ITAT Ahmedabad Judgments — September 2017

The Tribunal found that the assessee's interest-free reserves exceeded its investments, making the proportionate disallowance of interest unmeritorious. However, it directed a reasonable disallowance of Rs. 50,000 to meet the ends of justice.

The Tribunal found the assessee's explanation for the delay, citing lack of qualified personnel and unawareness of due dates as a small company, to be reasonable. The delay was considered clerical and not a willful attempt to evade tax.

The Tribunal dismissed the Revenue's appeal as not maintainable because the tax effect was below the threshold prescribed by CBDT Circular No. 21/2015. The assessee's cross-objection was dismissed as not pressed.

The Tribunal held that the claim for depreciation was a bona fide mistake rather than a deliberate attempt to conceal income. Following various judicial precedents, the penalty was deleted.

The Tribunal allowed the assessee's appeal. The Tribunal noted that the assessee had filed a revised computation of income, which included the interest income, before the framing of the regular assessment. Citing the Supreme Court decision in Price Waterhouse Coopers Pvt. Ltd. vs. CIT, the Tribunal held that penalty cannot be imposed when the assessee commits a 'silly mistake' and files a revised return before the regular assessment is framed. The Tribunal also observed that the Assessing Officer herself had made mistakes, which were rectified under Section 154, implying that the assessee should have received the benefit of such rectifications. The Tribunal found that the penalty was not sustainable in these circumstances. The issue regarding the disallowance of transfer fees and deduction under Section 24B, and the claim for improvement expenses, was also implicitly addressed by the allowance of the appeal, suggesting these were part of the overall circumstances leading to the penalty being set aside.

The Tribunal held that for imposing penalty, the department must prove conscious concealment or furnishing of inaccurate particulars. The Tribunal found that the assessee had provided details and explained the claim, and the department failed to prove otherwise.

The Tribunal held that the assessee is eligible for deduction under Section 80IB(10) as the conditions related to project development and construction were met. The fact that land was sold separately and construction agreements were entered into was considered incidental.