ITAT Jodhpur Judgments — August 2023

The Tribunal held that the AO was not justified in passing a rectification order under Section 154 as the issue of taxing surrendered income under Section 115BBE was debatable and not a mistake apparent from the record. The Tribunal quashed the Section 154 order.

The Tribunal noted that the assessee had opted for the 'Vivad se Vishwas Scheme 2020' and received Form-5. Therefore, no purpose would be served in keeping the appeal pending.

The Tribunal held that once the assessee filed affidavits explaining the source of cash deposits, the onus shifted to the department to disprove them. The CIT(A) unreasonably rejected the affidavits without proper investigation.

The Tribunal upheld the CIT(A)'s calculation of the fair market value of shares and confirmed the addition of Rs. 13,52,000/- under Section 56(2)(viib). The disallowance of Rs. 20,000/- for administrative expenses was also upheld due to lack of substantiation.

The Tribunal held that the assessee could not be denied exemption merely on the ground of delay in furnishing the audit report, especially when the delay was due to technical glitches and the COVID-19 pandemic. The Tribunal directed the Assessing Officer to consider the audit report and allow the claim of exemption.

The Tribunal observed that the appeal was old, filed on 19.02.2020. An adjournment was sought by the assessee for filing the paper book.

The Tribunal held that the expenditure, having been classified as revenue expenditure by the ITAT, must be allowed as a deduction even for MAT calculation. The AO was directed to allow the said expenditure.

The Tribunal held that employee contributions to PF/ESIC, if paid after the statutory due date, are not eligible for deduction. This is based on the Supreme Court's decision in the Checkmate Services case.

The Tribunal noted that the assessee had opted for the Vivad Se Vishwas Scheme and paid the full and final settlement amount. Therefore, the assessee was allowed to withdraw the appeal.

The Tribunal held that Section 40A(3) applies to expenditure claimed as a deduction, and payments for stock-in-trade are not considered expenditure but the cost of goods. Therefore, the disallowance was not justified.

The Tribunal held that the Assessing Officer (AO) had called for sufficient details and accepted the assessee's claim, which had been consistently allowed in earlier years. The Tribunal also noted that the PCIT's observations on certain issues expanded the scope of limited scrutiny, which is not permissible.

The Tribunal upheld the CIT(Exemption)'s order, finding that the disputed clauses in the trust deed were not merely incidental to the main charitable objects and were contrary to the facts presented. The Tribunal relied on a Supreme Court decision regarding similar issues.

The Tribunal found that the CIT(A) passed an ex-parte order without considering the assessee's grounds of appeal, potentially due to non-appearance. Upholding principles of natural justice, the Tribunal decided to grant the assessee another opportunity.

The Tribunal set aside the CIT(A)'s order, remitting the issues back for fresh adjudication. The assessee is to be provided with an adequate opportunity of hearing to substantiate their case.

The Tribunal set aside the CIT(A)'s order, remitting the issues back for fresh adjudication. The assessee is to be provided with an adequate opportunity of hearing to substantiate their case.

The Tribunal found that the CIT(E) rejected the application without providing a reasonable opportunity of hearing. Therefore, the order was set aside, and the case was remanded for de novo consideration.

The tribunal upheld the disallowance of expenses, stating the assessee failed to produce documentary evidence. However, it directed the deletion of the notional interest addition on the interest-free loan, as there is no provision for such an addition in the Income Tax Act.

The Tribunal allowed the assessee to withdraw the appeal as it had opted for the Vivad Se Vishwas Scheme. The appeal was accordingly dismissed as withdrawn.

The Tribunal held that the assessee had already offered income on a net worth basis based on incriminating material, which was not disputed. Adding notional interest on top of this already accepted income was considered unlawful.

The Tribunal admitted the legal ground regarding the validity of the notice, as it was not adjudicated by the lower appellate authority. The other grounds related to the merits of the penalty were deemed academic.

