ITAT Chennai Judgments — September 2016

The Tribunal held that travelling expenses paid to a foreign agent were part of a comprehensive commission payment and not deductible. It also held that services rendered by a UK company for erection and supervision in India were taxable in India, necessitating TDS deduction.

The Tribunal held that travelling expenses paid to a foreign agent were part of a comprehensive commission payment and not deductible. It also held that services rendered by a UK company for erection and supervision in India were taxable in India, necessitating TDS deduction.

The Tribunal held that the Assessing Officer failed to consider the aggregate average advance made by rural branches for the provision for standard assets. For investment depreciation reserve, the Tribunal found that the applicability of the Madras High Court judgment depended on whether investments were made as per statutory requirements or for trading purposes.

The Tribunal held that the Assessing Officer failed to consider the aggregate average advance made by rural branches for the provision for standard assets. For investment depreciation reserve, the Tribunal found that the applicability of the Madras High Court judgment depended on whether investments were made as per statutory requirements or for trading purposes.

The Tribunal held that surcharge is an integral part of income-tax. Once the assessee is treated as an Association of Person for the levy of income-tax, the same status must continue for the levy of surcharge. Therefore, the assessee's claim to be treated as a company for surcharge purposes was rejected.

The Tribunal held that losses arising from derivative transactions (hybrid option and forward contracts) entered into for hedging business exposure are to be treated as business losses. The matter of Section 35D deduction and Section 14A disallowance were remitted back to the Assessing Officer for fresh consideration.

The Tribunal held that the investment made on 30.06.2011 in REC Bonds was within the due date for filing the return of income and thus eligible for deduction. The matter regarding the disallowance of Rs. 24,42,000/- was remitted back to the Assessing Officer for fresh consideration.

The Tribunal held that the investment made on 30.06.2011 in REC Bonds was within the due date for filing the return of income and thus eligible for deduction. The matter regarding the disallowance of Rs. 24,42,000/- was remitted back to the Assessing Officer for fresh consideration.

The Tribunal held that the AO's enhancement of rental income was unjustified as the property was under attachment, and the actual rent received should be considered. It also held that the disallowance of pre-construction interest was unjustified as the AO had accepted similar claims in prior years.

The Tribunal held that losses arising from derivative transactions (hybrid option and forward contracts) entered into for hedging business exposure are to be treated as business losses. The matter of Section 35D deduction and Section 14A disallowance were remitted back to the Assessing Officer for fresh consideration.

The Tribunal noted the assessee's absence and lack of adjournment request, inferring a lack of interest in pursuing the appeal. Following precedent, the appeal was dismissed.

The Tribunal held that the logo charges were revenue in nature, as the assessee did not acquire ownership rights and only obtained a license for usage for a limited period in lieu of payment. The Tribunal followed its own previous orders on similar issues.

The Tribunal upheld the CIT(A)'s decision to exclude investments in subsidiary companies for disallowance computation under Section 14A read with Rule 8D. The Tribunal found that such investments were made for business expediency and not solely for earning dividend income.

The Tribunal held that disallowance under Section 14A is not applicable if no exempt income is received. It also ruled that manufacturing ready-mix concrete is not 'manufacture' for additional depreciation and upheld the CIT(A)'s allowance of Section 80IA deduction based on a binding High Court judgment.

The Tribunal, noting the assessee's absence and lack of interest in pursuing the appeal, dismissed the appeal in limine. The assessee was granted liberty to file a recall petition with sufficient cause for non-appearance.

The Tribunal upheld the order of the Commissioner (Appeals), following the jurisdictional High Court's decision that amendments to Section 43B are curative and retrospective, allowing deductions for payments made before the return filing due date.

The Tribunal upheld the order of the Commissioner (Appeals), following the jurisdictional High Court's decision that amendments to Section 43B are curative and retrospective, allowing deductions for payments made before the return filing due date.

The Tribunal upheld the CIT(A)'s decision to exclude investments in subsidiary companies for disallowance computation under Section 14A read with Rule 8D. The Tribunal found that such investments were made for business expediency and not solely for earning dividend income.

The Tribunal found that there was no material to support the assessee's claim that the deposits were out of earlier withdrawals. The CIT(A)'s analysis showed that whenever money was deposited, an equal amount was transferred or paid to others, with no indication of personal withdrawal by the assessee.

The Tribunal held that depreciation is an element of operating cost and should be considered. It also found that the assessee failed to establish that the comparable companies selected by the TPO were functionally different.

The Tribunal held that the sole issue was the estimation of the fair market value (FMV) as on 01.04.1981. The Tribunal opined that the guideline value of the Sub-Registrar is only one factor and does not always reflect the market value. The FMV should be determined considering various factors like location, infrastructure, public access, potential for development, and proximity to public institutions. Given that Sarangapani Street, T. Nagar, is a prime area with good infrastructure, the Tribunal found the CIT(Appeals)'s conclusion that the assessee's estimated FMV was reasonable and acceptable to be correct. Regarding the building value, the Tribunal noted that the debris from demolition would have fetched ₹15 lakhs in 1982, and the assessee claimed only 46% of this amount. The Tribunal found this claim to be reasonable and upheld the CIT(Appeals)'s decision. Therefore, the Tribunal found no reason to interfere with the order of the lower authority and confirmed it.

The Tribunal found a factual dispute regarding whether the assessee has multiple units and how losses were set off. Therefore, the matter was remitted back to the Assessing Officer for re-examination.

