ITAT Chennai Judgments — June 2018

The Tribunal held that the denial of exemption under Section 10(23C)(vi) was valid due to the lack of approval from the prescribed authority and the substantial surplus generated, indicating a profitable venture. However, following a previous ruling, payments made to the founder's wife were allowed as honorarium, and the Revenue's appeals were dismissed.

The Tribunal upheld the CIT(A)'s decision, stating that the ALP determined by the TPO was unwarranted. The Revenue failed to demonstrate how the assessee's pricing was incorrect or perverse, and the CIT(A) had rightly deleted the adjustment.

The Tribunal upheld the CIT(A)'s decision, stating that the ALP determined by the TPO was unwarranted. The Revenue failed to demonstrate how the assessee's pricing was incorrect or perverse, and the CIT(A) had rightly deleted the adjustment.

The Tribunal directed the AO to disallow 2.5% of the total turnover towards inflated expenses, partly allowing the Revenue's appeal. The Tribunal also dismissed the Revenue's appeal regarding exhibition expenses, holding them to be revenue in nature.

The Tribunal held that the denial of exemption under Section 10(23C)(vi) was valid due to the lack of approval from the prescribed authority and the substantial surplus generated, indicating a profitable venture. However, following a previous ruling, payments made to the founder's wife were allowed as honorarium, and the Revenue's appeals were dismissed.

The Tribunal decided to remit the issue of commission disallowance back to the AO for fresh consideration, allowing the assessee to produce evidence. The Tribunal also directed the deletion of the addition made on account of discount disallowance, finding it to be a prerogative of the assessee.

The Tribunal found that the assessee failed to provide sufficient evidence to justify the reduction from the initially admitted amount. However, considering the Rs. 31,39,660/- based on inventory, the matter was remitted back to the Assessing Officer for a final opportunity to justify the claim.

The Tribunal held that the reopening was invalid because the AO failed to provide the reasons for reopening despite a request, and there was no fresh tangible material. The reopening was based on a change of opinion, making it bad in law.

The Tribunal noted that the Apex Court ruling in The Citizen's Co-operative Society was relevant but the specific provisions of the enactment under which the assessee was registered were not clear. The Assessing Officer's findings indicated a distinction between shareholding and associate members, with loans granted to the latter.

The Tribunal decided to remit the issue of commission disallowance back to the AO for fresh consideration, allowing the assessee to produce evidence. The Tribunal also directed the deletion of the addition made on account of discount disallowance, finding it to be a prerogative of the assessee.

The Tribunal decided to remit the issue of commission disallowance back to the AO for fresh consideration, allowing the assessee to produce evidence. The Tribunal also directed the deletion of the addition made on account of discount disallowance, finding it to be a prerogative of the assessee.

The Tribunal noted that the CIT(A) had not considered relevant High Court decisions. Both parties agreed to a fresh consideration of the matter. Therefore, the appeals and cross-objections were remitted back to the AO for de-novo consideration.

The Tribunal found that the CIT(A) had erred by not considering relevant High Court decisions. Both parties agreed that the matter should be reconsidered by the AO.

The Tribunal upheld the disallowance of security charges, following a previous order. It admitted the fresh legal ground raised by the assessee and remitted the matter to the AO. The Tribunal also upheld the CIT(A)'s decision regarding the exclusion of subsidiary investments from Section 14A disallowance.

The Tribunal noted that the CIT(A) had not considered relevant High Court decisions. Both parties agreed to a fresh consideration of the matter. Therefore, the appeals and cross-objections were remitted back to the AO for de-novo consideration.

The Tribunal excluded the abnormally high-profit comparable company from the transfer pricing analysis. It also remitted the issue of disallowance of R&D expenses back to the AO for fresh examination.

The Tribunal noted that the CIT(A) had not considered relevant High Court decisions. Both parties agreed to a fresh consideration of the matter. Therefore, the appeals and cross-objections were remitted back to the AO for de-novo consideration.

The Tribunal upheld the disallowance of security charges, following a previous order. It admitted the fresh legal ground raised by the assessee and remitted the matter to the AO. The Tribunal also upheld the CIT(A)'s decision regarding the exclusion of subsidiary investments from Section 14A disallowance.

The Tribunal noted that the CIT(A) had not considered relevant High Court decisions. Both parties agreed to a fresh consideration of the matter. Therefore, the appeals and cross-objections were remitted back to the AO for de-novo consideration.

The Tribunal held that the assessee failed to demonstrate compelling circumstances or syndicate agreements that necessitated cash payments. The payments did not fall under the exceptions provided in Rule 6DD of the Income Tax Rules.

The Tribunal noted that the CIT(A) had not considered relevant High Court decisions. Both parties agreed to a fresh consideration of the matter. Therefore, the appeals and cross-objections were remitted back to the AO for de-novo consideration.

The Tribunal noted that the CIT(A) had not considered relevant High Court decisions. Both parties agreed to a fresh consideration of the matter. Therefore, the appeals and cross-objections were remitted back to the AO for de-novo consideration.

The Tribunal noted that the CIT(A) had not considered relevant High Court decisions. Both parties agreed to a fresh consideration of the matter. Therefore, the appeals and cross-objections were remitted back to the AO for de-novo consideration.

The Tribunal upheld the cancellation of registration under Section 12AA and the withdrawal of approval under Section 10(23C)(vi). It found that the assessee failed to challenge the order withdrawing the approval, making it ineligible for deductions.

The Tribunal upheld the cancellation of registration under Section 12AA and the withdrawal of approval under Section 10(23C)(vi). It found that the assessee failed to challenge the order withdrawing the approval, making it ineligible for deductions.

