ITAT Ahmedabad Judgments — November 2019

The Tribunal held that since the ITAT had already allowed the assessee's appeal in the quantum proceedings, there was nothing left to confirm the penalty. The assessee's activities were considered charitable in nature, falling under the advancement of general public utility.

The Tribunal noted that an identical issue for a previous assessment year was set aside to the Assessing Officer for re-adjudication. Therefore, the Tribunal remitted the current issue to the Assessing Officer for fresh decision.

The Tribunal held that the appeal was not maintainable as the tax effect was below the threshold stipulated in CBDT Circular No. 17/2019. The circular was applicable retrospectively to pending appeals.

The Tribunal presumed the assessee was not serious in pursuing the appeal due to non-representation. Consequently, the appeal was dismissed in limine.

The tribunal held that the commission payments were not prohibited by law and were akin to advertising expenses, especially since the relevant CBDT circular was not applicable to the assessment year in question. Therefore, the disallowance of expenses was not justified.

The Tribunal held that the assessee had sufficient interest-free funds (capital and reserves) to cover the advances made. Therefore, it was presumed that the advances were made out of these interest-free funds, and the disallowance of interest was not justified.

The Tribunal held that the appeals were not maintainable as the tax effect was below the threshold stipulated in CBDT Circular No. 17/2019, which was applicable retrospectively. The appeals did not fall under any exceptions mentioned in the circular.

The Tribunal held that the appeal filed by the Revenue was not maintainable as the tax effect was below the enhanced monetary limit for filing appeals as per a subsequent CBDT circular. The Revenue was granted liberty to move an application for recalling the order if their case fell under exceptions.

The Tribunal held that the payment could not be treated as deemed dividend as the lender company was not a shareholder of the assessee and the assessee had not taken any loan. Relying on previous judgments, the addition was deleted.

The Tribunal held that foreign travel expenses were not substantiated for business purposes and upheld their disallowance. However, it ruled that unsold real estate units treated as stock-in-trade are not taxable as income from house property. The forfeiture of advance payment for a property deal entered into in the normal course of business was considered a business loss.

The Tribunal dismissed the Revenue's appeal due to low tax effect. For the assessee's appeal, the Tribunal held that since the addition itself was wrongly made in the assessee's hands (as the bank account belonged to an HUF), the penalty under Section 271(1)(c) was not sustainable.

The Tribunal dismissed the Revenue's appeal due to low tax effect. For the assessee's appeal, the Tribunal held that since the addition itself was wrongly made in the assessee's hands (as the bank account belonged to an HUF), the penalty under Section 271(1)(c) was not sustainable.

The Tribunal held that the assessee failed to demonstrate that shares and securities were held as investments, and thus the short-term capital gains were rightly treated as business income. The Tribunal also upheld the disallowance of expenses related to earning exempt income.

The Tribunal held that the reassessment proceedings were initiated beyond the prescribed limitation period of four years from the end of the assessment year. It was also found that the assessee had disclosed all material facts during the original assessment, and there was no failure on its part leading to escapement of income.

The Tribunal held that foreign travel expenses were not substantiated for business purposes and upheld their disallowance. However, it ruled that unsold real estate units treated as stock-in-trade are not taxable as income from house property. The forfeiture of advance payment for a property deal entered into in the normal course of business was considered a business loss.

The Tribunal dismissed the revenue's appeal, upholding the CIT(A)'s deletion of additions for raw tobacco loss, undervaluation of closing stock, and damaged goods. The Tribunal also dismissed the assessee's cross-objection on all grounds.

The Tribunal decided to remit the matter back to the file of the Ld. CIT(A) for fresh adjudication. This was done in light of a previous order by the ITAT in the assessee's own case which had also set aside the matter for fresh adjudication.

The tribunal accepted the assessee's prayer for withdrawal of the appeal. Consequently, the appeal was dismissed as withdrawn.

The Tribunal accepted the assessee's prayer for withdrawal of the appeal. The appeal was dismissed as withdrawn by the Tribunal.

The tribunal upheld the CIT(A)'s decision to admit additional evidence due to the bank attachment. It also allowed depreciation and deleted additions for unsecured loans and expenses, finding sufficient evidence provided. However, it disallowed the deduction for employee's PF contribution not paid by the due date.

The Tribunal, noting the absence of the assessee and the lack of an adjournment request, concluded that the assessee was not interested in pursuing the appeal. Consequently, the appeal was dismissed in limine.

