ITAT Amritsar Judgments — August 2018

The Tribunal held that the contract receipts are income of the AOP. It reduced the estimated profit rate on contract receipts to 1.5% and directed the exclusion of the disclosed surplus income, as it was wrongly included by the CIT(A).

The Tribunal held that the donation to the unregistered society was to be treated as income under Section 11(3) as it was not applied for charitable purposes. However, regarding the surplus income, the Tribunal found that the Assessing Officer had not properly determined the application of 85% of the income and allowed for a partial exemption.

The Tribunal held that the Revenue failed to discharge its primary onus of proving the jewellery belonged solely to the assessee. Since the jewellery was found in a residence shared by three ladies, and the Revenue did not establish control or possession by the assessee, no penalty was warranted.

The Tribunal, following a co-ordinate bench's decision in a similar case, found that the assessee did not have sufficient opportunity to defend the penalty. Therefore, the penalty was set aside.

The Tribunal upheld the CIT(A)'s decision, following its own coordinate bench rulings. It held that interest on NPAs is taxable on actual receipt basis, even with mercantile accounting, and that provision for standard assets is allowable under Section 36(1)(viia) of the Income Tax Act for co-operative banks.

The Tribunal upheld the CIT(A)'s order, finding it logical and reasoned. It agreed that once a profit is estimated, no further addition can be made without a finding that a liability is not genuine. The destruction of books due to the flood was also considered.

The Tribunal held that the Assessing Officer did not apply his mind independently while imposing the penalty, as even income tax and legal fees were considered for disallowance. This non-application of mind vitiates the penalty order.

The Tribunal held that the CIT(A) erred in rejecting the Assessing Officer's (AO) findings, particularly regarding the non-production of books of account. The Tribunal found that the AO had valid reasons to invoke Section 145(3) and proceed under Section 144 due to the assessee's failure to provide necessary documentation.