ITAT Chennai Judgments — February 2024

The Tribunal noted that the Supreme Court in Shriram Chits and Investments Pvt. Ltd. held that a chit agreement is not a money lending transaction. However, the Tribunal also referred to Oriental Kuries Limited, where the Supreme Court clarified that a prized subscriber incurs a debt payable in installments, and the foreman can recover future subscriptions in case of default.

The Tribunal noted that the Supreme Court in Shriram Chits and Investments Pvt. Ltd. held that a chit agreement is not a money lending transaction. However, the Tribunal also referred to Oriental Kuries Limited, where the Supreme Court clarified that a prized subscriber incurs a debt payable in installments, and the foreman can recover future subscriptions in case of default.

The Tribunal condoned the delay in filing the appeals before the CIT(A) because the assessee was pursuing an alternative remedy (rectification application) which remained undecided. The appeals were remitted back to the CIT(A) for fresh adjudication on merits.

The Tribunal held that while the assessee was non-cooperative, the CIT(A) should have decided the appeal on merits based on available material, rather than dismissing it on technical grounds. Therefore, the assessee deserves one more opportunity before the CIT(A).

The Tribunal condoned the delay in filing the appeals before the CIT(A) because the assessee was pursuing an alternative remedy (rectification application) which remained undecided. The appeals were remitted back to the CIT(A) for fresh adjudication on merits.

The Tribunal condoned the delay in filing the appeals before the CIT(A) because the assessee was pursuing an alternative remedy (rectification application) which remained undecided. The appeals were remitted back to the CIT(A) for fresh adjudication on merits.

The Tribunal held that for Section 2(22)(e) to apply, the recipient must be a shareholder of the lending company. Since the assessee companies were not shareholders of M/s. IG3 Infra Limited, the payments could not be taxed as deemed dividend in their hands.

The Tribunal upheld the disallowance of depreciation on land, stating no depreciation is allowed on land. For expenditure related to exempt income, the issue was set aside to the AO for reconsideration. Losses from joint ventures were treated as capital loss.

The Tribunal upheld the disallowance of depreciation on land, stating no depreciation is allowed on land. For expenditure related to exempt income, the issue was set aside to the AO for reconsideration. Losses from joint ventures were treated as capital loss.

The Tribunal upheld the disallowance of depreciation on land, stating no depreciation is allowed on land. For expenditure related to exempt income, the issue was set aside to the AO for reconsideration. Losses from joint ventures were treated as capital loss.

The Tribunal upheld the disallowance of depreciation on land, stating no depreciation is allowed on land. For expenditure related to exempt income, the issue was set aside to the AO for reconsideration. Losses from joint ventures were treated as capital loss.

The Tribunal held that the penalty proceedings were not validly initiated. This was because the Assessing Officer did not record satisfaction in the assessment order regarding the violation, and the proposal for penalty was made long after the assessment was concluded, violating CBDT circulars.

The Tribunal held that the penalty proceedings were not validly initiated. This was because the Assessing Officer did not record satisfaction in the assessment order regarding the violation, and the proposal for penalty was made long after the assessment was concluded, violating CBDT circulars.

The Tribunal held that the penalty proceedings were not validly initiated. This was because the Assessing Officer did not record satisfaction in the assessment order regarding the violation, and the proposal for penalty was made long after the assessment was concluded, violating CBDT circulars.

The Tribunal held that the cash deposits were sale proceeds from the business of selling gas cylinders, which was a routine business activity. Therefore, the addition was deleted entirely.

The Tribunal held that filing Form 10CCB electronically along with the return is not mandatory, and if filed before assessment completion, the deduction should be allowed. The disallowance for late PF contribution was also directed to be verified and deleted if it was a double disallowance.

The Tribunal held that the CIT(A) correctly appreciated that the physical stock should be valued at cost price, excluding GST and gross profit. The remaining un-reconciled amount was rightly treated as business income.

The Tribunal held that the difference between the sale consideration and the deemed consideration was only 14%, which is a negligible variation. Relying on Supreme Court judgments, it concluded that such a variation does not warrant an addition to income.

The Tribunal allowed the commission expenses of Rs. 7,50,000/- for which confirmations were provided. For the remaining amount, a 50% estimate was allowed, disallowing the other 50%.

The Tribunal acknowledged that the AO had not rejected the assessee's books of accounts and had accepted some cash deposits as explained. However, due to abnormal cash deposit patterns, the Tribunal made a fair estimate and restricted the addition to Rs. 4,32,000, treating the balance as unexplained.

The Tribunal condoned the delay in filing the appeal due to unavoidable reasons. It held that the CIT(A) should have decided the appeal on merits rather than dismissing it on technical grounds, and therefore, restored the issue to the CIT(A) for a fresh hearing.

The Tribunal found that the CIT(A)'s order was ex-parte and non-speaking, dismissing the appeal for non-prosecution without proper adjudication. Therefore, the Tribunal set aside the CIT(A)'s order and remanded the matter back for fresh adjudication.

The Tribunal set aside the orders of the lower authorities and remitted the matter back to the Assessing Officer for fresh adjudication. This was done in the interest of natural justice, considering the assessee's age and location, and the possibility of not accessing email notices.

The Tribunal dismissed the revenue's appeal, holding that disallowances based solely on percentage increases in expenditure without proving the expenses were not genuine or capital in nature were unjustified. For the assessee's appeal, two issues were allowed for statistical purposes, and one was partly allowed.

The Tribunal dismissed the revenue's appeal, holding that disallowances based solely on percentage increases in expenditure without proving the expenses were not genuine or capital in nature were unjustified. For the assessee's appeal, two issues were allowed for statistical purposes, and one was partly allowed.