The Tribunal held that the CIT(A) erred in confirming the disallowance without properly appreciating the facts and considering the assessee's submissions. Crucially, the Tribunal noted that the assessee was denied the opportunity to cross-examine a witness whose statement was relied upon by the AO.

The Tribunal allowed the appeal regarding the Rs. 5,00,000/- addition, finding that the assessee subsequently provided sufficient evidence of repayment and the depositor's details. The disallowance for late PF contribution was confirmed, and the interest on TDS was not pressed by the assessee.

The Tribunal noted the assessee's absence and lack of interest in prosecuting the appeal. Following precedent, the appeal was dismissed in limine.

The Tribunal set aside the matter to the AO for fresh adjudication. The AO is directed to consider all details filed before the CIT(A) or to be filed by the assessee and decide the matter afresh.

The Tribunal held that Section 10(5) of the Income Tax Act, along with Rule 2B, does not provide exemption for foreign travel as part of LTC. Therefore, the assessee was in default for not deducting tax at source on such reimbursements.

The Tribunal held that the disallowance was justified as the employees' contribution was not deposited within the due date specified in the Explanation to Section 36(1)(va), even if deposited before filing the return.

The Tribunal found merit in the assessee's contentions regarding the violation of natural justice and the procedural irregularities in reopening the assessment. The appeals were set aside and restored to the Assessing Officer for de novo assessment.

The Tribunal held that if tax is deducted and paid in a wrong section with a bonafide belief, Section 40(a)(ia) cannot be applied. Following the Calcutta High Court's decision in CIT vs. S.K. Tekriwal, the disallowance was deleted.

The Tribunal dismissed the appeal in limine due to the assessee's non-appearance and lack of interest in prosecuting the appeal. The assessee can approach the Tribunal to recall the order if there was a sufficient cause for non-appearance.

The tribunal accepted the assessee's prayer for withdrawal of the appeal. The appeal was dismissed as withdrawn by the tribunal.

The Tribunal found that the AO failed to provide reasons for reopening and did not allow cross-examination of the donee, violating principles of natural justice. Therefore, the case was restored to the AO for de novo assessment.

The tribunal accepted the assessee's prayer for withdrawal of the appeal. The appeal was dismissed as withdrawn by the tribunal.

The Tribunal accepted the assessee's prayer for withdrawal of the appeal. The appeal was dismissed as withdrawn.

The Tribunal held that while the proviso to Section 50C, which considers the date of agreement for sale for stamp duty valuation, is applicable retrospectively as per Dharamshibhai Sonani Vs. ACIT, the present case involves a change in the nature of the asset. The land was converted from agricultural to non-agricultural, creating a different product. Therefore, the date of conversion to non-agriculture land, April 8, 2011, should be considered the effective date for the agreement to sell the capital asset. The Tribunal noted that stamp duty rates were revised effective April 1, 2011. On this date, the rate for land converted to non-agriculture was Rs. 250 per sq. meter. Applying this rate to the area sold (24,888 sq. meters) resulted in a value of approximately Rs. 62.22 lakhs, which is less than the Rs. 1.10 crore declared by the assessees. The Tribunal also observed that the higher stamp duty paid by the vendees (Rs. 6,47,14,285) was a mutual agreement and did not obligate the assessees financially, nor did it mean the stamp duty valuation authority had adopted this value. Therefore, no addition was warranted. The appeals were allowed, and additions were deleted.

The Tribunal held that while the proviso to Section 50C, which considers the date of agreement for sale for stamp duty valuation, is applicable retrospectively as per Dharamshibhai Sonani Vs. ACIT, the present case involves a change in the nature of the asset. The land was converted from agricultural to non-agricultural, creating a different product. Therefore, the date of conversion to non-agriculture land, April 8, 2011, should be considered the effective date for the agreement to sell the capital asset. The Tribunal noted that stamp duty rates were revised effective April 1, 2011. On this date, the rate for land converted to non-agriculture was Rs. 250 per sq. meter. Applying this rate to the area sold (24,888 sq. meters) resulted in a value of approximately Rs. 62.22 lakhs, which is less than the Rs. 1.10 crore declared by the assessees. The Tribunal also observed that the higher stamp duty paid by the vendees (Rs. 6,47,14,285) was a mutual agreement and did not obligate the assessees financially, nor did it mean the stamp duty valuation authority had adopted this value. Therefore, no addition was warranted. The appeals were allowed, and additions were deleted.

