ITAT Mumbai Judgments — April 2026

The Tribunal held that only the profit element of on-money receipts is taxable, and that unaccounted cash expenditure intrinsically linked to these receipts should not be separately added to avoid double taxation. Subcontracting expenses were found to be supported by evidence, and disallowances were deleted.

The Tribunal found that the assessee failed to produce sufficient evidence before the lower authorities. Therefore, both issues were remanded back to the AO for re-adjudication after considering additional evidence to be filed by the assessee.

The Tribunal allowed the assessee's grounds relating to additions under Section 69C concerning unexplained expenditure based on seized material. The Tribunal found that the handwritten notes in the seized material did not indicate materialized transactions attributable to the assessee. It noted that the department had not attempted to segregate entries attributable to the assessee versus other group entities. The Tribunal further observed that any presumption from such documents is rebuttable and requires corroborative statements and independent inquiries, which were not conducted. The CIT(A) was found to have treated 'dumb documents' as materialized transactions without a clear finding on the entity and persons involved, or whether the transactions materialized. Therefore, the Tribunal was inclined to allow the ground relating to additions under Section 69C. The judgment also mentions that the appeals were allowed for statistical purposes, implying that other grounds might have been decided in favor of the assessee or were consequential to the allowance of the primary grounds. The specific findings on other grounds like Section 68 additions, Section 115BBE, Section 234B, and Section 271(1)(c) are not explicitly detailed in the provided extract, but the overall outcome suggests a favorable decision for the assessee.

The Tribunal held that the CIT(A) erred in deleting the addition without adhering to the procedural safeguards of Rule 46A, which requires allowing the Assessing Officer an opportunity to examine additional evidence and submit a remand report. The Tribunal also noted the CIT(A) failed to adjudicate the assessee's ground challenging the validity of reassessment proceedings.

The Tribunal held that only the profit element of on-money receipts is taxable, and that unaccounted cash expenditure intrinsically linked to these receipts should not be separately added to avoid double taxation. Subcontracting expenses were found to be supported by evidence, and disallowances were deleted.

The Tribunal held that only the profit element of on-money receipts is taxable, and that unaccounted cash expenditure intrinsically linked to these receipts should not be separately added to avoid double taxation. Subcontracting expenses were found to be supported by evidence, and disallowances were deleted.

The Tribunal held that only the profit element of on-money receipts is taxable, and that unaccounted cash expenditure intrinsically linked to these receipts should not be separately added to avoid double taxation. Subcontracting expenses were found to be supported by evidence, and disallowances were deleted.

The Tribunal held that only the profit element of on-money receipts is taxable, and that unaccounted cash expenditure intrinsically linked to these receipts should not be separately added to avoid double taxation. Subcontracting expenses were found to be supported by evidence, and disallowances were deleted.

The Tribunal held that the issue of delay in filing Form 10AB requires fresh adjudication by the CIT(E) considering additional evidence regarding prior approval and revalidation provisions. The Tribunal also ruled that foreign remittances for subscriptions and software services used for charitable activities within India do not violate Section 11(1)(c).

The Tribunal held that the assessee had provided sufficient evidence, including customer confirmations and tax invoices, to explain the source of the cash deposits as advances received for car bookings. The AO's addition was made without proper verification.

The Tribunal found that the lower authorities failed to verify the legal status of the banks where deposits were placed. Therefore, the matter was restored to the Assessing Officer to verify if the payor-banks are registered as 'co-operative societies'.

The Tribunal held that the reopening of assessment was invalid as the alleged escapement of income did not meet the threshold for extended limitation under Section 149(1)(b). Therefore, the reassessment proceedings were quashed.

The Tribunal held that the assessment order passed without awaiting the DVO's report, despite a valid reference under Section 50C(2), is premature and not in accordance with law. Such an action renders the assessment order vitiated in law.

The Tribunal upheld the CIT(A)'s decision, finding that the proceedings under section 153C lacked legally admissible and credible evidence. The seized material did not have the required bearing on the assessee's income, and the satisfaction recorded by the AO was not sustainable.

The tribunal directed the deletion of additions related to compensation paid to the partner and society maintenance expenses. For the ALV issue, the matter was restored to the AO for fresh adjudication based on specific parameters.

