ITAT Panaji Judgments — October 2026

The Tribunal held that the interest received on enhanced compensation under Section 28 of the Land Acquisition Act, 1894, is not taxable under Section 56(2)(viii) of the Income Tax Act, 1961. The Tribunal relied on the decision of the Hon'ble High Court of Karnataka in 'The Defense Estate Officer Karnataka and Goa Circle vs. Mita Ripa Naik' and coordinate benches of the Tribunal, which consistently held that interest received under Section 28 of the Land Acquisition Act is part of the compensation and therefore exempt. The Tribunal also referred to the Supreme Court's decision in 'Ghanshyam (HUF)' and the Gujarat High Court's decision in 'Movaliya Bhikhubhai Balabhai', which distinguished interest under Section 28 from interest under Section 34. The Tribunal further noted the jurisdictional High Court of Bombay's observation in the context of motor accident claims that interest paid till the judgment of the High Court is not taxable as income from other sources. Applying this principle, the Tribunal concluded that interest granted under Section 28 of the Land Acquisition Act on enhanced compensation is an accretion to the value of the land acquired and not taxable under Section 145A(b) or Section 56(2)(viii). The addition of Rs. 1,08,17,790/- was directed to be deleted. For ITA No. 351/2025, the consequential penalty under Section 270A was also deleted.

The Tribunal held that the interest received on enhanced compensation under Section 28 of the Land Acquisition Act, 1894, is not taxable under Section 56(2)(viii) of the Income Tax Act, 1961. The Tribunal relied on the decision of the Hon'ble High Court of Karnataka in 'The Defense Estate Officer Karnataka and Goa Circle vs. Mita Ripa Naik' and coordinate benches of the Tribunal, which consistently held that interest received under Section 28 of the Land Acquisition Act is part of the compensation and therefore exempt. The Tribunal also referred to the Supreme Court's decision in 'Ghanshyam (HUF)' and the Gujarat High Court's decision in 'Movaliya Bhikhubhai Balabhai', which distinguished interest under Section 28 from interest under Section 34. The Tribunal further noted the jurisdictional High Court of Bombay's observation in the context of motor accident claims that interest paid till the judgment of the High Court is not taxable as income from other sources. Applying this principle, the Tribunal concluded that interest granted under Section 28 of the Land Acquisition Act on enhanced compensation is an accretion to the value of the land acquired and not taxable under Section 145A(b) or Section 56(2)(viii). The addition of Rs. 1,08,17,790/- was directed to be deleted. For ITA No. 351/2025, the consequential penalty under Section 270A was also deleted.

The Tribunal held that the PCIT had jurisdiction under Section 263 of the Income Tax Act, 1961, to revise the AO's order. The Tribunal found that the AO's assessment order was passed without making necessary inquiries and verification, particularly regarding the suppressed sales and the cash deposits during demonetization. Consequently, in terms of clause (a) of Explanation 2 to Section 263, the assessment order was deemed erroneous and prejudicial to the interests of the Revenue. The Tribunal dismissed the assessee's grounds regarding the PCIT's jurisdiction, the erroneous nature of the order, and the grounds not being in the show cause notice. The grounds related to the absence of a DIN number and borrowed satisfaction were not pressed or found to be without merit. The Tribunal found no error in the PCIT's order and upheld the set-aside of the assessment order for fresh assessment after thorough inquiry. The appeal filed by the assessee was dismissed.

The Tribunal noted that the assessee raised legal issues challenging the validity of the reassessment proceedings, particularly the AO's failure to dispose of objections with a speaking order, as per the Supreme Court's mandate in GKN Driveshafts. The CIT(A) had apparently upheld the reassessment proceedings without adjudicating this specific legal ground. The Tribunal found that a complete bifurcation of issues raised for the first time before the Tribunal was not discernible, and the facts regarding the disposal of objections were not clear from the record. In the larger interest of justice and for proper adjudication, the Tribunal decided to restore all issues, including the legal and preliminary grounds, to the file of the CIT(A) for fresh adjudication. This fresh adjudication would involve calling for a remand report from the jurisdictional AO and examining the assessee's claim regarding the reassessment proceedings being carried out without a speaking order disposing of objections. The Tribunal deemed it appropriate to set aside the impugned order and allow the grounds of appeal for statistical purposes, making the adjudication of other remaining grounds academic at this stage.

The Tribunal held that the inordinate delay of 619/650 days in filing the appeals could not be condoned. The Tribunal observed that the reasons provided by the assessees, such as financial crisis and recovery proceedings, did not constitute sufficient cause for such a prolonged delay. The Tribunal emphasized that condonation of delay is not a matter of right but a discretion of the court, and it should not be an act of generosity. Citing various Supreme Court judgments, including H. Guruswamy & Ors. Vs. A. Krishnaish, Thirunagalingam Vs. Lingeswaran & Anr., and State of Orissa Vs. Managing Committee of Namatara Girls High School, the Tribunal stated that delay caused by negligence or an inactive approach cannot be condoned. The Tribunal found that the assessees had acted with gross negligence and had been 'sleeping on its rights'. Therefore, the Tribunal declined to condone the delay and dismissed all the appeals on the ground of limitation, without going into the merits of the cases. The operative direction was the dismissal of the appeals.

The Tribunal held that the inordinate delay of 619/650 days in filing the appeals could not be condoned. The Tribunal observed that the reasons provided by the assessees, such as financial crisis and recovery proceedings, did not constitute sufficient cause for such a prolonged delay. The Tribunal emphasized that condonation of delay is not a matter of right but a discretion of the court, and it should not be an act of generosity. Citing various Supreme Court judgments, including H. Guruswamy & Ors. Vs. A. Krishnaish, Thirunagalingam Vs. Lingeswaran & Anr., and State of Orissa Vs. Managing Committee of Namatara Girls High School, the Tribunal stated that delay caused by negligence or an inactive approach cannot be condoned. The Tribunal found that the assessees had acted with gross negligence and had been 'sleeping on its rights'. Therefore, the Tribunal declined to condone the delay and dismissed all the appeals on the ground of limitation, without going into the merits of the cases. The operative direction was the dismissal of the appeals.

The Tribunal held that the inordinate delay of 619/650 days in filing the appeals could not be condoned. The Tribunal observed that the reasons provided by the assessees, such as financial crisis and recovery proceedings, did not constitute sufficient cause for such a prolonged delay. The Tribunal emphasized that condonation of delay is not a matter of right but a discretion of the court, and it should not be an act of generosity. Citing various Supreme Court judgments, including H. Guruswamy & Ors. Vs. A. Krishnaish, Thirunagalingam Vs. Lingeswaran & Anr., and State of Orissa Vs. Managing Committee of Namatara Girls High School, the Tribunal stated that delay caused by negligence or an inactive approach cannot be condoned. The Tribunal found that the assessees had acted with gross negligence and had been 'sleeping on its rights'. Therefore, the Tribunal declined to condone the delay and dismissed all the appeals on the ground of limitation, without going into the merits of the cases. The operative direction was the dismissal of the appeals.