The Tribunal held that the assessee's activity of selling the land was an adventure in the nature of trade and thus the income should be taxed as business income. Section 50C was deemed not applicable to this transaction.

The Tribunal upheld the order of the CIT(A) and dismissed the assessee's appeal. It found that the assessee had ample opportunities to comply with the statutory notices but failed to do so without any valid reasons.

The Tribunal held that the addition of Rs. 79,12,500/- under Section 69B was not sustainable. The Tribunal noted that the AO had not brought any material on record to establish that the assessee had expended Rs. 4.21 crore in the purchase of the property, acting merely on suspicion and guesswork. The registered sale deed, executed on a stamped document and reflecting the value adopted by the Stamp Registrar, could not be replaced by an unsigned document from a loose paper, especially when the assessee and his son denied its contents. The Tribunal emphasized that the registered public document has greater evidentiary value in the absence of adverse material suggesting payment of on-money. The AO's failure to verify with the seller and the fact that the AO taxed a portion of the turnover from the loose paper in the HUF's case while making additions in the individual's case were also considered. Consequently, Ground No. 2 was allowed. Grounds 1, 3, and 4 were dismissed as not pressed by the assessee's Authorized Representative. The appeals were partly allowed.

The Tribunal held that the addition of Rs. 79,12,500/- under Section 69B was not sustainable. The Tribunal noted that the AO had not brought any material on record to establish that the assessee had expended Rs. 4.21 crore in the purchase of the property, acting merely on suspicion and guesswork. The registered sale deed, executed on a stamped document and reflecting the value adopted by the Stamp Registrar, could not be replaced by an unsigned document from a loose paper, especially when the assessee and his son denied its contents. The Tribunal emphasized that the registered public document has greater evidentiary value in the absence of adverse material suggesting payment of on-money. The AO's failure to verify with the seller and the fact that the AO taxed a portion of the turnover from the loose paper in the HUF's case while making additions in the individual's case were also considered. Consequently, Ground No. 2 was allowed. Grounds 1, 3, and 4 were dismissed as not pressed by the assessee's Authorized Representative. The appeals were partly allowed.

The Tribunal held that the addition of Rs. 79,12,500/- under Section 69B was not sustainable. The Tribunal noted that the AO had not brought any material on record to establish that the assessee had expended Rs. 4.21 crore in the purchase of the property, acting merely on suspicion and guesswork. The registered sale deed, executed on a stamped document and reflecting the value adopted by the Stamp Registrar, could not be replaced by an unsigned document from a loose paper, especially when the assessee and his son denied its contents. The Tribunal emphasized that the registered public document has greater evidentiary value in the absence of adverse material suggesting payment of on-money. The AO's failure to verify with the seller and the fact that the AO taxed a portion of the turnover from the loose paper in the HUF's case while making additions in the individual's case were also considered. Consequently, Ground No. 2 was allowed. Grounds 1, 3, and 4 were dismissed as not pressed by the assessee's Authorized Representative. The appeals were partly allowed.

The Tribunal held that the assessee had already offered income on a net worth basis based on incriminating material, which was not disputed. Adding notional interest on top of this already accepted income was considered unlawful.

The Tribunal held that the assessee had already offered income on a net worth basis based on incriminating material, which was not disputed. Adding notional interest on top of this already accepted income was considered unlawful.

The Tribunal held that the assessee had already offered income on a net worth basis based on incriminating material, which was not disputed. Adding notional interest on top of this already accepted income was considered unlawful.

The Tribunal held that the assessee had already offered income on a net worth basis based on incriminating material, which was not disputed. Adding notional interest on top of this already accepted income was considered unlawful.

The Tribunal held that the assessee had already offered income on a net worth basis based on incriminating material, which was not disputed. Adding notional interest on top of this already accepted income was considered unlawful.

The Tribunal held that the assessee had already offered income on a net worth basis based on incriminating material, which was not disputed. Adding notional interest on top of this already accepted income was considered unlawful.

