ITAT Chennai Judgments — October 2018

The Tribunal held that the drawings were part of current account transactions for business purposes and not loans or advances. Relying on High Court and Tribunal precedents, it ruled that Section 2(22)(e) was not applicable.

The Tribunal held that the drawings were part of current account transactions for business purposes and not loans or advances. Relying on High Court and Tribunal precedents, it ruled that Section 2(22)(e) was not applicable.

The Tribunal held that the drawings were part of current account transactions for business purposes and not loans or advances. Relying on High Court and Tribunal precedents, it ruled that Section 2(22)(e) was not applicable.

The Tribunal held that the lower authorities' orders were not sustainable as they relied on evidence not provided to the assessee, violating principles of natural justice. The case was remitted to the Assessing Officer for fresh consideration.

The ITAT held that the intimation demanding the late fee under Section 200A was invalid as there was no enabling provision for levying Section 234E fees through Section 200A prior to June 1, 2015. Furthermore, the Assessing Officer did not pass an independent order under Section 234E within the prescribed limitation period.

The Tribunal held that the intimation levying the late fee under section 234E was invalid as there was no enabling provision in section 200A prior to June 1, 2015. Furthermore, the Assessing Officer did not pass an independent order under section 234E within the prescribed limitation period.

The Tribunal held that the transaction of providing a guarantee in favor of an AE is an international transaction. Regarding the transfer pricing adjustment for corporate guarantee, the Tribunal confirmed the ALP at 0.5%, respectfully following the Bombay High Court's decision in M/s. Everest Kanto Cylinders. The assessee's appeal grounds on this issue were dismissed. Concerning the disallowance for fees paid to the Registrar of Companies for an increase in authorized share capital, the Tribunal confirmed the CIT(A)'s order, noting that the assessee failed to provide any material to support its claim under section 35D, such as setting up a new industrial unit or substantial expansion. The assessee's appeal grounds on this issue were also dismissed. For the disallowance under section 14A, the Tribunal directed that the disallowance be restricted to the exempt income, following the ratio of the Delhi High Court decision in Joint Investment Pvt. Ltd. vs CIT. Consequently, the assessee's appeal on this issue was partly allowed. The ground challenging the disallowance of Rs. 1,12,408/- towards interest paid on TDS was dismissed as the assessee's counsel did not press it.

The tribunal held that since the assessee failed to rectify the defects despite receiving a notice, the appeal could not be sustained.

The Tribunal held that disallowance under Section 14A must be restricted to the extent of dividend income earned. It also held that advertisement and brand promotion expenses are revenue in nature, following a previous order for an earlier assessment year.

The Tribunal condoned the delay in filing the appeals for the assessment years in question. The issues concerning TDS credit and interest under Section 244A were remitted to the CIT(A) for a decision on merits after giving the assessee an opportunity.

The Tribunal found that the claims regarding erroneous TDS uploads and incorrect TDS credit needed verification. Consequently, the matter was remitted back to the Assessing Officer for re-examination and fresh decision.

The Tribunal held that the issue of granting interest u/s.244A when TDS certificates are submitted with delay, despite timely deduction and deposit, is a debatable issue. Therefore, it cannot be adjudicated through a rectification order u/s.154.

The Tribunal held that even if the manufactured products are consumed captively by the assessee, the assessee is still eligible for deduction under Section 80-IB of the Act. This decision was based on a previous ruling in the assessee's own case for a prior assessment year.

The Tribunal restored the issue to the Assessing Officer for re-adjudication after allowing the assessee to substantiate its case with the rectified Form 10CCB.

The Tribunal restored both issues to the Assessing Officer for re-adjudication, citing a lack of adequate opportunity for the AO to rebut evidence and the assessment order being passed hastily. The AO was also directed to verify TDS credit.

The Tribunal held that the credit card expenses, if disallowable, should be in the hands of the company, not the assessee, as they were reimbursed. Regarding drawings, the Tribunal estimated annual household expenditure at Rs. 8 lakhs and sustained an addition of Rs. 5,21,836/-.

The Tribunal restored both issues to the Assessing Officer for re-adjudication, citing a lack of adequate opportunity for the AO to rebut evidence and the assessment order being passed hastily. The AO was also directed to verify TDS credit.

The Tribunal condoned the delay in filing the appeals for the assessment years in question. The issues concerning TDS credit and interest under Section 244A were remitted to the CIT(A) for a decision on merits after giving the assessee an opportunity.

The Tribunal condoned the delay in filing the appeals for the assessment years in question. The issues concerning TDS credit and interest under Section 244A were remitted to the CIT(A) for a decision on merits after giving the assessee an opportunity.

The Tribunal condoned the delay in filing the appeals for the assessment years in question. The issues concerning TDS credit and interest under Section 244A were remitted to the CIT(A) for a decision on merits after giving the assessee an opportunity.

The Tribunal condoned the delay in filing the appeals for the assessment years in question. The issues concerning TDS credit and interest under Section 244A were remitted to the CIT(A) for a decision on merits after giving the assessee an opportunity.

The Tribunal condoned the delay in filing the appeals for the assessment years in question. The issues concerning TDS credit and interest under Section 244A were remitted to the CIT(A) for a decision on merits after giving the assessee an opportunity.

The Tribunal held that income which is otherwise taxable under the Income-tax Act cannot be considered for disallowance under Section 14A. The Assessing Officer needs to verify and segregate taxable and non-taxable income.