The Tribunal held that the PCIT was not justified in invoking his revisionary power under Section 263 of the Act regarding the claim of deduction under Section 80P(2)(d) of the Act. The Tribunal reasoned that the AO's decision to allow the deduction, based on interest income of Rs. 4,52,47,245/- received from a Cooperative Bank, was a possible and legally permissible view. It noted that the Tribunal itself had, in principle, allowed such deduction in the assessee's own case in previous appeals. The Tribunal distinguished the Supreme Court's decision in Totgars' Co-operative Sale Society Ltd. as not applicable to the claim under Section 80P(2)(i). Therefore, the Tribunal reversed the PCIT's finding on this issue and restored the AO's original assessment. Regarding the taxability of interest income earned on FDRs with various banks other than Cooperative Banks (amounting to Rs. 3,94,82,24,597/-), the Tribunal found that the AO had not properly inquired into this issue in the original assessment. Consequently, the Tribunal upheld the PCIT's justification in setting aside the original assessment order on this point and directing the AO to conduct necessary inquiries. The appeals were partly allowed.

The Tribunal held that the PCIT was not justified in invoking his revisionary power under Section 263 of the Act regarding the claim of deduction under Section 80P(2)(d) of the Act. The Tribunal reasoned that the AO's decision to allow the deduction, based on interest income of Rs. 4,52,47,245/- received from a Cooperative Bank, was a possible and legally permissible view. It noted that the Tribunal itself had, in principle, allowed such deduction in the assessee's own case in previous appeals. The Tribunal distinguished the Supreme Court's decision in Totgars' Co-operative Sale Society Ltd. as not applicable to the claim under Section 80P(2)(i). Therefore, the Tribunal reversed the PCIT's finding on this issue and restored the AO's original assessment. Regarding the taxability of interest income earned on FDRs with various banks other than Cooperative Banks (amounting to Rs. 3,94,82,24,597/-), the Tribunal found that the AO had not properly inquired into this issue in the original assessment. Consequently, the Tribunal upheld the PCIT's justification in setting aside the original assessment order on this point and directing the AO to conduct necessary inquiries. The appeals were partly allowed.

The Tribunal held that the PCIT was not justified in invoking his revisionary power under Section 263 of the Act regarding the claim of deduction under Section 80P(2)(d) of the Act. The Tribunal reasoned that the AO's decision to allow the deduction, based on interest income of Rs. 4,52,47,245/- received from a Cooperative Bank, was a possible and legally permissible view. It noted that the Tribunal itself had, in principle, allowed such deduction in the assessee's own case in previous appeals. The Tribunal distinguished the Supreme Court's decision in Totgars' Co-operative Sale Society Ltd. as not applicable to the claim under Section 80P(2)(i). Therefore, the Tribunal reversed the PCIT's finding on this issue and restored the AO's original assessment. Regarding the taxability of interest income earned on FDRs with various banks other than Cooperative Banks (amounting to Rs. 3,94,82,24,597/-), the Tribunal found that the AO had not properly inquired into this issue in the original assessment. Consequently, the Tribunal upheld the PCIT's justification in setting aside the original assessment order on this point and directing the AO to conduct necessary inquiries. The appeals were partly allowed.

The Tribunal held that the PCIT was not justified in invoking his revisionary power under Section 263 of the Act regarding the claim of deduction under Section 80P(2)(d) of the Act. The Tribunal reasoned that the AO's decision to allow the deduction, based on interest income of Rs. 4,52,47,245/- received from a Cooperative Bank, was a possible and legally permissible view. It noted that the Tribunal itself had, in principle, allowed such deduction in the assessee's own case in previous appeals. The Tribunal distinguished the Supreme Court's decision in Totgars' Co-operative Sale Society Ltd. as not applicable to the claim under Section 80P(2)(i). Therefore, the Tribunal reversed the PCIT's finding on this issue and restored the AO's original assessment. Regarding the taxability of interest income earned on FDRs with various banks other than Cooperative Banks (amounting to Rs. 3,94,82,24,597/-), the Tribunal found that the AO had not properly inquired into this issue in the original assessment. Consequently, the Tribunal upheld the PCIT's justification in setting aside the original assessment order on this point and directing the AO to conduct necessary inquiries. The appeals were partly allowed.

The Tribunal held that the notice dated 30.07.2022, issued under Section 148 of the amended Income Tax Act, 1961, was barred by limitation. The Tribunal arrived at this conclusion by calculating the surviving time limit available to the Revenue for issuing the notice, as per the principles laid down by the Supreme Court in Union of India v. Rajeev Bansal [2024] 167 taxmann.com 70 (SC). The Tribunal noted that the original notice under Section 148 was issued on 29.06.2021. Considering the extended limitation as per the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, up to 30.06.2021, the surviving time was only one day. Even with the proviso to Section 149(1)(b) allowing for an extension, the notice under Section 148A(d) was passed on 29.07.2022 and the fresh notice under Section 148 was issued on 30.07.2022, which was beyond the permissible surviving time limit of 16.06.2022. The Tribunal respectfully followed the judgments of the Bombay High Court in Hitesh Ramniklal Shah vs. Assistant Commissioner of Income-tax [2025] 180 taxmann.com 642 (Bombay) and the Delhi High Court in Ram Balram Buildhome (P.) Ltd. v. ITO [2025] 171 taxmann.com 99 (Delhi), which also dealt with similar issues concerning time-barred notices under Section 148. Consequently, the Tribunal declared the notice dated 30.07.2022 as void ab initio and quashed it, along with the consequential reassessment proceedings and the assessment order dated 03.05.2023. The alternative ground raised by the assessee was allowed, rendering the remaining grounds infructuous.

The Tribunal allowed the assessee's appeal on the additional ground raised, quashing the assessment order. The primary issue decided was the validity of the assessment order passed under section 144 without issuing a notice under section 143(2) of the Income Tax Act, 1961, even though the assessee had filed a belated return in response to a notice under section 148 (though the judgment refers to section 142(1) in the facts, the legal argument and relied upon cases pertain to section 148 and 143(2) in the context of reassessment). The Tribunal, respectfully following the decision in Kamlesh Pramod Gandhi vs. ITO and other coordinate bench decisions, held that the non-issuance of a notice under section 143(2) after the filing of a return (even if belated) makes the assessment order invalid and without jurisdiction. The Tribunal noted that the AO had admittedly not issued any notice under section 143(2). Consequently, the assessment order dated December 18, 2019, was set aside and declared bad in law. As the assessment order was quashed on this legal ground, the other grounds raised by the assessee concerning merits (additions under section 69A, 115BBE, TDS credit, etc.) were rendered infructuous and not adjudicated. The operative direction was to quash the assessment order.

