ITAT Ahmedabad Judgments — July 2024

The Tribunal held that the systematic recovery of salaries and their subsequent misrepresentation as corpus donations constituted a violation of Sections 13(1)(c) and 13(1)(d) of the Income Tax Act. This fraudulent activity disqualified the trust from exemptions under Sections 11 and 12.

The Tribunal held that the systematic recovery of salaries and their subsequent misrepresentation as corpus donations constituted a violation of Sections 13(1)(c) and 13(1)(d) of the Income Tax Act. This fraudulent activity disqualified the trust from exemptions under Sections 11 and 12.

The Tribunal held that the assessee, being an intermediary who advanced the received amounts as loans to other entities, should not be treated as having undisclosed income. The addition made by the AO was deleted.

The Tribunal held that the CIT(A) erred in dismissing the appeal ex-parte without adjudicating the issues on merits, violating the principles of natural justice and Section 250(6). The appellate order was non-speaking and non-reasoned.

The Tribunal held that the notice under Section 153C was valid, dismissing the assessee's contention regarding its validity. However, on the merits of the additions for M/s. A.B. Engineering, the Tribunal found that the additions of Rs. 1.15 Crores and Rs. 39 Lakhs were not based on searched material but on statements that were not verified or tested by confronting the assessee. The Tribunal noted that the purchase of assets was recorded in the books and payments were made through banking channels, which was not disputed. The assessee demonstrated no evidence to justify the disclosure of on-money receipt, and the AO made additions purely on conjectures. Therefore, these additions did not sustain. For Shri Bhavesh Praful Mistry, the Tribunal found that the survey evidence (loose papers) was not substantiated by the Revenue. The assessee filed an affidavit retracting the statement and clarifying the loose papers. The agreement to sell was not materialized, and the assessee's contentions regarding the GIDC premium rate were overlooked. Consequently, the addition did not sustain. The appeals concerning interest under Sections 234A, 234B, and 234C for Shri Bhavesh Praful Mistry were not decided as the primary addition was deleted.

The Tribunal held that the notice under Section 153C was valid, dismissing the assessee's contention regarding its validity. However, on the merits of the additions for M/s. A.B. Engineering, the Tribunal found that the additions of Rs. 1.15 Crores and Rs. 39 Lakhs were not based on searched material but on statements that were not verified or tested by confronting the assessee. The Tribunal noted that the purchase of assets was recorded in the books and payments were made through banking channels, which was not disputed. The assessee demonstrated no evidence to justify the disclosure of on-money receipt, and the AO made additions purely on conjectures. Therefore, these additions did not sustain. For Shri Bhavesh Praful Mistry, the Tribunal found that the survey evidence (loose papers) was not substantiated by the Revenue. The assessee filed an affidavit retracting the statement and clarifying the loose papers. The agreement to sell was not materialized, and the assessee's contentions regarding the GIDC premium rate were overlooked. Consequently, the addition did not sustain. The appeals concerning interest under Sections 234A, 234B, and 234C for Shri Bhavesh Praful Mistry were not decided as the primary addition was deleted.

The Tribunal held that the notice under Section 153C was valid, dismissing the assessee's contention regarding its validity. However, on the merits of the additions for M/s. A.B. Engineering, the Tribunal found that the additions of Rs. 1.15 Crores and Rs. 39 Lakhs were not based on searched material but on statements that were not verified or tested by confronting the assessee. The Tribunal noted that the purchase of assets was recorded in the books and payments were made through banking channels, which was not disputed. The assessee demonstrated no evidence to justify the disclosure of on-money receipt, and the AO made additions purely on conjectures. Therefore, these additions did not sustain. For Shri Bhavesh Praful Mistry, the Tribunal found that the survey evidence (loose papers) was not substantiated by the Revenue. The assessee filed an affidavit retracting the statement and clarifying the loose papers. The agreement to sell was not materialized, and the assessee's contentions regarding the GIDC premium rate were overlooked. Consequently, the addition did not sustain. The appeals concerning interest under Sections 234A, 234B, and 234C for Shri Bhavesh Praful Mistry were not decided as the primary addition was deleted.

The Tribunal upheld the CIT(A)'s decision, stating that the AO failed to provide specific discrepancies and that the demand for pay-in-slips was impractical. The cash deposits were found to be consistent with the society's operational pattern.

The Tribunal held that the 'right of possession' can be considered a capital asset. However, the assessee failed to provide crucial documents like the family settlement agreement and a clear basis for the cost of acquisition.

