ITAT Chennai Judgments — January 2025

The Tribunal upheld the CIT(A)'s rejection of the assessee's books of accounts due to inaccuracies and the estimation of income based on average net profit rates. Consequently, separate additions made by the AO under Section 37(1) and 40A(3) were also deleted.

The Tribunal adjudicated the issues as follows: 1. **Depreciation on leasehold property:** The Tribunal noted that this issue was remitted back to the AO in the assessee's own case for AY 2010-11, directing verification of surplus funds and nexus between borrowed funds and advances. Since the facts are similar, the Tribunal issued similar directions to the AO for de novo adjudication. The grounds were allowed for statistical purposes. 2. **Deduction u/s 80G:** The Tribunal decided to remit this issue back to the AO for de novo adjudication. The AO is directed to consider the nature of donations, subsequent amendments to the law, and various judicial decisions. The fact that only a part of CSR expenditure was claimed under Section 80G is also to be considered. The assessee is directed to substantiate its claim. The grounds were allowed for statistical purposes. 3. **Disallowance u/s 14A:** The Tribunal directed the AO to compute the disallowance under Rule 8D(2)(ii) by considering only those investments that yielded exempt income during the year. The Tribunal held that the amendment to Section 14A, effective from 01.04.2022, does not have retrospective application. The grounds were allowed for statistical purposes. 4. **TP adjustment on interest on loan to AE:** For AY 2020-21, the Tribunal issued directions similar to its order for AY 2010-11, directing the AO to verify surplus funds and the nexus between borrowed funds and advances to the AE. The grounds were allowed for statistical purposes. For AY 2021-22, the facts are the same as AY 2020-21, and the same directions apply, allowing the grounds for statistical purposes. 5. **TP adjustment on Corporate Guarantee:** The Tribunal noted that this matter was remitted back to the AO in the assessee's own case by the Madras High Court. Following the same, similar directions were issued to the AO for AY 2020-21, and the grounds were allowed for statistical purposes. For AY 2021-22, the grounds were partly allowed. 6. **TP adjustment on interest on debentures (AY 2021-22):** The Tribunal directed the TPO to benchmark the interest rate based on comparable international transactions, not domestic ones, considering the AE is a UK-based entity. The assessee is directed to provide the requisite data. The grounds were allowed for statistical purposes. Overall, the appeals were partly allowed.

The Tribunal held that the sworn statement recorded under Section 133A is inadmissible as per the Madras High Court's ruling. It also found that the AO's telescoping of sales variations for the entire year was impermissible without cogent evidence.

The Tribunal remitted the issue of depreciation on leasehold property and corporate guarantee adjustments back to the Assessing Officer for fresh adjudication. For Section 80G deduction and Section 14A disallowance, similar directions were issued to the AO, considering specific aspects and prior rulings. Transfer pricing adjustments on loans and debentures were also partly allowed or remitted.

The Tribunal held that the assessee had provided a plausible explanation for the SBN deposits as credit sales of fireworks, supported by audited financials and customer details. The AO erred in adding the entire amount without rejecting the audited books of accounts or sales.

The Tribunal allowed the guarantee commission and prior period adjustments related to excess transmission charges, excess billing, and operation/maintenance charges, subject to verification by the AO. Other claims were allowed for statistical purposes or remanded for fresh adjudication.

The Tribunal held that statements recorded during a survey under Section 133A do not have sufficient evidentiary value to form the sole basis for additions. The lower authorities failed to point out defects in the books of account or provide corroborative evidence for the additions.

The Tribunal held that statements recorded during a survey under Section 133A do not have sufficient evidentiary value on their own. The additions made solely based on such admissions, without corroborative evidence or defects pointed out in the books, were deleted.

The Tribunal upheld the CIT(A)'s rejection of the assessee's books of accounts due to inaccuracies and the estimation of income based on average net profit rates. Consequently, separate additions made by the AO under Section 37(1) and 40A(3) were also deleted.

The Tribunal upheld the CIT(A)'s rejection of the assessee's books of accounts due to inaccuracies and the estimation of income based on average net profit rates. Consequently, separate additions made by the AO under Section 37(1) and 40A(3) were also deleted.

The Tribunal noted that the assessee has settled the issue under the Vivad-Se-Vishwas Scheme and the Revenue had no objection. Therefore, the appeal was dismissed as withdrawn.

The Tribunal held that the Ld.CIT(A) erred in not condoning the delay in filing the appeals, considering the medical emergency and other circumstances explained by the assessee. The Tribunal relied on a Supreme Court decision where a similar large delay was condoned.

