ITAT Chennai Judgments — June 2015

The Tribunal held that the expenditure on Life Extension Program and rejuvenation of Bucket Wheel Excavators was allowable as revenue expenditure, as there was no increase in production capacity and it was covered by previous decisions.

The Tribunal held that the expenditure on Life Extension Program and rejuvenation of Bucket Wheel Excavators was allowable as revenue expenditure, as there was no increase in production capacity. The issue of deductibility of tax at source on payments made under a supply contract was remitted back to the Assessing Officer.

The Tribunal held that the Assessing Officer was justified in reopening the assessment as processing under Section 143(1) does not preclude reopening. However, on merits, the matter was remitted back to the Assessing Officer for fresh consideration regarding the nature of the letting out activity.

The Tribunal held that Section 2(22)(e) applies to payments made by a company to its shareholders or for their benefit. Since the assessee-company was not a shareholder in the sister concern, the provisions of Section 2(22)(e) were not applicable to the assessee.

The Tribunal noted that additional material was filed by the assessee which was not considered by the lower authorities. Therefore, the matter was remitted back to the Assessing Officer for fresh examination of the additional material.

The Tribunal held that for income tax purposes, transfer of property to a partnership firm can occur without registration of a document, as per Section 2(47) of the Income Tax Act. Consequently, the gain on sale was correctly treated as short-term capital gain.

The Tribunal held that the Addl. Commissioner cannot issue directions prejudicial to the assessee without providing an opportunity to be heard. Since no such opportunity was given, the matter needs reconsideration.

The Tribunal held that the expenditure on Life Extension Program and rejuvenation of Bucket Wheel Excavators was allowable as revenue expenditure, as there was no increase in production capacity. The issue of deductibility of tax at source on payments made under a supply contract was remitted back to the Assessing Officer.

The Tribunal held that reassessment proceedings initiated under Section 148 were not valid for certain assessment years due to expired time limits. It also noted that additions cannot be made solely on presumption and assumption without supporting material specific to the assessee.

The Tribunal held that reassessment proceedings initiated under Section 148 were not valid for certain assessment years due to expired time limits. It also noted that additions cannot be made solely on presumption and assumption without supporting material specific to the assessee.

The Tribunal held that reassessment proceedings initiated under Section 148 were not valid for certain assessment years due to expired time limits. It also noted that additions cannot be made solely on presumption and assumption without supporting material specific to the assessee.

The Tribunal held that reassessment proceedings initiated under Section 148 were not valid for certain assessment years due to expired time limits. It also noted that additions cannot be made solely on presumption and assumption without supporting material specific to the assessee.

The Tribunal held that reassessment proceedings initiated under Section 148 were not valid for certain assessment years due to expired time limits. It also noted that additions cannot be made solely on presumption and assumption without supporting material specific to the assessee.

The Tribunal held that reassessment proceedings initiated under Section 148 were not valid for certain assessment years due to expired time limits. It also noted that additions cannot be made solely on presumption and assumption without supporting material specific to the assessee.

The Tribunal held that reassessment proceedings initiated under Section 148 were not valid for certain assessment years due to expired time limits. It also noted that additions cannot be made solely on presumption and assumption without supporting material specific to the assessee.

The Tribunal held that reassessment proceedings initiated under Section 148 were not valid for certain assessment years due to expired time limits. It also noted that additions cannot be made solely on presumption and assumption without supporting material specific to the assessee.

The Tribunal held that the expenditure on LEP and rejuvenation of BWE was allowable as revenue expenditure, following its own previous decisions and the Supreme Court's ruling in CIT vs. Saravana Spinning Mills P. Ltd. The issue of TDS interest was remitted back to the Assessing Officer.

The Tribunal held that the expenditure on Life Extension Program and rejuvenation of Bucket Wheel Excavators was allowable as revenue expenditure, as there was no increase in production capacity and the expenditure was for maintaining the existing assets.

The Tribunal held that when the assessee admits to incurring indirect expenditure for exempt income, the Assessing Officer is mandated by Section 14A(2) and Rule 8D(1) to determine the disallowance strictly according to the method prescribed in Rule 8D(2), not on an ad hoc 10% basis. The matter was remitted to the Assessing Officer for re-computation as per Rule 8D(2).

The Tribunal held that reassessment proceedings initiated under Section 148 were not valid for certain assessment years due to expired time limits. It also noted that additions cannot be made solely on presumption and assumption without supporting material specific to the assessee.

The Tribunal held that disallowances made under Section 14A read with Rule 8D cannot be added back while computing book profit under Section 115JB. Such disallowances are only for computing taxable income in the normal course.

The Tribunal held that additions in completed assessments can only be made based on incriminating material found during a search. Since no such material was found, the additions made without it were not justified, and consequently, the penalty levied was also deleted.

The Tribunal held that if an assessee borrows funds on which interest is paid and also advances funds to sister concerns or others without interest and without a business purpose, the interest on borrowings to that extent is disallowable under Section 36(1)(iii). The assessee failed to establish that the advances were made from own funds.

The Tribunal held that the reasons provided for the delay were bald statements and indicated negligence and inaction on the part of the assessee. The Tribunal found no sufficient cause for the delay.

