ITAT Chennai Judgments — August 2017

The ITAT held that the CIT(A) exceeded his jurisdiction by directing the re-opening of assessments of third parties who were not before him, violating principles of natural justice. The Tribunal also noted that a lower sale price by a partnership firm might be due to business compulsions, not necessarily a gift.

The Tribunal held that disallowance should not be made merely on suspicion when payments were made by cheque and commission receipts were reflected in the recipients' tax returns. However, the disallowance related to Ms. Pinky Devi was upheld due to lack of substantiation.

The Tribunal held that 'other income' not directly derived from the industrial activity is not eligible for deduction under Section 80IA, but allowed estimation of expenses at 10% of such income. Disallowances under Section 14A were restored to the AO for re-adjudication. Mine closure expenses were also restored to the AO for verification regarding escrow accounts and subsequent taxability.

The Tribunal held that 'other income' not directly derived from the industrial activity is not eligible for deduction under Section 80IA, but allowed estimation of expenses at 10% of such income. Disallowances under Section 14A were restored to the AO for re-adjudication. Mine closure expenses were also restored to the AO for verification regarding escrow accounts and subsequent taxability.

The Tribunal held that 'other income' not directly derived from the industrial activity is not eligible for deduction under Section 80IA, but allowed estimation of expenses at 10% of such income. Disallowances under Section 14A were restored to the AO for re-adjudication. Mine closure expenses were also restored to the AO for verification regarding escrow accounts and subsequent taxability.

The Tribunal held that Section 44AD is not applicable to persons carrying on a profession, as was the case with the assessee running a coaching center. However, the 50% disallowance of expenditure was deemed excessive.

The Tribunal found that the addition under Section 69C requires the assessee to be unable to explain the source of expenditure. Since the assessee claimed sale proceeds were deposited in the bank and payments were made through banking channels, the matter was remanded for fresh examination.

The Tribunal, in the interest of justice, remitted the matter back to the CIT(A) for a fresh hearing, granting the assessee one more opportunity. The assessee was cautioned to cooperate fully in future proceedings.

The Tribunal held that micro-financing activity for the poor cannot be considered non-charitable solely due to earning a surplus, especially when the surplus is used for the trust's objects. The consultation fees paid to trustees were also deemed reasonable.

The Tribunal held that micro-financing activity for the poor cannot be considered non-charitable solely due to earning a surplus, especially when the surplus is used for the trust's objects. The consultation fees paid to trustees were also deemed reasonable.

The Tribunal allowed the exemption for the Provident Fund balance, finding the termination was due to industry-wide recession and not the assessee's fault. The housing loan interest deduction was allowed subject to verification of its utilization for purchasing the residential flat.

The CIT(A) had failed to adjudicate on the grounds raised by the assessee regarding the validity of re-opening the assessment under Section 147 without proper approval under Section 151 and without forming an independent opinion. Therefore, the CIT(A)'s order was set aside for fresh consideration.

The Tribunal held that the AO was not justified in denying the assessee's claim for exemption under Section 10(38) for long-term capital gains, citing a CBDT circular that prevents disputes when the assessee opts for capital gains treatment for shares held over 12 months. The grounds related to disallowance under Section 14A were dismissed as not pressed.

The Tribunal held that the AO should have verified the actual recipient of the income instead of solely relying on Form 26AS. The matter was remitted back to the AO for proper verification.

The Tribunal held that penalty charges for late payment are excluded from the definition of interest under Article 12 of the Indo-Denmark Double Taxation Avoidance Agreement (DTAA). Therefore, the assessee was not obligated to deduct TDS on such payments.

The Tribunal held that reopening the assessment after four years was not justified as the assessee had furnished all required particulars and there was no new material. The Assessing Officer had reviewed existing records to identify the interest payment.

The Tribunal held that the CIT(A) erred in dismissing the appeal without adjudicating on the merits of the claim. The assessee has a right to appeal under Section 248 to seek a declaration that no tax was deductible.

The Tribunal held that since four years had expired from the end of the relevant assessment year and the original assessment was under Section 143(3), reassessment under Section 148 could not be reopened without negligence on the part of the assessee. As no such negligence was alleged by the revenue, the reassessment was barred by limitation.

The Tribunal held that the assessee's claim of an oral agreement for property exchange was unsubstantiated and did not meet the requirements of Section 54(2) of the Income Tax Act. The purchase of the property was made beyond the prescribed time limit, rendering the capital gains taxable.

The Tribunal held that the assessee was not given an effective opportunity to be heard by the CIT(A). Therefore, the appeal order was set aside.

