ITAT Ahmedabad Judgments — March 2020

The Tribunal held that if a component of income does not qualify for deduction under Section 80P(2), it should be computed on a net basis, allowing relatable expenditure before exclusion. Therefore, the Revenue's appeal lacked merit.

The Tribunal upheld the disallowance made under Section 14A. The assessee failed to substantiate that the investments yielding exempt income were made from interest-free funds, especially given the negative capital balance.

The Tribunal held that the assessee had sufficient interest-free funds, and the AO's disallowance was based on an opinion. Therefore, the penalty sustained by the CIT(A) was not in accordance with the law.

The Tribunal held that the assessee failed to provide sufficient evidence to substantiate the genuineness and creditworthiness of the lenders for the unsecured loans. Regarding bad debts, the Tribunal found that the assessee did not comply with the conditions under Section 36(2) as the debts were not previously offered to tax. For a small receipt from a company, the Tribunal confirmed the addition but directed the AO to verify if the income was offered in a subsequent year to avoid double taxation.

The Tribunal held that the assessee needs to provide identity, genuineness, and creditworthiness of share applicants. The AO's reliance solely on meager income shown in tax returns to doubt creditworthiness was questioned, and the matter was remanded for fresh consideration.

The Tribunal held that the appeal fell within the purview of the CBDT circular due to the low tax effect. Therefore, the appeal was dismissed at the threshold.

The Tribunal upheld the CIT(A)'s deletion of additions. For TDS, it relied on the retrospective effect of amended provisions and payee confirmations. For excise duty, it noted the consistent accounting method and revenue-neutrality of adjustments to closing stock.