ITAT Mumbai Judgments — August 2026

The Tribunal held that additions under Section 68 and consequential commission were unsustainable on both legal and merit grounds. For earlier years, the assessment was concluded before the search, and no incriminating material was found. The Tribunal also noted issues with the retracted statement, denial of cross-examination, and the assessee's documentary evidence.

The Tribunal held that additions under Section 68 and consequential commission were unsustainable on both legal and merit grounds. For earlier years, the assessment was concluded before the search, and no incriminating material was found. The Tribunal also noted issues with the retracted statement, denial of cross-examination, and the assessee's documentary evidence.

The Tribunal held that additions under Section 68 and consequential commission were unsustainable on both legal and merit grounds. For earlier years, the assessment was concluded before the search, and no incriminating material was found. The Tribunal also noted issues with the retracted statement, denial of cross-examination, and the assessee's documentary evidence.

The Tribunal held that the CIT(A) had correctly considered the submissions and evidence provided by the assessee. The CIT(A) found that the assessee had discharged its onus by providing loan agreements, bank statements, and financial records of the lender.

The Tribunal upheld the CIT(A)'s order, finding no infirmity. The AO had made additions without appreciating the assessee's contentions and supporting evidence, including confirmations, bank statements, and ITRs.

The Tribunal found that the Assessing Officer and CIT(A) had not properly examined the WhatsApp chats and related evidence. The matter was restored to the Assessing Officer for de novo adjudication with specific directions.

The Tribunal found that the Assessing Officer and CIT(A) had not properly examined the WhatsApp chats and related evidence. The matter was restored to the Assessing Officer for de novo adjudication with specific directions.

The Tribunal found that the Assessing Officer and CIT(A) had not properly examined the WhatsApp chats and related evidence. The matter was restored to the Assessing Officer for de novo adjudication with specific directions.

The Tribunal held that the mere grant of provisional registration does not equate to the commencement of charitable activities. The actual date of commencement requires factual verification, which was not adequately done by the CIT(E).

The Tribunal held that the mere grant of provisional registration does not equate to the commencement of charitable activities. The actual date of commencement requires factual verification, which was not adequately done by the CIT(E).

The Tribunal found that the genuineness of the cash sales and the source of the SBN deposits required further verification. It noted the abnormal surge in cash sales before demonetization and the lack of contemporaneous evidence.

The Tribunal held that a mere mismatch in reporting figures in the return processing under Section 143(1) cannot create a tax liability if the substantive provisions of the Act do not warrant it. The utilization of earlier accumulated income, properly disclosed in the revised audit report, should not be taxed under Section 115BBI due to a reporting error.

The Tribunal held that the residential status alone is not conclusive for exemption under Section 10(4)(ii), as permission from the RBI to maintain the account is an alternative condition. The factual aspect of whether the assessee had such permission was not clearly established.

The Tribunal decided the appeals on merits. Regarding the legality of the assessment under Section 153C, the Tribunal noted that the CIT(A) had rejected the assessee's contention, holding that incriminating material was found during the search on Ms. Tapasee Pannu or derived from impounded data related to the assessee, and the AO had recorded satisfaction. However, since the additions were deleted on merits, the Tribunal considered the adjudication of this legal ground to be academic and left it open. On the merits of the additions, the Tribunal deleted the additions of Rs. 2,06,59,690/- under Section 68 (conversion of share money into sponsorship income), Rs. 39,77,397/- towards unexplained expenditure to M/s KRI Entertainment, and Rs. 53,69,000/- towards value of barter services with Entertainment Network (India) Ltd. These deletions were based on the Tribunal's decision in a connected appeal (IT(SS)A No. 427/Mum/2026) which dealt with identical additions. For the disallowance under Section 40(a)(ia) concerning accommodation expenses of Rs. 4,10,142/-, the Tribunal found merit in the assessee's alternative contention. While the assessee failed to substantiate its primary plea, the disallowance was restricted to 30% of the expenditure as per the provision for the relevant assessment year, and the balance disallowance was deleted. Thus, the ground was partly allowed.