The Tribunal first addressed the delay of 388 days in filing the appeal. Citing Supreme Court decisions in Collector, Land Acquisition, Anantnag & Anr. Vs Mst. Katiji and others and N. Balakrishnan Vs M. Krishnamurthy, and the Delhi High Court's decision in HL Malhotra & Company Pvt. Ltd. Vs DCIT, the Tribunal condoned the delay. It reasoned that the assessee, being 94 years old and not well-versed with online compliances, had sufficient cause for the delay, and there was no malafide intention or deliberate delay. The Tribunal then noted that the CIT(A) had not decided the appeal with a well-reasoned order as required by section 250(6) of the Act. Citing the Bombay High Court's decision in Prem Kumar Arjun Das Luthra HUF, the Tribunal held that the CIT(A) is obliged to dispose of appeals on merit. Consequently, without commenting on the merits, the Tribunal set aside the impugned order and remanded the matter back to the CIT(A) for a fresh decision denovo, after providing the assessee an adequate opportunity of being heard. The appeal was allowed for statistical purposes.

The Tribunal noted that the CIT(A) had not decided the appeal after discussing the issues in detail and had failed to provide a well-reasoned order as required by section 250(6) of the Act. The Tribunal observed that the CIT(A) is obliged to apply their mind to all issues arising from the impugned order and dispose of the appeal on merits, not by dismissing it for non-prosecution. Citing the decision of the Hon'ble Bombay High Court in Prem Kumar Arjun Das Luthra HUF, the Tribunal found the impugned order to be unfit and set it aside. The matter was remanded back to the file of the CIT(A) for deciding the case afresh/denovo, after providing an adequate opportunity of being heard to the assessee. The Tribunal made no comment on the merits of the case. The appeal was allowed for statistical purposes.

The Tribunal held that the inordinate delay of 619/650 days in filing the appeals could not be condoned. The Tribunal observed that the reasons provided by the assessees, such as financial crisis and recovery proceedings, did not constitute sufficient cause for such a prolonged delay. The Tribunal emphasized that condonation of delay is not a matter of right but a discretion of the court, and it should not be an act of generosity. Citing various Supreme Court judgments, including H. Guruswamy & Ors. Vs. A. Krishnaish, Thirunagalingam Vs. Lingeswaran & Anr., and State of Orissa Vs. Managing Committee of Namatara Girls High School, the Tribunal stated that delay caused by negligence or an inactive approach cannot be condoned. The Tribunal found that the assessees had acted with gross negligence and had been 'sleeping on its rights'. Therefore, the Tribunal declined to condone the delay and dismissed all the appeals on the ground of limitation, without going into the merits of the cases. The operative direction was the dismissal of the appeals.

On the issue of Section 14A disallowance, the Tribunal found that the AO had recorded sufficient dissatisfaction by examining financial statements and noting exempt income from investments, justifying the application of Rule 8D. However, for calculating the average value of investments, the Tribunal held that only investments yielding or potentially yielding exempt income (like dividends) should be considered. This includes investments in subsidiaries/holding/group companies. The matter was restored to the AO for verification, with the direction that disallowance should not exceed exempt income. This issue was allowed for statistical purposes. Regarding compensatory afforestation expenses, the Tribunal upheld the CIT(A)'s decision to amortize the expenditure over the mining lease period, dismissing the Assessee's appeal on this ground. For foreign exchange loss on forward contracts, the Tribunal noted it was the second round of litigation and that the CIT(A) had partly sustained the disallowance for AY 2009-10. Observing that the genuineness of the loss was not doubted and citing a precedent for the parent company, the Tribunal held that partial disallowance for AY 2009-10 was unwarranted and deleted it, while upholding the deletion for AY 2010-11. The Tribunal dismissed the Revenue's ground regarding commission paid to non-residents, following precedents that no TDS is required if the non-resident has no PE in India and their income is not taxable in India. The Tribunal upheld the CIT(A)'s deletion of disallowance of 50% additional depreciation on Plant and Machinery, stating that if allowed in the preceding year, the balance must be allowed in the subsequent year. Similarly, additional depreciation on mining activity was allowed, following precedents. The expenditure on road construction was allowed, as it was necessary for business operations and did not create an enduring benefit, following prior decisions. Finally, the Tribunal held that profits on the sale of current investments were rightly treated as capital gains, not business income, as the securities were held as investments and not stock-in-trade, aligning with CBDT guidelines.

The Tribunal held that the issue of disallowance under Section 14A is restored to the Assessing Officer for fresh calculation with specific directions. These include: (1) Provisions for diminution in value of investments are not to be added back to the book value. (2) For calculating 0.50% of the average value of investments under Rule 8D(iii), only investments yielding exempt income (including those that can yield exempt income in subsequent years) are to be included. (3) Disallowance under Section 14A should not exceed the exempt income earned during the year. (4) Average value of investments in subsidiary/holding/group companies should be included. The Tribunal dismissed the appeal concerning the addition of interest under Section 244A for AY 2014-15, holding that once a refund is generated and adjusted, the interest income is taxable. The ground regarding withdrawal of TDS for AY 2012-13 was dismissed as not pressed. The issue of withdrawal of TDS credit under Section 199 read with Rule 37BA for AYs 2012-13 and 2013-14 was restored to the AO for denovo adjudication after verifying if 40% of the amount paid by Sesa Sterlite Ltd. was offered to tax by the respective sellers. The appeal concerning the addition for interest receivable for AY 2012-13 was dismissed, holding that under the mercantile system of accounting, income must be accounted for on accrual, and the plea of not offering notional interest income is not sustainable. Remaining grounds were dismissed as infructuous.

The Tribunal held that the issue of disallowance under Section 14A is restored to the Assessing Officer for fresh calculation with specific directions. These include: (1) Provisions for diminution in value of investments are not to be added back to the book value. (2) For calculating 0.50% of the average value of investments under Rule 8D(iii), only investments yielding exempt income (including those that can yield exempt income in subsequent years) are to be included. (3) Disallowance under Section 14A should not exceed the exempt income earned during the year. (4) Average value of investments in subsidiary/holding/group companies should be included. The Tribunal dismissed the appeal concerning the addition of interest under Section 244A for AY 2014-15, holding that once a refund is generated and adjusted, the interest income is taxable. The ground regarding withdrawal of TDS for AY 2012-13 was dismissed as not pressed. The issue of withdrawal of TDS credit under Section 199 read with Rule 37BA for AYs 2012-13 and 2013-14 was restored to the AO for denovo adjudication after verifying if 40% of the amount paid by Sesa Sterlite Ltd. was offered to tax by the respective sellers. The appeal concerning the addition for interest receivable for AY 2012-13 was dismissed, holding that under the mercantile system of accounting, income must be accounted for on accrual, and the plea of not offering notional interest income is not sustainable. Remaining grounds were dismissed as infructuous.

