ITAT Ahmedabad Judgments — February 2018

The Tribunal held that the Assessing Officer's order allowing additional depreciation was not erroneous as it was supported by a binding judicial precedent. The revisionary action regarding expenses was also found unjustified as the CIT's reasoning was casual and not based on any error in the original assessment.

The Tribunal held that disallowance under Section 14A is limited to the extent of actual exempt income earned. Therefore, the disallowance was restricted to the actual exempt dividend income.

The Tribunal held that the assessee failed to prove the genuineness of gifts received from relatives and borrowings from friends and relatives. The donors and lenders, mostly laborers or farmers, did not maintain bank accounts or provide documentary evidence for their creditworthiness or the source of funds.

The Tribunal upheld the CIT's order, stating that allowing a higher depreciation rate than legally permissible is erroneous and prejudicial to the interest of revenue, even if the assessee paid tax under MAT provisions. The incorrect depreciation calculation could affect future assessment years.

The Tribunal held that temporary deposits of surplus funds at a lower interest rate do not constitute a diversion of interest-bearing funds. Following a co-ordinate bench's decision, the Tribunal allowed the assessee's plea.

The Tribunal dismissed the appeal, upholding the disallowance of employees' PF contribution due to late payment, cash payment for miscellaneous expenses without justification of exceptional circumstances, and commission payment without adequate explanation.

The Tribunal held that income from operation and maintenance of an SEZ is eligible for deduction under Section 80IAB. This was based on previous decisions of coordinate benches and the interpretation of the SEZ Act and Income Tax Act provisions.

The Tribunal followed its own previous decision in the assessee's own case, which held that no penalty was leviable when the assessee had furnished particulars of income and it was not a case of furnishing inaccurate particulars. Therefore, the penalties were deleted.

The Tribunal held that depreciation is allowable in the case of a charitable trust, following the Gujarat High Court's decision in CIT Vs. Sheth Manilal Ranchhoddas Vishram Bhavan Trust. The reliance on the Escorts Ltd. judgment by the AO was distinguished.

The Tribunal presumed that the assessee was not serious in pursuing the appeal due to non-appearance. Therefore, the appeal was dismissed in limine.

The Tribunal dismissed the ground related to M/s. Shree Gurudev Enterprise as the assessee failed to provide corroborative evidence. For the cash deposits, the Tribunal remanded the matter concerning Rs. 10,71,000/- to the AO for re-examination.