ITAT Chennai Judgments — November 2023

The Tribunal held that the provision for warranty was not scientifically recognized and upheld the disallowance. However, it ruled that payments made to non-residents were not liable for TDS and consequently, disallowances under Section 40(a)(i) and demands under Section 201/201(1A) could not be sustained.

The Tribunal held that the provision for warranty was not scientifically recognized and upheld the disallowance. However, it ruled that payments made to non-residents were not liable for TDS and consequently, disallowances under Section 40(a)(i) and demands under Section 201/201(1A) could not be sustained.

The Tribunal held that the provision for warranty was not scientifically recognized and upheld the disallowance. However, it ruled that payments made to non-residents were not liable for TDS and consequently, disallowances under Section 40(a)(i) and demands under Section 201/201(1A) could not be sustained.

The Tribunal held that the Assessing Officer completed the assessment within the scope of limited scrutiny. Since the issue raised by the PCIT was not part of the limited scrutiny, the assessment order could not be considered erroneous or prejudicial to the revenue. Therefore, the PCIT's revision order was quashed.

The Tribunal held that the Assessing Officer erred in denying the deduction without properly examining if the society fulfilled the conditions for Section 80P(2)(a)(i). The Tribunal noted that co-operative societies must charge interest as per the relevant Co-operative Societies Act.

The Tribunal condoned the delay in filing the appeal, citing the assessee's severe and continuous medical issues as a reasonable cause. The Tribunal set aside the CIT(A)'s order and remitted the matter back for a fresh decision, granting the assessee one more opportunity to present their case.

The Tribunal held that the CIT(Exemptions) erred in invoking Section 263. The assessment order was neither erroneous nor prejudicial to the revenue, as the AO had considered the exemption claim. The Supreme Court's decision cited by the CIT could not be applied retrospectively.

The Tribunal set aside the ex-parte appellate order and remitted the matter back to the CIT(A) to provide the assessee with another opportunity to present their case with supporting evidence, subject to a cost payment.

The Tribunal acknowledged the pandemic's impact and the assessee's inability to furnish details. It granted the assessee one more opportunity to present its case before the Assessing Officer for a fresh decision.

The Tribunal held that the reopening of assessment was bad in law as it was based on a change of opinion, using material already available on record during the original assessment. No new tangible material came to the AO's notice to justify the reopening.

The Tribunal noted a typographical error in its previous order and clarified that the disallowance should be restricted to ₹.18,00,000/-, with the balance of ₹.7,60,000/- treated as unexplained money under Section 69A.

The Tribunal held that the reasons provided by the assessee for the inordinate delay in filing the appeals were not bonafide or reasonable. The medical certificate was vague and not supported by evidence, and the assessee had a history of not pursuing her case diligently.

The Tribunal held that the reasons provided by the assessee for the inordinate delay in filing the appeals were not bonafide or reasonable. The medical certificate was vague and not supported by evidence, and the assessee had a history of not pursuing her case diligently.

The Tribunal held that the reasons provided by the assessee for the inordinate delay in filing the appeals were not bonafide or reasonable. The medical certificate was vague and not supported by evidence, and the assessee had a history of not pursuing her case diligently.

The Tribunal noted that both lower authority orders were ex-parte. For the sake of justice, the Tribunal decided to give the assessee one more opportunity to substantiate their case before the AO.

The Tribunal decided the issues as follows: For AY 2011-12 (ITA No. 797/Chny/2020): The appeal was dismissed. The specific grounds for dismissal are not detailed in the provided excerpt, but it implies the assessee's appeal on the confirmed addition was not successful. For AY 2011-12 (ITA No. 798/Chny/2020): The appeal was allowed for statistical purposes. This likely pertains to issues where the Tribunal directed further verification or set aside the matter. The specific issue is not detailed in the excerpt, but it's noted that the foreign exchange loss addition was confirmed by the CIT(A). For AY 2013-14 (ITA No. 2757/Chny/2017): The appeal was partly allowed for statistical purposes. This indicates that some grounds were decided in favor of the assessee, while others were not. For AY 2017-18 (IT(TP)A No. 21/Chny/2021): The appeal was allowed for statistical purposes. The Tribunal directed the Assessing Officer to verify the claim for credit of tax paid in Singapore in terms of Article 25 of the DTAA and Section 90, allowing credit in accordance with law. The Tribunal also directed the Assessing Officer to verify the TDS credit claim with Form 26AS and other details and allow credit as per law. For AY 2018-19 (IT(TP)A No. 40/Chny/2022): The appeal was allowed for statistical purposes. The Tribunal directed the TPO to compute corporate guarantee fee at 0.5% on the total corporate guarantee given by the appellant to its AE, following its own decision for AY 2013-14 and the Bombay High Court's decision in CIT vs. Everest Kento Cylinders Ltd. For AY 2013-14 (Revenue appeal ITA No. 1672/Chny/2019): The appeal was dismissed. This means the Revenue's appeal against the CIT(A)'s order was unsuccessful.

The Tribunal directed the Assessing Officer to verify claims for foreign tax credit and TDS credit. For corporate guarantee fees, the Tribunal directed the TPO to compute the fee at 0.5% on the total corporate guarantee given to AEs.

The Tribunal directed the Assessing Officer to verify claims for foreign tax credit and TDS credit. For corporate guarantee fees, the Tribunal directed the TPO to compute the fee at 0.5% on the total corporate guarantee given to AEs.

The Tribunal directed the Assessing Officer to verify claims for foreign tax credit and TDS credit. For corporate guarantee fees, the Tribunal directed the TPO to compute the fee at 0.5% on the total corporate guarantee given to AEs.

