ITAT Chennai Judgments — July 2023

The Tribunal held that the assessee's explanation for the delay was not convincing and lacked bonafide. The Tribunal noted that the assessee was aware of ITAT appeals for other assessment years.

The Tribunal held that the assessee's explanation for the delay was not convincing and lacked bonafide. Citing precedents, the Tribunal found the assessee to be lackadaisical in its approach.

The Tribunal found a factual difference between its previous order and the DRP's findings regarding supplementary agreements. To resolve this conflict, the Tribunal set aside the impugned order and restored the assessment to the AO for fresh assessment, directing adherence to previous tribunal directions if the assessee's submissions are correct.

The Tribunal held that a prerequisite for exercising powers under Section 263 is the existence of an order passed by the Assessing Officer. Since the AO had not passed any formal order dropping the proceedings, the PCIT's revision order was quashed.

The Tribunal held that the assessee's explanation for the delay was not convincing and lacked bonafide. The Tribunal relied on the Madras High Court's decision in Ajmeer Sherriff & Co. vs. ITO, which emphasized a strict approach for inordinate delays.

The Tribunal held that the CIT(A) correctly deleted the addition made by the AO. The Tribunal relied on High Court decisions stating that deemed dividend under Section 2(22)(e) can only be taxed in the hands of registered shareholders for whose benefit the money was advanced, and not in the hands of the company receiving the loan, especially when the transactions are mutual and beneficial to both parties.

The Tribunal held that the CIT(A) correctly deleted the addition made by the AO. The Tribunal relied on High Court decisions stating that deemed dividend under Section 2(22)(e) can only be taxed in the hands of registered shareholders for whose benefit the money was advanced, and not in the hands of the company receiving the loan, especially when the transactions are mutual and beneficial to both parties.

The Tribunal found the assessee's explanation for incurring minor, day-to-day vehicle maintenance expenses reasonable, especially considering the nature of the educational trust. Therefore, the disallowance made by the AO was set aside.

The Tribunal held that the assessee's explanation for the delay was not convincing and lacked bonafide. The Tribunal noted that the assessee was aware of ITAT appeals for other assessment years.

The Tribunal accepted the assessee's closing cash balance of Rs. 21,53,708/- as on 08.11.2016, which was not denied by the Revenue. Consequently, the entire cash deposit of Rs. 11,63,000/- was treated as explained.

The Tribunal held that while the cash deposits were from business transactions, the exact amount from the demonetized period was not fully explained. Therefore, the addition was estimated at Rs. 25,00,000/- and to be treated as business income, not unexplained money.

The Tribunal held that the disallowance of managerial service expenses under Section 40(a)(i) for non-deduction of TDS was not justified. The assessee could not have foreseen the retrospective amendment to Section 9(1)(vii) of the Act.

The Tribunal held that the interest rate of 16% on an unsecured loan from a related party was reasonable, considering the benchmark rates and the nature of the loan. It also confirmed the CIT(A)'s decision that the intimation under Section 143(1) could not be challenged in an appeal against the Section 143(3) assessment order, as the assessee had not appealed the 143(1) intimation separately.

The Tribunal held that the disallowance of managerial service expenses under Section 40(a)(i) for non-deduction of TDS was not justified. The assessee could not have foreseen the retrospective amendment to Section 9(1)(vii) of the Act.

The Tribunal condoned the delay in filing the appeal subject to a cost payment. Regarding the addition under section 69, the Tribunal set aside the CIT(A)'s order and remitted the matter back for fresh adjudication, considering new evidence.

The Tribunal held that the disallowance of managerial service expenses under Section 40(a)(i) for non-deduction of TDS was not justified. The assessee could not have foreseen the retrospective amendment to Section 9(1)(vii) of the Act.

The Tribunal held that the cash deposits were from sales and had been deposited into the bank account. However, the assessee could not fully substantiate the entire cash deposits as sales proceeds.

The Tribunal condoned the delay in filing appeals before the CIT(A) due to the assessee's ill health. The Tribunal directed the CIT(A) to adjudicate the appeals on merits after affording an opportunity of hearing.

The Tribunal set aside the appellate order and remitted the matter back to the CIT(A) to adjudicate the issues on merits after considering the additional evidence and affording the assessee an opportunity of being heard.

The Tribunal held that the disallowance of managerial service expenses under Section 40(a)(i) for non-deduction of TDS was not justified. The assessee could not have foreseen the retrospective amendment to Section 9(1)(vii) of the Act.

The Tribunal held that once the CIT(A) determined the unexplained cash credit based on peak credit, which is an estimation, the Assessing Officer was not correct in levying penalty under section 271(1)(c). Therefore, the penalty was deleted.

The Tribunal condoned the delay in filing the appeal and set aside the CIT(A)'s order. The matter was remitted back to the CIT(A) to decide afresh after considering the evidence submitted by the assessee.

The Tribunal condoned the delay in filing appeals before the CIT(A) due to the assessee's ill health. The Tribunal directed the CIT(A) to adjudicate the appeals on merits after affording an opportunity of hearing.

The Tribunal set aside the CIT(A)'s order and remanded the matter back for adjudication on merits. The CIT(A) was directed to provide one more opportunity to the assessee to present submissions and evidence.

The Tribunal held that the PCIT's revision order was passed ex-parte without providing a reasonable opportunity of being heard to the assessee. Therefore, the PCIT's order was set aside, and the matter was remanded back for fresh adjudication.

