ITAT Ahmedabad Judgments — May 2022

The Tribunal held that the appeal filed by the Revenue was not maintainable as the tax effect was below the prescribed limit of Rs. 50 lakhs as per CBDT Circular No. 17 of 2019. The Tribunal dismissed the appeal on this ground.

The Tribunal held that the expenditure incurred on consultancy and travelling/promotional activities was not for the direct or indirect benefit of any specified persons. Therefore, the disallowance made by the AO was incorrect.

The Tribunal held that the assessee's conduct, including the frequent purchase and sale of most shares within the same year, indicated an intention to trade rather than invest. Therefore, the loss was to be treated as business loss.

The Tribunal held that since the additions/disallowances on which the penalty was levied were deleted in the quantum proceedings by the ITAT, there was no basis for levying the penalty.

The Tribunal held that the AO exceeded the scope of limited scrutiny by treating the capital gain as business income without proper approval. Therefore, the AO's action was not justified, and the assessee's claim for deduction should be allowed.

The Tribunal held that no disallowance under Section 14A can be made if no exempt income was actually earned or claimed by the assessee. Consequently, the deletion of the disallowance by the CIT(A) was upheld.

The Tribunal upheld the CIT(A)'s order cancelling the penalty. The penalty was based on additions that were later deleted or substantially reduced by the ITAT in quantum proceedings, negating the basis for penalty.

The Tribunal held that the penalty cannot be levied solely on the basis of additions made during assessment proceedings without independent verification. The assessee's explanation, though not fully accepted for additions, did not necessarily constitute furnishing inaccurate particulars of income.

The Tribunal held that the issue of delayed payment of employees' contribution beyond the due date under the PF Act has been decided against the assessee by the jurisdictional High Court. Therefore, the appeal of the assessee is dismissed.

The Tribunal held that no disallowance under Section 14A can be made if no exempt income was actually earned or claimed by the assessee. Consequently, the deletion of the disallowance by the CIT(A) was upheld.

The Tribunal held that the issue is covered against the assessee by the Gujarat High Court's decision. However, the assessee was granted liberty to revive the appeal if the Supreme Court reverses the High Court's ruling.

The Tribunal held that the penalty for the undisclosed cash loan of Rs. 15 lakhs was rightly confirmed as the assessee deliberately concealed this information during assessment. The Tribunal also rejected the plea of limitation regarding the penalty.

The Tribunal held that the CIT(A) had not approached the matter judiciously by dismissing the appeal solely on the ground of delay without assigning specific reasons for not condoning it. The Tribunal noted that there was no allegation of mala fide conduct by the assessee and that the CIT(A) had not demonstrated how the assessee would gain by filing the appeal late. The Tribunal considered the delay of 67 days to be minor and found the assessee's explanation plausible. Citing cases like Kashmir Road Lines v. DCIT, the Tribunal emphasized that even if an assessee is not interested in pursuing an appeal, the CIT(A) should dispose of it on merits. Therefore, the delay of 67 days in filing the appeal before the CIT(A) was condoned. The matter was restored to the first appellate authority to decide the appeal on its merits after providing the assessee with an opportunity of hearing. The Tribunal did not decide the merits of the addition made by the Assessing Officer.

The Tribunal held that since the assessment order was void, the penalty levied on the additions made therein cannot sustain. The appeals filed by the Revenue were therefore dismissed.

The Tribunal accepted the assessee's request to withdraw the appeal. Consequently, the appeal filed by the assessee was dismissed as withdrawn.

The Tribunal upheld the CIT(A)'s order, noting that the issues were identical to those in the preceding assessment year where the ITAT had ruled in favor of the assessee. Therefore, both additions were deleted.

The Tribunal held that the interest expense was genuine and directly connected to the interest income earned on deposits with a company, as the borrowing was necessitated by the inability to recover those deposits. Therefore, the interest expense was eligible for deduction against the interest income.

The Tribunal held that the Assessing Officer had made sufficient inquiries and accepted the assessee's claim for Section 54 deduction. Therefore, the revision order under Section 263 was not sustainable and was quashed. The consequential appeal was dismissed as infructuous.

The tribunal condoned the delay in filing the cross-objection. It also held that the reopening of assessment under Section 147 was unsustainable as it was based on a change of opinion without new material. The tribunal confirmed the CIT(A)'s restricted disallowance under Section 40A(3).

The Tribunal held that the AO was precluded from making additions on grounds other than those forming the basis of the original reassessment notice, as no addition was made on the initial ground. The additions made on different grounds were therefore liable to be set aside.

The Tribunal held that the issue of delayed payment of EPF & ESIC contribution beyond the due date under the respective Acts is decided against the assessee by the jurisdictional High Court. Therefore, the disallowance is confirmed.

The Tribunal held that the assessee voluntarily revised the computation of income before any detection by the revenue, and the AO made the addition based on the revised return. Therefore, it cannot be held that the assessee concealed income or furnished inaccurate particulars.

The Tribunal held that the expenditure incurred on consultancy and travelling/promotional activities was not for the direct or indirect benefit of any specified persons. Therefore, the disallowance made by the AO was incorrect.