The Tribunal held that the assessment framed under Section 153C without incriminating material is bad in law, citing the Supreme Court decision in PCIT vs. Abhisar Buildwell (P) Ltd. The Tribunal also upheld the addition of the differential value of shares under Section 56(2)(vii)(c) as the company and individual shareholder are distinct entities and not relatives.

The Tribunal decided the issues as follows: For AY 2011-12 (ITA No. 797/Chny/2020): The appeal was dismissed. The specific grounds for dismissal are not detailed in the provided excerpt, but it implies the assessee's appeal on the confirmed addition was not successful. For AY 2011-12 (ITA No. 798/Chny/2020): The appeal was allowed for statistical purposes. This likely pertains to issues where the Tribunal directed further verification or set aside the matter. The specific issue is not detailed in the excerpt, but it's noted that the foreign exchange loss addition was confirmed by the CIT(A). For AY 2013-14 (ITA No. 2757/Chny/2017): The appeal was partly allowed for statistical purposes. This indicates that some grounds were decided in favor of the assessee, while others were not. For AY 2017-18 (IT(TP)A No. 21/Chny/2021): The appeal was allowed for statistical purposes. The Tribunal directed the Assessing Officer to verify the claim for credit of tax paid in Singapore in terms of Article 25 of the DTAA and Section 90, allowing credit in accordance with law. The Tribunal also directed the Assessing Officer to verify the TDS credit claim with Form 26AS and other details and allow credit as per law. For AY 2018-19 (IT(TP)A No. 40/Chny/2022): The appeal was allowed for statistical purposes. The Tribunal directed the TPO to compute corporate guarantee fee at 0.5% on the total corporate guarantee given by the appellant to its AE, following its own decision for AY 2013-14 and the Bombay High Court's decision in CIT vs. Everest Kento Cylinders Ltd. For AY 2013-14 (Revenue appeal ITA No. 1672/Chny/2019): The appeal was dismissed. This means the Revenue's appeal against the CIT(A)'s order was unsuccessful.

The Tribunal held that dry land is considered agricultural land and the sale of agricultural land is not liable to capital gains tax. The intention of the seller and the nature of the land as recorded in revenue documents are determinative factors.

The Tribunal directed the Assessing Officer to verify claims for foreign tax credit and TDS credit. For corporate guarantee fees, the Tribunal directed the TPO to compute the fee at 0.5% on the total corporate guarantee given to AEs.

The Tribunal held that the addition was unsustainable as it was based on financial projections made in an earlier year for lower TDS certificates, not actual revenue earned. The assessee correctly followed the percentage of completion method and recognized revenue based on certified work.

The Tribunal held that the assessment framed under Section 153C without incriminating material is bad in law, citing the Supreme Court decision in PCIT vs. Abhisar Buildwell (P) Ltd. The Tribunal also upheld the addition of the differential value of shares under Section 56(2)(vii)(c) as the company and individual shareholder are distinct entities and not relatives.

The Tribunal held that since the reassessment was initiated beyond four years from the end of the assessment year and the original assessment was completed under Section 143(3), the Revenue failed to establish any failure on the part of the assessee to disclose material facts. Therefore, the reopening was bad in law.

The Tribunal held that the assessee is entitled to claim credit for the additional foreign withholding tax. The claim was allowed as the corresponding income was already offered to tax and the additional deduction was made due to a revision by Australian tax authorities.

The Tribunal upheld the CIT(A)'s decision, finding the loss to be notional and artificial. The claim was also rejected as a double deduction attempt in subsequent years.

The Tribunal held that salary income accrued for work performed outside India is not taxable in India, while salary received for work performed in India is taxable. The benefit of the DTAA is available even to non-residents if it is more beneficial.

The Tribunal held that timely payment of employee's contribution to PF/ESI is necessary for deduction, following the Supreme Court's decision in M/s. Checkmate Services P. Ltd. v. CIT.

The Tribunal held that the additional payments were made on dates subsequent to the registration of the property and were not unexplained investments. Therefore, the addition made by the Assessing Officer was deleted.

The Tribunal held that the interest disallowance was wrongly made as the assessee had sufficient interest-free funds. The addition for sales suppression was deleted due to lack of evidence, and the addition for cash credits was also deleted as they were found to be realizations from sundry debtors.

The Tribunal upheld the CIT(A)'s decision to restrict the disallowance of bonus payments to 20% due to lapse of time and the inability to produce evidence. It also upheld the deletion of the Section 40A(3) disallowance, finding that the Assessing Officer had not properly established the violation.

The Tribunal noted that the assessee had furnished copies of Form 67 and sought a remand. Considering the submissions and various judicial precedents, the Tribunal set aside the orders of the lower authorities.

The Tribunal held that the CIT(A) should have kept the appeal proceedings in abeyance until the disposal of the assessee's petition before the CBDT. The order of the CIT(A) was set aside and the issue was restored to the file of the CIT(A) for reconsideration.

The Tribunal held that the CIT(A) should have kept the appeal proceedings in abeyance to allow the assessee to pursue its waiver petition before the CBDT. The order of the CIT(A) was set aside and restored to its file.

The Tribunal noted that the assessee had furnished copies of Form 67 and sought a remand. Considering the submissions and various judicial precedents, the Tribunal set aside the orders of the lower authorities.

The Tribunal held that the CIT(A) cannot make enhancements on issues not considered by the Assessing Officer, as this is beyond the jurisdiction of the first appellate authority. The enhancements made were therefore deleted.

The Tribunal held that a difference in stock valuation due to different methods or increased selling prices does not constitute unexplained investment under Section 69B. It also upheld the assessee's claim for a 2% deduction for obsolete stock, citing previous ITAT decisions in its own case.