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1,120 tribunal orders from the Rajkot bench in 2026.
Showing 40 of 1,120 orders. Use the months below for the rest.
The Tribunal held that the expenses incurred for preservation of environment, even if not allowable under Section 11 as charitable purpose, could be allowed under Section 37(1) if the assessee were treated as carrying on a business. The Tribunal referred to the principle that expenditure for preservation of business interests can be allowed. Citing the Delhi High Court in Petroleum Sports Promotion Board, the Tribunal noted that even if a trust is denied registration and its income is taxed as 'income from other sources', relevant expenditures should be allowed under Section 57(iii). The Tribunal emphasized that Section 57(iii) requires expenditure to be wholly and exclusively for the purpose of making or earning income, not necessarily that income is actually earned. The Tribunal found that the assessee had submitted necessary documents for the expenses, which were not rebutted by the AO. The AO's disallowance without rejecting books of account was deemed impermissible. Therefore, the AO was directed to allow these expenses as if the assessee were running a business, by following normal rates of income.
The Tribunal held that the issue was squarely covered in favour of the assessee by the decision of a Co-ordinate Bench in the case of Ashish Dubey vs. ACIT (ITA No. 222/Del/2020). In that case, the Tribunal had observed that once the assessee established, on the basis of material evidence, the fact of payment of donation and the receipt acknowledged to the assessee, the mere fact that the political party failed to account for the donation received did not fault the assessee as a donor, thereby denying the deduction. The Tribunal noted that the assessee had provided a copy of the donation receipt, the PAN of the political party, its registration under section 29A of the Representation of the People Act, 1951, its ITR, and confirmation by email. Bank statements corroborated the donations made through banking channels. The Tribunal found no reason to take a different view, as there was no change in facts and law, and the Revenue could not produce any materials to controvert the findings in Ashish Dubey. The Tribunal also referred to a similar decision in ITAT Rajkot in the case of Nihil Nitinbhai Bhuptani (ITA No.479/RJT/2025). Therefore, respectfully following the binding precedent, the Tribunal deleted the addition made by the Assessing Officer. The appeal filed by the assessee was allowed.
The Tribunal held that the addition of Rs. 2,10,000/- based on unauthenticated and unsigned Excel sheets found from a third party's premises was not sustainable. The Tribunal noted that the Excel sheet lacked the assessee's signature or any nexus with the assessee, and it was a 'dumb document' without evidentiary value. Crucially, the Tribunal emphasized that an opportunity for cross-examination of the third party from whom the data was seized ought to have been provided, as the addition was made solely on this material without any corroborative evidence. This failure to provide cross-examination violated the principles of natural justice, which is a settled legal position supported by Supreme Court decisions in Krishnachand Chelaram and Andaman Timber Industries. The Tribunal also referred to the jurisdictional Gujarat High Court's decision in PCIT vs. Kaushik Nanubhai Majithia, which held that proceedings under Section 153C initiated based on an Excel sheet found from a third party, without corroborative material and without adjudicating the payment, were vitiated. The Tribunal found the issue squarely covered by a coordinate bench decision in M/s. RC Buildcon/M/s. RC Heights Pvt. Ltd. Therefore, the addition was deleted, and the appeal was allowed. The Tribunal did not expressly leave any issue undecided.
The Tribunal admitted the additional legal ground challenging the reassessment proceedings, citing the Supreme Court's decision in National Thermal Power Company Ltd. vs. CIT. The Tribunal found that the reassessment proceedings were initiated beyond a period of three years from the end of the relevant assessment year. For such reopening, the Assessing Officer must possess material showing that income chargeable to tax had escaped assessment and such escaped income amounted to or was likely to amount to Rs. 50,00,000/- or more, as per section 149(1)(b) of the Act. The Tribunal noted that the Assessing Officer did not carry out the required analysis of the information before initiating reassessment proceedings, and the escaped income ultimately assessed was far below the statutory monetary threshold. Relying on the coordinate bench decision in Shri Ashokbhai Anbabhai Kachadiya and Prakash Babulal Bhandari v. ITO, the Tribunal held that the reassessment proceedings were barred by limitation and without jurisdiction. Consequently, the reassessment order passed by the Assessing Officer and the directions issued by the CIT(A) were quashed. As the reassessment itself was quashed, the issues on merits regarding the additions were rendered academic and infructuous.