The Tribunal decided the appeals on merits. Regarding the legality of the assessment under Section 153C, the Tribunal noted that the CIT(A) had rejected the assessee's contention, holding that incriminating material was found during the search on Ms. Tapasee Pannu or derived from impounded data related to the assessee, and the AO had recorded satisfaction. However, since the additions were deleted on merits, the Tribunal considered the adjudication of this legal ground to be academic and left it open. On the merits of the additions, the Tribunal deleted the additions of Rs. 2,06,59,690/- under Section 68 (conversion of share money into sponsorship income), Rs. 39,77,397/- towards unexplained expenditure to M/s KRI Entertainment, and Rs. 53,69,000/- towards value of barter services with Entertainment Network (India) Ltd. These deletions were based on the Tribunal's decision in a connected appeal (IT(SS)A No. 427/Mum/2026) which dealt with identical additions. For the disallowance under Section 40(a)(ia) concerning accommodation expenses of Rs. 4,10,142/-, the Tribunal found merit in the assessee's alternative contention. While the assessee failed to substantiate its primary plea, the disallowance was restricted to 30% of the expenditure as per the provision for the relevant assessment year, and the balance disallowance was deleted. Thus, the ground was partly allowed.

The Tribunal held that the Assessing Officer had conducted necessary inquiries, examined the material, and taken a plausible view. Therefore, the Principal CIT's invocation of Section 263 was not justified merely because he held a different opinion.

The Tribunal held that an assessment framed in the name of a non-existent entity after amalgamation is void ab initio and a jurisdictional defect. Participation in proceedings by the amalgamated entity does not validate such an assessment.

The Tribunal held that the profit from commodity trades was a trading result arising from completed business transactions and had already been offered in the computation of income. Therefore, treating it as unexplained income under Section 68 was legally untenable and resulted in double taxation.

The tribunal held that the CIT(A) erred in admitting additional evidence without satisfying Rule 46A and in allowing deductions for properties not solely in the assessee's name. The tribunal also noted that the proviso to Section 54(1) restricts the claim for two houses when capital gains exceed Rs. 2 Crores.

The Tribunal noted that the Assessing Officer (AO) had made additions based on seized material and statements without allowing cross-examination, violating natural justice. The Tribunal also found issues with the validity of the notice under Section 148 and the approval obtained for reassessment.

The Tribunal held that the material available was insufficient to definitively confirm or delete the disputed additions. The Assessing Officer's rejection of the assessee's explanations lacked specific findings, and the relief granted by the CIT(A) was not supported by adequate verification from third parties. The Tribunal noted that both parties selectively accepted parts of the same material, further complicating the issue. Given the large number of parties and transactions, and the necessity of independent verification from third parties, the Tribunal decided to set aside the impugned orders of the CIT(A) in their entirety. The entire matter, including additions sustained and deleted by the CIT(A), was restored to the Assessing Officer for de novo adjudication. The Assessing Officer was directed to examine each party and transaction, ascertain the nature of numerical expressions in the chats, verify if transactions occurred, determine if they were receipts or payments, and assess whether the assessee was the owner of money (Section 69A) or incurred expenditure from an unexplained source (Section 69C). The AO was also to determine if the assessee acted on their own account or as an intermediary, requiring verification of confirmations and third-party records. The peak-fund-flow method was to be examined only after identifying transactions belonging to the assessee. The Tribunal clarified that the de novo proceedings would be strictly confined to the parties, transactions, and additions already considered in the original assessment orders, and no fresh transactions or items were to be introduced. The substantive grounds were allowed for statistical purposes.

The Tribunal held that an assessment framed in the name of a non-existent entity after amalgamation is void ab initio and a jurisdictional defect. Participation in proceedings by the amalgamated entity does not validate such an assessment.

The Tribunal held that since the assessment order forming the basis of the penalty no longer survives, the penalty is liable to be deleted. The appeal was allowed, setting aside the CIT(A)'s order and directing the deletion of the penalty.

The Tribunal held that the notice issued under Section 148 was bad in law because the approval for its issuance was not obtained from the specified authority as required by Section 151(ii). Consequently, the reassessment proceedings were quashed.

The Tribunal held that interest expenditure satisfying the conditions of Section 57 is allowable and cannot be restricted to the amount of interest income earned in the relevant year. Revenue's appeals were dismissed on grounds of low tax effect for certain years.

The Tribunal accepted the assessee's request to withdraw the appeal. The appeal was dismissed as withdrawn because it was a duplicate filing.

The Tribunal condoned the delay in filing the appeal, finding reasonable cause. It then restored the matter to the Jurisdictional AO for passing a fresh assessment order after providing a fair opportunity to the assessee.

The Tribunal restored the issue of gift expenditure to the AO for fresh adjudication due to lack of adequate opportunity for the assessee. For the weighted deduction under Section 35(2AB), the Tribunal held that the assessee cannot be denied the deduction solely due to the prescribed authority's failure to furnish Form 3CL, following coordinate bench and High Court decisions.

