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229 orders · Page 3 of 5
The Tribunal noted that the CBDT Instruction No. 3 of 2017 debars revenue officers from conducting inquiries for cash deposits up to Rs. 2.5 lakhs for individuals without business income. The AO erred by assuming jurisdiction and making an addition in disregard of these guidelines.
The Tribunal condoned the 45-day delay in filing the appeal before the NFAC, citing reasons such as election code of conduct and board meeting procedures as sufficient cause for the delay. The issue regarding the deduction under Section 80P(2)(d) was remitted to the AO for fresh consideration.
The Tribunal noted that the assessment was completed ex-parte and that the assessee provided reasons for non-appearance during the appellate proceedings, citing illness of the managing partner and difficulty in accessing electronically sent notices due to the COVID-19 pandemic. Considering the circumstances and in the interest of justice, the Tribunal decided to remit the issue back to the AO for fresh consideration.
The assessee's appeal before the CIT(Appeals) was dismissed ex parte for non-prosecution, despite the assessee claiming that notices were not received and that insufficient opportunities were granted, especially during the COVID-19 pandemic.
The Tribunal noted that the CBDT had extended the due date for filing Form 10AB till 30.06.2024 through a press release dated 25.04.2024. This extension aimed to mitigate genuine hardships to taxpayers and covered applications for registration under section 80G.
The Tribunal noted that the appeal was dismissed by the CIT(A) for non-prosecution, and the assessee's authorized representative requested an opportunity to present the case with evidence before the lower authorities, stating that notices were not properly served. Considering the interest of justice, the Tribunal decided to remit the issue back to the CIT(A).
The Tribunal noted that the AO passed a best judgment assessment and the CIT(A) order was ex-parte. It also found that the assessee's non-appearance was not willful or wanton. The Tribunal decided to grant one more opportunity to the assessee to produce documents.
The Tribunal noted that the impugned order of the CIT(A) had not taken into account a previous order by the CIT(Appeals) dated 22.02.2024, which had allowed the assessee's appeal. Furthermore, since the proceedings under section 263 were sent back to the PCIT for fresh consideration, the subsequent proceedings became infructuous. The present appeal was also deemed infructuous.
The Tribunal held that the verification of cash deposits made during the demonetization period was not in accordance with CBDT instructions, indicating inadequate enquiry by the AO. The issue requires examination in light of various CBDT circulars.
The Tribunal noted that both the assessment order and the CIT(A)'s order were ex-parte. Given that the assessee failed to appear before the AO and CIT(A) and provide necessary details, the Tribunal felt that in the interest of justice, one more opportunity should be granted to the assessee.
The Tribunal held that the AO was incorrect in denying exemption under Section 11 as the lease rent was accepted in previous years with identical facts and no evidence of diversion of funds was presented. The valuation report was also accepted in prior assessments.
The Tribunal held that the payments made by the assessee to its AE were not in the nature of Fees for Technical Services (FTS) because the services rendered did not 'make available' technical knowledge, experience, or skills to the assessee. Therefore, the assessee was not obligated to deduct TDS.
The Tribunal held that the disallowance for belated remittance of employees' contribution to PF/ESI, as reported in the tax audit report, is decided in favour of the revenue. However, since the tax audit report included both employee and employer contributions, the issue of delayed remittance of employer's contribution was remitted to the AO for verification.
The Tribunal noted that while the assessee claimed the deposits were for client tax payments, KYC details of clients and verification of tax payments were lacking. Considering the request of the assessee and in the interest of justice, the Tribunal decided to remit the issue to the AO for fresh consideration.
The Tribunal held that the CIT(A) correctly allowed the deduction under Section 80P(2)(a)(i) based on the Karnataka High Court's decision regarding Souharda societies. Similarly, the deduction under Section 80P(2)(d) for interest income earned from co-operative banks was also allowed as per jurisdictional High Court precedents. However, regarding the cash deposits made during demonetization, the Tribunal found that the AO had not conducted necessary verification.
The Tribunal noted the assessee's retail business and the need to re-examine the cash deposits in light of CBDT instructions. The case was remanded back to the AO for fresh consideration of the claim.
The Tribunal found that the actual accumulated amount was less than what was initially reported in Form 10. Regarding the second issue, the Tribunal noted that capital assets represent application of income and should be excluded from investment calculations.
The Tribunal condoned the delay in filing the appeal, considering the exclusion period due to the COVID-19 pandemic and the circumstances preventing timely filing. The matter was remanded back to the AO for fresh adjudication in the interest of justice.
