ITAT Ahmedabad Judgments — September 2018

The Tribunal found that while sales were genuine, purchases might be bogus. However, it reduced the addition to 2.5% of the purchases from the disputed suppliers, considering the assessee's low profit margins and the nature of its trading business.

The Tribunal held that the appeal was not maintainable as the tax effect was below the threshold prescribed by the CBDT circular for filing departmental appeals. The circular's exemptions did not apply to this case.

The Tribunal held that the amount received by the assessee was for business expediency to safeguard the company's interest, including mortgaging ancestral property for funding. Therefore, it could not be treated as deemed dividend under Section 2(22)(e).

The Tribunal noted that the assessee was a sick unit under BIFR and had difficulty collecting documents. In the interest of justice, the Tribunal set aside the CIT(A)'s order and remanded the case back for a fresh decision.

The Tribunal held that transaction charges, annual subscription charges, and NSE non-settlement charges paid to the Stock Exchange were not subject to TDS under Section 194J or 194C. Therefore, the disallowance under Section 40(a)(ia) for these expenses was deleted. However, the disallowance of professional charges was upheld as the assessee did not press that ground.

The Tribunal held that the assessee had substantiated the manner in which the undisclosed income was derived, fulfilling the conditions for immunity under Section 271AAA(2). Therefore, the penalty levied was deleted.

The Tribunal inferred that the assessee was not serious about pursuing the appeal. Citing precedents, the Tribunal dismissed the appeal for non-prosecution.

The Tribunal upheld the disallowance of the compensation paid for the cancellation of the sale agreement. It was found that the entire arrangement was a sham transaction designed to reduce the assessee's tax liability on the capital gains.

The Tribunal dismissed the Revenue's appeal, following a co-ordinate bench's decision. The Tribunal held that Section 14A is not applicable for adjustments towards capital expenditure and its scope is restricted to computing chargeable income.

The Tribunal found merit in the Revenue's plea regarding the contradictory findings of the CIT(A) on business loss set off. Both issues were remitted back to the Assessing Officer for de novo consideration after giving the assessee a reasonable opportunity.

The Tribunal found that the CIT(A)'s deletion of the Section 14A disallowance was in line with jurisdictional High Court rulings. However, for the Section 80-IB(10) issue, the Tribunal felt further examination was needed and remitted the issue back to the AO.

The Tribunal held that spreading awareness about environmental preservation is intrinsically linked to the act of preservation itself. It found the distinction made by the lower authorities between awareness activities and direct preservation activities to be fallacious. The Tribunal also considered the assessee's status as a Section 25 company, which is inherently non-profit.

The Tribunal held that Section 54F is a beneficial provision and should be interpreted liberally. The completion of construction within three years is not a strict requirement if the capital gains have been appropriated for construction.

The Tribunal held that the CIT(A) correctly treated the income from share transactions as capital gains, aligning with previous decisions. Similarly, the Tribunal upheld the CIT(A)'s decision regarding the non-applicability of Section 2(22)(e) based on prior rulings.

The Tribunal dismissed the appeal in limine due to the assessee's non-appearance and lack of interest in prosecuting the appeal. The assessee retains the liberty to seek recall of the order if prevented by sufficient cause.

The Tribunal dismissed the Revenue's appeal, finding it not maintainable due to the low tax effect, which was below the threshold prescribed by the CBDT circular. The case did not fall under any of the stated exemptions.

The Tribunal held that the Assessing Officer's reference to the DVO under Section 55A was legally flawed as per the law prevailing at that time. The AO could only refer when the assessee's claimed value was less than the fair market value, which was not the case here.

The Tribunal held that the amounts were received through banking channels and the explanation regarding the source of funds in the creditor's accounts was sufficient. Therefore, the credits could not be treated as unexplained cash credits.

The Tribunal upheld the CIT(A)'s deletion of the addition for unrealized sales, following previous decisions of the ITAT and the High Court on identical facts. The Tribunal also restricted the disallowance under Section 14A to the extent of exempt income earned by the assessee.

The Tribunal upheld the deletion of the addition for unrealized sales, following previous High Court and ITAT decisions on identical facts. The Tribunal also restricted the disallowance under Section 14A to the extent of exempt income earned by the assessee.

The Tribunal held that the transactions were speculative in nature as they were settled otherwise than by actual delivery of goods and did not fall under any exceptions provided in Section 43(5) of the Income Tax Act. Consequently, the claimed loss was not allowable as a business loss.

The Tribunal noted that the sale deed was executed after a prolonged period and not strictly as per the original agreement. However, considering the assessee's plea regarding the stamp valuation potentially exceeding the fair market value, the issue was restored to the AO to refer the case to the Valuation Officer.

The Tribunal found that the lower authorities did not properly examine the affidavits filed by the assessee and the person claiming ownership of the cash. Therefore, the case was remanded to the AO for fresh inquiry and examination of evidence.

The Tribunal upheld the deletion of the addition for unrealized sales, following previous High Court and ITAT decisions on identical facts. The Tribunal also restricted the disallowance under Section 14A to the extent of exempt income earned by the assessee.

The Tribunal held that the CIT(A) was correct in deleting the addition for unrealized sales, as the assessee consistently followed the same accounting method and previous ITAT and High Court decisions supported this treatment. The disallowance under Section 14A was restricted to the extent of exempt income earned.

