ITAT Amritsar Judgments — January 2019

The Tribunal held that the land was purchased with the intent to exploit it commercially, making it stock-in-trade and not a capital asset. The disallowance under Section 40A(3) for the cash payment was upheld as the transaction was a venture in the nature of trade.

The Tribunal held that the assessee had sufficient cash in hand to cover the deposits, considering the opening balance and income declared in the preceding year. The addition affirmed by the CIT(A) was deleted.

The Tribunal held that the appeal was not maintainable as it fell below the monetary limit prescribed by Section 268A of the Income Tax Act and the relevant CBDT instructions. Therefore, the appeal was dismissed in limine.

The Tribunal held that once books of account are rejected and income is estimated as a percentage of gross receipts, no further disallowances under sections 40(a)(ia) and 40A(3) are permissible. The additions on account of unsecured loans were also deleted as the identity, creditworthiness, and genuineness were established.

The Tribunal held that while the expenses were necessary for a hotel, the AO did not provide a concrete basis for the 10% disallowance. For AY 2010-11, the disallowance was to be made only to the extent expenses exceeded 10% of total operating revenue. For AY 2012-13, since the expense percentage was below 10%, no disallowance was warranted.

The Tribunal held that while the expenses were necessary for the hotel industry, the AO did not provide a concrete basis for the 10% disallowance. For AY 2010-11, it directed the AO to allow expenses up to 10% of total operating revenue, making a partial disallowance. For AY 2012-13, since the expense percentage was already below 10%, no disallowance was made.

The Tribunal held that since the expenses claimed were on the lower side in proportion to sales compared to preceding years and the books of accounts were duly maintained, sustaining any addition was not justified. Therefore, the addition sustained by the CIT(A) was deleted.

The Tribunal held that the non-issuance of a notice under Section 143(2) before completing an assessment under Section 143(3) is not a procedural irregularity but a mandatory requirement. Following the Apex Court's decision in ACIT vs. Hotel Blue Moon, the assessment was deemed invalid.

The Tribunal held that since the assessee maintained regular books of account, which were accepted by the AO, and all relevant documents for the cash sale were furnished, there was no reason to doubt the cash sale. Consequently, the addition was deleted.

The Tribunal held that the penalty notice issued by the AO was bad in law as it did not specify the limb of Section 271(1)(c) under which penalty proceedings were initiated. Therefore, the penalty was deleted.

The Tribunal held that the AO failed to specify the exact default for which penalty was sought, rendering the show cause notice invalid. This failure to specify the charge violates principles of natural justice and divests the assessee of their right to defend themselves.

The Tribunal noted that a similar issue in the assessee's own case was decided in its favour by the ITAT and subsequently upheld by the jurisdictional High Court. The High Court found that the accumulation of funds and creation of assets were not detrimental to the society's objects and genuineness of activities.

The Tribunal decided to remand the case back to the AO. This was because the assessee's counsel stated they could now produce the share applicant and relevant evidence for the ROC fees, and the Tribunal wished to provide a reasonable opportunity for fresh adjudication.

The Tribunal held that a Power of Attorney does not transfer ownership rights. The assessee was merely authorized to deal with the property as per the owner's wishes, not become the owner himself.

The Tribunal found that the assessee had a plausible explanation for the Rs. 22,00,000/- deposit, supported by bank statements and a receipt for property sale advance, which was later returned. The explanation for the Rs. 2,30,000/- deposit from truck and agricultural income was also accepted.

The Tribunal held that the AO's failure to clearly specify the default in the show cause notice, by not striking off the irrelevant limb, amounted to a non-application of mind and a violation of natural justice. This rendered the penalty order invalid.

The Tribunal found that the additional evidence furnished by the assessee was not appreciated properly by the lower authorities. The Tribunal set aside the issue of addition to the CIT(A) for fresh adjudication, considering the sale agreement of land and the AO's alleged wrong calculation of peak deposits.

The Tribunal held that the disallowance under Section 14A cannot exceed the amount of exempt income earned. Therefore, the disallowance made by the Assessing Officer and confirmed by the CIT(A) was directed to be restricted to the extent of exempt income.

The Tribunal held that the penalty notice issued by the AO was not specific about which limb of Section 271(1)(c) the penalty proceedings were initiated under. Following a precedent, the Tribunal deleted the penalty.

The Tribunal held that the disallowance under Section 14A cannot exceed the amount of exempt income earned. Therefore, the disallowance made by the Assessing Officer and confirmed by the CIT(A) was directed to be restricted to the extent of exempt income.

The Tribunal held that the CIT(A) passed an ex-parte order without ensuring proper service of notice to the assessee, violating the principle of natural justice. Therefore, the case was remanded back to the CIT(A) for a fresh decision.

The Tribunal decided that the sale value of the property should be determined based on the circle rate/segment rate of Rs. 1 crore, not the lower sale consideration declared by the assessee. Consequently, the LTCG was upheld at Rs. 74,61,158/-.

The tribunal held that the CIT(A) erred in passing an ex parte order without considering the material on record or providing a proper opportunity of being heard. The case was set aside to the CIT(A) for a fresh decision on merits.

The Tribunal held that the penalty proceedings were initiated for furnishing inaccurate particulars, but the penalty was levied for concealment of income. Since the charge for levying the penalty was different from the charge for initiating the proceedings, the penalty was not justified.

The Tribunal held that the issue regarding interest-free loans was settled by the Jurisdictional High Court in favour of the assessee. The Tribunal also upheld the CIT(A)'s decision to allow depreciation, as the claim was inadvertently omitted in the computation but was present in the tax audit report.