The Tribunal held that the assessment order passed in the name of a non-existing entity is void ab initio and without jurisdiction. Following Supreme Court and High Court precedents, the assessment order was quashed.

The Tribunal allowed the assessee's grounds relating to additions under Section 69C concerning unexplained expenditure based on seized material. The Tribunal found that the handwritten notes in the seized material did not indicate materialized transactions attributable to the assessee. It noted that the department had not attempted to segregate entries attributable to the assessee versus other group entities. The Tribunal further observed that any presumption from such documents is rebuttable and requires corroborative statements and independent inquiries, which were not conducted. The CIT(A) was found to have treated 'dumb documents' as materialized transactions without a clear finding on the entity and persons involved, or whether the transactions materialized. Therefore, the Tribunal was inclined to allow the ground relating to additions under Section 69C. The judgment also mentions that the appeals were allowed for statistical purposes, implying that other grounds might have been decided in favor of the assessee or were consequential to the allowance of the primary grounds. The specific findings on other grounds like Section 68 additions, Section 115BBE, Section 234B, and Section 271(1)(c) are not explicitly detailed in the provided extract, but the overall outcome suggests a favorable decision for the assessee.

The Tribunal held that granting scholarships to Indian students for education abroad constitutes application of income for charitable purposes in India. Therefore, the rejection of applications by the CIT(E) was not sustainable.

The Tribunal upheld the Commissioner's deletion of additions, finding that the assessee had sufficiently explained the source of cash with documentary evidence and that the cash belonged to another entity which had already accepted it substantively. The protective addition was therefore unwarranted.

The Tribunal upheld the Commissioner's deletion of additions, finding that the assessee had sufficiently explained the source of cash with documentary evidence and that the cash belonged to another entity which had already accepted it substantively. The protective addition was therefore unwarranted.

The Tribunal held that the delay in filing the appeal was due to sufficient and reasonable cause, as the assessee was prevented from filing on time due to non-service and non-availability of the assessment order. The defect of not filing a certified copy was not considered a curable defect in these circumstances.

The Tribunal held that interest income earned by a cooperative housing society from deposits with a cooperative bank is not eligible for deduction under Section 80P(2)(d). This is because cooperative banks are specifically excluded from such deductions by Section 80P(4) and the income is considered 'income from other sources' rather than business income.

The tribunal held that Section 56(2)(x) was prematurely invoked as the assessee had not actually received the immovable property during the relevant assessment year, as the building was still under construction. Therefore, the addition was deleted.

The Tribunal allowed the grounds relating to additions under section 69A on account of cash receipts as per seized materials for AY 2014-15. The Tribunal found that the department did not make attempts to identify and segregate entries attributable to the assessee, and the presumption was rebuttable and not supported by corroborative statements or independent enquiries. The CIT(A) treated 'dumb documents' as materialized transactions without a clear finding. Consequently, the appeal for AY 2014-15 was allowed. Applying the same findings, the appeal for AY 2015-16 was also allowed. For AY 2016-17, the Tribunal deleted the addition of Rs 12,00,000/- under section 69D. The assessee successfully argued, relying on judicial precedents, that the seized document was not a 'Hundi' as it was in English, bilateral, and not tripartite, and represented a proposed transaction that did not materialize. The Tribunal followed decisions in Kemox Corporation, Dexan Pharmaceuticals Private Limited, Ravi B Jaising, CIT vs Ram Niwas, Vasupujya Filaments, and Dodhia Synthetics Ltd. The appeals filed by the assessee were allowed.

The Tribunal condoned the delay in filing the first appeal, citing the assessee's bonafide reasons due to her husband's death and mental trauma. The Tribunal also accepted the deposit as explained by past savings and household work receipts, deleting the addition.

The Tribunal held that claiming depreciation on assets reflected in books and routine administrative expenses, even without active business, does not constitute furnishing inaccurate particulars or misreporting of income. Penalties were deleted for most years.

