ITAT Patna Judgments — December 2025

The Tribunal found that applying a GP rate on seized turnover for brick kiln business was unjustified. A net profit rate of 16% was deemed appropriate for undisclosed turnover. The addition for unexplained money introduced was deleted due to sufficient cash availability. The Section 50C issue was remanded. The addition for unexplained expenditure was deleted due to lack of nexus and the principle of telescoping.

The Tribunal noted that the CIT(A) dismissed the appeal for non-prosecution, which is not empowered by law according to case precedents. The Tribunal also observed that proper representation was not made by the assessee at both the AO and CIT(A) stages. Considering the interest of justice, the Tribunal decided to provide one more opportunity.

The CIT(A) dismissed the assessee's appeal ex parte due to non-compliance. The Tribunal found that the CIT(A)'s order was passed without considering the merits of the case. Consequently, the Tribunal restored the appeal to the Assessing Officer for fresh consideration after allowing the assessee an opportunity to submit evidence.

The CIT(A) dismissed the assessee's appeal ex parte due to non-compliance. The Tribunal found that the CIT(A)'s order was passed without considering the merits of the case. Consequently, the Tribunal restored the appeal to the Assessing Officer for fresh consideration after allowing the assessee an opportunity to submit evidence.

The Tribunal restored the appeal to the CIT(A) for fresh consideration after affording the assessee an opportunity to present evidence. The CIT(A) had dismissed the appeal without considering documentary evidence.

The Tribunal noted that some documents supporting the assessee's claims, particularly regarding agricultural income and gifts, were not filed before the lower authorities. In the interest of justice, the Tribunal decided to set aside the order of the CIT(A) and remand the matter back to the AO.

The Tribunal found merit in the assessee's argument that its Section 12AA registration was not cancelled. Therefore, the matter was remanded to the AO to re-examine the facts and ascertain if any reference for cancellation of registration was made and if any consequential order was passed.

The Tribunal upheld the CIT(A)'s order deleting the addition. It found that the assessee had provided sufficient evidence of genuine sales and payments received through banking channels, and was not given an opportunity to cross-examine the persons whose statements were relied upon by the AO.

The Tribunal held that the AO and CIT(A) erred by not considering the Jharkhand address on the invoices as the supplier's manufacturing unit location. Since the sales corresponding to these purchases were not disbelieved, the addition was deemed unjustified.

The Tribunal found that the assessee was indeed non-compliant, leading to an ex-parte decision. However, it noted that the CIT(A) failed to set out the points of determination and reasons for the decision as required by Section 250(6) of the Act. Therefore, in the interest of justice, the matter was restored to the CIT(A) for a fresh adjudication with a reasonable opportunity for the assessee to be heard.

On the issue of diamond jewellery valuation, the Tribunal found merit in the assessee's contention. It noted that the assessee's revised valuation was ₹19,11,349, and if this was considered, the total jewellery valuation would be ₹1,20,79,572. Since the assessee had already offered income of ₹21,25,00,000, no addition was called for. The Tribunal accordingly directed the AO to delete the addition, allowing ground no. 2. Regarding the cash found, the Tribunal found merit in the assessee's argument that the cash of ₹3,50,000 belonged to the Ghanshyam Prasad Gupta (HUF). Despite the HUF not filing a return because its income was not taxable, the Tribunal acknowledged that the HUF derived rental income and income from lichi sale from its land. Therefore, the Tribunal set aside the CIT(A)'s order on this issue and directed the AO to delete the addition, allowing ground no. 3. The Tribunal expressly left undecided the general ground no. 1.

The Tribunal held that the amortization of premium paid on the purchase of government securities, especially when undertaken to maintain statutory liquidity ratios as per RBI guidelines, constitutes revenue expenditure. This is consistent with the prudential norms of the RBI and is also supported by various judicial precedents.

The Tribunal held that the same income cannot be taxed twice. The deposits in the bank account were explained as sale proceeds from the proprietary concern, which were duly incorporated in its audited accounts and balance sheet. The addition made by the AO under Section 69A was thus not sustainable as the source of the funds was explained.