The Tribunal held that the issue of disallowance under Section 14A is restored to the Assessing Officer for fresh calculation with specific directions. These include: (1) Provisions for diminution in value of investments are not to be added back to the book value. (2) For calculating 0.50% of the average value of investments under Rule 8D(iii), only investments yielding exempt income (including those that can yield exempt income in subsequent years) are to be included. (3) Disallowance under Section 14A should not exceed the exempt income earned during the year. (4) Average value of investments in subsidiary/holding/group companies should be included. The Tribunal dismissed the appeal concerning the addition of interest under Section 244A for AY 2014-15, holding that once a refund is generated and adjusted, the interest income is taxable. The ground regarding withdrawal of TDS for AY 2012-13 was dismissed as not pressed. The issue of withdrawal of TDS credit under Section 199 read with Rule 37BA for AYs 2012-13 and 2013-14 was restored to the AO for denovo adjudication after verifying if 40% of the amount paid by Sesa Sterlite Ltd. was offered to tax by the respective sellers. The appeal concerning the addition for interest receivable for AY 2012-13 was dismissed, holding that under the mercantile system of accounting, income must be accounted for on accrual, and the plea of not offering notional interest income is not sustainable. Remaining grounds were dismissed as infructuous.

On the issue of Section 14A disallowance, the Tribunal found that the AO had recorded sufficient dissatisfaction by examining financial statements and noting exempt income from investments, justifying the application of Rule 8D. However, for calculating the average value of investments, the Tribunal held that only investments yielding or potentially yielding exempt income (like dividends) should be considered. This includes investments in subsidiaries/holding/group companies. The matter was restored to the AO for verification, with the direction that disallowance should not exceed exempt income. This issue was allowed for statistical purposes. Regarding compensatory afforestation expenses, the Tribunal upheld the CIT(A)'s decision to amortize the expenditure over the mining lease period, dismissing the Assessee's appeal on this ground. For foreign exchange loss on forward contracts, the Tribunal noted it was the second round of litigation and that the CIT(A) had partly sustained the disallowance for AY 2009-10. Observing that the genuineness of the loss was not doubted and citing a precedent for the parent company, the Tribunal held that partial disallowance for AY 2009-10 was unwarranted and deleted it, while upholding the deletion for AY 2010-11. The Tribunal dismissed the Revenue's ground regarding commission paid to non-residents, following precedents that no TDS is required if the non-resident has no PE in India and their income is not taxable in India. The Tribunal upheld the CIT(A)'s deletion of disallowance of 50% additional depreciation on Plant and Machinery, stating that if allowed in the preceding year, the balance must be allowed in the subsequent year. Similarly, additional depreciation on mining activity was allowed, following precedents. The expenditure on road construction was allowed, as it was necessary for business operations and did not create an enduring benefit, following prior decisions. Finally, the Tribunal held that profits on the sale of current investments were rightly treated as capital gains, not business income, as the securities were held as investments and not stock-in-trade, aligning with CBDT guidelines.

On the issue of Section 14A disallowance, the Tribunal found that the AO had recorded sufficient dissatisfaction by examining financial statements and noting exempt income from investments, justifying the application of Rule 8D. However, for calculating the average value of investments, the Tribunal held that only investments yielding or potentially yielding exempt income (like dividends) should be considered. This includes investments in subsidiaries/holding/group companies. The matter was restored to the AO for verification, with the direction that disallowance should not exceed exempt income. This issue was allowed for statistical purposes. Regarding compensatory afforestation expenses, the Tribunal upheld the CIT(A)'s decision to amortize the expenditure over the mining lease period, dismissing the Assessee's appeal on this ground. For foreign exchange loss on forward contracts, the Tribunal noted it was the second round of litigation and that the CIT(A) had partly sustained the disallowance for AY 2009-10. Observing that the genuineness of the loss was not doubted and citing a precedent for the parent company, the Tribunal held that partial disallowance for AY 2009-10 was unwarranted and deleted it, while upholding the deletion for AY 2010-11. The Tribunal dismissed the Revenue's ground regarding commission paid to non-residents, following precedents that no TDS is required if the non-resident has no PE in India and their income is not taxable in India. The Tribunal upheld the CIT(A)'s deletion of disallowance of 50% additional depreciation on Plant and Machinery, stating that if allowed in the preceding year, the balance must be allowed in the subsequent year. Similarly, additional depreciation on mining activity was allowed, following precedents. The expenditure on road construction was allowed, as it was necessary for business operations and did not create an enduring benefit, following prior decisions. Finally, the Tribunal held that profits on the sale of current investments were rightly treated as capital gains, not business income, as the securities were held as investments and not stock-in-trade, aligning with CBDT guidelines.

On the issue of Section 14A disallowance, the Tribunal found that the AO had recorded sufficient dissatisfaction by examining financial statements and noting exempt income from investments, justifying the application of Rule 8D. However, for calculating the average value of investments, the Tribunal held that only investments yielding or potentially yielding exempt income (like dividends) should be considered. This includes investments in subsidiaries/holding/group companies. The matter was restored to the AO for verification, with the direction that disallowance should not exceed exempt income. This issue was allowed for statistical purposes. Regarding compensatory afforestation expenses, the Tribunal upheld the CIT(A)'s decision to amortize the expenditure over the mining lease period, dismissing the Assessee's appeal on this ground. For foreign exchange loss on forward contracts, the Tribunal noted it was the second round of litigation and that the CIT(A) had partly sustained the disallowance for AY 2009-10. Observing that the genuineness of the loss was not doubted and citing a precedent for the parent company, the Tribunal held that partial disallowance for AY 2009-10 was unwarranted and deleted it, while upholding the deletion for AY 2010-11. The Tribunal dismissed the Revenue's ground regarding commission paid to non-residents, following precedents that no TDS is required if the non-resident has no PE in India and their income is not taxable in India. The Tribunal upheld the CIT(A)'s deletion of disallowance of 50% additional depreciation on Plant and Machinery, stating that if allowed in the preceding year, the balance must be allowed in the subsequent year. Similarly, additional depreciation on mining activity was allowed, following precedents. The expenditure on road construction was allowed, as it was necessary for business operations and did not create an enduring benefit, following prior decisions. Finally, the Tribunal held that profits on the sale of current investments were rightly treated as capital gains, not business income, as the securities were held as investments and not stock-in-trade, aligning with CBDT guidelines.

