ITAT Chennai Judgments — August 2024

The Tribunal held that the CIT(A) erred by proceeding ex-parte and not remanding the case to the AO for fresh adjudication in light of the Supreme Court judgment. The Tribunal set aside the appeals to the AO for a de novo assessment.

The Tribunal held that the CIT(A) was not justified in deleting the T.P adjustment for difference in margin and material cost adjustment. The Tribunal found no basis for reducing the cost to make profit margins comparable, considering the abnormal consumption and foreign exchange losses as operating items. The Tribunal reversed the CIT(A)'s finding regarding the adjustment of Rs. 3.76 Crores and upheld the TPO's adjustment.

The Tribunal held that the sole issue is the cost of acquisition of land as on 01.04.1981. Considering the significant variance between the assessee's valuation and the AO's valuation, and accepting the assessee's limited prayer, the case was remitted to the AO. The AO is directed to ascertain the cost of acquisition by referring the matter to the District Valuation Officer (DVO) and re-adjudicate the issue after providing an opportunity of being heard to the assessee.

The Tribunal noted that the Central Board of Direct Taxes (CBDT) issued a circular extending the due date for such applications and allowing fresh applications for those whose applications were rejected due to delay. The assessee had already filed a fresh application within the extended period.

The Tribunal noted that many notices were sent during the Covid-19 pandemic and that the assessee's counsel argued a violation of natural justice. Therefore, the Tribunal set aside the impugned order and restored the appeal to the CIT(A) for a fresh adjudication on merits, with a proper opportunity for the assessee to present evidence.

The Tribunal accepted the assessee's explanation for cash sales, finding them supported by sales bills and VAT returns, and deleted the addition. However, it confirmed the addition of Rs. 7,00,000 as unexplained cash deposit due to lack of evidence that employees returned the advance salary.

The Tribunal held that the cash deposits were adequately explained by the hospital's routine collections from patients and were duly accounted for in the books of accounts. The AO had not disputed the sales or the books of accounts.

The Tribunal noted that the assessee was ready to present documentary evidence and prosecute the case. In the interest of natural justice, the matter was remitted back to the Assessing Officer for fresh consideration.

The CIT(A) correctly considered the loan documents, bank statements of the assessee and his relatives, and found that the source of funds for the property purchase was properly explained. The Tribunal upheld the CIT(A)'s decision, also following a similar ruling in the assessee's brother's case.

The Tribunal noted that the assessee's parents withdrew Rs. 25,50,000/- and deposited Rs. 19,70,000/- into the assessee's account, while their own accounts had other deposits and a net withdrawal. The Tribunal found that Rs. 3,10,000/- of the deposited amount was not explained.

The Tribunal held that there was no documentary evidence to support the AO's addition, as the sale deeds were registered for a lower value. The Tribunal also noted procedural lapses in the cross-examination process and inconsistencies in the statements of witnesses and the seller's heirs. The court found no concrete evidence against the assessee and rejected the AO's grounds for addition.

The Tribunal noted that the appeal was filed with a significant delay, which was condoned with a cost of Rs. 5,000/-. The Tribunal set aside the orders of the CIT(A) and AO and remanded the matter back to the AO.

The Tribunal noted that the assessee made partial submissions and lacked complete documentary evidence before the Assessing Officer and CIT(A). However, considering the assessee's readiness to prosecute the case with all documentary evidence, and in the interest of natural justice, the Tribunal decided to remit the matter back to the Assessing Officer.

The Tribunal held that the working capital adjustment was rightly allowed by the CIT(A). It reasoned that capital employed, including working capital, is a relevant factor for determining ALP, citing Tribunal decisions. The assessee was able to demonstrate this adjustment before the TPO, and the CIT(A) correctly allowed it. The revenue's grounds on this issue were dismissed. Regarding the delayed payment of PF/ESI, the Tribunal held that the issue is covered against the assessee by the Supreme Court's decision in Checkmate Services P. Ltd. vs. CIT. Therefore, the disallowance made by the AO was confirmed, and the CIT(A)'s adjudication was reversed. The revenue's grounds on this issue were allowed. The assessee's appeal was dismissed as it was not pressed, being solely on the Transfer Pricing Adjustment. The revenue's appeal was partly allowed, and the assessee's appeal was dismissed.

The Tribunal held that the reassessment proceedings for AY 2006-07 were invalid as they were initiated beyond four years without any failure on the part of the assessee. The Tribunal also found that the HUF status was wrongly denied and its income should not have been clubbed.

The Tribunal held that interest income earned from TAICO Bank, which is a registered cooperative society, is eligible for deduction under Section 80P(2)(d). However, interest income earned from SBI is to be assessed as income from other sources as it is not earned from a cooperative society.