The Tribunal held that the CIT(A) committed a clear violation of Section 250(6) of the Income-tax Act, 1961. The CIT(A) is obligated to pass an appellate order by stating the points for determination, the decision, and the reasoning thereof. In this case, the CIT(A) dismissed the appeal ex-parte for non-prosecution without adjudicating the issues on merits, despite the assessee raising substantial grounds, including the nature of the asset and the indexed cost of acquisition. The Tribunal noted that the CIT(A) did not rebut the assessee's claims but simply upheld the AO's additions. The Tribunal acknowledged that the assessee also failed to comply with the notices issued by the CIT(A) and did not provide requisite documents. However, in the interest of justice and fairness, and to ensure compliance with the principles of natural justice and Section 250(6), the Tribunal set aside the appellate order of the CIT(A). The matter was restored to the file of the CIT(A) for fresh adjudication on merits, with directions to give opportunities to both parties and pass a speaking and reasoned order. The Tribunal clarified that it had not commented on the merits of the issues. The appeal was allowed for statistical purposes.

The Tribunal admitted additional evidence filed by the assessee and remanded the matter back to the AO for verification of the genuineness of the transactions with M/s. Subh Trading Co. The AO is to verify the identity of the party and the transactions.

The Tribunal upheld the order of the CIT(A) and dismissed the Revenue's appeal. The primary issue was whether the AO was justified in making additions based on the presumption of 'on-money' receipt without concrete evidence. The Tribunal agreed with the CIT(A)'s observation that the AO's presumption was not supported by evidence and that the AO failed to bring on record material to substantiate the receipt of 'on-money' for all units. The Tribunal noted the CIT(A)'s finding that even if a document indicated on-money for one unit, any extrapolation should be confined to the year surveyed, citing decisions of the jurisdictional High Court and ITAT that extrapolation for earlier years without evidence is unsustainable. The Tribunal also referred to the principle that only the profit element in 'on-money' receipt can be taxed, not the entire receipt. Since the addition based on extrapolation was not sustainable, no gross profit related to it could be considered. Therefore, the deletion of the addition of Rs. 2,43,39,000/- by the CIT(A) was upheld.

The Tribunal held that the expenses were incurred wholly and exclusively for the purpose of the assessee's business to secure a contract. It found that the consortium did not constitute a separate AOP for taxation purposes, and therefore, the disallowance was not justified.

The Tribunal held that the CIT(A) passed the order without considering the assessee's submissions and in violation of natural justice. Therefore, the order of the CIT(A) was set aside.

The Tribunal upheld the deletion of Rs. 1,74,09,917/- by the CIT(A), finding that the assessee provided sufficient justification and documentation for these cash deposits, which were part of regular business transactions. The AO's additions were deemed based on presumptions without cogent evidence.

The Income Tax Appellate Tribunal (ITAT) dismissed the appeal because the assessee had passed away and the legal heir was not brought on record, making it impossible to adjudicate the appeal on a deceased person. The Tribunal noted that this was the 39th hearing without the legal heir being impleaded.

The Tribunal condoned the delay in filing the appeal and, noting that the quantum addition was set aside, also set aside the penalty order. The penalty appeal was restored to the CIT(A) for fresh adjudication.

The Tribunal noted that the grievance of the assessee had been resolved with the grant of registration. Therefore, the appeal had become infructuous.

The Tribunal held that the CIT(A) erred in dismissing the appeal ex-parte without a reasoned order, violating Section 250(6) and principles of natural justice. The matter was restored to the CIT(A) for fresh adjudication.

The Tribunal condoned the delay in filing the appeal and, noting that the quantum addition was set aside, also set aside the penalty order. The penalty appeal was restored to the CIT(A) for fresh adjudication.

The ITAT held that the CIT(A)'s order was cryptic and non-speaking, failing to comply with Section 250(6) of the Act. The Tribunal set aside the CIT(A)'s order and remanded the matter for fresh adjudication on merits.

The Tribunal dismissed the Revenue's appeal and the assessee's cross-objection. Regarding the Revenue's appeal, the Tribunal found that the CIT(A) had considered the additional evidence and restricted the addition. The Tribunal did not elaborate on the specific reasoning for upholding the CIT(A)'s decision on the quantum of addition for unexplained investment, but the overall dismissal implies agreement with the CIT(A)'s findings or a lack of sufficient grounds to interfere. Concerning the assessee's cross-objection, Ground No. 1 was not pressed. On Ground No. 2, the Tribunal did not provide specific reasoning for dismissing the challenge to the commission income addition, but the overall dismissal suggests it was not upheld. Crucially, on the additional ground regarding the Section 143(2) notice, the Tribunal held that a notice under Section 143(2) is not a mandatory jurisdictional requirement for assessments under Section 153A. The Tribunal reasoned that Section 153A itself confers jurisdiction upon the AO following a search, and unlike regular assessments, it mandates assessment for the prescribed years. The issuance of a notice under Section 142(1) along with a questionnaire satisfied the principles of natural justice, making the absence of a Section 143(2) notice irrelevant. Therefore, the additional ground was dismissed.

