ITAT Surat Judgments — April 2026

The Tribunal noted that the assessee provided evidence of purchase through banking channels, reflected in demat accounts, and sale through a recognized stock exchange with STT payment. The AO's addition was based on general investigation reports about penny stocks, and the CIT(A) had confirmed this without specific evidence linking the assessee to manipulation. The Tribunal found that the burden of proof was not discharged by the revenue.

The Tribunal held that while the Assessing Officer's estimation of gross on-money receipt was debatable, the unexplained unsecured loans brought into the books of account, which were admitted to be generated from such on-money receipts, could not be ignored. The CIT(A)'s action of restricting the addition to the amount of unsecured loans was found to be correct.

The Tribunal held that the assessee failed to provide adequate documentary evidence to substantiate the genuineness of the long-term capital gains exemption claim. Therefore, the additions made by the Assessing Officer were considered justified.

The Tribunal held that while the AO's estimation of gross on-money receipts was high, the CIT(A) correctly restricted the addition by considering the profit embedded in on-money receipts and unexplained unsecured loans introduced into the books. The Tribunal found no reason to interfere with the CIT(A)'s findings for both assessment years.

The Tribunal held that while the gross 'on-money' receipt could not be taxed entirely, the unexplained unsecured loans brought into the books, as admitted by the partners, could not be ignored. Therefore, the CIT(A)'s decision to restrict the addition to the extent of unexplained unsecured loans was considered justified.

The Tribunal held that the assessee failed to provide necessary documentary evidence, such as contract notes and demat account details, to substantiate the claim of long-term capital gains exemption. Consequently, the AO's additions were deemed justified, and the CIT(A)'s decision to set aside the matter was not interfered with.

The Tribunal directed that the addition on account of unexplained bank credits be restricted to 8% profit. The issue of unexplained investment was restored to the AO for re-examination. The addition on account of deemed rental income was deleted. The addition for difference in receipts was also deleted to avoid double taxation.

The Tribunal noted that the assessees argued the AO had conducted sufficient inquiries and that the Pr.CIT was merely substituting his opinion. The core of the assessees' argument was that the AO's order was not erroneous nor prejudicial to the revenue, as required for revision under Section 263. The Pr.CIT believed the AO's assessment was erroneous due to a lack of detailed verification of cash sales and purchases, and that this prejudiced the revenue.

The Tribunal held that the CIT(A) did not violate principles of natural justice by admitting additional evidence without a remand report, as verification at the appellate stage is permissible. The Tribunal found that the CIT(A) correctly deleted the additions related to unexplained credits and job work expenses after verifying the submitted documents.

The Tribunal held that the jurisdictional High Court's decision in the case of Checkmate Services Pvt. Ltd., which was binding at the time of assessment, favored the Revenue on this issue. Therefore, the assessee's appeal could not be sustained.

The Tribunal held that the interest on occupation charges was rightly claimed under Section 37(1) as the payment and settlement occurred in the assessment year under consideration. The CIT(A)'s finding to this effect was not interfered with.

The Tribunal noted that the AO had rejected the assessee's books of accounts under Section 145 and made an addition based on estimation. The PCIT initiated revision under Section 263, citing lack of proper inquiry into cash sales, purchases, and unexplained cash deposits, which he believed prejudiced the revenue.

The tribunal held that the opening cash on hand was sufficiently explained by the assessee by referring to the previous year's return. The gifts were considered genuine as details of the donor, who was the assessee's father, were provided, including bank statements and cash withdrawals. The addition for unexplained expenditure was a corollary to the cash on hand issue.

The Tribunal held that Section 68 is not applicable as there was no credit entry in the assessee's books of account for the addition. The sale deed clearly mentioned payments made over a period from 1990 to 2012, which the AO failed to consider. Therefore, the addition made by the AO was not justifiable.