The Tribunal first addressed the delay in filing the appeals. Citing decisions of the Supreme Court and the Gujarat High Court, it emphasized a pragmatic and liberal approach to condonation of delay, stating that substantive rights should not be defeated on technicalities unless malafide or negligence is writ large. The Tribunal found the reasons provided in the affidavit convincing and constituting a reasonable cause, and thus, condoned the delay of 434 and 526 days in both appeals in the interest of justice. Subsequently, the Tribunal, respectfully following the binding precedent of the jurisdictional High Court of Gujarat on identical facts, quashed the reassessment proceedings initiated by the Assessing Officer under section 147/148 of the Act. As the reassessment proceedings were quashed, the grounds raised by the assessee on merit became academic and infructuous. Consequently, the appeal in ITA No. 514/RJT/2026 was allowed. Regarding the penalty appeal (ITA No. 515/RJT/2026), the Tribunal held that since the assessment order itself was quashed, there was no foundation to levy penalty under section 271(1)(c), applying the legal maxim "Sublato fundamento cadit opus" (foundation being removed, structure falls). Therefore, the penalty was also deleted, and the appeal was allowed. In combined result, both appeals were allowed.
The Tribunal first addressed the delay in filing the appeals. Citing decisions of the Supreme Court and the Gujarat High Court, it emphasized a pragmatic and liberal approach to condonation of delay, stating that substantive rights should not be defeated on technicalities unless malafide or negligence is writ large. The Tribunal found the reasons provided in the affidavit convincing and constituting a reasonable cause, and thus, condoned the delay of 434 and 526 days in both appeals in the interest of justice. Subsequently, the Tribunal, respectfully following the binding precedent of the jurisdictional High Court of Gujarat on identical facts, quashed the reassessment proceedings initiated by the Assessing Officer under section 147/148 of the Act. As the reassessment proceedings were quashed, the grounds raised by the assessee on merit became academic and infructuous. Consequently, the appeal in ITA No. 514/RJT/2026 was allowed. Regarding the penalty appeal (ITA No. 515/RJT/2026), the Tribunal held that since the assessment order itself was quashed, there was no foundation to levy penalty under section 271(1)(c), applying the legal maxim "Sublato fundamento cadit opus" (foundation being removed, structure falls). Therefore, the penalty was also deleted, and the appeal was allowed. In combined result, both appeals were allowed.
The Tribunal noted that the assessment was carried out under Section 144 of the Act and the order of the Ld. CIT(A) was non-speaking because the assessee could not file the required documents and details before the Ld. CIT(A) despite several opportunities. The Tribunal did not wish to make any comments on the merits of the grounds raised. It observed that the assessee had not been given a sufficient opportunity of being heard and could not plead his case successfully before the Ld. CIT(A). Citing the principle of natural justice and fair play, the Tribunal restored the matter back to the file of the Ld. CIT(A) for de novo adjudication and to pass a speaking order after affording sufficient opportunity of being heard to the assessee. The assessee was also directed to contest his stand forthwith. Therefore, the order of the Ld. CIT(A) was set aside and the matter was remitted back to the file of the Ld. CIT(A) to adjudicate the issue afresh on merits. For statistical purposes, the appeal of the assessee was treated as allowed.
The Tribunal held that the reassessment proceedings initiated against the assessee are bad in law due to a defective approval under section 151 of the Income Tax Act, 1961. The Tribunal observed that the approval granted by the Income Tax Authority was neither digitally nor manually signed. Citing the decision in Rolex Rings Limited v. DCIT, the Tribunal emphasized that a notice or document without a signature loses its relevance and is to be treated as invalid. Section 282A of the Act mandates that notices or documents must be signed, either manually for paper form or digitally for electronic form. The absence of a signature on the approval under section 151 renders it invalid, meaning the Assessing Officer failed to assume proper jurisdiction to issue the notice under section 148 of the Act. Consequently, the reassessment order was quashed. The addition made by the Assessing Officer was deleted, and the appeal of the assessee was allowed.
The Tribunal held that the reopening of assessment under section 147 was valid. The assessee's contention that the land sold was agricultural land was accepted. The Tribunal found that the Ld. CIT(A) had erred in holding that the sale of agricultural land constituted the sale of non-agricultural land solely on the alleged ground that the appellant did not furnish evidence of agricultural operations during the relevant period. The Tribunal emphasized that the classification of land in revenue records and its location are the primary determinants of its agricultural character, not necessarily the conduct of agricultural activity in the year of sale or the status of the purchaser. The Tribunal noted that the Ld. CIT(A) had expressly recorded that if credible documents demonstrating agricultural use were produced, the computation of capital gains would become redundant. Consequently, the Tribunal directed the Assessing Officer to re-examine the issue of the nature of the land and the computation of capital gains, if any, after considering the evidence of agricultural use and classification in the revenue records. The issue of whether the land constituted land not chargeable to capital gains under section 2(14) was to be conclusively determined.