The Tribunal condoned the delay in filing the appeals for the assessment years in question. The issues concerning TDS credit and interest under Section 244A were remitted to the CIT(A) for a decision on merits after giving the assessee an opportunity.

The Tribunal held that the exemption under Section 10B should be computed after setting off unabsorbed depreciation, following the Supreme Court's decision in CIT vs Yokogawa India Ltd. The Tribunal noted this was a recurring issue and had been decided in the assessee's own case.

The Tribunal held that the CBDT Circular No. 3/2018, which instructs officers to withdraw appeals with a tax effect below ₹20 lakhs, is binding. Therefore, the Revenue could not proceed with these appeals.

The Tribunal noted that the CBDT Circular No. 3/2018 instructs to withdraw appeals pending before the ITAT where the tax effect is less than ₹20 lakhs. The Tribunal held that this circular is binding on the department.

The Tribunal, following its own previous orders on similar facts and issues, remitted the matter back to the Assessing Officer for fresh consideration. The issue was previously decided by the Tribunal in the assessee's own case for AY 2011-12.

The Tribunal held that interest paid to partners with debit balances was rightly disallowed. However, the capital gains on gifted agricultural lands were not taxable as the gift was made before the relevant amendment and Section 47(iii) provided an exclusion.

The Tribunal directed the AO to allow actual bonus paid as a deduction in the year of payment. Regarding the grant, it was held to be revenue in nature as its object was to enable the assessee to run the business more profitably.

The Tribunal, in the interest of natural justice, directed the CIT(A) to grant the assessee one more opportunity to present its case and substantiate the claim for deduction. The issue was to be decided afresh.

The Tribunal found conflicting statements regarding the source of the deposit. Due to the lack of verifiable details and conflicting claims, the matter was remitted back to the Assessing Officer for re-examination.

The Tribunal held that while the assessee could not prove the genuineness of purchases, the addition should be restricted to the profit margin embedded in the alleged bogus purchases, not the entire purchase value. Additions for alleged commission were deleted as no commission was claimed by the assessee.

The Tribunal held that while the assessee could not prove the genuineness of purchases, the addition should be restricted to the profit margin embedded in the alleged bogus purchases, not the entire purchase value. Additions for alleged commission were deleted as no commission was claimed by the assessee.

The Tribunal held that while the assessee could not prove the genuineness of purchases, the addition should be restricted to the profit margin embedded in the alleged bogus purchases, not the entire purchase value. Additions for alleged commission were deleted as no commission was claimed by the assessee.

The Tribunal held that the investigation report was not provided to the assessees, and their role in promoting or inflating the share price was not established. If the assessees were innocent investors, they could not be faulted solely for investing in a penny stock company.

The Tribunal noted that the CBDT Circular No. 3/2018 mandates withdrawal of appeals with a tax effect below ₹20 lakhs. Therefore, the Revenue could not proceed with the appeal.

The Tribunal held that while the assessee could not prove the genuineness of purchases, the addition should be restricted to the profit margin embedded in the alleged bogus purchases, not the entire purchase value. Additions for alleged commission were deleted as no commission was claimed by the assessee.

The Tribunal condoned the delay in filing the appeal, citing reasonable cause. It held that the indexed cost of acquisition should be computed with reference to the year the previous owner first held the asset, not when the assessee acquired it. Consequently, the revision order was quashed.

The Tribunal noted that the CBDT Circular No. 3/2018 instructs officers to withdraw appeals where the tax effect is below ₹20 lakhs. The Tribunal considered this circular binding on the department.

The Tribunal directed the AO to allow actual bonus paid as a deduction in the year of payment. Regarding the grant, it was held to be revenue in nature as its object was to enable the assessee to run the business more profitably.

The Tribunal held that while the assessee could not prove the genuineness of purchases, the addition should be restricted to the profit margin embedded in the alleged bogus purchases, not the entire purchase value. Additions for alleged commission were deleted as no commission was claimed by the assessee.

The Tribunal condoned the delay in filing the appeal, citing reasonable cause. It held that the indexed cost of acquisition should be computed with reference to the year the previous owner first held the asset, not when the assessee acquired it. Consequently, the revision order was quashed.

The Tribunal noted that the CBDT Circular No. 3/2018 instructs officers to withdraw appeals where the tax effect is below ₹20 lakhs. Therefore, the Revenue could not proceed with these appeals.

The Tribunal held that the investigation report was not provided to the assessees, and their role in promoting or inflating the share price was not established. If the assessees were innocent investors, they could not be faulted solely for investing in a penny stock company.

The Tribunal held that the CBDT Circular No. 3/2018, which instructs officers to withdraw appeals with a tax effect below ₹20 lakhs, is binding. Therefore, the Revenue could not proceed with these appeals.

The Tribunal noted that the tax effect in the appeal was below the monetary limit prescribed by the CBDT for filing appeals. Therefore, the Revenue was precluded from filing the appeal.

The Tribunal restored the matter to the Assessing Officer for re-adjudication. The interest expense incurred for acquiring an asset used for earning income is generally revenue expenditure.

The ITAT held that the PCIT wrongly invoked Section 263 jurisdiction on the AO's order passed under Section 143(3) r.w. 254. The issue of agricultural land had attained finality except for the population criteria, which was also resolved in favor of the assessee.

The Tribunal held that the sale proceeds of ESOPs exercised when the assessee was a non-resident should not be taxed as perquisites in the relevant assessment year. Any gain arising from the sale of these vested shares during the relevant year should be treated as capital gains.