ITAT Hyderabad Judgments — July 2018

The Tribunal upheld the CIT(A)'s order, agreeing that the expenditure incurred on the BOT project gives rise to an intangible asset and the assessee is eligible to claim depreciation on it. The revenue's contention for amortization was dismissed as the assessee had not claimed it.

The Tribunal held that the assessees discharged their onus by providing confirmations from family members who had creditworthiness. The unsigned statement was deemed unreliable, and cash deposits before loan issuance do not automatically prove anything against the assessees.

The Tribunal dismissed the appeal as not maintainable, citing the CBDT circular regarding monetary limits for appeals. The issues raised in the appeal were left open for future examination.

The Tribunal held that the assessees discharged their onus by providing confirmations from family members who had creditworthiness. The unsigned statement was deemed unreliable, and cash deposits before loan issuance do not automatically prove anything against the assessees.

The Tribunal dismissed the appeal as not maintainable, citing the CBDT circular regarding the monetary limit for filing appeals. The issues raised were left open for future proceedings.

The Tribunal, following previous co-ordinate bench decisions, directed the Assessing Officer to estimate the net profit at 3% of the cost of goods sold, ensuring it does not fall below the returned income.

The Tribunal, following coordinate bench decisions, held that an estimation of 3% of the cost of goods sold would be reasonable, provided it was not less than the returned income.

The Tribunal, following its previous decisions, directed the AO to estimate the net profit at 3% of the cost of goods sold, provided it was not less than the returned income.

The Tribunal, following its coordinate benches, directed the Assessing Officer to estimate the net profit at 3% of the cost of goods sold, provided it was not less than the returned income. The grounds related to the rejection of books of account were not pressed by the assessee.

The Tribunal noted that as per CBDT Circular No. 3/2018, appeals with a tax effect below Rs. 20 lakhs should not be filed. Therefore, the appeal was dismissed.

The Tribunal upheld the CIT(A)'s decision, following a coordinate bench ruling that unabsorbed losses from prior years, already set off against other business income, cannot be notionally brought forward and set off against the eligible business's profits for Section 80IB deduction. The assessee's appeal regarding reassessment proceedings and depreciation disallowance was dismissed.

The Tribunal upheld the CIT(A)'s deletion of disallowances for rating fees and audit programme expenses, finding them to be revenue in nature and substantiated. The Tribunal also confirmed the deletion of interest on NPAs, following established precedents regarding income recognition for such assets.

The Tribunal found that the Assessing Officer had not doubted all purchases but only a portion, and the assessee had provided some documentary evidence. However, due to issues with substantiating the transportation of goods and the lack of conclusive proof, the matter was remitted back to the Assessing Officer for fresh verification.

The Tribunal upheld the CIT(A)'s decision, following a coordinate bench ruling that unabsorbed losses from prior years, already set off against other business income, cannot be notionally brought forward and set off against the eligible business's profits for Section 80IB deduction. The assessee's appeal regarding reassessment proceedings and depreciation disallowance was dismissed.

The Tribunal held that the amounts received and repaid were not loans but a transaction for convenience to accommodate the assessee's children in obtaining Demand Drafts without charges. Therefore, the penalties levied under sections 271D and 271E were not leviable.

The Tribunal held that the entire suppressed turnover cannot be brought to tax as income; only a reasonable profit on the suppressed sales can be taxed. The disallowance under Section 40(a)(ia) was also deleted as there was no incriminating material found during the search to support the addition.

The Tribunal held that the entire suppressed turnover cannot be brought to tax as income; only a reasonable profit on the suppressed sales can be taxed. The disallowance under Section 40(a)(ia) was also deleted as there was no incriminating material found during the search to support the addition.

The Tribunal held that the entire suppressed turnover cannot be brought to tax as income; only a reasonable profit on the suppressed sales can be taxed. The disallowance under Section 40(a)(ia) was also deleted as there was no incriminating material found during the search to support the addition.

The Tribunal held that the entire suppressed turnover cannot be brought to tax as income; only a reasonable profit on the suppressed sales can be taxed. The disallowance under Section 40(a)(ia) was also deleted as there was no incriminating material found during the search to support the addition.

The Tribunal held that the amounts received and repaid were not loans but a transaction for convenience to accommodate the assessee's children in obtaining Demand Drafts without charges. Therefore, the penalties levied under sections 271D and 271E were not leviable.

The Tribunal dismissed the appeal as not maintainable, citing CBDT Circular No. 3/2018 which sets a monetary limit for appeals. The issues raised were left open for future proceedings.

The Tribunal held that the expenditure incurred on customer meets was allowable as business expenditure as it was necessary for the chit fund business. It also held that the accrued interest on fixed deposits was correctly offered to tax by the assessee, and the AO's addition was unjustified.

The Tribunal held that since the TPO had already considered interest on receivables as a factor in computing the working capital adjustment, it could not be considered again for a separate transfer pricing adjustment. Therefore, the grounds of appeal on this issue were allowed.

The Tribunal held that the entire suppressed turnover cannot be brought to tax as income; only a reasonable profit on the suppressed sales can be taxed. The disallowance under Section 40(a)(ia) was also deleted as there was no incriminating material found during the search to support the addition.