The Tribunal condoned the delay of 1105 days in filing the appeal, finding that the reasons explained by the assessee, supported by an affidavit and circumstances of prolonged medical emergency in the family, justified condonation in the interest of substantial justice. The Tribunal noted that both assessment and appellate proceedings were concluded ex parte, and the assessee could not effectively represent her case. In the interest of justice and fair play, the matter was restored to the Assessing Officer for fresh adjudication. The Assessing Officer was directed to re-examine the issue of cash deposits of Rs.2,20,134/- after considering the assessee's explanation and evidence, and providing a reasonable opportunity of being heard. The assessee was directed to comply with notices and cooperate. The appeal was allowed for statistical purposes.
The Tribunal held that the appeals are squarely covered by the decision of the Co-ordinate Bench in the case of Ashish Dubey vs. ACIT. The Tribunal noted that in the Ashish Dubey case, the assessee had provided evidence such as donation receipts, the political party's PAN, its registration with the Election Commission, its ITR, and confirmation emails, along with bank statements corroborating the donations made through banking channels. The Tribunal in Ashish Dubey had observed that even if the political party failed to account for the donation in its return, the donor assessee cannot be faulted for denying the deduction, provided the fact of payment and receipt is established by material evidence. Since the facts and law were similar, and the revenue could not produce any material to controvert the findings in Ashish Dubey, the Tribunal respectfully followed the precedent. The addition made by the Assessing Officer was deleted. The appeals were allowed with consequential effect.
The Tribunal held that the assessee cannot be treated as an "assessee in default" under section 201(1) of the Income Tax Act, 1961, for the impugned period. The reasoning was that the assessee was operating under the binding interim directions of the Hon'ble Madras High Court during the relevant period. These directions explicitly stated that LFC payments would not amount to income for the purpose of TDS deduction. Therefore, the assessee had a legal obligation to comply with these judicial orders, which effectively restrained it from deducting tax at source. The Tribunal emphasized that the obligation under section 192 of the Act to deduct tax at source cannot be read in isolation and must yield to binding judicial orders. Consequently, the failure to deduct tax in such circumstances cannot be equated with a default contemplated under section 201(1). The Tribunal respectfully followed the decisions of the Hon'ble Kerala High Court in ITA No.45 of 2025 and a coordinate bench decision in ITA No.514/Agr/2024, which held that where an assessee is restrained by judicial orders from deducting tax at source, section 201(1) cannot be invoked. The subsequent decision of the Hon'ble Supreme Court, while settling the merits, cannot retrospectively fasten liability under section 201(1) for a period during which the assessee was acting in compliance with judicial orders. Accordingly, the demand raised under section 201(1) and the consequential interest under section 201(1A) were directed to be deleted. The appeals were allowed.
The Tribunal held that the assessee's onus of proving the source of cash deposits was discharged. It noted that the bank account was jointly held by the assessee and his brother, Shri Dipak Arunbhai Raithatha, but the assessee contended that the account was operated exclusively by his brother and the deposits pertained to him. In response to the AO's notice under section 133(6), the assessee provided an explanation and confirmations from third parties, which was further corroborated by the confirmation of Shri Dipak Arunbhai Raithatha. The Tribunal relied on the principle that if documentary material establishes exclusive operation and utilization of a joint account by one holder, and the deposits represent their funds, the addition should not be made in the hands of the other. It cited the decisions in Sakina Ahmedali Kantavala v. ITO (Ahmedabad Bench) and Trupti Shukla v. ITO (Raipur Bench) to support the view that affidavits and corroborative material can explain the source of funds in joint accounts, and liability should not be fastened on one joint holder when the other explains and substantiates the source. Therefore, the addition of Rs. 12,50,000/- was deleted. The issue regarding the validity of notice under section 148 was not expressly decided, as the appeal was allowed on merits.
The Tribunal held that the reassessment proceedings were liable to be set aside/quashed. The Assessing Officer had issued the notice under section 147/148 of the Act based on incorrect facts. Crucially, the AO himself accepted that the assessee did not have a bank account in Kotak Mahindra Bank, yet this was stated as a reason for reopening. This indicated a complete non-application of mind by the AO. The Tribunal noted that the "Reasons to believe" did not contain any allegation of the assessee failing to disclose material facts leading to escapement of income and were based on borrowed satisfaction. The AO had taken irrelevant facts into consideration and proceeded on a factually incorrect basis. The Tribunal relied on the Gujarat High Court decision in Vijay Ramanlal Sanghvi and the decision in Inductotherm (India) (P) Ltd. v. M. Gopalan. As the reassessment itself was quashed, all other issues on merits of the additions were rendered academic and infructuous. The appeals were allowed.
