ITAT Jaipur Judgments — June 2019

The Tribunal held that a subsequent notice under section 142(1) was received by the assessee in person at the same address, deeming the earlier notice under section 148 to be properly served. The claim for deductions under sections 54F and 54B was denied due to the lack of a sale deed and reliance on an unregistered agreement to sell.

The Tribunal condoned the delay in filing the appeals and set aside the ex parte orders of the CIT(A). The matters were restored to the CIT(A) for fresh adjudication after providing a reasonable opportunity of being heard.

The Tribunal held that the reopening of assessment was valid as the assessee failed to disclose material facts regarding property sale transactions. The claim for development expenditure was also disallowed for lack of substantiation and because it was claimed during reassessment proceedings for unsold plots.

The Tribunal condoned the delay in filing the appeals and set aside the ex parte orders of the CIT(A). The matters were restored to the CIT(A) for fresh adjudication after providing a reasonable opportunity of being heard.

The Tribunal held that the assessee failed to demonstrate compelling circumstances for making the cash payment, especially since a significant amount was paid via RTGS on the same date. Therefore, the disallowance made by the AO and upheld by the CIT(A) was justified.

The Tribunal held that the subsequent withdrawal of the institute's notification does not affect the assessee's claim for deduction made when the notification was valid. The assessee acted bonafide, and no additional tax burden can be imposed retrospectively.

The Tribunal held that the additions made were not based on estimation but on specific unexplained deposits and income not disclosed. Therefore, the penalty under Section 271(1)(c) was attracted.

The Tribunal noted that the assessee's Gross Profit (GP) and Net Profit (NP) rates for the assessment year were higher than the average of the preceding three years. Therefore, the addition made by the AO was not justified.

The Tribunal held that the outstanding amount, even if to be adjusted against future remuneration, constituted a loan or advance and was therefore taxable as deemed dividend under Section 2(22)(e) of the Income Tax Act. The additional ground regarding the validity of the reassessment notice was set aside for adjudication by the Assessing Officer.

The Tribunal held that the penalty was correctly levied as the charge for initiating penalty proceedings (concealment and furnishing inaccurate particulars) was consistent with the charge in the penalty order. The additions were also confirmed, indicating no dispute regarding concealment or inaccurate particulars.

The Tribunal held that the assessee had not taken a loan in cash, but rather joint family expenses were incurred and paid by the sister concern, which were then debited to the assessee's account. This was considered a current account transaction, not a loan or deposit.

The Tribunal considered the assessee's salary income and agricultural land, allowing for reasonable savings. The addition was reduced by Rs. 43,000/- from prior withdrawals and Rs. 75,000/- from estimated savings.

The tribunal dismissed ground no. 1 of the assessee's appeal as not pressed. The remaining grounds, concerning disallowances of expenditure and denial of exemption, were to be adjudicated further.

The Tribunal held that the matter of exemption requires verification of the actual activities carried out by the assessee. Regarding the expenditure disallowance, the Tribunal found a discrepancy and restricted it to 10% of the expenses, subject to the outcome of the exemption issue.

The Tribunal held that the CIT(A) erred in confirming the addition without referring to the DVO and without allowing deductions for the cost of acquisition and transfer expenses. The Tribunal also noted that the CIT(A) did not provide an opportunity to the assessee to produce evidence for the cost of acquisition and ignored the balance sheet reflecting the source of investment.

The Tribunal held that the penalty under Section 271AAB of the Income Tax Act is not mandatory but discretionary. The AO must judiciously decide whether to impose the penalty after considering the facts and material on record.

The Tribunal held that the penalty under Section 271AAB of the Income Tax Act is not mandatory but discretionary. The AO must judiciously decide whether to impose the penalty after considering the facts and the assessee's explanation.

The Tribunal held that interest earned on the assessee's own surplus funds deposited in banks is eligible for deduction under Section 80P(2)(a) as it is attributable to the assessee's business activity. The disallowance made by the AO was deleted.

The Tribunal held that the building constructed on the agricultural land, used for residential purposes, is a separate asset and the income therefrom is assessable under the head 'Income from house property'. Therefore, the capital gain arising from the sale of the residential house is eligible for deduction under Section 54.

The Tribunal held that in cases of completed assessments, additions under Section 153A cannot be made without incriminating material found during the search. However, the AO could initiate proceedings under Section 147/148 if the time limit was available.

The Tribunal held that interest earned on the assessee's own surplus funds deposited in banks is eligible for deduction under Section 80P(2)(a) as it is attributable to the assessee's business activity. The disallowance made by the AO was deleted.

The Tribunal held that the assessee was engaged in bullion trading and the gold found during the search could be treated as stock-in-trade. Consequently, the loss arising from the valuation of closing stock was allowable as a business loss.

The Tribunal held that the reopening of assessment was invalid as it was based on borrowed satisfaction without independent inquiry by the AO. Furthermore, the denial of cross-examination to the assessee violated principles of natural justice.

The Tribunal held that the reopening of assessment was invalid as it was based on borrowed satisfaction without independent inquiry by the AO. Furthermore, the denial of cross-examination to the assessee violated principles of natural justice.

The Tribunal held that the addition of the cash gift was based on suspicion and that the assessee had provided sufficient evidence, including an affidavit and donor's income details, to support the genuineness of the gift. The disallowance of interest was also found unwarranted as the assessee had sufficient interest-free funds.

