ITAT Rajkot Judgments — March 2025

The Tribunal noted that many grounds raised by both parties were academic or contentious. The Tribunal decided to focus on the core controversies. Several grounds raised by the Revenue were dismissed, while some of the Assessee's grounds were partly allowed.

The Tribunal noted that the assessee had not provided satisfactory evidence to explain the source of substantial cash deposits and the identity of beneficiaries. While the assessee claimed to earn commission, this was not reflected in their returns, and the evidence provided was deemed insufficient or an afterthought. The Tribunal also observed that the assessee might not have been given sufficient opportunity to present their case properly during the assessment proceedings. Consequently, the appeals were allowed for statistical purposes, with a direction for further adjudication to provide the necessary details and cross-examination of beneficiaries.

The Tribunal noted that the assessee failed to provide evidence to substantiate claims of commission income and ownership of funds, making the addition of cash deposits as unexplained income justified. However, considering that the assessee may not have been given sufficient opportunity to produce beneficiaries and their details, one more opportunity was granted. The appeals were allowed for statistical purposes, directing the assessee to furnish details of beneficiaries and produce them before the Assessing Officer for cross-examination.

The assessee's counsel requested to withdraw the appeal to opt for VSVS, 2024. The DR did not object to this request. The Tribunal heard both parties and allowed the assessee to withdraw the appeal.

The Tribunal noted that the assessee failed to provide proper evidence regarding the source of the cash deposits. The claim of earning commission income was not substantiated with evidence and appeared to be an afterthought. The reopening of assessment was found to be valid and in accordance with legal provisions. However, considering the arguments from both sides that the assessee was not given sufficient time to produce beneficiaries, one more opportunity was granted.

The Tribunal, in its decision, largely followed the precedents set by its coordinate bench in similar cases involving the assessee. Many of the Revenue's grounds of appeal were dismissed as being covered by prior decisions or lacking substantiation. The Assessee's appeals were partly allowed on specific grounds.

The Tribunal condoned the delay in filing Form 10AB, finding it to be unintentional and relying on judicial precedents emphasizing a liberal approach to condone delays in the interest of justice. The matter was remitted back to the CIT(E) with a direction to grant approval in accordance with law, after verifying the assessee's eligibility and considering the application on its merits, subject to the assessee providing all necessary documents.

The Tribunal noted that the assessee failed to provide plausible evidence to prove that the deposits did not belong to him and that he only earned commission. The lack of proper opportunity to present beneficiaries and the speedy assessment order were also considered.

The Tribunal noted that the assessee was given sufficient opportunities to explain the source of the deposits and provide beneficiary details, but failed to do so. The grounds challenging the reopening were dismissed. However, considering the arguments from both sides regarding insufficient time to produce beneficiary details, the Tribunal decided to give one more opportunity.

The Tribunal noted that the assessee claimed to be engaged in the business of cheque/shroff discounting and earning commission, but failed to provide evidence or offer this income in regular returns. The Assessing Officer's addition of the unexplained cash deposits and commission income was upheld by the CIT(A). However, considering the submissions of both parties that the assessee was not given sufficient time, the Tribunal decided to give one more opportunity to furnish beneficiary details and produce them for cross-examination.

The Tribunal largely upheld the findings of the CIT(A), dismissing most of the Revenue's appeals where additions were deleted, and dismissing the Assessee's appeals where additions were confirmed. Specifically, the Tribunal confirmed the deletion of additions related to foreign bank account entries (treating them as derivative trading accounts), unexplained credits in STCSH, cash/premium payments in STCSH, undisclosed investments based on KYC documents (due to lack of corroborative evidence and being outside the block period), interest disallowance u/s 36(1)(iii) (as not for non-business purpose), undisclosed income for cheques/DDs (due to lack of cross-examination), unexplained cash credit from Jay Khodiyar Dairy Farm (amount received through banking channel and squared up as sales), unaccounted stock of bullion (as declared in audited financials). However, the Tribunal upheld additions against the assessee for deemed rental income and premature surrender of ULIPs. The issue regarding the scope of assessment under section 153A (restriction to incriminating material) was decided in favor of the assessee, based on previous binding judgments.

The Tribunal noted that the assessee had not been given sufficient opportunity to provide details of beneficiaries and produce them for cross-examination. While the AO and CIT(A) had rejected the assessee's claims due to lack of evidence, the Tribunal acknowledged the arguments from both sides regarding the sufficiency of time granted for producing evidence. Therefore, the Tribunal decided to provide one more opportunity to the assessee.

The Tribunal observed that assessment orders were framed in haste and without sufficient opportunity for the assessee to produce evidence or identify beneficiaries. The Tribunal set aside the orders of the Ld. CIT(A) and remitted all cases back to the Assessing Officer for fresh adjudication. The AO is directed to ascertain whether the assessees deal with 'contents' (warranting full addition) or 'container' (warranting only commission income addition). All appeals were allowed for statistical purposes.