The Tribunal noted that the appeal was filed with a delay of 35 days, for which the assessee provided reasons related to technical issues with the online portal. The Tribunal found these reasons to be sufficient and condoned the delay. The CIT(E)'s order was set aside, and the case was remanded to the CIT(E) for examination on merits.

The Tribunal held that the cash deposits represented cash sales duly accounted for in the assessee's books, which were audited and not rejected by the AO. The addition was considered a double taxation of the same income and Section 69A was wrongly invoked.

The Tribunal held that the compensation received for compulsory acquisition of land under the National Highways Act, 1956, is exempt from income tax as per Section 96 of the RFCTLARR Act, 2013, and CBDT Circular No. 36/2016. Section 50C is not applicable in cases of compulsory acquisition as stamp duty is not involved.

The Tribunal held that the CIT(A) erred in dismissing the appeal solely on the ground of delay without considering the merits. The assessee's reasons for delay, such as lack of education and ignorance of e-proceedings, were considered sufficient cause. Therefore, the CIT(A)'s order was set aside.

The Tribunal upheld the deletion of the addition of ₹3,96,94,221 related to the Percentage Completion Method. The CIT(A) had correctly observed that the AO erred in calculating the revenue recognition by not considering the percentage completion of individual projects against the total projected revenue. The CIT(A)'s finding that the AO had taken the full value instead of the percentage value based on project completion was accepted. The Tribunal also upheld the deletion of the addition of ₹40,97,800 made under Section 43CA. The CIT(A) had correctly applied the proviso to Section 43CA, noting that the agreements for sale were executed in earlier assessment years, and the stamp duty valuation should be considered as of the date of those agreements, especially since payments were made by account payee cheques. The Tribunal found no infirmity in this deletion. Regarding the interest of ₹27,758 on service tax and TDS, the Tribunal held that such interest is not penal in nature and is allowable as a deduction. Therefore, the addition was rightly deleted. The Tribunal dismissed the Revenue's appeal on all grounds.

The Tribunal upheld the decision of the CIT(A) and dismissed the Revenue's appeal. The Tribunal noted that the CIT(A) had deleted the addition of ₹87,65,840 on the grounds that the assessee had furnished evidence to the AO, and the AO had failed to conduct any independent inquiry. Regarding the addition of ₹1,25,00,000, the CIT(A) had noted that ₹18,88,000 was received from Shri Jawahar Lal for share allotment and ₹1,06,12,000 was against the sale of rice/broken rice, with supporting documents provided by the assessee. The CIT(A) found that the AO had ignored the assessee's submissions and failed to conduct independent inquiries. The Tribunal found the CIT(A)'s order to be well-reasoned and speaking, requiring no interference. Therefore, the appeal filed by the Revenue was dismissed.

The ITAT admitted the legal issues raised by the assessee concerning the validity of the notice under Section 143(2), the assessment proceedings under Section 143(3) without a Section 127 order, and the alleged absence of mandatory show cause notices. The Tribunal held that these issues arose from the assessment record and went to the root of the matter, and that an assessee is at liberty to raise any legal issue before any appellate authority for the first time, even if not raised before lower authorities. The ITAT relied on the decisions in Jute Corporation of India Ltd. vs CIT, National Thermal Power Co. Ltd v. CIT, and PCIT vs. Britannia Industries Ltd. Since these issues were not adjudicated by the first appellate authority, the ITAT restored the additional grounds to the file of the learned CIT(A) with a direction to decide them after affording a reasonable opportunity of hearing to the assessee and considering the relevant facts. The Tribunal did not decide the merits of the additions or the applicability of Section 115BBE or the interest charges. The appeal was allowed for statistical purposes.

