ITAT Chennai Judgments — February 2018

The Tribunal found that the facts were not clear regarding an agreement for sale before demolition. Therefore, the matter was remitted back to the Assessing Officer to re-examine the eligibility for exemption under Section 54 and also consider Section 54F if the property was transferred as vacant land.

The Tribunal held that the Assessing Officer's addition was based on surmises and conjectures, lacking cogent material. It directed the deletion of the addition and allowed the exemption under Section 10(38).

The Tribunal held that the matter needed verification by the Assessing Officer regarding the availability of own funds and interest-free funds for investments yielding exempted income. Charging of interest under Section 234B was also to be reconsidered.

The Tribunal held that the excess price received was not a non-compete fee, as the sale involved a controlling interest transfer and the same price was paid to other shareholders. The CIT(Appeals) had rightly deleted the addition.

The Tribunal held that the assessment was made without furnishing the share broker's statement to the assessee and without proper disclosure of the mode of payment. Therefore, the matter needed reconsideration by the AO.

The Tribunal held that the amendment to Section 54F, effective from 01.04.2015, was not retrospective and thus not applicable to the assessment year in question. Therefore, the CIT(Appeals) order was upheld.

The Tribunal held that since the assessee could not prove he was acting as a commission agent and failed to produce books of accounts, the Assessing Officer was justified in estimating the income. The estimation of profit at 3.5% of the purchase turnover was considered reasonable.

The Tribunal confirmed the CIT(Appeals) decision on Section 14A disallowance, holding it should be restricted to exempted income. It also confirmed the allowance of interest on belated service tax, deeming it compensatory. For hire purchase interest and hire charges, the Assessing Officer was directed to re-examine based on CBDT circulars and proof of tax payment by recipients.

The Tribunal dismissed the appeal for AY 2006-07, finding the reassessment valid and the grounds regarding welfare expenses unsubstantiated. For AY 2007-08, the Tribunal remanded the matter to the Assessing Officer to examine the employer-employee relationship, which is a prerequisite for fringe benefit tax.

The Tribunal held that the matter needed verification by the Assessing Officer regarding the availability of own funds and interest-free funds for investments yielding exempted income. Charging of interest under Section 234B was also to be reconsidered.

The Tribunal held that the assessee's trust was a determinate trust, as previously decided by a co-ordinate bench. Since the penalty was levied on issues that no longer survived due to this finding, the CIT(A)'s order of cancellation was upheld.

The Tribunal found merit in the assessee's submission that the matter required verification of whether investments were made from own or borrowed funds. The AO had not adequately dealt with this aspect. Therefore, the appeals were remitted back to the AO for verification.

The Tribunal held that the issue had been decided in favour of the assessee by the same Tribunal for earlier assessment years. Furthermore, for a subsequent year, the Assessing Officer had allowed the claim after examining separate books of account for the Turbine Division.

The Tribunal noted that the issue was covered by the jurisdictional High Court's decisions in favor of the assessee. However, it also considered a Supreme Court judgment that was against the assessee on similar facts.

The Tribunal held that the matter of differential duty and interest needs to be re-examined by the Assessing Officer based on the Customs Department's receipt. For the Section 14A disallowance, since dividend income was received, expenditure needs to be computed under Rule 8D, and this also requires re-examination by the Assessing Officer.

The Tribunal held that the assessee utilized the funds for construction by depositing them in the Capital Gains Account Scheme and withdrawing them for the builder. However, the claim for cost of improvement was disallowed as it was considered maintenance, not development.

The Tribunal held that the stockbroker's statement was material evidence and should have been furnished to the assessee. The Assessing Officer also failed to examine the mode of payment and receipt of sale proceeds.

The Tribunal held that the assessee's trust was a determinate trust, as previously decided by a coordinate bench. Since the penalty was levied on issues that no longer survived due to this finding, the CIT(A)'s order deleting the penalty was upheld.

The Tribunal held that since the entire rental income was offered in the husband's hands and tax was paid, the TDS credit should be granted. As the husband did not claim the TDS credit, it was rightly directed to be refunded to the assessee.

The Tribunal dismissed the appeal for AY 2006-07, finding the reassessment valid and the grounds regarding welfare expenses unsubstantiated. For AY 2007-08, the Tribunal remanded the matter to the Assessing Officer to examine the employer-employee relationship, which is a prerequisite for fringe benefit tax.

The Tribunal held that advance received for sale of plots does not accrue as income until the sale is concluded, regardless of the accounting method followed. Therefore, the CIT(Appeals) was correct in deleting the addition.

The Tribunal held that since the assessee could not appear before the CIT(Appeals) due to a change of residence, the matter needs to be re-examined by the Assessing Officer. The Assessing Officer was directed to re-examine the issue based on the material filed by the assessee.

The Tribunal held that disallowance under Section 14A should be restricted to exempted income, and in the absence of exempted income, no disallowance is warranted. The premium on redemption of debentures was held to be allowable as a revenue expenditure.

The Tribunal held that the amendment to Section 54F, effective from 01.04.2015, was not retrospective and thus not applicable to the assessment year in question. Therefore, the CIT(Appeals) order was upheld.

