ITAT Jaipur Judgments — May 2018

The Tribunal, following a coordinate bench decision, held that since the addition was based on an estimation after rejecting books of accounts, it did not constitute concealment of income or furnishing inaccurate particulars. Therefore, the penalty was deleted.

The Tribunal held that if an assessee fails to maintain regular books of accounts, the default is complete under Section 44AA. Consequently, there cannot be a further default for not getting the accounts audited under Section 44AB, making the penalty under Section 271B unjustified.

The Tribunal upheld the CIT(A)'s decision to allow TDS credit, following its own precedents where the interest income was not taxable. It also upheld the deletion of disallowance for delayed PF/ESI contributions, relying on High Court judgments.

The Tribunal held that since the assessee is a Primary Co-operative Agricultural and Rural Development Bank eligible for Section 80P deduction, the disallowance of provisions for bad debts and bad interest would not result in an enhancement of taxable income. Therefore, it did not constitute furnishing inaccurate particulars or concealment of income.

The Tribunal held that for the purpose of Section 50C, the stamp duty value should be considered as on the date of the agreement to sell, not the date of registration, following a previous coordinate bench decision.

The tribunal held that advance against depreciation is not taxable as income and is a timing difference, following Supreme Court and coordinate bench decisions. It also held that employee's PF & ESI contributions paid before the due date of filing the return of income are allowable, following Rajasthan High Court decisions.

The Tribunal held that the transaction was a family settlement and not a sale, therefore, Section 50C of the Income Tax Act was not applicable. The enhanced income was deleted.

The Tribunal held that the commodity derivatives traded by the assessee were speculative transactions and could not be set off against normal business income. Regarding the capital gains, the Tribunal upheld the CIT(A)'s order allowing deduction only for the cost of land.

The Tribunal partially allowed the appeal, reducing the disallowance for shortages/discounts to 50% due to some confirmations being submitted. Similarly, the disallowance for bardana expenses was also reduced to 50% considering the nature of the assessee's business.

The Tribunal held that the addition was based on a statement that the assessee was not given an opportunity to cross-examine. Relying on the Supreme Court's decision in Andaman Timber Industries, the matter was set aside to the AO to allow cross-examination.

The Tribunal held that the deletion of additions related to the sub-contract amount and creditors by the CIT(A) was not justified due to lack of supporting evidence. The disallowance for non-deduction of TDS was upheld.

The Tribunal held that since the commission payments were directly made by the mobile operator to the retailers and not by the assessee, the assessee was not obligated to deduct TDS. Similarly, the addition for alleged bogus commission expenses was deleted as the assessee only made book entries and did not actually receive or pay the amounts.

The Tribunal held that the addition was made solely on the basis of the statement of Shri Rattan Singh, without providing the assessee an opportunity to cross-examine him. The Tribunal also noted that CBI investigations indicated the amount was an advance, not commission.

The Tribunal held that the assessee is eligible for exemption under Section 10(23C)(iiiab) as its activities are educational and it is substantially financed by the Government, following a similar decision by the Rajasthan High Court in the assessee's own case.

The Tribunal held that the deletion of additions related to the sub-contract amount and creditors by the CIT(A) was not justified due to lack of supporting evidence. The disallowance for non-deduction of TDS was upheld.

The Tribunal condoned the delay in filing the appeals, citing the interest of justice and the lack of evidence of ulterior motive. The Tribunal set aside the orders of the CIT(A) and remanded the matters back to provide the assessee with an opportunity to explain the delay and for a decision on merits.

The Tribunal condoned the delay in filing the appeals before the CIT(A) due to the explanation provided and the interest of justice. The appeals were set aside to the CIT(A) to grant the assessee an opportunity to explain the delay and decide the matter on merits.

The Tribunal condoned the delay in filing the appeals, citing the interest of justice and the lack of evidence of ulterior motive. The Tribunal set aside the orders of the CIT(A) and remanded the matters back to provide the assessee with an opportunity to explain the delay and for a decision on merits.

The Tribunal held that contributions to a reserve fund mandated by the Rajasthan Cooperative Societies Act, 2001, are allowable as a deduction. The lower authorities failed to examine the statutory provisions and verify the quantum and deposit of the amount.

