ITAT Mumbai Judgments — September 2026

The Tribunal allowed the assessee's appeal on Ground No. 2 for AY 2017-18, directing deletion of the disallowance of Rs.2,89,380/- under section 36(1)(iii). The Tribunal held that the Revenue failed to establish that the Kotak Mahindra Bank borrowing was for a non-business purpose. Applying the principle from CIT (LTU) v. Reliance Industries Ltd., where interest-free funds exceed non-business deployment, a presumption arises that such deployment was from interest-free funds. The Revenue did not rebut this presumption or establish a nexus between interest-bearing borrowings and personal expenditure. The fact that the loan was used for repayment of an earlier liability did not establish diversion of borrowed funds. The Tribunal also rejected the contention of double disallowance of interest. The ratio is that in cases of mixed funds, if interest-free funds are sufficient to cover non-business deployment, the latter is presumed to be out of interest-free funds, unless rebutted by the Revenue. The Tribunal also allowed the assessee's appeal on Ground No. 3 for AY 2017-18, directing deletion of the disallowance of loan-processing charges of Rs.5,21,400/-. The Tribunal held that since the underlying borrowing was found to be connected with the assessee's financing business, the expenditure incurred for obtaining such borrowing is also allowable as business expenditure. The sole basis for disallowance, i.e., utilization for non-business purpose, no longer survived. The appeals filed by the Revenue for AYs 2017-18 and 2018-19 were partly allowed for statistical purposes. The appeal filed by the assessee for AY 2021-22 was partly allowed and partly allowed for statistical purposes. The judgment does not explicitly state findings on all grounds raised by the Revenue for AY 2017-18 and AY 2018-19, nor on the assessee's appeal for AY 2021-22, beyond the specific grounds discussed.

The Tribunal held that the learned CIT(Exemptions) had noted the filing of the updated ITR-5 returns. The Tribunal found that the mere fact that the updated returns were not yet processed under Section 143(1) could not be a valid reason for rejecting the application for registration, as the processing of returns is not within the assessee's control. The Tribunal agreed with the assessee's submission that the error was inadvertent and had been rectified. Citing the decision of the Pune Bench in Akshar Sangeet Foundation, where a similar situation led to the application being remanded, the Tribunal allowed the appeals. The impugned orders were set aside, and the applications for registration under Section 12A and approval under Section 80G were restored to the file of the learned CIT(Exemptions) for decision on merits, with directions for the assessee to cooperate and be afforded an adequate opportunity of being heard. No issue was expressly left undecided.

The Tribunal held that the learned CIT(Exemptions) had noted the filing of the updated ITR-5 returns. The Tribunal found that the mere fact that the updated returns were not yet processed under Section 143(1) could not be a valid reason for rejecting the application for registration, as the processing of returns is not within the assessee's control. The Tribunal agreed with the assessee's submission that the error was inadvertent and had been rectified. Citing the decision of the Pune Bench in Akshar Sangeet Foundation, where a similar situation led to the application being remanded, the Tribunal allowed the appeals. The impugned orders were set aside, and the applications for registration under Section 12A and approval under Section 80G were restored to the file of the learned CIT(Exemptions) for decision on merits, with directions for the assessee to cooperate and be afforded an adequate opportunity of being heard. No issue was expressly left undecided.

The Tribunal held that the order of the learned CIT(A) was to be set aside and the matter restored to the file of the learned CIT(A) for fresh adjudication. The Tribunal acknowledged that while multiple hearing notices were issued, the period available to the assessee to respond and place material on record was relatively short, especially considering the nature of the grounds raised before the CIT(A). These grounds included the year of taxability of capital gains from a redevelopment arrangement, the applicability of section 45(5A), and the claim for deduction under section 54. The Tribunal found that the CIT(A) had dismissed the appeal for non-prosecution without examining these grounds on their merits, which is contrary to the requirement of a reasoned order under section 250(6) of the Act. Therefore, to serve the interests of justice, the matter was remanded to the CIT(A) for a decision on the merits after affording the assessee a reasonable opportunity of being heard. The Tribunal explicitly stated that it was expressing no opinion on the merits of the grounds, which would be decided independently by the learned CIT(A). The appeal was allowed for statistical purposes.