The Tribunal held that the issue regarding the validity of the draft assessment order (Ground No. 1) had become academic due to the deletion of the transfer pricing adjustment and did not require adjudication. Regarding the comparability analysis, the Tribunal found merit in the assessee's contention that the TPO's approach of repeatedly changing filters amounted to impermissible cherry-picking. The Tribunal noted that the turnover filter was not applied consistently, and the inclusion of companies with disproportionately high turnover and diversified operations distorted comparability. The Tribunal also found that being a 100% export-oriented entity, an appropriate export filter ought to have been applied, and the inclusion of predominantly domestic companies distorted comparability. The Tribunal rejected the Revenue's contention that the assessee's services fell under "knowledge process outsourcing services" under Rule 10TA(g), stating that the emphasis is on the nature and complexity of functions requiring advanced analytical and technical skills, which were not present in the assessee's routine HR support services. The Tribunal held that the comparables selected by the assessee were based on proper FAR analysis and satisfied the test of broad comparability under TNMM, while the TPO's selected comparables were functionally dissimilar. Consequently, the Tribunal directed the deletion of the transfer pricing adjustment of Rs. 6,99,33,200/-.

The Tribunal allowed the assessee's grounds relating to additions under Section 69C concerning unexplained expenditure based on seized material. The Tribunal found that the handwritten notes in the seized material did not indicate materialized transactions attributable to the assessee. It noted that the department had not attempted to segregate entries attributable to the assessee versus other group entities. The Tribunal further observed that any presumption from such documents is rebuttable and requires corroborative statements and independent inquiries, which were not conducted. The CIT(A) was found to have treated 'dumb documents' as materialized transactions without a clear finding on the entity and persons involved, or whether the transactions materialized. Therefore, the Tribunal was inclined to allow the ground relating to additions under Section 69C. The judgment also mentions that the appeals were allowed for statistical purposes, implying that other grounds might have been decided in favor of the assessee or were consequential to the allowance of the primary grounds. The specific findings on other grounds like Section 68 additions, Section 115BBE, Section 234B, and Section 271(1)(c) are not explicitly detailed in the provided extract, but the overall outcome suggests a favorable decision for the assessee.

The Tribunal held that the notice issued under Section 148 and the subsequent assessment order were void ab initio due to the lack of proper sanctioning authority. Therefore, both the notice and the assessment order were quashed.

The Tribunal held that the assessment order passed in the name of a non-existing entity is void ab initio and bad in law. Following Supreme Court and High Court precedents, the assessment order was quashed.

The ITAT held that once an appeal is dismissed on limitation, the merits of the case should not be adjudicated. However, considering the peculiar facts and the need for proper adjudication, the case was remanded to the CIT(A) for a fresh decision.

The Tribunal held that interest income earned by a co-operative society from investments in other co-operative societies, including co-operative banks, is eligible for deduction under Section 80P(2)(d). Section 80P(4) primarily excludes co-operative banks from claiming deductions under Section 80P, not from being investment avenues for other co-operative societies.

The Tribunal allowed the grounds relating to additions under section 69A on account of cash receipts as per seized materials for AY 2014-15. The Tribunal found that the department did not make attempts to identify and segregate entries attributable to the assessee, and the presumption was rebuttable and not supported by corroborative statements or independent enquiries. The CIT(A) treated 'dumb documents' as materialized transactions without a clear finding. Consequently, the appeal for AY 2014-15 was allowed. Applying the same findings, the appeal for AY 2015-16 was also allowed. For AY 2016-17, the Tribunal deleted the addition of Rs 12,00,000/- under section 69D. The assessee successfully argued, relying on judicial precedents, that the seized document was not a 'Hundi' as it was in English, bilateral, and not tripartite, and represented a proposed transaction that did not materialize. The Tribunal followed decisions in Kemox Corporation, Dexan Pharmaceuticals Private Limited, Ravi B Jaising, CIT vs Ram Niwas, Vasupujya Filaments, and Dodhia Synthetics Ltd. The appeals filed by the assessee were allowed.

The Tribunal held that the assessee had sufficient cash available in his personal balance sheet, as supported by the balance sheet as on 31.03.2020 and the significant income declared by the assessee over the years. Therefore, the addition of Rs. 3,80,560/- under section 68 was unsustainable.

The Tribunal held that the additions were made on suspicion and conjecture, relying solely on a third-party statement and seized material without independent corroborative evidence. The assessees had consistently denied making any 'on-money' payments. Therefore, the additions could not be sustained.

