ITAT Ahmedabad Judgments — September 2022

The Tribunal admitted the additional ground of appeal concerning the AO's jurisdiction, finding that the notice under section 143(2) was issued without proper jurisdiction. Consequently, the assessment order was quashed as void-ab-initio.

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.

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.

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 education expenses incurred by the assessee for his daughter were primarily for personal considerations and not for the dominant purpose of business. The Tribunal noted that the daughter was pursuing studies in continuation of her architectural education and the contract for her future employment lacked authenticity.

The Tribunal held that both the AO and CIT(A) erred by determining the fair market value themselves instead of referring the matter to the Departmental Valuation Officer (DVO). Given the age of the assessment year and the valuation date, the Tribunal decided not to remand the issue back to the AO for a DVO reference.

The Tribunal found that the assessee had sufficiently substantiated the source of the cash deposits as his share from the sale of land. The documentary evidence, including sale deeds and bank statements, demonstrated the flow of funds from the land sale to the assessee.

The Tribunal allowed the appeal on the issue of corporate guarantee charges, finding it covered by previous decisions in the assessee's own case. Similarly, the disallowance of depreciation on a car was deleted as the beneficial ownership was not disputed. The adjustment for disallowance under Section 14A for book profit computation was also allowed based on prior rulings.

The Tribunal held that the penalty under Section 271(1)(b) was not applicable as the assessee had not defaulted in complying with statutory notices. The Tribunal noted that the notices were likely not received physically by the assessee, and therefore, the penalty was deleted.

The Tribunal held that while the purchases were found to be bogus, disallowing the entire amount was not justified. It directed that the addition be restricted to 25% of the bogus purchases, aligning with a previous decision in the assessee's own case for a succeeding year.

The Tribunal found that the assessee's reasons for not attending the CIT(A) hearings were satisfactorily established due to COVID-19 complications. Therefore, in the interest of justice, the Tribunal decided to grant one more opportunity to the assessee.

The Tribunal held that the assessee had provided sufficient evidence, including sales invoices and confirmations, to substantiate that the receipts were for genuine sales. Therefore, the addition made by the AO and partly confirmed by the CIT(A) was directed to be deleted.

The Tribunal held that the reassessment proceedings were valid despite the notice being issued to a deceased person, as the department was not informed of the death. It was also held that no notice under section 143(2) was required as no return was filed by the assessee. The additions made on merits were confirmed due to lack of submissions.

The Tribunal held that income derived from credit provided to members is eligible for deduction under Section 80P(2)(a)(i). However, interest income from investments in banks or saving accounts is not eligible for this deduction, though corresponding direct expenses can be set off.

The Tribunal held that payments for clinical trials to US and Canadian entities did not satisfy the 'make available' clause of the respective tax treaties, thus not constituting FTS. However, payments to Cliantha Research Mexico were considered technical services liable for TDS.

The Tribunal found that the assessee was prevented from furnishing documents to the Assessing Officer due to ill health and relocation. Therefore, the case was set aside to the Assessing Officer for one more opportunity, subject to a cost of Rs. 10,000.

The Tribunal held that the income from agricultural land, supported by affidavits and consistent past treatment, should be treated as agricultural income. The Tribunal also decided the issue of capital gains versus business income in favor of the assessee.

The Tribunal held that the CIT(Appeals) was correct in allowing the deduction of dividend received from a subsidiary (ZAHL) on which DDT was paid, as per Section 115-O(1A) of the Income Tax Act. The AO's rejection of the refund claim was found to be incorrect.

The Tribunal held that the assessment order was passed beyond the time limit stipulated under Section 153 of the Income Tax Act, considering the receipt of the ITAT order. Therefore, the order was deemed void ab initio.

The Tribunal upheld the disallowance of Rs. 2,08,17,445/- on account of unverifiable direct expenses. It noted the assessee's failure to provide supporting documents despite opportunities and found the new Profit & Loss account unreliable.

The Tribunal found that the assessee was prevented from furnishing documents to the Assessing Officer due to ill health and relocation. Therefore, the case was set aside to the Assessing Officer for one more opportunity, subject to a cost of Rs. 10,000.

The Tribunal held that payments for clinical trials to US and Canadian entities did not satisfy the 'make available' clause of the respective tax treaties, thus not constituting FTS. However, payments to Cliantha Research Mexico were considered technical services liable for TDS.

The Tribunal upheld the CIT(A)'s decision to restrict the addition of estimated profit, agreeing that the cost of construction should be calculated on a weighted basis. The Tribunal also dismissed the assessee's cross-objection seeking NIL income.

The Tribunal held that the CIT(A) should have investigated the reasons for the reduction in loss, even if the appeal was ex parte. The CIT(A) failed to adjudicate the issue properly by not ascertaining the facts.

