ITAT Hyderabad Judgments — August 2023

The Tribunal allowed the miscellaneous application, recalling the ex parte order. The Tribunal also directed that the appeal be treated as allowed for statistical purposes, granting a final opportunity to the assessee to appear before the CIT(A) and argue the case on merits.

The Tribunal upheld the PCIT's order, finding that the AO's acceptance of a significantly smaller difference in contract receipts made the assessment order erroneous and prejudicial to the revenue. The AO failed to properly examine the discrepancy visible to the naked eye.

The Tribunal held that the issue regarding disallowance under section 40(a)(ia) was decided in favour of the assessee by a co-ordinate bench. For depreciation, it was held that computers and peripherals are eligible for 60% depreciation.

The tribunal accepted the assessee's request to withdraw the appeal. The APA rendered the transfer pricing adjustments, which were the subject of the appeal, no longer sustainable.

The tribunal held that the CIT(A)'s order was cryptic and did not comply with Section 250(6) of the IT Act as it failed to address the merits of the case. Therefore, the matter was restored to the AO for fresh adjudication.

The Tribunal found that while the CIT(A) doubted the source of the cash gift, there was no material to suggest the deposit was in demonetized notes. The Tribunal decided to restore the issue to the Assessing Officer for further verification.

The Tribunal held that the AO erred by adding the entire estimated income without reducing the declared income. It also noted that the nature of deposits and the possibility of lower profit margins on cell phones require factual verification.