August 2026

In this appeal, the assessee challenged the addition of Rs.54,76,000/- as on-money payment for purchase of property. The ITAT deleted the addition, holding that the AO cannot rely on unverified excel-sheet and third-party confession without linking the assessee or providing cross-examination. The Tribunal followed the coordinate bench decision in Munjal Mrugesh Jaykrishna and the Gujarat HC in Kaushik Nanubhai Majithia. The appeal was partly allowed, with grounds 1-2 dismissed as not pressed and ground 6 dismissed as consequential.

In a comprehensive judgment, the ITAT Delhi Bench allowed the assessee’s appeals for A.Y. 2013-14 and 2017-18 on the principal grounds. The Tribunal rejected the addition u/s 56(2)(viib), holding that the section applies only where consideration is received for issue of shares; since shares were issued for considerations other than cash (i.e., discharge of business acquisition liability), there was no taxable premium. It allowed the claim for bad debts written off u/s 36(1)(vii), treating the amounts as trade debts converted into loans, with interest offered to tax earlier, thereby satisfying the conditions of section 36(2). The Tribunal also struck down the section 14A disallowance as no exempt income existed, and held that reversal of liabilities (advance fees, prepaid franchisee fees) was not taxable under section 41(1) or 28(iv) as it represented only a book entry and no benefit was derived. Loan processing charges were held to be revenue expenditure having character of interest. The disallowance u/s 40(a)(ia) on royalty payments was deleted as the payee had offered the income to tax, based on second proviso. The outcome of the ground on advertisement expenses is unclear from the text due to incomplete narrative; however, the Tribunal noted that the 30% disallowance provision is not retrospective. The decision reinforces several settled principles: scope of section 56(2)(viib) is limited to cash receipt, bad debt deduction is permissible on write-off in books, section 14A requires exempt income, and section 40(a)(ia) is curative where tax is paid by recipient.

This is a decisive ITAT Ahmedabad ruling on reassessment jurisdiction. The assessee, Akash Shah, challenged the reassessment for A.Y. 2015-16, which was reopened vide notice u/s 148 dated 08.04.2021. The department alleged accommodation entries and bogus LTCG. The Tribunal, following the Supreme Court’s decisions in Rajeev Bansal and Deepak Steel & Power Ltd., as well as the jurisdictional Gujarat High Court in Narendra Maganlal Purohit, held that the notice was barred by limitation because it was issued on or after 01.04.2021 and was not within the extended timeline under TOLA. The Tribunal quashed the assessment order passed u/s 147 r.w.s 144B. This ruling reinforces the binding principle that for A.Y. 2015-16, any reassessment notice issued after 01.04.2021 is void ab initio. The appeal was allowed, and the remaining grounds on merits were not addressed.

In Hasmukhbhai Babulal Patel v. Income Tax Officer, ITA No. 658/Ahd/2026, the Ahmedabad Bench of ITAT (Judicial Member Sanjay Garg and Accountant Member Narendra Prasad Sinha) allowed the assessee’s appeal for A.Y. 2015-16 against the NFAC/CIT(A) order dated 13.11.2025. The case involved reopening under Section 147 on account of alleged capital gains from sale of immovable property for Rs. 62,00,000. The ITAT condoned the 2-day delay in filing the appeal. On merits, it held that the notice under Section 148 issued on 31.03.2022 for A.Y. 2015-16 was barred by limitation, as all notices issued on or after 01.04.2021 for that year must be dropped under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, following the Supreme Court in Deepak Steel and Power Ltd. and Union of India v. Rajeev Bansal, and the Gujarat High Court in Narendra Maganlal Purohit. Consequently, the assessment order dated 15.03.2023 passed under Section 147 read with Section 144B was quashed and the appeal was allowed.

In a decisive ruling for foreign cruise operators, the Supreme Court dismissed the Revenue’s appeals and held that the presumptive taxation regime under Section 44B of the Income Tax Act, 1961 applies to non-resident cruise ship operators even when the cruise is a round trip from Mumbai and includes on-board hospitality and entertainment. The Court approved the concurrent findings of the CIT(A), ITAT, and Bombay High Court that the primary fee collected is for carriage of passengers, and ancillary amenities are incidental. Consequently, the deemed income is 7.5% of gross cruise fare receipts and tax deduction under Section 195 must be made on that basis, not 25% as determined by the Assessing Officer. The companion appeal for a different assessment year was dismissed on the same reasoning.

This case involves cross appeals by Sun Pharmaceutical Industries Ltd. and the Revenue against the order of the CIT(A) for AY 2014-15. The assessee’s appeal (ITA No.885/Ahd/2019) challenges the transfer pricing adjustment on transfer of electricity from its captive power plant, disallowance under section 14A, disallowance of Rs.602.39 crores compensation paid to Pfizer Inc, disallowance of software expenses, and other claims. The Revenue’s appeal (ITA No.969/Ahd/2019) challenges the CIT(A)’s deletions relating to transfer pricing on interest on loans, price difference on sales to AEs, bad debts, weighted deduction under section 35(2AB), and other issues. The Tribunal heard both appeals together. However, the present excerpt does not include the Tribunal’s decision.

The assessee appealed against penalty order under Section 270A for A.Y. 2019-20, confirming penalty of Rs.1,87,200 for misreporting of income. The Tribunal, following Hiro Mulchand Tanwani, held that the penalty could not be sustained as the deduction under Section 80GGC was disclosed in the return and there was no evidence of deliberate misreporting. The Assessing Officer also failed to specify the limb of Section 270A(9). Consequently, the penalty was deleted. The appeal was partly allowed.