ITAT Jaipur Judgments — February 2019

The Tribunal held that the interest earned on FDRs by the assessee, acting as a nodal agency for government funds, is not the assessee's income. The interest belongs to the Government and is part of the funds to be disbursed for public welfare projects.

The Tribunal held that the AO cannot invoke Section 154 to withdraw a claim allowed in the original assessment order, especially when the issue is debatable. Following its own prior decisions and High Court pronouncements, the Tribunal ruled that the unabsorbed depreciation is eligible for set-off without time limit.

The Tribunal noted the assessee's consistent non-appearance, indicating a lack of interest in pursuing the appeal. Following established precedents, the appeal was not admitted.

The Tribunal held that the interest earned on FDRs by the assessee, acting as a nodal agency for government funds, is not the assessee's income. The interest belongs to the Government and is part of the funds to be disbursed for public welfare projects.

The Tribunal held that the interest income earned from lending activities was indeed 'income from other sources' as it was an intentional activity of lending in the market. However, it directed the Assessing Officer to allow the set-off of business expenditure against this interest income.

The Tribunal held that the second proviso to Section 40(a)(ia) is retrospective in nature. However, it directed the Assessing Officer to verify the additional evidence submitted by the assessee regarding tax compliance by the recipient institutions.

The Tribunal held that the assessee had consistently been treated as a 'Kachha Arthatia' for many years, and there was no material change in its business operations to justify a departure from this settled position. The AO's findings were not clear enough to depart from the past consistent view.

The Tribunal remanded the issue of interest disallowance back to the Assessing Officer for verification of fund sources. The disallowance under Section 14A for common administrative expenditure was restricted to the exempt dividend income.

The Tribunal held that since the assessee consistently valued its closing stock of foodgrains at market price and did not take the benefit of the higher valuation in the subsequent year's opening stock, the addition made by the AO did not ipso facto amount to furnishing inaccurate particulars or concealment of income.