ITAT Jaipur Judgments — October 2017

The Tribunal held that the assessee is entitled to exemption under Section 54 only in respect of one house. The issue regarding the deduction of interest paid on loan for construction was set aside to the AO for fresh consideration.

The Tribunal held that software licenses paid annually are revenue expenditure and not capital. It also found no basis for ad-hoc disallowance of travelling expenses, deleting the disallowance made by the AO and CIT(A). The issue of Section 80G deduction was also decided in favour of the assessee.

The Tribunal held that the disallowance under Section 14A was not warranted, following its previous decision in a similar case involving the predecessor firm. It also found that the ad-hoc disallowance of business promotion expenses lacked legal basis and deleted it.

The Tribunal found that the AO had not conducted a proper inquiry to verify the payments made for vacating the property, especially since the recipients denied receiving compensation. The matter was set aside to the AO for a fresh inquiry, including examination of the recipients and allowing cross-examination.

The Tribunal held that the CIT(A) does not have the power to direct the Assessing Officer to initiate fresh assessment proceedings. Therefore, the liberty granted by the CIT(A) to the AO for fresh reassessment was quashed.

The Tribunal held that capital gains tax is attracted even if the cost of acquisition cannot be ascertained, by taking the fair market value as on January 1, 1954, or a statutorily specified date. The issue of whether the land is assessable in the hands of the HUF was remanded to the Assessing Officer.

The Tribunal held that the assessee was not prevented by sufficient cause from producing evidence before the AO and thus additional evidence was not admitted. However, regarding the advance received for land sale, the Tribunal found that the purchasers had appeared before the AO and their capacity to pay was not disproven, thus deleting the addition.

The Tribunal dismissed the assessee's appeal for want of prosecution, as the assessee did not appear and was presumed to be not interested in pursuing the appeal.

The Tribunal noted that no one appeared for the assessee despite proper notice and no adjournment was sought. Therefore, it was presumed the assessee was not interested in pursuing the appeal.

The Tribunal upheld the CIT(A)'s decision, finding that the salary and rent payments were reasonable considering the qualifications, services rendered, and prevailing market rates in the area. The Tribunal noted that similar payments were accepted in previous assessment years.

The Tribunal held that compensation for short power generation is not eligible for deduction under Section 80IA as it is not directly derived from the business. However, the disallowance of Rs. 50,000/- for presumed expenses was deleted as the operation and maintenance were fully outsourced.

The Tribunal held that the requirement to furnish the audit report along with the return of income is directory, not mandatory. Since the assessee had obtained the report before filing the return and it was submitted during assessment proceedings, the disallowance was incorrect.

The Tribunal held that assessments under Section 153A, when no assessment proceedings were pending at the time of search and no incriminating material was found, must be based on seized material. Since this was not demonstrated, the assessment orders were quashed.

The Tribunal restored the issue of disallowance under Section 40(a)(ia) to the CIT(A) for fresh adjudication. The Tribunal allowed the appeal on the second ground, directing the deletion of the ad-hoc addition made on account of contract expenses.

The Tribunal held that since the additions forming the basis of the penalty were deleted in the quantum proceedings, there was no justification for levying the penalty. Therefore, the order of the CIT(A) cancelling the penalty was affirmed.

The Tribunal held that the purchases and sales of properties, as well as payments for stamp papers, were duly recorded in the assessee's books and had been examined during the original assessment. Since no new tangible material was available to the AO, the reassessment proceedings under Section 147 were vitiated.

The Tribunal held that the AO is required to refer the issue of property valuation to the Departmental Valuation Officer (DVO) if the assessee claims that the value adopted or assessed by the Stamp Valuation Authorities exceeds the fair market value of the property as on the date of transfer. The Tribunal, respectfully following the judgment of the Hon'ble Calcutta High Court in Sunil Kumar Agarwal, found that the assessee had pointed out vide a letter dated 18th March, 2016 that the valuation of the property was disputed. The Tribunal observed that Section 50C(2) mandates the AO to refer the valuation to the DVO under such circumstances. Therefore, the Tribunal set aside the orders of the authorities below and restored the assessment to be framed denovo. The AO was directed to refer the issue of the Fair Market Value of the property to the DVO and to make an inquiry from the Stamp Valuation Authorities regarding the basis for their valuation. The ground of the assessee was allowed for statistical purposes.

The Tribunal held that assessments under Section 153A, when no assessment proceedings were pending at the time of search and no incriminating material was found, must be based on seized material. Since this was not demonstrated, the assessment orders were quashed.

The Tribunal held that assessments under Section 153A, when no assessment proceedings were pending at the time of search and no incriminating material was found, must be based on seized material. Since this was not demonstrated, the assessment orders were quashed.

The Tribunal held that depreciation on the windmill, including civil construction and electrical installation, is allowable at 80% based on previous rulings and High Court decisions. It also ruled that disallowances for Section 40(a)(ia) and PF/ESI contributions were not justified, and the addition under Section 14A was deleted due to sufficient interest-free funds. The ad-hoc disallowance of business expenses was also deleted.

The Tribunal found that while the CIT(A) had provided sufficient opportunities, the appeal should be decided on merit in the interest of natural justice. Therefore, the CIT(A)'s order was set aside.

The Tribunal set aside the issue of TDS on interest to the AO for verification. It upheld the CIT(A)'s decision disallowing excessive remuneration to a partner, finding it not in accordance with the partnership deed. The addition for interest income was also sustained as the assessee followed the mercantile system of accounting.

