ITAT Agra Judgments — June 2018

The Tribunal held that the approval granted by the Additional Commissioner was mechanical and lacked application of mind, rendering it legally invalid. Consequently, the reassessment proceedings and the penalty imposed were quashed.

The Tribunal held that the approval granted by the Additional Commissioner was mechanical and lacked application of mind, rendering it legally invalid. Consequently, the reassessment proceedings and the penalty imposed were quashed.

The Tribunal held that the reassessment notice was invalid because the AO's reasons did not quantify the escaped income and did not state that it was likely to be Rs. 1 lakh or more, which is a requirement for notices issued beyond four years. The Tribunal followed the jurisdictional High Court's decisions in Mahesh Kumar Gupta and Amar Nath Agarwal.

The Tribunal held that the reopening of assessment was invalid as the reasons were based on scanty and vague information from the investigation wing without sufficient corroboration. The CIT(A) had correctly quashed the assessment proceedings.

The Tribunal held that amounts received before the commencement of business cannot be added as the assessee's income, following the Supreme Court decision in CIT vs. Bharat Engineering Construction Company. Therefore, the addition made by the AO was deleted.

The Tribunal noted that the addition of Rs. 12,97,291/- which formed the basis for the penalty had been deleted by a prior Tribunal order. Since the basis for the penalty no longer existed, the penalty was also deleted.

The Tribunal held that the reasons recorded by the AO were not valid reasons in the eyes of law as they did not show any application of mind to the information received. The Tribunal relied on previous judgments stating that mere deposits in a bank account do not automatically constitute income that has escaped assessment without proper inquiry.

The Tribunal held that the AO's failure to supply the material forming the basis of the reasons to believe, despite a request, violated the principles of natural justice. Consequently, the reassessment proceedings were deemed not in accordance with law and were cancelled.

The Tribunal confirmed the CIT(A)'s decision to allow the full deduction for rural advances, following a previous ITAT order. Similarly, the CIT(A)'s direction to allow the benefit of brought forward losses was also confirmed.

The Tribunal held that the AO's failure to supply the material forming the basis of the reasons to believe, despite a request, violated the principles of natural justice. Consequently, the reassessment proceedings were deemed not in accordance with law and were cancelled.