ITAT Chennai Judgments — September 2023

The Tribunal observed that while some individuals confirmed receiving compensation, one retracted their statement, and the AO's investigation into the remaining individuals was inconclusive. The Tribunal noted that the remaining five individuals did not deny receiving money, implying they had. The Tribunal also clarified the meaning of encumbrance in the context of land.

The Tribunal held that the pre-closure charges, loan processing fees, and loan syndication charges were incurred for the business of the assessee and were allowable expenditures. The CIT(A)'s order was set aside.

The Tribunal held that ESOP expenditure is allowable based on previous High Court and Supreme Court decisions. Regarding R&D expenses, the Tribunal noted the assessee's submission that no deduction under Section 35(2AB) was claimed, making Form 3CL irrelevant.

The Tribunal held that actual payment of expenditure for business purposes should be allowed as a deduction in the year of payment, even if treated differently in books of accounts. The disallowance of prepaid finance charges was set aside.

The Tribunal held that the reassessment was initiated due to a change of opinion and that if the AO believed certain areas were not considered, revision proceedings under Section 263 should have been initiated, not reassessment. The CIT(A)'s order was upheld.

The Tribunal held that the assessee failed to discharge the burden of proof that the land was agricultural. Lack of details about the caretaker and crops grown, along with revenue records showing 'Banjar' land, led to this conclusion.

The Tribunal held that the agricultural income claim was supported by evidence and should be accepted. Investments disclosed in the balance sheet and filed before the search were not sustainable additions. Some additions were reduced or sustained based on specific submissions.

The Tribunal held that the Assessing Officer misunderstood Section 270A(9) as the assessee neither claimed the excessive loss against other income in the impugned year nor set it off in subsequent years. Therefore, the computation of excessive loss did not amount to under-reporting of income.

The Tribunal held that agricultural income should be accepted as such, and undisclosed investments disclosed in the return and balance sheet are not sustainable. Additions related to FDR and interest were confirmed as they were deleted in the associate's case.

The Tribunal directed the Assessing Officer to compute interest at 12% on net amounts, following a previous decision. For unexplained bank credits, the matter was remitted back to the Assessing Officer to examine the details furnished by the assessee.

The Tribunal found that the Assessing Officer's higher estimations were without concrete material and there was no reason to disbelieve the assessee's claims. The certificate from the Village Administrative Officer supported the assessee's agricultural land holdings.

The Tribunal held that the interest on borrowed capital for acquiring a new asset should be allowed as a deduction if the business has been 'set up', even if it has not commenced generating revenue. The new mandapam was ready for use, indicating the business was set up.

The Tribunal, following a coordinate bench's decision in the assessee's own case, set aside the CIT(A)'s order and remitted the matter back to the Assessing Officer. The AO is directed to re-examine the claim of 'peak credit theory' with necessary evidence and consider the opening cash balance.

The Tribunal noted that the substantive additions in the lead case of Shri Ku.Pa. Krishnan, relating to the present assessee, were already deleted. It found that the assessee had sufficient cultivable land and had disclosed investments in the balance sheets, with no material to disbelieve the agricultural income. Consequently, the protective additions were deleted.

The Tribunal noted that the substantive additions in the lead case of Shri Ku.Pa. Krishnan, relating to the present assessee, were already deleted. It found that the assessee had sufficient cultivable land and had disclosed investments in the balance sheets, with no material to disbelieve the agricultural income. Consequently, the protective additions were deleted.

The Tribunal held that the Assessing Officer (AO) failed to comply with the specific directions of the High Court and the Tribunal by not properly considering the additional evidence filed by the assessee. The AO had merely confirmed the original assessment order dated July 31, 1997, and rejected all additional evidences and submissions. The Tribunal noted that the High Court had explicitly stated that additional evidence ought to have been confronted to the AO, who would be in a better position to appreciate and verify it. This fact strongly supported the adoption of the first round adjudication by the Tribunal. Therefore, the Tribunal directed the AO to determine the total income of the assessee at Rs. 64,98,721/-, as adjudicated in the first round of the Tribunal's decision. The grounds of appeal were disposed of accordingly. The Tribunal also noted that its adjudication was supported by the order of the Hon'ble Special Court acquitting the assessee and other accused persons, and relied on the Supreme Court's observations in DCIT vs. Jayachandran & Others regarding the consideration of criminal court findings.

The Tribunal found that the Assessing Officer's higher estimations were without concrete material and there was no reason to disbelieve the assessee's claims. The certificate from the Village Administrative Officer supported the assessee's agricultural land holdings.

The Tribunal held that the AO had applied his mind to the facts and taken a conscious decision, finding no error or prejudice to the revenue. Therefore, the PCIT's revision order was reversed.

