The Tribunal held that interest income arising from working capital used in regular activities retains its character as business income. Section 80P relief cannot be denied merely because income arises as bank interest.
ITAT upheld revision under Section 263 after finding that the AO failed to verify the taxability of ₹669 crore received by a trust under Section 56(2)(x), rendering the assessment erroneous and prejudicial.
The Tribunal held that amounts reflected in regular books and disclosed in returns before search cannot be treated as unexplained expenditure. Section 69C was found inapplicable as no out-of-books spending was established.
The Tribunal clarified that even where the assessee owns more than ten trucks, Section 44AE can be used as a fair yardstick for income estimation. Arbitrary assessment and multiple additions were set aside.
The Tribunal held that taxing total gross winnings without examining expenditure and loss components violates principles of fairness. The case was sent back for proper scrutiny of actual net winnings.
The Tribunal ruled that incorrect computation of opening and closing stock during survey cannot justify full addition. Only the reconciled excess stock amount already offered to tax was sustained.
Where more than three years had elapsed, approval from the higher specified authority was compulsory before issuing notice. Failure to obtain such approval vitiated the reassessment proceedings.
ITAT Mumbai ruled that registration under section 12AB cannot be refused based on apprehended future application of funds or possible violations. The Tribunal held that the authority must restrict examination to objects and genuineness of activities, restoring the matter for fresh consideration.
The Tribunal found that additions under unexplained money provisions cannot be sustained where the assessee provides credible documentary evidence. Suspicion without inquiry cannot replace factual verification.
Tribunal sent back the matter to the AO to verify eligibility of Section 80P(2)(d) deduction based on Supreme Court guidelines regarding RBI licence status of the co-operative bank.