The Tribunal allowed the assessee's appeal on Ground No. 2 for AY 2017-18, directing deletion of the disallowance of Rs.2,89,380/- under section 36(1)(iii). The Tribunal held that the Revenue failed to establish that the Kotak Mahindra Bank borrowing was for a non-business purpose. Applying the principle from CIT (LTU) v. Reliance Industries Ltd., where interest-free funds exceed non-business deployment, a presumption arises that such deployment was from interest-free funds. The Revenue did not rebut this presumption or establish a nexus between interest-bearing borrowings and personal expenditure. The fact that the loan was used for repayment of an earlier liability did not establish diversion of borrowed funds. The Tribunal also rejected the contention of double disallowance of interest. The ratio is that in cases of mixed funds, if interest-free funds are sufficient to cover non-business deployment, the latter is presumed to be out of interest-free funds, unless rebutted by the Revenue. The Tribunal also allowed the assessee's appeal on Ground No. 3 for AY 2017-18, directing deletion of the disallowance of loan-processing charges of Rs.5,21,400/-. The Tribunal held that since the underlying borrowing was found to be connected with the assessee's financing business, the expenditure incurred for obtaining such borrowing is also allowable as business expenditure. The sole basis for disallowance, i.e., utilization for non-business purpose, no longer survived. The appeals filed by the Revenue for AYs 2017-18 and 2018-19 were partly allowed for statistical purposes. The appeal filed by the assessee for AY 2021-22 was partly allowed and partly allowed for statistical purposes. The judgment does not explicitly state findings on all grounds raised by the Revenue for AY 2017-18 and AY 2018-19, nor on the assessee's appeal for AY 2021-22, beyond the specific grounds discussed.

The Tribunal held that there is no reason to interfere with the impugned order of the CIT(A). The Tribunal noted that both the AO and the CIT(A) made additions on the basis of estimation, with the AO estimating gross profit at 25% and the CIT(A) reducing it to 12.5% of total turnover. The Tribunal reiterated the well-settled principle that where additions are made on an estimation basis, penalty is normally not called for. The Tribunal referred to the decision of the Punjab & Haryana High Court in Harigopal Singh, which was also relied upon by the CIT(A), as an authority for this proposition. The Tribunal found no illegality in the impugned order and dismissed the appeal as without merit. No issue was expressly left undecided.

The Tribunal held that the delay of 345 days in filing the appeal before the CIT(A) should be condoned in the interest of substantial justice. The Tribunal noted the assessee's status as an NRI residing and working in the USA, his unfamiliarity with electronic assessment, and the personal circumstances involving his father's serious illness and subsequent demise, as well as his mother's care. The Tribunal found these circumstances could not be brushed aside. Citing the Supreme Court's decisions in Collector, Land Acquisition v. Mst. Katiji & Others and N. Balakrishnan v. M. Krishnamurthy, the Tribunal emphasized a liberal approach to condonation of delay to avoid defeating substantial justice on technicalities. The length of delay is not decisive; a reasonable explanation and the merits of the case are material. Since the appeal had not been examined on merits by the CIT(A), the Tribunal condoned the delay and set aside the CIT(A)'s order. The matter was restored to the file of the Assessing Officer for de novo consideration. The Tribunal did not decide on the other grounds raised by the assessee, as the appeal was allowed on the preliminary issue of condonation of delay.

The Tribunal allowed the assessee's appeal on Ground No. 2 for AY 2017-18, directing deletion of the disallowance of Rs.2,89,380/- under section 36(1)(iii). The Tribunal held that the Revenue failed to establish that the Kotak Mahindra Bank borrowing was for a non-business purpose. Applying the principle from CIT (LTU) v. Reliance Industries Ltd., where interest-free funds exceed non-business deployment, a presumption arises that such deployment was from interest-free funds. The Revenue did not rebut this presumption or establish a nexus between interest-bearing borrowings and personal expenditure. The fact that the loan was used for repayment of an earlier liability did not establish diversion of borrowed funds. The Tribunal also rejected the contention of double disallowance of interest. The ratio is that in cases of mixed funds, if interest-free funds are sufficient to cover non-business deployment, the latter is presumed to be out of interest-free funds, unless rebutted by the Revenue. The Tribunal also allowed the assessee's appeal on Ground No. 3 for AY 2017-18, directing deletion of the disallowance of loan-processing charges of Rs.5,21,400/-. The Tribunal held that since the underlying borrowing was found to be connected with the assessee's financing business, the expenditure incurred for obtaining such borrowing is also allowable as business expenditure. The sole basis for disallowance, i.e., utilization for non-business purpose, no longer survived. The appeals filed by the Revenue for AYs 2017-18 and 2018-19 were partly allowed for statistical purposes. The appeal filed by the assessee for AY 2021-22 was partly allowed and partly allowed for statistical purposes. The judgment does not explicitly state findings on all grounds raised by the Revenue for AY 2017-18 and AY 2018-19, nor on the assessee's appeal for AY 2021-22, beyond the specific grounds discussed.

The ITAT held that the appeal filed by the assessee was not maintainable. The Tribunal noted that the Revenue had provided a screenshot from the ITBA portal indicating that the CIT(A) had issued a show-cause notice under Section 250 on 15.10.2025, and not a final order. The assessee had also filed a copy of this show-cause notice in their paper book. The ITAT reasoned that the mere issuance of a show-cause notice under Section 250 is not an appealable order under Section 253 of the Income Tax Act. Consequently, the appeal was dismissed as not maintainable. All grounds of appeal were consequently dismissed. The operative direction was the dismissal of the appeal.

