ITAT Ahmedabad Deletes ₹74.64 Lakh Addition After Waste Stock Discrepancy Was Adequately Explained

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) deleted a ₹74.64 lakh addition made against Shakti Polyweave Private Limited towards estimated gross profit. The tribunal held that the company had adequately explained the alleged discrepancy in wastage stock reported in its tax audit report and that rejection of its books of account was unjustified. The bench of Judicial Member Siddhartha Nautiyal and Accountant Member Annapurna Gupta partly allowed the assessee's appeals for...

'Left No Stone Unturned To Harass': Delhi HC On IT Dept's Delay In Releasing KVPs, IVPs

The Delhi High Court has pulled up the Income Tax Department for delaying the release of seized Kisan Vikas Patras (KVPs) and Indira Vikas Patras (IVPs) even after the assessee deposited the settlement amount, observing that the authorities had “left no stone unturned to harass” the petitioner.A division bench of Justices Dinesh Mehta and Om Prakash Shukla directed the tax authorities to compensate the petitioners for loss of interest caused due to wrongful retention of the instruments.The case...

Company's Car, Telephone Costs Not 'Personal' Despite Being Separate Legal Entity: Delhi High Court

The Delhi High Court has held that telephone and car expenses incurred by a company cannot be disallowed as “personal” expenses merely because a company is treated as a separate legal person.A division bench of Justices Dinesh Mehta and Vinod Kumar allowed the company's appeal and set aside an order of the Income Tax Appellate Tribunal (ITAT), which had upheld disallowance of one-sixth of the company's telephone and car expenses on the ground of possible personal use.The company argued that...

Tax Appellate Authority Cannot Rely On New Evidence Without Letting Tax Officer Examine It: ITAT Mumbai

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has held that while taxpayers may file additional evidence at the appellate stage in appropriate cases, the appellate authority cannot rely on such fresh material without first giving the Assessing Officer an opportunity to examine it and respond. Referring to Rule 46A of the Income-tax Rules, 1962, which governs admission of additional evidence before the appellate authority, a bench of Judicial Member Anikesh Banerjee and Accountant...

ITAT Mumbai Remands Developer's Tax Dispute To Assessing Officer Over Revised Income, Project Cost Estimates

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has remanded to the Assessing Officer a tax dispute involving Lohitka Properties LLP's revised income computation for its “Montana” real estate project. The Tribunal held that the assessee's revised estimates and the Revenue's objections require detailed factual verification. A bench of Judicial Member Anikesh Banerjee and Accountant Member Om Prakash Kant observed: “Neither the approach adopted by the Assessing Officer in...

Huge Turnover Difference Between Taxpayer, Comparable Warrants Exclusion In Transfer Pricing Analysis: Delhi HC

The Delhi High Court has held that a company with a vastly different turnover and scale of operations may not be a proper comparable for transfer pricing analysis.A division bench of Justices V. Kameswar Rao and Vinod Kumar observed that huge differences between the tested entity and the comparable would necessarily require the exclusion of the comparable.The court made the observation while dealing with an appeal filed by the Income Tax Department against an order of the Income Tax Appellate...

ITAT Mumbai Rejects Section 14A Addition For Lack Of Recorded Satisfaction, Upholds Suo Motu Disallowance

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) on 22 April held that an assessing officer cannot invoke Rule 8D under Section 14A of the Income Tax Act without recording dissatisfaction with the taxpayer's suo motu disallowance. Judicial Member Sandeep Gosain and Accountant Member Girish Agrawal dismissed the Revenue's appeal and partly allowed Trent Limited's appeal for Assessment Year 2016–17, holding that brand equity fees paid to Tata Sons Ltd. are deductible under Section...

ITAT Kolkata Upholds Interest Deduction On Loans Advanced On Commercial Expediency Grounds

The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) on 18 May upheld the deletion of disallowance of interest expenditure claimed by South City Projects (Kolkata) Ltd., holding that loans advanced to its subsidiary for overseas real estate projects were made on grounds of commercial expediency and qualified for deduction under the Income Tax Act. Accountant Member Rajesh Kumar and Judicial Member Pradip Kumar Choubey dismissed the Revenue's appeals for Assessment Years 2021-22 and...

Delhi High Court Quashes IT Order After Dept. Failed To Intimate Decision On Taxpayer's Adjournment Request

The Delhi High Court has quashed an income tax assessment order and demand notice after finding that a taxpayer was denied a fair hearing. The tax department failed to communicate whether his adjournment request had been accepted or rejected. It also passed the order without considering the reply he had filed. A Bench of Justice Dinesh Mehta and Justice Vinod Kumar observed, “It is clear that the petitioner's right of being heard has been infracted and the violation of petitioner's Fundamental...

Father Of Deceased Taxpayer Can Be Treated As Legal Representative Despite Not Being Legal Heir: Delhi HC

The Delhi High Court has held that the father of a deceased assessee can be treated as a “legal representative” under the Income Tax Act even if he is not a Class-I heir under the Hindu Succession Act.A Division Bench of Justices Dinesh Mehta and Amit Mahajan observed,“A person need not be a legal heir, much less a Class I heir under the Hindu Succession Act to fall within this definition. The test is not one of inheritance; it is one of representation vis-à-vis the estate of the deceased.”The...

No Rectification For Debatable Points Under Section 254(2) Of Income Tax Act: Allahabad High Court

The Allahabad High Court on 6 May held that only mistakes apparent from the record can be rectified under Section 254(2) of the Income Tax Act, 1961, and that debatable issues fall outside its scope. A Division Bench of Justices Shekhar B. Saraf and Abdhesh Kumar Chaudhary dismissed the appeal filed by Abusaad Ahmad, upholding the Income Tax Appellate Tribunal's refusal to rectify its earlier order rejecting condonation of delay. It held: “In order to attract the power to rectify under...

Supreme Court Issues Notice On IT Dept. Appeal Over Relief To Vedanta For TDS Default On Non-Resident Payments

The Supreme Court on Monday issued notice on an appeal filed by the Income Tax Department against a Madras High Court ruling that had partly quashed tax proceedings against Vedanta Ltd. The case concerns its alleged failure to deduct tax on payments made to its overseas group entity. The Madras High Court had, on August 29, 2025 partly ruled in Vedanta's favour. It held that the tax department could not uniformly apply a seven-year limitation benchmark across all assessment years. Observing...