ITAT Chandigarh Judgments — December 2018

The Tribunal held that no disallowance under Section 14A was warranted due to sufficient own interest-free funds. For other expenses under Rule 8D(2)(iii), the disallowance was restricted to the exempt income earned. The disallowance of interest under Section 36(1)(iii) was deleted due to sufficient own funds. Consequently, the penalty was also deleted.

The Tribunal held that no disallowance under Section 14A was warranted due to sufficient own interest-free funds. For other expenses under Rule 8D(2)(iii), the disallowance was restricted to the exempt income earned. The disallowance of interest under Section 36(1)(iii) was deleted due to sufficient own funds. Consequently, the penalty was also deleted.

The Tribunal held that filing an appeal is not sufficient; it must be effectively pursued. Since the assessee failed to prosecute the appeal, it was dismissed.

The Tribunal found that the evidence provided (Khasra Girdawari and a photograph) was insufficient to prove the construction of a residential house. The matter was restored to the AO to verify if a residential house has been constructed on the property.

The tribunal held that an appeal requires effective prosecution, not just filing. Following established precedents, the appeal was dismissed for non-prosecution.

The Tribunal held that the assessee is not interested in pursuing the appeal and dismissed the appeal for non-prosecution, following established legal principles.

The Tribunal held that the assessee is entitled to the claim of exemption under Section 54F for installments paid towards the new house, as the purchase was within the stipulated period and the beneficial object of the provision should be considered.

The Tribunal held that it was unreasonable to assume the income was from other sources, especially since the Assessing Officer had no evidence of other income. The Tribunal directed the Assessing Officer to treat the Rs. 16.50 lacs as part of capital gains.

The Tribunal held that if the assessee is not deemed in default under Section 201, the disallowance under Section 40(a)(ia) is not attracted. The Tribunal relied on High Court decisions regarding the applicability of the proviso. The matter was restored to the AO for verification of the payees' compliance.

The Tribunal found that the CIT(E) had not properly examined the facts and had not given the appellant a proper opportunity to present its case. Therefore, the matter was restored to the CIT(E) for a fresh decision.

The Tribunal held that interest on borrowed funds used for advances to others is disallowable, but directed the AO to calculate it based on the period funds were borrowed before being offset by own funds. For repair expenses, the Tribunal held that renovations in leased premises for business smoothness are revenue expenditure.

The Tribunal held that interest on borrowed funds used for advances to others is disallowable, but directed the AO to calculate it based on the period funds were borrowed before being offset by own funds. For repair expenses, the Tribunal held that renovations in leased premises for business smoothness are revenue expenditure.

The Tribunal held that interest on borrowed funds used for advances to others is disallowable, but directed the AO to calculate it based on the period funds were borrowed before being offset by own funds. For repair expenses, the Tribunal held that renovations in leased premises for business smoothness are revenue expenditure.

The Tribunal held that if the assessee is not deemed in default under Section 201, the disallowance under Section 40(a)(ia) is not attracted. The Tribunal relied on High Court decisions regarding the applicability of the proviso. The matter was restored to the AO for verification of the payees' compliance.

The tribunal allowed the assessee's request to withdraw the appeals. The Revenue did not object to the withdrawal. Consequently, the appeals were dismissed as withdrawn.

The Tribunal decided that interest from customers and suppliers should be treated as business income, while interest from banks should be 'income from other sources', allowing netting of interest expenditure against interest income where a direct nexus exists. Certain other incomes were directed to be considered as income of the undertaking eligible for deduction, while head office expenses allocation was upheld. The subsidy received from the Government of Punjab was treated as revenue receipt.

The Tribunal upheld the CIT(A)'s deletion of penalty. It found that the assessee had declared all details and acted on a bonafide belief regarding eligibility for the deduction, thus no penalty was leviable under Section 271(1)(c).

The Tribunal upheld the order of the CIT(A), noting that the disallowance was restricted and that similar disallowances in subsequent years were also limited. The Tribunal found no reason to interfere with the CIT(A)'s decision.

The Tribunal decided that interest from customers and suppliers should be treated as business income, while interest from banks should be 'income from other sources', allowing netting of interest expenditure against interest income where a direct nexus exists. Certain other incomes were directed to be considered as income of the undertaking eligible for deduction, while head office expenses allocation was upheld. The subsidy received from the Government of Punjab was treated as revenue receipt.

The Tribunal decided that interest from customers and suppliers should be treated as business income, while interest from banks should be 'income from other sources', allowing netting of interest expenditure against interest income where a direct nexus exists. Certain other incomes were directed to be considered as income of the undertaking eligible for deduction, while head office expenses allocation was upheld. The subsidy received from the Government of Punjab was treated as revenue receipt.

The Tribunal decided that interest from customers and suppliers should be treated as business income, while interest from banks should be 'income from other sources', allowing netting of interest expenditure against interest income where a direct nexus exists. Certain other incomes were directed to be considered as income of the undertaking eligible for deduction, while head office expenses allocation was upheld. The subsidy received from the Government of Punjab was treated as revenue receipt.

The Tribunal allowed the assessee's request to withdraw the appeals. The Revenue did not object to the withdrawal.

The Tribunal confirmed the CIT(A)'s deletion of disallowance under Section 14A, following the jurisdictional High Court's view that it cannot be invoked without exempt income. The Tribunal also confirmed the deletion of interest disallowance under Section 36(1)(iii) considering the availability of interest-free funds.