The Tribunal noted that the assessee relied on judicial precedents without adequately explaining their applicability to the facts of the case. In the absence of proper assistance and adequate material on record, the Tribunal was unable to conclusively adjudicate the issue. Therefore, in the interest of justice and fair play, the Tribunal restored the issue to the file of the Assessing Officer for fresh examination. The Assessing Officer was directed to consider the assessee's submissions and supporting evidence, examine the claims regarding agricultural land, cotton production, and agricultural income, and decide the issue afresh after providing a reasonable opportunity of being heard to the assessee. The appeal was allowed for statistical purposes.
The Tribunal held that the appeals are squarely covered by the decision of the Co-ordinate Bench in the case of Ashish Dubey vs. ACIT. The Tribunal noted that in the Ashish Dubey case, the assessee had provided evidence such as donation receipts, the political party's PAN, its registration with the Election Commission, its ITR, and confirmation emails, along with bank statements corroborating the donations made through banking channels. The Tribunal in Ashish Dubey had observed that even if the political party failed to account for the donation in its return, the donor assessee cannot be faulted for denying the deduction, provided the fact of payment and receipt is established by material evidence. Since the facts and law were similar, and the revenue could not produce any material to controvert the findings in Ashish Dubey, the Tribunal respectfully followed the precedent. The addition made by the Assessing Officer was deleted. The appeals were allowed with consequential effect.
The Tribunal held that the reassessment proceedings were liable to be set aside/quashed. The Assessing Officer had issued the notice under section 147/148 of the Act based on incorrect facts. Crucially, the AO himself accepted that the assessee did not have a bank account in Kotak Mahindra Bank, yet this was stated as a reason for reopening. This indicated a complete non-application of mind by the AO. The Tribunal noted that the "Reasons to believe" did not contain any allegation of the assessee failing to disclose material facts leading to escapement of income and were based on borrowed satisfaction. The AO had taken irrelevant facts into consideration and proceeded on a factually incorrect basis. The Tribunal relied on the Gujarat High Court decision in Vijay Ramanlal Sanghvi and the decision in Inductotherm (India) (P) Ltd. v. M. Gopalan. As the reassessment itself was quashed, all other issues on merits of the additions were rendered academic and infructuous. The appeals were allowed.
The Tribunal held that the appeals are squarely covered by the decision of the Co-ordinate Bench in the case of Ashish Dubey vs. ACIT. The Tribunal noted that in the Ashish Dubey case, the assessee had provided evidence such as donation receipts, the political party's PAN, its registration with the Election Commission, its ITR, and confirmation emails, along with bank statements corroborating the donations made through banking channels. The Tribunal in Ashish Dubey had observed that even if the political party failed to account for the donation in its return, the donor assessee cannot be faulted for denying the deduction, provided the fact of payment and receipt is established by material evidence. Since the facts and law were similar, and the revenue could not produce any material to controvert the findings in Ashish Dubey, the Tribunal respectfully followed the precedent. The addition made by the Assessing Officer was deleted. The appeals were allowed with consequential effect.
The Tribunal held that the assessee cannot be treated as an "assessee in default" under section 201(1) of the Income Tax Act, 1961, for the impugned period. The reasoning was that the assessee was operating under the binding interim directions of the Hon'ble Madras High Court during the relevant period. These directions explicitly stated that LFC payments would not amount to income for the purpose of TDS deduction. Therefore, the assessee had a legal obligation to comply with these judicial orders, which effectively restrained it from deducting tax at source. The Tribunal emphasized that the obligation under section 192 of the Act to deduct tax at source cannot be read in isolation and must yield to binding judicial orders. Consequently, the failure to deduct tax in such circumstances cannot be equated with a default contemplated under section 201(1). The Tribunal respectfully followed the decisions of the Hon'ble Kerala High Court in ITA No.45 of 2025 and a coordinate bench decision in ITA No.514/Agr/2024, which held that where an assessee is restrained by judicial orders from deducting tax at source, section 201(1) cannot be invoked. The subsequent decision of the Hon'ble Supreme Court, while settling the merits, cannot retrospectively fasten liability under section 201(1) for a period during which the assessee was acting in compliance with judicial orders. Accordingly, the demand raised under section 201(1) and the consequential interest under section 201(1A) were directed to be deleted. The appeals were allowed.
