ITAT Chennai Judgments — February 2017

The Tribunal found that the AO's computation of income using two different methods resulted in inconsistent taxable incomes, indicating an incorrect approach. The Tribunal decided to set aside the orders of the lower authorities and remit the case back to the AO for fresh assessment.

The Tribunal found that the AO's computation of income using two different methods resulted in inconsistent taxable incomes, indicating an incorrect approach. Therefore, the matter was remitted back to the AO for a fresh assessment using a single, correct method.

The Tribunal found that the AO's computation of income using two different methods resulted in inconsistent taxable incomes, indicating an incorrect approach. Therefore, the matter was remitted back to the AO for a fresh assessment using a single, correct method.

The Tribunal held that there was a reasonable cause for the delay, considering the need to trace the assessment order and locate parties for substantiating claims. The delay was condoned to promote the cause of justice.

The Tribunal found that the AO incorrectly applied both investment and income methods, leading to different taxable incomes. The AO's approach to calculating income was flawed, requiring fresh consideration.

The Tribunal, relying on the Apex Court's judgment in CIT v Meghalaya Steels Ltd, held that the excise duty refund was derived from the industrial undertaking. Therefore, the CIT(A) was justified in allowing the claim.

The Tribunal confirmed the CIT(Appeals)'s decision regarding transfer pricing adjustments for AY 2004-05 and software expenses for all years, citing previous tribunal orders. However, for AY 2009-10 and 2010-11, training expenses were treated as capital expenditure due to enduring benefit.

The Tribunal confirmed the CIT(Appeals)'s decision regarding transfer pricing adjustments for AY 2004-05 and software expenses for all years, citing previous tribunal orders. However, for AY 2009-10 and 2010-11, training expenses were treated as capital expenditure due to enduring benefit.

The Tribunal found that crucial aspects, including the classification of land by the State Revenue Department and the actual cultivation, were not examined by the lower authorities. The assessee's intention to develop farm sites also needed further scrutiny.

The Tribunal found that the AO's computation of income using two different methods resulted in inconsistent taxable incomes, indicating an incorrect approach. The Tribunal decided to set aside the orders of the lower authorities and remit the case back to the AO for fresh assessment.

The Tribunal found that the AO's computation of income using two different methods resulted in inconsistent taxable incomes, indicating an incorrect approach. The Tribunal decided to set aside the orders of the lower authorities and remit the case back to the AO for fresh assessment.

The Tribunal found that the AO's computation of income using two different methods resulted in inconsistent taxable incomes, indicating an incorrect approach. The Tribunal decided to set aside the orders of the lower authorities and remit the case back to the AO for fresh assessment.

The Tribunal held that mixing up of papers is a human error and constitutes a reasonable cause for delay. Therefore, the delay was condoned, and the appeal was restored to the CIT (Appeals) for a decision on merits.

The Tribunal held that the addition of ₹1,25,000/- was not justified, considering the economic conditions and the assessee's engagement in business. The orders of the lower authorities were set aside, and the addition was deleted.

The Tribunal found the assessee's explanation for cash payments on weekends unsatisfactory and upheld the disallowance. It clarified that a significant payment for land advance was not the subject of the Section 40A(3) disallowance.

The Tribunal held that the assessment order, being consequential to a set-aside Section 263 order, cannot stand. The pendency of a High Court appeal by the Revenue without a stay does not justify a different view.

The Tribunal held that there was a reasonable cause for the delay, considering the need to trace the assessment order and locate parties for substantiating claims. The delay was condoned to promote the cause of justice.

The Tribunal held that if the borrowed funds were used for the purchase of the immovable asset, the interest expenditure should be allowed as a deduction. Disallowing it solely for not capitalizing it to the asset's cost was considered a technical mistake.

The Tribunal confirmed the CIT(Appeals)'s decision regarding transfer pricing adjustments for AY 2004-05 and software expenses for all years, citing previous tribunal orders. However, for AY 2009-10 and 2010-11, training expenses were treated as capital expenditure due to enduring benefit.

The Tribunal held that the Assessing Officer has a duty to verify and allow the correct amount of depreciation irrespective of the assessee's claim. The matter was remitted back to the AO for verification.

The Tribunal allowed the assessee's cross-objection regarding the exclusion of M/s. Amtek Ring Gears Ltd. as a comparable. The assessee argued that this company followed a different accounting year (June to June) compared to the assessee's (April to March), making it an unsuitable comparable due to potential wide-ranging effects on operating results. The Tribunal, relying on the decision in M/s. Hewlett Packard (India) Globalsoft (P) Ltd., held that a company following a different accounting year ceases to be a good comparable unless its financials are reconciled to the tested party's period. The Revenue's ground regarding the inclusion of M/s. Ceekay Daikin Limited and the exclusion of forex loss from operating costs were not explicitly addressed in the provided excerpt of the judgment, but the overall result indicates a partial allowance of the cross-objections.

The tribunal inferred that the assessee was not interested in pursuing the appeal. Consequently, the appeal was dismissed for want of prosecution.

The Tribunal found that the lower authorities incorrectly assumed the loss was related to External Commercial Borrowings (ECB). Since the assessee denied availing ECB and the facts required further verification, the matter was set aside.