The Tribunal held that the ITAT's direction was to apply Rule 8D for calculating disallowance, not to enhance the disallowance itself. The increased disallowance was a consequence of correctly applying the law, which the assessee had initially requested. Therefore, the enhanced disallowance was permissible.

The Tribunal condoned the delay in filing the appeal before the CIT(A) due to the assessee not receiving notices at the correct address and the CIT(A) not providing a hearing. The CIT(A)'s order refusing to admit the appeal was set aside.

The Tribunal allowed a further sum of Rs. 3,00,000/- towards getting the property vacated, reducing the disallowance. It also allowed Rs. 1,00,000/- for renovation costs, restricting the disallowance on that issue.

The Tribunal held that the CIT(A) was correct in directing the AO to comply with the ITAT's earlier directions, as the AO had failed to do so. This direction was not considered a setting aside of the assessment, but rather an order to fulfill prior directives.

The Tribunal held that the CIT(A) was correct in directing the AO to comply with the ITAT's earlier directions, as the AO had failed to do so. This direction was not considered a setting aside of the assessment, but rather an order to fulfill prior directives.

The Tribunal condoned the delay in filing the appeal before the CIT(A) due to the assessee not receiving notices at the correct address and the CIT(A) not providing a hearing. The CIT(A)'s order refusing to admit the appeal was set aside.

The Tribunal held that the cash deposit in the bank account is equivalent to an investment and can be added under Section 69. The assessee's explanation for the source of the cash was not plausible given the totality of circumstances.

The CIT(A) admitted additional evidence, obtained a remand report from the AO which was in favour of the assessee, and deleted the additions. The Tribunal found no prejudice to the Revenue.

The Tribunal held that the interim order staying the demand had merged with the final order of the CIT(A). Consequently, the Revenue's appeal had become infructuous.

The Tribunal, considering the past and subsequent GP rates and the assessee's explanations, directed the GP rate to be taken at 12.50%. The Tribunal also allowed the assessee's ground regarding the addition of Rs. 2,04,000/- for non-charging of interest.

The Tribunal held that interest received on enhanced compensation for compulsory acquisition of agricultural land is part of the compensation and exempt from tax under Section 10(37). However, the factual issue of whether the land was agricultural was restored to the Assessing Officer for fresh examination.

The Tribunal held that if an assessee possesses sufficient own interest-free funds, it is presumed that interest-free advances/investments are made from these own funds. Therefore, disallowance of interest expenditure in such cases is not justified.

The Tribunal held that if an assessee possesses sufficient interest-free funds, it is presumed that capital advances and investments are made from these own funds. The loss on foreign currency fluctuation was also considered an allowable revenue expenditure for saving interest costs.

The Tribunal dismissed the appeals for non-prosecution, following established legal principles and High Court judgments. The Revenue's representative also submitted that the issues were covered in favor of the assessee by a previous Tribunal decision.

The Tribunal held that interest received on enhanced compensation for compulsory acquisition of agricultural land is part of the compensation and exempt from tax under Section 10(37). However, the factual issue of whether the land was agricultural was restored to the Assessing Officer for fresh examination.

The Tribunal held that if an assessee possesses sufficient own interest-free funds, it is presumed that interest-free advances/investments are made from these own funds. Therefore, disallowance of interest expenditure in such cases is not justified.

The Tribunal dismissed the appeals for non-prosecution, following established legal principles and High Court judgments. The Revenue's representative also submitted that the issues were covered in favor of the assessee by a previous Tribunal decision.

The Tribunal, considering the past and subsequent GP rates and the assessee's explanations, directed the GP rate to be taken at 12.50%. The Tribunal also allowed the assessee's ground regarding the addition of Rs. 2,04,000/- for non-charging of interest.

The CIT(A) deleted the addition after verifying that the agents had indeed received the commission and considering the nature of the assessee's multi-level marketing business. The Tribunal upheld the CIT(A)'s order.

The Tribunal held that if an assessee possesses sufficient own interest-free funds, it is presumed that interest-free advances/investments are made from these own funds. Therefore, disallowance of interest expenditure in such cases is not justified.

The Tribunal held that the commission was not a separate payment but a discount on sales, and since no separate amount was paid, the disallowance was unwarranted. The unsecured loans from directors were also allowed as the creditworthiness and genuineness were established.

The Tribunal found that the assessee was unable to appear before the CIT(A) due to his incarceration. Therefore, to serve the interest of justice, the assessee should be given an opportunity to present his case.

The Tribunal held that the commission was not a separate payment but a discount on sales, and since no separate amount was paid, the disallowance was unwarranted. The unsecured loans from directors were also allowed as the creditworthiness and genuineness were established.

The Tribunal condoned the delay in filing the appeal. It held that the rent payment was not disputed and the assessee had provided compelling circumstances for the increase, thus deleting the disallowance.

The Tribunal held that the assessee had a bonafide belief for claiming the set-off of interest income. It was not a fit case for penalty as every disallowance does not automatically attract penalty provisions.

The Tribunal restricted the disallowance under Section 14A to 5% of the total tax-exempt earned income. It also directed the inclusion of interest from customers, insurance claims, and processing charges in eligible income for Section 80IC deduction, while excluding profit on raw material sale.

The Tribunal restricted the disallowance under Section 14A to 5% of the total tax-exempt earned income. It also directed the inclusion of interest from customers, insurance claims, and processing charges in eligible income for Section 80IC deduction, while excluding profit on raw material sale.