ITAT Surat Judgments — September 2025

The Tribunal held that the CIT(E)'s ex-parte order violated the principles of natural justice. The Tribunal restored the matter to the file of the CIT(E) for de novo adjudication, subject to the assessee paying a cost of Rs. 5,000.

The Tribunal condoned the delay in filing the appeal due to lack of proper communication and opportunity of hearing. It was held that principles of natural justice require a party to be given sufficient opportunity to be heard. The matter was restored back to the AO for fresh adjudication.

The Tribunal condoned the delay, citing that the assessee was unaware of the appellate order due to issues with communication. The Tribunal held that adequate opportunity of hearing was not provided due to non-compliance and ex-parte orders. The matter was restored to the AO for a de novo assessment.

The Tribunal held that the impugned payments were not unexplained expenditure but should be treated as business income. The addition was confined to the profit element, estimated at 15% of Rs. 9,16,800/-, which amounts to Rs. 1,37,520/-. Section 115BBE was not applicable for AY 2017-18.

The Tribunal held that the land was agricultural land situated in a rural area and thus not a capital asset. The sale of this land did not constitute a business transaction or adventure in the nature of trade. The order of the CIT(A) was set aside, and the AO was directed to delete the addition.

The Tribunal held that the application should not be dismissed solely on grounds of delay of 41 days without considering the merits. Principles of natural justice require adequate opportunity to be heard. The CIT(E)'s order was set aside, and the matter was remitted for de novo adjudication.

The Tribunal found that the CIT(E) passed the order without effectively hearing the appellant, as only one notice was issued and the submitted documents were not considered. Therefore, the Tribunal set aside the order and restored the matter to the CIT(E) for a fresh decision.

The Tribunal held that principles of natural justice require a sufficient opportunity of being heard. The CIT(A) passed an ex-parte order without providing this opportunity and also failed to pass a speaking order.

The Tribunal acknowledged that the delay in filing the appeal was due to circumstances beyond the assessee's control, specifically the incorrect communication of notices. Therefore, the delay was condoned. The Tribunal set aside the order of the CIT(A) and remitted the matter back for a de novo adjudication.

The Tribunal noted that the assessee was consistently non-cooperative and failed to provide necessary details to the lower authorities. However, considering the contention that sundry creditors were advances from customers, supported by audited accounts, and the principle of substantial justice, the Tribunal decided to set aside the matter for fresh assessment.

The Tribunal held that the reopening of assessment was justified as the AO had tangible material to believe income had escaped assessment. Regarding the addition, while the assessee's business activity was accepted, the profit was estimated at 15% of the turnover instead of the declared 8%, leading to an adjusted addition.

The Tribunal condoned the 38-day delay in filing the appeal. Considering that the quantum assessment order has been restored to the AO's file, the penalty levied under section 271(1)(c) is also restored to the AO for fresh consideration, ensuring the appellant is given a reasonable opportunity to be heard.

The Tribunal found that the CIT(A) passed an ex-parte order without giving adequate opportunity of hearing to the assessee, violating Section 250(6) of the Act. The Tribunal held that the assessee deserves another opportunity to present their case on merit.

The Tribunal held that the transactions were gift by book entries and not cash gifts, and no funds were transferred. The creditworthiness of the donors was not doubted, and the sums were not liable to tax as income from other sources. The grounds regarding additional evidence were dismissed as no new evidence was produced during appeal.

The Tribunal held that the assessee had adequately proved the identity of lenders, the genuineness of loan transactions through banking records, and demonstrated repayment of loans. The AO's objection regarding credit entries before loan transfer was not sufficient to doubt creditworthiness.

The CIT(A) confirmed the addition made by the AO, stating that the stamp value on the date of agreement was higher than the agreement value. However, the Tribunal found that the CIT(A) dismissed the appeal without considering the evidence and submissions provided by the assessee and without providing proper opportunity for hearing.

The Tribunal held that the amount in question was a capital contribution towards the partnership firm for a commercial purpose (facilitating a bank loan) and not a loan or advance. Therefore, it was not covered under Section 2(22)(e) of the Act. Consequently, no TDS was deductible, and the assessee could not be treated as being in default.

The Tribunal found that both the AO and CIT(A) passed ex-parte orders due to the assessee's non-compliance, which was submitted to be neither deliberate nor intentional. The Tribunal held that principles of natural justice require a fair opportunity for the assessee to be heard.

