ITAT Ahmedabad Judgments — September 2022

The Tribunal held that interest income, when offered as business income, cannot be notionally excluded for computing book profit to determine the ceiling for partners' remuneration under Section 40(b). The CIT(A)'s order was upheld.

The Tribunal held that an assessment cannot be made on a deceased person for an assessment year in which they were not alive. Any additions on account of unexplained expenditure should have been made in the hands of the legal heir.

The Tribunal held that belated payments of Employees' PF and ESIC contributions beyond the due date prescribed under Section 36(1)(va) are not eligible for deduction under Section 43B, even if deposited before the tax return filing due date.

The Tribunal held that the CIT(A) was justified in upholding the addition on undisclosed turnover. However, it ruled that the disallowance under Section 40A(3) was not sustainable when profit was already estimated on the undisclosed turnover.

The Tribunal found that the assessee had demonstrated sufficient cash withdrawals prior to the deposits and the Revenue failed to prove any utilization of that withdrawn cash. Therefore, the addition was treated as explained.

The Tribunal condoned the delay in filing the appeals, citing reasonable cause due to the internal company dispute and the need for substantial justice. The matter was then to be decided on merits.

The Tribunal held that the assessee failed to provide acceptable grounds for condoning the significant delay. The explanation of blaming the previous counsel was not supported by an affidavit, and thus, the Tribunal was not satisfied with the explanation.

The Tribunal condoned the delay in filing the appeals, citing reasonable cause due to the internal company dispute and the need for substantial justice. The matter was then to be decided on merits.

The Tribunal noted that a subsequent rectification order under Section 154 allowed the full TDS credit as claimed by the assessee. Therefore, the appeal before the CIT(A) and the impugned order became infructuous.

The Tribunal upheld the CIT(A)'s order, following its own previous decisions for the same assessee. The disallowance under Section 14A read with Rule 8D(2)(iii) was sustained to the extent of Rs. 10,90,721/-.

The Tribunal held that the reopening of the assessment under Section 147 was not valid as the AO lacked sufficient information to form a belief of escapement of income. Furthermore, even on merits, the assessee's explanation for the cash deposits, being withdrawals from their own bank account, could not be rejected.

The Tribunal held that the assessee was not interested in pursuing the appeal due to persistent non-appearance and non-compliance. The Tribunal upheld the concurrent findings of the lower authorities regarding the contravention of Section 269T.

The Tribunal held that the explanation for the delay was not supported by adequate evidence like a doctor's certificate or affidavit. The assessee was also uncooperative in previous proceedings.

The Tribunal held that the assessee's explanation of the source of cash deposits as withdrawals from bank accounts or cash on hand could not be rejected merely because a different explanation was given during assessment. The Tribunal found the CIT(A)'s reasoning for upholding the addition to be without merit.

The Tribunal held that merely because a claim is not accepted by the Revenue does not automatically attract penalty under Section 271(1)(c). The assessee had provided documentary evidence and explanations, distinguishing the case from those where penalties were upheld.

The Tribunal condoned the delay in filing the appeals, citing reasonable cause due to the internal company dispute and the need for substantial justice. The matter was then to be decided on merits.

The Tribunal held that merely because a claim is not accepted by the Revenue does not automatically attract penalty under Section 271(1)(c). The assessee had provided documentary evidence and explanations, distinguishing the case from those where penalties were upheld.

The Tribunal held that merely because a claim is not accepted by the Revenue does not automatically attract penalty under Section 271(1)(c). The assessee had provided documentary evidence and explanations, distinguishing the case from those where penalties were upheld.

The Tribunal held that delayed deposit of employees' contribution to PF/ESI is not deductible in computing income. This decision followed the jurisdictional High Court's ruling in CIT vs. Gujarat State Road Transport Corporation.

The Tribunal set aside the CIT(A)'s order and remanded the matter back to the Assessing Officer. The AO was directed to verify the TDS credit claim afresh after giving the assessee an opportunity of being heard.

The Tribunal condoned the delay in filing the appeals, citing reasonable cause due to the internal company dispute and the need for substantial justice. The matter was then to be decided on merits.

The Tribunal found that the existence of separate bank accounts was not conclusively established by the Revenue. The assessees presented certificates from banks denying the existence of certain accounts alleged by the Revenue. The source of cash deposits was also not properly appreciated.

The Tribunal found that the existence of separate bank accounts was not conclusively established by the Revenue. The assessees presented certificates from banks denying the existence of certain accounts alleged by the Revenue. The source of cash deposits was also not properly appreciated.

The Tribunal allowed the withdrawal of the appeal as the assessee had opted for the VSV Scheme. The appeal was dismissed based on this withdrawal.

The Tribunal condoned the delay in filing the appeals, citing reasonable cause due to the internal company dispute and the need for substantial justice. The matter was then to be decided on merits.

The Tribunal held that the violation of conditions for claiming deduction under Section 54 occurred in AY 2011-12, and therefore, the deduction should have been denied in that year itself. The belated filing of the return for AY 2011-12 did not justify adding the deduction to the income of AY 2013-14. Furthermore, the deduction had already been denied in AY 2011-12 by treating long-term capital gain as short-term capital gain.

The Tribunal held that the assessee was an entry provider and had already offered commission income at 0.5% on the transaction. Therefore, the amount could not be taxed again as business income.

The Tribunal confirmed the concurrent findings of the AO and CIT(A) that the share transactions were sham and intended to generate bogus long-term capital gains. The assessee's appeal was dismissed due to lack of credible evidence and the suspicious nature of the transactions.