The Tribunal held that the CIT(A)'s order quashing the reopening notice was cryptic and unreasoned. The Tribunal found that the AO had sufficient material to reopen the assessment, specifically the large cash deposits during demonetization, and therefore, set aside the CIT(A)'s order on this issue, upholding the reopening. Regarding the deletion of the addition on merits, the Tribunal upheld the CIT(A)'s decision to delete the addition of ₹1,12,30,000/-. The Tribunal reasoned that the cash deposits represented sales from the assessee's FMCG business, which are largely in cash, and that the AO's addition was based on guesswork. Furthermore, the Tribunal noted that invoking Section 69A was incorrect as the transactions were recorded in the assessee's books of account. The Tribunal also observed that making the addition would lead to double taxation. Consequently, the Revenue's appeal on this issue was dismissed. The assessee's Cross Objection challenging the upholding of reopening was dismissed, and the ground supporting the deletion of addition was rendered infructuous.

The Tribunal held that Ground No. 1 concerning the provision for gratuity should be allowed for statistical purposes. It noted a potential factual mistake in the tax audit report and the assessee's suo motu disallowance. The matter was set aside to the AO for re-examination and to ascertain the correct amount, with a direction to delete the addition if the assessee had indeed suo motu disallowed %39,88,247 and there was an error in the tax audit report. For Ground No. 2, the Tribunal held that interest on EPF and TDS was not penal in nature and was an allowable expense. The order of the CIT(A) was set aside, and the AO was directed to delete the addition. Ground No. 3, regarding bonus paid, was allowed for statistical purposes. The Tribunal restored the issue to the AO to verify if the bonus was paid before the due date of filing the return, directing its allowance if so. For Ground No. 4, concerning LIC premium for superannuation benefits, the issue was restored to the AO for examination and decision in accordance with the law, as it was not verified by the AO and not claimed in the return. Ground No. 5, relating to prior period expenses, was allowed. The Tribunal found that these were expenses that crystallized during the year and related to the current financial year, not prior periods. The CIT(A)'s order was set aside, and the AO was directed to delete the disallowance.

The tribunal held that the addition made by the AO was based solely on the non-deduction of TDS on works contract receipts and suspicion, without sufficient evidence. The tribunal also noted that the principle of natural justice was violated as the assessee was not given a proper opportunity to be heard.

The Tribunal held that the addition of ₹32,77,500 was tax neutral as the assessee had claimed it as an expenditure in the purchases account. Therefore, there was no justification for the relief claimed by the assessee.

The CIT(A) allowed the assessee's appeal, noting that the Assessing Officer did not conduct independent inquiries and merely relied on a previous assessment order. The Tribunal found that the CIT(A) adjudicated on issues not arising from the assessment order under section 153C and that the appeal before the CIT(A) was against the order passed under section 153C, not the section 144 order.

The Tribunal noted that the assessee's representative was unavailable due to COVID-19 and had sought adjournments that were not granted. The Tribunal decided to set aside the CIT(A)'s order and remit the matter to the AO for fresh assessment.

The Tribunal noted that the assessee, being a semi-educated villager, was unaware of the proceedings and that the distinction between ₹5.33 Lakh and ₹5.33 Crore was crucial. The delay in filing the appeal before the CIT(A) was attributed to the assessee's circumstances and lack of proper representation. The Tribunal admitted additional evidence, including a bank certificate confirming the ₹5.33 Lakh deposit.

The Tribunal found that additional evidence (cancellation deed) was crucial and had not been properly considered. Therefore, the matter was remanded to the Assessing Officer for fresh assessment.

The Tribunal noted that the assessee failed to provide adequate explanation and evidence before the lower authorities. However, in the interest of justice, the Tribunal decided to remand the case back to the Assessing Officer to provide one more opportunity for the assessee to explain the source of the deposit.

The ITAT observed that the CIT(A) dismissed the appeal for non-prosecution without proper adjudication, which is not empowered by law. Citing relevant case laws, the Tribunal held that the CIT(A) should have passed a speaking order on merits.

The Tribunal observed that the assessee had provided an explanation regarding the sources of the cash deposits (Stridhan and sale proceeds) to the AO, which was not considered by the lower authorities. In the interest of justice and fair play, the Tribunal set aside the CIT(A)'s order and remanded the case to the AO for a fresh opportunity of hearing and a decision on merits.