Ahmedabad ITAT rules in Naman Vidyapati Patel Vs PCIT that the cancellation of a land deal and refund of received amounts, even post-search, negated the claim of unaccounted income, quashing the PCIT’s revision order under Section 263.
Description: The CIT(A) failed to adjudicate the core dispute of 2.46 crore bogus purchase disallowance, despite detailed submissions, due to a clerical error in the grounds of appeal. The ITAT ruled that this failure violated natural justice, set aside the appellate order, and remanded the matter to the Assessing Officer for fresh, proper verification and adjudication.
ITAT directs the Assessing Officer to freshly adjudicate the tax case of Meenaz Anjum Dayatar to allow her to claim cost of acquisition and indexation against the sale of a crore property, which was incorrectly taxed as unexplained income under Section 68.
The Ahmedabad ITAT set aside the CIT(A)’s order in Nidhiben Mrugeshkumar Shah Vs ACIT(OSD), restoring the addition dispute of ₹10,00,100 under Section 69A for fresh review.
The AO virtually passed an ex parte order regarding a70 lakh addition, ignoring the assessee’s detailed submissions and denying a proper opportunity. The ITAT upheld the CIT(A)’s decision to set aside the assessment and remand the matter for a fresh adjudication, confirming that violations of natural justice necessitate a proper de novo inquiry.
ITAT Ahmedabad partly allows appeal in Somnath Bandopadhaya v. ITO, deleting ₹2.27 crore addition under Section 69A after verifying explained bank deposits.
The Revenue treated a documented sale of gold, with payment received via RTGS, as a bogus accommodation entry solely based on the buyer’s failure to reply to a section 133(6) notice. The Tribunal held that concrete evidence, including the full bank trail, stock records, and invoice, outweighs a general investigation report or the non-cooperation of a third party, and deleted the unjustified addition under section 69A.
The ITAT deleted the entire Rs.3.94 crore Transfer Pricing (TP) adjustment, ruling that three companies involved in product development, distribution, and proprietary software (Kellton, Magnasoft, Interglobe) were functionally dissimilar to a captive software service provider.2 The Tribunal held that excluding these companies brought the assessees margin of within the Arms Length Price (ALP) range.
The AO passed a final assessment order without waiting for the DRP’s directions, even though the assessee had filed timely objections against the draft order. The ITAT ruled the final assessment was illegal and void ab initio because the AO violated Section 144C, and it remanded the matter to the DRP for fresh adjudication on merits.
The AO mechanically reopened the case and made a 2.86 crore addition based only on an investigation alert, without being able to identify the alleged property. The ITAT upheld the quashing of the entire proceeding, ruling that simple reproduction of external information, without independent application of mind or tangible evidence, invalidates the reassessment notice.