The Tribunal noted that the assessee failed to provide credible evidence regarding the source of cash deposits and the beneficiaries, despite multiple opportunities. The reopening of assessment was found to be in compliance with the law. However, considering the arguments from both sides regarding insufficient time to produce beneficiary details, one more opportunity was granted to the assessee.

The Tribunal observed that the assessment orders were framed in haste without adequate inquiry and the assessee was not given sufficient opportunity to provide full details and evidence regarding the nature of their business and the beneficiaries of the cash transactions. It noted the lack of a definitive decision by lower authorities on whether the assessee dealt with 'contents' (requiring full addition) or 'container' (requiring only commission income addition). Consequently, all appeals were remitted back to the Assessing Officer for fresh adjudication, directing the assessee to furnish relevant documents and beneficiaries' details for cross-examination and verification.

The Tribunal found that the assessee failed to provide adequate evidence to explain the source of the cash deposits or to prove that the income was solely commission-based. The Assessing Officer and CIT(A) had both upheld the addition of the cash deposits as the assessee's unaccounted income, and also added a 1% commission on the total deposits as income. However, considering the submissions from both parties, the Tribunal decided to grant one more opportunity to the assessee to furnish details of beneficiaries for cross-examination.

The Tribunal noted that the CBDT instruction and judicial precedents suggest that the filing of the audit report in Form 10B is directory and not mandatory, and failure to file it along with the return should not automatically disentitle the trust from claiming exemption, especially if it has complied with other requirements. The Tribunal also noted that the report can be filed during assessment or appellate proceedings.

The Tribunal noted that the assessee failed to provide sufficient evidence to prove the source of the cash deposits or that the income was solely from commission. While acknowledging that the assessee was not given sufficient time for cross-examination, the Tribunal decided to allow the appeals for statistical purposes.

The Tribunal noted that the assessee faced difficulties due to notices being sent to an old consultant and technical issues with the website, which led to an ex-parte decision. Recognizing the assessee's grievances, the Tribunal decided to grant an opportunity for proper adjudication.

The Tribunal noted that the assessment was carried out ex-parte under section 144 of the Act, and the order from the Ld. CIT(A) was also non-speaking. The Tribunal observed that the assessee was not afforded sufficient opportunity to be heard, which violated the principles of natural justice. Consequently, the Tribunal decided not to comment on the merits of the case.

The Tribunal noted that the assessee was not provided with sufficient time to produce beneficiaries and their details, which was a violation of natural justice. The Tribunal allowed one more opportunity for the assessee to furnish the required information and produce the beneficiaries for cross-examination. For statistical purposes, all appeals were allowed.

The Tribunal allowed the appeal regarding the disallowance of sub-contract expenses, finding that the assessee had demonstrated the genuineness of the payments through banking channels and TDS deduction. The disallowance of salary to partners was remitted back to the Assessing Officer for re-computation. The disallowance on account of personal nature of expenses was partly allowed, with 10% of the total expenditure being added back. The disallowance under section 40(a)(ia) was dismissed. The disallowance on direct expenses was partly allowed, with the addition restricted to 10% of the expenses.

The Tribunal noted that the assessee failed to provide credible evidence for the source of cash deposits or to prove that the income was solely commission-based. Despite multiple opportunities, the assessee did not explain the commission income or provide details of beneficiaries. The Tribunal also addressed the grounds related to the validity of reopening and the opportunity for being heard, ultimately deciding to grant one final opportunity for the assessee to provide necessary details of beneficiaries for cross-examination and verification.

The Tribunal noted that the assessee had not provided sufficient evidence to prove the source of the cash deposits or that they did not belong to him. The claim of earning commission income was also unsubstantiated. While the AO initially treated the entire cash deposit as unexplained income, the Tribunal, considering arguments from both sides, decided to give the assessee one more opportunity to furnish details of beneficiaries and produce them for cross-examination. For statistical purposes, the appeals were allowed.

The Tribunal, in its decision, has relied heavily on a previous order in the assessee's own case. Several grounds raised by the Revenue have been dismissed, following the precedent. Conversely, one ground raised by the assessee regarding advances given to friends and relatives has been allowed. The Tribunal found that these advances were temporary, out of declared unaccounted business income, and were later received back, rendering the addition unjustified.

The Tribunal noted that the assessee failed to provide documentary evidence to support the claim that the transaction was a transfer of rights and not a sale of land/building. The Tribunal observed that Section 50C is a deeming provision and its application is mandatory when the sale consideration is less than the stamp duty value. However, considering the arguments and the need for proper verification, the Tribunal decided to set aside the order and remand the matter.

The tribunal noted that the adjustment made by the CPC-AO was without prior intimation, violating the first proviso to Section 143(1) of the Act. The nature of the donation (corpus vs. regular) was found to be debatable and required proper examination.

Given the assessee's request to withdraw the appeal due to participation in the Vivad Se Vishwas scheme and the Departmental Representative's lack of objection, the Tribunal decided to dismiss the appeal as withdrawn. The Assessing Officer was directed to pass consequential orders in light of this decision.