The Tribunal held that the addition made by the revenue was unjustified as the assessee had provided other supporting evidence like land holding documents, a certificate from the village sarpanch, and evidence of crop loans taken and repaid in preceding years. These other evidences were ignored by the lower authorities.

The Tribunal found no infirmity in the CIT(A)'s order. The assessee failed to provide proper explanations for the huge loss and there were anomalies in the stock valuation. Therefore, the rejection of books of accounts and estimation of net profit were upheld.

The Tribunal held that the disallowance of the Employees' Contribution to ESI was justified as it was deposited beyond the due date. This decision followed a previous ITAT ruling for the same assessee and the jurisdictional High Court's decision.

The Tribunal agreed with the CIT(A) that additions made after the search date without concrete evidence were presumptuous. They held that unaccounted cash should be restricted to scheduled cash payments as per the sale deed up to the date of the search.

The Tribunal held that the land was non-agricultural at the time of sale, making capital gains taxable. However, the cost of acquisition for capital gains calculation and the agricultural income claim were remanded for fresh adjudication.

The Tribunal held that the AO correctly initiated penalty proceedings under Section 271(1)(c) for concealment of income, as non-filing of the return of income by a company with substantial income demonstrates willful concealment. The Tribunal also noted that a separate penalty under Section 271F was levied for non-filing of the return.

The Tribunal held that the late payment of Employees Provident Fund/ESI contributions were disallowable. This decision was supported by a jurisdictional High Court ruling.

The Tribunal allowed the withdrawal of the appeal. The assessee can seek restoration if they fail to avail the VSV scheme for bonafide reasons.

The Tribunal held that expenses incurred for Riddhi Siddhi Trade Link were for the purpose of business, even during a lull, and thus allowable. For De-Param Healthcare, the Tribunal found sufficient evidence for sales returns and high expenditure, deleting the disallowance.

The Tribunal noted the lack of corroborative evidence for the sales promotion expenses and the increase in such expenses despite a reduction in turnover. However, it found it fit to give the assessee a further opportunity to present its case with supporting evidence.

The Tribunal held that a mere debit entry in a ledger does not constitute income or investment without corroborative evidence. The bank account of the assessee's son was opened much later, and no transactions were found, making the addition unsustainable.

The Tribunal held that a mere debit entry in a ledger does not constitute income or investment without corroborative evidence. The bank account of the assessee's son was opened much later, and no transactions were found, making the addition unsustainable.

The Tribunal held that the AO failed to properly intimate the interest component under Section 245 of the Act. Since the assessee bona fide offered the interest income in AY 2011-12, the addition for AY 2008-09 was deleted.

The Tribunal held that the Revenue failed to prove that the transactions were not genuine or that the loss was artificial. The Tribunal noted that the assessee maintained audited books, supported transactions with bills, and similar claims were allowed in other assessment years.

The Tribunal held that the services rendered by Lambda Canada did not 'make available' technical knowledge or expertise to the assessee, which is a condition under Article 12 of the India-Canada DTAA for treating the payment as fees for technical services. Therefore, the payment was to be treated as business income not taxable in India in the absence of a Permanent Establishment.

The Tribunal agreed with the CIT(A) that additions made after the search date without concrete evidence were presumptuous. They held that unaccounted cash should be restricted to scheduled cash payments as per the sale deed up to the date of the search.

The Tribunal held that the assessee had disclosed all particulars of R&D expenses and its claim of non-allocation was not unfounded, as the nexus between R&D expenses and the eligible units was not clearly established. Therefore, the penalty was not sustainable.

The Tribunal held that the Revenue failed to provide substantial basis for treating the machinery as scrap. The assessee sufficiently demonstrated that the plant and machinery had value and were not scrap, supported by evidence like a valuation report and job work income.

The Tribunal found it fit to give the assessee a further opportunity to represent his case before the authorities below with supporting evidence. The issue was set aside to the file of the AO to dispose of the same afresh after affording an opportunity of being heard.

The Tribunal found no merit in the assessee's contention that the AO had examined the issue. They agreed with the CIT that the assessment order was erroneous due to the AO's failure to conduct proper inquiry into the dispensary expenses. The CIT's direction to the AO to make a fresh assessment was upheld.

The Tribunal held that an appeal against a penalty order passed by the Director of Income Tax (I&CI) under section 271FA is not maintainable. The relevant provisions of the Act do not provide for such an appeal.

The Tribunal held that a mere debit entry in a ledger does not constitute income or investment without corroborative evidence. The bank account of the assessee's son was opened much later, and no transactions were found, making the addition unsustainable.

The Tribunal restored the issue to the AO to re-examine the disallowance under Section 14A. The AO is directed to consider only those investments that earned exempt income when applying Rule 8D.

The Tribunal admitted additional evidence from the assessee and set aside the CIT(A)'s order. The matter was remitted back to the CIT(A) for a fresh disposal after verifying the new evidence.