The Tribunal noted that the assessee's counsel stated that the assessee did not wish to press the appeal. The revenue's representative did not object to this submission. Consequently, the Tribunal treated the appeal as withdrawn. The operative direction was to treat the appeal as withdrawn, which resulted in the appeal being dismissed. No specific findings were made on the merits of the PCIT's order as the appeal was not pressed.
The Tribunal held that the reassessment proceedings were bad in law due to a defective approval under section 151 of the Act. The Tribunal noted that the approval provided by the revenue was neither digitally nor manually signed. It respectfully followed the binding precedent of the Coordinate Bench in M/s Aditya Plastic (supra), which had also quashed the assessment order on similar grounds, citing the lack of a valid signature on the approval under section 151 and the Allahabad High Court's decision in Vikas Gupta. The Tribunal found no reason to deviate from this precedent as there was no change in facts or law, and the revenue could not produce any material to controvert the earlier findings. Therefore, the assessment order framed by the AO was quashed. The appeal of the assessee was allowed.
The Tribunal held that the deletion of the addition by the Learned CIT(A) was correct and did not warrant interference. The reasoning was based on the fact that the substantive assessment order for Assessment Year 2017-18 in the hands of Shri Manishbhai Rasikbhai Bavariya, dated December 19, 2019, clearly showed that additions were made on an absolute basis, including the cash deposit of Rs. 2,53,60,000/- in the specified bank account. The assessment order for Shri Bavariya also recorded his statement that the bank account belonged to M/s. Eagle Petroleum and the deposits were made by him. The Tribunal emphasized that the Revenue cannot subject the same income to substantive taxation in the hands of one person and simultaneously sustain a corresponding addition in the hands of another. Protective assessments are a measure of abundant caution where there is uncertainty regarding the assessable person, but they cannot lead to double taxation of the same income. Since the same income had already been substantively assessed in the hands of Shri Manishbhai Rasikbhai Bavariya, the corresponding addition in the hands of the assessee firm could not be sustained. The Tribunal approved and confirmed the order of the CIT(A).
The Tribunal held that Section 69A applies when an assessee is found to be the owner of money not recorded in books, and no satisfactory explanation is provided for its nature and source. The Tribunal noted that the assessee is engaged in agricultural commodity trading, where cash transactions are common. The assessee had explained the cash deposits of Rs. 20,25,800/- as sourced from business receipts and earlier cash withdrawals. Crucially, cash withdrawals aggregating to Rs. 1,00,67,000/- were made during the relevant period, which substantially exceeded the impugned deposits. The Tribunal found that the assessee had furnished bank statements and cash-flow details demonstrating the availability and source of cash. Citing the Ahmedabad Bench decision in Gaurav Harshadbhai Chokshi v. ITO, the Tribunal held that an addition under Section 69A cannot be sustained merely on cash deposits if the assessee establishes, through bank statements and cash-flow records, that the deposits represent earlier withdrawals or disclosed business receipts. Therefore, the addition of Rs. 20,25,800/- was deleted.
The Tribunal condoned the delay of 917 days in filing the appeal, finding the reasons provided by the assessee, including partner disputes and tax consultant negligence, to be convincing and constituting a reasonable cause. The Tribunal adopted a liberal and pragmatic approach, citing precedents from the ITAT, Supreme Court, and Gujarat High Court, emphasizing that substantive rights should not be defeated by technicalities. Regarding the addition of Rs. 40,00,000/- as unsecured loan and Rs. 2,04,164/- as interest, the Tribunal deleted both additions. The reasoning was that the assessee had duly repaid the loan amount to the lender through banking channels, and interest was paid with TDS deducted. The Tribunal relied on the judgments in CIT vs. Ayachi Chandrashekhar Narsangji (Guj. HC) and Ojas Tarmake (P.) Ltd. (Gujarat-HC), which held that when loan repayment is accepted in a subsequent year and transactions are through banking channels, additions under Section 68 are not justified. The ratio is that repayment of a loan and payment of interest with TDS fortify the genuineness of the loan, and the substantive right of the assessee should not be denied on technicalities, especially when supported by judicial pronouncements.