The ITAT held that the CIT(A) erred in dismissing the appeal ex-parte without adjudicating the grounds on merits. The CIT(A) is mandated to pass a speaking order stating the points for determination, decision, and reasons, even if the assessee does not appear.

The Tribunal held that the land was not agricultural land, making the distance from municipal limits irrelevant for capital asset definition. Consequently, the income was rightly treated as business income, and the disallowance under Section 40A(3) for cash payments was also upheld.

The Tribunal held that merely because a claim is not accepted by the Revenue does not automatically attract penalty under Section 271(1)(c). The assessee had provided documentary evidence and explanations, distinguishing the case from those where penalties were upheld.

The Tribunal noted that the assessee appeared to be uninterested in pursuing the appeal. Given the consistent non-representation and unserved notices, the Tribunal proceeded to dispose of the appeal ex-parte.

The Tribunal held that the disallowance was unsustainable as the assessee was indeed carrying on business during the assessment year, as evidenced by its financial statements. The basis for disallowance by the CIT(A) regarding liquidation was factually incorrect for the impugned year.

The Tribunal held that the Revenue's estimation of agricultural expenses was arbitrary and without basis. The Tribunal found that a generalized finding of fact from a previous judgment cannot be applied across all situations and types of agricultural income.

The Tribunal held that the AO and CIT(A) were not right in disallowing the speculation loss claimed by the assessee. The Tribunal found that the assessee's business itself was speculative in nature, and the loss claimed was in the course of business.

The Tribunal held that the Assessing Officer and CIT(A) erred in not allowing the full set-off of the business loss. The dividend income, including the exempt portion, was correctly accounted for under other heads, and the business loss should be set off accordingly.

The Tribunal held that the Assessing Officer was not right in making the addition solely based on the admission of a third party without allowing the assessee to cross-examine them. The assessee had provided documentary evidence for the payment.

The Tribunal held that the CIT(A) properly considered the terms of the FCCB issue and correctly applied the ratio of the Secure Meters Limited case. The FCCBs were considered debt instruments, and the expenses were allowable as revenue expenditure.

The Tribunal held that the Assessing Officer should have taken cognizance of the revised return. If the claim for set-off of carry forward losses in the revised return is genuine, it should be considered, and the assessee should be given an opportunity of hearing.

The Tribunal held that the CIT(A) erred in rejecting the Section 154 application. The Assessing Officer should have considered the assessee's rectification application regarding the mistake in reporting business income.

The Tribunal held that the income from the supply of maintenance spares by the appellant from outside India is not taxable in India. It found no merit in the AO/DRP's findings regarding PE and the taxability of spares.

The Tribunal held that income by way of interest earned from investment of surplus funds does not change its character, and the assessee is eligible for proportionate deduction under Section 80P for interest earned from both nationalized and co-operative banks.

The Tribunal noted that in previous years, the CIT(A) had directed the AO to verify the assessee's submissions and determine tax at the appropriate rate. In this case, the CIT(A) did not provide reasons for applying the maximum marginal rate. Therefore, the AO was directed to verify the submissions and adjudicate the matter as per law.

The Tribunal held that the appeal was not maintainable due to the low tax effect, as per the enhanced monetary limits prescribed by the CBDT Circular. The circular's retrospective application to pending appeals was also noted.

The Tribunal held that dismissing the appeal solely on a technical ground of not filing electronically, especially when the rule was recently introduced, amounts to denial of natural justice. The appeal should have been dealt with on merits.

The Tribunal held that the CIT(A) erred in treating trade payables as accommodation entries without proper evidence and in directing the AO to calculate commission income. The Tribunal also found that the CIT(A) was correct in dismissing the disallowance under Section 14A as there was no exempt income.

The Tribunal noted that the CIT(A) did not provide sufficient opportunity to the assessee to prove the details of the unsecured loans. Therefore, the issue was remanded back to the CIT(A) for fresh consideration with an opportunity of hearing.

The Tribunal held that the Assessing Officer had conducted a proper inquiry and made a finding based on the DVO's report. The PCIT's action under Section 263 was deemed to be a review or change of opinion, which is not permissible.

The Tribunal held that the transaction was bonafide, with the sale consideration substantially paid by cheque more than 14 months before the execution of the sale deed. The Tribunal referred to the Supreme Court's observations in K.P. Varghese, which stated that Section 52(2) (predecessor to Section 50C in spirit for certain aspects) was not applicable to honest and bona fide transactions where the consideration was correctly declared and there was no concealment. The Tribunal found that the sale price was fixed in the agreement based on the jantri rate prevailing at that time, and the subsequent increase in the jantri value at the time of sale deed execution should not be applied. Therefore, the matter was set aside to the AO to compute capital gains by applying the amended proviso to Section 50C. Regarding the cost of improvement and exemption under Section 54F, the AO was directed to consider the supporting evidences filed by the assessee. The appeals were allowed for statistical purposes.

The Tribunal held that the transaction was bonafide, with the sale consideration substantially paid by cheque more than 14 months before the execution of the sale deed. The Tribunal referred to the Supreme Court's observations in K.P. Varghese, which stated that Section 52(2) (predecessor to Section 50C in spirit for certain aspects) was not applicable to honest and bona fide transactions where the consideration was correctly declared and there was no concealment. The Tribunal found that the sale price was fixed in the agreement based on the jantri rate prevailing at that time, and the subsequent increase in the jantri value at the time of sale deed execution should not be applied. Therefore, the matter was set aside to the AO to compute capital gains by applying the amended proviso to Section 50C. Regarding the cost of improvement and exemption under Section 54F, the AO was directed to consider the supporting evidences filed by the assessee. The appeals were allowed for statistical purposes.