ITAT Surat Judgments — October 2025

The Tribunal held that the seized documents (tally ledgers, manual sheets, digital images) lacked evidentiary value as they were not part of regularly maintained books of account and contained inconsistencies. Statements recorded were also considered unreliable due to retractions and lack of corroboration. The cross-objection regarding the validity of proceedings u/s 153C was also dismissed.

The Tribunal held that the 'Sauda-chitthi' was an unsigned document and insufficient evidence to prove 'on-money' receipt. The Tribunal also found that the explanation for unexplained cash and jewelry was reasonably supported by evidence. The deletion of additions related to marriage expenses was confirmed based on previous rulings.

The Tribunal upheld the CIT(A)'s deletion of the additions for marriage expenses and land investment, citing lack of corroborative evidence for the seized diary and the unsigned land undertaking. For the jewellery, the Tribunal confirmed the CIT(A)'s decision to sustain an addition of Rs. 24,58,397/-, agreeing with quantitative reconciliation but upholding the addition for bogus purchases from Surat jewelers. The assessee's challenge regarding the validity and time-barring of the assessment order was also dismissed.

The Tribunal held that the CIT(A) did not pass an order as per the mandate of section 250(6) of the Act and dismissed the appeal solely on the grounds of non-compliance. The Tribunal found that principles of natural justice require another opportunity of hearing.

The Tribunal, following the decisions of the Hon'ble Gujarat High Court in Ashwinkumar Arban Co-operative Society Ltd. and Rajkot Lodhika Sahakari Kharid Vechan Sangh Ltd., held that a cooperative bank is a cooperative society. Therefore, interest earned by a cooperative society from its investment in a cooperative bank is eligible for deduction under Section 80P(2)(d) of the Act.

The Tribunal upheld the CIT(A)'s decisions to delete additions for unexplained investments where evidence was based solely on 'dumb papers' or uncorroborated seized documents without proper confrontation. It confirmed the 13% net profit rate applied by CIT(A) on 'on-money' receipts from real estate projects, aligning with previous Tribunal decisions. The Tribunal also ruled that Section 115BBE is not applicable when the source of income, such as profit from 'on-money', is explained as business income, and it should be taxed at normal rates. Telescoping benefit was allowed for unexplained interest expenses against undisclosed income but denied for unexplained loans from different sources lacking a direct nexus to the assessee's undisclosed income.

The Tribunal found that the CIT(E) rejected the application due to the appellant not replying to a show-cause notice and considering two objects as religious. The appellant argued that the majority of objects were charitable and no religious expenses were incurred. The Tribunal, considering the interest of justice and the submissions of both parties, set aside the CIT(E)'s order.

The Tribunal largely dismissed the revenue's appeals, upholding the CIT(A)'s deletion or restriction of additions primarily due to lack of corroborative evidence for 'dumb papers' seized from third parties and the absence of direct nexus between alleged unaccounted payments and the assessee. The Tribunal confirmed the CIT(A)'s estimation of 13% net profit on 'on-money' receipts, directing the AO to tax this profit at normal rates instead of applying Section 115BBE. The assessee's additional grounds for telescoping benefits were admitted, with the principle being accepted, although some were dismissed for statistical purposes. Additions related to unaccounted loans were partly upheld, with interest deleted, as the principal was deemed explained from another party's undisclosed income.

The Tribunal largely upheld the CIT(A)'s decisions, dismissing many of the revenue's appeals related to unexplained investments in land (e.g., plots 224, 182 Kumbharia, 20/B Chhedcha, 155 Bhanodara) due to lack of corroborative evidence and the nature of documents as 'dumb papers' or estimates for bank loans. It confirmed the estimation of net profit on 'on-money' receipts for projects (Gopnath/Capital Palace, Kuberji Crown) at 13% and directed that such income be taxed as business income at normal rates, not under Section 115BBE. Telescopic benefits for interest payments and certain expenditures were allowed, but generally not for loan amounts from unrelated sources.

