ITAT Chennai Judgments — June 2016

The Tribunal held that if an assessee claims exemption under Section 11, it cannot claim depreciation under Section 32, as this would amount to double deduction. The Tribunal also found that the trust was engaged in commercial activities and was not entitled to exemption under Section 11.

The Tribunal upheld the CIT(A)'s decision, stating that the previous tribunal orders in favor of the assessee, even if under appeal to the High Court, are binding on subordinate authorities. Therefore, the deletion of the excess rent addition was justified.

The Tribunal held that service tax paid is deductible under Section 43B of the Act on actual payment basis, even if the liability accrued in a prior year. Regarding bad debts, the Tribunal found that the conditions of Section 36(1)(vii) needed further examination.

The Tribunal set aside the order of the CIT(Appeals) and remitted the issue back to the Assessing Officer. The AO is directed to verify the genuineness of transactions and compliance with Section 194C(6) after providing a hearing to the assessee.

The Tribunal found that the assessee had not substantiated the basis for its warranty provision calculation. However, considering the Supreme Court's ruling on warranty provisions for sophisticated goods, the matter was remitted back to the Assessing Officer for fresh verification.

The Tribunal held that the authorities below had not considered the revised return filed on 31.03.2011 within the stipulated period. The matter was remitted back to the DRP for fresh consideration.

The Tribunal held that if an assessee claims exemption under Section 11, it cannot claim depreciation under Section 32, as this would amount to double deduction. The Tribunal also found that the trust was engaged in commercial activities and was not entitled to exemption under Section 11.

The Tribunal held that if an assessee claims exemption under Section 11, it cannot claim depreciation under Section 32, as this would amount to double deduction. The Tribunal also found that the trust was engaged in commercial activities and was not entitled to exemption under Section 11.

The Tribunal held that if the amount was ultimately adjusted towards salary, rent, or sale consideration of a property, it would not fall under the purview of Section 2(22)(e). The case was remitted to the Assessing Officer for fresh consideration.

The Tribunal held that the CIT(A) should consider the additional evidence filed by the assessee to meet the ends of justice. The matter was remitted back to the CIT(A) for a decision on merits after considering the evidence.

The Tribunal held that while Section 40A(3) is applicable, the peculiar circumstances of working in remote areas, dealing with illiterate suppliers, and the business exigencies warrant a relaxation. Therefore, the disallowance was restricted to 50% for certain expenses.

The Tribunal held that while cash payments were made, the assessee's business operations in remote areas and dealing with illiterate suppliers presented unique circumstances. It directed the Assessing Officer to restrict the disallowance to 50% for certain expenses, acknowledging the business exigencies.

The Tribunal held that running the auditorium for commercial activities like marriages and exhibitions was not incidental to the trust's charitable objects. Therefore, the income generated was not eligible for exemption under Section 11.

The Tribunal held that the Assessing Officer's disallowance was based on presumption and suspicion without proper investigation. The Tribunal found that the assessee was a going concern with temporary business suspension and upheld the CIT(A)'s deletion of additions.

The Tribunal found that expenses incurred after the business is set up but before commencement of commercial operations are revenue in nature and allowable. The Tribunal set aside the issue to the Assessing Officer for verification of evidence regarding the business setup.

The Tribunal partly allowed the assessee's appeal regarding foreign travel expenses, allowing some expenditure related to vendor development and import purchases. The Tribunal also partly allowed the Revenue's appeal concerning machinery upgradation, remitting the issue back to the Assessing Officer for re-examination. The Revenue's ground on carry forward depreciation loss was dismissed.

The Tribunal held that the Assessing Officer's disallowance was based on presumption and suspicion without proper investigation. The Tribunal found that the assessee was a going concern with temporary business suspension and upheld the CIT(A)'s deletion of additions.

The Tribunal condoned the delay in filing the appeal, finding reasonable cause due to the assessee prosecuting the matter before the CIT(Appeals). The penalty levied under Section 271(1)(c) was deleted as claiming a statutory deduction in a belated return does not amount to furnishing inaccurate particulars.

The Tribunal partly allowed the assessee's appeal regarding foreign travel expenses, allowing some expenditure related to vendor development and import purchases. The Tribunal also partly allowed the Revenue's appeal concerning machinery upgradation, remitting the issue back to the Assessing Officer for re-examination. The Revenue's ground on carry forward depreciation loss was dismissed.

The Tribunal confirmed the addition of ₹ 15 lakhs received as a confirming party, finding the assessee's explanation unsupported by documents. The issue of unexplained credits from the employer and salary was remitted back to the AO for fresh consideration. The issue of advance paid to landowners was also remitted back to the AO for verification of cash balance and reconciliation.

The Tribunal held that the CIT(A) erred in deleting the capital gains charged on the land by treating it as agricultural. It also noted that once an order is quashed, nothing remains for adjudication.

The Tribunal found that the assessee was not provided with adequate opportunity to present his case, particularly regarding the existence of a Permanent Establishment (PE) in India. Therefore, the case was remitted back to the CIT(A) for fresh adjudication.

The Tribunal held that the assessee cannot be expected to anticipate future amendments to the law. Since the project was approved before the amendment to Section 80IB(10), the amended provisions are not applicable, and the deduction rightly allowed.

The Tribunal held that deemed dividend income under Section 2(22)(e) can only be assessed in the hands of the shareholder who holds shares in the lending company, not in the hands of the recipient company if it is not a shareholder. Therefore, the CIT(Appeals) was correct in deleting the addition.

