ITAT Chennai Judgments — July 2017

The Tribunal held that unabsorbed depreciation and brought forward losses need not be set off before allowing deductions under Sections 10A/10B. It also held that no disallowance under Section 14A can be made if no exempt income is earned.

The Tribunal held that an amount received as advance for installation of wind energy generators, which was later declared as income by the assessee in a subsequent year due to non-compliance, should not be taxed again in the earlier year to avoid double taxation. The Tribunal also ruled that additional depreciation on windmills was not allowable for AY 2011-12 as the relevant provision was effective from AY 2013-14. Furthermore, the advance written off as bad debts for acquiring cranes was allowed as a business loss.

The Tribunal held that an amount received as advance for installation of wind energy generators, which was later declared as income by the assessee in a subsequent year due to non-compliance, should not be taxed again in the earlier year to avoid double taxation. The Tribunal also ruled that additional depreciation on windmills was not allowable for AY 2011-12 as the relevant provision was effective from AY 2013-14. Furthermore, the advance written off as bad debts for acquiring cranes was allowed as a business loss.

The Tribunal held that an amount received as advance for installation of wind energy generators, which was later declared as income by the assessee in a subsequent year due to non-compliance, should not be taxed again in the earlier year to avoid double taxation. The Tribunal also ruled that additional depreciation on windmills was not allowable for AY 2011-12 as the relevant provision was effective from AY 2013-14. Furthermore, the advance written off as bad debts for acquiring cranes was allowed as a business loss.

The Tribunal upheld the CIT(A)'s order, finding that the assessee's surplus income was used for maintaining and expanding its infrastructure and was not distributed to members. The Revenue failed to disprove these findings.

The Tribunal upheld the CIT(A)'s order, finding that the assessee's surplus income was used for maintaining and expanding its infrastructure and was not distributed to members. The Revenue failed to disprove these findings.

The Tribunal found that the documents submitted by the assessee were not examined by the AO. Therefore, the Tribunal remitted the quantum appeal and penalty proceedings back to the AO for fresh examination and a speaking order.

The Tribunal held that the franchise fee income is in the nature of business income and not income from house property. Therefore, the deduction claimed under Section 24 was rightly disallowed.

The Tribunal held that the franchise fee income is in the nature of business income and not income from house property. Therefore, the deduction claimed under Section 24 was rightly disallowed.

The Tribunal held that the amended proviso to Section 40(a)(ia) is a beneficial provision and should be given retrospective effect. Since the recipients had declared the income and paid tax, the revenue was not at a loss.

The Tribunal noted that neither the Authorized Representative (AR) nor the Departmental Representative (DR) appeared for the hearing. Since the assessee was not present and no adjournment was sought, the Tribunal concluded that the assessee was not interested in pursuing the appeal.

The Tribunal upheld the CIT(A)'s order, finding that the assessee's surplus income was used for maintaining and expanding its infrastructure and was not distributed to members. The Revenue failed to disprove these findings.

The Tribunal held that an amount received as advance for installation of wind energy generators, which was later declared as income by the assessee in a subsequent year due to non-compliance, should not be taxed again in the earlier year to avoid double taxation. The Tribunal also ruled that additional depreciation on windmills was not allowable for AY 2011-12 as the relevant provision was effective from AY 2013-14. Furthermore, the advance written off as bad debts for acquiring cranes was allowed as a business loss.

The CIT(A) deleted the disallowance, finding that the recipients had paid taxes on the interest income and that the payments were not outstanding. The Tribunal upheld the CIT(A)'s order, agreeing that no disallowance was warranted under the circumstances.

The Tribunal held that the construction made by the assessee was an 'outhouse' or 'servant quarters' and not a residential house as required by Section 54F. The Tribunal also noted the lack of approved plans and substantiated evidence for the construction costs.

The Tribunal held that the reopening for AY 2006-07 was bad in law as the notice was issued after four years and there was no assessment under Section 143(3). For other years, reopening within four years was valid. Additions for unexplained cash deposits were upheld due to lack of explanation. Gifts from the spouse were remitted to the AO for verification of the spouse's capacity.

The Tribunal held that Section 14A read with Rule 8D cannot be applied in a vacuum without any exempt income being earned. Since the assessee had not earned any exempt income in the relevant year, the disallowance was not justified.

