifically identifying the assessee as having made the alleged payments. The Tribunal noted that it has consistently held in several decisions arising from the Rubberwala Group search that additions cannot be sustained merely on the basis of third-party statements and uncorroborated data, especially when the assessee denies the payment, no independent corroborative evidence is produced, and the opportunity for cross-examination is not provided. Following the decision in Praveen Khetaram Purohit and other similar cases, the Tribunal found that the lack of independent material, failure to confront the assessee with the Excel sheet, and denial of cross-examination rendered the additions unsustainable. Therefore, the additions were deleted. The appeals filed by the assessee were allowed.

The Tribunal held that the issue of filing an application under a wrong provision is a curable defect. They also noted that the assessee has taken steps to amend the object clause and has been granted provisional approval till AY 2024-25.

The Tribunal held that the satisfaction under section 153C was recorded in FY 2021-22, limiting the block of ten assessment years to AY 2012-13. Therefore, proceedings for AY 2009-10 and 2010-11 under section 153C were without jurisdiction.

The Tribunal held that the additions made by the AO and confirmed by the CIT(A) cannot be sustained. The AO initiated proceedings under section 153C and made additions based primarily on Shri Imran Ansari's statement and an alleged Excel sheet. Crucially, the AO did not provide a copy of the Excel sheet to the assessee, nor did the assessment order reproduce relevant entries or provide date-wise details linking the alleged payments to the assessee. The additions were made based on a general statement explaining the modus operandi without cogent, independent evidence specifically identifying the assessee as having made the alleged payments. The Tribunal noted that it has consistently held in several decisions arising from the Rubberwala Group search that additions cannot be sustained merely on the basis of third-party statements and uncorroborated data, especially when the assessee denies the payment, no independent corroborative evidence is produced, and the opportunity for cross-examination is not provided. Following the decision in Praveen Khetaram Purohit and other similar cases, the Tribunal found that the lack of independent material, failure to confront the assessee with the Excel sheet, and denial of cross-examination rendered the additions unsustainable. Therefore, the additions were deleted. The appeals filed by the assessee were allowed.

The Tribunal held that the assessee had discharged their primary onus by furnishing sufficient evidence to prove the genuineness of the share transactions and the LTCG. The Tribunal relied on various High Court judgments that held that in the absence of specific adverse material against the assessee or their broker regarding price manipulation, capital gains cannot be treated as unexplained cash credit.

The Tribunal held that the penalty proceedings, including the show cause notice and the penalty order, were initiated after the assessee's death. Following the Bombay High Court's decision in 'Geeta vs. Principal Commissioner of Income-tax', it was determined that such proceedings against a deceased person are invalid unless initiated through legal heirs.

The Tribunal held that the Ld. Commissioner erred in dismissing the appeal ex-parte without considering the medical reasons provided by the assessee and the documents submitted. The matter was remanded back for fresh adjudication.

The Tribunal noted that RD Telinet Pvt. Ltd. is in the business of electronic goods, and the cash sales were recorded in its books. No incriminating material was found from the assessee's residence, and the cash was found at the business premises of RD Telinet Pvt. Ltd. The assessee also filed an affidavit disowning the cash.

The Tribunal held that the Ld. Commissioner's order was liable to be set aside as no notice was issued to the assessee, nor was an opportunity of being heard provided. The Tribunal also noted the assessee's claim of non-taxable income.

The Tribunal upheld the CIT(A)'s decision, stating that disallowance under Section 14A should only consider investments that have actually generated exempt income. The AO's disallowance was deleted.

The AO and the First Appellate Authority found the assessee's explanations regarding the creditworthiness of lenders and details of creditors unsatisfactory. The appeal was subsequently dismissed for want of prosecution due to the assessee's non-appearance and unserved notices.

The Tribunal decided that consultancy payments to Shri Upendra Rai were genuine business expenses and deleted the disallowance. It also held that certain unsecured loans were actually trade credits and deleted the addition. The Tribunal reversed the disallowance of commission to M/s Ricami Giuma, stating non-payment by year-end doesn't make the expense excessive.