The Tribunal held that the assessee school, existing solely for educational purposes and not for profit, is entitled to exemption under Section 10(23C)(vi) of the Act. The Tribunal referred to the provisions of Section 10(23C)(vi) which allows exemption to any university or other educational institution existing solely for educational purposes and not for purposes of profit, provided it is approved by the prescribed authority. It noted that it is not disputed that the assessee is a school affiliated with the Council for the Indian School Certificate of Examination (ISCE) and that the Department does not contend that the school exists for profit. The Tribunal relied on the ratio laid down by the Hon'ble Karnataka High Court in CIT and Another Vs Children Education Society (2013) 358 ITR 373, which held that educational institutions are separate entities, and their management by societies or trusts does not negate their independent status. The Tribunal set aside the impugned order and directed the CIT(E) to allow the exemption/approval claimed by the assessee. The issue of the assessee not having its own PAN was implicitly addressed by the reliance on the Karnataka High Court judgment which emphasizes the separate entity status of educational institutions.

The Tribunal found the 15% disallowance by the AO to be unjustified as the business purpose was not doubted. However, some disallowance was warranted due to incomplete documentation. The Tribunal reduced the disallowance to 5%.

The Tribunal held that the notice issued by the AO under Section 274 r.w.s. 271 of the Act was invalid as it did not specify whether the penalty was for concealment of income or furnishing inaccurate particulars. Therefore, the penalty was deleted.

The Tribunal confirmed the assessment in principle due to the assessee's lack of bona fides and failure to prove the credits. However, a final opportunity was granted to substantiate claims related to depositors who also filed complaints with the consumer court.

The Tribunal condoned the delay in filing the appeal, citing the assessee's lack of fault. It further held that rental income from agricultural implements supplied to members is eligible for deduction under Section 80P(2)(a)(iv) of the Income Tax Act.

The Tribunal held that the assessment framed by the AO who had not issued the mandatory notice under Section 148 was bad in law. Furthermore, the discrepancy in the cash deposit figures indicated that the reasons recorded were not based on available records, rendering the reassessment invalid.

The Tribunal held that the notice issued by the AO under Section 274 r.w.s. 271 of the Act was invalid as it did not specify whether the penalty was for concealment of income or furnishing inaccurate particulars. Therefore, the penalty was deleted.

The Tribunal held that the penalty was wrongly levied as the AO initiated penalty proceedings for concealment of income but levied it for furnishing inaccurate particulars of income. This discrepancy rendered the penalty invalid.

The Tribunal held that the penalty notice issued by the AO was bad in law as it did not specify the exact charge for penalty under Section 271(1)(c). Following precedent, the penalty was deleted.

The Tribunal held that the notice issued by the AO under Section 274 r.w.s. 271 of the Act was invalid as it did not specify whether the penalty was for concealment of income or furnishing inaccurate particulars. Therefore, the penalty was deleted.

The Tribunal held that the notice issued by the AO under Section 274 r.w.s. 271 of the Act was invalid as it did not specify whether the penalty was for concealment of income or furnishing inaccurate particulars. Therefore, the penalty was deleted.

The Tribunal held that the levy of fees under Section 234E for TDS deducted prior to 01.06.2015, when processing statements under Section 200A, was without authority of law. Therefore, the demand raised was liable to be deleted.

The Tribunal held that the reopening of assessment under Section 147/148 was invalid as the AO merely acted upon information received from the Investigation Wing without applying their own mind. The Tribunal quashed the reassessment framed by the AO.

The Tribunal held that a bank passbook or bank statement cannot be considered 'books of account' of the assessee for the purpose of Section 68. Therefore, an addition under Section 68 cannot be made solely based on cash deposits in a bank account.

The Tribunal held that once books of account are rejected and income is estimated as a percentage of gross receipts, no further disallowances under sections 40(a)(ia) and 40A(3) are permissible. The additions on account of unsecured loans were also deleted as the identity, creditworthiness, and genuineness were established.

The Tribunal held that the levy of fees under Section 234E for TDS deducted prior to 01.06.2015, when processing statements under Section 200A, was without authority of law. Therefore, the demand raised was liable to be deleted.

The Tribunal held that the levy of fees under Section 234E for TDS deducted prior to 01.06.2015, when processing statements under Section 200A, was without authority of law. Therefore, the demand raised was liable to be deleted.

The Tribunal held that the levy of fees under Section 234E for TDS deducted prior to 01.06.2015, when processing statements under Section 200A, was without authority of law. Therefore, the demand raised was liable to be deleted.

The Tribunal noted that the Revenue did not object to the withdrawal. Consequently, the Tribunal dismissed the appeal as withdrawn.

The Tribunal held that the levy of fees under Section 234E for TDS deducted prior to 01.06.2015, even if the processing under Section 200A occurred after this date, was without authority of law. The demand raised under Section 234E was therefore vacated.

The Tribunal held that the levy of fees under Section 234E for TDS deducted prior to 01.06.2015, when processing statements under Section 200A, was without authority of law. Therefore, the demand raised was liable to be deleted.

The Tribunal found merit in the assessee's contention that an adjournment was sought by an unauthorized person. Therefore, the case was set aside to the CIT(A) for adjudication after verifying the facts and providing a reasonable opportunity of being heard.

The Tribunal found that the assessee's contention regarding the unauthorized representative and the request for adjournment required verification. Therefore, the case was set aside to the CIT(A) for adjudication after verifying these facts.

The Tribunal held that the cash payments for labour were made to individual labourers in petty amounts, none exceeding Rs. 20,000, thus not violating Section 40A(3). Regarding salary, the Tribunal found that a clerical error in the audit report led to the wrong name and amount being reported, and the correct payee and amount were verifiable from the books.