The Tribunal found merit in the assessee's submission that the matter required verification of whether investments were made from own or borrowed funds. The AO had not adequately dealt with this aspect. Therefore, the appeals were remitted back to the AO for verification.

The Tribunal held that the crystallization of the liability occurred only when the settlement was decreed by the Lok Adalat, making the payment a revenue outgo for the relevant year. Therefore, the disallowance was not justified.

The Tribunal held that rental income from sub-leased properties should be assessed under 'income from house property' as per previous decisions. However, it upheld the disallowance of commission expenses under Section 40(a)(ia) due to non-deduction of TDS, following a Supreme Court ruling.

The Tribunal held that disallowance under Section 14A should be restricted to exempted income, and in the absence of exempted income, no disallowance is permissible. The premium on redemption of debentures was held to be allowable as a revenue expenditure.

The Tribunal held that providing one more opportunity to the assessee would not prejudice the Revenue and would promote the cause of justice. Therefore, the orders of the lower authorities were set aside.

The Tribunal held that the disallowance of depreciation on software needs re-examination by the Assessing Officer. It further held that pooja expenses incurred in business premises are for business purposes and should be allowed. The disallowance of miscellaneous and fuel expenses due to lack of vouchers was confirmed.

The Tribunal considered the assessee's request and, with no objection from the respondent, dismissed the appeal as withdrawn.

The Tribunal, following the Apex Court's decision in CIT vs. Rajasthan & Gujarati Charitable Foundation, held that charitable trusts are entitled to claim depreciation for arriving at their net income. The Assessing Officer was directed to grant the benefit of depreciation.

The Tribunal held that the second proviso to Section 40(a)(ia) is declaratory and curative, having retrospective effect. Since the payee (Chennai Port Trust) certified that the payment was accounted for in its income, the disallowance was not warranted.

The Tribunal found it unfair that the CIT(A) did not adjudicate the appeal on merits. Therefore, the Tribunal directed the CIT(A) to decide the appeal on merits, providing one more opportunity to the assessee.

The Tribunal held that the reopening of assessment was valid as fresh evidence (order converting land for non-agricultural use) was available to the AO, indicating it was not merely a change of opinion. The levy of interest under Section 234B was also upheld as compensatory and mandatory.

The Tribunal held that the payments made for business development commission to the US parent company were not taxable in India as they did not involve making technical knowledge available and were for services rendered outside India. Therefore, TDS was not required.

The Tribunal noted a CBDT circular stating that trade advances for business transactions should not be treated as deemed dividend. Since this circular was not available to the lower authorities, the matter was remitted back to the Assessing Officer for fresh consideration.

The Tribunal found that the assessee did not provide sufficient evidence regarding the contract and the status of ILFS's accounts. The CIT(A) also noted the amount might be barred by limitation. Therefore, the matter was remitted back to the CIT(A) for a fresh decision.

The Tribunal held that the payments made for business development commission to the US parent company were not taxable in India as they did not involve making technical knowledge available and were for services rendered outside India. Therefore, TDS was not required.

The Tribunal upheld the CIT(A)'s order, following the Hon'ble Karnataka High Court's decision in CIT vs. Tata Elxi Ltd. This decision stated that expenditure excluded from export turnover in the numerator must also be excluded from total turnover in the denominator for Section 10A calculations.

The Tribunal held that disallowance under Section 14A cannot exceed the income claimed as exempt by the assessee. The CIT(A) was justified in restricting the disallowance to the quantum of exempt income.

The Tribunal set aside the orders of the lower authorities and remanded the matter back to the Assessing Officer for a fresh assessment. The assessee was to be given an opportunity to be heard.

The Tribunal admitted the additional evidence, acknowledging the delay in obtaining documents from M/s.Cybermate Infotek Ltd. The issue was restored to the Assessing Officer for re-adjudication, with an opportunity for the assessee to present all necessary evidence.

The Tribunal upheld the CIT(A)'s decision that the assessee could not prefer this claim at the appellate stage as it was a fresh claim not made in the return or during assessment. The CIT(A) has limited powers to reduce additions, not allow fresh deductions.

The Tribunal held that the CIT(A) violated Rule 46A by admitting fresh evidence without obtaining a remand report from the Assessing Officer. Therefore, the matter was remitted back to the Assessing Officer for fresh verification.

The Tribunal held that when technical considerations and merits are pitted against each other, merits should get preference. The delay ought to be condoned, and the appeal should be adjudicated on merits.

The Tribunal set aside the orders of the lower authorities and remanded the matter back to the Assessing Officer for a fresh assessment. The assessee was to be given an opportunity to be heard.

The Tribunal dismissed the Revenue's ground regarding Section 14A, agreeing that no disallowance was warranted as no exempt income was earned. For Section 40(a)(ia), the Tribunal remanded the issue to the Assessing Officer to verify compliance with Section 194C(6) and the belated filing of Form 26Q.

The Tribunal held that merely making a claim not sustainable in law does not amount to furnishing inaccurate particulars. Following the Supreme Court's decision in CIT v. Reliance Petroproducts (P) Ltd., the penalty was deleted.

The Tribunal, following the decision of the Hon'ble Supreme Court in Rajasthan Gujarati Charitable Foundation, directed the AO to grant the benefit of depreciation as claimed by the assessee.