The Tribunal allowed the appeal, deleting the addition made by the Assessing Officer. The Tribunal respectfully followed the binding precedent of the Co-ordinate Bench in the case of Ashish Dubey vs. ACIT (supra). In that case, the Tribunal had observed that the assessee had provided a receipt of donation, PAN of the political party, its registration under Section 29A of the Representation of the People Act, 1951, its ITR, and confirmation by email. The assessee's bank statement corroborated the donation made through banking channels. The Tribunal held that once the assessee established the fact of payment of donation and received a receipt, the mere fact that the political party failed to account for the donation received should not fault the assessee as a donor, thereby denying the deduction. The Tribunal found no reason to take a different view and noted that the Revenue had not produced any material to controvert the findings in the Ashish Dubey case. Therefore, the addition made by the AO was deleted.
The Tribunal held that the appeal of the assessee is allowed. The reasoning was that it is an undisputed fact that the first order passed under section 263 of the Act dated 30.03.2021 had already been quashed by the Tribunal. Once the original revisionary order itself has been set aside, every consequential proceeding flowing therefrom automatically loses its legal foundation. The assessment order dated 28.03.2022 was merely a consequence of the first order under section 263 of the Act and could not survive independently after the parent order had been quashed. The Tribunal noted that the second 263 order passed by the Ld. PCIT was on a different issue, and not connected with the first 263 order, therefore, the second 263 order is unsustainable in the eye of law. The operative direction is that the appeal of the assessee is allowed.
On the issue of deduction under section 80-IA, the Tribunal found merit in the assessee's contention that common expenses were arbitrarily allocated. It noted that the windmill generation was automated and remotely situated, and general factory expenses had no operational connection. The Tribunal held that where direct expenses are accounted for and standalone computations identify all related costs, the revenue cannot arbitrarily apportion general overheads without establishing a direct nexus. Therefore, the disallowance was deleted. On the issue of disallowance under section 40(a)(ia) for royalty payments, the Tribunal found that the assessee had duly deducted tax under section 195 on payments to a non-resident and deposited it with the government. The Tribunal held that the disallowance could not be sustained merely on the ground of an alleged difference in the applicable TDS provision (section 194J vs. 195) without establishing a statutory basis for the disallowance. Accordingly, the disallowance was deleted. The appeal was allowed in terms of these directions.
The Tribunal held that the reopening of the assessment under section 147 was liable to be set aside/quashed. The Assessing Officer (AO) had taken irrelevant facts into consideration, reopened the assessment on suspicion, and proceeded on a non-existent and factually incorrect basis. The AO had not applied his independent mind and had not verified the assessment records prior to recording the reasons. The reasons recorded lacked any allegation of failure by the assessee to disclose material facts, indicating a complete non-application of mind and borrowed satisfaction, as supported by the Gujarat High Court's decision in Vijay Ramanlal Sanghvi and the decision in Inductotherm (India) (P) Ltd. Regarding the violation of natural justice, the Tribunal found that additions made without providing an opportunity for cross-examination of persons whose statements were relied upon are in violation of natural justice and cannot be sustained, citing Krishnachand Chelaram and Andaman Timber Industries. On merits, the Tribunal found that the transactions represented genuine loans duly recorded in the books of account, supported by ledger accounts, PAN details, bank statements, confirmations, and repayment details. Relying on CIT vs. Ayachi Chandrashekhar Narsangji, the Tribunal held that if a loan has been repaid in the subsequent year, no addition should be made. Consequently, the addition made by the AO was deleted. The appeal was allowed.
The Tribunal held that the addition made by the Assessing Officer was not sustainable. The Tribunal noted that the addition was based on an unsigned excel sheet and a ledger account found during the search, which did not belong to the assessee and lacked corroborative evidence. The Tribunal relied on the decision of a Coordinate Bench of the ITAT Rajkot in the case of M/s. RC Buildcon/M/s. RC Heights Pvt. Ltd., which held that additions should not be made based on an excel sheet that was neither signed by the purchaser nor the seller. Furthermore, the Tribunal referred to the judgment of the Gujarat High Court in PCIT vs. Kaushik Nanubhai Majithia, which observed that proceedings initiated based on an excel sheet found from a third party, without corroborative material and without adjudication of the payment, are vitiated. The Tribunal found that the seized data had no nexus with the assessee and lacked the assessee's signature. Therefore, the addition exclusively based on such documents was deleted, and the appeal was allowed.
The Tribunal noted that the Assessing Officer had accepted an estimated addition at the rate of 8% in the previous assessment years (AYs 2011-12 and 2012-13) and had allowed the assessee's appeals partly on this basis. Since the department itself had accepted this approach, the Tribunal directed the Assessing Officer to make a similar estimated addition at 8% in the present case for AY 2013-14. The addition of Rs. 2,87,345/- was thus restricted to 8% of this amount, resulting in an addition of Rs. 22,987/-. The Tribunal did not explicitly decide on the validity of the reopening, the disposal of objections, or the violation of natural justice, but implicitly accepted the assessee's plea for consistency by applying the 8% profit element. The principle cited is that of consistency in treating similar transactions across assessment years, especially when accepted by the department.
