ITAT Jaipur Judgments — December 2024

The Tribunal held that the AO erred in not referring the matter to the DVO for valuation. It was also noted that the assessee was not afforded adequate opportunity to present its case. In several instances, the matters were set aside to the file of the AO for fresh adjudication with directions to provide adequate opportunities to the assessee and consider all evidence and submissions.

The Tribunal held that the PCIT erred in assuming jurisdiction under Section 263 as the original assessment order was no longer in existence in its substantive form. Furthermore, the PCIT failed to provide the assessee with an opportunity to be heard, which is a violation of natural justice. The grounds raised by the assessee were found to be correct and the PCIT's order was quashed.

The Tribunal observed that the AO did not provide adequate opportunity to the assessee and failed to properly confront seized materials. In many instances, the AO's actions were based on assumptions or incomplete analysis, leading to setting aside matters for fresh adjudication by the AO with directions for proper inquiry and adherence to natural justice.

The Tribunal noted that in several instances, the AO did not provide adequate opportunity to the assessee and did not conduct proper inquiries. The Tribunal also observed that seized documents were not properly confronted to the assessee, and some additions were made on an estimation basis without concrete evidence. Consequently, several matters were set aside to the file of the AO for fresh adjudication with directions to provide adequate opportunity to the assessee and consider all evidence and submissions.

The Tribunal considered the arguments and the various case laws cited. It was held that additions made solely based on statements recorded during search, especially when retracted without valid evidence, are not sustainable. The Tribunal noted that the AO had not established any incriminating material or conducted independent inquiries to disprove the assessee's contentions.

The Tribunal held that the cash belonged to the partnership firm and not to the assessee individually. The Tribunal found that the AO and CIT(A) had disregarded documentary evidence and made additions without cogent reasons. Consequently, the additions made under Section 69A and 115BBE were deleted.

The Tribunal held that the cash found belonged to the firm and not the assessee alone. The invocation of Section 69A in the hands of the assessee was considered misconceived. The addition of Rs. 95,89,000 and interest income of Rs. 25,481, as well as the addition related to agricultural income, were directed to be deleted.

The tribunal allowed all seven appeals filed by the assessee. The tribunal observed that the cash seized belonged to the firm M/s Meena Construction Works, and not solely to the assessee. Furthermore, the tribunal noted that the AO had not conducted adequate inquiries and had discarded documentary evidence without proper justification. The tribunal found that the assessee had discharged their onus by providing evidence and explanations, and thus the additions made by the AO were unwarranted.

The Tribunal held that the Assessing Officer's assessment order could not be considered erroneous or prejudicial to the interests of the Revenue solely because the AO did not initiate penalty proceedings under section 270A of the Act. The Tribunal relied on various judicial precedents, including decisions from the Delhi High Court and the Supreme Court, which established that penalty proceedings are distinct from assessment proceedings and that the failure of the AO to record an opinion on the leviability of penalty does not automatically render the assessment order flawed.

The Tribunal held that the cash seized was not unexplained money of the assessee but belonged to the firm, M/s Meena Construction Works. The Tribunal found that the assessee had discharged their onus by providing documentary evidence and that the AO had failed to investigate properly. The Tribunal allowed the appeal, directing the deletion of additions made under Sections 69A and 115BBE, as well as the addition of Rs. 25,481/- towards interest income. The addition related to business income from milk sale and agricultural income was also found to be not on merits and deserved deletion.

The Tribunal noted that the cash seizure was from individuals who were partners of a firm formed prior to the seizure. The Tribunal found that the assessee had discharged the onus of proving the source of the cash by presenting documentary evidence and the statements of partners. The AO and CIT(A) had disregarded this evidence without cogent reasons or rebuttal. Consequently, the Tribunal held that the cash did not belong to the assessee alone but to the firm, and the additions made were not justified.

The Tribunal held that the addition of Rs. 55,00,000/- was made purely based on the assessee's statement recorded during the search, which was later retracted. It noted that no supporting evidence or documents were found by the search team to substantiate the unaccounted investment. Citing jurisdictional High Court decisions, the Tribunal stated that an addition cannot be made solely based on a retracted statement without corroborative evidence. Therefore, the addition was deleted.