The Tribunal found that the documents submitted by the assessee were not examined by the AO. Therefore, the Tribunal remitted the quantum appeal and penalty proceedings back to the AO for fresh examination and a speaking order.

The ITAT decided to remit the matter back to the Assessing Officer for verification of the details to be filed by the assessee. The assessee was directed to deposit ₹25,000 to the Prime Minister's Relief Fund.

The Tribunal held that the assessee is entitled to the benefit of TDS credit even if it was mistakenly reflected in Form 26AS for the current year, as the tax was paid on the income in the earlier years when it was earned.

The Tribunal agreed that Rule 8D was not applicable for AY 1995-96 and that the 2% disallowance based on the High Court ruling was appropriate. However, due to discrepancies in the quantum of exempt income, the matter was remitted back to the AO for fresh consideration.

The Tribunal acknowledged the assessee's laxity but, in the interest of justice, decided to remit the matter back to the CIT(A) for a fresh consideration. The assessee was cautioned to appear promptly for future hearings.

The Tribunal held that the facts regarding the utilization of the loan from Super Selectro were not clearly emanating from the Assessment Order. The matter was restored to the AO for re-adjudication after allowing the assessee an opportunity to substantiate that the loans were used for business purposes.

The Tribunal confirmed the disallowance of professional fees for which bills were not produced. It also upheld the disallowance of amalgamation expenses, stating they should have been claimed by the amalgamated company, not the assessee.

The Tribunal held that no penalty was leviable under Section 271(1)(c) as the assessee's explanation was not disproved and the additions were minor. For Section 271B, the penalty was deleted as the audit report was obtained within time, and the delay in filing the return was due to the auditor's illness and subsequent death.

The Tribunal held that the assessee needs to produce necessary material for the purchase and distribution of gift articles to prove they were for maintaining good relations. The matter was remitted back to the Assessing Officer for re-examination.

The Tribunal held that no penalty was leviable under Section 271(1)(c) as the assessee's explanation was not disproved and the additions were minor. For Section 271B, the penalty was deleted as the audit report was obtained within time, and the delay in filing the return was due to the auditor's illness and subsequent death.

The Tribunal, noting the repeated adjournments and the absence of the assessee's representative, concluded that the assessee was not interested in pursuing the appeal. Consequently, the appeal was dismissed.

The Tribunal held that the payment was a refund of excess price collected by the assessee and not a penalty for violating any law. Therefore, it was allowable as revenue expenditure.

The Tribunal upheld the validity of the reopening of assessment. However, it found that additions based solely on information about bogus bills without verifying the assessee's invoices were not justified.

The Tribunal upheld the validity of the reopening of assessment. However, it found that additions based solely on information about bogus bills without verifying the assessee's invoices were not justified.

The Tribunal held that the assessee needs to produce necessary material for the purchase and distribution of gift articles to prove they were for maintaining good relations. The matter was remitted back to the Assessing Officer for re-examination.

The Tribunal held that the income from the Kalyana Mandapam is not eligible for exemption under Section 11 as it falls under the proviso to Section 2(15) and is not incidental to the trust's charitable objects. Depreciation on assets whose cost was already allowed as application of income was also denied.

The Tribunal noted that a subsequent circular clarified that Cyprus was removed as a notified jurisdictional area with retrospective effect. Therefore, the matter was remitted back to the AO for fresh consideration in light of this circular.

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

The Tribunal noted that a subsequent circular clarified that Cyprus was removed as a notified jurisdictional area with retrospective effect. Therefore, the matter was remitted back to the AO for fresh consideration in light of this circular.

The Tribunal found that the CIT(A) considered fresh evidence without proper verification by the Assessing Officer. Therefore, the matter was remitted back to the Assessing Officer for fresh verification and decision.

The Tribunal held that the commencement of construction before the sale of the original property does not disentitle the assessee from claiming deduction under Section 54. The law does not require the identity of funds used for construction if borrowed or own funds were used.

The Tribunal held that the issue regarding the Gratuity Fund contribution should be remanded to the AO for verification of the approval application status. For the additional depreciation claim, the Tribunal, relying on a previous ITAT order, directed the AO to consider the assessee as a manufacturer and grant the depreciation.