The Tribunal noted that the CIT(A) dismissed the appeal solely on the ground of delayed filing and failed to adjudicate the issues on merits, which is contrary to the principles of natural justice. While acknowledging the assessee's duty to diligently pursue the appeal, the Tribunal, considering the assessee's request for one more opportunity (not objected to by the Revenue) and following principles of justice and fair play, decided to remand the matter back to the CIT(A) for de novo adjudication. The CIT(A) is directed to afford sufficient opportunity of being heard to the assessee, who is also directed to cooperate. The Tribunal also imposed a cost of Rs. 50,000/- on the assessee for habitual non-compliance, to be paid to the Prime Minister's Relief Fund within 15 days. The grounds of appeal were allowed for statistical purposes. The issue of penalty under Section 271(1)(c) and interest under Sections 234A/B/C were implicitly part of the issues to be adjudicated de novo.

The Tribunal held that the first ground regarding the invalidity of the appellate order due to the assessee's death was dismissed. The Tribunal found no substance in the contention as the appellate order did not indicate that notices were issued to the deceased or that the assessee objected to such omission. The Tribunal found that the CIT(A) failed to appreciate the facts and circumstances concerning the addition of Rs. 7,95,000 and disallowance of expenses. The CIT(A) rejected additional evidence on a technical ground without adjudicating the issue on merit. Therefore, the Tribunal remitted the entire matter back to the CIT(A) for a de novo order after allowing adequate opportunity of hearing. The grounds related to penalty proceedings under Section 270A were dismissed as premature, as no penalty order had been passed. The ground pertaining to interest under Section 234B was also not adjudicated, being consequential and mandatory. The appeal was partly allowed.

The Tribunal held that since the assessment order forming the basis for the penalty was quashed by the ITAT, there was no longer any addition remaining. Following the Supreme Court's decision in K.C. Builders v. ACIT, the penalty levied under Section 271(1)(c) cannot survive and is liable to be cancelled.

The Tribunal held that the assessee's claim that the case is covered by the Third and Fourth Provisos to Section 43CA was not substantiated. The Tribunal noted that the sale agreements for Flat No. 101, 102 and Shop No. 1 were registered on 13.08.2015, and a rectification deed dated 08.12.2015 substituted the value to match the 2012 resolution. The Tribunal found that the assessee failed to provide sufficient evidence to prove that payments were made by the partners before the agreement date of 13.08.2015, other than cash, as required by Section 43CA. The capital account debits in 2014 were not considered sufficient proof of prior payments or allotment. Therefore, the stamp duty value adopted by the AO for the year 2015 was upheld. The addition of Rs. 1,56,11,820/- made by the AO under Section 43CA was confirmed. No issue was expressly left undecided.

The Tribunal considered the assessee's grounds of appeal regarding the invalidity of the assessment order and the disallowance of expenditure. For grounds 1 and 3, the Tribunal found no infirmity in the assessment order and dismissed these grounds due to the absence of cogent evidence. Regarding ground 3, concerning the disallowance of Rs. 1,41,88,378/-, the Tribunal noted the AO's detailed investigation and the CIT(A)'s in-depth deliberation. However, the Tribunal found merit in the assessee's contention that the Investigation Wing's report was never confronted. Following the principles of natural justice and fair play, the Tribunal held that any material used by the AO to draw adverse inferences must be duly confronted to the assessee. Therefore, the issue was remanded back to the AO with a direction to supply the incriminating materials relied upon, elicit the assessee's reply, and pass a fresh assessment order. The ground was allowed for statistical purposes.

The Tribunal noted that the facts were materially identical to the case of Ketan Himatlal Mehta v. DCIT. The Tribunal observed that the assessee was in possession of the property since FY 2008-2009 and had offered rental income. The consideration was settled through drawings from capital, evidenced by the Deed of Declaration. The Tribunal found that the assessee had furnished various documents before the CIT(A) which did not appear to have been considered in the impugned order, and these were not forwarded to the AO for a remand report. Therefore, the Tribunal restored the matter to the file of the AO for the limited purpose of examining and verifying the veracity of these documents. The legal principle would remain in parity with the decision in Ketan Himatlal Mehta. The AO was directed to determine the applicability of Section 56(2)(x)(b) by adopting the Stamp Duty value prevailing as on the date of execution of the Deed of Declaration, subject to verification of the additional evidence. The addition made by the AO was set aside and the issue was restored to the AO. The remaining grounds were rendered academic.

The Tribunal held that the delay of 134 days in filing the appeal before the CIT(A) deserves to be condoned. The Tribunal was satisfied with the explanation offered for the delay, considering the assessee's stated circumstances as a housewife unfamiliar with electronic proceedings and the fact that the appeal was dismissed without examining the assessment issues on merits. In the interest of justice, the Tribunal considered it appropriate to provide the assessee an effective opportunity to present her explanation and supporting material before the Assessing Officer. Consequently, the order of the CIT(A) and the assessment order were set aside. The matter was restored to the Assessing Officer for fresh adjudication after affording the assessee a reasonable opportunity of being heard. The Assessing Officer was directed to consider the evidence furnished by the assessee, including material relating to the source of investment and the addition of ₹38,00,000, and pass a speaking order. The Tribunal expressly stated that it expressed no opinion on the merits of the addition.