The Tribunal held that the Ld.CIT(A) erred in not condoning the delay in filing the appeals, considering the medical emergency and other circumstances explained by the assessee. The Tribunal relied on a Supreme Court decision where a similar large delay was condoned.

The Tribunal upheld the CIT(A)'s rejection of the assessee's books of accounts due to inaccuracies and the estimation of income based on average net profit rates. Consequently, separate additions made by the AO under Section 37(1) and 40A(3) were also deleted.

The Tribunal held that the re-opening of the assessment was bad in law as the AO did not have tangible material to justify it after four years, and the original assessment had already considered all material facts. The compensation received for relinquishing the right to claim specific performance of an agreement was considered a transfer of a capital asset.

The Tribunal upheld the CIT(A)'s rejection of the assessee's books of accounts due to inaccuracies and the estimation of income based on average net profit rates. Consequently, separate additions made by the AO under Section 37(1) and 40A(3) were also deleted.

The Tribunal upheld the CIT(A)'s rejection of the assessee's books of accounts due to inaccuracies and the estimation of income based on average net profit rates. Consequently, separate additions made by the AO under Section 37(1) and 40A(3) were also deleted.

The Tribunal upheld the CIT(A)'s rejection of the assessee's books of accounts due to inaccuracies and the estimation of income based on average net profit rates. Consequently, separate additions made by the AO under Section 37(1) and 40A(3) were also deleted.

The Tribunal upheld the CIT(A)'s rejection of the assessee's books of accounts due to inaccuracies and the estimation of income based on average net profit rates. Consequently, separate additions made by the AO under Section 37(1) and 40A(3) were also deleted.

The Tribunal upheld the CIT(A)'s rejection of the assessee's books of accounts due to inaccuracies and the estimation of income based on average net profit rates. Consequently, separate additions made by the AO under Section 37(1) and 40A(3) were also deleted.

The Tribunal upheld the CIT(A)'s rejection of the assessee's books of accounts due to inaccuracies and the estimation of income based on average net profit rates. Consequently, separate additions made by the AO under Section 37(1) and 40A(3) were also deleted.

The Tribunal allowed the guarantee commission and prior period adjustments related to excess transmission charges, excess billing, and operation/maintenance charges, subject to verification by the AO. Other claims were allowed for statistical purposes or remanded for fresh adjudication.

The Tribunal held that the reopening of assessment was based on a 'change of opinion' by the AO, as the AO had already examined the nature of transactions and the applicability of Section 2(22)(e) during the original assessment. Therefore, the reopening was not based on any new material.

The Tribunal condoned the delay in filing the appeal, noting the principles of natural justice. The impugned order was set aside, and the appeal was restored to the AO for a de novo assessment after providing the assessee with an opportunity to be heard.

The Tribunal set aside the impugned order, restoring the appeal to the AO for a denovo assessment. The assessee was directed to present all evidence and documentation, while the AO was granted liberty to proceed if the assessee failed to comply.

The Tribunal observed that since the substantive assessment of the Trust was restored to the AO, and the present assessment on the assessee was protective in nature, the Ld.CIT(A)'s order was set aside. The assessee's protective assessment was also restored to the AO for fresh adjudication in accordance with law, ensuring the assessee is heard.

The Tribunal held that the PDS activity, being supported by the society's by-laws and undertaken as per government directives, falls within the scope of its activities as a credit society. Therefore, the income earned from this activity is eligible for deduction u/s 80P(2)(a)(i).

The Special Bench noted that the assessee abandoned the contention of acting as an intermediary and conceded to acting as a principal. Consequently, the legal conflict regarding intermediary payments was non-existent. The Tribunal decided to remand the matter to the Assessing Officer to decide the issue of whether payments made by the assessee as a principal attracted Section 194C and consequential disallowance under Section 40(a)(ia).

The Tribunal held that the allegation made by the Departmental Representative regarding deception by the assessee during the original assessment was unfounded and lacked merit. The Tribunal found that the LTCG claim was clearly disclosed in the assessee's income and expenditure account and computation of total income.

The Tribunal held that the penalty under Section 271(1)(c) cannot be levied based on an estimated income, especially when the estimation was directed by the PCIT under Section 264. Following the High Court's decision in CIT v. P. Rojes, the penalty was deleted.

The Tribunal held that the CIT(A) had not addressed the merits of the case and that the assessee had provided sufficient reasons for the delay. The Tribunal decided to set aside the CIT(A)'s order and direct readjudication.

The Tribunal determined that the CIT(A) misapplied the PCIT v. Wipro Ltd. judgment, which distinguished between exemptions (Chapter III) and deductions (Chapter VI-A). The CIT(A) also failed to consider the assessee's bona fide efforts to comply with filing requirements. Therefore, the case is remanded back to the CIT(A) for fresh adjudication.