The Tribunal found that the assessee could not properly present their case before the lower authorities, resulting in ex-parte orders. While acknowledging the assessee's non-compliance, the Tribunal set aside the CIT(A)'s order in the interest of justice and natural principles of fairness, allowing for a fresh assessment.

The Tribunal observed that the CIT(A) passed an ex-parte order without giving adequate opportunity of hearing to the assessee. Therefore, the Tribunal set aside the order of the CIT(A) and restored the matter back to the file of the CIT(A) for a fresh decision.

The Tribunal noted that the AO did not reject the assessee's books of account, nor did he re-compute the trading results. The AO also did not question the genuineness of sales or examine the flow of goods. Therefore, disallowing the entire purchases was not justified. The Tribunal found that while the addition could not be sustained on the grounds taken by the AO, some disallowance was necessary to plug revenue leakage.

The CIT(A) set aside the AO's order and restored it to the AO for fresh assessment, citing a proviso that allows for this when an assessment order is made under section 144 of the Act. However, the Tribunal noted that the assessment order was passed under section 143(3) r.w.s. 144B of the Act, with a clerical error mentioning section 144. Therefore, the proviso to section 251(1) was not applicable.

The Tribunal observed that the AO's disallowance of development expenses was based on assumptions without independent verification. The CIT(A) partly allowed the claim, allowing post-purchase expenses but disallowing pre-purchase expenses. The Tribunal set aside the CIT(A)'s order and remitted the matter back to the AO for fresh verification.

The Tribunal held that while the reopening of assessment was justified as the assessee failed to disclose details of bank accounts and cash/credit entries, the addition of the entire amount was excessive. Citing precedents, the Tribunal stated that only a reasonable profit element should be taxed for unaccounted business transactions or collection activities.

The Departmental Representative for the Revenue did not object to the withdrawal request. The Tribunal accepted the assessee's prayer for withdrawal.

The Tribunal held that while the purchases were found to be bogus, disallowing the entire purchases was not justified. Following precedents, the Tribunal directed that only the profit element embedded in such purchases should be taxed, which was estimated at 5% of the impugned purchases.

The Tribunal held that while the reopening of the case was valid, the disallowance of entire purchases was not justified. Relying on precedents, the Tribunal ruled that only the profit element embedded in such purchases should be taxed. The commission addition was deleted as it amounted to double taxation.

The Tribunal found that the CIT(A) had issued a deficiency letter which was reportedly responded to by the appellant, contrary to the CIT(A)'s observation of no response. The Tribunal acknowledged the appellant's submission of details in the ITBA portal and the Revenue's inability to controvert the claim.

The Tribunal condoned the delay in filing the appeal and admitted an additional ground challenging the validity of the penalty notice. Since this ground was not adjudicated by the CIT(A), the matter was remanded back to the CIT(A) for fresh adjudication.

The Tribunal held that the additions made by the AO were not justified, as the evidence relied upon was generalized third-party information without specific link to the assessee. The CIT(A) correctly appreciated that the assessee had provided sufficient evidence for the genuineness of the transactions and that the income surrendered during the survey covered any potential exaggeration.

The Tribunal held that the disallowance on account of Section 35(2AB) should have been restricted to Rs. 12,42,434/-, being 50% of the unallowed revenue expenditure. The remaining revenue expenditure of Rs. 24,84,868/- was allowable under Section 35(1)(i). For the addition under Section 14A, the Tribunal noted that the assessee had not earned any exempt income, and following various High Court decisions, the disallowance was not sustainable.

The Tribunal held that the addition made by the AO was based on weak and inconclusive material from a third party, without establishing a clear link to the assessee or corroborative evidence. The purchase date also did not correspond to the assessment year in question, and the assessee was denied an opportunity for cross-examination, which is a violation of natural justice principles.

The CIT(A) deleted the additions made by the AO, finding that the assessee had provided sufficient evidence to prove the genuineness of expenses and loans. The CIT(A) also considered the additional income offered by the assessee during a survey, which subsumed any potential exaggeration of expenses.

The Tribunal held that notional exchange gain on foreign currency loans is not taxable as it is capital in nature and not real income. The Tribunal also held that expenses incurred for USFDA approval for product trials in the US market are allowable as business expenditure, as they were incurred for commercial expediency to expand the business.