The Tribunal held that the rejection of the application at the threshold for want of a formal Instrument of Trust/MoA was not justified. The Tribunal noted that the issue of the absence of a formal trust deed has been decided by the Tribunal in the case of Tsurphu Labrang, which was also upheld by the Delhi High Court. The Tribunal also referred to Rule 17A(2)(b) of the Income Tax Rules, 1962, which contemplates situations where a trust is created 'otherwise than by an instrument', allowing for the production of other documents evidencing establishment. Therefore, the Tribunal set aside the impugned order and restored the application to the file of the learned CIT (Exemptions) for disposal on merits, considering other requirements and compliances, after granting an adequate opportunity of hearing to the appellant. The principle is that a trust established otherwise than by a formal instrument may still be eligible for registration if it provides other documentary evidence of its establishment and activities.

The Tribunal upheld the CIT(A)'s deletion of the addition of ₹37,48,735. The Tribunal found that the assessment order lacked crucial particulars regarding the alleged transactions, such as the specific scrips traded, dates, volumes, the concerns through which the transactions were purportedly carried out, and how the sum of ₹37,48,735 was derived. More importantly, the assessment order failed to present material demonstrating that the assessee was the owner of any unrecorded money within the meaning of Section 69A. The Tribunal agreed with the CIT(A) that the AO had not discharged the initial burden of proof by providing credible material to establish that the alleged transactions had taken place. The assessee's request for particulars was deemed relevant, and the absence of these particulars in the assessment order was considered material. The Tribunal noted a similar issue in the assessee's own case for AY 2015-16, where the Tribunal had upheld the deletion due to the AO's failure to furnish transaction particulars. Therefore, the Tribunal found no infirmity in the CIT(A)'s order.

The Tribunal held that the reopening of assessment was invalid because the additions made were not based on the reasons recorded. The assessment orders were quashed as they were not passed in accordance with the statutory mandate.

The Tribunal held that the order passed under Section 148A(d) was barred by limitation due to the Assessing Officer issuing subsequent notices under Section 148A(b) to gain extension of time. Consequently, the assessment order was declared void ab initio.

The Tribunal held that the addition of Rs. 53,52,818/- on account of alleged deemed profit at 0.25% on the total purchase/sale turnover could not be sustained and was deleted. The Tribunal followed a coordinate bench's decision, noting that the purchases aggregating Rs. 2,14,11,27,057/- were not disturbed and were supported by invoices, warehouse receipts, delivery orders, bank statements, and GST returns. The Tribunal found that allegations regarding IP address, shareholders' financial capacity, and non-response to summons during the Covid-19 lockdown were explained by the assessee and not controverted by the Revenue. The Tribunal reasoned that since the purchases themselves were not doubted, an ad hoc commission addition rested on conjecture unsupported by material evidence of actual payment or receipt. Consequently, this ground of appeal was allowed. Regarding interest under Sections 234B and 234D, it was held to be consequential, and the AO was directed to recompute it. Initiation of penalty proceedings under Section 271(1)(c) was deemed premature and dismissed. The legal ground regarding the validity of reassessment proceedings (Ground 1) was left open for the assessee to raise at an appropriate forum. The Tribunal noted that its findings applied mutatis mutandis to the other years. The Tribunal did not decide the validity of the reassessment proceedings (Issue 1), the opportunity for Section 127 transfer (Issue 2), or the time-barred nature of the Section 148 notice (Issue 3).

The Tribunal held that while the AO initially failed to implement the DRP's directions, the subsequent rectification under Section 154 cured the apparent mistake. The Tribunal also directed the deletion of an addition related to reimbursement of expenses treated as Fees for Technical Services (FTS) as the 'make available' condition was not met. The issue of corporate guarantee commission was restored to the AO for fresh adjudication.

The Tribunal held that the Revenue's appeal was dismissed. The assessee's cross-objection was partly allowed. Regarding the disallowance of purchases, the Tribunal noted that while the supplier's genuineness was doubtful, the corresponding sales were not disputed. The Tribunal distinguished the case of Kanak Impex (India) Ltd. by noting that the assessee in the present case had furnished documentary evidence, demonstrated corresponding sales, and the AO had not established any cash trail returning to the assessee. The Tribunal relied on the principle from Mohammad Haji Adam & Co. that in cases of undisputed sales, addition should be confined to the profit element. Considering the past GP ratios of the assessee (averaging around 5.58%), the Tribunal found the CIT(A)'s estimation of 12% to be on the higher side. Therefore, the addition was restricted to 6% of the disputed purchases, amounting to Rs.2,12,480/-. The Tribunal also found no merit in the Revenue's prayer to set aside the matter for fresh assessment based on CBDT Circular No. 5/2024, as the circular did not mandate such action. The grounds raised by the Revenue were dismissed, and Ground 3 of the assessee's cross-objection was partly allowed.

