ITAT Jaipur Judgments — October 2018

The Tribunal held that the appeal filed by the revenue was not maintainable. It found no merit in the revenue's contention that the case fell under an exception in CBDT Circular No. 3 of 2018, as the issue did not involve any notification or circular being held illegal.

The Tribunal upheld the disallowance of indexed cost of improvement due to lack of documentary evidence. It also confirmed the denial of Section 54 deduction, stating that the assessee failed to acquire the new residential house within the stipulated time frame.

The Tribunal held that the AO had not conducted an independent enquiry and relied solely on the report of the Investigation Wing and the ACB's search memo. The Tribunal found that the AO's assessment lacked supporting evidence and set aside the matter for denovo assessment.

The Tribunal held that since the assessee consistently treated the land as stock-in-trade in its books of account, the interest and other related expenses incurred for its purchase are allowable as revenue expenditure. Any resulting losses should be allowed to be carried forward.

The Tribunal held that since the assessee consistently treated the land as stock-in-trade in its books of account, the interest and other related expenses incurred for its purchase are allowable as revenue expenditure. Any resulting losses should be allowed to be carried forward.

The Tribunal held that the AO had not conducted an independent enquiry and relied solely on the report of the Investigation Wing and the ACB's search memo. The Tribunal found that the AO's assessment lacked supporting evidence and set aside the matter for denovo assessment.

The Tribunal held that the AO had not conducted an independent enquiry and relied solely on the report of the Investigation Wing and the ACB's search memo. The Tribunal found that the AO's assessment lacked supporting evidence and set aside the matter for denovo assessment.

The Tribunal held that the AO had not conducted an independent enquiry and relied solely on the report of the Investigation Wing and the ACB's search memo. The Tribunal found that the AO's assessment lacked supporting evidence and set aside the matter for denovo assessment.

The Tribunal held that the AO had not conducted an independent enquiry and relied solely on the report of the Investigation Wing and the ACB's search memo. The Tribunal found that the AO's assessment lacked supporting evidence and set aside the matter for denovo assessment.

The Tribunal held that the additions were largely based on estimation and not on concrete evidence found during the search. Therefore, the penalty levied under Section 271(1)(c) was deleted.

The Tribunal held that the CIT(E)'s order under Section 263 was not valid. This was partly because a separate appeal had directed the grant of registration under Section 12AA, making the revision order infructuous. The Tribunal also found no merit in the CIT(E)'s objections regarding rent and the medical shop.

The Tribunal followed a previous order which applied a 5.5% net profit rate based on a jurisdictional High Court decision. Both the revenue's appeal and the assessee's cross-objection were rendered infructuous by this previous ruling.

The Tribunal held that the AO erred in selecting only a few cases of unrelated parties with lower interest rates for comparison. Since a majority of unrelated parties were paid interest at 18%, the interest paid to related parties was not considered unreasonable or excessive.

The Tribunal held that Section 44AF of the IT Act mandates acceptance of declared turnover for retail businesses if a certain profit rate is declared. The AO's estimation of turnover was not permissible under this section.

The Tribunal held that the assessee's application was filed within the time prescribed by the fourteenth proviso to Section 10(23C)(vi). Therefore, the approval should have been granted from Assessment Year 2017-18.

The Tribunal held that rejection of books under Section 145(3) was not justified as the AO did not find defects. A portion of expense disallowances were restricted, and telephone expense disallowance was deleted. The addition under Section 68 was set aside for verification.

The Tribunal decided several grounds based on earlier decisions of coordinate benches, allowing some claims in favor of the assessee. For the issue of disallowance under Section 14A concerning investments, the matter was remanded to the CIT(A) for fresh examination in light of specific directions.

The Tribunal decided several grounds based on earlier decisions of coordinate benches, allowing some claims in favor of the assessee. For the issue of disallowance under Section 14A concerning investments, the matter was remanded to the CIT(A) for fresh examination in light of specific directions.

The Tribunal decided the issues as follows: 1. Regarding the validity of reassessment proceedings under Section 147, the assessee did not press this ground. Therefore, the Tribunal dismissed this ground as not pressed. 2. Regarding the deduction under Section 80P(2)(a)(i) for interest income from banks, the Tribunal, following its own earlier decision for Assessment Year 2014-15, allowed the claim. The Tribunal noted that an identical issue was decided by the Tribunal in the assessee's own case for AY 2014-15, which in turn relied on the Karnataka High Court's decision in Guttigedarara Credit Co-operative Society Ltd. vs. ITO. The reasoning was that the term 'attributable to' in Section 80P(2)(a)(i) is wider than 'derived from'. The interest income earned from the savings bank account, used for day-to-day activities of providing credit facilities, was considered attributable to the business of banking or providing credit facilities. The Tribunal distinguished the Supreme Court's decision in Totgars Co-operative Sale Society's case, stating that in that case, the deposited amount was a liability to the members, unlike the present case where the interest was on the society's own funds. The Tribunal set aside the orders of the authorities below on this issue and allowed the deduction.

