ITAT Ahmedabad Judgments — April 2022

The Tribunal held that the issue of Section 14A disallowance was distinguishable from earlier cases due to the absence of suo-moto disallowance by the assessee. However, following a coordinate bench's decision in the assessee's own case, the ESOP compensation expenses were allowed for statistical purposes.

The Tribunal confirmed the disallowance of employee's contribution to ESIC due to late payment. For interest-free loans, the Tribunal decided in favour of the assessee, holding that such transactions were not necessarily international transactions requiring transfer pricing adjustments. For corporate guarantees, the Tribunal allowed a partial adjustment, considering the actual cost incurred and a reasonable markup.

The Tribunal held that the lower authorities erred in rejecting the assessee's explanation. The subsequent rectification entry in the audited books of the following year, adjusting the amount against loans and advances, justified the assessee's claim.

The Tribunal held that the Assessing Officer had duly examined the issues of interest capitalization in Work-in-Progress and the Project Completion Method for revenue recognition. The assessee had provided satisfactory explanations and documentation, and the AO's assessment order was not erroneous.

The Tribunal confirmed the disallowance of employee's contribution to ESIC due to late payment. For interest-free loans, the Tribunal decided in favour of the assessee, holding that such transactions were not necessarily international transactions requiring transfer pricing adjustments. For corporate guarantees, the Tribunal allowed a partial adjustment, considering the actual cost incurred and a reasonable markup.

The Tribunal held that the assessee failed to provide evidence that the property belonged to a company or that the capital gains were wrongly offered in his hands. Therefore, the CIT's order under Section 263 was upheld.

The Tribunal found no reason to keep the appeal pending and accordingly dismissed it. The assessee was granted liberty to seek restoration if they failed to avail the VSV Scheme for bonafide reasons.

The Tribunal deleted the addition related to Prakash Gold, stating that the liability arose in an earlier assessment year (2014-15) and could not be added in the impugned year. The addition related to Aarti Jewellers was also deleted as the assessee demonstrated discharge of the liability in subsequent years through banking channels.

The Tribunal held that the difference between the share issue price and the FMV was negligible (approximately 1%) and could be attributed to estimation in valuation. Therefore, no addition under Section 56(2)(viib) was warranted. The Tribunal also upheld the disallowance of ROC expenses as capital in nature.

The Tribunal held that the basis for reopening the assessment under Section 147 did not survive as no addition was made on that specific ground. Therefore, the reassessment proceedings were invalid, and any additions made on other grounds during these invalid proceedings could not be sustained.

The Tribunal noted the assessee's submission to withdraw the appeal under the Vivad Se Vishwas Scheme. Consequently, the appeal was dismissed as withdrawn.

The Tribunal held that the AO should have cross-verified the donors' income before drawing an adverse inference. Since sufficient documentary evidence of the donors' agricultural income was provided, the addition was deleted.

The Tribunal held that the determination of ALP by the AO and CIT(A) without referring to the TPO was not in accordance with law, and thus restored the transfer pricing issue to the AO for proper reference. The disallowance of commission expenses was deleted, and the disallowance under Section 14A was upheld as no exempt income was earned.

The Tribunal held that the assessee failed to provide material evidence for the claimed cost of improvement. In the absence of such evidence, the Tribunal could not interfere with the CIT's order invoking Section 263.

The Tribunal held that the issue of Section 14A disallowance was distinguishable from earlier cases due to the absence of suo-moto disallowance by the assessee. However, following a coordinate bench's decision in the assessee's own case, the ESOP compensation expenses were allowed for statistical purposes.

The ITAT held that the CIT(A) did not judiciously approach the matter and should have considered the reasons for delay more thoroughly. The Tribunal emphasized that substantial justice should be preferred over technicalities, especially when the delay is not mala fide.

The Tribunal held that the assessee failed to establish the creditworthiness of the lenders and the genuineness of the cash loans, confirming the addition of Rs. 1,88,50,000/-. However, the Tribunal allowed the appeal regarding the balance amount of Rs. 12,16,240/-, finding the assessee demonstrated ability to invest from personal savings.

The Tribunal held that the PCIT erred in initiating revision proceedings. The Tribunal found that the entrance fees were consistently treated as capital receipts in prior years, and the principle of mutuality applied, making them non-taxable. The Delhi Stock Exchange case relied upon by the PCIT was distinguished.

The Tribunal noted that the quantum addition under Section 68 was remitted back to the CIT(A) for fresh adjudication. Therefore, the penalty matter should also be remitted to the CIT(A) for fresh decision based on the outcome of the quantum proceedings.

The Tribunal held that the AO had made detailed inquiries regarding the LTCG claim, and the assessee had provided satisfactory explanations and documents. Therefore, the assessment order was not erroneous or prejudicial to the revenue, and the PCIT's revisionary order was not justified.

The Tribunal held that the alleged understatement of closing Work-in-Progress (WIP) related to the construction business and its cost was reflected in the books, thus it could not be treated as unexplained investment. The matter was remanded for re-computation of WIP and its treatment as business income.

The Tribunal dismissed the appeal, acknowledging that the matter was squarely covered against the assessee by a jurisdictional High Court judgment. The assessee's representative conceded that the appeal was against them.

The Tribunal held that the alleged understatement of closing Work-in-Progress (WIP) related to the construction business and its cost was reflected in the books, thus it could not be treated as unexplained investment. The matter was remanded for re-computation of WIP and its treatment as business income.

The Tribunal accepted the assessee's request to withdraw the appeal. The Revenue did not object to this request.