On the issue of Section 14A disallowance, the Tribunal found that the AO had recorded sufficient dissatisfaction by examining financial statements and noting exempt income from investments, justifying the application of Rule 8D. However, for calculating the average value of investments, the Tribunal held that only investments yielding or potentially yielding exempt income (like dividends) should be considered. This includes investments in subsidiaries/holding/group companies. The matter was restored to the AO for verification, with the direction that disallowance should not exceed exempt income. This issue was allowed for statistical purposes. Regarding compensatory afforestation expenses, the Tribunal upheld the CIT(A)'s decision to amortize the expenditure over the mining lease period, dismissing the Assessee's appeal on this ground. For foreign exchange loss on forward contracts, the Tribunal noted it was the second round of litigation and that the CIT(A) had partly sustained the disallowance for AY 2009-10. Observing that the genuineness of the loss was not doubted and citing a precedent for the parent company, the Tribunal held that partial disallowance for AY 2009-10 was unwarranted and deleted it, while upholding the deletion for AY 2010-11. The Tribunal dismissed the Revenue's ground regarding commission paid to non-residents, following precedents that no TDS is required if the non-resident has no PE in India and their income is not taxable in India. The Tribunal upheld the CIT(A)'s deletion of disallowance of 50% additional depreciation on Plant and Machinery, stating that if allowed in the preceding year, the balance must be allowed in the subsequent year. Similarly, additional depreciation on mining activity was allowed, following precedents. The expenditure on road construction was allowed, as it was necessary for business operations and did not create an enduring benefit, following prior decisions. Finally, the Tribunal held that profits on the sale of current investments were rightly treated as capital gains, not business income, as the securities were held as investments and not stock-in-trade, aligning with CBDT guidelines.

On the issue of Section 14A disallowance, the Tribunal found that the AO had recorded sufficient dissatisfaction by examining financial statements and noting exempt income from investments, justifying the application of Rule 8D. However, for calculating the average value of investments, the Tribunal held that only investments yielding or potentially yielding exempt income (like dividends) should be considered. This includes investments in subsidiaries/holding/group companies. The matter was restored to the AO for verification, with the direction that disallowance should not exceed exempt income. This issue was allowed for statistical purposes. Regarding compensatory afforestation expenses, the Tribunal upheld the CIT(A)'s decision to amortize the expenditure over the mining lease period, dismissing the Assessee's appeal on this ground. For foreign exchange loss on forward contracts, the Tribunal noted it was the second round of litigation and that the CIT(A) had partly sustained the disallowance for AY 2009-10. Observing that the genuineness of the loss was not doubted and citing a precedent for the parent company, the Tribunal held that partial disallowance for AY 2009-10 was unwarranted and deleted it, while upholding the deletion for AY 2010-11. The Tribunal dismissed the Revenue's ground regarding commission paid to non-residents, following precedents that no TDS is required if the non-resident has no PE in India and their income is not taxable in India. The Tribunal upheld the CIT(A)'s deletion of disallowance of 50% additional depreciation on Plant and Machinery, stating that if allowed in the preceding year, the balance must be allowed in the subsequent year. Similarly, additional depreciation on mining activity was allowed, following precedents. The expenditure on road construction was allowed, as it was necessary for business operations and did not create an enduring benefit, following prior decisions. Finally, the Tribunal held that profits on the sale of current investments were rightly treated as capital gains, not business income, as the securities were held as investments and not stock-in-trade, aligning with CBDT guidelines.

On the issue of Section 14A disallowance, the Tribunal found that the AO had recorded sufficient dissatisfaction by examining financial statements and noting exempt income from investments, justifying the application of Rule 8D. However, for calculating the average value of investments, the Tribunal held that only investments yielding or potentially yielding exempt income (like dividends) should be considered. This includes investments in subsidiaries/holding/group companies. The matter was restored to the AO for verification, with the direction that disallowance should not exceed exempt income. This issue was allowed for statistical purposes. Regarding compensatory afforestation expenses, the Tribunal upheld the CIT(A)'s decision to amortize the expenditure over the mining lease period, dismissing the Assessee's appeal on this ground. For foreign exchange loss on forward contracts, the Tribunal noted it was the second round of litigation and that the CIT(A) had partly sustained the disallowance for AY 2009-10. Observing that the genuineness of the loss was not doubted and citing a precedent for the parent company, the Tribunal held that partial disallowance for AY 2009-10 was unwarranted and deleted it, while upholding the deletion for AY 2010-11. The Tribunal dismissed the Revenue's ground regarding commission paid to non-residents, following precedents that no TDS is required if the non-resident has no PE in India and their income is not taxable in India. The Tribunal upheld the CIT(A)'s deletion of disallowance of 50% additional depreciation on Plant and Machinery, stating that if allowed in the preceding year, the balance must be allowed in the subsequent year. Similarly, additional depreciation on mining activity was allowed, following precedents. The expenditure on road construction was allowed, as it was necessary for business operations and did not create an enduring benefit, following prior decisions. Finally, the Tribunal held that profits on the sale of current investments were rightly treated as capital gains, not business income, as the securities were held as investments and not stock-in-trade, aligning with CBDT guidelines.

The Tribunal held that the issue of disallowance under Section 14A is restored to the Assessing Officer for fresh calculation with specific directions. These include: (1) Provisions for diminution in value of investments are not to be added back to the book value. (2) For calculating 0.50% of the average value of investments under Rule 8D(iii), only investments yielding exempt income (including those that can yield exempt income in subsequent years) are to be included. (3) Disallowance under Section 14A should not exceed the exempt income earned during the year. (4) Average value of investments in subsidiary/holding/group companies should be included. The Tribunal dismissed the appeal concerning the addition of interest under Section 244A for AY 2014-15, holding that once a refund is generated and adjusted, the interest income is taxable. The ground regarding withdrawal of TDS for AY 2012-13 was dismissed as not pressed. The issue of withdrawal of TDS credit under Section 199 read with Rule 37BA for AYs 2012-13 and 2013-14 was restored to the AO for denovo adjudication after verifying if 40% of the amount paid by Sesa Sterlite Ltd. was offered to tax by the respective sellers. The appeal concerning the addition for interest receivable for AY 2012-13 was dismissed, holding that under the mercantile system of accounting, income must be accounted for on accrual, and the plea of not offering notional interest income is not sustainable. Remaining grounds were dismissed as infructuous.