The Tribunal held that the assessee was not granted a proper opportunity of being heard by both the AO and the CIT(A), and that there was a breach of principles of natural justice. The matter was remanded back to the AO for de-novo assessment.

The Tribunal acknowledged the assessee's callous attitude but considered the voluminous evidence filed and the precedent of a similar case being restored. It decided to restore the appeals to the AO for reconsideration, imposing a cost on the assessee.

The Tribunal held that while the assessee had not filed a valid return of income, the CIT(A) incorrectly interpreted the law regarding advance tax liability. The matter was remanded to the CIT(A) for reconsideration.

The Tribunal held that the assessee was eligible for the full deduction of Rs. 1.5 crores under Section 54EC, as the investments were made before the amendment that introduced stricter limits. The Tribunal also condoned the delay in the assessee's appeal.

The Tribunal restored the issue to the AO to verify if the expense apportionment method used in the current year matches the method accepted in AY 2014-15. If consistent, no addition will be made.

The Tribunal held that the AO had conducted proper inquiries and applied his mind, making a plausible conclusion. The PCIT's order was based on a change of opinion rather than a demonstrable error or prejudice to revenue, and therefore, the revisional jurisdiction was not justified.

The Tribunal acknowledged the assessee's callous attitude but considered the voluminous evidence filed and the precedent of a similar case being restored. It decided to restore the appeals to the AO for reconsideration, imposing a cost on the assessee.

The Tribunal held that the Vishubaug Farm property was indeed a residential house and not exclusively for agricultural use. It also found that the assessee's claim of joint ownership was a way to circumvent the restriction of owning more than one residential house, especially since the entire investment was made by the assessee.

The Tribunal held that the assessee was eligible for the full deduction of Rs. 1.5 crores under Section 54EC, as the investments were made before the amendment that introduced stricter limits. The Tribunal also condoned the delay in the assessee's appeal.

The Tribunal dismissed the assessee's appeal, holding that depreciation is not admissible on the cost of land, even if it is embedded in the cost of a building. The Tribunal found the issue squarely covered by the Supreme Court's decision in CIT vs. Alps Theatre.

The Tribunal held that the creditworthiness of one loan creditor (Shri Sanjay Guru) was established, reversing the CIT(A)'s decision and directing deletion of the addition for Rs. 7 lakhs. However, the additions for other loan creditors were confirmed.

The Tribunal held that the reopening of assessment beyond four years was invalid because the Assessing Officer failed to demonstrate any failure on the part of the assessee to disclose fully and truly all material facts. The Tribunal quashed the reopening.

The Tribunal held that the assessee had discharged its onus by providing sufficient documentary evidence to establish the identity, creditworthiness, and genuineness of the unsecured loan. The Assessing Officer had failed to disprove these materials and relied solely on a third-party statement without providing the assessee an opportunity for cross-examination.

The Tribunal held that the appeals were not maintainable due to the assessee's lack of seriousness in pursuing them. The defects and absence indicated a lack of intent to prosecute the appeals.

The Tribunal held that the appeals were not maintainable due to the assessee's lack of seriousness in pursuing them. The defects and absence indicated a lack of intent to prosecute the appeals.

The Tribunal held that the overriding effect of the Insolvency and Bankruptcy Code, 2016 (IBC, 2016) prevails over other statutory acts. Since the Resolution Plan was accepted by the Revenue after its approval by the NCLT on June 20, 2022, and the Department had represented its stand before the NCLT on February 22, 2022, it is clear that the IBC, 2016, will prevail. The Tribunal found the CIT(A)'s decision to be just and proper as per the law of the land. Both the Revenue and the assessee are bound by the Resolution Plan accepted by the NCLT after hearing all parties, including the Income Tax Department. Therefore, the Revenue cannot contest the statutory liabilities before the Income Tax Appellate Tribunal at this juncture. Consequently, all appeals filed by the Revenue were dismissed. The cross-objections filed by the assessee were also dismissed as they did not survive in light of the findings.

The Tribunal held that the overriding effect of the Insolvency and Bankruptcy Code, 2016 (IBC, 2016) prevails over other statutory acts. Since the Resolution Plan was accepted by the Revenue after its approval by the NCLT on June 20, 2022, and the Department had represented its stand before the NCLT on February 22, 2022, it is clear that the IBC, 2016, will prevail. The Tribunal found the CIT(A)'s decision to be just and proper as per the law of the land. Both the Revenue and the assessee are bound by the Resolution Plan accepted by the NCLT after hearing all parties, including the Income Tax Department. Therefore, the Revenue cannot contest the statutory liabilities before the Income Tax Appellate Tribunal at this juncture. Consequently, all appeals filed by the Revenue were dismissed. The cross-objections filed by the assessee were also dismissed as they did not survive in light of the findings.

