ITAT Chennai Judgments — December 2024

The Tribunal held that in the interest of justice, the assessee should be given one more opportunity to present their case before the Additional/Joint CIT(A) by filing relevant evidences/documents.

The Tribunal, invoking principles of natural justice, set aside the impugned order. The matter was restored to the CIT(Exemptions) with a direction for the assessee to provide necessary details.

The Tribunal held that the AO had made necessary inquiries and accepted the assessee's plausible explanation with due application of mind. Therefore, the revisionary order under Section 263 was not sustainable.

The Tribunal held that the delay in filing the Tax Audit Report was beyond the control of the assessee. This was supported by an order allowing condonation of delay in filing the return of income under section 119(2)(b), which accepted that the delay was beyond the assessee's control. Therefore, there was a reasonable cause for the late filing.

The Tribunal noted that the accounts were audited before the due date, and the delay was only in uploading the report. Citing a previous decision with identical facts, the Tribunal held that such a venial technical breach without mala fide intention should not attract a penalty.

The Tribunal found no infirmity in the order of the Assessing Officer. The assessee's grounds of appeal were rejected, primarily concerning the exclusion of a comparable company (M/s. RRB Energy Ltd.) and the refusal to grant adjustments for commercial/extraordinary parameters and custom duty.

The Tribunal noted that the assessee had filed and e-verified the return before the due date of 31.10.2023, even though the acknowledgement generation was delayed by a few seconds due to system glitches. The disallowance by the CPC was considered erroneous as it was based on a wrong assumption of facts.

The Tribunal held that the addition made under Section 69A of the Act was invalid. The Tribunal found that the financial position extracted by the assessee was from seized books of accounts and thus not fresh evidence violating Rule 46A. It was evident that the balances of receivables were carried forward from preceding financial years, supporting the assessee's contention that the amount in question was an opening balance and could not be added as income of the current year. The AO made the addition based on loose sheets without other supporting evidence, and the Revenue could not produce evidence to show the amount was invested by the partner in the impugned assessment year. The Tribunal also noted that a deposit made by a partner into a firm would not fall under Section 69A, citing the Supreme Court ruling in D.N. Singh. Consequently, the Tribunal upheld the CIT(A)'s direction to delete the addition made under Section 69A. Since the Revenue's appeal was dismissed, the assessee's cross-objections were also dismissed as infructuous.

The Tribunal held that the seized material, when extracted from the books of account, did not constitute fresh evidence. It agreed that opening balances cannot be taxed as income of the current year and found no infirmity in the CIT(A)'s deletion of the additions.

The Tribunal held that the seized material pertained to the entire group of firms, not just the assessee, making additions solely in the assessee's hands impermissible. It also found that certain amounts did not represent income at all.

The Tribunal held that the assessee did not get a proper opportunity before the AO due to circumstances beyond their control. Therefore, the impugned order of the CIT(A) was set aside.

The Tribunal held that the seized material, when extracted from the books of account, did not constitute fresh evidence. It agreed that opening balances cannot be taxed as income of the current year and found no infirmity in the CIT(A)'s deletion of the additions.

The Tribunal held that the Rs.22,22,50,000 was indeed an opening balance, not taxable in the year under appeal, upholding the CIT(A)'s deletion. Regarding the Rs.2,91,92,500 for loans extinguished, the Tribunal agreed with the CIT(A) that it was made presumptively without evidence and deleted the addition. The deletion of Rs.84,18,700 for cash seized was also upheld, relying on the managing partner's statement and trial balance. For the Rs.10,14,12,246 business profit, the Tribunal found that the seized material referred to the entire group, not solely the assessee, and that taxing the entire group's income in the hands of one firm was impermissible, citing the Supreme Court in Ch. Atchaiah. The Tribunal directed that only Rs.10,22,875 be assessed in the assessee's hands and deleted the balance addition of Rs.6,93,99,944. Consequently, the Revenue's appeals concerning this amount were dismissed. Regarding the Rs.11,10,00,000 added under Section 154, the Tribunal agreed with the CIT(A) that it did not represent income and upheld its deletion, rendering the assessee's grounds on this issue academic. The Tribunal dismissed the Revenue's appeals and allowed the assessee's appeal regarding the business profit addition.

