ITAT Jaipur Judgments — April 2019

The Tribunal noted that an identical issue was decided in the case of co-owners, where the matter was remanded to the AO. Following this precedent, the Tribunal set aside the issue of capital gain computation to the AO for fresh adjudication.

The Tribunal directed to allow a portion of the brokerage expenses and the entire tube well expenses. The revenue's appeal was dismissed as not maintainable due to low tax effect.

The Tribunal directed to allow a portion of the brokerage expenses and the entire tube well expenses. The revenue's appeal was dismissed as not maintainable due to low tax effect.

The Tribunal held that for the provisions of Section 56(2)(vii)(b)(ii) to apply, the difference between the actual consideration and the stamp duty value must exceed Rs. 50,000. Since the difference in this case was only Rs. 34,271, the addition was not sustainable.

The Tribunal held that the CIT(A)'s finding that the AO's disallowance was unreasonable and excessive meant that sustaining any disallowance was without basis. Regarding the cash credit, the Tribunal found that the loan was taken from an employee, and a significant cash deposit was made in the employee's account just before the loan was given, indicating the assessee had not discharged its burden.

The Tribunal held that the addition made by the AO, based only on a statement under Section 133A without corroborating material, cannot automatically lead to the conclusion of concealment or furnishing inaccurate particulars. Therefore, the penalty levied under Section 271(1)(c) is not sustainable.

The Tribunal restored the issues to the AO for fresh adjudication after considering additional documents submitted by the assessee, including ITRs, bank statements, and Form 16A, and providing an opportunity of being heard.

The Tribunal noted that the AO had initiated reassessment proceedings for Assessment Year 2017-18 to assess the cash amount on a substantive basis. Therefore, the addition made on a protective basis could not be decided at that stage. The matter was set aside for denovo assessment along with the reassessment for AY 2017-18.

The Tribunal held that the assessee's claim for exemption under Section 11 was not valid as it did not possess the required registration under Section 12AA. The absence of a rejection letter within the statutory period does not amount to deemed registration.

The Tribunal held that the addition on account of interest income was not sustainable as it was either covered by excess interest offered in subsequent years or made without incriminating material. The Tribunal also ruled that additions under Section 2(22)(e) were not permissible as the assessment proceedings were not pending at the time of search.

The Tribunal held that the addition on account of interest income was not sustainable as it was either covered by excess interest offered in subsequent years or made without incriminating material. The Tribunal also ruled that additions under Section 2(22)(e) were not permissible as the assessment proceedings were not pending at the time of search.

For AY 2013-14, the Tribunal held that additions under Section 153A are not sustainable without incriminating material if the original assessment was not pending. For AY 2016-17, the Tribunal confirmed the addition as the amount was treated as a loan/advance for investment in shares.

The Tribunal held that the addition on account of interest income was not sustainable. It noted that the difference was covered by excess interest offered in subsequent years, leading to potential double taxation. The Tribunal also found that the assessment proceedings were not pending at the time of search, making additions in the absence of incriminating material illegal.

The Tribunal first addressed the assessee's preliminary objection under Rule 27 of the ITAT Rules concerning the validity of additions made under section 153A in the absence of incriminating material found during the search. Citing its own decision in Smt. Reema Harish Bhatia vs. DCIT and the Supreme Court decision in PCIT vs. Meeta Gutgutia, the Tribunal held that for completed assessments not pending at the time of search, additions under section 153A can only be made if there is incriminating material found during the search disclosing undisclosed income. Since no such material was found for AY 2014-15, the additions made by the AO were held to be invalid. Consequently, the revenue's appeal for AY 2014-15 was dismissed. Regarding the assessee's appeal for AY 2016-17, the Tribunal considered the addition of Rs. 2,72,153/- under section 2(22)(e). Citing its decision in Smt. Reema Harish Bhatia, the Tribunal noted that the assessee received funds from a company and utilized them for investment in shares of the same company, treating it as a loan/advance. The Tribunal found that the assessee treated the amount as a loan and paid interest, and the CBDT circular regarding trade advances was not applicable. Therefore, the addition under section 2(22)(e) was confirmed, and the assessee's appeal was dismissed.