The Tribunal held that the penalty proceedings were not validly initiated. This was because the Assessing Officer did not record satisfaction in the assessment order regarding the violation, and the proposal for penalty was made long after the assessment was concluded, violating CBDT circulars.

The Tribunal found that Rs. 8,65,500/- was deposited in demonetized currency, and out of this, Rs. 8,37,116/- was explained by opening cash balance. The remaining Rs. 28,384/- was considered unexplained.

The Tribunal acknowledged that vegetable trading is predominantly a cash business. While not accepting the entire claim, it directed the AO to treat Rs. 2,70,000/- as unexplained business income, allowing a fair estimate of Rs. 10,00,000/- as explained.

The Tribunal noted that the government permitted certain receipts in specified bank notes for LPG cylinder purchases. The Tribunal remitted the issue back to the Assessing Officer for verification of facts regarding the cash deposits.

The Tribunal held that while the assessee was non-cooperative, the CIT(A) should have decided the appeals on merits rather than on technical grounds of non-appearance. The assessee was granted one more opportunity to present its case.

The Tribunal held that interest income earned by a co-operative society from its investments with other co-operative banks is eligible for deduction under Section 80P(2)(d) of the Act. This decision was based on the interpretation of the definition of 'co-operative society' and supported by High Court precedents.

The Tribunal held that the filing of Form No. 67 is directory and not mandatory, following the Madras High Court's decision. The claim for FTC should be allowed if Form No. 67 is filed before the assessment is completed.

The Tribunal agreed that the orders were passed in violation of natural justice and were non-speaking. While acknowledging the assessee's non-cooperation, the Tribunal set aside the order to the CIT(A) for fresh adjudication on merits.

The Tribunal accepted that a portion of the cash deposit could be from past loans and advances, estimating Rs. 6,00,000 as available cash. The balance of Rs. 5,16,000 was treated as unexplained.

The Tribunal dismissed the appeal in limine due to the inordinate delay. The Tribunal found that the medical documents submitted were not relevant to the period of delay and that the assessee's husband had attended proceedings before the Assessing Officer after the alleged period of illness.

The Tribunal noted that the Assessing Officer (AO) had rectified the original assessment order to allow the accumulation after the delay in filing Form 10 was condoned. Therefore, the appeal filed by the assessee had become infructuous.

The Tribunal noted that general insurance business requires significant efforts and expenses due to its yearly renewable nature and associated activities. It estimated the disallowance at 25% of the claimed expenses, directing the Assessing Officer to recompute the income accordingly.

The Tribunal noted that general insurance business requires significant efforts and expenses due to its yearly renewable nature and associated activities. It estimated the disallowance at 25% of the claimed expenses, directing the Assessing Officer to recompute the income accordingly.

The Tribunal held that while the assessee was non-cooperative, the CIT(A) should have decided the appeals on merits rather than on technical grounds of non-appearance. The assessee was granted one more opportunity to present its case.

The Tribunal condoned the delay in filing the appeal and restored the matter to the AO. The AO is directed to re-decide the issue of Section 80P deduction after awaiting the CBDT's decision on the condonation petition.

The Tribunal condoned the delay in filing the appeal. However, it was observed that the tax effect in the appeal was below Rs. 50.00 lakhs, which is below the monetary limit prescribed by CBDT Circular No. 17/2019 for filing appeals.

The Tribunal condoned the delay in filing the appeal. It held that the CIT(A) erred in dismissing the appeal on technical grounds without considering the merits, and therefore, the assessee deserves another opportunity.

The Tribunal held that filing Form 67 is directory, not mandatory. Since the form was filed before the assessment order, the Assessing Officer should have allowed the credit for foreign taxes paid.

The Tribunal set aside the orders of the CIT(A) and AO and remitted the matter back to the AO for re-examination. The assessee was directed to substantiate their claims before the AO.

The Tribunal held that the date of transfer for capital gains should be considered as per the Release Deed, making it short-term capital gain. The Tribunal also upheld the AO's decision to treat cash deposits as unexplained credit under Section 68 due to lack of proper evidence from the assessee.

The Tribunal held that the assessment order was erroneous and prejudicial to the interest of the revenue. It found that the transaction appeared to be a structured arrangement to derive undue benefit of short-term capital loss, as the fair market value of the shares at the time of allotment was significantly lower than the face value.

The Tribunal held that the AO had conducted necessary inquiries regarding the lease equalization charges and the assessee's method of accounting. The PCIT erred in concluding that the assessment order was erroneous and prejudicial to the revenue.

The Tribunal set aside the CIT(A)'s order and directed the CIT(A) to provide the assessee with another opportunity to be heard and present evidence. The assessee was also directed to furnish complete details to substantiate their case.

The Tribunal accepted the submission that the manual appeal was a duplicate and therefore dismissed it. The appeal was dismissed as being redundant.

The Tribunal held that the attribution of notional income towards deemed brand development was erroneous. The Tribunal noted that the assessee had raised multiple grounds challenging the TPO's jurisdiction and the classification of AMP expenses as an international transaction. Specifically, the Tribunal observed that the DRP acknowledged similarities with previous assessment years where the Tribunal had deleted adjustments on brand building/AMP expenses. The Tribunal's reasoning, as indicated by the dismissal of grounds related to brand promotion/AMP expenses, suggests a finding that such activities, as treated by the TPO, did not constitute a separate international transaction or that the TPO had acted beyond jurisdiction. The Tribunal's decision to allow the appeal in terms of its order implies that the adjustment made by the TPO and confirmed by the DRP was deleted. The ratio would be that advertisement and marketing expenses incurred by a manufacturer for promoting its own sales, even if benefiting an associated enterprise's brand, do not automatically constitute a separate international transaction requiring arm's length benchmarking, especially when prior judicial precedents in the assessee's own case have held similarly. The operative direction was the deletion of the impugned adjustment.