ITAT Chennai Judgments — March 2020

The Tribunal held that the disallowance was made on the basis of surmises and conjectures without specific defects being pointed out. Following a previous similar order, the Tribunal allowed the assessee's appeal.

The Tribunal held that the AO's estimation of agricultural income was not justified, especially since the assessee owned substantial land and had agricultural activities. The AO's reasoning for treating the balance as other income, based on owning vehicles, was also found to be insufficient.

The Tribunal found merit in the assessee's submissions. The existence of a rental agreement, receipt of rent, and rental advance were not disputed. The Tribunal held that the value of the land and building as on 01.04.1981 should be determined on the basis of the rent capitalization method. The assessee quantified this value at Rs. 8,28,750/-, which the Tribunal rounded off to Rs. 10 lakhs. The AO was directed to adopt Rs. 10 lakhs as the cost of acquisition for the land and building as on 01.04.1981 and proceed to determine the cost of indexation accordingly for calculating capital gains. The ratio decidendi is that when rental income and advance are demonstrably received and undisputed, the rent capitalization method is a more appropriate basis for determining the fair market value of property for capital gains computation, especially when other valuation methods are contested or found unreliable. The corresponding grounds of appeal were allowed to this extent.

The Tribunal held that the CIT(A) who passed the order did not hear the appellant, violating principles of natural justice. Therefore, the matter was remanded back to the CIT(A) for fresh adjudication.

The Tribunal found merit in the assessee's submissions. The existence of a rental agreement, receipt of rent, and rental advance were not disputed. The Tribunal held that the value of the land and building as on 01.04.1981 should be determined on the basis of the rent capitalization method. The assessee quantified this value at Rs. 8,28,750/-, which the Tribunal rounded off to Rs. 10 lakhs. The AO was directed to adopt Rs. 10 lakhs as the cost of acquisition for the land and building as on 01.04.1981 and proceed to determine the cost of indexation accordingly for calculating capital gains. The ratio decidendi is that when rental income and advance are demonstrably received and undisputed, the rent capitalization method is a more appropriate basis for determining the fair market value of property for capital gains computation, especially when other valuation methods are contested or found unreliable. The corresponding grounds of appeal were allowed to this extent.

The Tribunal held that the ill health of the Managing Director constituted a reasonable cause for the delay in filing the appeal for AY 2007-08. For AY 2013-14, the CIT(A) did not provide a reasonable opportunity to comply with the defects. Therefore, both matters were restored to the CIT(A) for fresh adjudication.

The Tribunal held that the CBDT Circular No. 17/2019, which mandates withdrawal of appeals with a tax effect below Rs. 50 lakhs, is binding on the Department. Therefore, the Revenue could not proceed with the appeal.

The Tribunal held that since the assessee is in the real estate business and the ongoing projects are held as inventory for sale or rent, the interest expenses incurred on borrowings are revenue in nature and correctly claimed as a deduction. Even if capitalized to inventory, the expense would be allowed in subsequent years upon sale.

The Tribunal held that the addition to income was justified as the assessee voluntarily admitted it. However, the penalty was deleted because the assessee provided sufficient explanation and evidence, and the AO failed to record a finding that the explanation was false.

The Tribunal held that CBDT Circular No. 17/2019, which instructs officers to withdraw appeals with a tax effect below Rs. 50 lakhs, is binding. Therefore, the Revenue's appeals could not proceed.

The Tribunal held that CBDT Circular No. 17/2019, which instructs officers to withdraw appeals with a tax effect below Rs. 50 lakhs, is binding. Therefore, the Revenue's appeals could not proceed.

The Tribunal held that the ill health of the Managing Director constituted a reasonable cause for the delay in filing the appeal for AY 2007-08. For AY 2013-14, the CIT(A) did not provide a reasonable opportunity to comply with the defects. Therefore, both matters were restored to the CIT(A) for fresh adjudication.

The Tribunal held that the assessee was not given a fair opportunity to prove the genuineness of the transactions, and the assessment was primarily based on the Revenue's investigation. Therefore, the issue of genuineness requires re-adjudication.

The Tribunal held that the assessee was not given a fair opportunity to prove the genuineness of the transactions, and the assessment was primarily based on investigation reports. The matter was remitted back to the AO for re-adjudication.

The Tribunal upheld the disallowance of depreciation on compensation paid for easement rights. It followed its own earlier decisions in the assessee's own case, finding no commercial expediency for the payment.

The Tribunal upheld the disallowance of depreciation on compensation paid for easement rights. It followed its own earlier decisions where it was held that the assessee had not made any payment and even if it had, there was no commercial expediency.