The Tribunal found that the cash seized belonged to the partnership firm, not solely to the assessee. It was noted that the firm was established prior to the cash seizure and that the partners had made contributions to the firm. The Tribunal also noted that the AO did not conduct sufficient independent inquiries and disregarded documentary evidence. The Tribunal allowed the appeal, directing that the additions made were not sustainable.

The Tribunal noted that while the AO doubted the genuineness based on various factors like non-receipt of responses to notices, identical signatures, and lack of interest, the assessee provided confirmations, bank statements, and ITRs of the creditors. The Tribunal found that the identity, genuineness, and creditworthiness of the creditors were sufficiently established. The Tribunal also noted that amendment to Section 68 regarding source of source is effective from AY 2024-25, and for AY 2017-18, proving the source of funds in the bank account was sufficient.

The tribunal acknowledged the assessee's prior non-compliance but considered the evidence presented regarding the business of trading Kota Stones. Referencing Section 44AD of the Act, the tribunal applied an 8% net profit rate on the total deposit.

The tribunal noted that the assessee did not appear before the AO or the CIT(A) for hearings. Considering this, the tribunal decided to restore the matter to the CIT(A) for a fresh hearing, giving the assessee an opportunity to be heard, but directed them not to seek adjournments.

The Tribunal held that the assessee provided substantial proofs for the source of investment, including sale proceeds from property, which were not considered by the AO. The tribunal found the AO's remand report to be factually incorrect and the additions made by the AO and confirmed by the CIT(A) were liable to be deleted.

The Tribunal condoned the delay of 164 days in filing the appeals, citing confusion regarding legal remedies and relying on the Supreme Court's decision in Collector, Land & Acquisition Vs. Mst. Katiji & Others. The appeals were allowed for statistical purposes.

The Tribunal condoned the delay of one day in filing the appeals, referencing the Supreme Court's decision in Collector, Land & Acquisition Vs. Mst. Katiji & Others. The Tribunal noted that the reasons for rejection by the CIT(E) were curable and directed the matter to be restored to the file of the CIT(E) for fresh adjudication, giving the assessee an opportunity to be heard and cure defects.

The Tribunal condoned the delay of 164 days, citing the assessee's confusion regarding the correct legal remedy and the principles of natural justice. The Tribunal decided not to enter into the merits of the case and remanded the issue back to the CIT(E) for a fresh decision after providing the assessee an opportunity to be heard and to produce necessary documents.

The Tribunal condoned the one-day delay in filing the appeals, relying on the Supreme Court's decision in Collector, Land & Acquisition Vs. Mst. Katiji & Others, finding sufficient cause. The Tribunal observed that the reasons for rejection by the CIT(E) were curable and that the assessee was not given adequate opportunity. Therefore, the matter was restored to the file of the CIT(E) for fresh adjudication, with a direction to provide the assessee with a fair chance to present their case.

The Tribunal noted that the appellant society has since been registered under the Rajasthan Public Trust Act and submitted the certificate. Regarding the business activities, MOUs were produced, which were not submitted before the CIT(E) earlier. The FCRA Act violation was not specified with relevant provisions. The international nature of activities was also not substantiated to violate Section 11(1)(a) of the Act.

The Tribunal condoned the one-day delay in filing the appeals, citing the decision in Collector, Land & Acquisition Vs. Mst. Katiji & Others. The Tribunal further noted that the reasons for rejection by the CIT(E) were curable and that the assessee should be given another opportunity to present their case before the CIT(E).

The Tribunal held that the grounds of appeal concerning the disallowance under Section 40A(3) were merited. It noted that the genuineness of the transactions, the identity of the sellers, and the source of funds were established. Furthermore, it considered that the transactions were made during a period when banking facilities were unavailable or for business expediency, bringing them under the exceptions provided in Rule 6DD(j).

The CIT(A) had deleted the addition, relying on Supreme Court judgments like Commissioner of Income Tax Vs. Odisha Corporation Pvt. Ltd. and Lovely Exports. The CIT(A) held that the assessee had discharged its onus by providing details of investors, and the AO had not made sufficient efforts to disprove the genuineness of the transactions. The Tribunal, respectfully following the Apex Court's decision in Lovely Export and the jurisdictional High Court's decision in PCIT Vs. M/s. Esspal International P. Ltd., found no infirmity in the CIT(A)'s order.