This weekly round-up analytically summarises the key stories related to the Income Tax Appellate Tribunal (ITAT) reported at Taxscan during the previous week from January 4th to January 10th 2025. ITAT Partly Allows Assessee’s Appeal, Directs Benefit of Rs.8 Lakhs for Unexplained Cash Deposits Manan Kiritbhai Shah vs Income-Tax Officer CITATION:   2025 TAXSCAN (ITAT) 114 In a recent ruling, the Income Tax Appellate Tribunal (ITAT), Ahmedabad, partly allowed the appeal filed by assessee, in relation to the unexplained cash deposits during the demonetization period for the Assessment Year (AY) 2017-18. Tribunal addressed a significant issue involving unexplained cash deposits under Section 69A of the Income-tax Act, 1961. Manan Kiritbhai Shah,the appellant-assessee had challenged the decision made by the Commissioner of Income-tax (Appeals) under Section 250 of the Act, which had confirmed an addition of Rs. 10,21,000 as unexplained investment. ITAT Directs Reconsideration of Deduction Claim u/s  36(1)(va) in Light of Supreme Court Decision Ranjeet Kumar Budhia vs DCIT CPC CITATION:   2025 TAXSCAN (ITAT) 115 In a significant ruling, the Income Tax Appellate Tribunal (ITAT) Ranchi Bench has directed the Commissioner of Income Tax (Appeals) (CIT(A)) to reconsider the deduction claim under Section 36(1)(va) of the Income Tax Act, 1961, in light of the Supreme Court’s recent judgment.

The Tribunal observed that the CIT(A) had overlooked the latest Supreme Court decision, which could potentially affect the case outcome. As a result, the ITAT remanded the matter back to the CIT(A) for reconsideration, with instructions to consider the Supreme Court’s decision in the Checkmate Services case and pass a fresh order accordingly. ITAT Allows Assessee’s Appeal, Orders CIT(A) to Decide on Foreign Tax Credit Claim Along with Pending Appeal Kamlesh D. Pate vs The ACIT CITATION:   2025 TAXSCAN (ITAT) 116 Recently, the Ahmedabad Bench of  Income Tax Appellate Tribunal (ITAT), allowed the appeal of a senior citizen from Telangana, challenging the denial of Foreign Tax Credit (FTC) for the Assessment Year 2019-20. The Tribunal set aside the order passed by the Commissioner of Income Tax (Appeals) (CIT(A)), directing the CIT(A) to reconsider the matter along with a pending appeal related to the same assessment year. Kamlesh D Patel, the appellant, was denied of FTC due to the belated filing of Form No. 67, which is required for claiming the credit of taxes paid abroad under Section 90 of the Income Tax Act, 1961. Kamlesh Patel had filed his return declaring an income of Rs. 2.63 crore, including agriculture. Ex-parte Dismissal and Addition of Rs.1.55 Crore as Unexplained Investment: ITAT Remands Case to AO Dinesh Ramanbhai Patel vs Income Tax Officer CITATION:   2025 TAXSCAN (ITAT) 117 The Ahmedabad Bench of Income Tax Appellate Tribunal(ITAT) remanded the case back to the Assessing Officer (AO) for a fresh review after addressing the ex-parte dismissal and the addition of Rs. 1.55 Crore as unexplained investment. Dinesh Ramanbhai Patel,appellant-assessee, challenged the appeal dated 11.03.2024 for Assessment Year(AY) 2017-18 passed by the Commissioner of Income Tax(Appeals)[CIT(A)]. The two-member bench comprising Siddhartha Nautiyal(Judicial Member) and Annapurna Gupta(Accountant Member) directed the case back to the AO for a fresh review, allowing the assessee an opportunity to present their case. If the assessee does not comply with the notices, the AO may pass appropriate orders based on the available evidence.