The Tribunal held that the decision of the Hon'ble Supreme Court in the case of Checkmate Services Pvt. Ltd. was binding, and since the Jurisdictional High Court's decision in this regard was in favor of the Revenue, the assessee's case was not debatable. The cited case laws by the assessee were not applicable.

The Tribunal held that merely assuming purchases were bogus is not sufficient to establish the revenue's case, especially when the assessee provided details of purchases and sales. The Tribunal further found that the addition for commission expenses under Section 69C was purely presumptive and unsustainable.

The Tribunal held that the notice issued under section 274 r.w.s. 271(1)(c) was vague as it did not specify whether the penalty was for concealment of particulars or furnishing inaccurate particulars. Furthermore, the Tribunal noted that the assessee genuinely believed the sale of agricultural land was tax-neutral and that other co-owners in a similar situation did not face additions.

The Tribunal held that the Assessing Officer doubted the purchase without substantial finding and that the sale was not doubted. Therefore, adding 100% of the purchase amount as bogus was not justified. The Tribunal directed that the addition be restricted to an estimation of 8% profit on the total purchase.

The Tribunal held that the mere mention of a specific community does not negate that the trust is working for the general public at large, especially when the trust's objects and activities are charitable. The Tribunal relied on the Supreme Court's decision in Ahmedabad Rana Caste Association, which states that a section of the public can be beneficiaries, and the common quality uniting them is impersonal.

The Tribunal held that the PCIT erred in exercising revisionary powers under Section 263 to change the penalty provision invoked by the AO, especially when penalty proceedings under Section 270A had already been initiated. The Tribunal noted that the PCIT cannot determine which penalty section should have been invoked as part of the revisionary power and that the assessment order cannot be deemed erroneous solely on this basis. Furthermore, the Tribunal emphasized the mandatory hearing requirement before passing orders related to penalties.

The Tribunal noted that the AO had conducted inquiries, including issuing questionnaires and examining submissions, and had made an addition based on an estimation of inflated sales. The PCIT's view that the AO failed to conduct proper inquiry and followed a convenient method of rejecting books of account was challenged by the assessees. The Tribunal will examine whether the AO's assessment order was erroneous and prejudicial to the interest of the revenue.

The Tribunal held that the assessee regularly deposited cash generated from its business of selling milk and dairy products. The cash deposits during demonetization were consistent with daily cash generation from the business and should have been considered by the lower authorities.

The Tribunal held that the assessee's audited financials matched the objects in the trust deed and the PTR, and the objects were not discriminatory. The CIT(E) failed to demonstrate that expenditures were for specific communities only. Therefore, the rejection of the application was not justifiable.

The Tribunal found that the bank statements and cash books showed income from remuneration and interest, and provided details for cash deposits, including Rs. 7,50,000/- belonging to the Nilesh Natwarlal HUF. The AO was incorrect in making the addition to the individual assessee's income.

The Tribunal noted that the notice issued under section 148 was beyond the surviving time limit by approximately 43 days. Consequently, the notice was held to be bad in law, rendering the assessment order void ab initio.

The Tribunal held that the assessee provided all necessary details of turnover, gross profit, net profit rates, and cash deposits from previous years, which were duly verified by the CIT(A). The CIT(A) had rightly observed that the cash receipts of Rs. 4,29,05,391/-, out of which Rs. 3,57,34,500/- was deposited, were from customers.

The Tribunal accepted the assessee's plea to present additional evidence and remanded the matter to the CIT(A) for proper verification and adjudication. The Tribunal noted that stock registers, supplier IT returns, and sales/purchase registers were not previously submitted.

The Tribunal held that the activities of the assessee, as per audited financials, matched the objects mentioned in the trust deed. The objects were not restricted to a particular community. The CIT(E) failed to demonstrate that expenditures were not for the general public. Therefore, the rejection of the application was not justifiable.

The Tribunal held that the assessee was carrying out activities as per audited financials, which matched the objects in the trust deed. Since the objects were for the general public and the CIT(E) could not point out any specific community-based expenditure, the rejection of the application was not justifiable.