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169 orders · Page 3 of 4
The Tribunal upheld the disallowance of depreciation and expenses on luxury cars. It was held that the assessee failed to prove predominant business use and that the voluntary admission in the statement carried significant evidentiary value.
The Tribunal held that the assessee's voluntary admission during the search, coupled with the fact that the cars were found in the assessee's garage and expenses were booked, constituted incriminating material. The CIT(A)'s disallowance was upheld as the assessee failed to prove predominant business use.
The Tribunal upheld the disallowance of depreciation and expenses on luxury cars. It agreed that the assessee's admission under Section 132(4) carried significant evidentiary value and that the cars were not predominantly used for business purposes.
The Tribunal condoned the 688-day delay in filing the appeal, citing sufficient and reasonable cause. The ex-parte order of the CIT(A) was set aside, and the matter was restored for fresh adjudication.
The Tribunal held that the unaccounted transactions were part of the assessee's regular money lending business and should be assessed as business income, not as unexplained investment. The AO's invocation of Section 69 read with Section 115BBE was deemed unsustainable.
The Tribunal first addressed the issue of delay in filing the appeals. It held that while the delay was significant, considering the pendency of other related matters and the need to decide the substantive issues on merits, the delay in filing the appeals for assessment years 2013-14 to 2018-19 was condoned. The Tribunal reasoned that substantial justice should prevail over technicalities. Regarding the additions made on account of unexplained expenses, the Tribunal found that the assessee had not furnished sufficient evidence to substantiate the genuineness of these expenses before the lower authorities. Therefore, the Tribunal upheld the findings of the AO and the CIT(A) to the extent that the expenses remained unexplained. However, to provide a fair opportunity to the assessee, the Tribunal decided to restore the matters to the file of the AO for fresh adjudication. The AO was directed to allow the assessee to furnish evidence and to decide the issue afresh after considering the same. The issue of penalty under Section 271(1)(c) was also set aside to be decided by the AO after the fresh assessment.
The Tribunal held that the adjustment made by the TPO and confirmed by the DRP could not be sustained. It noted that in the first round, the Tribunal had clearly directed that if these expenses were part of operating costs, then no separate adjustment was required. This direction was binding on the TPO/AO. The CIT(A) had examined the records and made a factual finding that selling commission and networking charges were debited in the P&L account. Once this was established, and TNMM was applied as the Most Appropriate Method (MAM), the operating margin already covered such costs. The Tribunal agreed with the assessee that the TPO was not justified in isolating one component and determining ALP separately. The principle laid down in decisions like Tata Power Solar and Epson India supported the assessee's case. Therefore, the additions of Rs. 88.86 crores and Rs. 10.36 crores on account of selling commission and network charges were deleted. The ground of appeal of the Revenue was dismissed.
The Tribunal decided the issues based on its previous ruling in the assessee's own case for AY 2021-22. Firstly, the grounds challenging the validity of the assessment proceedings under Section 147 were dismissed as infructuous as the assessee did not press them. Secondly, concerning the classification of income, the Tribunal held that the subscription fees received by the assessee from Indian customers do not constitute royalty under Article 12 of the India-USA DTAA. The Tribunal reasoned that the assessee provides Software as a Service (SaaS), where customers gain access to a platform hosted on cloud servers outside India. The consideration is for acquiring data and using the platform, not for the use of or right to use copyright or any industrial, commercial, or scientific equipment. The Tribunal followed its own prior decision and several other High Court and ITAT rulings, including those concerning Elsevier BV and Dow Jones & Company Inc., which held similar payments as not being royalty. The AO was directed to delete the addition made.
The Tribunal decided the issues based on its previous ruling in the assessee's own case for AY 2021-22. Firstly, the grounds challenging the validity of the assessment proceedings under Section 147 were dismissed as infructuous as the assessee did not press them. Secondly, concerning the classification of income, the Tribunal held that the subscription fees received by the assessee from Indian customers do not constitute royalty under Article 12 of the India-USA DTAA. The Tribunal reasoned that the assessee provides Software as a Service (SaaS), where customers gain access to a platform hosted on cloud servers outside India. The consideration is for acquiring data and using the platform, not for the use of or right to use copyright or any industrial, commercial, or scientific equipment. The Tribunal followed its own prior decision and several other High Court and ITAT rulings, including those concerning Elsevier BV and Dow Jones & Company Inc., which held similar payments as not being royalty. The AO was directed to delete the addition made.