The Tribunal observed that grounds 1.1 and 1.2 were not argued and were therefore dismissed. Regarding grounds 2 to 4, which dealt with additions totaling Rs. 43,17,498/- under Section 69A, the Tribunal noted the assessee's claim of agricultural income of Rs. 91,19,038/-. The AO accepted agricultural income to the extent of Rs. 62,21,540/-, but added Rs. 28,97,498/- as unexplained money due to lack of documentary evidence. For cash deposits of Rs. 26,70,000/- (assessee stated Rs. 21,20,000/-), the AO accepted Rs. 12,50,000/- and added Rs. 14,20,000/- as unexplained money. The Tribunal found that the CIT(A) had not passed an order on merits but had directed the AO to verify the agricultural income and cash deposits. Such a direction was beyond the scope of the CIT(A)'s powers. Therefore, the Tribunal set aside the order of the CIT(A) and remanded the matter back to the CIT(A) for adjudication on merits after proper verification of the agricultural income and cash deposits.
The Tribunal acknowledged the contentions of the assessee's counsel and the absence of serious objections from the DR. Considering the interest of justice and equity, the Tribunal decided to give the assessee another opportunity to present their case.
The Tribunal found that the assessee had provided sufficient documentation, including cash book entries and current account details of the partnership firm, to justify the cash withdrawal. The Tribunal noted that the availability of cash in the partnership firm was not doubted by the revenue.
The Tribunal held that the grounds related to the rejection of transfer pricing documentation and comparability analysis were to be allowed, following precedents in the assessee's own case. Specifically, the Tribunal found that the reimbursement made by the assessee to overseas entities towards seconded employees could not be subjected to tax in India as there was no element of income embedded in it. This decision was supported by various judicial pronouncements, including the Karnataka High Court in Abbey Business Services India (P.) Ltd.'s case and the CESTAT in Volkswagen India (P.) Ltd. v. CCE, Pune-I. Consequently, the Tribunal held that the assessee could not be considered an assessee in default under Section 201(1) for all years under consideration and directed the deletion of interest levied under Section 201(1A). Furthermore, since the Tribunal had previously held that there was no violation of Section 195 for similar assessment years, no expenditure could be disallowed under Section 40(a)(ia). Accordingly, the addition of Rs. 48,25,91,738 under Section 40(a)(ia) was deleted. Ground No. 3 was deemed preposterous and did not require adjudication. The appeal was partly allowed for statistical purposes.
The Tribunal admitted additional documents filed by the assessee, which supported the claim that payment was made within the due date. The Tribunal acknowledged that technical glitches could cause payment delays and that the assessee should not be blamed.
The Tribunal held that for reopening under section 147 after 4 years from the end of the assessment year, it is mandatory for the AO to record a finding that the assessee failed to disclose all material facts. Since such a finding was not recorded by the AO, the reopening was considered bad in law.
The Tribunal found that the CIT(A) had dismissed the appeal ex-parte without properly considering the delay condonation application. The Tribunal noted that the assessee's primary email ID, as per filed returns, differed from the email address to which the assessment order was sent.
The Tribunal decided to reconsider the matter of foreign tax credit and its allowability as a business expenditure. The High Court's order setting aside the previous ITAT order and remitting the issue was noted.
The Tribunal, following the binding decision of the Hon'ble High Court of Karnataka in the assessee's own case (ITA No.82 to 87/2023 dated 9.1.2024), set aside the previous order of the ITAT. The High Court had remitted the issue for reconsideration. The Tribunal noted that the High Court accepted all contentions of the assessee. Specifically, the Tribunal referred to a co-ordinate bench's decision for AY 2015-16, which in turn relied on the Hon'ble High Court of Karnataka's detailed examination of the foreign tax credit issue. The High Court's reasoning, as extracted in the judgment, clarified that Section 90 and Section 91 provide for relief from double taxation. The Tribunal concluded that to the extent foreign tax for which credit has not been granted under Section 90 read with DTAA or Section 91, the claim for such amount should be allowed. The Tribunal set aside the Assessing Officer's order on this issue and directed the AO to allow the foreign tax credit claimed by the assessee in terms of the High Court's decision. The issue of allowing the difference as business expenditure was also considered, with the assessee arguing it should be deductible under Section 37(1) or as a loss under Section 28, as it's not covered by Section 40(a)(ii). The Tribunal's order for AY 2015-16, which was referred to, also allowed foreign tax credit. The present appeals were listed for fresh hearing to dispose of the issue once again.
The Tribunal noted that the CBDT had extended the due date for filing Form 10A/10AB till 30.06.2024, as per a press release dated 25.04.2024. Given this extension, the assessee's case was covered by the press release.
The High Court remitted the issue back to the Tribunal for reconsideration. The Tribunal, in turn, decided to reconsider the matter based on the High Court's direction and its own previous rulings in similar cases.
The Tribunal held that foreign tax paid on income that has accrued or arisen in India is not eligible for relief under Section 91. Consequently, such tax paid abroad on Indian-sourced income is not hit by Section 40(a)(ii) and is allowable as a business expenditure.