The Tribunal held that the issue of disallowance under Section 14A is restored to the Assessing Officer for fresh calculation with specific directions. These include: (1) Provisions for diminution in value of investments are not to be added back to the book value. (2) For calculating 0.50% of the average value of investments under Rule 8D(iii), only investments yielding exempt income (including those that can yield exempt income in subsequent years) are to be included. (3) Disallowance under Section 14A should not exceed the exempt income earned during the year. (4) Average value of investments in subsidiary/holding/group companies should be included. The Tribunal dismissed the appeal concerning the addition of interest under Section 244A for AY 2014-15, holding that once a refund is generated and adjusted, the interest income is taxable. The ground regarding withdrawal of TDS for AY 2012-13 was dismissed as not pressed. The issue of withdrawal of TDS credit under Section 199 read with Rule 37BA for AYs 2012-13 and 2013-14 was restored to the AO for denovo adjudication after verifying if 40% of the amount paid by Sesa Sterlite Ltd. was offered to tax by the respective sellers. The appeal concerning the addition for interest receivable for AY 2012-13 was dismissed, holding that under the mercantile system of accounting, income must be accounted for on accrual, and the plea of not offering notional interest income is not sustainable. Remaining grounds were dismissed as infructuous.

On the issue of Section 14A disallowance, the Tribunal found that the AO had recorded sufficient dissatisfaction by examining financial statements and noting exempt income from investments, justifying the application of Rule 8D. However, for calculating the average value of investments, the Tribunal held that only investments yielding or potentially yielding exempt income (like dividends) should be considered. This includes investments in subsidiaries/holding/group companies. The matter was restored to the AO for verification, with the direction that disallowance should not exceed exempt income. This issue was allowed for statistical purposes. Regarding compensatory afforestation expenses, the Tribunal upheld the CIT(A)'s decision to amortize the expenditure over the mining lease period, dismissing the Assessee's appeal on this ground. For foreign exchange loss on forward contracts, the Tribunal noted it was the second round of litigation and that the CIT(A) had partly sustained the disallowance for AY 2009-10. Observing that the genuineness of the loss was not doubted and citing a precedent for the parent company, the Tribunal held that partial disallowance for AY 2009-10 was unwarranted and deleted it, while upholding the deletion for AY 2010-11. The Tribunal dismissed the Revenue's ground regarding commission paid to non-residents, following precedents that no TDS is required if the non-resident has no PE in India and their income is not taxable in India. The Tribunal upheld the CIT(A)'s deletion of disallowance of 50% additional depreciation on Plant and Machinery, stating that if allowed in the preceding year, the balance must be allowed in the subsequent year. Similarly, additional depreciation on mining activity was allowed, following precedents. The expenditure on road construction was allowed, as it was necessary for business operations and did not create an enduring benefit, following prior decisions. Finally, the Tribunal held that profits on the sale of current investments were rightly treated as capital gains, not business income, as the securities were held as investments and not stock-in-trade, aligning with CBDT guidelines.

On the issue of Section 14A disallowance, the Tribunal found that the AO had recorded sufficient dissatisfaction by examining financial statements and noting exempt income from investments, justifying the application of Rule 8D. However, for calculating the average value of investments, the Tribunal held that only investments yielding or potentially yielding exempt income (like dividends) should be considered. This includes investments in subsidiaries/holding/group companies. The matter was restored to the AO for verification, with the direction that disallowance should not exceed exempt income. This issue was allowed for statistical purposes. Regarding compensatory afforestation expenses, the Tribunal upheld the CIT(A)'s decision to amortize the expenditure over the mining lease period, dismissing the Assessee's appeal on this ground. For foreign exchange loss on forward contracts, the Tribunal noted it was the second round of litigation and that the CIT(A) had partly sustained the disallowance for AY 2009-10. Observing that the genuineness of the loss was not doubted and citing a precedent for the parent company, the Tribunal held that partial disallowance for AY 2009-10 was unwarranted and deleted it, while upholding the deletion for AY 2010-11. The Tribunal dismissed the Revenue's ground regarding commission paid to non-residents, following precedents that no TDS is required if the non-resident has no PE in India and their income is not taxable in India. The Tribunal upheld the CIT(A)'s deletion of disallowance of 50% additional depreciation on Plant and Machinery, stating that if allowed in the preceding year, the balance must be allowed in the subsequent year. Similarly, additional depreciation on mining activity was allowed, following precedents. The expenditure on road construction was allowed, as it was necessary for business operations and did not create an enduring benefit, following prior decisions. Finally, the Tribunal held that profits on the sale of current investments were rightly treated as capital gains, not business income, as the securities were held as investments and not stock-in-trade, aligning with CBDT guidelines.

The Tribunal held that the CIT(A) correctly applied the principle that only the profit element embedded in suppressed receipts is taxable, not the entire receipts. The Revenue's ground regarding the 25% net profit rate was dismissed. The Tribunal noted that the assessee declared a 19% net profit rate, which increased to 21.85% after offering additional income. Considering the judicial precedents, including the decision in M/s. Sumer Builders, which states that on-money receipts are undisclosed receipts and only the profit element is taxable, the Tribunal deemed it appropriate to apply a Net Profit rate of 23% on the unaccounted sales turnover, as against the 25% applied by the CIT(A). This decision was based on the fact that expenses are incurred for sales, justifying the application of a net profit rate. The appeals of the Revenue were dismissed, and the cross-objections of the assessees were partly allowed.

The Tribunal held that the expenses amounting to Rs. 83,47,183/- were incurred wholly and exclusively in connection with the transfer of unlisted equity shares and are therefore allowable under Section 48(i) of the Income Tax Act, 1961. The Tribunal noted that the genuineness of the sale transaction was not in dispute. It observed that the assessee, along with other shareholders, had engaged 7i Advisors LLP to find a buyer and secure the best price for their shares in M/s. Lilac Medicare Pvt. Ltd. The advisory fees and event/execution expenses were considered incidental to setting up buyer representative functions, preparing documents, finding buyers, and locking the deal at the best price. The Tribunal found a direct nexus between the consultancy fees and the sale transaction, supported by the judgment in Kaushalya Devi Vs. CIT, which allows expenses inextricably linked to the transfer of a capital asset. Consequently, the disallowance made by the Assessing Officer was deleted, and the grounds of appeal were allowed.

The Tribunal held that the CIT(A) correctly applied the principle that only the profit element embedded in suppressed receipts is taxable, not the entire receipts. The Revenue's ground regarding the 25% net profit rate was dismissed. The Tribunal noted that the assessee declared a 19% net profit rate, which increased to 21.85% after offering additional income. Considering the judicial precedents, including the decision in M/s. Sumer Builders, which states that on-money receipts are undisclosed receipts and only the profit element is taxable, the Tribunal deemed it appropriate to apply a Net Profit rate of 23% on the unaccounted sales turnover, as against the 25% applied by the CIT(A). This decision was based on the fact that expenses are incurred for sales, justifying the application of a net profit rate. The appeals of the Revenue were dismissed, and the cross-objections of the assessees were partly allowed.