The Tribunal held that while the proviso to Section 50C, which considers the date of agreement for sale for stamp duty valuation, is applicable retrospectively as per Dharamshibhai Sonani Vs. ACIT, the present case involves a change in the nature of the asset. The land was converted from agricultural to non-agricultural, creating a different product. Therefore, the date of conversion to non-agriculture land, April 8, 2011, should be considered the effective date for the agreement to sell the capital asset. The Tribunal noted that stamp duty rates were revised effective April 1, 2011. On this date, the rate for land converted to non-agriculture was Rs. 250 per sq. meter. Applying this rate to the area sold (24,888 sq. meters) resulted in a value of approximately Rs. 62.22 lakhs, which is less than the Rs. 1.10 crore declared by the assessees. The Tribunal also observed that the higher stamp duty paid by the vendees (Rs. 6,47,14,285) was a mutual agreement and did not obligate the assessees financially, nor did it mean the stamp duty valuation authority had adopted this value. Therefore, no addition was warranted. The appeals were allowed, and additions were deleted.

The Tribunal held that while the proviso to Section 50C, which considers the date of agreement for sale for stamp duty valuation, is applicable retrospectively as per Dharamshibhai Sonani Vs. ACIT, the present case involves a change in the nature of the asset. The land was converted from agricultural to non-agricultural, creating a different product. Therefore, the date of conversion to non-agriculture land, April 8, 2011, should be considered the effective date for the agreement to sell the capital asset. The Tribunal noted that stamp duty rates were revised effective April 1, 2011. On this date, the rate for land converted to non-agriculture was Rs. 250 per sq. meter. Applying this rate to the area sold (24,888 sq. meters) resulted in a value of approximately Rs. 62.22 lakhs, which is less than the Rs. 1.10 crore declared by the assessees. The Tribunal also observed that the higher stamp duty paid by the vendees (Rs. 6,47,14,285) was a mutual agreement and did not obligate the assessees financially, nor did it mean the stamp duty valuation authority had adopted this value. Therefore, no addition was warranted. The appeals were allowed, and additions were deleted.

The Tribunal held that the Revenue's appeal was hit by the CBDT Circular No. 17 of 2019, which revised the monetary thresholds for tax effect in pending appeals. The appeal was therefore dismissed as not maintainable.

The Tribunal held that Section 14A disallowance is not maintainable if no exempt income is earned. It also held that disallowance under Section 14A cannot be added to book profit computed under Section 115JB.

The Tribunal observed that the AO had not verified the assessee's claim that the interest income was mistakenly reported due to a single PAN being used for two companies. Therefore, the case was restored to the AO for fresh assessment after verifying the claim.

The Tribunal upheld the CIT(A)'s decision to delete the addition. It was established that the shares were purchased through Parsoli Corporation Ltd., not Radharaman Holdings Pvt Ltd, and the misrepresentation in the books was due to a relationship between directors and apprehension of SEBI action.

The Tribunal held that while Section 69 uses the word 'may', this discretion must be exercised judiciously. The assessee failed to satisfactorily explain the source of the cash deposit, and the land holdings were insufficient to support the claimed agricultural income.

The Tribunal held that the assessee is eligible for deduction under Section 80IB(11A) on the enhanced income due to the addition of certain expenses. This decision was based on a previous ruling by a co-ordinate bench on identical facts and a CBDT circular.

The Tribunal held that Section 14A disallowance cannot exceed the exempt income earned. It also upheld the CIT(A)'s view that professional and legal fees were revenue expenditure. The assessee's cross-objection was dismissed, with one ground not pressed and the other dismissed based on High Court precedent.

The Tribunal held that the appeal filed by the Revenue was not maintainable due to the low tax effect, as per the revised monetary limits set by CBDT Circular No. 17 of 2019. The circular applies to pending appeals.

The Tribunal upheld the AO's action in rejecting the assessee's method of stock valuation. However, it directed the AO to apply the same FIFO method for valuing the opening stock of the year, as per the jurisdictional High Court's ruling.

The Tribunal, following a coordinate bench decision on identical facts and relying on jurisdictional High Court pronouncements, held that the assessee's activities were not in the nature of trade, commerce, or business. Therefore, the proviso to Section 2(15) was not applicable.

The Tribunal held that the activities of the assessee authority are for the advancement of general public utility and do not fall under the proviso to Section 2(15). Therefore, the assessee is entitled to exemption under Section 11.