ITAT Chennai Judgments — August 2024

The tribunal upheld the CIT(A)'s order confirming the reassessment proceedings and the addition on account of the factory building sale, as the transfer is effective upon registration. The disallowance of short-term capital loss was also confirmed, finding the share transaction to be not genuine due to lack of evidence and unusual circumstances.

The Tribunal held that the partnership deed authorized the payment of interest on additional funds infused by partners, and the interest paid was within the 12% limit. Therefore, the disallowance made by the AO and confirmed by the CIT(A) was incorrect.

The Tribunal found reasonable cause for the delay, condoned the 359-day delay, and set aside the CIT(A)'s order. The appeal was restored to the CIT(A) for adjudication on merits.

The Tribunal condoned the delay in filing the appeal and followed a coordinate bench's order. The matter was restored to the CIT(A) for de novo adjudication after the CBDT decides on the assessee's condonation petition under Section 119(2)(b).

The Tribunal noted that the assessee was provided multiple opportunities by lower authorities but did not avail them. However, in the interest of natural justice, one last opportunity was granted to the assessee to present its case and supporting evidence before the AO. The assessment order and appellate order were set aside and the matter was restored to the AO for de novo assessment.

The Tribunal held that interest under section 234A should be calculated from the expiry of the notice period under section 153A. For section 234B, interest is to be recomputed after giving credit for self-assessment tax paid.

The Tribunal noted that the assessee was provided multiple opportunities by lower authorities but did not avail them. However, in the interest of natural justice, one last opportunity was granted to the assessee to present its case and supporting evidence before the AO. The assessment order and appellate order were set aside and the matter was restored to the AO for de novo assessment.

The Tribunal held that the addition of Rs. 63,500/- was made without any material to show the source was unexplained. The CIT(A) confirmed the addition without considering relevant facts.

The Tribunal noted that both the Ld.CIT(A) and AO had passed ex parte orders. Considering that the assessee had filed relevant documents for the first time, the Tribunal granted an opportunity for de novo assessment.

The Tribunal found that the CIT(E) could have considered the application by ignoring the incidental religious objects. The impugned order was set aside and the case was restored to the CIT(E) for fresh adjudication, after giving the assessee an opportunity of being heard.

The Tribunal held that the Investment Promotion Subsidy received by way of Output VAT is a capital receipt and not chargeable to tax. This decision followed a previous ruling by the ITAT in the assessee's own case for an earlier assessment year.

The Tribunal noted that a related application for regular registration under section 12A had been restored back to the CIT(E) for fresh consideration. Considering this, the Tribunal decided to restore the section 80G application as well, directing the CIT(E) to grant proper opportunity to the assessee.

The Tribunal found that the assessee did not get a proper opportunity to present its case before the AO as the notice was issued to a dissolved entity. The Ld.CIT(A)'s order was set aside due to incorrect assertions contrary to the facts. The Tribunal noted that the AO passed an ex-parte order.

The Tribunal noted that the assessee was non-cooperative and negligent, leading to ex-parte orders from both the AO and CIT(A)-NFAC. However, in the interest of justice, the Tribunal decided to set aside the orders and remand the matter back to the AO for fresh adjudication.

The Tribunal held that deduction under Section 80P(2)(d) is allowable if the interest is derived from investments with another cooperative society. The Tribunal remanded the issue to the AO to verify if VDDC Bank possesses an RBI license to conduct banking business with the public.

The Tribunal held that the partnership deed authorized the payment of interest on additional funds infused by partners. Since the interest paid was at 12% and authorized by the partnership deed, the deduction claimed was allowable under Section 40(b)(iv) of the Act.

The assessee's grievance was redressed as they were granted the registration. The Department did not raise any objection to the withdrawal of the appeal.

The Tribunal acknowledged that the assessee had filed a petition for condonation of delay in filing Form-10B with the CBDT, which was pending. Following a coordinate bench's order, the Tribunal decided to set aside the CIT(A)'s order and remit the matter back for denovo adjudication after the CBDT decides on the condonation petition.

