ITAT Chandigarh Judgments — July 2018

The Tribunal held that the definition of a 'rural branch' under Section 36(1)(viia) requires the branch to be situated in a place with a population not exceeding ten thousand according to the last preceding census. The Assessing Officer's disallowance based on the Census Department's categorization of branches as urban or having populations over ten thousand was upheld.

The Tribunal held that the definition of a 'rural branch' under Section 36(1)(viia) requires the branch to be situated in a place with a population not exceeding ten thousand according to the last preceding census. The Assessing Officer's disallowance based on the Census Department's categorization of branches as urban or having populations over ten thousand was upheld.

The Tribunal dismissed the Revenue's appeal based on CBDT Circular No. 3/2018, which revised the monetary limit for filing appeals. This decision was made without going into the merits of the case.

The Tribunal found the assessee's explanation for non-appearance to be reasonable. To serve the interest of justice, the assessee was granted an opportunity to present his case before the lower authorities.

The Tribunal held that income from short-term deposits was directly connected to the project construction work and should be set off against pre-operative expenses. The Revenue's appeal was dismissed as the issue was already decided in favour of the assessee in earlier assessment years.

The Tribunal held that in cases of concluded assessments, additions under Section 153A are not permissible if no incriminating material is found during the search. The AO cannot reassess concluded matters under the guise of Section 153A without such material.

The Tribunal found that the CIT(A) failed to consider the assessee's contention that the books of account were already produced before the AO. The assessee was also willing to produce them before the CIT(A).

The Tribunal found that the assessee's absence was not intentional and that the interest of justice would be served by allowing the assessee to present their case. Therefore, the CIT(A)'s order was set aside.

The Tribunal held that in cases of concluded assessments, additions under Section 153A are not permissible if no incriminating material is found during the search. The AO cannot reassess concluded matters under the guise of Section 153A without such material.

The Tribunal held that PUDA, being established by a State Act, falls under the notification exempting such institutions from TDS. Therefore, the disallowance made by the Assessing Officer was incorrect.

The Tribunal held that the AO failed to establish that the recipient societies were persons specified under Section 13(3). Furthermore, the loans were not considered investments or deposits violating Section 11(5). The Tribunal also noted that the loans were advanced in earlier years, making the invocation of Section 13 in the impugned year unjustified.

The Tribunal held that the CIT(E) erred in rejecting the application solely based on previous rejections and amendments made to comply with state law. The genuineness of the activities should be assessed on merits.

The Tribunal dismissed the appeals filed by the Revenue. This was done in limine as the appeals were to be treated as withdrawn due to revised monetary limits for filing appeals.

The Tribunal held that the AO failed to establish that the recipient societies were persons specified under Section 13(3). Furthermore, the loans were not considered investments or deposits violating Section 11(5). The Tribunal also noted that the loans were advanced in earlier years, making the invocation of Section 13 in the impugned year unjustified.

The Tribunal held that the AO failed to establish that the recipient societies were persons specified under Section 13(3). Furthermore, the loans were not considered investments or deposits violating Section 11(5). The Tribunal also noted that the loans were advanced in earlier years, making the invocation of Section 13 in the impugned year unjustified.

The Tribunal held that if the genuineness of the transaction is not doubted and the assessee explains the business expediency for making cash payments, no disallowance under Section 40A(3) is warranted. The Tribunal also allowed expenses under Section 40(a)(ia) by admitting additional evidence showing payments were below TDS limits and deleted disallowances for canteen and vehicle expenses, finding them arbitrary and without basis.

The Tribunal held that while the dominant object of the assessee is charitable, hosting the Davis Cup Tie involved incidental commercial activity. Income from this commercial activity up to Rs. 25 lakhs (as per the proviso to Section 2(15)) would be treated as charitable, but any surplus beyond that limit would be considered business income.

The Tribunal held that the AO failed to establish that the recipient societies were persons specified under Section 13(3). Furthermore, the loans were not considered investments or deposits violating Section 11(5). The Tribunal also noted that the loans were advanced in earlier years, making the invocation of Section 13 in the impugned year unjustified.

The Tribunal dismissed the appeals filed by the Revenue. This was done in limine as the appeals were to be treated as withdrawn due to revised monetary limits for filing appeals.

The Tribunal set aside the ex-parte order of the CIT(A) and remanded the matter back for a fresh decision. The CIT(A) was directed to provide the assessee with a reasonable opportunity of being heard at the correct address.

The Tribunal held that the AO failed to establish that the recipient societies were persons specified under Section 13(3). Furthermore, the loans were not considered investments or deposits violating Section 11(5). The Tribunal also noted that the loans were advanced in earlier years, making the invocation of Section 13 in the impugned year unjustified.

The Tribunal found a considerable difference in the FMV computation between the assessee and the AO, and noted the assessee's inability to furnish complete information regarding projected net profits for the DCF method. Therefore, the matter was referred back to the AO for redetermination.

The tribunal found that the assessee could not provide details of properties and rental income. The Revenue also agreed to remand the matter for verification.

The Tribunal held that the interest levied was not leviable as the tax was deposited on time, and the error was a clerical mistake. However, relief was granted subject to verification that the trust had not claimed credit for the deposit.

The Tribunal held that the identity and creditworthiness of most of the share applicants were proved, considering their income and savings. For the deceased shareholder, the matter was remanded to the Assessing Officer for further examination with legal heirs.