The Tribunal upheld the CIT(A)'s order in deleting the additions related to unaccounted income from land sale and unexplained marriage expenses, finding insufficient tangible material and lack of corroborative evidence. The Tribunal partly confirmed the addition for unexplained cash, finding that a portion was sufficiently explained, while sustaining a part attributed to family members' withdrawals. The addition for unexplained jewellery was deleted by the CIT(A) and upheld by the Tribunal due to satisfactory explanation and evidence provided by the assessee.

The Tribunal found that the AO failed to conduct a proper inquiry to establish the link between the assessee's purchase and the prior 'Satakhat'. The assessee also did not provide sufficient evidence regarding the fate of the 'Satakhat'. Due to these factual gaps and the principles laid down by the Delhi High Court, the matter was restored to the AO for fresh examination.

The Tribunal noted that the assessee's delay in filing the appeal was due to notices being sent to an incorrect email ID, preventing them from accessing the CIT(A)'s order. Consequently, the Tribunal condoned the delay and set aside the CIT(A)'s order.

The Tribunal admitted an additional ground of appeal regarding the AO issuing notices from a non-jurisdictional office and the absence of a notice u/s 143(2). Both parties agreed that the matter should be set aside to the AO for a de novo assessment. The Tribunal clarified it expressed no opinion on the merits of the case.

The Tribunal found that similar issues were decided in favour of the assessee in their own case, where such compensation was treated as a capital receipt and not includible in income.

The Tribunal held that the proviso to Section 56(2)(x) allowing adoption of stamp duty value as on the agreement date is applicable from Assessment Year 2017-18 onwards. Since the conditions of prior payment through banking modes and the agreement date's stamp duty value being less than the consideration were met, the addition was not sustainable.

The Tribunal held that the assessee was not eligible for the deduction because the return of income was not filed within the prescribed time under section 139(1) of the Act. It was also noted that the interest income claimed for deduction was not solely from the business activity of extending credit facilities to its members. The reassessment proceedings are for the benefit of the revenue, and an assessee cannot convert them into a means to claim deductions not originally claimed.

The Tribunal condoned the 11-day delay in filing the appeal, recognizing it as a bona fide cause in the interest of substantial justice. The principles of natural justice were considered paramount. The impugned order of the Ld. CIT(A) was set aside, and the matter was restored to the Ld. CIT(A)'s file.

The Tribunal, considering the principles of substantial justice and fair play, decided to give the assessee one more opportunity to present their case before the CIT(A). The impugned order of the CIT(A) was set aside, and the matter was restored for fresh adjudication.

The Principal Commissioner of Income-tax (PCIT) held that the assessment order was erroneous and prejudicial to the interest of the Revenue because the Assessing Officer failed to conduct proper inquiries and verification regarding the stock discrepancy. The PCIT directed the Assessing Officer to re-examine the issue.

The Tribunal condoned the delay of 490 days, considering the bona fide reasons and unavoidable circumstances explained by the assessee. The Tribunal further held that the penalty appeal should be decided after the disposal of the quantum appeal by the Ld. CIT(A) to ensure consistency and avoid multiplicity of proceedings.

The Tribunal held that the addition based solely on third-party digital data from the 'Sumeet' Group's 'Purchi.exe' software cannot be sustained without proper corroboration and without affording the assessee an opportunity to cross-examine the concerned parties. The principles of natural justice were violated as the assessee was not confronted with the full data and not given an opportunity to cross-examine. Therefore, the matter was restored to the Assessing Officer for fresh adjudication.

The Tribunal acknowledged that the ground regarding the validity of the Section 148 notice is purely legal and goes to the root of the jurisdiction. Citing Supreme Court judgments, the Tribunal noted that the issuance of such notices is subject to strict time limits derived from the date of the assessee's response.

