ITAT Cochin Judgments — April 2017

The Tribunal held that cash deposits amounting to Rs. 4,51,000, claimed as agricultural income, were properly explained and deleted the addition. For the remaining Rs. 10,05,000, the Tribunal granted one more opportunity to the assessee to explain the source of funds.

The Tribunal held that the 'on-money' received on sale of agricultural land should be treated as agricultural income itself, similar to the amount shown in the sale deed. The Tribunal found no concealment as the entire sale transaction was disclosed in the return.

The Tribunal upheld the disallowance of interest paid to the related concern. It found that the transaction was a device to divert income, as the funds were withdrawn from partners' accounts (earning 12%) and re-lent to the firm through the related party at a higher rate.

The Tribunal held that the withdrawal of funds from partners' accounts and re-investment through a related concern at a higher interest rate was a devise to divert income. Therefore, the disallowance of interest under Section 40A(2) was justified.

The Tribunal held that the amount written off as bad debts was actually a provision for bad and doubtful debts. Therefore, in light of Explanation 1 to Section 36(1)(vii), it cannot be allowed as a deduction. The order of the CIT(A) was reversed.

The Tribunal held that unsecured loans generally carry a higher interest rate than secured loans due to lack of collateral. The Assessing Officer failed to establish that the 16% interest rate on unsecured loans was excessive compared to the market rate for such loans.

The Tribunal set aside the CIT(A)'s order and remanded the matter to the Assessing Officer. The Assessing Officer must examine if the cost of assets was allowed as application of income, in which case depreciation cannot be carried forward.

The Tribunal set aside the CIT(A)'s order and remanded the matter to the Assessing Officer. The Assessing Officer must examine if the cost of assets was allowed as application of income, in which case depreciation cannot be carried forward.

The Tribunal set aside the CIT(A)'s order and remanded the matter to the Assessing Officer. The Assessing Officer must examine if the cost of assets was allowed as application of income, in which case depreciation cannot be carried forward.