ITAT Jaipur Judgments — May 2019

The Tribunal held that the assessee failed to discharge the onus of proving the genuineness of the transaction by not producing the purchasers or any independently verifiable evidence. The CIT(A)'s decision to treat the addition under Section 69 was upheld.

The Tribunal upheld the deletion of a substantial portion of the addition related to excess stock of yarn, finding errors in the valuation by the revenue. However, it upheld minor additions for excess grey and finished fabrics.

The Tribunal held that the penalty under section 271AAB is not mandatory and that the cash and jewellery found during the search could not be considered as undisclosed income after considering the assessee's income, withdrawals, and family customs regarding jewellery possession.

The Tribunal held that the amended Rule 12(2) was not applicable as on the due date of filing the return. Since the audit report was obtained before the due date and filed along with the belated return, there was a reasonable cause for non-compliance, making Section 273B applicable.

The Tribunal held that while reopening was justified, the addition needed to be recomputed. The profit from interior decoration business was directed to be computed at 10% of gross receipts, and the addition was restricted to the total of offered income and this recomputed profit.

The Tribunal held that the assessee had sufficiently explained the identity, genuineness, and availability of funds for the unsecured loans. The revenue failed to prove that the cash deposited in creditors' accounts originated from the assessee.

The Tribunal held that the assessee had sufficiently explained the identity, genuineness, and availability of funds for the unsecured loans. The revenue failed to prove that the cash deposited in creditors' accounts originated from the assessee.

The Tribunal upheld the deletion of a substantial portion of the addition related to excess stock of yarn, finding errors in the valuation by the revenue. However, it upheld minor additions for excess grey and finished fabrics.

The Tribunal held that even if exemption under Section 11 and 12 is denied for want of registration under Section 12AA, only the net income (gross receipts minus expenses) can be brought to tax, not the gross receipts. The lower authorities had incorrectly taxed gross receipts.

The Tribunal held that the objects and activities of the assessee society are directed towards the education of socially and economically under-privileged children, either directly or through collaboration. The intention is not to earn profits but to carry out educational activities for the benefit of underprivileged children. The surplus generated is used for furthering these educational activities. Therefore, the assessee does not lose its character as a charitable society engaged in educational activities. The Tribunal found that it would be incorrect to classify the objects and activities as being in the nature of general public utility. Consequently, the proviso to Section 2(15), which is applicable in cases of general public utility, does not apply. The AO's action in withdrawing the exemption claimed under Sections 11 & 12 was set aside. The matter was decided in favour of the assessee. The same findings and directions were applied to the other two assessment years as the facts were identical. The appeals were allowed.

The Tribunal held that since the income was disclosed in the original return and the reclassification had no revenue effect, it did not constitute concealment or furnishing of inaccurate particulars. Therefore, the penalty under Section 271(1)(c) was not sustainable.

The Tribunal held that the jewellery found was reasonable considering the status of the family and the number of ladies. The addition made by the Assessing Officer was not justifiable as the possession of jewellery was within tolerable limits as per CBDT guidelines.

The Tribunal found that non-appearance due to medical grounds is a reasonable cause. Therefore, the assessee deserves another opportunity to present its case before the CIT(A).

The Tribunal held that the penalty under Section 271AAB was not leviable as the surrendered amount, being an investment in land, did not qualify as 'undisclosed income' as defined in the section. The deeming provisions of Sections 69, 69A, and 69B for investments cannot be automatically extended to penalty proceedings under Section 271AAB.

The Tribunal held that the letter from the AO of the searched person transmitting the seized material constituted sufficient satisfaction for initiating proceedings under Section 153C. The addition made on the basis of the copy of the sale agreement was also upheld.

The Tribunal held that the penalty under Section 271AAB was not leviable as the surrendered amount, being an investment in land, did not qualify as 'undisclosed income' as defined in the section. The deeming provisions of Sections 69, 69A, and 69B for investments cannot be automatically extended to penalty proceedings under Section 271AAB.

The Tribunal upheld the CIT(A)'s order, stating that once books of account are rejected, income should be estimated on a reasonable basis. The AO's finding that the 13 parties were unregistered dealers was contrary to facts as the assessee had provided PAN, TIN, CST, and RST numbers.

The Tribunal upheld the rejection of the assessee's books of accounts due to the inability to verify stock valuation. The AO's addition based on a 12% GP rate, lower than the average of preceding years, was also sustained.

The Tribunal held that additions made solely on the basis of a third party's statement, without providing an opportunity for cross-examination, are not sustainable. The matter was set aside to the AO for fresh consideration after allowing cross-examination.

The Tribunal held that client code modification is a regular business practice for rectifying errors, and in the absence of proof of common intention or malafide intent by the assessee, the addition made by the AO is not sustainable. The loss claimed was found to be negligible compared to the total trading volume.

The Tribunal found that the submissions were insufficient and the actual activities of the assessee needed further examination. Therefore, the matter was remanded back to the CIT(E) for a fresh consideration.

The Tribunal found that while multiple opportunities were granted, a reasonable cause was presented for the final adjournment. Therefore, one more opportunity should be granted to the assessees to present their case.