The Tribunal held that the agricultural income claim was supported by evidence and should be accepted. Investments disclosed in the balance sheet and filed before the search were not sustainable additions. Some additions were reduced or sustained based on specific submissions.

The Tribunal found that the Assessing Officer's higher estimations were without concrete material and there was no reason to disbelieve the assessee's claims. The certificate from the Village Administrative Officer supported the assessee's agricultural land holdings.

The Tribunal found that the Assessing Officer's higher estimations were without concrete material and there was no reason to disbelieve the assessee's claims. The certificate from the Village Administrative Officer supported the assessee's agricultural land holdings.

The Tribunal noted that if the rental income was indeed shared equally among three co-owners and declared in their respective returns, the AO should verify this and allow TDS credit accordingly. However, if the income was not declared by the other co-owners, the AO would not allow any TDS credit.

The Tribunal decided on various issues. Regarding the assessment order's legality, it was not explicitly quashed but the appeal was partly allowed. Concerning transfer pricing adjustments, the Tribunal held that adjustments should be restricted to international transactions related to the domestic car sales segment and not at the entity level, as per the High Court's decision in the assessee's own case for AY 2012-13. The matter of TP adjustment for import of goods pertaining to domestic car sales segment was set aside to the file of the TPO for reconsideration. On the issue of foreign exchange loss, the Tribunal held that forex gain or loss is revenue in nature and operating in nature, rejecting the assessee's argument for it to be considered non-operating. The Tribunal allowed the additional ground for working capital adjustment, remanding the issue to the TPO to examine the claim. Regarding interest under Section 234C, the AO was directed to re-examine the computation considering pre-paid taxes and TDS. For short credit of TDS and relief under Section 90, the AO was directed to verify TDS as per Form 26AS and allow relief under Section 90 in accordance with law. The judgment does not explicitly record findings on all grounds raised, particularly those concerning Section 14A, capital subsidy, depreciation on UPS/scanners/printers, performance reward, output VAT incentives, and education cess, suggesting these might have been resolved through the partial allowance or were not the focus of the detailed discussion in the provided excerpt.

The Tribunal held that reopening the assessment under Section 147 based on a change of opinion regarding the quantum of disallowance under Section 14A, without any fresh tangible material, is not permissible. The original assessment had already dealt with this issue.

The Tribunal held that the impugned additions had no legs to stand as the assessee possessed sufficient cultivable land, and the agricultural income was used for the impugned investments. Therefore, the additions were deleted.

The Tribunal held that the impugned additions had no legs to stand as the assessee possessed sufficient cultivable land, and the agricultural income was used for the impugned investments. Therefore, the additions were deleted.

The Tribunal, following a coordinate bench's decision in the assessee's own case, set aside the CIT(A)'s order and remitted the matter back to the Assessing Officer. The AO is directed to re-examine the claim of 'peak credit theory' with necessary evidence and consider the opening cash balance.

The Tribunal found that the evidence regarding the settlement of creditors' dues and repayment of bank loans for the purchase of property from M/s. Mars Exports was contradictory and lacked sufficient verification. Therefore, the issue of unexplained investment in M/s. Mars Exports was set aside and remitted back to the Assessing Officer for re-examination.

The Tribunal found that the evidence regarding the settlement of creditors' dues and repayment of bank loans for the purchase of property from M/s. Mars Exports was contradictory and lacked sufficient verification. Therefore, the issue of unexplained investment in M/s. Mars Exports was set aside and remitted back to the Assessing Officer for re-examination.

The Tribunal found that the evidence regarding the settlement of creditors' dues and repayment of bank loans for the purchase of property from M/s. Mars Exports was contradictory and lacked sufficient verification. Therefore, the issue of unexplained investment in M/s. Mars Exports was set aside and remitted back to the Assessing Officer for re-examination.

The Tribunal found that the evidence regarding the settlement of creditors' dues and repayment of bank loans for the purchase of property from M/s. Mars Exports was contradictory and lacked sufficient verification. Therefore, the issue of unexplained investment in M/s. Mars Exports was set aside and remitted back to the Assessing Officer for re-examination.

The Tribunal found that the evidence regarding the settlement of creditors' dues and repayment of bank loans for the purchase of property from M/s. Mars Exports was contradictory and lacked sufficient verification. Therefore, the issue of unexplained investment in M/s. Mars Exports was set aside and remitted back to the Assessing Officer for re-examination.

The Tribunal found that the evidence regarding the settlement of creditors' dues and repayment of bank loans for the purchase of property from M/s. Mars Exports was contradictory and lacked sufficient verification. Therefore, the issue of unexplained investment in M/s. Mars Exports was set aside and remitted back to the Assessing Officer for re-examination.

The Tribunal noted that the substantive additions in the lead case of Shri Ku.Pa. Krishnan, relating to the present assessee, were already deleted. It found that the assessee had sufficient cultivable land and had disclosed investments in the balance sheets, with no material to disbelieve the agricultural income. Consequently, the protective additions were deleted.