The CIT(A) correctly concluded that the investments were funded from the bank account and through switching of existing investments. The Revenue failed to point out any discrepancies in the reconciliation statement provided by the assessee.

The Tribunal held that the advance could not be treated as deemed dividend in the hands of the assessee-firm because the investment in shares of M/s Lanson Motors Pvt. Ltd. was made by individual partners before the firm came into existence. Therefore, the firm was not the beneficial owner of the shares.

The Tribunal held that the CIT(Appeals) does not have the power to set aside the matter to the Assessing Officer. However, in the interest of justice, the Tribunal remitted the alternative claim under Section 10A back to the Assessing Officer for fresh examination.

The Tribunal found that the lower authorities did not consider the availability of partner's credit balances and the reasons for borrowing. Therefore, the matter was remitted back to the Assessing Officer for re-examination.

The Tribunal directed the AO to re-examine the provision for warranty based on Supreme Court guidelines and allowed the disallowance of sub-contract and labour charges, directing re-examination of commission and royalty payments by the CIT(A).

The Tribunal directed the AO to re-examine the provision for warranty based on Supreme Court guidelines and allowed the disallowance of sub-contract and labour charges for non-deduction of TDS, with a direction to allow deduction in the year TDS was paid. Disallowances for commission and royalty were remitted back to the CIT(A).

The Tribunal deleted the addition of Rs. 21,97,073 as it was not claimed as expenditure by the assessee. For the bank deposit of Rs. 15,40,000, the addition was confirmed to the extent of Rs. 5,40,000, allowing Rs. 10 lakhs considering the assessee's personal resources and savings.

The Tribunal held that the reassessment proceedings were initiated beyond four years without any tangible material or failure on the part of the assessee to disclose material facts. The AO's action was considered a review of the earlier opinion, which is not permissible under Section 147.

The Tribunal found that the assessee had not furnished required particulars, forcing the AO to complete the assessment based on available material. However, in the interest of justice, the appeals were remitted back to the AO for de-novo consideration.

The Tribunal found that the assessee had not furnished required particulars, forcing the AO to complete the assessment based on available material. However, in the interest of justice, the appeals were remitted back to the AO for de-novo consideration.

The Tribunal found that the assessee had not furnished required particulars, forcing the AO to complete the assessment based on available material. However, in the interest of justice, the appeals were remitted back to the AO for de-novo consideration.

The Tribunal found that the assessee had not furnished required particulars, forcing the AO to complete the assessment based on available material. However, in the interest of justice, the appeals were remitted back to the AO for de-novo consideration.

The Tribunal held that penalty cannot be levied when an addition is accepted by the assessee solely to avoid confrontation and protracted litigation. The primary burden of proof for furnishing inaccurate particulars lies with the revenue, which was not discharged in this case.

The Tribunal found that the assessee had not furnished required particulars, forcing the AO to complete the assessment based on available material. However, in the interest of justice, the appeals were remitted back to the AO for de-novo consideration.

The Tribunal, noting the absence of the assessee and the lack of any request for adjournment, concluded that the assessee was not interested in pursuing the appeal. Consequently, the appeals were dismissed.

The Tribunal, noting the absence of the assessee and the lack of any request for adjournment, concluded that the assessee was not interested in pursuing the appeal. Consequently, the appeals were dismissed.

The Tribunal held that the levy of interest under Section 234B needs to be verified and re-examined in light of the Assessing Officer's order under Section 154 and a previous Tribunal order. The matter was remitted back to the Assessing Officer for fresh consideration.

The Tribunal, in the interest of justice, remitted the matter back to the CIT(A) to provide the assessee with one more opportunity of being heard. The assessee was cautioned to cooperate with the proceedings.

The Tribunal, while noting the assessee's failure to cooperate with the lower authorities, decided to provide one more opportunity in the interest of justice. The matter was remitted back to the CIT(A) for de-novo consideration.

The Tribunal held that there was a reasonable cause for the delay in filing the tax audit report due to technical difficulties and the chartered accountant's illness. Following a similar precedent, the Tribunal set aside the penalty.

The Tribunal, noting the absence of the assessee and the lack of any request for adjournment, concluded that the assessee was not interested in pursuing the appeal. Consequently, the appeals were dismissed.

The Tribunal, noting the absence of the assessee and the lack of any request for adjournment, concluded that the assessee was not interested in pursuing the appeal. Consequently, the appeals were dismissed.

The Tribunal, noting the absence of the assessee and the lack of any request for adjournment, concluded that the assessee was not interested in pursuing the appeal. Consequently, the appeals were dismissed.