The Tribunal held that the overriding effect of the Insolvency and Bankruptcy Code, 2016 (IBC, 2016) prevails over other statutory acts. Since the Resolution Plan was accepted by the Revenue after its approval by the NCLT on June 20, 2022, and the Department had represented its stand before the NCLT on February 22, 2022, it is clear that the IBC, 2016, will prevail. The Tribunal found the CIT(A)'s decision to be just and proper as per the law of the land. Both the Revenue and the assessee are bound by the Resolution Plan accepted by the NCLT after hearing all parties, including the Income Tax Department. Therefore, the Revenue cannot contest the statutory liabilities before the Income Tax Appellate Tribunal at this juncture. Consequently, all appeals filed by the Revenue were dismissed. The cross-objections filed by the assessee were also dismissed as they did not survive in light of the findings.

The Tribunal held that the overriding effect of the Insolvency and Bankruptcy Code, 2016 (IBC, 2016) prevails over other statutory acts. Since the Resolution Plan was accepted by the Revenue after its approval by the NCLT on June 20, 2022, and the Department had represented its stand before the NCLT on February 22, 2022, it is clear that the IBC, 2016, will prevail. The Tribunal found the CIT(A)'s decision to be just and proper as per the law of the land. Both the Revenue and the assessee are bound by the Resolution Plan accepted by the NCLT after hearing all parties, including the Income Tax Department. Therefore, the Revenue cannot contest the statutory liabilities before the Income Tax Appellate Tribunal at this juncture. Consequently, all appeals filed by the Revenue were dismissed. The cross-objections filed by the assessee were also dismissed as they did not survive in light of the findings.

The Tribunal held that the overriding effect of the Insolvency and Bankruptcy Code, 2016 (IBC, 2016) prevails over other statutory acts. Since the Resolution Plan was accepted by the Revenue after its approval by the NCLT on June 20, 2022, and the Department had represented its stand before the NCLT on February 22, 2022, it is clear that the IBC, 2016, will prevail. The Tribunal found the CIT(A)'s decision to be just and proper as per the law of the land. Both the Revenue and the assessee are bound by the Resolution Plan accepted by the NCLT after hearing all parties, including the Income Tax Department. Therefore, the Revenue cannot contest the statutory liabilities before the Income Tax Appellate Tribunal at this juncture. Consequently, all appeals filed by the Revenue were dismissed. The cross-objections filed by the assessee were also dismissed as they did not survive in light of the findings.

The Tribunal held that the overriding effect of the Insolvency and Bankruptcy Code, 2016 (IBC, 2016) prevails over other statutory acts. Since the Resolution Plan was accepted by the Revenue after its approval by the NCLT on June 20, 2022, and the Department had represented its stand before the NCLT on February 22, 2022, it is clear that the IBC, 2016, will prevail. The Tribunal found the CIT(A)'s decision to be just and proper as per the law of the land. Both the Revenue and the assessee are bound by the Resolution Plan accepted by the NCLT after hearing all parties, including the Income Tax Department. Therefore, the Revenue cannot contest the statutory liabilities before the Income Tax Appellate Tribunal at this juncture. Consequently, all appeals filed by the Revenue were dismissed. The cross-objections filed by the assessee were also dismissed as they did not survive in light of the findings.

The Tribunal upheld the CIT(A)'s order, dismissing the Revenue's appeal. It found that the interest payment was for business expediency and that the repairs and maintenance expenses were revenue in nature. The Tribunal also confirmed the assessee's eligibility for balance additional depreciation based on judicial precedent.

The Tribunal held that the assessee is eligible for TDS credit even if the TDS certificates are in the name of the merged entity, provided the income is assessed in the hands of the assessee. The CIT(A)'s order was set aside.

The Tribunal noted that a fresh application was filed within the extended due date. Therefore, the appeal was dismissed, and the CIT(E) was directed to dispose of the fresh application on merits.

The Tribunal noted that the assessee had filed a fresh application for registration on 22/05/2024, which was within the extended due date as per CBDT Circular No.7 of 2024. The Tribunal dismissed the appeal with a direction to the CIT(E) to dispose of the fresh application.

The Tribunal held that the CIT(A) erred by passing a cryptic, non-speaking ex-parte order without deciding the appeal on merits, violating Section 250(6) of the Act. The Tribunal restored the matter to the CIT(A) for fresh adjudication.

The Tribunal noted that the assessee, a housing co-operative society, may have committed procedural lapses in filing its return. It acknowledged that the doors of justice should not be shut on technicalities and that departmental authorities are obligated to assess correct income. The matter was remanded back to the CIT(A) for reconsideration on merits.

The Tribunal held that the CIT(A) erred by dismissing the appeal without adjudicating the issues on merits, violating Section 250(6). The matter was restored to the CIT(A) for fresh adjudication.