The Tribunal upheld the CIT(A)'s decision on the stock shortage addition, finding no reason to interfere. For the interest expense disallowance, the issue was restored to the AO for verification of a certificate provided by the assessee.

The CIT(A) held that the land belonged to the HUF of the assessee and directed the AO to assess the gains in the hands of the HUF. The Tribunal upheld this decision, finding that the AO had not controverted the evidence of HUF ownership.

The Tribunal restored the issue of TDS on interest payment to the AO for verification. For other expenses, the Tribunal upheld the CIT(A)'s order, which had partly sustained disallowances.

The Tribunal restored the issue of interest paid to Reliance Capital Ltd. to the Assessing Officer for verification of a certificate. The Tribunal affirmed the CIT(A)'s deletion of disallowance for Indiabulls, following the Delhi High Court's decision on the retrospective application of the second proviso to Section 40(a)(ia).

The Tribunal restored the issue of interest paid to Reliance Capital Ltd. to the Assessing Officer for verification of a certificate. The disallowance for Indiabulls was affirmed based on the CIT(A)'s order following a High Court precedent.

The Tribunal held that depreciation is admissible to the assessee under Section 32 of the Income Tax Act in respect of assets on which exemption has been claimed and allowed under Section 11. The amendment to Section 11(6) was held to be prospective.

The Tribunal found that further inquiries were required to ascertain if the property was received as a gift and no consideration was paid. The matter was restored to the Assessing Officer for a fresh decision.

The Tribunal upheld the order of the CIT(A), noting that the issue was identical to preceding years where the ITAT and the jurisdictional High Court had ruled in favor of the assessee. The assessee had provided agreements, confirmations, deducted TDS, and established that services were rendered.

The Tribunal held that the assessee, being an intermediary, was not responsible for paying commission or determining the discount rate. The service provider was solely responsible for allowing and paying any commission. Therefore, the assessee had no obligation to deduct TDS under Section 194H.

The Tribunal upheld the CIT(A)'s order, finding that the assessee was an investor and not engaged in real estate business. The addition for undisclosed investment was also deleted as it was considered a double addition.

The Tribunal held that the dividend declared on 30.09.2011 for AY 2011-12 would be chargeable to DDT in AY 2012-13. The AO was directed to verify if the DDT payment made on 10.10.2011 could be adjusted against the liability for AY 2012-13.

The Tribunal, following precedents, decided that the appeal was not admitted and was dismissed in limine for non-prosecution due to the assessee's failure to appear.

The Tribunal held that the transactions of purchase, construction, and sale of properties constituted business activities, not capital gains. Therefore, Section 50C was not applicable.

The Tribunal restored the matter back to the file of the CIT(A). The CIT(A) was directed to decide the appeal afresh after providing an adequate and reasonable opportunity of being heard to the assessee.

The Tribunal partly allowed the appeal regarding expenses, sustaining 50% of the disallowance made by the AO. For the addition under Section 68, the Tribunal restored the issue to the AO for fresh adjudication, allowing the assessee to produce evidence.

The Tribunal held that the assessee failed to provide sufficient evidence to substantiate the claimed sale proceeds of agricultural land and the source of investment. The AO's addition of unexplained investment in land was confirmed.

The Tribunal confirmed the addition of Rs. 14 lacs made by the AO under Section 69C. However, it set aside the matter concerning certain other expenses under Section 69C for fresh examination by the CIT(A) based on impounded documents.

The Tribunal upheld the decision of the CIT(A). It was held that Section 14A of the Income Tax Act is applicable only when there is an actual receipt of income which does not form part of the total income. Therefore, if no exempt income is earned or receivable, no disallowance can be made under Section 14A.

The Tribunal held that Section 14A is applicable only when there is an actual receipt of income which is not includible in the total income. Since the assessee had not earned any exempt income, no disallowance could be made.

The Tribunal held that Section 14A of the Income Tax Act is applicable only when there is an actual receipt of income which is not includible in the total income. Since the assessee had not earned any exempt income, the disallowance made by the AO was not justified.

The Tribunal upheld the CIT(A)'s decision, agreeing that disallowance under Section 14A requires actual receipt of exempt income. Since no exempt income was earned, the disallowance was not justified.

The Tribunal held that for Section 41(1) to apply, there must be a remission or cessation of liability. Merely because a liability is outstanding for a long time or creditors are not traceable does not automatically mean the liability has ceased to exist, especially when the assessee continues to acknowledge it.

The Tribunal, following the jurisdictional High Court's decision in the assessee's own case, held that the Urban Improvement Trust functions as a local authority. Consequently, the impugned orders were set aside, and the Assessing Officer was directed to conduct a fresh assessment.

The Tribunal noted that the assessee had submitted relevant documents like balance sheets and ledger accounts before the Tribunal. Therefore, the issues were restored to the CIT(A) for a fresh decision.

The Tribunal, following the jurisdictional High Court's decision in the assessee's own case, held that the Urban Improvement Trust functions as a local authority. Consequently, the impugned orders were set aside, and the Assessing Officer was directed to conduct a fresh assessment.

The Tribunal held that the assessee was not liable to deduct TDS under Section 194H on the discount allowed to distributors. This decision was based on the jurisdictional High Court's judgment in the assessee's own case and other similar cases.

The Tribunal held that the assessee was not liable to deduct TDS under Section 194H on the discount allowed to distributors. This decision was based on the jurisdictional High Court's judgment in the assessee's own case and other similar cases.