The Tribunal observed that the commission and interest were credited to the brother's account at year-end without commensurate withdrawals, suggesting it was an accumulation of profits rather than actual payment. Similar facts emerged for the sister-in-law. The matter was remanded for fresh examination.

The Tribunal held that disallowance under Section 14A is not warranted for investments that did not yield dividend income or where the income generated was taxable. The matter was set aside for re-computation.

The Tribunal held that the addition was ad-hoc and not based on specific defects found during the assessment. A mere fall in GP rate cannot be the sole basis for such disallowance.

The Tribunal, noting the assessee's consistent non-appearance and lack of interest in pursuing the appeal, decided to dismiss the appeal.

The Tribunal decided to remand the issue of registration for Indian Medical Trust back to the Principal Commissioner of Income Tax (Exemptions) (Pr.CIT(E)). The Tribunal found that the Pr.CIT(E) had not properly examined the objects and genuineness of the activities of the institution for charitable purposes. The issue of whether the University stood on the notified 'Khasra' numbers was deemed a matter for State authorities, not the Income Tax Department, and did not negate the genuineness of charitable activities. For NIMS University, the Tribunal also remanded the issue of approval under Section 10(23C) back to the Pr.CIT(E). The Tribunal stated that the allegations of unaccounted capitation fees found in the Indian Medical Trust case should not be automatically imported to NIMS University without specific incriminating material or enquiry. The genuineness of the agreement for transfer of assets and liabilities from Indian Medical Trust to NIMS University also needed to be examined. The Pr.CIT(E) was directed to examine these aspects afresh, giving due opportunity to the assessee. The appeals of Indian Medical Trust were dismissed, while the appeals of NIMS University were allowed for statistical purposes.

The Tribunal condoned the delay of 67 days in filing the appeal, finding the assessee's reasons to be bonafide and reasonable. The Tribunal also addressed various grounds of appeal related to rejection of books of accounts, disallowance of expenses, and additions on account of gifts.

The Tribunal held that the revised return was filed within the limitation period, making the reopening valid. However, the addition for unexplained stock was upheld as the assessee failed to provide satisfactory evidence of its ownership by a third party.

The Tribunal rejected the additional ground regarding transfer in an earlier year, deeming it a new case not previously raised. However, it admitted additional evidence concerning the land's distance from municipal limits and remanded the issue for fresh verification and adjudication.

The Tribunal held that the assessee had sufficiently explained the source of funds for the land purchase by producing the cash book and bank statements of his proprietorship business. Similarly, the source for the car purchase was also explained through a cash flow statement supported by account details.

The Tribunal held that the assessee had sufficiently explained the source of funds for the land purchase by producing the cash book and bank statements of his proprietorship business. Similarly, the source for the car purchase was also explained through a cash flow statement supported by account details.

The Tribunal condoned the delay of 91 days, finding the assessee's explanation for the delay to be reasonable due to ongoing litigation concerning the land's title. The Tribunal then partly allowed the appeal on merits, directing recomputation of deductions under Sections 54B and 54F.

The Tribunal held that the appeal was not maintainable as the tax effect was below the prescribed monetary limit. The exception claimed by the Revenue regarding the circular not being followed was not applicable as the CIT(A) had decided the issue based on High Court decisions, not by deeming the circular illegal.

The Tribunal held that the appeal was not maintainable as it did not fall under the exceptions provided in the CBDT Circular. The CIT(A) had deleted the disallowance based on High Court decisions, not by holding the circular illegal.

The Tribunal decided to remand the issue of registration for Indian Medical Trust back to the Principal Commissioner of Income Tax (Exemptions) (Pr.CIT(E)). The Tribunal found that the Pr.CIT(E) had not properly examined the objects and genuineness of the activities of the institution for charitable purposes. The issue of whether the University stood on the notified 'Khasra' numbers was deemed a matter for State authorities, not the Income Tax Department, and did not negate the genuineness of charitable activities. For NIMS University, the Tribunal also remanded the issue of approval under Section 10(23C) back to the Pr.CIT(E). The Tribunal stated that the allegations of unaccounted capitation fees found in the Indian Medical Trust case should not be automatically imported to NIMS University without specific incriminating material or enquiry. The genuineness of the agreement for transfer of assets and liabilities from Indian Medical Trust to NIMS University also needed to be examined. The Pr.CIT(E) was directed to examine these aspects afresh, giving due opportunity to the assessee. The appeals of Indian Medical Trust were dismissed, while the appeals of NIMS University were allowed for statistical purposes.