The Tribunal held that consultancy payments were substantiated by an agreement and confirmation letters, and that certain unsecured loans were actually trade credits supported by CA certificates and ledger accounts. It also ruled that commission expenses, even if unpaid by year-end, are allowable if regular and per agreement, and that property taxes on premises used for business are deductible.

The Tribunal held that consultancy payments were substantiated by an agreement and confirmation letters, and that certain unsecured loans were actually trade credits supported by CA certificates and ledger accounts. It also ruled that commission expenses, even if unpaid by year-end, are allowable if regular and per agreement, and that property taxes on premises used for business are deductible.

The Tribunal held that the notice under Section 148 was issued beyond the permissible limitation period as per the Supreme Court's decision in Rajeev Bansal. Furthermore, the mandatory sanction under Section 151(ii) was granted by an incompetent authority, rendering the entire reassessment proceedings void ab initio.

The Tribunal acknowledged the assessee's plea of medical hardship preventing the submission of evidence to lower authorities. It was held that appellate proceedings aim for substantive justice and should not be defeated by procedural lapses, especially when a plausible explanation for non-production of evidence is offered.

The Tribunal found that the AO's assessment was casual and lacked specific findings regarding the nature of the purchases. The CIT(A)'s restriction of the addition to the gross profit declared by the assessee was deemed sufficient to prevent revenue leakage. The case law cited by the Revenue was found not applicable.

The Tribunal held that the non-disposal of objections to the reasons for reopening, prior to the completion of reassessment, is a jurisdictional defect, not a curable procedural lapse. Relying on judgments from the Bombay High Court and Rajasthan High Court, the Tribunal stated that such a failure vitiates the entire reassessment proceedings, rendering the order void ab initio.

The Tribunal noted that the Assessee claimed to have provided submissions and computations for disallowance under Section 14A and also submitted audited balance sheets. The Tribunal found the facts peculiar and decided to remand the case to the Assessing Officer for fresh adjudication.

The Tribunal noted that the entire addition was made based on WhatsApp messages and statements. The assessee argued that the invocation of Section 69A was misplaced and referred to a coordinate bench decision in their own case. The Tribunal found that the facts of the present case were squarely covered by the said decision.

The Tribunal, finding that the CIT(A) had dismissed the appeal ex parte due to the assessee's non-compliance, decided to give the assessee one more opportunity to present their case. The matter was restored to the file of the CIT(A) for fresh adjudication.

The Tribunal admitted the additional ground raised by the assessee, which challenged the reassessment proceedings initiated under Section 147. Citing the jurisdictional High Court's decision in Spicy Sangaria Hotels Pvt. Ltd., which followed the Supreme Court's ruling in Union of India vs. Rajeev Bansal, the Tribunal held that the notice under Section 148, issued on 27.07.2022 for AY 2015-16, was time-barred and thus liable to be quashed.

The Tribunal held that the CIT(A) cannot dismiss an appeal solely on account of non-prosecution. The impugned order was set aside as it was passed without considering the merits of the case.

The Tribunal held that for Section 69 to apply, the investment must not be recorded in the assessee's books, and there must be an absence of a satisfactory explanation for its nature and source. In this case, the investment was recorded in the assessee's books, negating the first condition. Furthermore, the AO's reasoning based on premium comparison and non-reflection in the investee company's records did not satisfy the requirements of Section 69.

The Tribunal held that since the income was offered to tax in the return and accepted in assessment, there was no under-reporting or misreporting of income as per Section 270A. The penalty was deemed unsustainable.

The Tribunal noted that the appeals before the CIT(A) were disposed of ex parte without adjudication on merits. While acknowledging the assessee's failure to diligently pursue the remedy, the Tribunal, in the interest of substantial justice, decided to restore the matters to the CIT(A) for fresh adjudication.

The Tribunal noted that the appeal was filed with a delay, but condoned it due to peculiar jurisdictional circumstances and the assessee's bona fide conduct. The Tribunal found that the CIT(A) had passed an ex-parte order without adequately hearing the assessee or adjudicating on the merits of the evidence produced. Therefore, the Tribunal set aside the CIT(A)'s order.

The Tribunal noted that the appeals before the CIT(A) were disposed of ex parte without adjudication on merits. While acknowledging the assessee's failure to diligently pursue the remedy, the Tribunal, in the interest of substantial justice, decided to restore the matters to the CIT(A) for fresh adjudication.