The Tribunal held that the Ld.CIT(A)'s action of dismissing the appeal solely on the ground of delay, without condoning it or adjudicating the grounds on merits, was not in consonance with the statutory right of appeal. The Tribunal noted that the Ld.CIT(A) is duty-bound to decide the grounds of appeal under Section 250(6) of the Act. However, considering the submission that the assessment order was non-speaking and passed without proper opportunity, the Tribunal found merit in restoring the assessment to the file of the Assessing Officer (AO) for de novo assessment. The Tribunal directed the assessee to diligently file documents and the AO to adjudicate the expenditure claims according to law after hearing the assessee, without being influenced by any prior observations. The appeal against the rectification order was rendered infructuous. The Tribunal allowed ITA No.913/Chny/2024 for statistical purposes and dismissed ITA No.915/Chny/2024 as infructuous.

The Tribunal noted that a petition for condonation of delay was pending before the CBDT, which had a direct bearing on the issue. Therefore, the Tribunal set aside the CIT(A)'s order and remitted the matter back for denovo adjudication after the CBDT's decision on the condonation petition.

The tribunal noted that the Ld.CIT(A) passed an ex-parte order without considering the merits of the appeal. The assessee has a statutory right to appeal, and the Ld.CIT(A) is bound to decide the appeal on merits. Therefore, the tribunal set aside the ex-parte order.

The Tribunal held that interest income earned from surplus funds invested in banks cannot be considered within the ambit of the mutuality principle. The CIT(A) rightly exercised its power under Section 154 to rectify its earlier order.

The Tribunal noted that when an assessee has mixed funds (interest-free and interest-bearing), the presumption is that loans given are from interest-free funds, as per judicial precedent. The Tribunal found that the AO had not verified these facts and set aside the CIT(A)'s order.

The tribunal held that the CIT(A) should have decided the appeal on merits and not dismissed it for default, as per the provisions of the Act and judicial precedents. The order of the CIT(A) was set aside.

The Tribunal noted that the assessee is a regular investor and had purchased the shares through proper banking channels and a registered stock broker. The Tribunal found no material to dispute the genuineness of the transaction and held that the LTCG cannot be disallowed merely on the basis of a general investigation report, especially when the assessee was not alleged to have a role in any wrongdoings.

The Tribunal noted that the CIT(A) dismissed the appeal without considering the impact of the COVID-19 pandemic and the Supreme Court's directions on condoning delays. The Tribunal found a reasonable cause for the delay and decided to condone it.

The CIT(A) dismissed the appeal without condoning the delay, holding that there was no reasonable cause for the delay. The assessee's representative argued that the delay was due to communication issues with the previous auditor and updating email IDs on the portal. The Tribunal, considering the smallness of the delay and the reason provided, was inclined to condone the delay.

The Department did not object to the withdrawal of the appeals. Consequently, the withdrawal was permitted by the Tribunal.

The Department did not object to the withdrawal of the appeals. Consequently, the withdrawal was permitted by the Tribunal.

The Tribunal held that the assessee is entitled to the full TDS credit available as per Form 26AS. The Tribunal noted that while credit notes were issued to re-compute royalty payments, TDS was deducted against the initial payments. The income to the extent of credit notes did not accrue to the assessee, and thus, there was no question of offering it to tax. The Tribunal found that the provisions of Section 155(14) were not applicable as they pertain to cases where TDS certificates are furnished later and income has not been disclosed. The Tribunal respectfully followed a co-ordinate bench decision in the assessee's own case for an earlier assessment year, which held that the assessee would be entitled to the credit of TDS deducted even against amounts covered by credit notes, as the mechanism to claim refund of excess TDS is through filing an Income Tax Return. Therefore, the Assessing Officer was directed to allow full TDS credit as per Form 26AS. No issue was expressly left undecided.

The Tribunal condoned the delay in filing one appeal due to COVID-19. Regarding prepaid finance charges, the issue was not fully elaborated in the provided text, but the disallowance by the AO and CIT(A) was challenged. For bad debts, the Tribunal held that the deduction is limited to the provision made in the books, not exceeding 5% of total income, and remanded the alternative claim for fresh adjudication.

The Tribunal condoned the delay in filing one appeal due to COVID-19. Regarding prepaid finance charges, the issue was not fully elaborated in the provided text, but the disallowance by the AO and CIT(A) was challenged. For bad debts, the Tribunal held that the deduction is limited to the provision made in the books, not exceeding 5% of total income, and remanded the alternative claim for fresh adjudication.