The Tribunal held that the working capital adjustment was rightly allowed by the CIT(A). It reasoned that capital employed, including working capital, is a relevant factor for determining ALP, citing Tribunal decisions. The assessee was able to demonstrate this adjustment before the TPO, and the CIT(A) correctly allowed it. The revenue's grounds on this issue were dismissed. Regarding the delayed payment of PF/ESI, the Tribunal held that the issue is covered against the assessee by the Supreme Court's decision in Checkmate Services P. Ltd. vs. CIT. Therefore, the disallowance made by the AO was confirmed, and the CIT(A)'s adjudication was reversed. The revenue's grounds on this issue were allowed. The assessee's appeal was dismissed as it was not pressed, being solely on the Transfer Pricing Adjustment. The revenue's appeal was partly allowed, and the assessee's appeal was dismissed.

The Tribunal held that the explanation for the change in residential status and the subsequent disclosure of income was plausible and should be accepted as bona fide. Therefore, the imposition of penalty under Section 270A was not justified.

The Tribunal held that the orders of the CIT(A) and AO on the issue of determining the ALP of international transactions, including the selection of comparables and the rejection of the assessee's benchmarking approach, were to be set aside. The matter was remanded back to the Assessing Officer to refer it to the TPO for determining the correct ALP. This issue raised by the assessee was allowed for statistical purposes. Regarding economic adjustments (working capital, customs duty, and foreign exchange), the Tribunal held that the CIT(A) erred in confirming the AO's rejection of these adjustments. The matter was set aside and remanded back to the AO for de novo consideration of these adjustments. The grounds raised by the assessee on these issues were allowed for statistical purposes. On the disallowance of depreciation on leasehold land, the Tribunal noted that neither the AO nor the CIT(A) provided reasoning for the disallowance. The matter was set aside and remanded back to the AO for fresh adjudication. This issue was allowed for statistical purposes. For the Revenue's appeal concerning the deletion of margin adjustment on import of capital goods, the Tribunal noted that both parties agreed to remit the issue back to the AO. Therefore, the order of the CIT(A) and AO was set aside, and the issue was remitted back to the AO for fresh adjudication. The ground raised by the Revenue was allowed for statistical purposes.

The Tribunal noted that the assessee's managing trustee was in custody during the assessment proceedings, which was acknowledged in previous related cases. Agreeing with the coordinate bench, the Tribunal set aside the cancellation order and remanded the matter back for fresh adjudication.

The Tribunal held that the orders of the CIT(A) and AO on the issue of determining the ALP of international transactions, including the selection of comparables and the rejection of the assessee's benchmarking approach, were to be set aside. The matter was remanded back to the Assessing Officer to refer it to the TPO for determining the correct ALP. This issue raised by the assessee was allowed for statistical purposes. Regarding economic adjustments (working capital, customs duty, and foreign exchange), the Tribunal held that the CIT(A) erred in confirming the AO's rejection of these adjustments. The matter was set aside and remanded back to the AO for de novo consideration of these adjustments. The grounds raised by the assessee on these issues were allowed for statistical purposes. On the disallowance of depreciation on leasehold land, the Tribunal noted that neither the AO nor the CIT(A) provided reasoning for the disallowance. The matter was set aside and remanded back to the AO for fresh adjudication. This issue was allowed for statistical purposes. For the Revenue's appeal concerning the deletion of margin adjustment on import of capital goods, the Tribunal noted that both parties agreed to remit the issue back to the AO. Therefore, the order of the CIT(A) and AO was set aside, and the issue was remitted back to the AO for fresh adjudication. The ground raised by the Revenue was allowed for statistical purposes.

The Tribunal held that the reassessment proceedings for AY 2006-07 were invalid as they were initiated beyond four years without any failure on the part of the assessee. The Tribunal also found that the HUF status was wrongly denied and its income should not have been clubbed.

The Tribunal held that the warranty liability was an ascertained liability that crystallized in the year under consideration, as evidenced by contractual terms and subsequent actions, irrespective of when the customer recognized it for tax purposes. Regarding PF/ESI contributions, the AO was directed to re-compute the disallowance after considering the grace period.

The Tribunal perused the financial statements and noted the assessee's long-standing money-lending activity, consistent interest income, and sufficient cash balance from prior years and realization of sundry debts. The Tribunal found the assessee's claim backed by documentary evidence, and that the AO erred in rejecting it.

The Tribunal held that the AO had duly considered the assessee's submissions and documentary evidence, including judicial precedents, and accepted the claim of agricultural land exemption. The AO's view was considered one of the possible views and not contrary to law, thus the revision under Section 263 was not justified.

The Tribunal held that the explanation for the change in residential status and the subsequent disclosure of income was plausible and should be accepted as bona fide. Therefore, the imposition of penalty under Section 270A was not justified.

The Tribunal held that the disallowance under Section 14A was not justified for the assessment year 2020-21, following a Delhi High Court ruling on the retrospective applicability of an amendment. The Tribunal also deleted the interest charged under Section 115P, finding it unjustified due to a clerical error in reporting the dividend declaration date, as the dividend distribution tax was paid within the prescribed time.

