ITAT Chennai Judgments — January 2015

The Tribunal decided that the CIT(A) was correct in adopting a higher land value than the AO. However, it remanded the issue of Section 54 exemption back to the CIT(A) for fresh consideration.

The Tribunal found that it was unclear whether only damaged parts were replaced or the entire windmill was substituted. The matter was remitted back to the Assessing Officer for fresh verification of factual aspects.

The Tribunal held that the issue was identical to one previously decided by the Jurisdictional High Court in the assessee's own case. The High Court had ruled that such licence fees were justifiable business expenditure.

The Tribunal held that the issue of whether the payment was compensation or a fine was debatable, and the Assessing Officer's view was a plausible one. Therefore, the revision order was not sustainable.

The Tribunal held that the CIT(A) erred in placing the burden of proof on the Assessing Officer, as Section 292C of the IT Act presumes documents found during a survey to be true, shifting the onus to the assessee. The matter was remanded for fresh examination.

The Tribunal upheld the CIT(Appeals)'s decision, finding that the additions were not sustainable. The liability towards creditors continued to exist, and the property investment was solely by the assessee's brother.

The Tribunal held that for the assessment year in question, disallowance under Section 14A should be made in a reasonable manner, and a 2% of dividend income is justified as per jurisdictional High Court precedent. Since the assessee's own disallowance exceeded this amount, it was restricted to the assessee's self-disallowed amount.

The Tribunal noted a discrepancy in the timeline of the purchase register's impounding and its use during the assessee's statement recording. It found that the entire assessment was vitiated if the purchase register was fabricated.

The Tribunal held that Rule 8D was not applicable for the assessment year. Following the Madras High Court's decision, the disallowance under Section 14A was restricted to 2% of the dividend income.

The Tribunal held that penalty was not leviable as the assessee claimed the deduction based on legal opinion and bonafide belief, following precedents where penalty was not levied on disallowances made on legal grounds.

The Tribunal found that the CIT(Appeals) did not properly consider the assessee's explanation and the confirmation letter from Mohanlal Jain. The matter was remitted back to the CIT(Appeals) for fresh examination.

The Tribunal held that the determination of 'actual cost' under Explanation 3 to Section 43(1) should have arisen in the year of purchase (AY 2009-10), not the current year. Since the AY 2009-10 assessment was reopened and pending, the issue for the current year was consequential.

The Tribunal held that the assessee's agreement to apportion common expenses did not cover expenses exclusively incurred for the web portal business. The matter was restored to the Assessing Officer for fresh examination.

The Tribunal set aside the order of the CIT(A) and restored the matter to the Assessing Officer. The Assessing Officer was directed to ascertain the facts regarding the replaced machinery and allow the claim if it involved introducing compact spinning technology.

The Tribunal found that the CIT(Appeals) had estimated the income instead of ascertaining the source of deposits. Considering the assessee's willingness to explain the deposits and the pending block assessment issues, the matter was restored to the AO for fresh examination.

The Tribunal found merit in the assessee's submissions that the disallowances were made without proper examination and adherence to natural justice. The Tribunal set aside the orders of the CIT(Appeals) on all issues.

The Tribunal held that interest on KVPs accrues only after six months from the date of purchase. Since the KVPs were purchased on January 24, 2006, no interest had accrued by March 31, 2006, for the assessment year in question.

The Tribunal noted that the AO had not examined the assessee's books of accounts. The matter was remitted back to the AO to verify if the transactions were reflected in the books.

The Tribunal held that the overseas commission paid for canvassing sales outside India was not chargeable to tax in India. Therefore, the disallowance made by the Assessing Officer was incorrect.

The Tribunal held that the restriction on mixed objects applies to Section 80G recognition, not Section 12AA registration. Following a High Court judgment, the Tribunal found the DIT's objection unsustainable.

The Tribunal upheld the CIT(Appeals)'s order, stating that the binding decision of the Hon'ble Madras High Court was correctly followed. Therefore, there was no reason to interfere with the allowance of deduction under Section 80-IA.

The Tribunal upheld the CIT(Appeals)'s order, stating that the decision of the Hon'ble Madras High Court was binding. Therefore, the deduction under Section 80-IA was allowed to the assessee.

The Tribunal upheld the deletion of the addition by the CIT(Appeals). The CIT(Appeals) found that the seized cash book was a petty cash book and that the creditor also belonged to the same group, with matching disclosures from the creditor's side.

The Tribunal held that the CIT(Appeals) correctly followed the binding decision of the Hon'ble Madras High Court. Therefore, there was no reason to interfere with the order allowing the deduction.

The Tribunal held that penalty was not leviable as the assessee claimed the deduction based on legal opinion and bonafide belief, following previous decisions in similar cases. The revenue did not prove concealment or furnishing of inaccurate particulars.

The Tribunal upheld the CIT(Appeals)'s decision that expenses incurred in foreign exchange and communication charges are deductible from both export turnover and total turnover for computing deduction under Section 10B. This was based on a Special Bench decision and a prior ruling in the assessee's own case.

The Tribunal held that the pendency of a Special Leave Petition does not prevent authorities from following a binding High Court judgment. The CIT(A) had rightly allowed the deduction by following the Madras High Court's decision.

The Tribunal dismissed the Revenue's appeal regarding local area expenses, holding that the CIT(A)'s 50% disallowance based on a site visit was reasonable. However, the Tribunal allowed the Revenue's appeal on business promotion expenses, disallowing the entire claim due to lack of supporting documents. The appeals concerning research and development expenses were dismissed, upholding the CIT(A)'s deletion of disallowance.

The Tribunal dismissed the Revenue's appeal regarding local area expenses, holding that the CIT(A)'s 50% disallowance based on a site visit was reasonable. However, the Tribunal allowed the Revenue's appeal on business promotion expenses, disallowing the entire claim due to lack of supporting documents. The appeals concerning research and development expenses were dismissed, upholding the CIT(A)'s deletion of disallowance.