The Tribunal held that the Rs.22,22,50,000 was indeed an opening balance, not taxable in the year under appeal, upholding the CIT(A)'s deletion. Regarding the Rs.2,91,92,500 for loans extinguished, the Tribunal agreed with the CIT(A) that it was made presumptively without evidence and deleted the addition. The deletion of Rs.84,18,700 for cash seized was also upheld, relying on the managing partner's statement and trial balance. For the Rs.10,14,12,246 business profit, the Tribunal found that the seized material referred to the entire group, not solely the assessee, and that taxing the entire group's income in the hands of one firm was impermissible, citing the Supreme Court in Ch. Atchaiah. The Tribunal directed that only Rs.10,22,875 be assessed in the assessee's hands and deleted the balance addition of Rs.6,93,99,944. Consequently, the Revenue's appeals concerning this amount were dismissed. Regarding the Rs.11,10,00,000 added under Section 154, the Tribunal agreed with the CIT(A) that it did not represent income and upheld its deletion, rendering the assessee's grounds on this issue academic. The Tribunal dismissed the Revenue's appeals and allowed the assessee's appeal regarding the business profit addition.

The Tribunal held that the Rs.22,22,50,000 was indeed an opening balance, not taxable in the year under appeal, upholding the CIT(A)'s deletion. Regarding the Rs.2,91,92,500 for loans extinguished, the Tribunal agreed with the CIT(A) that it was made presumptively without evidence and deleted the addition. The deletion of Rs.84,18,700 for cash seized was also upheld, relying on the managing partner's statement and trial balance. For the Rs.10,14,12,246 business profit, the Tribunal found that the seized material referred to the entire group, not solely the assessee, and that taxing the entire group's income in the hands of one firm was impermissible, citing the Supreme Court in Ch. Atchaiah. The Tribunal directed that only Rs.10,22,875 be assessed in the assessee's hands and deleted the balance addition of Rs.6,93,99,944. Consequently, the Revenue's appeals concerning this amount were dismissed. Regarding the Rs.11,10,00,000 added under Section 154, the Tribunal agreed with the CIT(A) that it did not represent income and upheld its deletion, rendering the assessee's grounds on this issue academic. The Tribunal dismissed the Revenue's appeals and allowed the assessee's appeal regarding the business profit addition.

The Tribunal, referring to a Madras High Court decision, held that the assessee's gross receipts should not be taxed entirely, but only the net income after allowing legitimate deductions should be considered. The case was remitted back to the Assessing Officer for a fresh assessment.

The Tribunal held that the addition made under Section 69A of the Act was invalid. The Tribunal found that the financial position extracted by the assessee was from seized books of accounts and thus not fresh evidence violating Rule 46A. It was evident that the balances of receivables were carried forward from preceding financial years, supporting the assessee's contention that the amount in question was an opening balance and could not be added as income of the current year. The AO made the addition based on loose sheets without other supporting evidence, and the Revenue could not produce evidence to show the amount was invested by the partner in the impugned assessment year. The Tribunal also noted that a deposit made by a partner into a firm would not fall under Section 69A, citing the Supreme Court ruling in D.N. Singh. Consequently, the Tribunal upheld the CIT(A)'s direction to delete the addition made under Section 69A. Since the Revenue's appeal was dismissed, the assessee's cross-objections were also dismissed as infructuous.

The Tribunal held that the addition made under Section 69A of the Act was invalid. The Tribunal found that the financial position extracted by the assessee was from seized books of accounts and thus not fresh evidence violating Rule 46A. It was evident that the balances of receivables were carried forward from preceding financial years, supporting the assessee's contention that the amount in question was an opening balance and could not be added as income of the current year. The AO made the addition based on loose sheets without other supporting evidence, and the Revenue could not produce evidence to show the amount was invested by the partner in the impugned assessment year. The Tribunal also noted that a deposit made by a partner into a firm would not fall under Section 69A, citing the Supreme Court ruling in D.N. Singh. Consequently, the Tribunal upheld the CIT(A)'s direction to delete the addition made under Section 69A. Since the Revenue's appeal was dismissed, the assessee's cross-objections were also dismissed as infructuous.

The Tribunal held that the addition made under Section 69A of the Act was invalid. The Tribunal found that the financial position extracted by the assessee was from seized books of accounts and thus not fresh evidence violating Rule 46A. It was evident that the balances of receivables were carried forward from preceding financial years, supporting the assessee's contention that the amount in question was an opening balance and could not be added as income of the current year. The AO made the addition based on loose sheets without other supporting evidence, and the Revenue could not produce evidence to show the amount was invested by the partner in the impugned assessment year. The Tribunal also noted that a deposit made by a partner into a firm would not fall under Section 69A, citing the Supreme Court ruling in D.N. Singh. Consequently, the Tribunal upheld the CIT(A)'s direction to delete the addition made under Section 69A. Since the Revenue's appeal was dismissed, the assessee's cross-objections were also dismissed as infructuous.