The Tribunal decided the issues based on its previous ruling in the assessee's own case for AY 2021-22. Firstly, the grounds challenging the validity of the assessment proceedings under Section 147 were dismissed as infructuous as the assessee did not press them. Secondly, concerning the classification of income, the Tribunal held that the subscription fees received by the assessee from Indian customers do not constitute royalty under Article 12 of the India-USA DTAA. The Tribunal reasoned that the assessee provides Software as a Service (SaaS), where customers gain access to a platform hosted on cloud servers outside India. The consideration is for acquiring data and using the platform, not for the use of or right to use copyright or any industrial, commercial, or scientific equipment. The Tribunal followed its own prior decision and several other High Court and ITAT rulings, including those concerning Elsevier BV and Dow Jones & Company Inc., which held similar payments as not being royalty. The AO was directed to delete the addition made.
The Tribunal held that the assessee's Ground No. 13, relating to depreciation on software, is allowed. The Tribunal found that the definition of 'computer software' in Appendix I, Part A, Item 5 of the Income Tax Rules, 1962, read with Note 7, is inclusive and does not distinguish between system and application software. Any program stored on a device is to be considered software for depreciation purposes. The Tribunal agreed with the assessee that software is integral to a computer's function and that confining 'integral software' only to Microsoft Office, as done by the AO, is too narrow. Therefore, the software acquired by the assessee is considered computer software eligible for 40% depreciation. The disallowance of excess depreciation made by the AO and confirmed by the DRP is directed to be deleted. The appeal is partly allowed. The judgment does not provide a final decision on the transfer pricing issues (Grounds 2-10), as the relevant portion of the judgment was omitted. However, the overall result indicates a partial allowance, implying that the depreciation issue was decided in favour of the assessee.
The Tribunal admitted the additional documents in the interest of justice and fair play, but directed the assessee to pay a cost of ₹5,500 due to their negligent approach. The issue was set aside to the AO for fresh adjudication considering the additional evidence.
The Tribunal held that additions solely based on statements without corroborative material are unsustainable. The Tribunal found no incriminating material to support the allegation of bogus purchases and set aside the addition. Similarly, the addition for interest income was deleted as it was based on an admission without corroborative evidence.
The tribunal held that the CIT(Exemption) failed to apply its own mind and did not provide the assessee an opportunity to be heard, violating principles of natural justice. The order was set aside, and the issue was restored for fresh adjudication.
The Tribunal held that the CIT(A) order violated the principles of natural justice due to lack of proper opportunity for the assessee to be heard. The appeal was set aside to the CIT(A) for fresh adjudication.
The Tribunal held that the notice issued under section 143(2) was invalid as it was neither digitally nor manually signed, failing to comply with section 282A(1) and relevant notifications. Consequently, the assessment made on the basis of such notice was void ab initio. Section 292B was held not to cure this jurisdictional defect.
The Tribunal ruled that the assessee's dominant intention was to hold the property as an investment for rental income, evidenced by consistent attempts to lease and declarations in income/wealth tax returns. The sale was a forced transaction due to financial distress, not a business venture, thus classifying the property as a capital asset. Therefore, profit from sale is to be assessed under 'Capital Gains' with eligibility for Section 54EC exemption.
The Tribunal held that the initiation of proceedings under section 263 was invalid because the Commissioner did not apply his own mind and form his own satisfaction, but relied solely on the Assessing Officer's proposal. Therefore, the order passed under section 263 was quashed.
The Tribunal held that the Assessing Officer had conducted necessary enquiries and applied his mind before accepting the assessee's explanation. Therefore, the revisionary order under Section 263 by the Principal Commissioner was not justified.
The Tribunal held that a registered sale deed has strong evidentiary value and cannot be disregarded based on uncorroborated oral statements. The Revenue failed to provide clinching evidence of cash payment, and principles of natural justice were violated by not allowing cross-examination.
The Tribunal found that the lower authorities' basis for addition was not appropriate, as there was no material to show the closure of business was wrong. The revenue also failed to prove the claimed expenses were not genuine.
