High Court (HC) overruled ITAT decision and deleted addition u/s 69A; Source of cash deposits made during the demonetization pertained to and had its immediate inextricable nexus with cash withdrawals made by the Assessee from regular bank account in AY 2015-16; As per HC, explanation of nature and source of cash and invocation of deeming fiction engrafted u/s 69A, could only have been undertaken in AY 2016-17 and not in AY 2017-18 by the AO; Also, factum of refund of short term loans and advances and its consequential accumulation as cash-in-hand as on 31-3-2016 could have been examined in the assessment year 2016-17 only; Suspicion, however strong, cannot take the place of proof beyond reasonable doubt.

ITAT confirmed the addition made towards commission income of the assessee, a CA, for providing accommodation entries of bogus LTCG; Search conducted u/s 132 on the assessee wherein it was found that assessee was involved in arranging accommodation entries for commission at 4%; CIT(A) confirmed the addition by relying on depositions of various parties recorded during the course of investigation; ITAT noted that the assessee did not avail the cross examination opportunity offered by the Revenue; ITAT upheld the addition in principle, however, considered the possibility of some expenditure which might be incurred and therefore directed that a lumpsum deduction towards expenditure of Rs. 1 lakh may be given.

ITAT deleted penalty u/s 271D levied on the basis of an unregistered sale deed alleging receipt of consideration in cash without any corroborative evidence to substantiate violation of Section 269SS; There was no corroborative evidence such as DVO report to substantiate claim about the fair market value or the alleged cash component; ITAT rejected Revenue’s contention that Assessee’s failure to file appeal against assessment order amounted to acceptance of AO’s finding; ITAT opined that requirement to file an appeal was not warranted as no addition was made to the returned income in the assessment order.

ITAT held that payments made by Assessee to non-resident foreign law firms were purely for professional services and did not partake the character of FTS u/s 9(1)(vii); Reliance placed on co-ordinate bench decision in Chander Mohan Lall, wherein the disallowance u/s 40(a)(i) in respect of legal fee paid to foreign attorneys without TDS was deleted, holding that there is a clear distinction between FTS and fee for professional services. “Professional Service” is a separate category of service, distinct from Fee for Technical Services (FTS) that is primarily “managerial, technical or consultancy” services; While FTS is defined in Explanation 2 to Section 9(1)(vii), fee for professional services draws its meaning from Explanation (a) to Section 194J.

ITAT allowed assessee’s claim of rebate u/s 87A holding that the rebate under the said section is available to all incomes and does not provide for any special rate income exclusion, i.e., with respect to exclude any Long term capital gains; ITAT observed that the first proviso to Section 87A included an exemption qua total income falling under Section 115BAC(1A), however, the impugned amendment was brought by Finance Act 2024 w.e.f April 01, 2025 and the present AY 2024-25 was not hit by the same; ITAT set aside the orders of lower authorities and directed the AO to allow the Assessee its claim of rebate under Section 87A.

ITAT allowed assessee’s claim of exemption u/s 54 for AY 2016-17 on investments made in seven residential units on the same floor; Reliance placed on Delhi HC in ruling in Lata Goel wherein it was held that multiple residential units may be construed as a single residential house for the purposes of exemption u/s 54F of the Act and that the term ‘a residential house’ can be construed as ‘one residential house’; ITAT held that “one residential house” in Section 54/54F can encompass within its fold seven residential units on the same floor and therefore deleted the addition made by the AO.

ITAT deleted addition u/s 40(a)(i) for not deducting tax at source on foreign remittances made by the Assessee u/s 195; Since the recipient was non-resident and provided services outside India, there would be no tax liability in India and no TDS was required to be deducted on such payment; When any non-resident agent of the assessee rendered certain services outside India and commission was paid to them, same could not be said to be income which had accrued in India and the said recipient was not liable to pay tax in India; Also the commission paid to nonresident Indian could not be treated as FTS as per ITAT

ITAT held that date of possession is relevant for determining eligibility under Section 54, and not the date of agreement or payment; Assessee purchased an under construction flat in 2009 for which part payments were made and final possession was taken on 06.04.2011; Assessee also sold an old flat on 21.07.2011 and claimed exemption u/s 54; AO denied the claim u/s 54 noting that almost the entire payment was made before 14.12.2009 which was more than ‘one year prior to the date of sale’ of the old property; Since possession date was within prescribed period of less than one year before the sale of old flat, claim u/s 54 could not be denied.

High Court (HC) directed deletion of disallowance noting that second proviso to Section 40(a)(ia) applies retrospectively from April 1, 2005; It was undisputed that the persons to whom the payments were made by the assessee had already paid the requisite taxes; If an assessee has not been declared as an assessee in default u/s 201(1), and the payee has paid the tax, then it shall be deemed that the assessee has deducted and paid the TDS; Reliance placed on jurisdictional HC ruling in Perfect Circle India.

An addition u/s 68 was made for unexplained cash deposits made post-demonetization, which was deleted by the ITAT; High Court held that no substantial question of law arose and issue was a pure question of fact; ITAT had noted that time gap of a few months between cash withdrawal and cash deposits was similarly observed in preceding AY also, which establishes a pattern; Assessee had satisfactorily proved the deposits by placing on record main as well as site cash books which AO had failed to consider.

Penalty u/s 270A upheld by ITAT for nondisclosure of foreign exchange gains in the original return; Forex gains of Rs. 69.79 lakh were failed to be reported; Reliance placed on SC ruling in Mak Data P. Ltd. wherein it was held that voluntary disclosure or revised computation of income does not release the Assessee from the mischief of penal proceedings; Assessees argument that wrong section of 270A(9)(e) was applied, was rejected by ITAT by noting that the CIT(A) had rectified the AO’s mistake and invoked correct provision of 270A(9)(a).