The Tribunal held that the Assessing Officer was not justified in reopening the assessment as there was no negligence on the part of the assessee and the reopening indicated a change of opinion. The disallowance made by the Assessing Officer was deleted.

The Tribunal held that the Assessing Officer had not applied his mind to the facts regarding the payment of interest to trusts for minor children. Therefore, the Principal Commissioner was correct in finding the assessment order erroneous and prejudicial to the revenue, and in directing a fresh assessment.

The Tribunal held that the AO was correct in invoking Section 14A but the CIT(A)'s restriction was not justified. The Tribunal remitted the Section 14A issue back to the AO for fresh consideration. Other issues raised by the assessee were also remitted to the AO for de novo consideration.

The Tribunal held that the AO was right in invoking Section 14A but remanded the matter to the AO to allow the assessee to compute actual expenditure. For other issues, the Tribunal also remanded the matters to the AO for de-novo consideration, allowing fresh evidence.

The Tribunal held that the assessee failed to comply with the requirements of Rule 10D regarding the maintenance and furnishing of documents for transfer pricing analysis. The assessee could not demonstrate a reasonable cause for this failure.

The Tribunal held that the assessee was eligible for deduction under Section 80P(2)(a)(vi). Following previous decisions, it was found that the society's bye-laws did not violate the provisions of Section 80P, as the voting rights were not improperly conferred on non-labor contributing members.

The Tribunal held that the dispute was only on the classification of income and not on concealment or furnishing inaccurate particulars. Relying on the Apex Court judgment in Reliance Petroproducts, the levy of penalty was deemed unjustified.

The Tribunal held that depreciation is allowable on assets even if their cost was treated as application of income. This is based on established judicial precedents, including Supreme Court decisions, which allow for depreciation based on commercial principles.

The Tribunal found that the Assessing Officer's order indicated the societies had associate members who were not entitled to voting rights or dividends, and loans were granted to them. Therefore, the issue required reconsideration in light of the Apex Court's judgment.

The Tribunal held that the differential treatment for deferred revenue expenditure was not acceptable and that additional depreciation should be allowed if the asset was put to use in the impugned year. The disallowance of club entrance fees was to be verified, and the ROC fee disallowance was to be decided afresh. The disallowance under Section 40A(3) was also to be verified.

The Tribunal held that interest earned on short-term deposits made from borrowed funds is taxable as income from other sources, even if the funds were borrowed for business purposes and the business had not yet commenced. The interest income is not inextricably linked to the business activity.

The Tribunal held that the additional construction, featuring a separate staircase, kitchen, water connection, and sewage connection, constituted an independent dwelling unit. Therefore, the assessee was eligible for the deduction under Section 54F.

The Tribunal found the 6% estimation arbitrary as no disallowance was made for non-deduction of TDS. Considering the assessee's own prior and subsequent years' net profit ratios, the net profit was determined at 3.5% of total turnover.

The Tribunal held that the undervaluation of stock due to unmarketable items, even if not initially accounted for, does not automatically constitute concealment or furnishing inaccurate particulars. Similarly, for sundry creditors, offering outstanding amounts for taxation in the next assessment year, after proper book entries, is not a fit case for penalty.

The Tribunal found that the assessee failed to provide sufficient details to substantiate its claims regarding purchases and advances. Therefore, the matter was remitted back to the Assessing Officer for fresh examination.

The Tribunal, for consistency with a co-owner's case, decided to remit the matter back to the Assessing Officer. The Assessing Officer is to re-examine the issue of whether the land was agricultural based on the evidence provided by the assessee.

The Tribunal held that the transactions were not loans or deposits in violation of Section 271D, considering the nature of the collection and the relationship between the entities. Furthermore, for earlier assessment years, the penalty proceedings were initiated after an unreasonable delay of six years, making them time-barred.

The Tribunal held that the transactions were not loans or deposits in violation of Section 271D, as the funds were collected by the trust on behalf of students and transferred to the assessee company where the trustee was also a director. Furthermore, for earlier assessment years, the penalty proceedings were initiated after an unreasonable delay of nearly six years, making them time-barred.

The Tribunal held that the transactions were not loans or deposits in violation of Section 271D, as the funds were collected by the trust on behalf of students and transferred to the assessee company where the trustee was also a director. Furthermore, for earlier assessment years, the penalty proceedings were initiated after an unreasonable delay of nearly six years, making them time-barred.

The Tribunal held that the transactions were not loans or deposits in violation of Section 271D, as the funds were collected by the trust on behalf of students and transferred to the assessee company where the trustee was also a director. Furthermore, for earlier assessment years, the penalty proceedings were initiated after an unreasonable delay of nearly six years, making them time-barred.

The Tribunal held that the transactions were not loans or deposits in violation of Section 271D, as the funds were collected by the trust on behalf of students and transferred to the assessee company where the trustee was also a director. Furthermore, for earlier assessment years, the penalty proceedings were initiated after an unreasonable delay of nearly six years, making them time-barred.

The Tribunal held that the transactions were not loans or deposits in violation of Section 271D, as the funds were collected by the trust on behalf of students and transferred to the assessee company where the trustee was also a director. Furthermore, for earlier assessment years, the penalty proceedings were initiated after an unreasonable delay of nearly six years, making them time-barred.

The Tribunal found that the assessee failed to provide sufficient details to substantiate its claims regarding purchases and advances. Therefore, the matter was remitted back to the Assessing Officer for fresh examination.

The Tribunal held that the addition must be made in the hands of the correct person, and the factual aspect of whether the credit was in the assessee's account or the school's account needed verification.