ITAT Cochin Judgments — October 2017

The Tribunal held that the initial compensation received in AY 2009-10 was taxable in that year, and the cost of acquisition could not be deducted against the enhanced compensation received in AY 2013-14 due to Explanation 1 to Section 45(5)(b). The matter of actual receipts in AY 2013-14 was remanded.

The Tribunal deleted the disallowance of copra purchases, stating that without rejecting the books of account, such disallowance is unsustainable. However, it upheld the disallowance of depreciation on vehicles as the assessee failed to provide evidence of ownership and business use.

The Tribunal held that interest earned on deposits with the Sub Treasury by a cooperative society engaged in banking activities is eligible for deduction under Section 80P(2)(a)(i) as it is part of its banking business. The CIT(A)'s denial of this deduction was deemed unsustainable.

The Tribunal held that a primary agricultural credit society, registered under the Kerala Cooperative Societies Act, is entitled to the full benefit of deduction under Section 80P(2). This decision followed a judgment of the jurisdictional High Court.

The Tribunal held that companies with vastly different turnovers, like Infosys and Wipro, cannot be considered comparable to a smaller captive service provider. Therefore, the five disputed companies were excluded from the comparable list.

The Tribunal held that there was a reasonable cause for the assessee's non-compliance with Sections 269SS and 269T, citing the assessee's rural operations and clientele. Therefore, the penalties imposed under Sections 271D and 271E were deleted.

The Tribunal held that the CIT(A) erred in directing a reference for valuation under Section 50C(2) as the assessee had not availed this opportunity during the assessment proceedings.

The Tribunal restored the issue of membership fees to the Assessing Officer for fresh examination, considering Supreme Court decisions. The Tribunal upheld the CIT(A)'s deletion of the addition for the written-off loan, finding the reopening invalid on that point.

The Tribunal held that the Hon'ble High Court's decision dictates that the belated filing of a return does not disentitle the assessee from claiming deduction under section 80P, provided further proceedings are pending. Therefore, the assessee is eligible for the deduction.

The Tribunal held that the assessee had a reasonable cause for the cash payment due to court directions and exigencies, and therefore, the penalty under Section 271D was not imposable. The penalty was deleted.

The Tribunal found that the CIT(A) erred in deleting the penalty based on the explanation of the seized amount, as the penalty was levied for the unproven source of investment in gold purchases. Therefore, the order of the CIT(A) was set aside.

The Tribunal upheld the CIT(A)'s decision, finding that donations received for the building fund were for a specific purpose and qualified as corpus fund. The assessee was entitled to exemption under Section 11(1)(d) for the amount received in the relevant assessment year.

The Tribunal held that the Assessing Officer's failure to conduct a proper inquiry into the disallowance under Section 14A made the assessment order erroneous and prejudicial to the revenue. Therefore, the CIT's revisionary order under Section 263 was upheld.

The Tribunal held that there was a reasonable cause for the non-compliance with Sections 269SS and 269T, as per Section 273B. The Tribunal noted that the cash transactions were a small percentage of the total and involved rural populations with limited banking access.

The Tribunal held that the assessee's unit registered with STPI was eligible for deduction under Section 10A, as the law permits such units to claim this benefit. The CIT(A) was justified in allowing the alternative claim.

The Tribunal held that the CIT(A) was justified in allowing the alternative claim for deduction under Section 10A. The unit's registration with STPI was considered sufficient for this purpose.

The Tribunal held that the assessee's unit registered with STPI was eligible for deduction under Section 10A, as the law permits such units to claim this benefit. The CIT(A) was justified in allowing the alternative claim.

The Tribunal deleted the addition of Rs. 5,44,000/- related to the purchase of land, finding that the CIT(A) had implicitly deleted a larger sum that covered this amount. The addition for profit on sale of land was dismissed. Agricultural income was partly allowed, directing the AO to treat Rs. 2,00,000/- as agricultural income, following consistency.

The Tribunal held that the payments made for extraction of sand were not rent for the use of land under Section 194I, as the assessee did not have control over the land and the transaction was essentially for the purchase of sand. Consequently, the disallowance under Section 40(a)(ia) was also not upheld.