The Tribunal noted that the assessee filed the application for registration under Section 12AA in Form 10A through e-filing and attached the trust deed, trust accounts, trust creation evidence, and activities note in PDF form. Additionally, the assessee submitted a letter dated November 15, 2018, providing certified copies of annual accounts for the last three years, the original trust deed for verification, copies of income tax returns and computation for the last three years, and the CBSE affiliation letter. The Tribunal found that the objects of the assessee trust, which are primarily to impart education through an educational institution (LBS Convent School affiliated with CBSE), are charitable in nature, and the CIT(E) did not dispute this. The Tribunal observed that the CIT(E)'s reason for rejection, namely the non-submission of financial accounts and original documents, was contrary to the record, as these documents were indeed produced. Since the charitable nature of the objects was not in dispute, the Tribunal directed the CIT(E) to verify the genuineness of the assessee's activities from the documents produced. If satisfied, the CIT(E) was to grant registration under Section 12AA. The appeal was partly allowed.

The CIT(A) deleted the addition, finding that the assessee had provided reconciliation and ledger accounts. The tribunal upheld this decision, noting that the initial surrender was tentative and subject to reconciliation.

The Tribunal held that since the vendor was assessed for capital gains on the sale of the property, the assessee's claim for deduction under Section 54F for the same property cannot be denied. The AO was directed to allow the deduction.

The Tribunal held that the summary dismissal by the CIT(A) without a speaking order and discussion of all relevant aspects was not justified. The matter was remanded to the CIT(A) for fresh decision after providing an opportunity of hearing to the assessee.

The Tribunal held that the discrepancy in the khasra number was explained by the Tehsildar's report, which indicated a new khasra number was generated after land division. Therefore, the addition made by the Assessing Officer was baseless.

The tribunal condoned the delay in filing the appeal, finding the reasons provided by the assessee to be reasonable. The appeal was then admitted for hearing on its merits.

The Tribunal held that the frequent changes in the Managing Director constituted a reasonable cause for the delay in filing the audit report. Therefore, the penalty levied under Section 271B was deleted.

The Tribunal admitted additional grounds of appeal as they were purely legal. For AY 2011-12, the Tribunal's findings in a related appeal were to be applied. For AY 2012-13, the facts were identical to the AY 2011-12 appeal.

The Tribunal held that if the original addition is deleted, there is no basis for levying a penalty under Section 271(1)(c). The revenue's contention that the ITAT's quantum appeal order was not accepted on merits was not sufficient to sustain the penalty without any record of the order being reversed.

The Tribunal condoned the delay in filing the appeals before the CIT(A) by following its earlier decision on identical facts. The matters were set aside to the CIT(A) for deciding on merits after giving the assessee an opportunity of hearing.

The Tribunal upheld the rejection of books of accounts and the consequential trading addition. It also confirmed the addition of unsecured loans, finding them to be accommodation entries based on investigation reports and lack of evidence from the assessee.

The Tribunal held that the assessee's objects, being to provide finance to the economically weaker section without security at a concessional rate, are prima facie charitable. However, the CIT(E) did not consider all relevant facts, including the company's Section 8 registration and the assessee's opportunity to respond to adverse inquiries.

The Tribunal held that the payment was commission for services rendered outside India and not chargeable to tax in India. Therefore, the assessee was not liable to deduct TDS, and the disallowance under Section 40(a)(i) was not sustainable.

The Tribunal held that the process undertaken by the assessee, involving breaking boulders, removing impurities, crushing, and grading soapstone into powder, resulted in a distinct and marketable article. Therefore, it constituted production and manufacture, making the assessee eligible for deductions under sections 80-I and 80-IA.

The Tribunal held that the CIT(A) had issued notices to the old address, which the assessee did not receive due to her relocation. Therefore, the matter was again set aside to the CIT(A) for granting an opportunity of hearing to the assessee.

The Tribunal held that the process undertaken by the assessee, involving breaking boulders, removing impurities, crushing, and grading soapstone into powder, resulted in a distinct and marketable article. Therefore, it constituted production and manufacture, making the assessee eligible for deductions under sections 80-I and 80-IA.

The Tribunal held that the process undertaken by the assessee, involving breaking boulders, removing impurities, crushing, and grading soapstone into powder, resulted in a distinct and marketable article. Therefore, it constituted production and manufacture, making the assessee eligible for deductions under sections 80-I and 80-IA.

The Tribunal held that the assessees had not declared any additional income and that the non-reflection of losses in the acknowledgements was due to a technical error. The carry forward of current year losses was therefore allowed.

The Tribunal held that the assessees had not declared any additional income and that the non-reflection of losses in the acknowledgements was due to a technical error. The carry forward of current year losses was therefore allowed.

The Tribunal held that the assessees had not declared any additional income and that the non-reflection of losses in the acknowledgements was due to a technical error. The carry forward of current year losses was therefore allowed.

The Tribunal held that the assessees had not declared any additional income and that the non-reflection of losses in the acknowledgements was due to a technical error. The carry forward of current year losses was therefore allowed.

The Tribunal found that the tax effect in the Revenue's appeal was below the Rs. 20 lacs threshold stipulated by CBDT Circular No. 3 of 2018. Therefore, the appeal was not maintainable.

The Tribunal held that the CIT(A) erred in not considering the revised computation of income and the claim for capital expenditure as application of income. It also found that the disallowance of depreciation was not a double claim.

The Tribunal upheld the lower authorities' decision, confirming the additions made by the AO. The Tribunal found no infirmity in the order, dismissing the assessee's grounds of appeal.

The Tribunal held that Section 56(2)(viib) applies to preference shares. However, it set aside the AO's order and remanded the matter for re-valuation of preference shares using the Net Asset Value (NAV) method as per Rule 11UA, specifically on the date of issuance.