ITAT Hyderabad Judgments — February 2024

The Tribunal restored the issue to the AO, directing the assessee to substantiate the nature and source of cash deposits. The AO is to decide the issue after providing an opportunity for hearing and examining the details.

The Tribunal condoned the delay in filing the appeal and, in the interest of justice, restored the issue to the Assessing Officer. The assessee is directed to provide substantiation for the cash deposits, failing which the AO can pass an order as per law.

The Tribunal condoned the delay and set aside the CIT(A)'s ex parte order. The appeal was restored to the CIT(A) for a fresh hearing on merits, with a direction for the assessee to cooperate and the CIT(A) to provide a reasonable opportunity of being heard.

The Tribunal noted that a duplicate appeal had been filed and, in the absence of objection from the revenue, considered the present appeal infructuous.

The Tribunal condoned the delay, citing Supreme Court orders regarding COVID-19 related limitations. It held that Section 79 of the Income Tax Act, which restricts set-off of losses due to change in shareholding, does not apply to unabsorbed depreciation.

The Tribunal directed the Assessing Officer to verify the genuineness of the Section 195(3) certificate. If found genuine, the remittances to the foreign company would be considered non-taxable for TDS purposes, invalidating the order under Section 201(1A).

The Tribunal held that the assessee's accounting method of treating utilized grants as income and amounts covered by utilization certificates as expenditure was correct and followed GFR guidelines. The investment in question was made in a prior year without objection.

The Tribunal held that the CIT(A)'s valuation of the cost of construction was final as it was not appealed by the Revenue. However, the Tribunal directed the AO to allow indexed cost of construction for the additional area constructed after the valuation report, upon verification.

The tribunal held that the CIT(A)'s order was not in compliance with Section 250(6) of the Act as it did not deal with the matter on merits. The tribunal emphasized that substantial justice should prevail over technicalities.

The Tribunal held that expenses incurred in the interregnum period between setting up and commencement of business are permissible deductions. This was based on a previous decision for the assessment year 2014-15 on identical facts.

The Tribunal held that the acquisition was a legitimate business transaction and not a colourable device. Depreciation on goodwill was allowed, while depreciation on other tangible assets was remanded for verification regarding apportionment.

The Tribunal held that the sale deed and the receipt of sale consideration in cash on 07/11/2016 explained the source of the deposits. The fact that the assessee deposited the cash in installments did not make the source unknown.

The Tribunal held that the addition of Rs. 44,87,000/- on account of demonetization deposits should be deleted, except for Rs. 7.72 lakhs. It also directed the Assessing Officer to estimate net profit at 3% on stock put to use, following the consistent view of co-ordinate benches.

The Tribunal held that the assessee is a co-operative society and not a co-operative bank. It further held that interest earned by a co-operative society on its own surplus funds invested in nationalized banks is eligible for deduction under Section 80P(2)(a)(i) of the Act.

The Tribunal held that the NFAC's dismissal of the appeal for non-prosecution without adjudicating on merits was unreasonable and unjustified. The matter was remanded back to the NFAC for adjudication on merits.

The Tribunal held that the provision for bad and doubtful debts does not need to be bifurcated between rural and non-rural advances for the purpose of deduction under Section 36(1)(viia). The deduction is permissible up to the limits prescribed, irrespective of the nature of the advances.

The Tribunal held that the CIT(A) erred in not computing the capital loss on one property and directed the AO to do so. However, it upheld the CIT(A)'s decision to disallow 50% of improvement expenses on two other properties due to lack of evidence.

The Tribunal held that an appellate authority must dispose of an appeal on merits, even if it is ex-parte. Since the CIT(A) failed to do so, the case was remanded.

The Tribunal allowed the appeal partly for statistical purposes. It specifically allowed grounds related to the disallowance of land cost, finding that the assessee's submissions and the DVO's valuation were not properly appreciated. The additional grounds regarding unsold lands were dismissed as infructuous due to a corrigendum order.

The Tribunal held that if the Section 195(3) certificate is found to be genuine, the remittances to IGTL Solutions (USA) would be non-taxable for TDS purposes, rendering the interest charge invalid. The matter was remitted for verification.