The Tribunal held that the Assessing Officer had not examined the vital issues raised by the revisionary authority. Therefore, the assessment order was indeed erroneous and prejudicial to the revenue, justifying the invocation of Section 263.

The Tribunal found that the services rendered by the assessee were wrongly tabulated in the DRP order, as the listed functions were performed by the Singapore AE, not the assessee. Based on the assessee's TP study, the assessee provides low-end basic BPO services and does not undertake substantial risks, thus not qualifying as an entity engaged in ITeS services. Upon perusal of the financials of M/s. Datamatics Business Solutions Ltd., the Tribunal noted its engagement in database solutions, demand generation, and business research. The Tribunal's reasoning suggests a strong inclination towards excluding M/s. Datamatics Business Solutions Ltd. due to functional dissimilarity, as the assessee's functions are limited to basic BPO services. The appeal is disposed of based on these findings.

The Tribunal held that the CIT(Exemptions) correctly granted registration from AY 2019-20 onwards, as the lack of genuineness persisted until AY 2018-19, aligning with the Tribunal's previous observations.

The Tribunal held that the provision for warranty is not an allowable business expenditure as it is a contingent liability and not an incurred expense. The Tribunal also upheld the CIT(A)'s decision to restrict disallowance under Section 14A to the extent of exempt income.

The Tribunal upheld the disallowance of warranty provision, following its own earlier decisions. It also upheld the CIT(A)'s decision to restrict disallowance under Section 14A to the extent of exempt income earned.

The Tribunal held that the AO cannot scrutinize the closing stock if it has been accepted by the Commercial Tax Department, following the principle of consistency and High Court decisions. The addition made by the AO was deleted.

The Tribunal held that the provision for warranty is not an allowable business expenditure as it is a contingent liability and not an incurred expense. The Tribunal also upheld the CIT(A)'s decision to restrict disallowance under Section 14A to the extent of exempt income.

The Tribunal held that the assessee's claim, while not accepted by the AO, was not a misrepresentation or suppression of facts. Merely because a claim was disallowed does not automatically warrant a penalty, and the penalty was deleted.

The Tribunal held that while the transaction involved cash dealings in an immovable property transaction, the intention of Section 269SS is primarily to curb the generation of black money. Given that the sale consideration was declared and only a small portion was received in cash, it was not a fit case for penalty.

The Tribunal held that ATMs are eligible for higher depreciation as they function as computers in the banking business. Previous decisions of the Tribunal in the assessee's own case were followed.

The Tribunal held that since the income related to the share premium was already taxed in the hands of the group company before the Settlement Commission, a further addition in the hands of the assessee for the same income was not permissible. The CIT(A)'s deletion of the addition was upheld.

The Tribunal held that the provision for warranty is not an allowable business expenditure as it is a contingent liability and not an incurred expense. The Tribunal also upheld the CIT(A)'s decision to restrict disallowance under Section 14A to the extent of exempt income.

The Tribunal held that the cash deposits were explained as they were backed by sales recorded in the assessee's books of accounts and sourced from identifiable debtors. Therefore, the addition under Section 68 was unsustainable.

The Tribunal held that since the assessee's only source of income is business, and the excess stock was accounted for by crediting partners' capital and increasing the stock register, it should be considered as 'Business Income' only. The Madras High Court case relied upon by the AO was distinguished on facts.

The Tribunal acknowledged that the assessee could not provide credible evidence for the entire cash deposit. However, it also noted that the AO did not provide conclusive reasons to treat the entire amount as unexplained. Therefore, the Tribunal directed the AO to estimate income from the cash deposits.

The Tribunal set aside the CIT(A)'s order and remitted the matter back for fresh adjudication. The assessee was directed to provide convincing explanations and supporting evidence, and the CIT(A) was instructed to issue notices to the assessee's registered email ID.

The Tribunal held that since the repayment was made by way of book entry and there was no actual movement of money, Section 269T was not violated. Therefore, the penalty under Section 271E was not sustainable.

The Tribunal held that the full deduction under Section 10AA is allowable to the assessee and directed the AO to re-compute the income accordingly. The Tribunal also directed the AO to verify and allow the credit for advance tax and TDS of amalgamated entities as per law.

The Tribunal found that the CIT(A) erred by remitting issues back to the Assessing Officer without following proper procedure like calling for a remand report. Therefore, the matter was remitted back to the Assessing Officer for fresh adjudication.

The Tribunal condoned the delay and restored the appeal to the CIT(A) for fresh adjudication. The assessee was directed to substantiate its case, adhering to the principles of natural justice.

The Tribunal condoned the delay in filing the appeal and restored the matter to the CIT(A) for fresh adjudication, directing the assessee to substantiate its case. This was done to provide another opportunity of hearing in the interest of natural justice.

The Tribunal found that the CIT(A) did not conduct necessary inquiries or obtain a remand report before dismissing the appeal. To ensure natural justice, the matter was set aside and remitted back to the CIT(A) for fresh adjudication.

The Tribunal deleted the penalty, following a previous decision where it was held that penalty under Section 271B was not leviable on similar facts. The Tax Audit Report was filed along with the return of income and during assessment proceedings.

The Tribunal noted a discrepancy in the assessee's address and directed the CIT(A) to provide one more opportunity for hearing and explanation to ensure natural justice. The CIT(A) is to decide the issue on merits after considering the assessee's submissions.

The Tribunal, considering the assessee's plea for a fresh opportunity due to circumstances beyond her control, set aside the appellate order. The matter was remitted back to the CIT(A) for a fresh decision after considering the assessee's explanations and evidence.