Assessee Gets Partial Relief from ITAT as Tribunal Sets Aside Interest Expenses Addition and Partly Sustains Household Expenses Disallowance Manish Chiranjilal Jain vs Income Tax Officer CITATION:   2025 TAXSCAN (ITAT) 118 In a recent ruling by the Income Tax Appellate Tribunal (ITAT), Surat Bench, the assessee, Manish Chiranjilal Jain, received partial relief in his appeal concerning the assessment for the financial year 2018-19. The Tribunal set aside the addition made by the Assessing Officer (AO) on account of interest expenses and partly sustained the disallowance concerning household expenses. The appeal was filed by the assessee against the order of the National Faceless Appeal Centre (NFAC), Delhi, dated August 2, 2022, which had confirmed the AO’s assessment order. The AO had made a disallowance of Rs. 1,10,895 under section 36(1)(iii) of the Income Tax Act, related to interest-free advances made by the assessee. Additionally, an addition of Rs. 4.20 lakh was made on account of low household expenses, estimated by the AO to be insufficient for the assessee’s family in Surat. ITAT directs Reconsideration of LTCG Claim owing to New Evidence including Cheque Transactions Naranbhai Samatbhai Bharwad vs Income Tax Officer CITATION:   2025 TAXSCAN (ITAT) 120 The Income Tax Appellate Tribunal (ITAT), Ranchi Bench, has set aside the order of the Commissioner of Income Tax (Appeals) (CIT(A)) and directed the reassessment of the long-term capital gain (LTCG) claim for the assessment year 2014-15. The tribunal’s decision came after it found that new evidence submitted by the assessee had not been considered during the earlier proceedings.

The appellant, Raj Kumar Gupta, a proprietor of Sitaram Jewellers, had earned LTCG of Rs.1,91,276 from the sale of shares worth Rs.74,30,512/. The assessee claimed this income as exempt under Section 10(38) of the Income Tax Act, 1961. Assessee’s Lack of Diligence Delayed Proceedings: ITAT imposes Cost of Rs. 10k, remands Matter Rajeshbhai Mohanbhai Prajapati vs The ITO CITATION:   2025 TAXSCAN (ITAT) 121 The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has taken a stern stance against the lack of diligence by Rajeshbhai Mohanbhai Prajapati, an assessee whose negligence led to delayed income tax proceedings. The case pertains to unexplained cash credits totaling Rs. 107.8 crore (AY 2016-17) and Rs. 74.49 crore (AY 2017-18). The tribunal has imposed a cost of Rs. 10,000 and remanded the matter for fresh adjudication. The matter revolved around transactions with entities M/s Orange Tradex Pvt. Ltd. and M/s Krrish Enterprise, identified as shell companies providing accommodation entries. These entities were flagged for non-genuine business activities, and their VAT registrations had been canceled by the Gujarat VAT Department. Consequently, the Assessing Officer (AO) treated the large sums credited to the assessee’s bank accounts as unexplained income under Section 68 of the Income Tax Act, 1961.

Agriculturist not Liable for Buyer’s non-response to Tax Notice: ITAT Confirms Cash Deposits as Agricultural Income with Sale Bills and Land Records Dushyant M. Pandya Vs The DCIT CITATION:   2025 TAXSCAN (ITAT) 123 The Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) ruled an agriculturist could not be held liable for the non-response of a third party to a tax notice. The tribunal confirmed that the cash deposit during the demonetization period was agricultural income supported by sale bills and land records. Dushyant M. Pandya, an agriculturist, explained that the cash deposited in his bank account was derived from the sale of agricultural produce. The AO disbelieved the explanation citing that New Surrod Ginning and Pressing Factory, the party to whom the agricultural produce was sold, failed to respond to a notice issued under Section 133 ( 6 ) of the Act. ITAT Grants relief in Tax Appeals, Condones Procedural Lapses and Professional Negligence: Remands Case to CIT(A) Smt. Santra vs ITO CITATION:   2025 TAXSCAN (ITAT) 124 The Jaipur bench of the Income Tax Appellate Tribunal ( ITAT ), in a recent case, remanded the case back to the Commissioner of Income Tax ( Appeals ) [CIT(A)], providing the assessee an opportunity to present her case on merit again. The assessee, Smt. Santra, an illiterate housewife, appealed against an order passed by the CIT(A) under Section 250 of the Income Tax Act relating to the Assessment Year 2010-11, which initiated penalty proceedings against the assessee under Section 271 ( 1 ) ( c ) of the Income Tax Act for alleged concealment of Income or accounting of wrong income. Setback to Titan as ITAT confirms Legality of Reopening Assessment u/s 147 Titan Company Limited vs Assistant Commissioner of Income Tax CITATION:   2025 TAXSCAN (ITAT) 125 The Chennai bench of the Income Tax Appellate Tribunal ( ITAT ) delivered a setback to Titan and upheld the legality of reopening the assessment under Section 147 of the Income Tax Act, 1961. In this case, the assessing officer ( AO ) reopened the assessment under Section 147 due to the omission of a Rs. 2.12 crore prior-year loss while computing a Rs. 3.72 crore deduction under Section 80IC of the Income Tax Act for assessing officer ( AY ) 2011-12 and a wrongful bad debts claim of Rs. 29.52 crore.