The Tribunal dismissed the appeal as not maintainable, applying the CBDT Circular No. 3 of 2018 which mandates dismissal of appeals with a tax effect below Rs. 20 lacs.

The Tribunal held that the appeal was not maintainable as the tax effect was below the threshold prescribed by CBDT Circular No. 3 of 2018. The case did not fall under any of the exceptions mentioned in the circular.

The Tribunal partly allowed the assessee's appeals, holding that certain expenses disallowed under Section 14A were correctly restricted by the CIT(A) and that prior period adjustments should not be added to book profits under Section 115JB. The revenue's appeals were dismissed on most grounds.

The Tribunal found that the appeal of the Revenue was not maintainable due to the low tax effect, which was below the threshold prescribed by the CBDT circular. The case did not fall under any of the exemption clauses.

The Tribunal held that the reasons for reopening the assessment were different from the grounds on which the reassessment order was framed. This vitiated the reassessment proceedings in law.

The Tribunal held that the reassessment proceedings were vitiated in law because the grounds for reopening the assessment were different from the grounds on which the reassessment order was passed. The Tribunal quashed the reassessment proceedings.

The Tribunal held that the assessee failed to discharge the burden of proving a bonafide omission. The explanation of ignorance of law or reliance on an accountant was not accepted, and the concealment of income was considered apparent.

The Tribunal held that disallowance under Section 40A(3) cannot be made if the genuineness of the transaction and the identity of the payee are not doubted. Following a precedent, the Tribunal reversed the lower authorities' order.

For AY 2010-11, the Tribunal allowed the appeal for statistical purposes, remitting the matter to the CIT(A) for fresh adjudication after providing a reasonable opportunity of hearing. For AY 2012-13, the Tribunal dismissed the appeal, following the jurisdictional High Court's decision on delayed deposit of employee contributions.

The Tribunal held that interest paid to partners of a firm cannot be considered for disallowance under Section 14A read with Rule 8D due to the inherent mutuality between the firm and its partners. The disallowance should exclude such interest.

The Tribunal held that the reference to the DVO under Section 55A was not permissible when the assessee's claimed value, based on a registered valuer's report, was higher than what the AO intended to achieve. The Tribunal also noted that similar treatment was given to a co-owner, accepting the lower capital gain.

The Tribunal noted that the tax effect in the appeal was less than Rs. 20 lacs. Following CBDT Circular No. 3 of 2018, which mandates dismissal of appeals below a certain tax effect, the Tribunal dismissed the appeal.

The Tribunal held that interest paid to partners of a firm cannot be considered for disallowance under Section 14A read with Rule 8D due to the inherent mutuality between the firm and its partners. The disallowance should exclude such interest.

The Tribunal partly allowed the assessee's appeals, holding that certain expenses disallowed under Section 14A were correctly restricted by the CIT(A) and that prior period adjustments should not be added to book profits under Section 115JB. The revenue's appeals were dismissed on most grounds.

The Tribunal partly allowed the assessee's appeals, holding that certain expenses disallowed under Section 14A were correctly restricted by the CIT(A) and that prior period adjustments should not be added to book profits under Section 115JB. The revenue's appeals were dismissed on most grounds.

The Tribunal partly allowed the assessee's appeals, holding that certain expenses disallowed under Section 14A were correctly restricted by the CIT(A) and that prior period adjustments should not be added to book profits under Section 115JB. The revenue's appeals were dismissed on most grounds.

The Tribunal partly allowed the assessee's appeals, holding that certain expenses disallowed under Section 14A were correctly restricted by the CIT(A) and that prior period adjustments should not be added to book profits under Section 115JB. The revenue's appeals were dismissed on most grounds.

The Tribunal partly allowed the assessee's appeals, holding that certain expenses disallowed under Section 14A were correctly restricted by the CIT(A) and that prior period adjustments should not be added to book profits under Section 115JB. The revenue's appeals were dismissed on most grounds.

For AY 2010-11, the Tribunal allowed the appeal for statistical purposes, remitting the matter to the CIT(A) for fresh adjudication after providing a reasonable opportunity of hearing. For AY 2012-13, the Tribunal dismissed the appeal, following the jurisdictional High Court's decision on delayed deposit of employee contributions.

The Tribunal held that the disallowance under Section 41(1) was incorrect because the liability was shown as subsisting in the balance sheet and was subsequently paid in later years, indicating no cessation of liability.

The Tribunal found that the tax effect in the appeal was below the threshold prescribed by the CBDT circular for filing departmental appeals. As the case did not fall under any exemption clauses, the appeal was deemed not maintainable.

The Tribunal held that while the purchases could not be fully substantiated, a complete disallowance was not justified. Therefore, a part of the purchase amount was sustained as an addition to account for potential inflation in purchase costs.

The Tribunal upheld the CIT(A)'s decision, stating it is inappropriate to disallow the entire purchases when the assessee is a contractor and the expenses were added to work-in-progress. The Tribunal agreed that only the profit margin embedded in such purchases should be taxed.

The Tribunal held that the denial of indexation on the cost of acquisition for long-term capital gains was unjustified and directed its deletion. It further held that the compensation received for relinquishing the 'right to sue' is a non-taxable capital receipt, not business income.

The Tribunal held that derivative transactions in equity and commodity segments, when carried out through recognized exchanges, are not speculative and are eligible for set off against other income under Section 43(5)(d) of the Act.