The Tribunal noted that the issue concerning the addition under Section 56(2)(x)(b) was covered by a coordinate bench decision in a similar case for AY 2023-24, which had restored the matter to the AO for reference to the District Valuation Officer (DVO). In the present case, the assessee disputed the stamp duty value, citing the property being under construction. Although the assessee initially sought a DVO reference but withdrew it, the Tribunal, following the precedent, restored the issue to the AO. The AO is directed to obtain valuation from the DVO and then adjudicate the applicability and quantum of addition under Section 56(2)(x)(b) afresh after affording the assessee an opportunity of hearing. Consequently, Grounds 2 and 3 of the Revenue's appeal are allowed for statistical purposes, and the impugned order on this issue is set aside. The appeal of L7 Media Pvt Ltd for AY 2023-24 is allowed, and for AY 2021-22 is partly allowed. The cross-appeals of the Revenue for AY 2023-24 are partly allowed for statistical purposes. The appeal of L7 Construction Pvt. Ltd. for AY 2023-24 is allowed, and the Revenue's appeal for AY 2023-24 is partly allowed for statistical purposes.

The Tribunal upheld the CIT(A)'s decision that the initiation of reassessment proceedings under Section 147 of the Act was bad in law. The Tribunal found no reason to interfere with this finding, as it was covered by the Bombay High Court's decision in Sejal Jewellary (supra). The Tribunal noted that the Bombay High Court, in Sejal Jewellary, had considered decisions from the Delhi High Court (CIT vs. Kabul Chawla) and Gujarat High Court (Pr. CIT vs. Saumya Construction (P.) Ltd.), as well as the Supreme Court (Pr. CIT v. Abhisar Buildwell (P.) Ltd.). The Tribunal highlighted that Section 153A, with its non-obstante clause, overrides Sections 139, 147, 148, 149, 151, and 153, and that Section 153C also begins with a non-obstante clause. The Tribunal found that Section 147 does not contemplate the situation covered by Sections 153A or 153C, which are based on search actions. Regarding the contention that the CIT(A) should have adjudicated on merits as per Section 250(6), the Tribunal observed that while it is advisable, the section does not explicitly mandate addressing all issues if the appeal can be disposed of on one or more preliminary issues. However, in this case, since the final order was in favour of the assessee, the Tribunal refrained from restoring the matter to the CIT(A) for deciding issues on merits.

The Tribunal held that the reassessment proceedings initiated under Section 147 were invalid. The primary reason was that the CIT(A) had correctly found that the issue of share application money had already been examined during the original assessment under Section 143(3), thus rendering the reopening a case of change of opinion. The Tribunal noted that if a finding of the CIT(A) (that the reassessment proceedings are invalid) is not specifically challenged by the Revenue, it attains finality. Consequently, the Revenue could not sustain the reassessment proceedings. The Tribunal further held that since the assumption of jurisdiction to reopen the assessment failed, the reassessment order could not furnish a sustainable foundation for adjudicating the additions made therein. Therefore, the grounds raised by the Revenue challenging the deletion of additions under Section 68, as well as grounds relating to interest under Section 234B and penalty proceedings under Section 271(1)(c), were rendered consequential or academic and did not survive for adjudication. The assessee's cross-objections were also rendered academic as the assessee had succeeded on the principal jurisdictional issue. The appeal in ITA 5952/Mum/2026 was dismissed as withdrawn.

The Tribunal upheld the CIT(A)'s decision that the initiation of reassessment proceedings under Section 147 of the Act was bad in law. The Tribunal found no reason to interfere with this finding, as it was covered by the Bombay High Court's decision in Sejal Jewellary (supra). The Tribunal noted that the Bombay High Court, in Sejal Jewellary, had considered decisions from the Delhi High Court (CIT vs. Kabul Chawla) and Gujarat High Court (Pr. CIT vs. Saumya Construction (P.) Ltd.), as well as the Supreme Court (Pr. CIT v. Abhisar Buildwell (P.) Ltd.). The Tribunal highlighted that Section 153A, with its non-obstante clause, overrides Sections 139, 147, 148, 149, 151, and 153, and that Section 153C also begins with a non-obstante clause. The Tribunal found that Section 147 does not contemplate the situation covered by Sections 153A or 153C, which are based on search actions. Regarding the contention that the CIT(A) should have adjudicated on merits as per Section 250(6), the Tribunal observed that while it is advisable, the section does not explicitly mandate addressing all issues if the appeal can be disposed of on one or more preliminary issues. However, in this case, since the final order was in favour of the assessee, the Tribunal refrained from restoring the matter to the CIT(A) for deciding issues on merits.

