ITAT Surat Judgments — March 2026

The Tribunal noted that the quantum appeal had been restored to the AO for fresh adjudication. Therefore, the penalty matter was also restored back to the AO to be decided afresh along with the quantum proceedings.

The Tribunal condoned the delay of 324 days, citing the assessee's sufficient cause, including a non-cooperative consultant, a recent family bereavement, and the disproportionate nature of the addition compared to the returned income. The Tribunal restored the issue to the Assessing Officer for fresh assessment after providing an opportunity of hearing.

The Tribunal held that the amendment to Section 56(2)(x), increasing the tolerance limit to 10% for the difference between actual consideration and stamp duty value, is curative and retrospective in nature. Since the difference in this case was less than 10% of the consideration, the addition made by the AO was deleted.

The Tribunal noted that the Departmental Representative had no objection to the withdrawal. Consequently, the Tribunal granted the Assessee's prayer for withdrawal.

The Tribunal noted that the Revenue did not object to the withdrawal request. Therefore, the prayer of the assessee for withdrawal was granted.

The Tribunal held that the disallowance of interest on loans was not justifiable as the loans were given out of interest-free funds. The disallowance on account of non-deduction of TDS was also not justified as the expenses were part of the assessee's business. The addition for cash expenses was also held to be not justified.

The Tribunal held that since the sale deed was cancelled by a registered cancellation deed, the transaction of purchase did not take place. Therefore, the provisions of Section 56(2)(x)(b) of the Act were not applicable.

The Tribunal acknowledged the assessee's counsel's submission regarding an oversight that led to the ex-parte dismissal. To ensure justice, the Tribunal imposed a cost on the assessee and directed the AO to provide another opportunity for hearing.

The ITAT partly allowed the appeal, upholding an addition of Rs. 14,02,500/- for unexplained cash deposits while granting relief for Rs. 10,00,000/-. It also ruled that the amended Section 115BBE, effective from 15.12.2016, could not be applied to cash deposits made prior to that date.

The Tribunal, noting repeated non-compliance, imposed a cost of Rs. 25,000 on the assessee. Subject to this payment, the matter was remanded to the Assessing Officer to provide another opportunity for the assessee to furnish evidence for the cash deposits.