ITAT Ahmedabad Judgments — May 2018

The Tribunal noted that the assessee's appeal regarding the reopening of assessment was dismissed. However, for the main issue concerning the set-off of brought-forward losses against income eligible for Section 10A deduction, the Tribunal found the matter to be covered by the Hon'ble Supreme Court's decision in CIT vs. Yokogawa India Ltd.

The Tribunal restored the matter to the file of the CIT(A) for fresh adjudication on merits, considering the bonafides of the delay and identical facts to a previous case.

The Tribunal dismissed the Revenue's appeal, following the jurisdictional High Court's decision in the assessee's own case. The High Court held that taxing the same income again in the hands of the company after it was already taxed in the hands of the directors at the same rate would amount to double taxation.

The Tribunal held that the utilization of accumulated income in the year immediately following the expiry of the specified period is permissible under Section 11(3)(c) of the Act. Therefore, the addition of Rs. 45,00,000/- as deemed income was not justified.

The Tribunal upheld the addition of Rs. 1,00,000 as unexplained loan. The assessee failed to discharge the initial onus of proving the bonafides and creditworthiness of the lender before the AO and CIT(A), and no such evidence was presented before the Tribunal either.

The Tribunal held that the addition was made solely on the basis of the production manager's statement during the survey, without any corroborative evidence. The Tribunal also referred to CBDT instructions discouraging additions based on coerced statements without tangible material.

The Tribunal held that the disallowance under Section 14A read with Rule 8D cannot exceed the exempt income earned. The Tribunal followed its own previous decision in the assessee's own case for an earlier assessment year.

The Tribunal upheld the decision of the CIT(A) in not admitting additional evidence, as the assessee failed to provide valid reasons for not submitting them earlier. The additions and disallowances made by the AO were confirmed.

The Tribunal held that the supplementary partnership deed clearly stated that remuneration would be determined as per the amended provisions of Section 40(b) of the Act. Therefore, the assessee was entitled to determine the remuneration as per the amended provisions.

The Tribunal held that delayed deposit of employee PF/ESIC contributions after the due date specified in Section 36(1)(va) leads to disallowance, as per the jurisdictional High Court ruling. For TDS on professional services, disallowances were deleted if payments were below the threshold or if the recipient had paid tax. The issue of payment to R.M. Modi was remanded to the AO for verification.

The Tribunal held that the expenses incurred for company registration, MOA/AOA drafting, and increasing authorized share capital are in consonance with the provisions of Section 35D. Therefore, these expenses are allowable.

The Tribunal held that the commission payment was genuine and allowed the deduction as a business expenditure. It also upheld the CIT(A)'s decision regarding the apportionment of expenses for the power plant, finding no basis for the AO's adjustments.

The Tribunal held that the commission payment was genuine and allowed the deduction as a business expenditure. It also upheld the CIT(A)'s decision regarding the apportionment of expenses for the power plant, finding no basis for the AO's adjustments.

The Tribunal upheld the CIT(A)'s decision to delete the addition on advertisement expenditure, finding it to be revenue in nature and not of enduring benefit. The Tribunal also noted that the CIT(A) had allowed depreciation on the car, cessation of liability, and website development expenditure.

The Tribunal held that penalty on additions that were deleted by the ITAT or CIT(A) cannot be imposed. However, penalty was confirmed on certain additions where the assessee failed to provide a bona fide explanation or substantiate it.

The Tribunal upheld the CIT(A)'s decision, stating that the assessee's investments in cooperative societies were made from its own funds, not borrowed funds. Therefore, the deduction claimed under Section 80P(2)(d) was rightly allowed.

The Tribunal held that penalty on additions that were deleted by the ITAT or CIT(A) cannot be imposed. However, penalty was confirmed on certain additions where the assessee failed to provide a bona fide explanation or substantiate it.

The Tribunal held that expenses incurred for business promotion, scholarships to members' children, and payments to nominees are allowable as business expenditure if incurred for commercial expediency. The Tribunal also ruled that the assessee is entitled to amortization of premium paid on acquiring securities held till maturity.

The Tribunal held that the assessee fulfilled the criteria for deduction under Section 35AD as the expenditure was incurred prior to commencement of operations and capitalized. The delay in obtaining the star certificate was not the assessee's fault and no statutory time limit for obtaining it was prescribed.

The Tribunal allowed the appeal, deleting the disallowance under Section 14A. It also deleted the disallowance of foreign travel expenditure, following its previous orders.

The Tribunal held that expenses incurred for business promotion, scholarships to members' children, and payments to nominees are allowable as business expenditure if incurred for commercial expediency. The Tribunal also ruled that the assessee is entitled to amortization of premium paid on acquiring securities held till maturity.

The Tribunal held that since the revision order under Section 263 was quashed, the consequential assessment order passed in its effect becomes infructuous and unsustainable. Therefore, the appeal filed by the Revenue against the CIT(A)'s order was dismissed.

The Tribunal held that the CIT(A) was correct in deleting the addition, as the trade deposits were security for vehicles and not sale proceeds. The Tribunal followed its own previous orders in identical facts and circumstances for earlier assessment years.

The Tribunal held that the commission income earned by foreign agents was not taxable in India as the services were rendered outside India. Therefore, there was no obligation to deduct TDS under Section 195.