The Tribunal acknowledged the submissions of both the assessee and the revenue. It noted that some of the documents and evidences submitted were self-serving and not entirely reliable. To protect the interest of the revenue and considering the smallness of the disputed amount, the Tribunal found merit in making an estimated addition. The Tribunal directed the Assessing Officer to make an addition of Rs. 36,344/-, which represents a net profit rate of 10% on the total additions of Rs. 3,63,437/-. This estimated addition was intended to address inconsistencies in the documents and evidences presented before the lower authorities and to plug potential revenue leakage. The Tribunal clarified that this adjudication would not serve as a precedent for any other assessment year. The operative direction was to modify the assessment by making the estimated addition.
The Tribunal held that the addition made by the Assessing Officer was not sustainable. The primary reasoning was that the addition was based on an excel sheet/ledger copy found from the premises of a third party, which was neither signed by the assessee nor by the seller, and did not bear the assessee's name. The Tribunal noted that the assessee had strongly objected to the use of such material without an opportunity for cross-examination. Citing the principles of natural justice, the Tribunal referred to decisions of the Supreme Court in Krishnachand Chelaram and Andaman Timber Industries, which held that additions made without providing an opportunity for cross-examination are unsustainable. The Tribunal also relied on the coordinate bench decision in M/s. RC Buildcon/M/s. RC Heights Pvt. Ltd. and the jurisdictional Gujarat High Court's decision in PCIT vs. Kaushik Nanubhai Majithia. The High Court in the latter case had held that proceedings initiated based on an excel sheet found from a third party, without signature, corroborative material, or explanation from the AO, and without providing the assessee with statements recorded during the search, were vitiated. Consequently, the Tribunal deleted the addition and allowed both appeals of the assessee.
The Tribunal held that the addition made by the Assessing Officer was not sustainable. The primary reasoning was that the addition was based on an excel sheet/ledger copy found from the premises of a third party, which was neither signed by the assessee nor by the seller, and did not bear the assessee's name. The Tribunal noted that the assessee had strongly objected to the use of such material without an opportunity for cross-examination. Citing the principles of natural justice, the Tribunal referred to decisions of the Supreme Court in Krishnachand Chelaram and Andaman Timber Industries, which held that additions made without providing an opportunity for cross-examination are unsustainable. The Tribunal also relied on the coordinate bench decision in M/s. RC Buildcon/M/s. RC Heights Pvt. Ltd. and the jurisdictional Gujarat High Court's decision in PCIT vs. Kaushik Nanubhai Majithia. The High Court in the latter case had held that proceedings initiated based on an excel sheet found from a third party, without signature, corroborative material, or explanation from the AO, and without providing the assessee with statements recorded during the search, were vitiated. Consequently, the Tribunal deleted the addition and allowed both appeals of the assessee.
The Tribunal found merit in the assessee's submissions. It noted that the assessee had not purchased any office in R.K. World Tower, as evidenced by the sale deed which showed the property was executed in favour of a person other than the assessee. Therefore, the alleged on-money payment accepted by the developer from another purchaser could not be attributed to the assessee as an unexplained investment. The Tribunal held that the Assessing Officer failed to bring on record cogent and corroborative material establishing that the assessee had actually purchased the property and paid the alleged on-money. Citing Gujarat High Court decisions in CIT v. Maulikkumar K. Shah and PCIT v. Vivek Prahladbhai Patel, the Tribunal stated that suspicion cannot replace evidence, and an addition cannot be sustained on uncorroborated material. Consequently, the Tribunal deleted the additions made by the AO for both assessment years, as the revenue failed to establish the alleged undisclosed investment. The issue of violation of principles of natural justice and jurisdictional grounds were not explicitly decided as the primary issue of the addition was decided in favour of the assessee.
The Tribunal held that the issue is squarely covered in favour of the assessees by the decisions of the Co-ordinate Benches. Specifically, the Tribunal followed the precedent set in the case of Nihil Nitinbhai Bhuptani (ITA No. 479/Rjt/2025, AY 2019-20) and Ashish Dubey vs. ACIT (ITA No. 222/Del/2020, AY 2015-16). The reasoning was that once the assessee establishes, through material evidence like bank statements and receipts, the fact of payment of donation to a registered political party via banking channels, the assessee cannot be faulted for the subsequent failure of the political party to account for the donation in its return. The Tribunal found no change in facts or law and noted that the revenue failed to produce any material to controvert these findings. Therefore, the additions made by the Assessing Officer were deleted. The appeals were allowed with consequential relief.