Disallowance Claim on Loans written Off to Titan International: ITAT remands matter for Consideration of additional Evidence brought by Assessee Titan Company Limited vs Assistant Commissioner of Income Tax CITATION:   2025 TAXSCAN (ITAT) 125 The Chennai bench of the Income Tax Appellate Tribunal ( ITAT ) remanded the matter to the AO for a fresh examination concerning the write-off of loans amounting to Rs. 29.52 crore advanced by the assessee to its overseas associated enterprise ( AE ), Titan International Holdings BV (TIHBV) due to additional evidence brought by the assessee. There were 3 grounds raised by TIitan in this case and one of them was with regard to  the denial of the assessee’s claim under Sections 37 and 28(i) of the Income Tax Act, 1961, for writing off these advances by the assessing officer ( AO ).  ITAT quashes Addition on Previous Year on Account of Seven Companies by finding Investment Transactions to be Genuine of two companies Dy. Commissioner of Income Tax vs M/s. N. Kumar Construction Co. Pvt. Ltd CITATION:  2025 TAXSCAN (ITAT) 126 The Nagpur bench of the Income Tax Appellate Tribunal ( ITAT ) quashed the addition of Rs. 6.58 crore for the previous year, finding the investment transactions of two out of seven companies to be genuine. ITAT observed that no addition for that year can arise since the amount was not received in the previous year relevant to AY 2012–13 as an advance against property. The bench held that the share premiums were duly accounted for and made through proper banking channels, and thus the transactions were genuine.

The ITAT, comprising V. Durga Rao ( Judicial Member ) and K.M. Roy ( Accountant Member ) dismissed the revenue’s appeal. CIT(E) Rejects S. 12AB Claim Citing Related Party Transactions Without Considering Society’s Replies: ITAT Remands Matter for Proper Hearing CONFEDERATION OF BAHADURGARH INDUSTRIES vs CIT EXEMPTIONS CITATION:   2025 TAXSCAN (ITAT) 127 The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) remanded the matter concerning the rejection of a society’s application for registration under Section 12AB of the Income Tax Act, 1961 citing the Commissioner of Income Tax (Exemptions) [CIT(E)] did not consider the replies and directed a proper hearing to reassess the matter. The Confederation of Bahadurgarh Industries, the assessee is a society established on 07.12.2021, filed its application for registration on 01.09.2023, accompanied by financial statements, bank records, a memorandum of association, and evidence of its activities. The society was to promote industrial development in the Jhajjar region.

Delay in Filing Appeal Due to Change of Address, Non-Receipt of Order: ITAT Remands Matter for Fresh Adjudication Dubey Ravi Arunkumar vs The Income Tax Officer CITATION:   2025 TAXSCAN (ITAT) 128 The Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) remanded a matter for fresh adjudication concerning a delay in filing an appeal due to a change of address and non-receipt of an assessment order citing principles of natural justice. Dubey Ravi Arunkumar, the asssessee is a labor contractor filed his income tax return for the assessment year 2013-14. The assessment for the year 2013-14 was scrutinized and finalized under Section 143(3) of the Income Tax Act, 1961. The assessing officer (AO) issued notices to the assessee but he did not respond to scrutiny notices. Survey Reveals Undisclosed Income: ITAT Demands Verification of Tax Applicability u/s 115BBE Yuwam Education Private Ltd vs The DCIT CITATION:   2025 TAXSCAN (ITAT) 129 In a recent ruling, the Jaipur bench of the Income Tax Appellate Tribunal (ITAT) remanded the case back to the assessing officer (AO), asserting the need for a detailed reassessment of income tax returns filed by the assessee. The assessee, Yuwam Education Pvt Ltd, a Jaipur-based coaching institute, faced scrutiny under Section 133A of the Income Tax Act. The Survey revealed several unaccounted fee receipts and a total of ₹46.6 lakhs as unaccounted income.