The Tribunal held that additions in completed assessments can only be made based on incriminating material found during a search. Since no such material was found, the additions made without it were not justified, and consequently, the penalty levied was also deleted.

The Tribunal held that disallowances made under Section 14A read with Rule 8D cannot be added back while computing book profit under Section 115JB. Such disallowances are only for computing taxable income in the normal course.

The Tribunal held that the reasons provided for the delay were bald statements and indicated negligence and inaction on the part of the assessee. The Tribunal found no sufficient cause for the delay.

The Tribunal dismissed the appeal for non-prosecution, citing the assessee's failure to appear. The assessee can apply for recall of the order if sufficient cause for non-appearance is shown.

The Tribunal found that the CIT(A) did not address the delay in filing the appeal before adjudicating the matter on merits. Therefore, the case was remitted back to the CIT(A) to decide on the delay first.

The Tribunal held that the land in question was agricultural land and did not fall within the definition of a capital asset under Section 2(14) of the Income Tax Act. Therefore, no capital gains tax could be charged on its transfer.

The Tribunal held that the assessee need not be the owner of the land to be considered a developer for Section 80IB(10) purposes. The key is whether the assessee undertook all the risks from project commencement to completion, involving design, development, financial involvement, and technical know-how.

The Tribunal held that mere hiring of a vehicle does not constitute 'carrying out any work' under Section 194C. Furthermore, Section 194-I, which deals with rent/hire charges, was amended to be applicable from assessment year 2008-09, not the current assessment year 2006-07.

The Tribunal held that interest paid on capital borrowed for acquiring an asset not yet put to use is not deductible. Such expenditure should be capitalized, and only depreciation is allowable.

The Tribunal held that mere communication of fashion trends does not constitute technical service. Technical service involves applying techniques in the manufacturing process, which was not the case here. Therefore, the CIT(A)'s decision was upheld.

The Tribunal held that while disallowance under Section 14A is applicable, the calculation needs to be adjusted. It directed the Assessing Officer to disallow 2% of the exempt income as expenditure. Additionally, it ruled that disallowances under Section 14A should be considered for computing deduction under Section 10A.

The Tribunal held that the CIT(A)'s order regarding the deletion of the restriction of deduction u/s.80IA was correct, relying on the jurisdictional High Court's judgment. Similarly, the disallowance of foreign agency commission and warehousing charges was also upheld as correct, following earlier decisions of the Tribunal and High Court, as the payments were not chargeable to tax in India.

The Tribunal held that obtaining Form 15-J/15-I within the time period is mandatory, but filing before the concerned authority is discretionary. If obtained before the due date, it can be treated as sufficient compliance.

The Tribunal found that the lease agreement was not on record, making it impossible to determine if the payment was rent or sale consideration. Therefore, the matter was remitted back to the Assessing Officer for fresh adjudication after examining the lease deed.

The Tribunal held that while disallowance under Section 14A is applicable, the calculation needs to be adjusted. It directed the Assessing Officer to disallow 2% of the exempt income as expenditure. Additionally, it ruled that disallowances under Section 14A should be considered for computing deduction under Section 10A.

The Tribunal held that the CIT(Appeals) does not have the power to dismiss an appeal for non-prosecution and is expected to dispose of the appeal on its merits. The previous order of the CIT(Appeals) was set aside.

The Tribunal allowed the Revenue's ground regarding share issue expenses, citing a High Court decision. It rejected the ground on depreciation, upholding the CIT(A)'s order. The ground on Section 80HHC deduction was also rejected, following High Court and Supreme Court precedents. Finally, the ground on Section 35(2AB) deduction was dismissed, following a previous Tribunal order.

The Tribunal held that expenses excluded from export turnover must also be excluded from total turnover, confirming the CIT(A)'s direction. Regarding Section 10B, the Tribunal found that the approval by the Board constituted under the Industries (Development & Regulation) Act, 1951, was not clearly established and remitted the issue for re-examination, including a potential claim under Section 10A.

The Tribunal held that expenses excluded from export turnover must also be excluded from total turnover. Regarding Section 10B, the Tribunal found insufficient material to confirm approval by the specified Board and decided to re-examine the issue, including eligibility under Section 10A.

The Tribunal held that Section 40(a)(ia) is applicable only to expenses that are 'payable' and outstanding at the balance sheet date, not to expenses already paid. The disallowance should only be for outstanding amounts.

The Tribunal held that while the agreement was for 99 years, the copyright of a film subsists only for 60 years. Therefore, the transfer of rights beyond this period constitutes a sale, not royalty. Consequently, TDS was not required.

The Tribunal held that the rectification under Section 154 was justified as it was a mistake apparent from the record. However, penalty under Section 271(1)(c) for disallowance of rent payment due to non-deduction of TDS was deleted.

The Tribunal held that the rectification under Section 154 was justified as it was a mistake apparent from the record. However, penalty under Section 271(1)(c) for disallowance of rent payment due to non-deduction of TDS was deleted.

The Tribunal held that the Assessing Officer was justified in treating the loan amount as unexplained cash credit. The lender's financial capacity and the lack of supporting evidence for his own loan rendered the transaction not genuine.

The Tribunal held that the Assessing Officer was justified in treating the loan amount as unexplained cash credit. The lender's financial capacity and the lack of supporting evidence for his own loan rendered the transaction not genuine.