ITAT Chennai Judgments — March 2017

The Tribunal held that the capital reserve arising from the amalgamation of a wholly owned subsidiary does not constitute income taxable under Section 28(iv). The transaction was considered capital in nature and not a revenue receipt.

The Tribunal decided that the royalty payment should be split, with 75% treated as revenue expenditure and 25% as capital expenditure, allowing depreciation on the latter. The issue of marketing service fees was remitted back to the Assessing Officer for fresh verification.

The Tribunal noted that in the assessee's own case, 75% of royalty was treated as revenue and 25% as capital. For marketing fees, since the genuineness of services required further verification, the matter was remitted back to the Assessing Officer.

The Tribunal held that the penalty notice issued under Section 271(1)(c) was invalid because it did not explicitly specify whether the proceedings were for concealment of income or furnishing inaccurate particulars. Therefore, the penalty was cancelled.

The Tribunal held that the CIT(Appeals) rightly deleted the addition as the assessee had explained the source of the deposits by producing ledger extracts, cash book, and passbook. The Tribunal found that the transactions were recorded in the books and the deposits were reflected with contra entries.

The Tribunal held that the reopening of assessment was valid as the assessee had not filed a voluntary return. It further upheld the recomputation of capital gains based on the DVO's valuation, finding that the DVO considered the pending litigation. The enhancement of the cost of acquisition by the CIT(A) was also upheld.

The Tribunal held that the purchase of raw materials, establishment of plant and machinery, and completion of trial production indicate the commencement of business operations. Therefore, expenses debited to the Profit & Loss Account related to revenue are allowable.

The Tribunal held that the capital reserve arising from the amalgamation of a wholly owned subsidiary does not constitute income taxable under Section 28(iv). The transaction was considered capital in nature and not a revenue receipt.

The Tribunal held that the addition made by the TPO and upheld by the DRP was unsustainable. The Tribunal remitted the issue to the Assessing Officer (AO) for fresh consideration, allowing the assessee an opportunity to substantiate its claim with supporting evidence.

The Tribunal held that the appeal was not maintainable due to the incorrect payment of appeal fees. The assessee was given liberty to refile the appeal after complying with the fee payment.

The Tribunal held that the CIT(A) failed to dispose of the appeal on merits as required by law. Therefore, the assessee should be given one last chance to present its case.

The tribunal directed the Assessing Officer to decide the issue of Section 80-IB deduction in light of a High Court judgment. Penalty proceedings were deemed premature. The disallowance of representative office fees was deleted as the payment was not taxable in India. Some issues were remitted back for fresh examination.

For AY 2011-12, the CIT(A) did not consider the revised return showing no tax payable, hence the matter was remitted back for fresh consideration. For AY 2012-13, the appeal was rightly dismissed as the admitted tax was not paid.

The tribunal held that the Assessing Officer's order, giving effect to the earlier Tribunal's direction, was passed beyond the time limit prescribed under Section 153(2A) of the Income Tax Act, 1961. Consequently, the AO's order was set aside as being time-barred.

The tribunal directed the Assessing Officer to decide the issue of Section 80-IB deduction in light of a High Court judgment. Penalty proceedings were deemed premature. The disallowance of representative office fees was deleted as the payment was not taxable in India. Some issues were remitted back for fresh examination.

The Tribunal upheld the lower authority's order, confirming that income from property letting is business income, as decided by the Apex Court in the assessee's own case. The disallowance under Section 14A was also confirmed based on a co-ordinate bench's decision in the assessee's own case.

The Tribunal found that the total cost of acquisition of the new asset was not clearly established from the orders of the revenue authorities. Therefore, the matter was remitted back to the AO for de-novo consideration.

The Tribunal held that for a banking company, investments are part of its business and stock-in-trade, thus Section 14A is not applicable. The disallowance made by the CIT(Appeals) was deleted.

The Tribunal held that for a banking company, investments are part of its business and stock-in-trade, thus Section 14A is not applicable. The disallowance made by the CIT(Appeals) was deleted.

The tribunal directed the Assessing Officer to decide the issue of Section 80-IB deduction in light of a High Court judgment. Penalty proceedings were deemed premature. The disallowance of representative office fees was deleted as the payment was not taxable in India. Some issues were remitted back for fresh examination.

For AY 2011-12, the CIT(A) did not consider the revised return showing no tax payable, hence the matter was remitted back for fresh consideration. For AY 2012-13, the appeal was rightly dismissed as the admitted tax was not paid.

The Tribunal held that for a banking company, investments are part of its business and stock-in-trade, thus Section 14A is not applicable. The disallowance made by the CIT(Appeals) was deleted.

The Tribunal confirmed the CIT(A)'s order regarding royalty payment, finding it to be in the revenue field. For Section 14A, the Tribunal followed the Madras High Court's ruling that disallowance is not permissible in a year where no exempt income is earned.

The Tribunal found that the PAN number was erroneously uploaded by the stock exchange, and the assessee had not made the alleged investments. Therefore, the addition made by the AO was deleted.

The Tribunal held that there was no transfer of property in the year under consideration as the sale deed was executed and possession was handed over in the subsequent year. The Tribunal also allowed a reasonable estimation for the cost of improvement.

