ITAT Kolkata Judgments — September 2015

The Tribunal upheld the deletion of additions made by the CIT(A). It found that the CIT(A) had correctly deleted the addition for unexplained investment as the transaction was reconciled and the addition for bank deposit anomalies was also rightly deleted. The Tribunal also confirmed the deletion of addition for unexplained investment of Rs. 5 lacs, finding the source explained.

The Tribunal observed that the assessment was not properly carried out and the CIT(A) should have restored the file to the AO. Therefore, the matter was restored to the AO for fresh examination and passing an order according to law.

The Tribunal found that the CIT(A)'s order was silent on the assessee's contention that the trustee did not hold a significant stake in the developer company. Therefore, the matter was remanded back to the CIT(A) for re-examination.

The Tribunal held that the transaction for packing materials was a contract for sale, not a work contract, as the material was not supplied by the assessee, thus not attracting Section 194C. Regarding sales promotion/selling expenses, the Tribunal found no infirmity in the CIT(A)'s order, concluding the transactions were principal-to-principal and credit notes for incentives did not attract TDS under Section 194H.

The Tribunal held that the assessee had neutralized the impact of excise duty in the profit and loss account and offered the duty to tax in the subsequent year, thus avoiding double deduction. Therefore, the disallowance by the AO was incorrect.

The Tribunal held that the commencement of commercial production was 21-03-2000, making the assessment year 2009-10 eligible for Section 10B deduction. Consequently, the disallowance under Section 14A was also deleted.

The Tribunal restored the matter to the AO for fresh adjudication. This was done to provide the assessee, a small businessman, an opportunity to justify his transactions and work out the actual income, considering the low turnover.

The Tribunal found that the CIT(A)'s order was a non-speaking order as it merely confirmed the AO's decision without providing sufficient reasoning. Therefore, the order was set aside.

The Tribunal held that since the three sundry creditors were accepted as front firms of KCDIL and KCDIL had owned up these transactions, the addition under Section 68 was not justified. The Tribunal also noted that the revenue's grounds of appeal were irrelevant to the addition made.

The Tribunal held that the assessee had discharged its onus by providing sufficient documentary evidence, including licenses and bills, which were verified. The CIT(A) had rightly allowed the deduction, and the revenue's appeals were dismissed as the matter was covered by previous judgments.

The Tribunal upheld the CIT(A)'s decision, finding that the assessee had provided sufficient evidence of its business existence and manufacturing activities. The Tribunal noted that similar issues had been decided in favor of the assessee by higher authorities.

The Tribunal held that after the amendment to Section 36(1)(vii) of the Income Tax Act, 1961, it is sufficient for a debt to be written off as irrecoverable in the assessee's accounts. The Tribunal also found that the assessee's business of money lending through hire purchase means the installments receivable are stock-in-trade, and any loss arising is a business loss.

The Tribunal held that the assessee had fulfilled all three conditions stipulated in section 271AAA(2) for immunity from penalty. Therefore, the deletion of penalty by the CIT(A) was justified.

The Tribunal upheld the CIT(A)'s decision, finding that the assessee had provided sufficient evidence of its business existence and manufacturing activities. The Tribunal noted that similar issues had been decided in favor of the assessee by higher authorities.

The Tribunal held that the assessee had discharged its onus by providing sufficient documentary evidence, including licenses and bills, which were verified. The CIT(A) had rightly allowed the deduction, and the revenue's appeals were dismissed as the matter was covered by previous judgments.

The Tribunal, noting the consistent non-appearance of the assessee, concluded that the assessee was not interested in pursuing the appeal. Consequently, the appeal was treated as unadmitted and dismissed.

The Tribunal held that allowing deductions not claimed in the original return is outside the limited scope of adjustments permissible under Section 143(1). Therefore, there was no mistake apparent from the record to be rectified under Section 154.

The Tribunal held that the assessee had fulfilled all three conditions stipulated in section 271AAA(2) for immunity from penalty. Therefore, the deletion of penalty by the CIT(A) was justified.

The Tribunal upheld the CIT(A)'s decision, finding that the assessee had provided sufficient evidence of its business existence and manufacturing activities. The Tribunal noted that similar issues had been decided in favor of the assessee by higher authorities.

The Tribunal held that the assessee had discharged its onus by providing sufficient documentary evidence, including licenses and bills, which were verified. The CIT(A) had rightly allowed the deduction, and the revenue's appeals were dismissed as the matter was covered by previous judgments.

The Tribunal held that the provisions of Section 199(3) and Rule 37BA are procedural and applicable to pending cases. It emphasized that credit for TDS should be granted if the income is offered to tax, regardless of procedural delays, to prevent unjust enrichment by the revenue.

The Tribunal held that the assessee had clearly bifurcated investment and trading activities and accepted the share transactions as investment income. The Tribunal also found that the loan received was sufficiently explained and directed deletion of the addition.

The Tribunal confirmed the CIT(A)'s order restricting general expenses disallowance to 10% and deleting club expenses disallowance. The addition on account of interest on fixed deposits was confirmed as per assessee's concession. The disallowance of telephone expenses was upheld at 10%. The deletion of bad debts written off was also upheld.

The Tribunal held that the assessee was indeed a commission agent, not a trader, based on evidence including reports from a departmental inspector and the nature of transactions. Therefore, the disallowance under Section 40A(3) was not applicable.