The Tribunal held that the reopening of assessment was invalid because the additions made were not based on the reasons recorded. The assessment orders were quashed as they were not passed in accordance with the statutory mandate.

The Tribunal noted that the issue concerning the addition under Section 56(2)(x)(b) was covered by a coordinate bench decision in a similar case for AY 2023-24, which had restored the matter to the AO for reference to the District Valuation Officer (DVO). In the present case, the assessee disputed the stamp duty value, citing the property being under construction. Although the assessee initially sought a DVO reference but withdrew it, the Tribunal, following the precedent, restored the issue to the AO. The AO is directed to obtain valuation from the DVO and then adjudicate the applicability and quantum of addition under Section 56(2)(x)(b) afresh after affording the assessee an opportunity of hearing. Consequently, Grounds 2 and 3 of the Revenue's appeal are allowed for statistical purposes, and the impugned order on this issue is set aside. The appeal of L7 Media Pvt Ltd for AY 2023-24 is allowed, and for AY 2021-22 is partly allowed. The cross-appeals of the Revenue for AY 2023-24 are partly allowed for statistical purposes. The appeal of L7 Construction Pvt. Ltd. for AY 2023-24 is allowed, and the Revenue's appeal for AY 2023-24 is partly allowed for statistical purposes.

The Tribunal held that the reopening of assessment was invalid because the additions made were not based on the reasons recorded. The assessment orders were quashed as they were not passed in accordance with the statutory mandate.

The Tribunal allowed Ground No. 9 and 10, finding that the assessee's margin of 4.11% falls within the range of working capital adjusted margins (3.08% to 5.81%) of the comparable companies, with a median of 4.55%, after the TPO confirmed the assessee's computation of weighted average margins from annual reports and verified the working capital adjusted margins. Consequently, no transfer pricing adjustment is called for. Grounds 3-8 were rendered academic and dismissed. Regarding the disallowance of INR 11,51,940/- under Section 37(1), the matter was remitted to the AO to verify the assessee's claim of double disallowance of interest on income-tax. If found to be a suo-moto disallowance made by the assessee, the further disallowance is to be deleted. This ground was allowed for statistical purposes. For the addition of INR 3,64,042/- under Section 36(1)(va), the matter was remitted to the AO for examination in light of the Supreme Court decision in Checkmate Services (P) Ltd., concerning the due date of deposit under PF statute versus the due date for filing the return. This ground was also allowed for statistical purposes. Ground No. 14 was infructuous as credit was allowed. Ground No. 1 was dismissed as academic. Grounds 15-17 were not adjudicated as they related to consequential interest and penalty. The appeal was partly allowed for statistical purposes.

The Tribunal noted that the issue concerning the addition under Section 56(2)(x)(b) was covered by a coordinate bench decision in a similar case for AY 2023-24, which had restored the matter to the AO for reference to the District Valuation Officer (DVO). In the present case, the assessee disputed the stamp duty value, citing the property being under construction. Although the assessee initially sought a DVO reference but withdrew it, the Tribunal, following the precedent, restored the issue to the AO. The AO is directed to obtain valuation from the DVO and then adjudicate the applicability and quantum of addition under Section 56(2)(x)(b) afresh after affording the assessee an opportunity of hearing. Consequently, Grounds 2 and 3 of the Revenue's appeal are allowed for statistical purposes, and the impugned order on this issue is set aside. The appeal of L7 Media Pvt Ltd for AY 2023-24 is allowed, and for AY 2021-22 is partly allowed. The cross-appeals of the Revenue for AY 2023-24 are partly allowed for statistical purposes. The appeal of L7 Construction Pvt. Ltd. for AY 2023-24 is allowed, and the Revenue's appeal for AY 2023-24 is partly allowed for statistical purposes.

The Tribunal found that the assessee was not granted an effective opportunity to present its case before the CIT(A) due to the manner in which notices were issued. Therefore, the Tribunal set aside the CIT(A)'s order.

The Tribunal decided the issues as follows: 1. The additional ground regarding the invalidity of the notice u/s. 143(2) was dismissed, following the ITAT Special Bench decision in M/s. M.D. Sons. 2. Regarding the disallowance of expenses against non-member receipts, the Tribunal found the AO's reasoning unsustainable as the first appellate authority had accepted part of the expenses. However, the ad-hoc approach of the first appellate authority, with no basis for specific percentage restrictions, was also disagreed with. Considering the assessee's consistent method of allocation and the partial acceptance by the CIT(A), the Tribunal held that the assessee's method of allocation should not have been disturbed without valid reason and cogent material. Accordingly, the disallowance was deleted. 3. On the classification of income from the mobile tower, the Tribunal followed the ratio laid down in the ITAT decision in Kohinoor Industrial Premises Co-operative Society Ltd. vs. ITO. It held that the income received from letting out space on the terrace for a mobile tower should be treated as income from house property, and the total income should be computed after allowing statutory deductions. The order of the AO was modified accordingly. No issue was expressly left undecided.