The Tribunal held that the deletion of the addition for closing stock valuation was correct as the assessee consistently followed an exclusive method and there was no impact on profit. However, the disallowance of the provision for warranty was restored to the AO for fresh adjudication as the provision created exceeded the permissible limit.

The Tribunal held that the reassessment proceedings were invalid, following a Gujarat High Court judgment that quashed similar proceedings for an identical assessment year. The High Court had ruled that the entire suppressed sale transaction could not be treated as income.

The Tribunal held that the capital gain was duly reflected in the individual return of Shri Rajesh P. Shah, the karta of the HUF, and that he had claimed exemption under Section 54B. Therefore, the addition in the hands of the HUF was incorrect.

The Tribunal upheld the orders of the Revenue authorities, stating that interest earned from bank deposits by a cooperative credit society is not deductible under Section 80P(2)(a)(i). However, it allowed for the deduction of expenses incurred in earning such income.

The Tribunal noted that the ITAT had already allowed the assessee's appeal, setting aside the CIT's order. Consequently, the reassessment order passed in consequence of the CIT's order was rendered invalid.

The Tribunal held that similar expenditure had been allowed as revenue expenditure in earlier assessment years up to 2005-06, and the department had not appealed against those decisions. Therefore, following its own earlier orders, the Tribunal allowed the appeal.

The Tribunal held that the CIT(A) was justified in deleting the addition made by the TPO on account of transfer pricing adjustments, as the TPO had not properly rejected the assessee's chosen method. The Tribunal also deleted penalties imposed on various additions, finding no suppression of income or furnishing of inaccurate particulars by the assessee.

The Tribunal held that the CIT(A) was justified in deleting the addition made by the TPO on account of transfer pricing adjustments, as the TPO had not properly rejected the assessee's chosen method. The Tribunal also deleted penalties imposed on various additions, finding no suppression of income or furnishing of inaccurate particulars by the assessee.

The Tribunal upheld the disallowance of interest income from bank deposits as not deductible under Section 80P(2)(a)(i), following the jurisdictional High Court's decision. However, it allowed for the deduction of expenses incurred in earning such income.

The tribunal held that interest earned by a cooperative credit society on surplus funds deposited with nationalized banks is not deductible under Section 80P(2)(a)(i). However, any expenditure incurred in earning such income should be allowed.

The Tribunal held that the CIT(A) was justified in deleting the addition made by the TPO on account of transfer pricing adjustments, as the TPO had not properly rejected the assessee's chosen method. The Tribunal also deleted penalties imposed on various additions, finding no suppression of income or furnishing of inaccurate particulars by the assessee.

The Tribunal held that the CIT(A) was justified in deleting the addition made by the TPO on account of transfer pricing adjustments, as the TPO had not properly rejected the assessee's chosen method. The Tribunal also deleted penalties imposed on various additions, finding no suppression of income or furnishing of inaccurate particulars by the assessee.

The Tribunal upheld the disallowance of interest income from bank deposits as a deduction under Section 80P(2)(a)(i). However, it directed the AO to allow any expenditure incurred by the assessee for earning such income, determining the net interest income for exclusion.

The Tribunal upheld the disallowance of interest income as a deduction under Section 80P, following the jurisdictional High Court's decision. However, it allowed for the deduction of expenses incurred in earning such income.

The Tribunal held that the appeal was not maintainable as the tax effect was below the limit prescribed by CBDT Circular No. 21/2015, and no exceptions applied.

The Tribunal held that the CIT(A) was justified in deleting the addition made by the TPO on account of transfer pricing adjustments, as the TPO had not properly rejected the assessee's chosen method. The Tribunal also deleted penalties imposed on various additions, finding no suppression of income or furnishing of inaccurate particulars by the assessee.

The Tribunal upheld the CIT(A)'s decision to estimate net profit at 5.5% of turnover. It found no infirmity in the CIT(A)'s reasoning, which was based on comparable cases and judicial pronouncements, and noted the AO's estimation lacked a clear basis.

The Tribunal held that the order under section 263 was not sustainable in law, as the CIT had not demonstrated any error or prejudice to the revenue. Therefore, the assessment order passed in pursuance of the section 263 order was annulled.

The Tribunal held that since the interest expenditure was not claimed by the assessee and was contingent, no TDS liability arose. Therefore, the demand for short TDS and interest was deleted.

The Tribunal held that the assessee had a reasonable cause for accepting and repaying loans in cash due to severe financial crisis and the need to revive the company. Therefore, the penalties imposed were deleted.

The Tribunal allowed the expenses claimed by the assessee for business promotion, gifts, scholarships, and payments to legal heirs, following a coordinate bench decision. It also dismissed the revenue's appeal regarding the disallowance of amortized premium on securities. The disallowance under Section 14A was restricted to administrative expenses.

The Tribunal, following a coordinate bench decision in the assessee's own case, set aside the CIT(A)'s order and remanded the matter back to the AO for fresh adjudication.

The ITAT remanded the issue of commission expenses back to the AO for cross-examination of witnesses. The tribunal allowed depreciation on leased machinery and consultancy charges. The claim for depreciation on inverters was dismissed.