The Tribunal held that the addition of Rs. 79,12,500/- under Section 69B was not sustainable. The Tribunal noted that the AO had not brought any material on record to establish that the assessee had expended Rs. 4.21 crore in the purchase of the property, acting merely on suspicion and guesswork. The registered sale deed, executed on a stamped document and reflecting the value adopted by the Stamp Registrar, could not be replaced by an unsigned document from a loose paper, especially when the assessee and his son denied its contents. The Tribunal emphasized that the registered public document has greater evidentiary value in the absence of adverse material suggesting payment of on-money. The AO's failure to verify with the seller and the fact that the AO taxed a portion of the turnover from the loose paper in the HUF's case while making additions in the individual's case were also considered. Consequently, Ground No. 2 was allowed. Grounds 1, 3, and 4 were dismissed as not pressed by the assessee's Authorized Representative. The appeals were partly allowed.

The Tribunal held that the assessee's claim for drawings of Rs. 5,50,000/- from the firm was supported by audited accounts and other documentary evidence. The lower authorities failed to controvert this evidence, making the addition unsustainable.

The Tribunal noted that the assessee had indeed made a technical mistake in reporting exempt dividend income. Since the issue was not decided on merits by the lower authorities, the Tribunal remanded the matter back to the Assessing Officer.

The tribunal held that the assessee had sufficient interest-free funds available to cover the advance made to the sister concern (SIL). Therefore, the disallowance of interest was vacated.

The Tribunal found merit in the assessee's arguments that the lower authorities had not properly considered the facts. Therefore, the matter was remanded back to the Assessing Officer to hear the assessee's submissions on merits and pass a speaking order.

The Tribunal held that the orders of the lower authorities were not speaking orders and did not consider the assessee's submissions. The matter was remanded to the Assessing Officer to provide a proper opportunity of hearing.

The Tribunal held that the AO erred in invoking Section 154 as the issue was not a mistake apparent from the record but required a long-drawn process of reasoning. The transfer of reserves created out of tax-paid profits to partners' capital accounts is not taxable income in the year of transfer.

The Tribunal held that the CIT(A) was justified in allowing the benefit of Section 54B for both properties. Regarding the first property, the Tribunal noted that the AO rejected the claim based on a fabricated agreement and Rs. 80,00,000/- cash payment. However, the Tribunal observed that the AO did not present any supporting evidence to controvert the assessee's claim that the purchase was made out of advances received towards the sale of agricultural properties. For the second property, the Tribunal found no infirmity in the CIT(A)'s order, as the purchase was made out of advances received from the sale of agricultural properties. The Tribunal dismissed grounds 1 and 2. Regarding the third issue, the Tribunal found that the AO arbitrarily determined the fair market value without providing any basis or opportunity to the assessee. The CIT(A) had directed the AO to allow the indexed cost of acquisition as claimed by the assessee. The Tribunal agreed with the CIT(A), noting that the AO did not present any supporting evidence for his valuation, while the assessee's valuation was based on actual consideration and executed documents. Therefore, ground 3 was also dismissed. The appeal of the Revenue was dismissed.

The Tribunal held that while the purchases were not genuine, the entire amount could not be added as income. It directed the Assessing Officer to estimate the profit at 12% of the bogus purchases, allowing for a reduction of the gross profit already declared by the assessee.

The Tribunal allowed the assessee to withdraw the appeal as the revenue had no objection. Consequently, the appeal filed by the assessee was dismissed as withdrawn.

The Tribunal held that the CIT(A) was justified in allowing the exemption under Section 54F as the conditions were satisfied, including the construction of a residential house on the purchased plot. The Tribunal also allowed the assessee's ground regarding the disallowance of interest expenses.

The Tribunal held that the CIT(A) was justified in allowing the exemption under Section 54F as the conditions were satisfied, including the construction of a residential house on the purchased plot. The Tribunal also allowed the assessee's ground regarding the disallowance of interest expenses.