The Tribunal held that since the loan was repaid within the same financial year and on similar facts, a previous decision involving the assessee's family member allowed the appeal. Therefore, no addition was warranted.

The Tribunal allowed the assessee's application for admission of additional evidence, finding it legal and going to the root of the matter. The case was restored to the CIT(A) for fresh consideration.

The Tribunal held that no transfer pricing adjustment should arise for the availing of back-office, sales, and marketing support services once the overall segmental margins are at arm's length. It also directed the exclusion of a specific comparable company, Moonfrog Labs Pvt. Ltd., for software development services due to functional dissimilarity.

The Tribunal held that the payments towards Club House Charges, Corpus Fund, and Municipal Taxes are includible in the cost of acquisition for computing capital gains under Section 48. The reasoning was that these payments were made to the builder in relation to the identified property, supported by contemporaneous receipts and banking evidence, and their genuineness was undisputed. The Tribunal found no material to suggest they were independent personal expenditure, refundable deposits, or recurring expenses incurred after acquisition unconnected with the acquisition itself. The Club House Charges pertained to an amenity accompanying the property, the Corpus Fund was a one-time contribution connected with the residential complex, and the Municipal Taxes were paid during the construction/acquisition stage before the occupancy certificate, not representing the assessee's recurring municipal liability. The Tribunal directed the Assessing Officer to include these amounts in the cost of acquisition and recompute the capital gain, granting consequential benefits. The addition of ₹26,71,684/- was noted to be the consequential enhancement of capital gain, not the sum of the payments themselves. The Tribunal also noted an inadvertent factual reference in the DRP's directions and minor typographical variations in the assessee's submissions, clarifying that its decision was based on the amounts evidenced by contemporaneous documents. The grievance relating to demand computation was rendered consequential.

The Tribunal found that the assessee was not given adequate time to comply with show-cause notices, and the documents submitted during appeal were not properly examined by the CIT(A). Therefore, the matter was restored to the AO for fresh adjudication.

The Tribunal held that interest expenditure satisfying Section 57 cannot be restricted to the amount of interest income earned in the year. The Revenue's appeals were dismissed due to low tax effect, and the assessee's cross-objections were allowed.

The Tribunal held that the material available was insufficient to definitively confirm or delete the disputed additions. The Assessing Officer's rejection of the assessee's explanations lacked specific findings, and the relief granted by the CIT(A) was not supported by adequate verification from third parties. The Tribunal noted that both parties selectively accepted parts of the same material, further complicating the issue. Given the large number of parties and transactions, and the necessity of independent verification from third parties, the Tribunal decided to set aside the impugned orders of the CIT(A) in their entirety. The entire matter, including additions sustained and deleted by the CIT(A), was restored to the Assessing Officer for de novo adjudication. The Assessing Officer was directed to examine each party and transaction, ascertain the nature of numerical expressions in the chats, verify if transactions occurred, determine if they were receipts or payments, and assess whether the assessee was the owner of money (Section 69A) or incurred expenditure from an unexplained source (Section 69C). The AO was also to determine if the assessee acted on their own account or as an intermediary, requiring verification of confirmations and third-party records. The peak-fund-flow method was to be examined only after identifying transactions belonging to the assessee. The Tribunal clarified that the de novo proceedings would be strictly confined to the parties, transactions, and additions already considered in the original assessment orders, and no fresh transactions or items were to be introduced. The substantive grounds were allowed for statistical purposes.

The Tribunal held that the material available was insufficient to definitively confirm or delete the disputed additions. The Assessing Officer's rejection of the assessee's explanations lacked specific findings, and the relief granted by the CIT(A) was not supported by adequate verification from third parties. The Tribunal noted that both parties selectively accepted parts of the same material, further complicating the issue. Given the large number of parties and transactions, and the necessity of independent verification from third parties, the Tribunal decided to set aside the impugned orders of the CIT(A) in their entirety. The entire matter, including additions sustained and deleted by the CIT(A), was restored to the Assessing Officer for de novo adjudication. The Assessing Officer was directed to examine each party and transaction, ascertain the nature of numerical expressions in the chats, verify if transactions occurred, determine if they were receipts or payments, and assess whether the assessee was the owner of money (Section 69A) or incurred expenditure from an unexplained source (Section 69C). The AO was also to determine if the assessee acted on their own account or as an intermediary, requiring verification of confirmations and third-party records. The peak-fund-flow method was to be examined only after identifying transactions belonging to the assessee. The Tribunal clarified that the de novo proceedings would be strictly confined to the parties, transactions, and additions already considered in the original assessment orders, and no fresh transactions or items were to be introduced. The substantive grounds were allowed for statistical purposes.