The Tribunal noted that the CIT(A) followed an earlier decision where a 6% disallowance was upheld for bogus purchases, assuming procurement from the grey market. However, the Tribunal considered the recent judgment of the Bombay High Court in Kanak Impex (India) Ltd. v. ACIT, which emphasized the need to examine the source of funds for such purchases. The Tribunal found that the assessee failed to provide a credible explanation for the source of funds for the alleged grey market purchases.

The Tribunal held that the CIT(E)'s order was passed ex parte and in violation of the principles of natural justice as the assessee was not granted adequate opportunity to be heard. The Tribunal set aside the CIT(E)'s order and remitted the matter back for fresh adjudication.

The Tribunal noted that the substantive additions in the hands of M/s I.B. Enterprise and M/s Dashmesh Developers were confirmed by the Tribunal and CIT(A) respectively. Therefore, there was no basis for confirming the protective additions made by the AO. The order of the CIT(A) was confirmed.

The Tribunal held that the delay in filing the appeal was not intentional and was due to circumstances beyond the assessee's control, specifically the non-receipt of the order on the registered email. The explanation provided by the assessee was found to be reasonable and bona fide. The Tribunal, invoking its discretion and following Supreme Court precedents, condoned the delay.

The Tribunal quashed and set aside the impugned notice dated 31.07.2022 issued under Section 148 of the Act, along with all consequential proceedings, as it was issued beyond the permissible 'surviving time' as per the decisions of the Hon'ble Apex Court. The matter was restored to the CIT(A) for de novo consideration.

The assessee failed to provide any explanation or supporting documents for the cash deposit and other credits amounting to Rs. 1,17,98,862/-. The Assessing Officer completed the assessment under Section 147 read with Section 144 of the Act. The CIT(A) dismissed the appeal for non-compliance and lack of evidence. The Tribunal upheld the CIT(A)'s order, finding no infirmity.

The Tribunal held that while limitation laws are strict, substantial justice should prevail. Considering the assessee's non-resident status and the possibility of belated communication of the assessment order, the Tribunal restored the matter to the CIT(A) for fresh consideration of the delay condonation application.

The Tribunal held that the Ld. CIT(A) failed to consider the assessee's submissions and evidence, thereby breaching the principles of natural justice and statutory mandate. The order was passed without due appreciation of the materials on record.

The Tribunal condoned the delay of 640 days, holding that the reasons provided by the assessee constitute 'sufficient cause' as per legal precedents. The Tribunal also noted that the assessee was prevented from participating due to these circumstances and that principles of natural justice require an opportunity to be heard.

The Tribunal noted that the CIT(E) had issued notices, but the assessee failed to provide complete details and documentary evidence. The assessee argued that the matter was decided ex parte and violated principles of natural justice. The Tribunal, considering that the assessee is now ready with the necessary documents and in the interest of justice, set aside the CIT(E)'s order.

The Tribunal held that the Ld. CIT(A) is required to dispose of the appeal on merits, even in case of non-appearance. Dismissing an appeal for want of prosecution without adjudicating on merits is contrary to the statute. The matter was remitted to the Ld. CIT(A) for fresh adjudication.

The Tribunal held that the reassessment proceedings were validly initiated, rejecting the assessee's plea of a 'change of opinion'. Regarding the addition on merits, the Tribunal found the assessee's explanation for the cash deposits to be uncorroborated and inconsistent with normal business practices, and thus upheld the addition.

The Tribunal noted a contradiction between the assessee's earlier letter acknowledging profit from the said scrip and his subsequent affidavit denying any transaction. Due to this discrepancy, the Tribunal set aside the impugned order and remitted the matter back to the Assessing Officer for fresh examination.

The Tribunal noted that the Assessing Officer cannot condone such delays, but the jurisdictional Commissioner of Income-tax (Exemptions) can. The appeal was restored to the CIT(A) with a direction for the assessee to seek condonation of delay from the CIT(E) or PCIT(E).