The Tribunal held that the addition of Rs. 53,52,818/- on account of alleged deemed profit at 0.25% on the total purchase/sale turnover could not be sustained and was deleted. The Tribunal followed a coordinate bench's decision, noting that the purchases aggregating Rs. 2,14,11,27,057/- were not disturbed and were supported by invoices, warehouse receipts, delivery orders, bank statements, and GST returns. The Tribunal found that allegations regarding IP address, shareholders' financial capacity, and non-response to summons during the Covid-19 lockdown were explained by the assessee and not controverted by the Revenue. The Tribunal reasoned that since the purchases themselves were not doubted, an ad hoc commission addition rested on conjecture unsupported by material evidence of actual payment or receipt. Consequently, this ground of appeal was allowed. Regarding interest under Sections 234B and 234D, it was held to be consequential, and the AO was directed to recompute it. Initiation of penalty proceedings under Section 271(1)(c) was deemed premature and dismissed. The legal ground regarding the validity of reassessment proceedings (Ground 1) was left open for the assessee to raise at an appropriate forum. The Tribunal noted that its findings applied mutatis mutandis to the other years. The Tribunal did not decide the validity of the reassessment proceedings (Issue 1), the opportunity for Section 127 transfer (Issue 2), or the time-barred nature of the Section 148 notice (Issue 3).

The Tribunal held that the addition of Rs. 53,52,818/- on account of alleged deemed profit at 0.25% on the total purchase/sale turnover could not be sustained and was deleted. The Tribunal followed a coordinate bench's decision, noting that the purchases aggregating Rs. 2,14,11,27,057/- were not disturbed and were supported by invoices, warehouse receipts, delivery orders, bank statements, and GST returns. The Tribunal found that allegations regarding IP address, shareholders' financial capacity, and non-response to summons during the Covid-19 lockdown were explained by the assessee and not controverted by the Revenue. The Tribunal reasoned that since the purchases themselves were not doubted, an ad hoc commission addition rested on conjecture unsupported by material evidence of actual payment or receipt. Consequently, this ground of appeal was allowed. Regarding interest under Sections 234B and 234D, it was held to be consequential, and the AO was directed to recompute it. Initiation of penalty proceedings under Section 271(1)(c) was deemed premature and dismissed. The legal ground regarding the validity of reassessment proceedings (Ground 1) was left open for the assessee to raise at an appropriate forum. The Tribunal noted that its findings applied mutatis mutandis to the other years. The Tribunal did not decide the validity of the reassessment proceedings (Issue 1), the opportunity for Section 127 transfer (Issue 2), or the time-barred nature of the Section 148 notice (Issue 3).

The Tribunal held that the rejection of the application solely on the ground of absence of a formal Instrument of Trust/MoA was not justified. It relied on its own decision in Tsurphu Labrang, which was also upheld by the Delhi High Court, establishing that a formal Trust Deed is not a prerequisite for registration. The Tribunal also noted Rule 17A(2)(b) of the Income Tax Rules, 1962, which allows for the production of certified copies of documents evidencing the establishment of a trust if it is created otherwise than by an instrument. Therefore, the rejection at the threshold was deemed inappropriate. The Tribunal set aside the impugned order and restored the application to the file of the CIT (Exemptions) for disposal on merits, considering other requirements and compliances, after granting an adequate opportunity of hearing. The principle is that the absence of a formal trust deed alone cannot be a bar to registration if other evidence of the trust's establishment and functioning exists.

The Tribunal observed that the CPC did not consider the assessee's objections and that the assessee failed to furnish evidence before the CIT(A). Therefore, the case was restored to the CIT(A) for fresh adjudication with a direction to consider the additional evidence.

The Tribunal held that the CIT(E) erred in rejecting the applications solely for the absence of a formal trust deed. The Tribunal noted that Rule 17A(2)(b) allows for documents evidencing creation or establishment even if not under a formal instrument, and the genuineness of activities was not in doubt.

The Tribunal held that the CIT(E) erred in rejecting the applications solely for the absence of a formal trust deed. The Tribunal noted that Rule 17A(2)(b) allows for documents evidencing creation or establishment even if not under a formal instrument, and the genuineness of activities was not in doubt.

The Tribunal noted that the issue concerning the addition under Section 56(2)(x)(b) was covered by a coordinate bench decision in a similar case for AY 2023-24, which had restored the matter to the AO for reference to the District Valuation Officer (DVO). In the present case, the assessee disputed the stamp duty value, citing the property being under construction. Although the assessee initially sought a DVO reference but withdrew it, the Tribunal, following the precedent, restored the issue to the AO. The AO is directed to obtain valuation from the DVO and then adjudicate the applicability and quantum of addition under Section 56(2)(x)(b) afresh after affording the assessee an opportunity of hearing. Consequently, Grounds 2 and 3 of the Revenue's appeal are allowed for statistical purposes, and the impugned order on this issue is set aside. The appeal of L7 Media Pvt Ltd for AY 2023-24 is allowed, and for AY 2021-22 is partly allowed. The cross-appeals of the Revenue for AY 2023-24 are partly allowed for statistical purposes. The appeal of L7 Construction Pvt. Ltd. for AY 2023-24 is allowed, and the Revenue's appeal for AY 2023-24 is partly allowed for statistical purposes.