The Tribunal held that the assessee did not get a proper opportunity before the AO due to circumstances beyond its control. Therefore, the impugned order of the CIT(A) was set aside.

The Tribunal held that the addition made under Section 69A of the Act was invalid. The Tribunal found that the financial position extracted by the assessee was from seized books of accounts and thus not fresh evidence violating Rule 46A. It was evident that the balances of receivables were carried forward from preceding financial years, supporting the assessee's contention that the amount in question was an opening balance and could not be added as income of the current year. The AO made the addition based on loose sheets without other supporting evidence, and the Revenue could not produce evidence to show the amount was invested by the partner in the impugned assessment year. The Tribunal also noted that a deposit made by a partner into a firm would not fall under Section 69A, citing the Supreme Court ruling in D.N. Singh. Consequently, the Tribunal upheld the CIT(A)'s direction to delete the addition made under Section 69A. Since the Revenue's appeal was dismissed, the assessee's cross-objections were also dismissed as infructuous.

The Tribunal held that the inadvertent error in filing the wrong form should not prevent the assessee from obtaining provisional approval. The rejection of the application by the Ld.CIT(E) was set aside.

The Tribunal noted that the impugned order and the assessment order were passed ex-parte without hearing the assessee. The Tribunal, relying on the decision in TIN Box Co. v. CIT, set aside the order of the Ld.CIT(A) and restored the assessment to the file of the AO.

The Tribunal held that the addition of Rs. 85,500/- to rental income was not sustainable as the assessee proved they had not received this amount. The Tribunal also deleted the addition of Rs. 7,34,55,700/- concerning advance fees, stating that it was correctly accounted for as income in subsequent years and not unexplained credit. For capital gains, the Tribunal directed the AO to recompute based on the sale deed value and include all costs for indexation.

The tribunal held that the principles of natural justice were not properly followed by the CIT(E) due to the short notice period given to the assessee. The tribunal decided to grant the assessee one more opportunity.

The Tribunal acknowledged that the assessee is a contractor whose only income source is business receipts. While the assessee claimed the deposits were from contractual receipts, this could not be established. Therefore, the Tribunal estimated income at 25% of the impugned deposit, amounting to Rs.3,34,750/-, restricting the addition to this extent.

The Tribunal held that the addition of Rs.7.59 Lacs (cash sales) was deleted by the CIT(A) as the AO could not find contrary evidence. Regarding the withdrawal of Rs.45.43 Lacs by partners, purportedly for land purchase, the Tribunal noted that these withdrawals were supported by the firm's books and subsequently refunded. The addition was based on suspicion, which is impermissible.

The Tribunal noted that the assessee has opted for the Direct Tax Vivad Se Vishwas Scheme, 2024. Considering this, the Tribunal dismissed the appeal with a liberty to reinstate it if the scheme application is not accepted.

The Tribunal noted that the assessee had opted for the Direct Tax Vivad Se Vishwas Scheme, 2024. Consequently, the appeal was dismissed as withdrawn.

The Tribunal found that the appeal was filed within the prescribed time and the CIT(A) had erred in noting the correct facts. Therefore, the impugned order was set aside.

The Tribunal noted that the assessee had opted for the Vivad-se-Vishwas Scheme and paid the taxes. Therefore, the appeal was dismissed as infructuous.

The Tribunal noted the assessee's nonchalant attitude in not responding to notices and the remand report. However, considering the case involves capital gains, the Tribunal decided to restore the issue to the AO for examination as a last opportunity, directing the assessee to cooperate.

The Tribunal noted that the assessee's claim for verification of documents and evidence for the deduction was not considered in the appellate proceedings. The Tribunal found that both the AO and CIT(A) had confirmed the disallowance without sufficient consideration of the assessee's submissions and the circumstances.

The Tribunal held that the MOUs entered into by the assessee constituted agreements for the sale of immovable property. Consequently, the provisions of Section 194-IA were attracted, and TDS deduction was mandatory.