The Tribunal held that no transfer pricing adjustment should arise for the availing of back-office, sales, and marketing support services once the overall segmental margins are at arm's length. It also directed the exclusion of a specific comparable company, Moonfrog Labs Pvt. Ltd., for software development services due to functional dissimilarity.

The Tribunal restored the issue of gift expenditure to the AO for fresh adjudication due to lack of adequate opportunity for the assessee. For the weighted deduction under Section 35(2AB), the Tribunal held that the assessee cannot be denied the deduction solely due to the prescribed authority's failure to furnish Form 3CL, following coordinate bench and High Court decisions.

The Tribunal allowed the appeal on the transfer pricing issue, following its own consistent decisions for earlier years. It also allowed the grounds related to customs/VAT refunds, short TDS credit, and interest levy, directing the Assessing Officer to verify and recompute as necessary.

The Tribunal held that interest expenditure satisfying the conditions of Section 57 is allowable and cannot be restricted to the amount of interest income earned in the relevant year. Revenue's appeals were dismissed on grounds of low tax effect for certain years.

The Tribunal held that the CIT(A) erred in dismissing the appeal solely on the ground of non-compliance with Section 249(4)(b) without adjudicating the merits. The matter was restored to the CIT(A) for fresh adjudication.

The Tribunal held that interest expenditure satisfying the conditions of Section 57 is allowable and cannot be restricted to the amount of interest income earned in the relevant year. Revenue's appeals were dismissed on grounds of low tax effect for certain years.

The Tribunal held that interest expenditure satisfying the conditions of Section 57 is allowable and cannot be restricted to the amount of interest income earned in the relevant year. Revenue's appeals were dismissed on grounds of low tax effect for certain years.

The Tribunal held that the material available was insufficient to definitively confirm or delete the disputed additions. The Assessing Officer's rejection of the assessee's explanations lacked specific findings, and the relief granted by the CIT(A) was not supported by adequate verification from third parties. The Tribunal noted that both parties selectively accepted parts of the same material, further complicating the issue. Given the large number of parties and transactions, and the necessity of independent verification from third parties, the Tribunal decided to set aside the impugned orders of the CIT(A) in their entirety. The entire matter, including additions sustained and deleted by the CIT(A), was restored to the Assessing Officer for de novo adjudication. The Assessing Officer was directed to examine each party and transaction, ascertain the nature of numerical expressions in the chats, verify if transactions occurred, determine if they were receipts or payments, and assess whether the assessee was the owner of money (Section 69A) or incurred expenditure from an unexplained source (Section 69C). The AO was also to determine if the assessee acted on their own account or as an intermediary, requiring verification of confirmations and third-party records. The peak-fund-flow method was to be examined only after identifying transactions belonging to the assessee. The Tribunal clarified that the de novo proceedings would be strictly confined to the parties, transactions, and additions already considered in the original assessment orders, and no fresh transactions or items were to be introduced. The substantive grounds were allowed for statistical purposes.

The Tribunal admitted additional evidence and found it appropriate to set aside the CIT(A)'s order and restore the matter to the CIT(A) for fresh adjudication. The CIT(A) is to examine the additional evidence, hear both parties, and decide the issue afresh.

The Tribunal held that interest expenditure satisfying the conditions of Section 57 is allowable and cannot be restricted to the amount of interest income earned in the relevant year. Revenue's appeals were dismissed on grounds of low tax effect for certain years.

The Tribunal held that interest expenditure satisfying Section 57 cannot be restricted to the amount of interest income earned in the year. The Revenue's appeals were dismissed on grounds of low tax effect for certain years.

The Tribunal held that interest expenditure satisfying the conditions of Section 57 is allowable and cannot be restricted to the amount of interest income earned in the relevant year. Revenue's appeals were dismissed on grounds of low tax effect for certain years.

The Tribunal held that interest expenditure satisfying the conditions of Section 57 is allowable and cannot be restricted to the amount of interest income earned in the relevant year. Revenue's appeals were dismissed on grounds of low tax effect for certain years.

The tribunal held that the rejection of the CUP method by the AO was not sustainable as the associated enterprise status of MIA Computers Limited was not properly established. The matter was remanded to the AO to re-examine the comparability under the CUP method, considering material differences and the possibility of adjustments.