The Tribunal first addressed the assessee's preliminary objection under Rule 27 of the ITAT Rules concerning the validity of additions made under section 153A in the absence of incriminating material found during the search. Citing its own decision in Smt. Reema Harish Bhatia vs. DCIT and the Supreme Court decision in PCIT vs. Meeta Gutgutia, the Tribunal held that for completed assessments not pending at the time of search, additions under section 153A can only be made if there is incriminating material found during the search disclosing undisclosed income. Since no such material was found for AY 2014-15, the additions made by the AO were held to be invalid. Consequently, the revenue's appeal for AY 2014-15 was dismissed. Regarding the assessee's appeal for AY 2016-17, the Tribunal considered the addition of Rs. 2,72,153/- under section 2(22)(e). Citing its decision in Smt. Reema Harish Bhatia, the Tribunal noted that the assessee received funds from a company and utilized them for investment in shares of the same company, treating it as a loan/advance. The Tribunal found that the assessee treated the amount as a loan and paid interest, and the CBDT circular regarding trade advances was not applicable. Therefore, the addition under section 2(22)(e) was confirmed, and the assessee's appeal was dismissed.

The Tribunal held that the addition on account of interest income was not sustainable as it was either covered by excess interest offered in subsequent years or made without incriminating material. The Tribunal also ruled that additions under Section 2(22)(e) were not permissible as the assessment proceedings were not pending at the time of search.

The Tribunal held that the assessee's claim for exemption under Section 11 was rightly denied by the authorities below. The Tribunal noted that the application for registration under Section 12AA was not disposed of within the statutory period, and the assessee could not claim deemed registration.

The Tribunal held that reopening beyond four years requires a failure to disclose material facts. Since the AO had examined the salary expenses during the original assessment and there was no fresh material, the reassessment was based on a change of opinion and thus invalid.

The Tribunal held that the order of the CIT(A) in deleting the addition made by the AO under Section 2(24)(iv) of the IT Act was not erroneous or illegal. The Tribunal noted that the AO had made the addition by applying a proportion of 'on money' based on seized material. However, the Tribunal found that the actual rate per square foot paid by the assessee for the villa was Rs. 1922/-, which was more than the rate recorded in the seized material (ranging from Rs. 1550/- to Rs. 1675/- per sq. ft. for other plots) and also more than the circular rate. The AO's method of applying a ratio derived from other plots, without considering the specific rate declared by the assessee, was deemed arbitrary. The CIT(A) had correctly observed that the assessee had purchased the villa at a price higher than that determined by the Sub-Registrar and higher than the rates found in the seized documents for other properties, thus no benefit was obtained by the assessee. Therefore, the addition made by the AO was deleted.

The Tribunal held that the disallowance made by the AO on account of employee's contribution to PF & ESI is to be deleted. The Hon'ble jurisdictional High Court's decisions were in favour of the assessee, and the Supreme Court had dismissed the department's SLP on a similar issue.

For AY 2013-14, the Tribunal held that additions under Section 153A are not sustainable without incriminating material if the original assessment was not pending. For AY 2016-17, the Tribunal confirmed the addition as the amount was treated as a loan/advance for investment in shares.

The Tribunal held that the notice issued under Section 143(2) was invalid because it was issued by an officer without jurisdiction and also, another notice was issued beyond the period of limitation. Consequently, the assessment order passed under Section 143(3) is invalid and liable to be quashed.

The Tribunal held that the addition on account of interest income was not sustainable as it was either covered by excess interest offered in subsequent years or made without incriminating material. The Tribunal also ruled that additions under Section 2(22)(e) were not permissible as the assessment proceedings were not pending at the time of search.

The Tribunal noted that the CIT(A) had dismissed the appeal ex-parte and that a crucial report from the Tehsildar regarding the distance of the agricultural land from municipal limits was missing. Therefore, the matter was set aside to the AO for fresh adjudication.

The Tribunal held that the disallowance of employees' contribution to PF and ESI was incorrect. The contributions were deposited before the due date of filing the return of income, and this issue is covered by jurisdictional High Court decisions upheld by the Supreme Court.

The Tribunal held that since the assessment proceedings for the relevant years were not pending at the time of the search, additions under Section 153A could only be made if incriminating material was found. The Tribunal also found that certain additions were covered by the voluntary surrenders made by the assessee.

The Tribunal held that the AO cannot make an addition on a ground different from the reason for reopening the assessment if the original reason for reopening was not pursued. A fresh notice under Section 148 would be necessary to assess other income that comes to light.

The tribunal deleted the adhoc disallowance of expenses as it was made without evidence. The addition under Section 41(1) was deleted as the cessation of liability did not occur in the assessment year. The disallowance of interest on service tax was also deleted as it is compensatory and not a tax on profits.

The Tribunal held that since the assessment proceedings for the relevant years were not pending at the time of the search, additions under Section 153A could only be made if incriminating material was found. The Tribunal also found that certain additions were covered by the voluntary surrenders made by the assessee.