The Tribunal admitted the legal issue challenging the validity of the Section 148 notice, which was raised for the first time before it. The Tribunal noted that such legal issues can be raised at any stage and do not require fresh fact investigation, relying on the judgment of the Hon'ble Apex Court in National Thermal Power Co. Ltd. Vs. CIT (229 ITR 383). The Tribunal also observed that the NFAC had not adjudicated some of the legal issues raised before it. Citing the judgment of the Delhi High Court in 'Divine Infracon Pvt. Ltd. Vs PCIT' [2025, 171 taxmann.com 92 (Del)], the Tribunal held that it has no jurisdiction to decide a ground that did not arise from the impugned order of the first appellate authority, irrespective of whether it was raised in the first appeal. Consequently, the order of the NFAC was set aside, and the grounds of appeal raised by the assessee were allowed for statistical purposes. The matter was remitted back to the file of the NFAC for necessary adjudication of the legal issues along with other issues. The assessee was directed to provide updated contact details and remain vigilant. No specific finding was given on the addition of Rs. 95,30,000/-.

The Tribunal, in the larger interest of justice, decided to set aside the impugned order and restore the issues raised in the appeal to the file of the CIT(A) for fresh adjudication. The Tribunal noted that the assessee had failed to make any submissions before the CIT(A), and while the CIT(A) had dealt with the merits, the assessee's prayer for another opportunity was not objected to by the revenue. The CIT(A) was directed to provide a reasonable opportunity of hearing to the assessee. The assessee was also directed to provide its latest email ID and contact details and to remain vigilant, avoiding unnecessary adjournments. The appeal was allowed for statistical purposes.

The ITAT held that the disallowance of royalty expenditure of Rs.1,59,22,685/- was not justified. The Tribunal noted that the liability to pay royalty on rejections/waste dumps for FY 2007-08 and FY 2008-09 was initiated by the Director of Mines, Geology, and crystallized during the year under appeal. Citing the Gujarat High Court's decision in CIT vs. Indian Petrochemicals Corporation Limited, the Tribunal held that expenses quantified and paid during the year are allowable as business expenditure even under the mercantile system. Therefore, the royalty payment was allowed. Regarding the interest expenditure of Rs.78,73,785/-, the Tribunal found that the interest was levied for the delay in payment, which was due to the demand being raised during the year. Citing the Supreme Court's decision in CIT vs. Ahmedabad Cotton Manufacturing Company Ltd., the Tribunal held that if a payment is made without breach of law and in obedience to statutory provisions as a measure of business expediency, it should be allowed. The interest was considered compensatory in nature, incurred wholly and exclusively for business purposes, and thus allowable under Section 37(1). The CIT(A)'s finding was set aside, and the interest expenditure was allowed.

The Tribunal held that the assessment completed under Section 147 read with Sections 144 and 144B of the Income Tax Act, 1961, is invalid and bad in law due to the non-issuance of a notice under Section 143(2) of the Act. The Tribunal relied on the decisions of the Delhi High Court in Shaily Juneja Vs. ACIT and its own previous decisions in Bali Nagwanshi Vs. ACIT and Moammed Usman Vs. ITO-2(1), Bhilai. The reasoning is that if the Assessing Officer (AO) does not accept the return filed by the assessee at its face value, issuing a notice under Section 143(2) is mandatory to provide an opportunity to the assessee. Failure to issue this notice is fatal to the assessment order. The Tribunal found that the revenue could not provide any evidence to show that the notice under Section 143(2) was issued. Consequently, the reassessment proceedings were quashed. The appeal was allowed on this legal ground, rendering other grounds academic.

The Tribunal held that the order of the CIT(Appeals) was not sustainable. The assessee had clearly stated that the tax liabilities for the transactions were completed in the hands of the sub-contractors. The CIT(Appeals) had not conclusively denied this fact and had not conducted any independent inquiry as mandated by Sections 250(4) & (6) of the Act. Instead, the CIT(Appeals) relied on the submissions without proper verification and independent reasoning. The Tribunal found the CIT(Appeals)'s findings to be vague and not matching the assessee's submissions due to the lack of independent inquiry. Therefore, the Tribunal set aside the order of the CIT(Appeals) and remanded the matter back for de novo adjudication, directing the CIT(Appeals) to pass a speaking order after complying with the principles of natural justice and verifying the contentions.

The Tribunal condoned the delay of 59 days in filing the appeal, finding no material on record to suggest malafide or deliberate conduct by the assessee. The Tribunal relied on several judicial pronouncements, including Collector, Land Acquisition Vs. Mst. Katiji & Ors, to grant relief on the delay. Regarding the substantive issue, the Tribunal observed that the Ld. ADDL/JCIT(A)/NFAC had dealt with the merits of the matter but failed to adjudicate the specific legal ground raised by the assessee concerning the retrospective application of Section 115BBE. The Tribunal held that it is incumbent upon the quasi-judicial authority to first adjudicate such a legal ground that goes to the root of the matter. Therefore, the order of the Ld. ADDL/JCIT(A)/NFAC was set aside, and the matter was restored to its file for specific adjudication on this legal ground, ensuring compliance with the principles of natural justice. The appeal was allowed for statistical purposes.

The Tribunal noted that the assessee's grounds of appeal before the CIT(Appeals) and the ITAT specifically raised the issue of the AO's violation of the principles of natural justice by denying the opportunity for cross-examination. The Tribunal observed that this crucial ground, which goes to the root of the matter, was not adjudicated by the CIT(Appeals) in his order. Therefore, without delving into the merits of the additions, the Tribunal set aside the orders of the CIT(Appeals) for both assessment years. The matters were remanded back to the CIT(Appeals) for adjudication of the specific ground concerning the opportunity of cross-examination. The CIT(Appeals) was directed to pass a speaking order in accordance with Section 250(4) & (6) of the Act, ensuring compliance with the principles of natural justice.

The Tribunal noted that the assessee's grounds of appeal before the CIT(Appeals) and the ITAT specifically raised the issue of the AO's violation of the principles of natural justice by denying the opportunity for cross-examination. The Tribunal observed that this crucial ground, which goes to the root of the matter, was not adjudicated by the CIT(Appeals) in his order. Therefore, without delving into the merits of the additions, the Tribunal set aside the orders of the CIT(Appeals) for both assessment years. The matters were remanded back to the CIT(Appeals) for adjudication of the specific ground concerning the opportunity of cross-examination. The CIT(Appeals) was directed to pass a speaking order in accordance with Section 250(4) & (6) of the Act, ensuring compliance with the principles of natural justice.

