ITAT Agra Judgments — December 2017

The Tribunal held that the non-issuance of a notice under section 143(2) before completing the assessment is a jurisdictional error and renders the assessment bad in law. Therefore, the assessment order was set aside.

The Tribunal held that the assessee had reasonable cause for the initial non-compliance due to personal circumstances, including a matrimonial dispute involving his daughter. Therefore, the penalty was deleted.

The Tribunal held that the disallowance of Rs. 2,85,400/- should be re-examined by the AO after considering additional evidence. However, the disallowance of Rs. 45,300/- under Section 40A(3) was upheld.

The Tribunal held that the penalty notice issued under Section 274 read with Section 271(1)(c) was void ab initio because it was not specific about the charge of concealment or furnishing inaccurate particulars of income, violating principles of natural justice.

The Tribunal held that the assessee had sufficient interest-free funds available from customers and partners' capital to cover the interest-free loans given during the relevant year. Therefore, no disallowance of interest expenditure was warranted.

The Tribunal noted that proper notice was sent and not returned unserved, indicating the assessee's lack of interest in pursuing the appeal. Therefore, the appeal was dismissed for non-prosecution.

The Tribunal held that loans/advances can be taxed as deemed dividend under Section 2(22)(e) only in the hands of registered or beneficial shareholders. Since the assessee was neither, the provisions were not attracted. The disallowance of keyman insurance premium was also deleted, aligning with the CIT(A)'s order.

The Tribunal held that the assessee society was established for educational purposes, ran a CBSE-affiliated school, and all assets and liabilities were in its name. The Tribunal found no evidence of profit utilization or diversion of funds to trustees, and that expenditure on assets for the institution constitutes charitable application of funds.

The Tribunal held that a reference to the Valuation Officer under Section 142A is invalid if the AO has not rejected the assessee's books of account. The addition made based on the Valuation Officer's report was therefore quashed.

The Tribunal held that loans/advances can be taxed as deemed dividend under Section 2(22)(e) only in the hands of registered or beneficial shareholders. Since the assessee was neither, the provisions were not attracted. The disallowance of keyman insurance premium was also deleted, aligning with the CIT(A)'s order.

The Tribunal found that the Assessing Officer arbitrarily rejected the books of account without pointing out specific inaccuracies or incomplete entries. While acknowledging some deficiencies in documentation, the Tribunal considered the assessee's past GP rates and comparable cases.

The Tribunal found that the Assessing Officer arbitrarily rejected the books of account without pointing out specific inaccuracies or incomplete entries. While acknowledging some deficiencies in documentation, the Tribunal considered the assessee's past GP rates and comparable cases.

The Tribunal held that a bank passbook is not considered a book of accounts, and therefore, additions under Section 68 of the Income Tax Act cannot be made based solely on bank deposits. The Tribunal also noted that it could not convert the addition from Section 68 to Section 69.