The Tribunal decided to remand the issue of registration for Indian Medical Trust back to the Principal Commissioner of Income Tax (Exemptions) (Pr.CIT(E)). The Tribunal found that the Pr.CIT(E) had not properly examined the objects and genuineness of the activities of the institution for charitable purposes. The issue of whether the University stood on the notified 'Khasra' numbers was deemed a matter for State authorities, not the Income Tax Department, and did not negate the genuineness of charitable activities. For NIMS University, the Tribunal also remanded the issue of approval under Section 10(23C) back to the Pr.CIT(E). The Tribunal stated that the allegations of unaccounted capitation fees found in the Indian Medical Trust case should not be automatically imported to NIMS University without specific incriminating material or enquiry. The genuineness of the agreement for transfer of assets and liabilities from Indian Medical Trust to NIMS University also needed to be examined. The Pr.CIT(E) was directed to examine these aspects afresh, giving due opportunity to the assessee. The appeals of Indian Medical Trust were dismissed, while the appeals of NIMS University were allowed for statistical purposes.

The Tribunal decided to remand the issue of registration for Indian Medical Trust back to the Principal Commissioner of Income Tax (Exemptions) (Pr.CIT(E)). The Tribunal found that the Pr.CIT(E) had not properly examined the objects and genuineness of the activities of the institution for charitable purposes. The issue of whether the University stood on the notified 'Khasra' numbers was deemed a matter for State authorities, not the Income Tax Department, and did not negate the genuineness of charitable activities. For NIMS University, the Tribunal also remanded the issue of approval under Section 10(23C) back to the Pr.CIT(E). The Tribunal stated that the allegations of unaccounted capitation fees found in the Indian Medical Trust case should not be automatically imported to NIMS University without specific incriminating material or enquiry. The genuineness of the agreement for transfer of assets and liabilities from Indian Medical Trust to NIMS University also needed to be examined. The Pr.CIT(E) was directed to examine these aspects afresh, giving due opportunity to the assessee. The appeals of Indian Medical Trust were dismissed, while the appeals of NIMS University were allowed for statistical purposes.

The Tribunal held that the revised return was filed within the limitation period, making the reopening valid. However, the addition for unexplained stock was upheld as the assessee failed to provide satisfactory evidence of its ownership by a third party.

The Tribunal held that the revised return was filed within the limitation period, making the reopening valid. However, the addition for unexplained stock was upheld as the assessee failed to provide satisfactory evidence of its ownership by a third party.

The Tribunal set aside the disallowance of deduction under Section 80G to the Assessing Officer for fresh examination. Similarly, the disallowance under Section 40(a)(ia) was also set aside to the AO for fresh examination after providing a reasonable opportunity to the assessee.

The Tribunal held that the assessee's activities, even if commercial, were for a general public utility and covered by Section 2(15) for the relevant assessment years. Following its own prior decisions, the Tribunal upheld the CIT(A)'s order allowing exemption.

The Tribunal deleted the addition related to the opening capital account, finding that the assessee had established the genuineness of the gift from his father. The ground regarding trading addition was dismissed as not pressed.

The Tribunal held that the assessee failed to establish the nexus between the unsecured loan and investment in the partnership firm. Similarly, the commission paid to the son was disallowed due to lack of verifiable evidence of services rendered and the non-production of the son for verification.

The Tribunal held that the matter was covered by a previous decision in the assessee's own case. Following that precedent, the Tribunal found no reason to interfere with the CIT(A)'s order which had allowed the appeal of the assessee.

The Tribunal held that the reopening of assessment was valid as there was tangible material. However, it found that the CIT(A) erred in not accepting the AO's remand report which confirmed the genuineness of the capital introduced.

The Tribunal held that the AO's remand report, which accepted the genuineness of the capital introduction after examining evidence and recording statements, was not adequately addressed by the CIT(A). Therefore, the addition was set aside.

The Tribunal held that the AO's remand report, which accepted the capital introduction as genuine after verification, was not adequately addressed by the CIT(A). Therefore, the addition made by the CIT(A) was set aside.

The Tribunal held that the assessee's activities, even if commercial, were for a general public utility and covered by Section 2(15) for the relevant assessment years. Following its own prior decisions, the Tribunal upheld the CIT(A)'s order allowing exemption.