ITAT Cuttack Judgments — June 2019

The Tribunal upheld the CIT(A)'s order, finding that the assessee had produced satisfactory evidence of compliance with Section 40A(3) during remand proceedings. The Tribunal also agreed with the CIT(A) that there was no evidence of unaccounted sales or that the cash gift from the wife was not genuine.

The Tribunal accepted that Rs. 6,00,000/- was paid from business income and savings. However, the remaining investment of Rs. 17,61,867/- was considered unexplained.

The Tribunal held that Section 14A read with Rule 8D is applicable only when exempt income is earned. Since the assessee earned no exempt income, the disallowance made by the Assessing Officer was deleted.

The ITAT set aside the CIT(A)'s order and restored the appeal to the CIT(A)'s file. The CIT(A) was directed to dispose of the appeal afresh with a speaking order after providing a proper opportunity to the assessee and considering evidence for delay condonation.

The Tribunal accepted that Rs. 6,00,000/- was paid before the sale deed execution from past savings. However, the remaining investment of Rs. 21,45,170/- remained unexplained and was treated as such under Section 69.

The Tribunal found that the assessee had submitted a modified trust deed duly notarized. It was held that the matter should be restored to the CIT(Exemptions) for fresh adjudication, considering the modified trust deed and allowing the assessee an opportunity of hearing.

The Tribunal admitted the additional ground and held that the AO failed to provide specific instances of non-compliance by the assessee under Section 144. Since the salary and interest were offered for tax by the partners, disallowing the claim would lead to double taxation.

The Tribunal restored the issue of unexplained deposits to the AO for fresh adjudication, allowing the HRA claim, and restored issues related to sections 24(b) and 80C to the AO for verification. The ground challenging the assessment notice was dismissed.