ITAT Cochin Judgments — November 2022

The Tribunal held that the revenue's appeal was not maintainable as the tax effect of the disputed additions was below the threshold limit prescribed by CBDT Circular No. 17/2019. The appeal was dismissed on this ground.

The Tribunal set aside the impugned order and restored the appeal to the CIT(A) for fresh adjudication. The assessee was directed to prove that the liabilities were subsisting and settled in subsequent years.

The Tribunal found that the AO had verified the details of corpus donations and accepted the assessee's claim. The CIT's observations were considered allegations without supporting evidence, and the revisional jurisdiction under Section 263 was not justified solely on the basis of a different interpretation of the donations.

The Tribunal held that the AO mechanically applied Rule 8D without recording objective satisfaction as to why the assessee's suo-moto disallowance was unacceptable. The disallowance under Section 14A read with Rule 8D is not automatic and requires a nexus between expenditure and exempt income.

The Tribunal held that interest income derived by a co-operative society from its investments with a co-operative bank is eligible for deduction under Section 80P(2)(d). They followed a view favoring the assessee from conflicting High Court decisions, as no jurisdictional High Court ruling was presented.

The tribunal dismissed the disallowance for late PF/ESI contribution following the Supreme Court's decision in Checkmate Services. It deleted the disallowance for interest on late TDS deposit by following the Karnataka High Court's ruling. The disallowance for provision for advances was decided in the assessee's favor, following a previous ITAT Cochin decision.

The Tribunal directed the AO to allow depreciation on the previously disallowed excess amount by adding it to the opening WDV, provided the assessee files the necessary details. The Tribunal also directed the AO to allow credit for Tax Deducted at Source (TDS) as reflected in Form 26AS.

The Tribunal held that the issue flagged by the revisional authority was not verified by the AO during assessment. The AO's reliance on a High Court decision that was later reversed by the Supreme Court was also noted. The Pr. CIT's direction to verify the provisions in light of the Supreme Court decision was considered apt.

The Tribunal held that interest income earned by a cooperative society from its investments with another cooperative society is eligible for deduction under Section 80P(2)(d). Alternatively, such interest income should be treated as 'Business Income' eligible for deduction under Section 80P(2)(a)(i).

The Tribunal held that the assessee failed to comply with the mandatory requirement of Section 80A(5) of the Income Tax Act by not filing a return of income. Consequently, the denial of deduction under Section 80P(2)(a)(i) was upheld.

For AY 2017-18, the Tribunal directed a de novo assessment in light of the Supreme Court's decision in Mavilayi Service Cooperative Bank Ltd., allowing the appeal for statistical purposes. For AY 2019-20, the appeal was dismissed due to the violation of Section 80AC.

The Tribunal set aside the order of the CIT(A) due to incorrect factual appreciation and restored the appeal to the CIT(A) for fresh consideration after appreciating the correct facts.

The Tribunal held that receipts reflected in books of accounts do not necessarily constitute income and TDS claims against them are allowable. The Assessing Officer was directed to verify the TDS claim and grant credit in accordance with law.

The Tribunal held that the amount received was a rent advance, not a deposit or loan, and thus not in violation of Section 269SS. The assessee also had a bona fide belief that the receipt was not covered by Section 269SS.

The Tribunal held that the issue of disallowance for late payment of employees' contribution to ESI/PF is now settled in favor of the revenue by the Hon'ble Supreme Court's decision in Checkmate Services P. Ltd. Therefore, the disallowances stand confirmed.

The Tribunal held that the AO mechanically applied Rule 8D without recording objective satisfaction as to why the assessee's suo-moto disallowance was unacceptable. The disallowance under Section 14A read with Rule 8D is not automatic and requires a nexus between expenditure and exempt income.

The Tribunal held that the issue of disallowance for late payment of employees' contribution to ESI/PF is now settled in favor of the revenue by the Hon'ble Supreme Court's decision in Checkmate Services P. Ltd. Therefore, the disallowances stand confirmed.

The Tribunal held that interest income derived by a co-operative society from its investments with a co-operative bank is eligible for deduction under Section 80P(2)(d). They followed a view favoring the assessee from conflicting High Court decisions, as no jurisdictional High Court ruling was presented.

For AY 2017-18, the Tribunal directed a de novo assessment in light of the Supreme Court's decision in Mavilayi Service Cooperative Bank Ltd., allowing the appeal for statistical purposes. For AY 2019-20, the appeal was dismissed due to the violation of Section 80AC.

The Tribunal held that reopening beyond 4 years without any allegation of failure by the assessee to disclose material facts is impermissible. Reviewing an order based on a subsequent decision is not allowed.

The Tribunal held that TDS was applicable on reimbursement of salary and support costs, confirming the disallowance under Section 40(a)(ia). However, it held that subscription fees for accessing standardized online databases were not fees for technical services or royalty, deleting the disallowance under Section 40(a)(i).

The Tribunal held that the loss on investment in a subsidiary, intended to boost business profitability, was a revenue loss and allowable. However, equity investment loss was capital in nature. Disallowance of current repairs was partly allowed to permit depreciation, and interest on income tax refund was taxable on receipt.

The Tribunal held that the loss on investment in a subsidiary, intended to boost business profitability, was a revenue loss and allowable. However, equity investment loss was capital in nature. Disallowance of current repairs was partly allowed to permit depreciation, and interest on income tax refund was taxable on receipt.

The Tribunal upheld the deletion of the addition made by the AO. It relied on favorable remand reports from the AO and a High Court decision stating that an appeal against an order based on the AO's remand report is not maintainable.

The Tribunal restored the matter to the CIT(Exemptions) to grant the assessee another opportunity to substantiate its case with sufficient documents. The appeal was allowed for statistical purposes.

The Tribunal held that the issue flagged by the PCIT was not examined by the AO, constituting a case of 'no enquiry'. Therefore, the revision order was not faulted with.

The Tribunal condoned the delay in filing the appeal and restored the matter back to the CIT(A) for fresh adjudication. The stay application was dismissed as infructuous.

The Tribunal partly allowed the appeals, directing re-working of negative cash balance with telescoping benefit for certain years, allowing deemed rental income claims, and directing assessment of jewellery sale under capital gains. Other additions were confirmed.