The Tribunal found that the assessee had made a plea for the matter to be remanded back to the CIT(A) for consideration on merits. The Revenue had no serious objection to this.

The Tribunal held that the assessee had discharged its onus by providing sufficient evidence to prove the identity, creditworthiness of creditors, and genuineness of the unsecured loan transactions. Therefore, the addition made by the AO was deleted.

The Tribunal held that the assessee was not entitled to additional depreciation as per Section 32(1)(iia) of the Income Tax Act for the assessment year 2014-15, as the amendment extending this benefit to distribution-only companies was effective from April 1, 2017.

The Tribunal found that while the assessee failed to prove the genuineness of the entire agricultural income and the expenses incurred, treating the entire amount as unexplained income was not entirely correct. The Tribunal directed a disallowance of 25% of the expenses incurred for earning the agricultural income.

The Tribunal held that for F&O commodity transactions to be an exception to speculative transactions under Section 43(5)(e), payment of CTT is generally required. However, it remanded the issue of whether the transactions were in agricultural commodities for the AO to examine. For vehicle expenses, the Tribunal allowed fixed expenses like depreciation, interest, and insurance, but upheld the 10% disallowance on running expenses.

The Tribunal held that the AO exceeded his jurisdiction by adding closing cash in hand, as it was not part of the limited scrutiny notice. The AO should have obtained approval to convert to complete scrutiny.

The Tribunal found it appropriate to remit the issue back to the CIT(A) to provide the assessee with an opportunity to be heard and to present evidence.

The Tribunal held that the CIT(A) erred in deleting additions related to cash transactions, gold, and silver items. However, the Tribunal also noted that some issues were decided in favor of the assessee in separate appeals.

The Tribunal noted the assessee's non-cooperation with lower authorities and imposed a cost of Rs. 10,000. The appeal was allowed for statistical purposes, directing the Assessing Officer to consider additional evidence after payment of costs.

The Tribunal confirmed the addition of Rs. 12,14,500/- representing unexplained cash deposits in Kotak Mahindra Bank. The assessee failed to provide any details or evidence before the Assessing Officer, the CIT(A), or the Tribunal.

The Tribunal upheld the addition made by the lower authorities, noting the assessee's non-cooperation and failure to provide any evidence to substantiate the genuineness of the share transactions. The appeal was dismissed.

The Tribunal held that the assessee discharged its onus under Section 68 by providing identity, creditworthiness, and genuineness of unsecured loans. The Tribunal also found no infirmity in the CIT(A)'s order deleting the additions.

The Tribunal upheld the CIT(A)'s deletion of the addition. It found that the assessee had provided sufficient details establishing the identity and genuineness of the share transactions, and the Revenue had not brought forth material to disprove the creditworthiness of the applicants.

The Tribunal held that the penalty was levied on an addition of Rs. 6,14,178/-, not the entire assessed income. Since the assessee did not file a return voluntarily and only after notices, the penalty was confirmed.

The Tribunal held that the assessee had discharged its onus under Section 68 by providing identity, creditworthiness, and genuineness of the unsecured loans. The Tribunal also found no infirmity in the CIT(A)'s deletion of additions related to cash deposits.

The Tribunal held that if gift expenses are disallowed, the enhanced profit is eligible for deduction under Section 80P(2)(a)(i). For interest income on FDR/SB, only the net interest income after deducting interest expenses should be considered for disallowance under Section 80P(2)(a)(i).

The Tribunal held that the revenue failed to provide direct evidence that the account belonged solely to the assessee. Considering the surrounding evidence and the son's operation of the account in prior and subsequent years, no addition was warranted in the assessee's hands.

The Tribunal agreed that Section 36(1)(iii) cannot be invoked solely based on accounting errors if no interest-free advance was actually given. However, due to a lack of supporting evidence from the assessee, the case was remanded to the Assessing Officer to verify the nature of the transaction.

The Tribunal held that an intimation under section 143(1) is not an assessment, thus the proviso to section 12AA(2) is unavailable. Furthermore, since the trust was not eligible for exemption under section 11 and its beneficiaries were unknown, tax was correctly charged at the maximum marginal rate under section 164(1).

The Tribunal found that the documents submitted by the assessee were crucial and needed consideration by the lower authorities. Therefore, the issue was set aside to the AO for fresh adjudication after considering the evidence.

The Tribunal dismissed the assessee's appeal as withdrawn due to the assessee opting for the Vivad Se Vishwas scheme. The Revenue's Cross Objection was also dismissed as not maintainable due to low tax effect.

The Tribunal held that the notice under Section 143(2) was not mandatory in this case, and the disallowance of cash deposits under Section 69A was justified due to the lack of satisfactory explanation regarding their source. The appeal was dismissed.

The Tribunal held that the intimation issued under section 143(1) was invalid as it did not comply with the first proviso to section 143(1)(a), which requires an intimation to the assessee before making adjustments. The principle of 'audi alteram partem' was not followed.

The Tribunal held that the assessee had discharged its onus under Section 68 by providing identity, creditworthiness, and genuineness of unsecured loans through banking channels. The Revenue's appeal was dismissed.

The Tribunal held that the CIT(A) erred in deleting additions related to cash transactions, gold, and silver items. However, the Tribunal also noted that some issues were decided in favor of the assessee in separate appeals.

The Tribunal held that the assessee had discharged its onus under Section 68 by providing identity, creditworthiness, and genuineness of unsecured loans. The reopening under Section 147 was also challenged by the assessee.