ITAT Indore Judgments — August 2017

The Tribunal held that the deduction under Section 54B is allowable even if the new agricultural land is purchased in the name of close relatives, provided the nature of land sold and purchased is the same. Additions made under Section 69A and 69 were deleted due to lack of evidence and reconciliation with cash withdrawals.

The Tribunal held that the penalty levied under section 271(1)(c) was unsustainable because the penalty show cause notices did not specify the exact charges against the assessee. Consequently, the penalty was cancelled.

The Tribunal held that issuing a notice under Section 148 for reassessment when the time limit for issuing a notice under Section 143(2) for regular assessment was still available is illegal and void ab initio. Therefore, the reassessment proceedings were quashed.

The Tribunal held that the commission payment was justified as it was for business promotion and resulted in a significant increase in turnover. The disallowance was not justified as the distributor had not achieved the sales target in earlier years, and the commission agent was assessed to tax.

The Tribunal held that the principle of 'audi alteram partem' (hear the other side) is a fundamental concept of natural justice. Since the assessee was not given a proper opportunity of hearing, the order of the CIT(A) was not justified.

The Tribunal held that Section 80IA(4) does not apply to businesses that are in the nature of 'works contracts'. Following a previous ruling, the Tribunal found that the assessee was a works contractor and thus not eligible for the deduction.

The Tribunal found that the assessee had sufficient opening cash balance supported by documentation, including the cash flow chart and income tax return. Therefore, the source of the cash deposits was considered proved.

The CIT(A) deleted the addition, holding that the assessee had not suppressed commission income but had credited it to their purchase account, thereby reducing the purchase cost and increasing profits. The Tribunal upheld the CIT(A)'s decision.