The Tribunal held that the addition of notional exchange gain on foreign currency loan was incorrect as it was of a capital nature and not taxable, relying on judicial precedents. Regarding USFDA approval expenses, it was held to be a genuine business expenditure for expanding into the US market.

The tribunal considered the submissions of both parties. It was noted that the tax effect was less than Rs.60 lakh and the case did not fall under any exemptions mentioned in the relevant circular. Therefore, the appeal was deemed not maintainable.

The Tribunal observed that the AO had made inquiries during the reassessment proceedings and accepted the assessee's returned income without making additions. The Pr.CIT's order under section 263 was found to be unsustainable as it failed to demonstrate specific defects or infirmities in the AO's order. The Tribunal referred to a similar case where a revisionary order under section 263 was quashed under similar circumstances.

The tribunal held that the Ld. PCIT erred in exercising jurisdiction under section 263 as the Assessing Officer (AO) had made adequate inquiries and the Ld. PCIT failed to point out specific defects or infirmities in the AO's order. Relying on a coordinate bench's decision, the tribunal found the Ld. PCIT's order unsustainable.

The Tribunal considered the submissions of both parties and the provided calculations. It was found that the tax effect of Rs.30,62,301/- in the Revenue's appeal is indeed less than the Rs.60 lakh limit specified by the CBDT Circular for filing appeals.

The Tribunal noted that the tax effect of the Revenue's appeal was below the prescribed limit of Rs. 60 lakhs as per CBDT Circular No. 9 of 2024. Consequently, the appeal was dismissed as not maintainable.

The Tribunal found that the AO incorrectly treated cash deposits as unexplained income when the turnover was declared under presumptive taxation (Section 44AD). However, the Tribunal directed the AO to estimate income at 15% on the impugned deposit, restricting the addition. Regarding unsecured loans, while the assessee failed to provide evidence, the Tribunal noted that the revised addition for cash deposits would cover this amount.

The Tribunal dismissed the revenue's appeal, affirming the CIT(A)'s decision to delete the Rs.10 crore addition. It held that the uncorroborated diary entry from a third party could not sustain an addition under section 69B, especially since the transactions were fully documented, made through banking channels, and reflected in the assessee's books. Furthermore, the agreements and payments for land acquisition occurred in the subsequent assessment year, rendering the addition for AY 2015-16 unsustainable.

The Tribunal deleted the GP addition of Rs.11,67,182/-, finding no defects in the books of account or invocation of Section 145(3) by the AO. Regarding the cash deposits, the Tribunal partially allowed the appeal by accepting Rs.16,42,000/- as legitimate cash sales (deposited within the first two weeks of demonetization) but upheld the addition of the remaining Rs.46,18,000/- as unexplained money. The Tribunal also ruled that Section 115BBE, enacted on 15.12.2016, is not retrospectively applicable for AY 2017-18, directing the AO to tax the upheld addition at normal rates.

The Tribunal condoned the delay in filing the appeal before the Ld.CIT(A) because the assessee was pursuing its remedy for rectification. The matter was restored to the Ld.CIT(A) for a decision on merits. The appeal was allowed for statistical purposes.

The Tribunal noted that the PCIT did not decide the issue on merit but rather passed the order to keep the issue alive, pending further appeals. The Tribunal observed that a similar issue in the assessee's own case for AY 2017-18 was allowed by the ITAT. Therefore, the Tribunal set aside the PCIT's orders and remanded the matters for fresh adjudication.

The Tribunal noted that the PCIT had not decided the issue on merit but had passed the order to keep the issue alive, pending a decision on the department's appeal to the High Court. The Tribunal found that the PCIT had not adequately considered the submissions of the parties. Therefore, the matter was set aside to the PCIT for fresh adjudication.

The Tribunal held that the CIT(E)'s orders were passed without providing adequate opportunity to the assessee, violating the principles of natural justice. The Tribunal found that the delay in filing the appeals was not intentional and that substantial justice would be served by providing another opportunity.

The Tribunal found that the PCIT had not decided the issue on merit but rather passed the impugned order to keep the issue alive, especially since an appeal was pending before the Gujarat High Court. The Tribunal noted that in a similar case for AY 2017-18, the ITAT had already quashed the PCIT's order. Therefore, the matter was set aside to the PCIT for fresh adjudication.