The Tribunal noted that the CIT(A) passed an ex parte order without proper hearing. For the ends of justice and fair play, the Tribunal decided to give the assessee one more opportunity.

The Tribunal allowed the claim for prior period expenses, noting that the payment was made and the event was telecasted in AY 2014-15, and the TDS was deducted. For the second appeal, the Tribunal directed the Assessing Officer to verify and allow the set off of carried forward business loss and unabsorbed depreciation.

The Tribunal held that the addition made by the AO was not sustainable as the assessee was denied the opportunity to cross-examine the witness whose statement was used against him. This omission violated principles of natural justice.

The Tribunal condoned the delay and set aside the ex parte order of the CIT(A). The appeal was restored to the file of the CIT(A) for a fresh adjudication after providing a proper opportunity of hearing to the assessee.

The Tribunal held that since the assessee had itself added back the expenses and no addition was made to the returned income, no tax was sought to be evaded. Therefore, the penalty under Section 271(1)(c) was not leviable.

The Tribunal condoned the delay and set aside the CIT(A)'s order. It directed the CIT(A) to provide the assessee with another opportunity to present their case and pass a speaking order.

The Tribunal held that the assessee failed to provide satisfactory evidence to the lower authorities. However, to meet the ends of justice, the assessee is granted one last opportunity to present its case and supporting evidence before the AO.

The Tribunal noted that the CIT(A) passed an ex-parte order without proper hearing and that the assessment order might be bad in law due to the absence of a Section 143(2) notice. For ends of justice, the Tribunal decided to grant one more opportunity to the assessee.

The Tribunal found that the assessee was not given a proper opportunity to present its case and that the lower authorities did not fully consider the assessee's submissions regarding its business activities. Therefore, the case was remitted back to the Assessing Officer for a fresh assessment.

The Tribunal held that the amount deposited was reasonable considering it was received as gifts during a marriage. Following a previous precedent, the Tribunal decided to delete the addition made by the AO.

The Tribunal held that the expenditure was in the nature of trade discount/incentive and not commission. Furthermore, even if considered commission, the assessee's turnover in the preceding year did not exceed the threshold for mandatory TDS deduction under Section 194H.

The Tribunal held that the CIT(A) erred in dismissing the appeal before the disposal of the condonation petition by the jurisdictional CIT. The matter was remitted back to the AO to decide based on the jurisdictional CIT's decision on condonation.

The Tribunal held that filing the Audit Report in Form 10CCB before the processing of the return is sufficient for claiming deduction under Section 80IA. The requirement of filing the report along with the return was not applicable for the assessment year in question.

The Tribunal, in the interest of natural justice, decided to remit the matter back to the Assessing Officer for fresh consideration. The assessee was granted liberty to file supporting evidence before the Assessing Officer.

The Tribunal held that the construction of the first floor on an existing ground floor building qualifies for deduction under Section 54F, as it falls within the stipulated time frame. The Tribunal also found that the assessee had discharged the burden of proof for the cash credit addition under Section 68.

The Tribunal set aside the order of the CIT(A) and restored the assessment to the AO for de novo consideration. The AO was directed to re-examine the assessee's contentions in light of the Supreme Court's judgment in CIT v. Allahabad Urban Development Authority.

The Tribunal held that the penalty notice was invalid because the AO used 'and' to combine the distinct offenses of 'concealed particulars of income' and 'furnished inaccurate particulars of income', instead of the statutory 'or'. This made it difficult for the assessee to defend herself.

The Tribunal allowed the claim for prior period expenses, noting that the payment was made and the event was telecasted in AY 2014-15, and the TDS was deducted. For the second appeal, the Tribunal directed the Assessing Officer to verify and allow the set off of carried forward business loss and unabsorbed depreciation.

The Tribunal found that the assessee was not given a proper opportunity to present its case and that the lower authorities did not fully consider the assessee's submissions regarding its business activities. Therefore, the case was remitted back to the Assessing Officer for a fresh assessment.

The Tribunal found that the assessee was not given a proper opportunity to present its case and that the lower authorities did not fully consider the assessee's submissions regarding its business activities. Therefore, the case was remitted back to the Assessing Officer for a fresh assessment.

The Tribunal set aside the penalty orders and restored the appeals to the CIT(A). The CIT(A) was directed to pass a speaking order on the penalty issue, considering the ratio of the Supreme Court in Reliance Petroproducts Pvt. Ltd.

The Tribunal condoned the delay in filing the appeals. It upheld the CIT(A)'s decision to delete the additions related to logo charges and depot service charges, following its own prior decisions in the assessee's own case.

The Tribunal condoned the delay in filing the appeals. It upheld the CIT(A)'s decision to delete the additions related to logo charges and depot service charges, following its own prior decisions in the assessee's own case.