The Tribunal held that a ₹15.22 crore one-time payment to distributors, necessitated by a business model shift, was a valid revenue expenditure under Section 37, driven by commercial necessity. The ruling affirms that business prudence justifies compensation to maintain continuity without creating a capital asset.
The ITAT ruled that only the Gross Profit (GP) percentage on unaccounted purchases, not the entire purchase value, is taxable as undisclosed income. The Tribunal rejected the inflated purchase rate of Rs. 1,500 based solely on a partner’s statement, instead fixing a fair estimated rate of Rs. 770 per unit.
Delhi ITAT grants relief to Park View Automotive, deleting a ₹5.59 Cr. addition on share sale. The Tribunal held that an AO cannot arbitrarily substitute a genuine bulk sale price based merely on an Investigation Wing report or suspicion, emphasizing that concrete documentary evidence must be rebutted.
The ITAT ruled that receipts from the sale of power generated during the pre-commencement trial run of a plant are capital receipts, not taxable revenue income. This is because, under the matching principle, corresponding pre-operative expenses were capitalized to the fixed asset cost, justifying the deletion of the Rs. 42.56 crore tax addition.
ITAT Mumbai allowed the appeal in Samir N. Shah Vs ITO, holding that penalty u/s 271(1)(c) for concealment or inaccurate particulars cannot be levied when the underlying income addition is made solely by estimating a gross profit rate on alleged bogus purchases, in the absence of concrete evidence like seized material or cash transactions.
The Tribunal voided the reassessment, citing multiple legal failures: it was time-barred under the new law, the AO failed to share mandatory material, and the condition under Section 149(1)(b) requiring a proven asset/expenditure was not met. The ruling provides strong takeaways on the validity of new reassessment provisions.
ITAT Delhi rules in Mahabir vs ITO that the 1994 CBDT notification defines agricultural land limits for capital gains tax. Subsequent municipal expansions are irrelevant. Land 6km from Sohna Municipality was deemed non-taxable.
The Tribunal nullified four assessment years (AY 2013-14, 2014-15, 2018-19, 2021-22) due to serious legal defects, including unsigned/mechanical approvals and non-supply of mandatory sanction and underlying material. This ruling emphasizes that defective procedure is fatal to both reopening and regular assessment proceedings.
The Income Tax Appellate Tribunal {ITAT} Delhi set aside the CIT{A}’s order, remanding the addition of ₹5 crore under Section 68 back for fresh scrutiny. The issue revolves around Charan Renewable Energy Pvt. Ltd. receiving share capital at a high premium from 13 companies that the Assessing Officer (AO} suspected were paper companies due to unserved statutory notices.
The ITAT upheld the deletion of additions made under Section 153A for an unabated assessment year because the Assessing Officer relied solely on entries in the regular books of account. The ruling reaffirmed the Supreme Court’s mandate that no addition is permissible in completed (unabated) assessments without specific, incriminating material seized during the search.