The Tribunal held that the penalty was correctly levied as the charge for initiating penalty proceedings (concealment and furnishing inaccurate particulars) was the same as the charge levied in the penalty order. The addition was confirmed up to the highest appellate authority, validating the penalty.

The Tribunal held that Section 14A applies only when there is exempt income. In the absence of any tax-free income, no disallowance of expenditure can be made. Therefore, the disallowance made by the AO was not justified.

The Tribunal held that a portion of the withdrawn cash from the bank account could be considered as savings after accounting for household expenses. The addition was upheld to a reduced extent.

The Tribunal held that the disallowance under Section 40A(3) was unjustified as the lower authorities did not doubt the payment, source, or business expediency. The Tribunal also found merit in allowing interest and salary expenses, stating the business had commenced with the purchase of multiple plots for trading.

The Tribunal held that proceedings under Section 153C were valid. For printing & dyeing charges and interest expenses, the Tribunal directed the AO to delete the disallowance, considering the payee had paid taxes and the proviso to Section 201(1) was fulfilled. The issue of job charges was remanded back to the AO for fresh consideration.

The Tribunal held that an outflow of money for purchase of raw material, without any corresponding asset found, cannot be treated as undisclosed income as per the definition in Section 271AAB. Therefore, the penalty levied was not sustainable.

The Tribunal held that the addition of Rs. 2.60 lacs was unjustified as it was based on a retracted statement without further inquiry. However, considering the assessee's role, a 5% brokerage income was deemed reasonable.

The Tribunal confirmed the disallowance of the shortfall below 85% expenditure. However, it directed the AO to reverify the calculations regarding gross collection and 15% accumulation.

The Tribunal found that the assessee was not granted a proper opportunity of being heard by the CIT(A). Therefore, the matter was restored to the CIT(A) for fresh decision after providing a reasonable opportunity to the assessee.

The Tribunal held that the income surrendered by the assessee, which was recorded in 'other documents' maintained in the normal course, did not fall under the definition of 'undisclosed income' as per Section 271AAB Explanation (c). Therefore, the penalty was not sustainable.

The CIT(A) deleted the penalty, holding that penalty under Section 271(1)(c) cannot be imposed solely based on the deeming provisions of Section 50C. The tribunal agreed that the addition was due to the deeming provision and not due to concealment or furnishing of inaccurate particulars of income.

The Tribunal held that depreciation on windmill civil construction and electrical installation should be allowed at the same rate as the windmill itself, following previous rulings. Regarding Section 14A, the Tribunal deleted the disallowance as no exempt income was earned from the investments.

The Tribunal held that since the company was the beneficial owner, made all payments, and used the property for business purposes, the capital gain should not be taxed in the hands of the director. The Tribunal also directed the AO to verify the block of assets and ensure the sale consideration was reduced for depreciation calculation.

The Tribunal held that the addition of Rs. 2.60 lacs was unjustified as it was based on a retracted statement without further inquiry. However, considering the assessee's role, a 5% brokerage income was deemed reasonable.

The Tribunal held that since the company was the beneficial owner, made all payments, and used the property for business purposes, the capital gain should not be taxed in the hands of the director. The Tribunal also directed the AO to verify the block of assets and ensure the sale consideration was reduced for depreciation calculation.

The Tribunal held that Explanation 5A to Section 271(1)(c) requires the undisclosed income to be based on incriminating material found during the search, such as money, bullion, or entries in books. Since the additional income offered was not linked to such material, the penalty was not leviable.

The Tribunal held that the disallowance of the expenditure was a difference of opinion and not a case of furnishing inaccurate particulars or concealment of income. The assessee had a bonafide belief and all details were provided and audited.

The Tribunal held that since the Gross Profit (GP) declared by the assessee for the assessment years in question was higher than the GP declared in earlier years which were accepted, no further addition was warranted. The AO was directed to verify the GP rates and not make additions if they were found to be as declared.

The Tribunal held that the withdrawal of approval for the institution by the CBDT with retrospective effect should not affect the assessee's claim, as the approval was valid at the time of donation. The assessee acted bonafidely based on the existing notification.

The Tribunal held that since the Gross Profit (GP) declared by the assessee for the assessment years in question was higher than the GP declared in earlier years which were accepted, no further addition was warranted. The AO was directed to verify the GP rates and not make additions if they were found to be as declared.

The Tribunal held that the penalty under Section 271(1)(c) was correctly levied as the assessee failed to offer the unaccounted investment in the return of income and could not correlate cash payments with cash credits. The plea of peak cash credit was not accepted.

The Tribunal held that the CIT(A) was justified in allowing the deduction. Following previous coordinate bench decisions, it was held that the subsequent withdrawal of recognition by CBDT would not affect the assessee's claim for deduction made when the recognition was valid.

The Tribunal held that penalty under Section 271(1)(c) is not leviable when income is assessed on the basis of deemed consideration under Section 50C, especially when the revenue fails to produce evidence of the assessee receiving more than the declared amount. The Tribunal followed previous decisions to delete the penalty.

The Tribunal held that Section 44AD is applicable to the assessee's construction and sale of flats, as it constitutes civil construction. The CIT(A)'s finding that the flats were constructed for personal use was also found to be contrary to the record.

The Tribunal is hearing the assessee's appeal against the addition made under Section 43CA. The assessee is arguing against the addition based on the sale consideration of a flat.