The Tribunal held that the discrepancy in the date of entry was an inadvertent mistake and not a reason to treat the amount as unexplained. Since the receipt of income and the withdrawal of cash by the intermediary were not doubted, the addition was deleted.

The Tribunal held that since the assessment proceedings for the relevant years were not pending at the time of the search, additions under Section 153A could only be made if incriminating material was found. The Tribunal also found that certain additions were covered by the voluntary surrenders made by the assessee.

The Tribunal held that since the additions made by the Assessing Officer were deleted by the Tribunal and confirmed by the High Court, the penalty levied on those additions has no basis. Therefore, the penalty order was rightly deleted by the CIT(A).

The ITAT found that the assessee's Chartered Accountant had a reasonable cause for not appearing before the CIT(A). Therefore, the matter was restored to the CIT(A) for a fresh decision after providing an opportunity of hearing.

The Tribunal found sufficient reasons for the delay in filing the appeals before the CIT(A). Following its own previous order in similar circumstances, the Tribunal condoned the delay and restored the matter to the CIT(A) for a fresh decision on merits.

The Tribunal found that restoring the matter to the CIT(A) would not serve the ends of justice. Therefore, the matter was restored to the AO for fresh adjudication.

The Tribunal condoned the delay in filing the appeals before the CIT(A) due to the assessee's medical condition. The matter was restored to the CIT(A) for fresh adjudication on merits.

The Tribunal found that the AO had passed an ex parte order without adhering to the principles of natural justice. The Tribunal restored the matter to the AO for fresh decision, directing the assessee to appear before the AO within 60 days.

The Tribunal held that the CIT(A) erred in not admitting the additional evidence produced by the assessee, which included bank statements of creditors and loan confirmations. These documents were independently verifiable and should have been considered.

The Tribunal held that the provision for development expenses, made on an accrual basis as per mercantile accounting, represents an ascertained and committed liability for a real estate developer. Therefore, the disallowance made by the AO was not justified.

The Tribunal held that Section 56(2)(vii) was introduced to counter evasion and prevent laundering of unaccounted income, extending the tax net to transactions in kind. However, the intent was not to tax transactions in the normal course of business or trade, the profits of which are taxable under a specific head of income. The definition of 'property' under this section was amended to apply to capital assets, excluding stock-in-trade, raw material, and consumable stores. The Tribunal noted that the lower authorities had not properly appreciated the provisions concerning land purchased as stock-in-trade. Therefore, the matter was restored to the Assessing Officer for a fresh decision after giving the assessee due opportunity of hearing. The addition made by the AO and confirmed by the CIT(A) was set aside for fresh adjudication.

The Tribunal found that the assessee's non-appearance before the CIT(A) was on reasonable grounds and that the assessee was not provided with adequate opportunity to be heard. It also noted a previous ITAT order directing the AO to examine similar claims afresh.

The Tribunal held that the AO/CIT(A) ignored the assessee's agricultural income and past savings. Considering the accepted agricultural and other income, the addition of Rs. 4,95,661/- as unexplained investment was not justified.

The Tribunal found sufficient reasons for the assessee's non-appearance before the CIT(A). Therefore, the matters were restored to the file of the CIT(A) for fresh decision on merits after providing due opportunity of hearing.

The Tribunal considered the assessee's request to withdraw the appeal. The Revenue did not object to the withdrawal.

The Tribunal upheld the CIT(A)'s decision to apply a 7% NP rate, finding it reasonable given the defects in the books and the assessee's own declared NP rate. It also directed the AO to allow third-party interest from the net profit, following a previous tribunal decision.

The Tribunal held that finance costs, interest paid to partners, JDA expenses, site employee salaries, and site office expenses are directly related to the housing projects and must be accumulated as work-in-progress, not claimed in the year of incurrence. Other administrative expenses were allowed.

The Tribunal held that the cash deposits to the extent of Rs. 12,45,000/- could be explained from the assessee's business turnover of Rs. 26,04,540/-. The Tribunal also found that cheque withdrawals were explained by equivalent cheque deposits.

The Tribunal upheld the deletion of the trading addition and a significant portion of the cash deposit addition, finding the sources of deposits to be explained. However, for the remaining unexplained cash deposit, it directed that net profit be applied.

The Tribunal set aside the order of the CIT(A) and remanded the matter back for a fresh adjudication. The assessee was granted one more opportunity to represent its case before the CIT(A).

The Tribunal held that the deduction under Section 54B should be allowed if the investment is made from the sale consideration, even if received after the due date of filing the return, considering the bonafides and circumstances beyond the assessee's control. The Tribunal directed the Assessing Officer to allow the deduction.