The Tribunal found that the relevant materials were not placed before the Assessing Officer (AO) for due consideration. Therefore, the issue was remitted back to the AO for fresh examination.

The Tribunal held that the assessee was not given a fair opportunity to prove the genuineness of the transactions and that the assessment was based on the Revenue's investigation without providing the assessee with the evidence for rebuttal. Therefore, the issue requires re-adjudication.

The Tribunal held that the assessee was not given a fair opportunity to prove the genuineness of the transactions, and the assessment was primarily based on investigation evidence not shared with the assessee. Therefore, the issue requires re-adjudication.

The Tribunal held that the assessee was not given a fair opportunity to prove the genuineness of the transactions and that assessment cannot be made solely on investigation reports without providing them to the assessee for rebuttal.

The Tribunal held that CBDT Circular No. 17/2019, which instructs officers to withdraw appeals with a tax effect below Rs. 50 lakhs, is binding. Therefore, the Revenue's appeals could not proceed.

The Tribunal held that the addition to income was justified as the assessee voluntarily admitted it. However, the penalty was deleted because the assessee provided sufficient explanation and evidence, and the AO failed to record a finding that the explanation was false.

The Tribunal held that income tax proceedings are judicial and should be decided on merit rather than technicalities. The CIT(A) ought to have issued a defect memo to allow the assessee to rectify any errors in Form 35, especially when the appeals were filed within the limitation period.

The Tribunal held that the matter needed reconsideration by the Assessing Officer. It observed that neither the assessee nor the department had provided comparative sale instances in the locality. The Tribunal found that the Registered Valuer's report lacked detailed discussion, and the Assessing Officer had simply relied on the guideline value provided by the Sub-Registrar, which is not necessarily the fair market value. The Tribunal emphasized that estimating fair market value requires considering factors like the locality, infrastructure, potential for future development, and access to facilities, in addition to guideline values and comparative sale instances. The Tribunal set aside the orders of the authorities below and remitted the issue of valuation back to the Assessing Officer. The Assessing Officer was directed to re-examine the matter, potentially refer it to the Valuation Officer, and ascertain any available comparative sale instances. The fact that the property was inherited by settlement deed, as brought to the Tribunal's notice by the assessee, was also to be considered by the Assessing Officer.

The Tribunal held that income tax proceedings are judicial and should be decided on merit rather than technicalities. The CIT(A) ought to have issued a defect memo to allow the assessee to rectify any errors in Form 35, especially when the appeals were filed within the limitation period.

The Tribunal held that interest on delayed foreign remittances should be charged at LIBOR, not PLR. For the reimbursement issue, the matter was remitted back to the Assessing Officer pending a decision from the Authority for Advance Rulings (AAR) and the Supreme Court.

The Tribunal held that the additional royalty paid by the assessee on salt manufactured was a revenue expenditure and not an application of income. It was considered a diversion of income by overriding title, as it was levied on the product and not for acquisition of a capital asset.

The Tribunal held that the CBDT Circular No. 17/2019, which increased the monetary limit for filing appeals to ₹50 lakhs, is binding on the Revenue. Therefore, the appeal could not be proceeded with.

The Tribunal held that the cost of materials and labor for the temporary shed should be considered part of its construction cost for depreciation. However, due to lack of sufficient material before the Tribunal, the issue was remitted back to the Assessing Officer for re-examination.

The Tribunal held that the cost of materials and labor for the temporary shed should be considered part of its construction cost for depreciation. However, due to lack of sufficient material before the Tribunal, the issue was remitted back to the Assessing Officer for re-examination.

The Tribunal held that the illness of the assessee's representative was not in dispute and the matter needed re-examination. The Tribunal set aside the orders of the authorities below and remitted the issue back to the Assessing Officer.

The Tribunal dismissed the appeal filed by the Revenue due to low tax effect, as per CBDT Circular No. 17/2019. The Tribunal clarified that this decision was not on the merits of the case.

The Tribunal noted that the tax effect was below the CBDT limit and that the cross-objections had no independent grounds. Consequently, both the Revenue's appeals and the assessee's cross-objections were dismissed.

The Tribunal noted that the tax effect was below the CBDT limit and that the cross-objections had no independent grounds. Consequently, both the Revenue's appeals and the assessee's cross-objections were dismissed.

The Tribunal dismissed the appeal filed by the Revenue due to low tax effect, as per CBDT Circular No. 17/2019. The Tribunal clarified that the merits of the issue were not commented upon and granted liberty to the Revenue to file a miscellaneous application if exceptions in the circular applied.