The Tribunal held that procedural and technical lapses should not prevent adjudication of substantive rights, especially when rectifiable. The CIT(E) should have provided an opportunity to correct the mistake. Therefore, the matter was remanded for fresh adjudication on merits.

The Tribunal held that the CIT(E) erred in rejecting the applications solely for the absence of a formal trust deed. The Tribunal noted that Rule 17A(2)(b) allows for documents evidencing creation or establishment even if not under a formal instrument, and the genuineness of activities was not in doubt.

The Tribunal held that the revisionary proceedings under Section 263 were not justified. The Assessing Officer had specifically examined the issue of ESOP expenditure, issued a show-cause notice, received the assessee's replies, and verified the details before accepting the claim. The Tribunal noted that the AO's acceptance of the ESOP expenditure was a legally permissible view, supported by the Karnataka High Court's decision in CIT (LTU) v. Biocon Ltd. and the jurisdictional Bombay High Court's decision in PCIT v. Bajaj Finance Ltd. The Tribunal emphasized that Section 263 cannot be invoked merely because the Commissioner prefers another view or to conduct a more elaborate inquiry than what the AO had already done. The mere admission of a Special Leave Petition (SLP) against the Biocon Ltd. decision did not render the High Court's ruling ineffective without a stay. Therefore, the twin conditions for invoking Section 263 were not satisfied. The Tribunal quashed the order passed by the PCIT under Section 263.

For AY 2009-10, the Tribunal found that the CIT(A) had correctly held Section 69C to be inapplicable to the purchases. However, the CIT(A)'s direction to apply an unspecified gross profit percentage to the sum of Rs. 79,35,261/- and treat the result as undisclosed income was found to be unsustainable. The Tribunal noted that the AO had made the addition based on information from the Sales Tax Department regarding non-compliance with the MVAT Act. The Tribunal did not explicitly decide on the merits of the addition itself but indicated that the CIT(A)'s method was flawed. The appeal for AY 2009-10 was allowed for statistical purposes, implying the issue might need further examination on merits, though the specific direction by the CIT(A) was set aside. For AY 2015-16, the Tribunal held that the penalty under Section 271(1)(c) was not sustainable. It reasoned that the 'NIL' entry in the tax audit report regarding interest expenditure was an inadvertent error, not a deliberate attempt to furnish inaccurate particulars. The Tribunal relied on the Supreme Court's decision in Price Waterhouse Coopers (P.) Ltd. v. CIT, stating that a bona fide and inadvertent error, without material establishing a deliberate attempt to furnish inaccurate particulars, does not attract penalty. The Tribunal found no evidence that the interest liability was fictitious, the expenditure was not incurred, or that the assessee suppressed particulars. Therefore, the penalty sustained by the CIT(A) was deleted. The appeal for AY 2015-16 was partly allowed.

The Tribunal held that the nomenclature in the balance sheet is not determinative and the true nature of the holding must be assessed based on business activities and transaction conduct. It found that the mark-to-market loss on physical silver should be allowed, similar to mark-to-market gains on futures, as both were part of an integrated trading strategy.

The Tribunal held that the issue is no longer res integra, referring to decisions of co-ordinate benches. It was held that filing of Form 10IE is directory and not mandatory. The Central Processing Unit (CPC) should not deny the benefit of the old regime merely on account of non-filing of the form if the intention of the assessee is clear. The Tribunal noted that for AY 2022-23, the new regime was the default regime. However, in the present case, the assessee had opted out of the new regime while filing the return and claimed deductions permissible only under the old regime. This provided sufficient indication on record that the assessee was willing to be governed by the old regime. Therefore, following the co-ordinate benches, the assessee was entitled to the benefit of the old regime. The appeal was allowed, and the impugned order was set aside, directing the AO/CPC to re-compute the appellant's income under the old regime as declared in the return and determine the tax liability accordingly. No issue was expressly left undecided.

The Tribunal permitted the assessee to withdraw the appeal. The appeal was accordingly dismissed as withdrawn.

The Tribunal held that procedural and technical lapses should not prevent adjudication of substantive rights, especially when rectifiable. The CIT(E) should have provided an opportunity to correct the mistake. Therefore, the matter was remanded for fresh adjudication on merits.

The Tribunal held that the PCIT erred in invoking revisionary jurisdiction under Section 263. The Assessing Officer (AO) had made inquiries and taken a plausible view, and the issue of disallowance was already pending before the CIT(A).