The Tribunal held that the AO had made due enquiries and the assessee had provided necessary documents for R&D recognition. It was clarified that Form 3CL is an internal communication between government departments, and its non-submission by the assessee was not a valid ground for invoking Section 263.

The Tribunal condoned the delay in filing the appeal, acknowledging the reasonable cause presented by the assessee. The issues related to unexplained cash credits and unsecured loans were restored to the Assessing Officer for de-novo adjudication.

The Tribunal, following the jurisdictional High Court's decision, held that the relationship between the assessee and distributors was principal-to-agent, making TDS applicable. However, one ground related to interest computation was remitted to the AO.

The Tribunal upheld the CIT(A)'s decision to delete the penalty. It found that the issues were debatable and the assessee had made adequate disclosures, thus not falling under the purview of furnishing inaccurate particulars or concealment of income.

The Tribunal condoned the delay and restored the issues to the file of the AO for de-novo adjudication. The AO was directed to examine the issues considering the assessee's evidence and submissions.

The Tribunal held that since there was no variation in the quantity of jewellery declared in the wealth tax returns and the valuation report, no addition could be made solely on account of valuation difference. The addition made by the Assessing Officer was deleted.

The tribunal noted the CBDT Circular No. 3/2018 which stipulates that appeals with a tax effect below Rs. 20 lakhs should not be filed. Therefore, the appeals were dismissed as not pressed or not maintainable.

The Tribunal dismissed the appeals as not pressed/maintainable, citing CBDT Circular No. 3/2018 which sets a monetary limit for filing appeals. The issues raised were left open for future examination.

The Tribunal dismissed the appeals as not pressed/maintainable, following CBDT Circular No. 3/2018. The issues raised were left open for future proceedings.

The Tribunal found the CIT's reasons for rejection to be frivolous and lacking merit. It directed the CIT to reconsider the applications for registration and approval after fresh consideration.

The Tribunal held that expenditure on clinical drug trials, including bio-equivalence studies conducted outside the in-house R&D facility, is eligible for weighted deduction under Section 35(2AB). This is because such trials are an integral part of scientific research and development for pharmaceutical companies.

The Tribunal held that Section 40(b) governs interest paid to partners and that the AO must verify the claim for interest on partner's capital. Regarding interest on loans, the Tribunal directed the AO to examine if borrowed funds were diverted for non-business purposes before disallowing any amount.

The Tribunal condoned the delay in filing the appeal, acknowledging the reasonable cause presented by the assessee. The issues related to unexplained cash credits and unsecured loans were restored to the Assessing Officer for de-novo adjudication.

The Tribunal held that since the reassessment notice was issued after four years from the end of the assessment year, it was required that income escaped assessment due to the assessee's failure to disclose material facts. As the AO had already enquired into the matter during the original assessment and the assessee had provided explanations, and no failure to disclose material facts was established, the reopening was deemed bad in law.

The Tribunal held that dismissing the appeal without considering the merits violated the principles of natural justice. The order of the CIT(A) was set aside.

The Tribunal held that since the services were rendered outside India and the foreign agent had no permanent establishment in India, the commission income was not taxable in India. Consequently, TDS under Section 195 was not required, and the disallowance under Section 40(a)(i) was not sustainable.

The Tribunal held that the CIT(A) erred in rejecting the additional evidence, especially after the AO accepted the assessee's contentions in a remand report. The Tribunal directed the AO to consider the claims based on the remand report.

The Tribunal held that the CIT(A) erred in rejecting the additional evidence, especially after the AO accepted the assessee's contentions in a remand report. The Tribunal directed the AO to consider the claims based on the remand report.

The Tribunal found that the CIT(A) had passed an ex-parte order. Considering the assessee's submission to cooperate, the matter was restored to the CIT(A) for fresh adjudication.

The Tribunal held that capital gains are taxable in the individual status of the assessee and in the year of the development agreement. It also found that the assessee is entitled to deduction under Section 54F for the residential units received.

The Tribunal held that the CIT(A) erred in rejecting the additional evidence, especially after the AO accepted the assessee's contentions in a remand report. The Tribunal directed the AO to consider the claims based on the remand report.

The Tribunal held that the assessee is eligible for the full deduction of Rs. 1 crore as the six-month investment period straddled two financial years, and the limit of Rs. 50 lakhs per financial year was not applicable to the assessment year in question. The amendment to Section 54EC, which clarified this limit, was prospective.

The Tribunal found that the trust deed was amended to restrict activities to India and that the expenditure on religious activities was within the prescribed limit. Therefore, the matter was restored to the DIT(E) for re-examination.

The Tribunal held that the ad-hoc disallowance was made without any basis and was bad in law, especially since similar disallowances in a prior year were deleted by the ITAT. The Tribunal set aside the CIT(A)'s order and directed the AO to delete the addition.

The Tribunal held that for foreign loan transactions between associated enterprises, the arm's length interest rate should be determined based on LIBOR, as per judicial precedents. The domestic prime lending rate is not applicable in such cases.