The Tribunal held that the contribution is an allowable expenditure under Section 37(1) of the Income Tax Act. This was based on previous decisions of the Tribunal and a letter from the Government of Rajasthan granting the assessee a rebate for accommodation.

The Tribunal condoned the delay in filing the appeals before the CIT(A) due to the explanation provided and the interest of justice. The appeals were set aside to the CIT(A) to grant the assessee an opportunity to explain the delay and decide the matter on merits.

The Tribunal condoned the delay in filing the appeals before the CIT(A) due to the explanation provided and the interest of justice. The appeals were set aside to the CIT(A) to grant the assessee an opportunity to explain the delay and decide the matter on merits.

The Tribunal, following precedents, dismissed the appeals as the assessee failed to appear. The dismissal was pronounced in open court.

The Tribunal, following precedents, dismissed the appeals as the assessee failed to appear. The dismissal was pronounced in open court.

The Tribunal held that the disallowance of 20% of expenses was justified due to lack of supporting evidence and absence of regular books of accounts. Regarding the cash addition, the Tribunal found that even after telescoping with brokerage income, at least Rs. 3.15 lacs deserved to be sustained.

The Tribunal, following precedents, dismissed the appeals as the assessee failed to appear. The dismissal was pronounced in open court.

The Tribunal held that the reopening of assessment after four years from the end of the assessment year was invalid and without jurisdiction, as the Assessing Officer failed to establish the assessee's failure to disclose material facts fully and truly. Consequently, the reassessment order was quashed.

The Tribunal dismissed the ground related to conversion from limited to complete scrutiny. It allowed the disallowance of provision for bad and doubtful debts, following previous ITAT decisions. The issue of leave encashment was restored to the AO for fresh adjudication, and the enhancement of income on accrued interest was also allowed for statistical purposes.

The Tribunal set aside the issue of general overhead and plant running expenses to the AO for examination. Regarding interest on BOT assets, the disallowance was confirmed subject to adjustments. The issue of allocation of administrative and employee costs for Section 80-IA deduction was remanded back to the AO.

Regarding the first issue, the Tribunal held that while computing exemption under Section 54F, the actual sale consideration is to be taken into account, not the stamp duty valuation under Section 50C. The Tribunal relied on the Delhi High Court's decision in CIT V/S Smt. Nilofer I. Singh and the ITAT Jaipur Bench's decision in Gyan Chand Batra, which held that Section 50C is a deeming fiction limited to Section 50C only and cannot be enlarged without specific reference. Therefore, the Tribunal sustained the order of the CIT(A) on this issue, allowing deduction based on the full consideration received. The Tribunal did not record specific arguments from the Revenue on this point, but its appeal grounds indicate disagreement with the CIT(A)'s finding. The judgment does not explicitly address the second issue raised by the revenue concerning unexplained bank deposits and additional evidence admitted under Rule 46A. Regarding the third issue, the Tribunal found no merit in the assessee's cross-objection. It upheld the CIT(A)'s finding that the lands sold were capital assets, agreeing with the AO's detailed examination and conclusion. The assessee's argument that the status of the land should be seen as of 06/01/1994 was rejected, as the assessee failed to provide material indicating the land was beyond 8 Kms of the municipality or that the village population was less than 10,000 on that date. The Tribunal relied on the CIT(A)'s findings and rejected the assessee's ground.

The Tribunal held that the capital gain was rightly taxed in the year under consideration by invoking the provisions of Section 50C of the Act. The Tribunal noted that the assessee never gave possession of the land in earlier years, and there was no execution of a sale deed in earlier years. The agreement dated 27/09/1992 was cancelled, and the development agreement dated 06/08/2002 was not with the same party as the sale executed on 27/10/2006. The facts suggested that the agreements in 1992 and 2002 were made to avoid tax liability on the transfer of property. The Tribunal found that the purchaser party in the 1992 agreement was different from the purchaser party in the 2006 sale deed, and the development agreement was also with a different party. Therefore, the sale transaction on 27/10/2006 was considered an independent sale, even if documents reflected it as a continuation of the earlier agreement. The Tribunal confirmed the AO's addition as long-term capital gain. The ground regarding the assessee not inheriting the property was also dismissed as contrary to facts, as the property transferred to the assessee as a legal heir. The appeal was dismissed.