The Tribunal held that the AO and CIT(A) erred by not examining the source of the cash deposit, focusing solely on the unauthorized acceptance of SBNs. Relying on a previous ITAT ruling, the Tribunal stated that the mere violation of notifications in accepting SBNs does not automatically make the source unexplained, especially if the business pattern remains consistent.
The Tribunal found that the CIT(A) passed an ex-parte order without considering the assessee's adjournment request. In the interest of justice and equity, the assessee should be given another opportunity to present their case.
The Tribunal noted that the CBDT had extended the due date for filing Form 10AB till 30.6.2024. The assessee's case was covered by this extension, and therefore, the matter should be reconsidered by the CIT(Exemptions).
The Tribunal held that interest earned on unutilized grants deposited in fixed deposits is not income but part of the grant-in-aid, following previous decisions in the assessee's own case. The Tribunal also held that the contribution towards the "Karnataka Visveswaraya Solar Award" is a revenue expenditure, not a capital one, as it aligns with the assessee's objective of promoting solar energy and does not result in any enduring benefit.
The Tribunal noted that for a similar issue in the previous assessment year (2018-19), the matter was restored to the AO for fresh examination. The Tribunal followed the directions given in that order, specifically regarding the examination of interest income earned from investments made in compliance with co-operative societies rules and acts.
The Tribunal noted that the CBDT had extended the due date for filing Form 10A/10AB till 30.06.2024, as per a press release dated 25.04.2024. Given this extension, the assessee's case was covered by the press release.
The Tribunal held that interest income received from a co-operative bank cannot be allowed as a deduction under Section 80P(2)(d) as it is not received from a co-operative society and should be treated as 'Income from Other Sources'. However, the Tribunal allowed the cost of funds for earning this interest income to be deducted under Section 57 of the Act.
The Tribunal noted that the necessary verification regarding agricultural income and cash deposits had not been completed by the authorities. The assessee was directed to furnish relevant documents, and the AO was directed to verify these with reference to relevant CBDT circulars.
The Tribunal noted that the assessee's appeal before the CIT(A) was dismissed in limine due to a delay. However, the delay occurred during the COVID period, and the Supreme Court had extended limitation periods. The Tribunal condoned the delay and noted that the CIT(A) had not decided the issues on merits.
The Tribunal held that the CIT(A) erred in treating only the stamp duty as the purchase cost for Section 54 deduction, and the actual purchase cost along with stamp duty should be considered. The Tribunal also held that the disallowance of interest on the housing loan was incorrect as the assessee provided a certificate from the bank and had claimed similar deductions in previous years.
The Tribunal condoned the delay in filing the appeal, noting sufficient reasons provided by the assessee, including issues with communication of notices and illness. The Tribunal observed that the assessee claimed notices were not served and remitted the appeal back to the CIT(Appeals) for fresh consideration.
The Tribunal held that the Assessing Officer (AO) failed to conduct proper inquiries and verify the assessee's explanations regarding the cash payments. The Principal Commissioner of Income Tax (PCIT) was justified in exercising powers under Section 263 to direct further inquiry.
The Tribunal held that the show cause notice issued under Section 274 was defective as it did not specify the grounds for penalty. Following jurisdictional High Court decisions, the penalty was cancelled.
The Tribunal found that the CIT(Appeals) erred in calculating the net profit rate and ignoring certain sub-contract amounts. The Tribunal directed a revised calculation of net profit rate, considering specific sub-contract amounts and a profit share from one sub-contractor.
The Tribunal held that the assessee has a right to be heard, and non-appearance cannot be a reason for the CIT(A) to not decide the appeal on merits. The right to be heard, as per Section 250(2)(a) and 250(6) of the Income Tax Act, is essential before an appeal can be disposed of.
The Tribunal, referring to CBDT's Circular No.7/2024 and a similar order by the Bangalore Bench in the case of Samyata Foundation, noted that the circular allows for fresh applications in Form 10AB within an extended deadline of 30.06.2024, especially when rejections were solely due to late filing. Therefore, the matter was restored to the CIT(E) for fresh consideration.
The Tribunal acknowledged that the notices were sent to an incorrect email ID due to a mistake by the Chartered Accountant's office. In the interest of justice and equity, the assessee should be given another opportunity to present their case.
The Tribunal found that the carry forward of business loss for AY 2010-11 was reduced due to disallowance of interest expenditure, which was pending before the CIT(A). Therefore, the issue of carry forward of business loss needed to be adjudicated altogether.
The Tribunal held that additions cannot be made solely based on a statement recorded under section 132(4) without corroborating material found during the search. Such statements can be used as information but not as the sole basis for assessment.
The Tribunal held that additions cannot be made solely based on a statement recorded under section 132(4) without corroborative material. Since no incriminating material was found during the search, the addition was deleted.