The Tribunal condoned the delay of 273 days in filing the appeal, finding no material on record to suggest malafide or deliberate conduct by the assessee for the delay, and respectfully considering various judicial pronouncements. The Tribunal noted that the CIT(Appeals)/NFAC had passed an ex-parte order due to the assessee's non-compliance with notices, despite multiple opportunities. Following the principles laid down in the cases of Brajesh Singh Bhadoria and Collector Mining, Kondagaon, the Tribunal set aside the order of the CIT(Appeals)/NFAC and remanded the matter back to its file for de novo adjudication on merits. The assessee was directed to comply with the hearing notices from the CIT(Appeals)/NFAC and represent the matter on merits, as this was considered a final opportunity. The CIT(Appeals)/NFAC was directed to provide a reasonable opportunity of being heard and pass a speaking order in terms with Section 250(4) and (6) of the Act within three months. The grounds of appeal were allowed for statistical purposes.

The Tribunal condoned the delay of 172 days in filing the appeal, accepting the assessee's explanation that non-receipt of notices due to dispatch to an incorrect email address was beyond their control. The Tribunal noted the Revenue's concession regarding the incorrect dispatch of notices. Consequently, the Tribunal set aside the ex-parte order passed by the Ld. CIT(Appeals)/NFAC. Following the principles of natural justice and consistent views of the Tribunal in similar cases (Brajesh Singh Bhadoria, Collector Mining, Kondagaon, Amit Singh Thakur), the matter was remanded back to the file of the Ld. CIT(Appeals)/NFAC for denovo adjudication on merits. The assessee was directed to comply with hearing notices and represent the matter on merits, and the Ld. CIT(Appeals)/NFAC was directed to provide a reasonable opportunity of being heard and pass a speaking order within three months. The grounds of appeal were allowed for statistical purposes.

The Tribunal noted that the assessee, a sugar manufacturer, purchases sugarcane from farmers and makes payments to harvesting and transport contractors. The assessee contended that these payments are adjusted against the purchase price payable to farmers, and the assessee acts as a facilitator. The Tribunal considered additional evidence filed by the assessee, including sample agreements and farmer/contractor ledgers, which indicated that in many cases, the company paid for transport and harvesting. However, it also noted that the assessee started making TDS from financial year 2016-2017. The Tribunal observed that the decision in EID Parry India Ltd. was pronounced later than the decision relied upon by the assessee. Given the complexities and the additional evidence not placed before the lower appellate authority, the Tribunal restored the issue to the file of the CIT(A) for fresh adjudication. The CIT(A) was directed to consider the observations, potentially call for a Remand Report, and decide on the bifurcation of charges paid directly versus on behalf of farmers, affording the assessee an opportunity of hearing.

The Tribunal noted that the assessee, a sugar manufacturer, purchases sugarcane from farmers and makes payments to harvesting and transport contractors. The assessee contended that these payments are adjusted against the purchase price payable to farmers, and the assessee acts as a facilitator. The Tribunal considered additional evidence filed by the assessee, including sample agreements and farmer/contractor ledgers, which indicated that in many cases, the company paid for transport and harvesting. However, it also noted that the assessee started making TDS from financial year 2016-2017. The Tribunal observed that the decision in EID Parry India Ltd. was pronounced later than the decision relied upon by the assessee. Given the complexities and the additional evidence not placed before the lower appellate authority, the Tribunal restored the issue to the file of the CIT(A) for fresh adjudication. The CIT(A) was directed to consider the observations, potentially call for a Remand Report, and decide on the bifurcation of charges paid directly versus on behalf of farmers, affording the assessee an opportunity of hearing.

The Tribunal noted that the assessee, a sugar manufacturer, purchases sugarcane from farmers and makes payments to harvesting and transport contractors. The assessee contended that these payments are adjusted against the purchase price payable to farmers, and the assessee acts as a facilitator. The Tribunal considered additional evidence filed by the assessee, including sample agreements and farmer/contractor ledgers, which indicated that in many cases, the company paid for transport and harvesting. However, it also noted that the assessee started making TDS from financial year 2016-2017. The Tribunal observed that the decision in EID Parry India Ltd. was pronounced later than the decision relied upon by the assessee. Given the complexities and the additional evidence not placed before the lower appellate authority, the Tribunal restored the issue to the file of the CIT(A) for fresh adjudication. The CIT(A) was directed to consider the observations, potentially call for a Remand Report, and decide on the bifurcation of charges paid directly versus on behalf of farmers, affording the assessee an opportunity of hearing.

The Tribunal noted that the assessee, a sugar manufacturer, purchases sugarcane from farmers and makes payments to harvesting and transport contractors. The assessee contended that these payments are adjusted against the purchase price payable to farmers, and the assessee acts as a facilitator. The Tribunal considered additional evidence filed by the assessee, including sample agreements and farmer/contractor ledgers, which indicated that in many cases, the company paid for transport and harvesting. However, it also noted that the assessee started making TDS from financial year 2016-2017. The Tribunal observed that the decision in EID Parry India Ltd. was pronounced later than the decision relied upon by the assessee. Given the complexities and the additional evidence not placed before the lower appellate authority, the Tribunal restored the issue to the file of the CIT(A) for fresh adjudication. The CIT(A) was directed to consider the observations, potentially call for a Remand Report, and decide on the bifurcation of charges paid directly versus on behalf of farmers, affording the assessee an opportunity of hearing.

The Tribunal noted that the assessee, a sugar manufacturer, purchases sugarcane from farmers and makes payments to harvesting and transport contractors. The assessee contended that these payments are adjusted against the purchase price payable to farmers, and the assessee acts as a facilitator. The Tribunal considered additional evidence filed by the assessee, including sample agreements and farmer/contractor ledgers, which indicated that in many cases, the company paid for transport and harvesting. However, it also noted that the assessee started making TDS from financial year 2016-2017. The Tribunal observed that the decision in EID Parry India Ltd. was pronounced later than the decision relied upon by the assessee. Given the complexities and the additional evidence not placed before the lower appellate authority, the Tribunal restored the issue to the file of the CIT(A) for fresh adjudication. The CIT(A) was directed to consider the observations, potentially call for a Remand Report, and decide on the bifurcation of charges paid directly versus on behalf of farmers, affording the assessee an opportunity of hearing.

The Tribunal noted that the assessee, a sugar manufacturer, purchases sugarcane from farmers and makes payments to harvesting and transport contractors. The assessee contended that these payments are adjusted against the purchase price payable to farmers, and the assessee acts as a facilitator. The Tribunal considered additional evidence filed by the assessee, including sample agreements and farmer/contractor ledgers, which indicated that in many cases, the company paid for transport and harvesting. However, it also noted that the assessee started making TDS from financial year 2016-2017. The Tribunal observed that the decision in EID Parry India Ltd. was pronounced later than the decision relied upon by the assessee. Given the complexities and the additional evidence not placed before the lower appellate authority, the Tribunal restored the issue to the file of the CIT(A) for fresh adjudication. The CIT(A) was directed to consider the observations, potentially call for a Remand Report, and decide on the bifurcation of charges paid directly versus on behalf of farmers, affording the assessee an opportunity of hearing.