The Tribunal held that since the assessee did not claim deduction under Section 10B for AY 1997-98, the unabsorbed depreciation relatable to Zenith Textiles for that year was not hit by Section 10B(6). Therefore, the claim for set-off was allowed.

The Tribunal confirmed the CIT(A)'s order restricting general expenses disallowance to 10% and deleting club expenses disallowance. The addition on account of interest on fixed deposits was confirmed as per assessee's concession. The disallowance of telephone expenses was upheld at 10%. The deletion of bad debts written off was also upheld.

The Tribunal held that the second proviso to Section 40(a)(ia) is retrospective and set aside the issue of machinery hire charges to the AO for verification. It also upheld the assessee's claim for higher depreciation and dismissed the revenue's grounds regarding increased expenditure.

The Tribunal held that the payments made by bearer cheques fell under the exception provided in Rule 6DD(k) of the IT Rules, as the parties acted as agents for the assessee in procuring fly ash. Furthermore, three of the parties did not have bank accounts, making payment by cheque impracticable.

The Tribunal held that the addition based on the DVO's report should consider State PWD rates, not just Central PWD rates. It also ruled that once books of accounts are rejected, the AO cannot make separate additions from those same books, particularly for cash credits that were not outstanding in the balance sheet.

The Tribunal held that the assessee was in a bona fide belief that his income from the firm did not require an individual tax audit. Relying on a previous co-ordinate bench decision and Supreme Court pronouncements, the Tribunal found that Section 273B provides immunity from penalty in such cases.

The Tribunal held that dividend income from cooperative banks/institutions is not exempt under Section 10. For growth-oriented mutual funds, the AO needs to re-adjudicate based on whether redemption results in capital gains or taxable long-term capital gains.

The Tribunal upheld the CIT(Appeals)'s order, following the jurisdictional High Court's decision which held that cess paid on green leaf is eligible for deduction. The Tribunal noted that the Supreme Court had not reversed the High Court's decision.

The Tribunal restored the issue to the Assessing Officer to verify the assessee's claim that the purchased quantity represented net weight, not gross weight, and to decide afresh after providing an opportunity of hearing.

The Tribunal held that the reassessment proceedings were initiated on suspicion rather than a 'reason to believe' that income had escaped assessment, making the initiation invalid. Consequently, the assessment completed under section 143(3) read with section 147 was cancelled.

The Tribunal held that subsidies like transport, interest, and insurance, as well as insurance claims and sale of salvages, are directly linked to the industrial undertaking and qualify for deduction under Section 80IC. This decision followed a High Court ruling on similar issues.

The Tribunal held that the assessee failed to prove the creditworthiness of the five loan creditors. The pattern of cash deposits and immediate cheque issuances raised doubts about the genuineness of the transactions, thus confirming the addition made by the AO.

The Tribunal held that the assessee's illness during the relevant period constituted a sufficient cause beyond his control for the delay in filing the appeal. Therefore, the CIT(A)'s order dismissing the appeal was set aside.

The Tribunal held that penalty proceedings are distinct from assessment proceedings and that an addition being sustained does not automatically imply concealment. Considering the assessee's ignorance of financial matters and her bonafide explanation, the Tribunal directed the deletion of the penalty.

The Tribunal held that the share trading loss should not be treated as speculation loss as the assessee's gross total income predominantly consisted of income from other sources, falling within the exception to Section 73. The issue of unexplained cash deposits was set aside to the AO for fresh verification.

The Tribunal held that the assessee, as a land owner who contributed to the development of the housing project through a joint development agreement, is eligible for deduction under Section 80IB(10). All conditions stipulated in the section were found to be complied with.

The Tribunal held that the assessee, as a land owner who contributed to the development of the housing project through a joint development agreement, is eligible for deduction under Section 80IB(10). The conditions for the deduction were met, and the revenue had accepted similar claims for the same project in other cases.

The Tribunal held that verbal contracts are covered under Section 194C and that the lorry charges were not part of the purchase price. The decision of the CIT(A) was reversed, and the disallowance made by the Assessing Officer was confirmed.

The Tribunal heard the submissions and allowed the assessee's plea to withdraw the appeal. Consequently, the appeal filed by the assessee was dismissed as withdrawn.

The Tribunal held that the change in the method of valuation of closing stock was justified as the new method ('cost or market price whichever is lower') is a more proper and correct accounting practice. The AO was not justified in rejecting the change solely because it resulted in a loss.

The Tribunal directed the AO to accept the valuation of the DVO for calculating capital gains, overriding the stamp duty valuation as per Section 50C. The assessee's claim for deduction under Section 54EC was also considered.

The Tribunal found that the CIT(A)'s order was non-speaking and that the assessee was not granted a reasonable opportunity of hearing. Therefore, the matter was restored to the CIT(A) for a fresh decision.

The Tribunal held that the assessee had discharged her onus under Section 68 by providing evidence of gifts from her husband, including bank statements and confirmation. The AO's failure to submit a remand report was also noted.

The Tribunal held that once the genuineness and business purpose of the expenditure are established, the Revenue cannot substitute its own judgment for that of the businessman regarding the reasonableness of the amount. The disallowance made by the AO and confirmed by the CIT(A) was deleted.