The Tribunal noted that the delay was not deliberate and that the notices were indeed sent to a wrong email address. Considering the principles of natural justice, the Tribunal condoned the delay and set aside the CIT(A)'s order.

The Tribunal noted that the appeal was dismissed by the CIT(A) on technical grounds, specifically regarding the filling of Form 35, and that no proper notice was served at the assessee's residential address. The Tribunal found that the matter was not properly adjudicated.

The CIT(A) upheld the AO's order, relying on the Supreme Court decision in PCIT vs. Wipro Ltd., stating that filing the return within the due date is mandatory for claiming deductions under Chapter VI-A. The Tribunal observed that while the CIT(A) cannot condone the delay, the AO may consider condonation under section 119(2)(b) if there is a reasonable cause and genuine hardship.

The Tribunal noted that the AO accepted the DVO report without giving the assessee an opportunity to explain the case. The Tribunal found that the case was not properly adjudicated before the lower authority. Therefore, one more opportunity was given to the assessee to present his case before the AO.

The Tribunal held that the CIT(A) erred in not adjudicating the additional grounds raised by the assessee, which included challenging the reopening of assessment and the application of Section 50C. The CIT(A)'s powers are coterminous with the AO, and it should have considered these grounds.

The Tribunal held that the AO had conducted sufficient inquiry by calling for details and examining the documents submitted by the assessee regarding the claim for additional depreciation. The AO had formed a possible view based on the information provided. The PCIT's opinion that the order was erroneous and prejudicial to revenue was based on a different view, which is not sufficient for revision under Section 263 if the AO has made a plausible inquiry and formed a possible opinion.

The Tribunal held that the assessee's challenge to the jurisdictional notices was raised for the first time before the CIT(A) after the statutory period. Regarding the loss on penny stocks, the Tribunal noted that SEBI had reported unfair trade practices by the companies involved. Since the assessee claimed a loss from penny stock trading and did not show any exempt long-term capital gains, the disallowance of the loss was upheld.

The Tribunal held that the assessee's grounds challenging the jurisdiction of the AO were raised beyond the statutory period of one month and thus dismissed. Regarding the disallowance of the loss, the Tribunal found that the CIT(A) rightly disallowed the loss as it pertained to a penny stock and was not supported by sufficient evidence, confirming the CIT(A)'s order.

The Tribunal held that in the absence of specific evidence of actual payment of 'on-money' and considering the nature of transactions as distribution of unsold stock or capital adjustment, additions made by the AO were not justified. For the loan addition, it was held that the decoding of the amount was not substantiated, and the explanation of labour charges for ornament repair was plausible, leading to a restricted addition.

The Tribunal noted the assessee's negligent behavior and failure to respond to notices or provide documents. However, considering the interest of justice, one more opportunity was granted to the assessee to present their case before the lower authority.

The Tribunal held that the notice issued under Section 148 of the Act was beyond the time limit available, as per Supreme Court and High Court decisions. Therefore, the notice and the consequential reassessment order were considered bad in law.

The Tribunal held that the ex-parte order passed by the CIT(A) suffered from legal infirmity due to lack of sufficient opportunity to the legal heir of the deceased assessee and non-consideration of valid submissions. The Tribunal noted that the assessee died during the appellate proceedings, and no effective opportunity was granted to the legal heir to represent the case. This violated the principles of natural justice.

The Tribunal held that the reopening of assessment and the consequential order under Section 147 are bad in law. This is because the notice under Section 148 was issued based on a Supreme Court decision, but the escaped income was less than Rs. 50,00,000/-, making the notice invalid according to amended provisions and subsequent Supreme Court rulings.

The Tribunal held that the reassessment notice issued on 26/04/2021 was invalid as it was issued after the prescribed date of 01/04/2021, citing Supreme Court judgments. Consequently, the assessment order under Section 147 was quashed.