The Tribunal held that the withdrawal of ₹5,70,000 before demonetisation was admitted, with no evidence of it being spent elsewhere, making it available for redeposit. The basic exemption limit was also considered.
The Tribunal condoned the delay, finding the assessee acted in good faith and substantial justice should be preferred over technicalities. The CIT(A)'s order was set aside, and the matter was restored for fresh adjudication.
The Tribunal found that the assessee had validly exercised the option under Section 115BAA by filing Form 10-IC, and this option is irrevocable and subsists for subsequent years. It concluded that the CPC's contrary remark for Assessment Year 2022-23 was a processing error and not a rectifiable error under Section 143(1), directing the AO/CPC to recompute tax under Section 115BAA while verifying compliance conditions under Section 115BAA(2).
The Tribunal noted that the dispute solely concerned the difference in turnover reported in GST returns and the ITR. In the interest of justice, the issue was remitted back to the Assessing Officer (AO) for reconciliation, with directions to provide the assessee with three effective opportunities to substantiate their case.
The Tribunal held that additions cannot be made solely based on a statement without corroborative material, especially when the assessee retracts the admission. The Tribunal also found that the variations in cash purchase prices were nominal and not significant enough to treat them as bogus.
The Tribunal noted that the assessee was elderly and may have had difficulty responding to notices. Considering the ex-parte decision and the assessee's contention about lack of communication regarding adjournment, the Tribunal decided to grant one more opportunity.
The Tribunal held that the disallowance of purchases should be restricted to 6% as a profit element, considering the nature of the trade. The addition for sundry creditors was deleted as it would amount to double taxation if purchases were accepted. The addition for unexplained unsecured loans was deleted as the assessee had discharged the primary onus by providing prima facie evidence, and the AO failed to conduct further verification.
The Tribunal condoned the delay of 781 days in filing the appeal before the CIT(A) and set aside the order of the CIT(A). The matter was remitted to the AO for fresh consideration, subject to the assessee depositing Rs. 10,000/- as cost.
The Tribunal held that appellate authorities have wide powers to admit claims not made in the revised return. The assessee should have been allowed to claim the revised income on merits.
The Tribunal held that additions based solely on a statement made under Section 132(4) or 131, without corroborative material, cannot be sustained. The assessee's retraction from the admission and the lack of incriminating evidence further weakened the AO's case.
The Tribunal condoned the delay in filing the appeal. While acknowledging the inadvertent error in mentioning the wrong property address, the Tribunal found the claim for interest deduction to be genuine. The appeal was allowed, subject to verification of the quantum of interest by the Assessing Officer.
The Tribunal held that the disallowance of purchases should be restricted to 6% as a profit element, considering the nature of the trade. The addition for sundry creditors was deleted as it would amount to double taxation if purchases were accepted. The addition for unexplained unsecured loans was deleted as the assessee had discharged the primary onus by providing prima facie evidence, and the AO failed to conduct further verification.
The Tribunal found that the assessee had validly exercised the option under Section 115BAA by filing Form 10-IC, and this option is irrevocable and subsists for subsequent years. It concluded that the CPC's contrary remark for Assessment Year 2022-23 was a processing error and not a rectifiable error under Section 143(1), directing the AO/CPC to recompute tax under Section 115BAA while verifying compliance conditions under Section 115BAA(2).
The Tribunal held that the seized loose paper did not constitute incriminating material evidencing undisclosed income. The addition of alleged undisclosed interest income was directed to be deleted. The disallowance of cash purchases was also decided in favour of the assessee.
The Tribunal condoned the delay in filing the appeals, noting that while the reasons were weak, denying justice on technical grounds would cause greater hardship. The Tribunal also found that the orders of the Assessing Officer and CIT(A) were passed ex-parte, violating principles of natural justice.
The Tribunal held that the addition was not sustainable as the AO failed to specify particular bank account numbers and the cash deposits were explained through the audited books of accounts. Section 69A of the Income-tax Act was deemed inapplicable in this case.
The Tribunal noted that the assessee had filed extensive documentation, but proper verification was not done by the lower authorities. Considering the need for fresh verification of evidence and facts, both issues were set aside to the Assessing Officer.