The Tribunal found a factual dispute regarding whether the assessee has multiple units and how losses were set off. Therefore, the matter was remitted back to the Assessing Officer for re-examination.

The Tribunal found a factual dispute regarding whether the assessee has multiple units and how losses were set off. Therefore, the matter was remitted back to the Assessing Officer for re-examination.

The Tribunal held that the land was purchased as a capital asset and not stock-in-trade. Therefore, the profit on its sale must be treated as capital gain, making Section 50C applicable.

The Tribunal held that since the undisclosed income was assessed under Section 153A following a search, any penalty could only be levied under Section 271AAA. As Section 271AAA(3) prohibits penalty under Section 271(1)(c) in such cases, the entire penalty was deleted.

The Tribunal held that since the undisclosed income was assessed under Section 153A following a search, any penalty could only be levied under Section 271AAA. As Section 271AAA(3) prohibits penalty under Section 271(1)(c) in such cases, the entire penalty was deleted.

The Tribunal held that giving the assessee an opportunity to produce material before the AO would promote justice and not prejudice the revenue. Therefore, the orders of the lower authorities were set aside.

The Tribunal deleted the addition on interest on money lending, stating the assessee's own offered rate was higher and the AO's estimation was arbitrary. It also deleted additions for agricultural income, chit fund contributions, and sale of jewellery, finding the AO's disallowances unjustified. The addition on cost of construction was also deleted as the difference was less than 15%.

The Tribunal deleted the addition on interest on money lending, stating the assessee's own offered rate was higher and the AO's estimation was arbitrary. It also deleted additions for agricultural income, chit fund contributions, and sale of jewellery, finding the AO's disallowances unjustified. The addition on cost of construction was also deleted as the difference was less than 15%.

The Tribunal deleted the addition on interest on money lending, stating the assessee's own offered rate was higher and the AO's estimation was arbitrary. It also deleted additions for agricultural income, chit fund contributions, and sale of jewellery, finding the AO's disallowances unjustified. The addition on cost of construction was also deleted as the difference was less than 15%.

The Tribunal deleted the addition on interest on money lending, stating the assessee's own offered rate was higher and the AO's estimation was arbitrary. It also deleted additions for agricultural income, chit fund contributions, and sale of jewellery, finding the AO's disallowances unjustified. The addition on cost of construction was also deleted as the difference was less than 15%.

The Tribunal deleted the addition on interest on money lending, stating the assessee's own offered rate was higher and the AO's estimation was arbitrary. It also deleted additions for agricultural income, chit fund contributions, and sale of jewellery, finding the AO's disallowances unjustified. The addition on cost of construction was also deleted as the difference was less than 15%.

The Tribunal deleted the addition on interest on money lending, stating the assessee's own offered rate was higher and the AO's estimation was arbitrary. It also deleted additions for agricultural income, chit fund contributions, and sale of jewellery, finding the AO's disallowances unjustified. The addition on cost of construction was also deleted as the difference was less than 15%.

The Tribunal held that the Assessing Officer's order was silent on the depreciation claim and lacked application of mind. Therefore, the CIT rightly exercised revisional jurisdiction under Section 263.

The Tribunal deleted the addition on interest on money lending, stating the assessee's own offered rate was higher and the AO's estimation was arbitrary. It also deleted additions for agricultural income, chit fund contributions, and sale of jewellery, finding the AO's disallowances unjustified. The addition on cost of construction was also deleted as the difference was less than 15%.

The Tribunal deleted the addition on interest on money lending, stating the assessee's own offered rate was higher and the AO's estimation was arbitrary. It also deleted additions for agricultural income, chit fund contributions, and sale of jewellery, finding the AO's disallowances unjustified. The addition on cost of construction was also deleted as the difference was less than 15%.

The Tribunal held that the credit entries in the books of account, claimed as share premium and capital, were a colourable device to reduce tax liability. In the absence of satisfactory explanation and basis for the high valuation of shares, the addition made by the Assessing Officer was confirmed.

The Tribunal confirmed the CIT(A)'s order, finding that the assessee was eligible for deduction under Section 10A. This was based on STPI approval being renewed and communicated to the AO, and a similar deduction being allowed by the Tribunal in a prior assessment year.

The Tribunal held that the TPO was not justified in adopting the Cost Plus Method by comparing domestic sales with export sales to AEs. The nature of products and services offered in both segments were different, making them incomparable.

The Tribunal held that while Section 14A and Rule 8D are applicable even if no expenditure is claimed or borrowed funds are used, the Assessing Officer's calculation of the disallowance was not on record. Therefore, the matter was remanded for fresh consideration.

The Tribunal held that working capital is a relevant factor in determining arm's length price and that the DRP failed to provide a speaking order addressing the assessee's objections on comparables and working capital adjustments.

The Tribunal held that the appeal filed by the revenue was not maintainable. This was based on a CBDT circular instructing officers not to file appeals where the tax effect is less than Rs. 10,00,000/-.

The Tribunal held that the Assessing Officer was bound to follow the Tribunal's previous order on an identical issue for earlier assessment years, which had allowed the disallowance based on commercial expediency. Merely filing an appeal before a higher forum does not justify not following the Tribunal's order.

The Tribunal deleted the addition on interest on money lending, stating the assessee's own offered rate was higher and the AO's estimation was arbitrary. It also deleted additions for agricultural income, chit fund contributions, and sale of jewellery, finding the AO's disallowances unjustified. The addition on cost of construction was also deleted as the difference was less than 15%.