The Tribunal directed the Assessing Officer to examine bank withdrawals for the Rs. 15 lacs payment and accepted the explanation for the Rs. 36 lacs payment being from cash received against flat sales.

The Tribunal held that the compensation received for the hotel/dhaba and land should be bifurcated. Gain from the building (business asset) is STCG, while gain from land (non-depreciable asset) is LTCG. The matter was remanded to the Assessing Officer to determine the bifurcation of compensation.

The Tribunal held that the compensation received for the hotel/dhaba and land should be bifurcated. Gain from the building (business asset) is STCG, while gain from land (non-depreciable asset) is LTCG. The matter was remanded to the Assessing Officer to determine the bifurcation of compensation.

The Tribunal noted the absence of the assessee and the lack of any request for adjournment. It was presumed that the assessee was not serious in pursuing the appeal. The Tribunal also mentioned that the assessee could seek recall of the order if a reasonable cause for non-representation is shown.

The Tribunal directed the Assessing Officer to examine the issue of payment to the widow of the deceased Managing Director, considering the company's own funds and relevant judgments. The matter was allowed for statistical purposes.

The Tribunal held that the disallowance under Section 14A read with Rule 8D cannot exceed the exempt income earned. The investments were made from surplus funds and no loans were borrowed for this purpose.

The Tribunal held that the AO's reopening was based on suspicion rather than a reasoned belief, as no tangible material was considered beyond the AIR information. The assessees' explanations regarding past savings and rental income were not adequately examined.

The Tribunal directed the Assessing Officer to examine the issue of payment to the widow of the deceased Managing Director, considering the company's own funds and relevant judgments. The matter was allowed for statistical purposes.

The Tribunal held that the Assessing Officer had sufficient grounds to assume jurisdiction under Section 147/148 for reassessment. The assessee's inability to provide satisfactory explanation and evidence for the cash deposit led to the addition.

The Tribunal agreed with the Pr. CIT that the AO's inquiry was inadequate, as the assessee's activities (cold storage) were not considered 'processing' as per Supreme Court precedent. Therefore, the assessment order was erroneous.

The Tribunal found the CIT(A)'s order contradictory for rejecting additional evidence while also stating the assessee offered no explanation during penalty proceedings. The matter was restored to the CIT(A) for reconsideration of the additional evidence and a speaking order.

The Tribunal found merit in the assessee's contention that the payments were incentives, not commission, and that the mode of payment in cash should not be doubted when similar transactions paid by cheque were accepted. The Tribunal held that the genuineness of the incentive paid in cash was duly established.

The Tribunal found the CIT(A)'s order to be non-speaking and lacking in discussion of the assessee's submissions. Therefore, the issue was restored to the AO for a speaking order.

The Tribunal dismissed the appeal of the Revenue due to low tax effect, as per CBDT circular No. 3/2018 and the decision of the Punjab & Haryana High Court. The dismissal does not affirm the CIT(A)'s order on merits.

The Tribunal held that disallowance under Section 40A(3) was not warranted because the business expediency for cash payments was established. The genuineness of the transactions was not doubted, and the fact that sellers were females who insisted on cash was considered a valid reason.

The Tribunal held that the tubewell qualifies as 'machinery' and is eligible for depreciation at the plant and machinery rate. It also allowed the assessee to claim additional depreciation on plant and machinery, restoring the issue to the CIT(A) for fresh adjudication.

The Tribunal held that interest received under Section 28 of the Land Acquisition Act is an accretion to the value and part of the enhanced compensation, not taxable interest. Therefore, it should be treated as compensation exempt under Section 10(37).

The Tribunal held that the appeal was not maintainable as the tax effect was less than the monetary limit of Rs. 20 lacs specified by the CBDT circular. The Revenue could not provide any exceptions to this circular.

The Tribunal found that while the assessee had made payments through banking channels, the genuineness of the purchases needed to be proven by establishing the sequence of events and transportation of goods. The Revenue was also obligated to provide an opportunity for cross-examination of the persons whose statements were used against the assessee.

The Tribunal held that making a claim which is disallowed in assessment does not automatically warrant a penalty, especially when all material facts are disclosed and there is a bonafide belief. The penalty was not leviable as it was not a case of concealment or furnishing inaccurate particulars.

The Tribunal held that the reopening was bad in law as it was based on an audit objection and constituted a change of opinion, as the AO had already examined the issue of cash payments during the original assessment. The Tribunal also found merit in the assessee's arguments on the grounds of business expediency.

The Tribunal held that the omission was an inadvertent and unintentional mistake, and the assessee was unaware of the interest component. Therefore, the penalty was not sustainable.

The Tribunal dismissed the Revenue's appeal based on CBDT Circular No. 3/2018, which revised the monetary limit for filing appeals. The dismissal was due to the low tax effect and not on the merits of the case.

The Tribunal held that the assessee's claim for depreciation was bonafide as the CBDT circular clarifying amortization was issued after the return was filed. The difference was only in the method of computation, and the case did not involve concealment or inaccurate particulars to attract penalty.

The Tribunal held that for a penalty under Section 271(1)(b) to be attracted, the Assessing Officer must specify the exact date on which the assessee failed to comply with a notice. Since this crucial detail was not addressed by the AO or CIT(A), the penalty cannot be upheld.