The Tribunal held that the assessee's claim for exemption under Section 54F was not a fresh claim in reassessment proceedings and that evidence of ownership of the new residential units was lacking. However, relying on previous Tribunal and High Court decisions, the issue was set aside for fresh adjudication by the AO.
The Tribunal held that additions made in unabated assessment years cannot be sustained in the absence of incriminating material found during a search, relying on the Supreme Court's decision in PCIT v. Abhisar Buildwell (P) Ltd. For an abated assessment year, the AO has full jurisdiction, but for other years, the absence of incriminating material is fatal to the additions.
The Tribunal held that the documents seized during the search were not incriminating and did not establish a violation of Section 47(xiii). The Tribunal relied on its previous decision in the assessee's own case for AY 2017-18, which found similar documents to be not incriminating and set aside additions.
The Tribunal held that additions made in unabated assessment years cannot be sustained in the absence of incriminating material found during a search, relying on the Supreme Court's decision in PCIT v. Abhisar Buildwell (P) Ltd. For an abated assessment year, the AO has full jurisdiction, but for other years, the absence of incriminating material is fatal to the additions.
The Tribunal held that additions made in unabated assessment years cannot be sustained in the absence of incriminating material found during a search, relying on the Supreme Court's decision in PCIT v. Abhisar Buildwell (P) Ltd. For an abated assessment year, the AO has full jurisdiction, but for other years, the absence of incriminating material is fatal to the additions.
The Tribunal held that additions made in unabated assessment years cannot be sustained in the absence of incriminating material found during a search, relying on the Supreme Court's decision in PCIT v. Abhisar Buildwell (P) Ltd. For an abated assessment year, the AO has full jurisdiction, but for other years, the absence of incriminating material is fatal to the additions.
The Tribunal held that the documents seized during the search were not incriminating and did not establish a violation of Section 47(xiii). The Tribunal relied on its previous decision in the assessee's own case for AY 2017-18, which found similar documents to be not incriminating and set aside additions.
The Tribunal condoned the delay of 166 days, finding reasonable cause. For the merits, the Tribunal set aside the order and restored the matter to the Assessing Officer to examine the fresh evidence submitted by the assessee.
The Tribunal condoned the delay in filing the appeals, noting that while the reasons were weak, denying justice on technical grounds would cause greater hardship. The Tribunal also found that the orders of the Assessing Officer and CIT(A) were passed ex-parte, violating principles of natural justice.
The Tribunal held that additions made in unabated assessment years cannot be sustained in the absence of incriminating material found during a search, relying on the Supreme Court's decision in PCIT v. Abhisar Buildwell (P) Ltd. For an abated assessment year, the AO has full jurisdiction, but for other years, the absence of incriminating material is fatal to the additions.
The Tribunal held that additions made in unabated assessment years cannot be sustained in the absence of incriminating material found during a search, relying on the Supreme Court's decision in PCIT v. Abhisar Buildwell (P) Ltd. For an abated assessment year, the AO has full jurisdiction, but for other years, the absence of incriminating material is fatal to the additions.
The Tribunal held that the assessee has satisfied the conditions of section 54 of the Income Tax Act, 1961. It was not disputed that the assessee sold a residential property and invested the entire capital gains in a new residential flat, with payments made before the due date of filing the return under section 139(1). The denial of exemption was solely based on the delay in issuing the Occupancy Certificate and executing the sale deed. The Tribunal noted that section 54 uses the expression "purchased or constructed" within the prescribed period and does not mandate registration of the sale deed or obtaining possession within the same period. The Tribunal relied on the judgments of the Delhi High Court in R.L. Sood v. CIT and the Karnataka High Court in CIT v. Sambandam Udaykumar, which held that substantial payment within the stipulated period fulfills the requirement of section 54, even if possession is delayed. The Tribunal also found support in CBDT Circulars 471 and 672, which clarify that allotment or booking of a flat and making payments towards construction is to be treated as construction for section 54. The Tribunal concluded that the assessee complied with the investment requirement within the stipulated time, and the delays in the Occupancy Certificate and sale deed were due to the builder and regulatory issues, for which the assessee should not be penalized. Therefore, the AO and DRP erred in denying the exemption. The assessee is entitled to deduction under section 54 for the entire long-term capital gain of ₹98,67,486. The AO was directed to allow the claim.