The Tribunal held that the security deposits received under the JDA were business receipts and not deemed dividend, as the assessee was neither a shareholder nor beneficial shareholder. It also held that the addition on account of the JDA was incorrect as the profit should be taxed on sale of constructed premises, not on entering the agreement.

The Tribunal held that the security deposits received under the JDA were business receipts and not deemed dividend, as the assessee was neither a shareholder nor beneficial shareholder. It also held that the addition on account of the JDA was incorrect as the profit should be taxed on sale of constructed premises, not on entering the agreement.

The Tribunal held that the additions were made on suspicion and conjecture, relying solely on a third-party statement and seized material without independent corroborative evidence. The assessees had consistently denied making any 'on-money' payments. Therefore, the additions could not be sustained.

The Tribunal noted that the contractual payments for fund-raising constituted over 20% of the total receipts and questioned their necessity for the trust's objects. Despite the appointment letters, the assessee failed to substantively establish how these expenses were essential for achieving the trust's objectives or how much was raised through these efforts. Consequently, the matter was remanded back to the CIT(A) for fresh adjudication.

The Tribunal held that the rejection of the application based solely on the absence of an irrevocability clause, especially when the Hon'ble Jurisdictional High Court in a similar case (The Chamber of Tax Consultants Vs. CIT(Exemptions)) had directed not to reject applications on this ground, was incorrect. The Tribunal followed the High Court's order.

The Tribunal held that penalty proceedings are consequential and cannot survive if the underlying addition is deleted. Since the CIT(A) had already deleted the entire addition in the quantum appeal after reviewing the assessee's filed return, TDS, and Form 26AS, the basis for the penalty under section 270A ceased to exist. Therefore, the penalty was deleted.

The Tribunal held that the legal heirs might not possess complete financial details and require a reasonable opportunity to present their case. Observing that the CIT(A) passed an ex parte order without a final effective opportunity and that the Revenue did not object, the Tribunal decided to restore the matter.

For AY 2010-2011, the Tribunal held that penalty cannot be levied on estimated additions, following established judicial precedents, and deleted the penalty. For AY 2011-2012, the Tribunal found that the CIT(A) failed to properly adjudicate the appeal and set aside the order, directing fresh adjudication.

For AY 2010-2011, the Tribunal held that penalty cannot be levied on estimated additions, following established judicial precedents, and deleted the penalty. For AY 2011-2012, the Tribunal found that the CIT(A) failed to properly adjudicate the appeal and set aside the order, directing fresh adjudication.

The Tribunal held that the addition on account of sale of investments was wrongly made as the AO could not have treated the amount received as unexplained cash credit merely because the creditor company's name was struck off later, without pointing out deficiencies in evidence. For the unsecured loans, the Tribunal found that the AO failed to controvert the findings of the first appellate authority, who had accepted the genuineness of the transactions based on the documentary evidence provided by the assessee.

The Tribunal condoned the delay in filing the appeal, considering the assessee is a senior citizen and the delay was unintentional. The Tribunal found a discrepancy between the stamp duty value and a private valuer's report, warranting a valuation by the Departmental Valuation Officer (DVO). Therefore, the matter was remanded to the AO for fresh adjudication.

The Tribunal held that the AO did not travel beyond the scope of limited scrutiny as issues relating to investment in immovable property encompass capital gains. However, it found that the surrender of tenancy rights and consequent capital gain taxable event occurred only upon possession of the alternative accommodation being handed over in April 2019, which falls in AY 2020-21, not the impugned AY.

The Tribunal held that MPS Ltd. was not functionally comparable to the assessee due to its diversified business, including software development and significant business risks. Consequently, MPS Ltd. was excluded from the list of comparables.

The Tribunal held that the reassessment proceedings were initiated on the basis of a mere change of opinion by the AO, without any new tangible material. The AO had already examined the issue of the property's acquisition date and treated the gain as long-term capital gain in the original assessment.

The Tribunal held that the voice termination services did not constitute 'Royalty' under Section 9(1)(vi) of the Income Tax Act or Article 12 of the India-USA DTAA. It further held that the receipts should be taxed as business profits, not royalty or fees for technical services.