ITAT Chennai Judgments — September 2015

The Tribunal upheld the CIT(Appeals)'s decision that the expenditure was for current repairs. The replacement of parts did not increase production capacity or efficiency, and the supplier's letter confirmed the parts did not constitute a complete new line.

The Tribunal held that the CIT(Appeals) was not correct in observing that Rule 7B of the Income-tax Rules was not applicable. The matter was remitted back to the CIT(Appeals) to recompute the income from the coffee estate by applying Rule 7B.

The Tribunal upheld the disallowance of unrecoverable advances and work-in-progress due to lack of evidence. The issue of property sale addition was to be re-examined. The Tribunal found the loan transaction questionable and remitted it for fresh investigation by the Assessing Officer.

The Tribunal upheld the disallowance of unrecoverable advances and work-in-progress due to lack of evidence. The issue of property sale addition was to be re-examined. The Tribunal found the loan transaction questionable and remitted it for fresh investigation by the Assessing Officer.

The Tribunal held that certain outsourced services, specifically support and customer support services involving identification of customers and marketing, require technical and managerial expertise and thus attract TDS under Section 194J. However, housekeeping services were considered to fall under Section 194C.

The Tribunal held that certain outsourced services, specifically support and customer support services involving identification of customers and marketing, require technical and managerial expertise and thus attract TDS under Section 194J. However, housekeeping services were considered to fall under Section 194C.

The Tribunal held that merely making a claim that is not sustainable in law does not amount to furnishing inaccurate particulars of income. The assessee had provided all the details, and the disallowances were based on debatable issues.

The Tribunal held that the pendency of a Special Leave Petition before the Apex Court is not a reason to deviate from a binding High Court judgment. The CIT(Appeals) rightly followed the Madras High Court's decision.

The Tribunal held that taxing the cessation of liability as income twice, after the assessee had voluntarily offered it, was not permissible. The addition made by the Assessing Officer on this account was directed to be deleted.

The Tribunal held that an order passed against a dead person is a nullity in the eyes of law. Since the Commissioner passed the order against a deceased assessee without impleading the legal representative, the order cannot stand.

The Tribunal upheld the CIT(Appeals)'s order, finding no infirmity. It held that the property sold could be considered a residential property, and even if it were vacant land, exemption under Section 54F was available.

The Tribunal held that the CIT(Appeals) failed to pass a speaking order by re-appreciating the material and recording his own reasons. The order of the CIT(Appeals) was set aside.

The Tribunal held that the Assessing Officer cannot solely rely on the Volker Committee report without conducting an independent inquiry into the nature of payments. The CIT(A) had rightly deleted the addition, following High Court and Tribunal precedents.

The Tribunal held that the expenses incurred on construction of structures on leased premises, which provide an enduring benefit, fall under Explanation 1 to Section 32(1) of the Act and are to be treated as capital expenditure. The Tribunal relied on the Supreme Court judgment in the case of Madras Auto Service (P) Ltd.

The Tribunal held that while the assessee's claim of difficulty in obtaining vouchers from farmers was noted, the lack of even minimal particulars like village names in the payment records made cross-verification impossible. Therefore, some disallowance was warranted.

The Tribunal held that the CIT(Appeals) must re-appreciate the material and pass a speaking order, and the assessee's failure to appear should not automatically confirm the additions. The order of the CIT(Appeals) was set aside.

The Tribunal held that the Commissioner of Income Tax (Appeals) had no jurisdiction to enhance the assessment by considering a new source of income which was not before the Assessing Officer. The Tribunal noted that the Assessing Officer had requested the CIT(A) to enhance the assessment after the High Court had stayed the second reopening notice issued to the assessee. This request was considered to be for a collateral purpose and not bonafide, as the Revenue authorities should have waited for the outcome of the Writ Petition filed by the assessee. The Tribunal also observed that the CIT(A) relied on the director's statement regarding profit, but the assessee had stated that this income was to be taxed in the hands of an AOP separately. Furthermore, the Tribunal held that Section 50C of the Income Tax Act, 1961, is applicable only for determining the sale consideration for the computation of capital gains under Chapter IV-E and cannot be applied for determining income under other heads, such as business income. Since the sale of the property was treated as business income and not capital gain, Section 50C was not applicable. Therefore, the CIT(A) was not justified in enhancing the assessment. The appeal was partly allowed.

The Tribunal held that the pendency of a Special Leave Petition before the Apex Court is not a reason to deviate from a binding High Court judgment. The CIT(Appeals) rightly followed the Madras High Court's decision.

The Tribunal found that the assessee had not properly reconciled the two turnovers with supportive evidence before the Assessing Officer. Therefore, the issue was remitted back to the Assessing Officer for fresh consideration.

The Tribunal held that expenditure incurred on partitions and interior works in leasehold premises, which do not result in the creation of a new asset or alteration of the existing building's structure, is revenue in nature.

The Tribunal found that the balance sheets filed by the assessees explained the investments as contributions from own capital and reserves. Therefore, there was no unexplained investment to be brought to tax.

The Tribunal upheld the disallowance of expenses claimed against commission receipts as the assessee failed to provide supporting evidence. However, the issue of unexplained investment was remitted back to the Assessing Officer for fresh consideration.

The Tribunal found that the assessee had not properly reconciled the two turnovers with supportive evidence before the Assessing Officer. Therefore, the issue was remitted back to the Assessing Officer for fresh consideration.