The Tribunal upheld the CIT(A)'s decision, confirming that disallowance under Section 14A is not warranted when no exempt income is earned. It further ruled that the explanation inserted in Section 14A by the Finance Act, 2022 is prospective and does not apply to AY 2014-15.

The Tribunal held that the penalty under Section 271D of the Act cannot be levied without the Assessing Officer recording his satisfaction of violation of Section 269SS in the assessment order. Since no such satisfaction was recorded in the assessment order, the penalty proceedings were invalid.

The Tribunal held that the AO's action of treating the entire deposits as unexplained was questionable, especially given the assessee's stated business of real estate. The AO failed to provide evidence to doubt the business activity. The addition was restricted to 30% of the deposits, estimating profit from the real estate business.

The Tribunal held that for levying penalty under Section 271D, it is mandatory for the Assessing Officer to record his satisfaction regarding the violation of Section 269SS in the assessment order. Since this was not done, the penalty proceedings were not validly initiated.

The Tribunal held that the PDS activity, being supported by the society's by-laws and undertaken as per government directives, falls within the scope of its activities as a credit society. Therefore, the income earned from this activity is eligible for deduction u/s 80P(2)(a)(i).

The Tribunal held that the penalty under Section 271(1)(c) cannot be levied based on an estimated income, especially when the estimation was directed by the PCIT under Section 264. Following the High Court's decision in CIT v. P. Rojes, the penalty was deleted.

The Tribunal upheld the reopening of the assessment, finding that the CCI order provided new and tangible material. It also ruled that the Federation's activities, in light of the Supreme Court's decision in ACIT vs. Ahmedabad Urban Development Authority, do not qualify as charitable under Section 2(15) of the IT Act.

The Tribunal condoned the delay in filing the appeal due to a technical glitch. It held that since the cash sales were reflected in the assessee's books of accounts and offered to tax, adding the same again would amount to double taxation, which is impermissible. The Tribunal found that the assessee had discharged the burden of proving the source of cash deposits, and the Assessing Officer failed to rebut it.

The Tribunal held that the penalty under Section 271(1)(c) cannot be levied based on an estimated income, especially when the estimation was directed by the PCIT under Section 264. Following the High Court's decision in CIT v. P. Rojes, the penalty was deleted.

The Tribunal held that the AO's action of treating the entire deposits as unexplained was questionable, especially given the assessee's stated business of real estate. The AO failed to provide evidence to doubt the business activity. The addition was restricted to 30% of the deposits, estimating profit from the real estate business.

The Tribunal held that the CIT(A) did not violate Rule 46A by calling for and admitting additional evidence, as permitted by sub-rule (4). The Tribunal further held that the CIT(A) was justified in deleting the additions on sundry creditors and unsecured loans, especially after the AO had rejected the assessee's books and resorted to estimation.

The Tribunal noted that the revenue's DR had no objection to the withdrawal. Accordingly, the Tribunal granted leave to the assessee to withdraw the appeals and dismissed them as withdrawn.

The Tribunal noted that the assessee had opted for resolution of the dispute under the Direct Tax Vivad Se Vishwas Scheme, 2024, as evidenced by the filing of Form No.1 and the issuance of Form No.2. Consequently, the Tribunal treated the appeal as dismissed as withdrawn. The assessee was granted liberty to seek restoration of the appeal if the resolution under the Vivad Se Vishwas Scheme failed. The operative direction was to dismiss the appeal as withdrawn. No specific issue was left undecided; the entire appeal was disposed of based on the assessee's decision to opt for the scheme.

The Tribunal, in the interest of justice, decided to provide the assessee with another opportunity. The appeal is set aside to the CIT(A) for de novo adjudication, ensuring the assessee receives a proper hearing to present all relevant evidence.

The Tribunal noted that the revenue's DR had no objection to the withdrawal. Accordingly, the Tribunal granted leave to the assessee to withdraw the appeals and dismissed them as withdrawn.

The Tribunal held that the assessee should be given another opportunity to present their case before the CIT(A). The appeal was set aside for denovo adjudication, with the CIT(A) directed to provide a proper hearing.

The Tribunal held that an inadvertent error in reflecting debtors in the return should not lead to estimation of debtors, especially when the assessee provided elaborate details. Similarly, rejection of party-wise interest income details was also found questionable.

The Tribunal held that the reasons provided by the assessee constituted a 'sufficient cause' for the delay and that the CIT(A) should have adopted a pragmatic approach. The Tribunal condoned the delay and remitted the matter back to the CIT(A) to decide the appeal on its merits.