The Tribunal held that the CIT(A) should have reappreciated the material on record independently for the penalty proceedings, rather than confirming the penalty solely due to the assessee's non-appearance. The penalty proceedings are separate from the quantum appeal.

The Tribunal held that the CIT(Appeals) has the power to enhance assessment and is expected to examine appeals on merit, even if the assessee does not appear. Dismissing the appeal without considering the merits is not appropriate.

The Tribunal held that a transaction between a husband and wife, who are considered one entity under common law, cannot be construed as a violation of statutory provisions for the purpose of levying penalty under Section 271D. The object of Section 271D is to penalize genuine transactions between two different parties.

The Tribunal directed the Assessing Officer to restrict the addition on account of unexplained investment in stock to ₹32,34,343/-, reducing it from the initial figure of ₹6,14,15,338/-.

The Tribunal held that deemed dividend income under Section 2(22)(e) can only be assessed in the hands of the shareholder who holds shares in the lending company, not in the hands of the recipient company if it is not a shareholder. Therefore, the CIT(Appeals) was correct in deleting the addition.

The Tribunal held that the payments made for the purchase of software products were not in the nature of royalty. Therefore, there was no obligation to deduct tax at source under Section 195, and consequently, proceedings under Section 201(1) and 201(1A) were not justified.

The Tribunal found that the Assessing Officer did not bring sufficient evidence on record to prove the foreign agent had a permanent establishment in India or that the services were technical. Therefore, the issue was set aside to the Assessing Officer for further verification.

The Tribunal held that the land was intended to be treated as a capital asset, even though the firm was formed for land purchase and sale. Merely entering into a development agreement does not automatically make it stock-in-trade if the intention was investment.

The Tribunal allowed commission payments at 1% of the sale value. For clearing charges, the issue was remitted to the AO for further evidence. The claim for set-off of business losses against long-term capital gains was also remitted to the AO to disallow only excessive or unreasonable expenditure.

The Tribunal held that the excess profit declared by the assessee over the arm's length price determined by the TPO is eligible for deduction under Section 10B. Mere pendency of an appeal before the High Court is not a reason to deviate from established precedent.

The Tribunal held that the CIT(A) correctly deleted the penalty as the assessee provided evidence of disbursement of the remaining loan amount. The Tribunal found no infirmity in the CIT(A)'s order.

The Tribunal held that the DRP and TPO erred by not using one of the prescribed methods under Section 92C of the Income-tax Act and instead resorting to a statistical method. The Tribunal also noted that the DRP's reliance on its prior order for a different assessment year was not appropriate.

The assessee's counsel requested to withdraw the appeal as the assessee was not interested in prosecuting it. The Tribunal permitted the withdrawal.

The Tribunal noted that a related appeal for the same assessee and assessment year was already remitted to the Assessing Officer. Therefore, the Revenue's appeal was also remitted to the Assessing Officer for fresh consideration.

The Tribunal held that the customary practice of gifting jewellery during marriages and family events cannot be ignored. Merely because the jewellery was not disclosed in pre-search returns does not invalidate the claim, especially given the family's financial background and business history.

The Tribunal held that Section 2(22)(e) of the Income-tax Act is not applicable when the assessee holds less than 10% of the shares. The transfer of shares was a business transaction and not a dividend.

The Tribunal held that giving the assessee an opportunity to reconcile the figures would promote justice. The matter was remitted back to the Assessing Officer for fresh consideration.

The Tribunal held that it is a customary practice to give gold jewellery as Sridhan during marriages and ceremonial occasions. Considering the social and financial status of the assessees and their families, the receipt of such jewellery by their wives cannot be ruled out.

The Tribunal held that it is a customary practice to give gold jewellery as Sridhan during marriage and that spouses might acquire jewellery after marriage. The authorities below should consider the social and financial background of the assessees and their parents.

The Tribunal held that the Dispute Resolution Panel (DRP) passed a non-speaking order, failing to address the assessee's submissions and rejecting additional evidence summarily. Therefore, the matter was remitted back to the DRP for a fresh consideration and to pass a speaking order.

The Tribunal held that Section 40A(2)(a) is not applicable as no expenditure was incurred by the assessee; the land was a capital contribution. The difference in valuation of the land between the assessee and the Assessing Officer was also considered too minor to warrant disallowance.

The Tribunal allowed commission payments at 1% of the sale value. For clearing charges, the issue was remitted to the AO for further evidence. The claim for set-off of business losses against long-term capital gains was also remitted to the AO to disallow only excessive or unreasonable expenditure.

The Tribunal held that the land was intended to be treated as a capital asset, even though the firm was formed for land purchase and sale. Merely entering into a development agreement does not automatically make it stock-in-trade if the intention was investment.

The Tribunal held that the customary practice of gifting jewellery during marriages and family events cannot be ignored. Merely because the jewellery was not disclosed in pre-search returns does not invalidate the claim, especially given the family's financial background and business history.

The Tribunal held that the customary practice of gifting jewellery during marriages and family events cannot be ignored. Merely because the jewellery was not disclosed in pre-search returns does not invalidate the claim, especially given the family's financial background and business history.

The Tribunal held that the customary practice of gifting jewellery during marriages and family events cannot be ignored. Merely because the jewellery was not disclosed in pre-search returns does not invalidate the claim, especially given the family's financial background and business history.