The Tribunal found merit in the assessee's submissions. It noted that the assessee had not purchased any office in R.K. World Tower, as evidenced by the sale deed which showed the property was executed in favour of a person other than the assessee. Therefore, the alleged on-money payment accepted by the developer from another purchaser could not be attributed to the assessee as an unexplained investment. The Tribunal held that the Assessing Officer failed to bring on record cogent and corroborative material establishing that the assessee had actually purchased the property and paid the alleged on-money. Citing Gujarat High Court decisions in CIT v. Maulikkumar K. Shah and PCIT v. Vivek Prahladbhai Patel, the Tribunal stated that suspicion cannot replace evidence, and an addition cannot be sustained on uncorroborated material. Consequently, the Tribunal deleted the additions made by the AO for both assessment years, as the revenue failed to establish the alleged undisclosed investment. The issue of violation of principles of natural justice and jurisdictional grounds were not explicitly decided as the primary issue of the addition was decided in favour of the assessee.
The Tribunal held that the reassessment proceedings initiated under Section 147 of the Income Tax Act, 1961, were invalid. The primary reason for this decision was the defective approval obtained under Section 151. The Tribunal noted that the approval was neither digitally nor manually signed, which was a critical procedural flaw. Following the precedent set by a coordinate bench of the ITAT Rajkot in the case of M/s. Aditya Plastics, the Tribunal quashed the reassessment proceedings. Furthermore, the Tribunal addressed the second technical plea regarding the reassessment being initiated on one issue and the addition being made on a different issue. Citing the judgment of the Hon'ble Bombay High Court in Jet Airway Limited, the Tribunal found this to be another ground to quash the reassessment order. As the reassessment itself was quashed, all other issues on merits, including the disallowance of the Section 80P deduction, were rendered academic and infructuous. The appeal of the assessee was allowed.
The Tribunal held that the issue is squarely covered in favour of the assessees by the decisions of the Co-ordinate Benches. Specifically, the Tribunal followed the precedent set in the case of Nihil Nitinbhai Bhuptani (ITA No. 479/Rjt/2025, AY 2019-20) and Ashish Dubey vs. ACIT (ITA No. 222/Del/2020, AY 2015-16). The reasoning was that once the assessee establishes, through material evidence like bank statements and receipts, the fact of payment of donation to a registered political party via banking channels, the assessee cannot be faulted for the subsequent failure of the political party to account for the donation in its return. The Tribunal found no change in facts or law and noted that the revenue failed to produce any material to controvert these findings. Therefore, the additions made by the Assessing Officer were deleted. The appeals were allowed with consequential relief.
The Tribunal acknowledged that the assessee failed to submit complete documents and that some submitted documents were self-serving. However, considering the smallness of the amount and the inconsistencies in the evidence, the Tribunal found merit in the assessee's contention for some relief. It held that the entire 'on-money' should not be taxed, and only the embedded profit element should be considered. To meet the ends of justice, the Tribunal directed the Assessing Officer to make an addition of Rs. 23,656/-, representing a 10% net profit rate on Rs. 2,36,560/-. This addition was to be made at the normal rate of income tax, not under Section 115BBE. The Tribunal explicitly stated that this adjudication would not serve as a precedent for any other assessment year. The issue of whether the assessee had an opportunity for cross-examination was not expressly decided, but the relief granted suggests a consideration of procedural fairness and evidentiary issues.
The Tribunal acknowledged that the assessee had submitted various documents and evidences, including bank statements, cash books, and balance sheets. However, it noted that some of these were self-serving and the books of accounts were not subject to audit. Therefore, the Tribunal found that the assessee was not entitled to full relief. Citing the Supreme Court's decision in CIT v. Williamson Financial Services, the Tribunal emphasized that tax is levied on income, not gross receipts. To protect the revenue's interest and considering the amount in dispute, the Tribunal directed an ad-hoc estimated addition. It determined that a net profit rate of 10% on Rs. 12,03,500/-, amounting to Rs. 1,20,350/-, would address the inconsistencies in the submitted documents and evidence. This addition was to be made at the normal rate of income tax, not under Section 115BBE. The Tribunal explicitly stated that this adjudication would not serve as a precedent for any other assessment year.