The Tribunal condoned the delay in filing one appeal due to COVID-19. Regarding prepaid finance charges, the issue was not fully elaborated in the provided text, but the disallowance by the AO and CIT(A) was challenged. For bad debts, the Tribunal held that the deduction is limited to the provision made in the books, not exceeding 5% of total income, and remanded the alternative claim for fresh adjudication.

The Tribunal found that the CIT(A) had proceeded ex-parte and failed to follow principles of natural justice by not remanding the case to the AO. Therefore, the Tribunal set aside the orders of the lower authorities and remanded the appeals to the AO for de novo assessment.

The Tribunal found that the CIT(A) had proceeded ex-parte and failed to follow principles of natural justice by not remanding the case to the AO. Therefore, the Tribunal set aside the orders of the lower authorities and remanded the appeals to the AO for de novo assessment.

The Tribunal held that the CIT(A) should have waited for the outcome of appeals before the Madras High Court that directly addressed the issue of extinguished liabilities under the IBC Code. The CIT(A) also failed to provide adequate opportunity to the assessee on merits.

The Tribunal held that the CIT(A) should have waited for the outcome of appeals before the Madras High Court that directly addressed the issue of extinguished liabilities under the IBC Code. The CIT(A) also failed to provide adequate opportunity to the assessee on merits.

The Tribunal held that the CIT(A) should have waited for the outcome of appeals before the Madras High Court that directly addressed the issue of extinguished liabilities under the IBC Code. The CIT(A) also failed to provide adequate opportunity to the assessee on merits.

The Tribunal held that initiating penalty under a non-existent provision (Section 271AAC for the relevant AY) is equivalent to non-initiation. Furthermore, the AO failed to record satisfaction regarding concealment of income, which is a prerequisite for revision under Section 263.

The Tribunal held that the revised computation of income was not a fresh claim and was supported by audited financials. The Tribunal set aside the impugned order, allowing the appeal and directing the AO to accept the revised computation.

The Tribunal condoned the delay in filing one appeal due to COVID-19. Regarding prepaid finance charges, the issue was not fully elaborated in the provided text, but the disallowance by the AO and CIT(A) was challenged. For bad debts, the Tribunal held that the deduction is limited to the provision made in the books, not exceeding 5% of total income, and remanded the alternative claim for fresh adjudication.

The Tribunal held that the Assessing Officer had examined the issue of Section 14A disallowance during the original assessment, and no disallowance was made as there was no exempt income. The amendment to Section 14A by the Finance Act, 2022, was held to be prospective and not applicable to the assessment year in question.

The Tribunal held that the Assessing Officer (AO) had already examined the issues of NSEL transactions and bad debt provision during the original and reassessment proceedings. Since the AO had verified the facts and completed the reassessment, the revision order was quashed.

The Tribunal found that the CIT(A) had proceeded ex-parte and failed to follow principles of natural justice by not remanding the case to the AO. Therefore, the Tribunal set aside the orders of the lower authorities and remanded the appeals to the AO for de novo assessment.

The Tribunal held that the CIT(A) should have waited for the outcome of appeals before the Madras High Court that directly addressed the issue of extinguished liabilities under the IBC Code. The CIT(A) also failed to provide adequate opportunity to the assessee on merits.

The Tribunal held that the cash deposits were backed by sales carried out by the assessee and duly recorded in the books of accounts. Therefore, the source of cash was explained and the addition under Section 69A was not sustainable.

The tribunal held that interest from trade debtors should be treated as business income, while interest on fixed deposits and electricity deposits should be income from other sources, with a possibility of netting if a direct nexus to business is proven. Disallowances for capital expenditure and belatedly recorded expenses were deleted.

The Tribunal found that the AO erred in rejecting the assessee's books of accounts without proper justification and that the additions made were arbitrary. The Tribunal upheld the CIT(A)'s deletion of additions related to estimated revenue and the difference between 26AS and book receipts.

The Tribunal noted the assessee's consistent failure to appear or provide submissions. However, to uphold the principle of natural justice, the impugned order was set aside, and the appeal was restored to the CIT(A) for fresh adjudication.

The Tribunal noted that subsequent to the CIT(E)'s order, the CBDT issued a circular extending the deadline for filing such applications. Given that the assessee had already filed a fresh application within the extended period, the appeal became infructuous.