The Tribunal held that the Assessing Officer had taken a plausible view supported by previous judgments of the jurisdictional High Court, which were not overruled by later decisions. The Tribunal found that the interest income earned from co-operative banks is eligible for deduction under Section 80P(2)(d) of the Act.

The Departmental Representative raised no objection to the assessee's request not to press the appeal. Therefore, the tribunal treated the appeal as withdrawn.

The Assessing Officer completed the assessment ex-parte, making an addition of Rs. 54,13,257/-. The CIT(A) upheld the AO's order, finding no meaningful submissions or documentation from the assessee to counter the findings. The Tribunal noted the assessee's consistent failure to respond to notices, attributing it to the assessee's old age, wife's illness, and death.

The assessee's counsel prayed for withdrawal of the appeal. The Departmental Representative did not raise any objection. Therefore, the appeal was treated as withdrawn.

The Tribunal noted that the CIT(A) dismissed the appeal without properly considering the assessee's submissions and evidence. Citing principles of natural justice, the Tribunal held that the assessee should be given another opportunity to present her case before the CIT(A).

For the u/s 12A registration, the Tribunal found the CIT(E)'s rejection unwarranted, as the trust clarified its activities and the gaushala's rental status. The matter was set aside and remanded to the CIT(E) for fresh consideration. For the u/s 80G(5) approval, relying on various judicial precedents regarding condonation of delay, the Tribunal condoned the delay in filing and similarly remitted this matter back to the CIT(E) for fresh adjudication.

The assessee received an order in Form No. 4 (Dispute Settled) under the scheme. The Revenue Department did not object to the withdrawal. The Tribunal permitted the assessee to withdraw the appeal.

The Tribunal noted that the AO had accepted the sale transaction as genuine in the hands of the assessee's two brothers for the same property, with identical facts and circumstances. Therefore, applying the principle of consistency and equality, the addition made in the hands of the assessee was deleted.

The Tribunal noted that the rejection of the application for registration under section 12A was based on the CIT(E)'s observation that the trust's objects and expenditure were not in consonance. Regarding the 80G approval, the CIT(E) rejected it on the grounds of delay in filing the application. The Tribunal considered various case laws and circulars regarding condonation of delay.

The Tribunal held that the addition made by the AO was invalid because the sales consideration of Rs. 6,75,000/- was already offered for income in the return of income and also included in the total sales turnover. Furthermore, the property in question was held as stock-in-trade, not a capital asset, making the invocation of Section 50C of the Act illegal.

The Tribunal found that most of the trust's objects are for the general public's benefit, not just a particular religious community. The Tribunal cited a Gujarat High Court judgment supporting this view, stating that if a trust has numerous general public benefit objects, it should be allowed registration. The Tribunal noted that the CIT focused on specific clauses while ignoring many others that serve the general public.

The Tribunal held that the Assessing Officer had conducted sufficient inquiry and applied his mind while passing the assessment order. The PCIT's view that the order was erroneous and prejudicial to revenue due to lack of inquiry was not sustainable, as the AO had gathered necessary information and taken a plausible view. The ITAT also noted that the PCIT had failed to point out specific defects or errors in the AO's order and instead delegated the duty of examination to the AO, which is not permissible under Section 263. The Tribunal relied on various judicial precedents to support its decision.

The Tribunal noted that a related appeal filed by the Department before the Hon'ble High Court was dismissed on account of low tax effect, as per Circular No. 9 of 2024. Therefore, the present appeal by the Revenue was deemed infructuous and not sustainable in law or facts.

The assessee prayed for withdrawal of the appeal to avail the benefit of the 'Direct Tax Vivad Se Vishwas Scheme'. The Departmental Representative did not object to the withdrawal. The Tribunal treated the appeal as withdrawn.

The Tribunal noted the assessee's non-compliance both before the Assessing Officer and the CIT(A). While imposing a cost of Rs. 5000/- on the assessee, the Tribunal decided to grant one more opportunity to plead their case.

The Assessing Officer (AO) and the Commissioner of Income Tax (Appeals) [CIT(A)] both treated the cash deposits as unexplained income and added them to the assessee's total income. The appeals were dismissed by both authorities due to the assessee's non-compliance and failure to provide explanations.

The Tribunal noted that the assessee had filed relevant documents before the CIT(E), but they were not considered. The ex-parte and non-speaking order was a violation of natural justice, as the assessee was not given a sufficient opportunity to be heard.

The Tribunal found merit in the assessee's submission, noting that the assessee acted as an agent for FCI and the purchases were not for its own account. Consequently, the provisions of Section 44AB were not applicable to the assessee.

The Tribunal acknowledged that the orders passed were ex-parte and that the assessee was not given sufficient opportunity to be heard. While noting the assessee's non-compliance, the Tribunal decided to restore the appeals to the Assessing Officer for fresh adjudication.

The ITAT condoned the 370-day delay, finding sufficient cause due to the accountant's oversight and the assessee's unawareness. It held that the CIT(A) violated principles of natural justice by passing an ex-parte order without providing adequate opportunity of hearing. The ITAT set aside the CIT(A)'s order and remitted the matter back to the CIT(A) for de novo adjudication on merits.