The Tribunal held that the discount of Rs. 57,26,783/- recovered from Dish TV is not taxable in the year under consideration as the settlement agreement was entered into after the relevant financial year and the payments were due in a subsequent year. For the additions concerning M/s. Planetcast Media Services Pvt. Ltd. and M/s. CCN Den Network Ltd., the Tribunal observed that the arguments were not adequately addressed by the revenue authorities and restored the matter to the AO for fresh adjudication after providing an opportunity of hearing to the assessee. The Tribunal also noted that the addition of Rs. 22,99,038/- was made without drawing a negative inference from the assessee's submitted information regarding purchases.

The Tribunal condoned the 56-day delay in filing the appeal before the CIT(A), finding sufficient cause due to the assessee's non-resident status and lack of effective service. The Tribunal then proceeded to adjudicate the substantive issue on merits, considering the new evidence provided by the assessee regarding the source of funds for the investment.

The Tribunal held that for the purpose of deduction under section 80P(2)(d) of the Income Tax Act, co-operative banks should be treated as primary co-operative societies. Therefore, the assessee is eligible for the deduction of interest income earned from such banks.

The Tribunal noted that the appeals before the CIT(A) were disposed of ex parte without adjudication on merits. While acknowledging the assessee's failure to diligently pursue the remedy, the Tribunal, in the interest of substantial justice, decided to restore the matters to the CIT(A) for fresh adjudication.

The Tribunal found that the assessee was not provided with the statement of the third party, denying them a proper opportunity to verify the addition. Therefore, the matter was restored to the AO for further factual verification.

The Tribunal held that in both assessment years, the audit report (Form 10B) was available when the return was processed and when the appeals were heard. Citing Supreme Court and other High Court decisions, the Tribunal found that the assessee should be eligible for relief, especially since the report was filed within the due date for AY 2018-19 and only subsequent to the return for AY 2019-20.

The Tribunal held that the disallowance under Section 14A could not exceed the amount of exempt income that the assessee had already suo motu disallowed. Regarding the interest expenditure, the Tribunal found that the CIT(A) had not adequately examined the nexus between the borrowed funds and the business activities, and thus remanded the matter back to the Assessing Officer for further verification.

The Tribunal held that the addition was not sustainable as it was based on a retracted statement and a loose paper entry without sufficient corroboration. The Assessing Officer and CIT(A) failed to provide a reasoned order and meet the requirements of relevant sections of the Income Tax Act.

The Tribunal condoned the 510-day delay in filing the first appeal, subject to the deposit of Rs. 11,000/-. The Tribunal also decided to remand the case to the Commissioner for a decision on merits, as the appeal was dismissed in limine.

The Tribunal held that in both assessment years, the audit report (Form 10B) was available when the return was processed and when the appeals were heard. Citing Supreme Court and other High Court decisions, the Tribunal found that the assessee should be eligible for relief, especially since the report was filed within the due date for AY 2018-19 and only subsequent to the return for AY 2019-20.

The Tribunal dismissed the grounds challenging the validity of reassessment. However, it restored the issues relating to additions under Section 68 to the Assessing Officer for fresh adjudication after conducting necessary inquiries.

The Tribunal found that neither the Assessing Officer nor the CIT(A) conducted adequate independent enquiry into the genuineness of the transactions. Therefore, the matter was restored to the Assessing Officer for fresh examination and necessary enquiries.

The Tribunal condoned the delay in filing the appeal due to lack of knowledge of the impugned order. It noted that the assessee had challenged the reopening of assessment, and the CIT(A) had rejected these contentions, relying on Supreme Court decisions regarding the stage of reopening.

The Tribunal condoned the delay in filing the appeal due to the assessee's lack of knowledge of the CIT(A)'s order. The Tribunal noted the assessee's grounds challenging the reopening and the CIT(A)'s reasoning for upholding it, emphasizing that at the reopening stage, a prima facie belief based on tangible material is sufficient.

The Tribunal dismissed the grounds challenging the validity of reassessment. However, it restored the issues relating to additions under Section 68 to the Assessing Officer for fresh adjudication after conducting necessary inquiries.