The Tribunal held that disallowance under Section 40A(3) is only applicable if a deduction is claimed against business income. For payments claimed as loans or capital expenditures, the Assessing Officer was directed to verify if they were indeed not charged to the P&L account. For payments made due to business expediency, the disallowance was deleted, but for material purchases where expediency was not proven, the disallowance was sustained.

The tribunal directed the Assessing Officer to decide the issue of Section 80-IB deduction in light of a High Court judgment. Penalty proceedings were deemed premature. The disallowance of representative office fees was deleted as the payment was not taxable in India. Some issues were remitted back for fresh examination.

The Tribunal held that for a banking company, investments are part of its business and stock-in-trade, thus Section 14A is not applicable. The disallowance made by the CIT(Appeals) was deleted.

The Tribunal held that since the assessee filed a revised return voluntarily and the Assessing Officer accepted it with a minor disallowance, it cannot be considered concealment of income or furnishing of inaccurate particulars. Therefore, penalty under Section 271(1)(c) is not leviable.

The Tribunal held that the deduction under Section 80P(2)(c)(i) for trading activities is automatically restricted to Rs. 1,00,000. Furthermore, the deduction under Section 80P(2)(a)(i) for banking business is on profits and gains attributable to the business, not gross interest receipts before setting off expenses.

The tribunal directed the Assessing Officer to decide the issue of Section 80-IB deduction in light of a High Court judgment. Penalty proceedings were deemed premature. The disallowance of representative office fees was deleted as the payment was not taxable in India. Some issues were remitted back for fresh examination.

The tribunal directed the Assessing Officer to decide the issue of Section 80-IB deduction in light of a High Court judgment. Penalty proceedings were deemed premature. The disallowance of representative office fees was deleted as the payment was not taxable in India. Some issues were remitted back for fresh examination.

The Tribunal held that Rule 8D is applicable only for investments made to earn exempt income. Since the investment was for business purposes in the joint venture, the disallowance of interest was not justified.

The Tribunal held that the AO was barred from initiating reassessment proceedings under Section 147 when the time limit for issuing notice under Section 143(2) had not expired. The CIT(A)'s order cancelling the reassessment was upheld.

The Tribunal condoned the delay in filing the appeal and, considering the interest payment issue, remitted the matter back to the Assessing Officer for fresh examination in the interest of justice.

The Tribunal held that the statement recorded by the AO from the contractor, which confirmed the demolition of the old house and construction of a new one, constituted evidence in favor of the assessee. Therefore, the assessee was entitled to the deduction under Section 54.

The Tribunal upheld the CIT(A)'s decision, finding that the society's activities, including extending loans to its members (even associate members), qualified for deduction under Section 80P(2)(a)(i). The Tribunal relied on High Court and ITAT precedents.

The Tribunal held that the appeal was defective due to non-payment of appeal fees. Consequently, the adjournment petition was not entertained, and the appeal was dismissed as not maintainable.

The Tribunal held that it has the power to admit legal issues raised for the first time at the appellate stage. Therefore, the matter was remitted back to the Assessing Officer to decide the issue on merits.

The Tribunal held that the appeal was not maintainable as the tax effect was below the revised monetary limit of Rs. 10 lakhs set by CBDT Circular No. 21/2015. The circular was applicable retrospectively to pending appeals.

The Tribunal held that the assessee was not interested in pursuing the appeal. Consequently, the appeal was dismissed without going into the merits of the case.

The Tribunal held that disallowance under Section 40(a)(ia) is not applicable in cases of short deduction of TDS, provided the recipient has paid the tax. For cases of non-deduction, the matter was remanded to the AO to allow the assessee to prove tax compliance by the recipient.

The Tribunal held that disallowance under Section 40(a)(ia) is not applicable in cases of short deduction of TDS, provided the recipient has paid the tax. For cases of non-deduction, the matter was remanded to the AO to verify if the recipient had paid the tax.

The Tribunal upheld the CIT(A)'s order, agreeing that the society's activities, including lending to associate members, were eligible for deduction under Section 80P(2)(a)(i). The Madras High Court's decision in a similar case was found to be squarely applicable.

The Tribunal observed that the assessee was not interested in pursuing the appeal. Following established precedents, the Tribunal dismissed the appeal in limine.

The Tribunal upheld the CIT(A)'s decision to allow the deduction. It relied on the Madras High Court's judgment which held that the nature of members (associate vs. voting) and interest rates charged do not disqualify a cooperative society from claiming deduction under Section 80P(2)(a)(i) if its activities are confined to its members.

The Tribunal upheld the CIT(A)'s decision, following the jurisdictional High Court's ruling that a CFS, when considered an 'inland port' and an extended arm of the port, is an eligible infrastructure facility for Section 80IA deduction.

The Tribunal noted that the issue of limitation and the specificity of the penalty notice were not raised before lower authorities. Since these issues go to the root of the matter, the Tribunal decided to remit the entire issue back to the Assessing Officer for fresh consideration.

The Tribunal noted that the issue of limitation and the specificity of the penalty notice were not raised before lower authorities. Since these issues go to the root of the matter, the Tribunal decided to remit the entire issue back to the Assessing Officer for fresh consideration.

The Tribunal held that no interest income accrued on the deposit due to doubt of recovery, applying the 'real income' theory. It also held that interest paid to the partner was for business purposes, ensuring continuous supply of yarn.