The Tribunal noted that the assessee intended to withdraw the appeal to avail the 'Vivad se Vishwas' scheme. The appeal was dismissed as withdrawn under the scheme.

The Tribunal held that no disallowance under Section 14A can be made if no exempt income was actually earned or claimed by the assessee. Consequently, the deletion of the disallowance by the CIT(A) was upheld.

The Tribunal held that since the assessment order was void, the penalty levied on the additions made therein cannot sustain. The appeals filed by the Revenue were therefore dismissed.

The Tribunal held that while the assessee may have incorrectly classified the loss as business loss instead of capital loss, there was no deliberate attempt to conceal income or furnish inaccurate particulars. Therefore, the penalty was not sustainable.

The Tribunal held that an assessment order cannot be deemed erroneous merely because the PCIT has a different opinion on the extent of inquiry. The AO had made inquiries and applied their mind, and the PCIT cannot substitute their judgment for the AO's unless there is a lack of inquiry or the order is not in accordance with law.

The Tribunal upheld the CIT(A)'s decision to accept additional evidence, finding that the assessee had a reasonable cause for non-compliance during the assessment proceedings. The Tribunal also agreed with the CIT(A)'s deletion of additions related to reclassification of accounts.

The Tribunal held that the assessee had bonafide reasons for non-compliance as notices were sent to incorrect addresses and not received. Therefore, the penalty was not leviable.

The Tribunal held that the penalty cannot be levied solely on the basis of additions made during assessment proceedings without independent verification. The assessee's explanation, though not fully accepted for additions, did not necessarily constitute furnishing inaccurate particulars of income.

The tribunal condoned the delay in filing the cross-objection. It also held that the reopening of assessment under Section 147 was unsustainable as it was based on a change of opinion without new material. The tribunal confirmed the CIT(A)'s restricted disallowance under Section 40A(3).

The Tribunal held that the penalty cannot be levied solely on the basis of additions made during assessment proceedings without independent verification. The assessee's explanation, though not fully accepted for additions, did not necessarily constitute furnishing inaccurate particulars of income.

The Tribunal held that the CIT(A) was justified in deleting the addition as the assessee's explanation regarding the nature of the transaction and the subsequent sale was accepted. The AO's view that the land was introduced as stock-in-trade was not substantiated.

The Tribunal held that the penalty cannot be levied solely on the basis of additions made during assessment proceedings without independent verification. The assessee's explanation, though not fully accepted for additions, did not necessarily constitute furnishing inaccurate particulars of income.

The Tribunal held that no disallowance under Section 14A can be made if no exempt income was actually earned or claimed by the assessee. Consequently, the deletion of the disallowance by the CIT(A) was upheld.

The Tribunal held that the expenditure incurred on consultancy and travelling/promotional activities was not for the direct or indirect benefit of any specified persons. Therefore, the disallowance made by the AO was incorrect.

The Tribunal held that depreciation is not allowable if the entire block of plant and machinery was not put to use for business purposes during the year, even if some assets were part of the opening block.

The Tribunal acknowledged that a validly filed revised return substitutes the original return. However, it noted that the genuineness of the assessee's claim in the revised return was not examined by the Revenue.

The Tribunal agreed that a validly filed revised return substitutes the original. However, it noted that the genuineness of the assessee's claim in the revised return was not examined by the Revenue.

The Tribunal held that Section 271AAB is applicable only when undisclosed income is found or seized during the search itself, or admitted during the search. Since the cash credits were unearthed during assessment proceedings and not during the search, the penalty under Section 271AAB was not sustainable.

The Tribunal held that no deduction or allowance is permissible against unexplained cash credit treated as income. Therefore, the Principal CIT was correct in setting aside the assessment order as erroneous and prejudicial to the revenue.

The Tribunal held that Section 234E is a charging provision and can be levied even without a specific machinery provision in Section 200A for computation. Therefore, the late filing fee and interest were rightly demanded.

The Tribunal found that the assessee was not given an opportunity of hearing by the CIT(A). Therefore, in the interest of justice, the case was restored to the CIT(A) for fresh adjudication.

The Tribunal held that the amount paid by the purchaser directly to the bank to clear the mortgage was not an allowable deduction from sale consideration as it represented an application of income, not a diversion by overriding title. The estimation of net profit at 2.5% was deemed reasonable due to the non-production of books of account.

The Tribunal held that since the PCIT's order under section 263 was quashed by the ITAT, the subsequent proceedings and the Revenue's appeal arising from it were not maintainable and thus infructuous. Therefore, the appeals were dismissed.

The Tribunal held that the Assessing Officer did not properly verify the parties or provide sufficient opportunity for the assessee to produce evidence. Therefore, the issue of disallowance was remitted back to the Assessing Officer for proper adjudication.

The Tribunal considered the assessee's submission and application for withdrawal under the "Vivad se Vishwas" Scheme. The appeal was dismissed as withdrawn.

The Tribunal held that the gross amount of sales cannot be treated as income, and only the profit on unrecorded sales is taxable. The addition was restricted to 10% of the gross unrecorded sales.