The Tribunal held that while Section 206C does not explicitly prescribe limitation periods, proceedings can be guided by Section 201(3). The matter was set aside to the CIT(A) to determine if the proceedings were barred by limitation.

The Tribunal held that ISO certification expenses, being for a limited period and not creating an enduring asset, are revenue in nature. The interest on Service Tax and TDS issue was not pressed by the assessee.

The tribunal held that interest expenses related to building construction should be capitalized until the building is put to use. However, depreciation on the capitalized interest was allowed. Disallowances for telephone and entertainment/staff refreshment expenses were deleted, while conveyance disallowance was confirmed. Depreciation on cars was allowed.

The tribunal held that Section 14A can only be invoked if the assessee has earned exempt income. Since the assessee had not earned any exempt income during the year under consideration, no disallowance under Section 14A could be made.

The Tribunal held that penalty under Section 271(1)(c) for concealment of income was not leviable as the addition was based on estimates and the assessee claimed bonafide mistake. Penalty under Section 271A for non-maintenance of books of account was confirmed. Penalty under Section 271B for non-audit was deleted due to the impossibility of performance after non-maintenance of books.

The Tribunal held that the assessee should be granted one more opportunity to produce the original record, books of accounts, and vouchers before the Commissioner of Income-tax (Exemptions). The Tribunal noted that the CIT(E) had not raised any objection regarding the charitable nature of the assessee's objects. The rejection was based on the inability to verify the genuineness of the activities due to the non-production of original documents. The Tribunal found that the assessee could not avail the opportunity to produce original records because a notice was not received in time. Therefore, the impugned order under Section 12AA was set aside, and the matter was remitted to the CIT(E) for fresh adjudication after providing one more opportunity to the assessee. Consequently, the order under Section 80G, being consequential, was also set aside and remanded on similar terms. The ratio decidendi is that a reasonable opportunity must be provided for verification of genuineness of activities, and if a procedural lapse prevents compliance, a further opportunity may be granted.

The Tribunal held that penalty under Section 271(1)(c) for concealment of income was not leviable as the addition was based on estimates and the assessee claimed bonafide mistake. Penalty under Section 271A for non-maintenance of books of account was confirmed. Penalty under Section 271B for non-audit was deleted due to the impossibility of performance after non-maintenance of books.

The Tribunal held that penalty under Section 271(1)(c) for concealment of income was not leviable as the addition was based on estimates and the assessee claimed bonafide mistake. Penalty under Section 271A for non-maintenance of books of account was confirmed. Penalty under Section 271B for non-audit was deleted due to the impossibility of performance after non-maintenance of books.

The Tribunal upheld the CIT(A)'s decision regarding the addition of Rs. 7,056/- for sundry creditors as no explanation was provided. The addition of Rs. 10,00,000/- for cash deposit was also confirmed as the explanation based on an unregistered sale agreement for agricultural land to a non-Scheduled Tribe person was not accepted.

The Tribunal held that the cash payments were made due to business expediency at the insistence of the sellers, and the source of funds was clearly identifiable from bank withdrawals. The genuineness of the transactions was established through registered sale deeds.

The Tribunal held that while the information from the Investigation Wing was sufficient to form a prima facie belief for reopening, the AO failed to conduct further examination of documents submitted by the assessee or undertake independent investigation. This lack of due diligence meant the AO could not finalize the addition based solely on the initial information.

The Tribunal found that the Rajasthan Tax Board's order, which restored the original land value of Rs. 12,00,000/-, was crucial. The CIT(A) had correctly considered this subsequent order when deleting the AO's addition.

The Tribunal held that penalty under Section 271(1)(c) cannot be levied solely on estimated additions without positive evidence of concealment. Relying on Rajasthan High Court decisions, the levy of penalty was deleted.

The assessee's counsel stated that the assessee no longer wished to pursue the appeal. The revenue did not object to the withdrawal.

The Tribunal held that the impounded documents did not directly implicate the assessee in the land transactions or show any income earned by them. The AO failed to bring on record sufficient corroborative evidence to justify the addition.

The Tribunal held that the AO mechanically issued the notice under Section 148 without applying his own mind, as the reasons recorded were vague and contradicted the information received. The reassessment proceedings were quashed.

The Tribunal held that the AO mechanically applied the information received without independent application of mind. The reasons recorded for reopening were vague and did not align with the nature of information received, making the reassessment invalid.