The Tribunal noted that the substantive additions in the lead case of Shri Ku.Pa. Krishnan, relating to the present assessee, were already deleted. It found that the assessee had sufficient cultivable land and had disclosed investments in the balance sheets, with no material to disbelieve the agricultural income. Consequently, the protective additions were deleted.

The Tribunal noted that the substantive additions in the lead case of Shri Ku.Pa. Krishnan, relating to the present assessee, were already deleted. It found that the assessee had sufficient cultivable land and had disclosed investments in the balance sheets, with no material to disbelieve the agricultural income. Consequently, the protective additions were deleted.

The Tribunal held that the AO cannot make adjustments to re-compute book profit under Section 115JB if the item does not fall under the specified adjustments in the Explanation to Section 115JB. The Supreme Court in Apollo Tyres Ltd. held that the AO's power is limited to making increases and reductions as provided in the Explanation.

The Tribunal held that the agricultural income claim was supported by evidence and should be accepted. Investments disclosed in the balance sheet and filed before the search were not sustainable additions. Some additions were reduced or sustained based on specific submissions.

The Tribunal held that the assessee had already offered the Rs. 1 Crore as additional income and paid taxes on it. Therefore, making a further addition by the Assessing Officer for the same amount was incorrect.

The Tribunal upheld the addition of Rs. 1,55,40,000/- as on-money payment. The assessee's contradictory statements and the lack of proof for subsequent payment were considered, along with human probabilities.

The Tribunal held that the agricultural income claim was supported by evidence and should be accepted. Investments disclosed in the balance sheet and filed before the search were not sustainable additions. Some additions were reduced or sustained based on specific submissions.

The Tribunal found that the evidence regarding the settlement of creditors' dues and repayment of bank loans for the purchase of property from M/s. Mars Exports was contradictory and lacked sufficient verification. Therefore, the issue of unexplained investment in M/s. Mars Exports was set aside and remitted back to the Assessing Officer for re-examination.

The Tribunal set aside the orders of the AO and CIT(A) and remanded the matter back to the AO for fresh adjudication. The AO is directed to examine the alleged power agents and purchasers, allow cross-examination, and then decide the issue.

The Tribunal held that adjustments for belated PF/ESI contributions and disallowances for non-deduction of TDS are permissible under section 143(1) as they are apparent from the return. The Supreme Court's decision in Checkmate Services Pvt Ltd was followed regarding belated PF/ESI remittances.

The Tribunal held that adjustments for belated PF/ESI contributions and disallowances for non-deduction of TDS are permissible under section 143(1) as they are apparent from the return. The Supreme Court's decision in Checkmate Services Pvt Ltd was followed regarding belated PF/ESI contributions.

The Tribunal held that the transaction was a simpliciter transaction of purchase of a dredger in assessment year 2011-12, and the payment made in assessment year 2018-19 was merely a delayed settlement of the purchase price. The Tribunal noted that the assessee had purchased the capital asset (dredger and tender boat) in AY 2011-12, and the subsequent transaction in AY 2018-19 was only a settlement of payment towards that purchase and could not be considered a separate international transaction in AY 2018-19. The Tribunal found that the AO/TPO erred in ignoring the invoice of payment in USD in AY 2011-12 and the same amount being paid in USD in AY 2018-19. Since the AE received the same amount of foreign currency as raised in the invoice, the exchange difference due to delayed payment was attributable to the assessee, not the AE. The Tribunal observed that the assessee had produced accounts statements, purchase agreements, and finance agreements, which were allegedly not placed before the lower authorities. Therefore, for verification purposes, the Tribunal remitted the issue back to the file of the AO/TPO to verify the transaction and consider it as a simpliciter transaction of purchase of a capital asset, in which case, no adjustment could be made. The orders of the DRP and AO were set aside.

The Tribunal held that the assessee's case is covered by the Supreme Court decisions in Mavilayi Service Co-operative Bank Ltd. and Kerala State Co-operative Agricultural and Rural Development Bank Ltd. Therefore, the revision order passed by the PCIT under Section 263 was quashed.

The Tribunal held that while the Tax Audit Report was obtained before the extended due date, there was only a delay in uploading it. Therefore, it was not a fit case for levying the penalty under Section 271B.

The Tribunal held that adjustments for belated PF/ESI contributions and disallowances for non-deduction of TDS are permissible under section 143(1) as they are apparent from the return. The Supreme Court's decision in Checkmate Services Pvt Ltd was followed regarding belated PF/ESI contributions.

The Tribunal, following the Supreme Court's decision in M/s. Checkmate Services P. Ltd. v. CIT, held that timely payment of employee contributions to PF and ESI is necessary for deduction. Delayed remittances are not entitled to deduction.