The AO observed that the assessee had furnished its ITR along with a profit and loss account in which the assessee had reported gross receipts from tuition and registration fees worth ₹3 Cr, on which the assessee had shown income of ₹52 Lakhs. ITAT dismisses Appeal after Assessee Fails to rectify Filing Defects Despite Multiple Notices Gautam Keshavrao Lohe vs The PCIT CITATION:   2025 TAXSCAN (ITAT) 132 Gautam Keshavrao Lohe,appellant-assessee,filed an appeal on 23.04.2024 against the revision order dated 19.02.2024, issued by the Principal Commissioner of Income Tax ( PCIT ), Vadodara-1. The appeal pertained to an assessment order passed under Section 143(3) of the Act, for the Assessment Year 2018-19. The repeated absence of the assessee and failure to comply with procedural requirements indicated a lack of interest in pursuing the appeal. The defects highlighted by the Registry remained unresolved, and no steps were taken by the assessee to address the reminders or comply with the tribunal’s directions. This inaction left the appeal in a non-maintainable state. The two member bench comprising T.R.Senthil Kumar ( Judicial Member ) and Makarand V.Mahadeokar ( Accountant Member ) noted the assessee’s continued non-compliance and lack of response, suggesting the matter could not proceed further due to the assessee’s failure to rectify the identified issues or participate in the appeal process.

ITAT Quashes Penalty under Section 271(1)(c), Directs AO to Reconsider Quantum Addition Chandra Bali Singh vs Income Tax Officer-3(1) CITATION:   2025 TAXSCAN (ITAT) 134 The Income Tax Appellate Tribunal (ITAT), Allahabad Bench, quashed a penalty under Section 271(1)(c) of the Income Tax Act, 1961, and remanded the quantum addition case back to the Assessing Officer (AO) for fresh consideration. Chandra Bali Singh, appellant-assessee  challenged the addition of ₹11,08,130, which was treated as unexplained cash deposits by the AO. The second appeal challenged the penalty imposed under Section 271(1)(c) on the same addition. The AO passed the assessment order on June 28, 2016, in an ex-parte manner, citing non-compliance with notices issued under Sections 148 and 142(1). Tax Liability of Charitable Trust Dismissed: ITAT Remands Matter back to CIT(A) for Reconsideration of Expenditure Claims Ariana Charitable Trust vs Income Tax Officer CITATION:   2025 TAXSCAN (ITAT) 136 In a recent order, the Allahabad Bench of the Income Tax Appellate Tribunal ( ITAT ) quashed the tax liability imposed  for the Assessment Year (A.Y.) 2018-19.

The Tribunal remanded the matter back to the Commissioner of Income Tax (Appeals) [CIT(A)] for fresh adjudication, emphasizing the importance of substantive justice. The case stemmed from the denial of expenditure claims by the Assessing Officer ( AO ) under Section 143(1) of the Income Tax Act, 1961. Ariana Charitable Trust, assessee, running a school up to the 8th standard, reported total receipts of Rs.41,68,597 against an expenditure of Rs.48,07,340. However, the AO treated the entire receipt as taxable income, disregarding the expenditure claims.

ITAT Confirms Taxability of Trust Receipts u/s 56(2)(x) of Income Tax Act citing Inclusion of Non-Relatives as Beneficiaries Buckeye Trust vs PCIT-2 CITATION: 2025 TAXSCAN (ITAT) 137 The Bangalore Bench of the Income Tax Appellate Tribunal ( ITAT ) dismissed an appeal filed by the assessee, upholding the Principal Commissioner of Income Tax ( PCIT )’s order under Section 263 of the Income Tax Act 1961. The assessee, Buckeye Trust, is a private discretionary trust established under the Indian Trust Act of 1882. It received substantial investments amounting to ₹669 crore from its settlor, Mr Anand Nadathur. These included interests in partnership firms and shares of private companies. In the Income Tax Return ( ITR ), the assessee declared its income as nil, claiming that the funds were received in a fiduciary capacity and for the benefit of family members who qualify as relatives under the Act.