The Tribunal noted that the assessee's claim for verification of documents and evidence for the deduction was not considered in the appellate proceedings. The Tribunal found that both the AO and CIT(A) had confirmed the disallowance without sufficient consideration of the assessee's submissions and the circumstances.

The PCIT held that the AO's order allowing the provision for warranty expenses without examining the actual expenditure was erroneous and prejudicial to the revenue. The Tribunal agreed that the AO had not conducted the necessary inquiry or verification regarding the warranty provisions.

The Tribunal held that the PCIT had the jurisdiction under Section 263 of the Act as the issues found to be erroneous were not subject to the pending appeal before the CIT(A). The Tribunal found no infirmity in the PCIT's order regarding the lack of inquiry and verification by the A.O. concerning the gift from the father and the assessee's savings.

The Tribunal held that the reopening of assessment beyond four years was bad in law as it was not based on any fresh material or evidence indicating the failure of the assessee to disclose fully and truly all material facts. The Tribunal noted that the original assessment was completed after scrutiny, and the reopening was based on a change of opinion without satisfying the conditions laid out in the first proviso to Section 147 of the Act.

The Tribunal held that the MOUs entered into by the assessee constituted agreements for the sale of immovable property. Therefore, the provisions of Section 194-IA were attracted, and the assessee was liable for TDS.

The Tribunal noted that the lower authorities had not properly followed the principles of natural justice. Therefore, in the interest of justice, the assessee was granted one more opportunity before the Assessing Officer to present its case.

The Tribunal held that for expenditure to be allowable under Section 57(iii), it must be incurred wholly and exclusively for earning the income offered under 'income from other sources'. The assessee must prove this nexus and also establish that the expenditure was incurred by them and not by another entity. Since the assessee failed to substantiate the expenses and the nexus, the disallowance by the lower authorities was confirmed.

The Tribunal held that the addition of unexplained money, which was already part of the disclosed turnover and derived from business receipts, would result in double taxation. They noted that the explanation for the cash deposits was out of sale proceeds and that the source was not disputed.

The Tribunal held that for penalty under Section 270A to be levied, the assessee must first be considered to have under-reported income as per Section 270A(2). Since no intimation under Section 143(1)(a) was issued, the condition of under-reporting was not met.

The Tribunal held that M/s. Northstar Health Care could not be treated as a deemed AE, deleting the related adjustment. Regarding the adjustments on drug sales, the Tribunal followed its previous ruling and directed the AO to consider the aggregation of transactions based on OECD and US guidelines. For the premium on FCCB redemption, the Tribunal set aside the disallowance but directed that the deduction be allowed in the year TDS is made.

The Tribunal found that the assessee should be given another opportunity to present their case before the CIT(A). Therefore, the appeal was set aside for denovo adjudication.

The Tribunal held that the additional income assessed to tax was available to be set off against unexplained money found during the search, applying the principle of telescoping. Consequently, no separate addition was warranted under Section 69A.

The Tribunal held that the assessee should be given one more opportunity to present their case before the CIT(A). The appeal was set aside to the file of the CIT(A) for denovo adjudication.

The Tribunal held that the additional income assessed to tax was available to be set off against unexplained money found during the search, applying the principle of telescoping. Consequently, no separate addition was warranted under Section 69A.

The Tribunal held that the cash deposits were not unexplained money as they were sourced from recorded sales, and Section 69A was not applicable. The disallowance of knitting charges was restricted to the actual cash payment exceeding the prescribed limit.

The Tribunal held that the impugned addition of Rs.66,00,000/- (for AY 2014-15) and Rs.39,05,000/- (for AY 2015-16) was based on notings in a classmate notebook seized from Smt. R. Geetha, supported by her statement and statements from other group employees, including the director. Smt. Geetha's statement detailed the mobilization of cash from customers as deposits, with interest, which were not recorded in the books of account and were utilized for land purchases. However, the Tribunal found that these transactions clearly emerged as deposits from customers, representing a liability for the assessee, not income. The assessee mobilized deposits against interest (11-12% p.a.) which were subsequently refunded. Therefore, these deposits did not partake the character of income but represented a liability. Furthermore, the Tribunal noted that Section 68 could not be invoked as the credit was not in the regular books of accounts. It also found that the identity of depositors and source of deposits were established in the data maintained by Shri S. Senthil Kumar. Consequently, the Tribunal deleted the impugned addition in all three appeals. No other grounds were urged. The appeals were allowed in terms of this order.