The Tribunal held that an amount of Rs. 14,21,362/- disclosed in the trial balance could not be added as unexplained investment. It also deleted the addition of Rs. 18 lakhs related to loan settlements, finding no evidence of the assessee making such payments.

The Tribunal held that the issue of bonus provision requires verification by the AO to determine if it attracts Section 43B and whether it should be taxed. Similarly, warranty expenses require further verification by the AO to ascertain their correctness and genuineness.

The Tribunal held that the reopening of assessment under Section 147 was valid. However, it ruled that rental income from commercial properties, when commercially exploited and consistently treated as business income by the assessee and accepted by the department in prior years, should be assessed as business income.

The Tribunal held that the issue of bonus provision requires verification by the AO to determine if it attracts Section 43B and whether it should be taxed. Similarly, warranty expenses require further verification by the AO to ascertain their correctness and genuineness.

The Tribunal held that since the assessee had disclosed her income and particulars in the return, there was no concealment of income. The claim for exemption was considered a bonafide mistake or oversight by the accountant.

The Tribunal held that expenditure incurred for establishing new showrooms/workshops on leased premises is capital in nature. However, it directed the AO to verify the breakup and allow expenses for upkeep of existing assets as revenue.

The Tribunal held that the valuation report submitted by the assessee was unscientific and unacceptable. However, since the AO did not provide evidence to disprove the assessee's claimed indexed cost of ₹3,16,000/-, the AO was directed to adopt this amount.

The Tribunal held that the reopening of assessment under Section 147 was valid. However, it ruled that rental income from commercial properties, when commercially exploited and consistently treated as business income by the assessee and accepted by the department in prior years, should be assessed as business income.

The Tribunal held that the TPO should re-evaluate the turnover filter for comparable companies and consider including M/s.HMT Ltd. as an additional comparable. The Tribunal also directed the TPO to re-work the margins and make necessary adjustments for working capital, allowing this ground for statistical purposes.

The Tribunal held that the period of holding for capital gains should be reckoned from the date the asset was converted from stock-in-trade to a capital asset. Since this period was less than 36 months, the gains were correctly treated as short-term.

The Tribunal held that an amount of Rs. 14,21,362/- disclosed in the trial balance could not be added as unexplained investment. It also deleted the addition of Rs. 18 lakhs related to loan settlements, finding no evidence of the assessee making such payments.

The Tribunal held that the cash deposits could have been made from the assessee's opening cash balance, thus explaining the source. Therefore, the addition sustained by the CIT(A) was not warranted.

The Tribunal held that for the purpose of indexation in cases of inheritance, the cost of acquisition of the original owner must be considered. The second issue regarding the sale deeds was remitted back to the AO for fresh consideration.

The Tribunal held that the Assessing Officer failed to examine the rental agreements, confirmation letters, and documentary evidence for mutual fund investments. The matter was remitted back to the Assessing Officer for fresh consideration of all evidence.

The Tribunal held that since the partnership firm came into existence after a portion of the expenditure was incurred, the addition could not be made in the hands of the firm. The addition was deleted.

The Tribunal found prima facie arithmetic mistakes in the calculations and decided to re-examine the matter. The entire issue was remitted back to the Assessing Officer for fresh consideration.

The Tribunal followed its own coordinate bench decisions for earlier assessment years. It held that leasehold improvements qualifying as temporary structures are eligible for higher depreciation rates and that rent paid and deposits made to a related party were not excessive, especially considering rent control legislation.

The Tribunal, following its previous orders, remitted the matter back to the Assessing Officer. The Assessing Officer was directed to verify if charity/mahamai was disclosed separately in bills, if separate books of account were maintained for charity, and if payments were made to the trust.

The Tribunal followed the Madras High Court's decision in Velayudhaswamy Spinning Mills (P) Ltd. v. ACIT, which held that prior year losses are not to be set off against profits for Section 80-IA deduction. The Supreme Court also dismissed the Revenue's SLP on this matter.

The Tribunal held that the statutory deduction under Section 36(1)(viia) should be considered, even if not raised before lower authorities. The matter was remitted back to the Assessing Officer for verification and fresh adjudication.

The Tribunal held that the assessee was not interested in pursuing the appeal. Therefore, the appeal was dismissed in limine.

The Tribunal, following the proviso to Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963, dismissed the appeals for non-prosecution. The assessee can move for recall if sufficient cause for non-appearance is shown.

The Tribunal, following the proviso to Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963, dismissed the appeals for non-prosecution. The assessee can move for recall if sufficient cause for non-appearance is shown.

The Tribunal held that while the second proviso to Section 40(a)(ia) could be considered retrospective if the payee offered the income to tax, the Assessing Officer was not given an opportunity to verify this claim. Therefore, the issue required a fresh examination.

The Tribunal held that the addition for the opening balance was incorrect as the source was from a prior assessment year. The cash deposit was justified by the assessee's declared income and religious activities. The vehicle purchase was from an earlier year, and the addition for insufficient drawings was arbitrary.

The Tribunal held that the assessee was not interested in pursuing the appeal. Therefore, the appeal was dismissed in limine.

The Tribunal, following the proviso to Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963, dismissed the appeals for non-prosecution. The assessee can move for recall if sufficient cause for non-appearance is shown.