ITAT Kolkata Judgments — April 2016

The Tribunal confirmed the CIT(A)'s decision to estimate the net profit at 5.25%, finding it reasonable given the assessee's historical profit margins and the increase in turnover. The revenue's appeal was dismissed.

The Tribunal held that since the original assessment order was set aside by the High Court, the subsequent levy of interest and penalties based on that assessment had no legal basis. Therefore, the grounds raised by the assessee became infructuous.

The Tribunal found that the facts regarding the investments were not clearly established by the lower authorities. Therefore, the Tribunal set aside the orders and remitted the issues back to the AO for fresh adjudication.

The tribunal found that the appeals were defective because the grounds of appeal were not signed. Despite a defect memo being issued, the defect was not rectified.

The Tribunal found that the assessee did not get a proper opportunity to present its case regarding expense allowability during the set-aside proceedings. Therefore, the matter was restored to the Assessing Officer for a fresh decision on the allowability of expenses.

The Tribunal noted that the assessee was not present and had not filed any adjournment petition, indicating a lack of interest in prosecuting the case. Following established precedents, the appeal was dismissed for non-prosecution.

The Tribunal held that the intimation under section 143(1) was sent beyond the period of one year from the end of the financial year in which the return was filed, making it barred by limitation. Therefore, the intimation was considered invalid.

The Tribunal held that the assessee was not interested in prosecuting the appeal due to their lack of diligence. The appeal was treated as unadmitted and dismissed for non-prosecution.

The Tribunal found that the assessee's claim of deposits being from business sales was not substantiated with evidence. However, it also noted discrepancies in the AO's findings regarding credit card payments and share transactions.

The Tribunal held that the application for rectification under Section 154 was barred by limitation as it was filed beyond four years from the end of the financial year in which the original order of 18.12.2007 was passed. Furthermore, the issue of whether tanker hire charges fall under Section 194C or 194I is a debatable issue, which cannot be adjudicated under Section 154.

The Tribunal found that the facts regarding the investments were not clearly established by the lower authorities. Therefore, the Tribunal set aside the orders and remitted the issues back to the AO for fresh adjudication.

The Tribunal set aside the disallowance of foreign travel expenses to the AO for re-examination, partly allowed the miscellaneous expenses by restricting the disallowance, and allowed the directors' club fees by reversing the CIT(A)'s order.

The Tribunal considered the assessee's repeated adjournments and non-appearance, along with the fact that notices were returned undelivered. It was also noted that the main issue was covered by a previous decision in the assessee's own case.

The Tribunal held that expenses incurred for providing services and amenities to tenants should be allowed to be reduced from the composite rent and service charges, following the consistent practice and previous orders.

The Tribunal, following established precedents, dismissed the appeal in limine due to non-prosecution. This means the appeal was rejected without considering its merits because the appellant failed to pursue it.

The Tribunal held that the disallowance of rebate under Section 88E should be made on a proportionate basis, considering both the assessee's own transactions and client transactions. The Tribunal directed that the disallowance should be at 10% for indirect expenses and interest income.

The Tribunal held that the interest-free advances were indeed made from the assessee's own funds in an earlier year and continued in the current year, thus not representing a diversion of interest-bearing borrowed funds. Consequently, the disallowance of interest was not sustainable.

The Tribunal held that the CIT(Appeals) did not allow double deduction while computing short-term capital gains. The re-computation by the Assessing Officer, as per the CIT(Appeals)'s directions, was found to be correct.

The Tribunal held that club subscriptions paid for staff membership are allowable business expenditures if incurred wholly and exclusively for business purposes. It also held that marked-to-market losses on forex contracts, when accounted for as per mandatory accounting standards and consistently followed, are allowable.

The Tribunal upheld the CIT(A)'s deletion of additions for rental income, bad debts, and short-term capital gains. The AO's additions were found to be based on presumptions and lacking contrary evidence.

The Tribunal quashed the order of the CIT(A) due to its procedural deficiencies. The appeal was remitted back to the CIT(A) for a fresh adjudication with specific directions to pass a speaking order after providing proper hearing.

The Tribunal held that the penalty under Section 271AAA was not leviable as the assessee had disclosed the income in the return filed under Section 153A and paid the tax and interest. The Tribunal relied on the fact that the Assessing Officer had accepted the disclosure and made no adverse findings based on the seized material.

The Tribunal held that the order passed by the Learned CIT refusing registration under Section 12AA of the Act was beyond the stipulated period of six months as per Section 12AA(2). Relying on the Supreme Court's decision in CIT vs. Society for the Promotion of Education, Allahabad, and the Allahabad High Court's ruling in the same case, the Tribunal concluded that non-consideration of a registration application within the time fixed by Section 12AA(2) would result in deemed registration. The Tribunal found that the sufficiency or irregularities in bringing the initial corpus fund would not automatically make the trust non-existent, especially when the charitable objects were not disputed. The Tribunal emphasized that at the time of granting registration, the CIT is to see if the objects are charitable and activities are genuine, which were satisfied. Therefore, the assessee could not be denied the benefit of registration. The appeal of the assessee was allowed.

The Tribunal held that the disallowance of rebate under Section 88E should be made on a proportionate basis, considering both the assessee's own transactions and client transactions. The Tribunal directed that the disallowance should be at 10% for indirect expenses and interest income.

The Tribunal found the reason for the delay to be reasonable and condoned it. The matter was set aside to the CIT(A) for adjudication on its merits.

The Tribunal upheld the addition of Rs. 19,00,000/- as peak credit in the undisclosed bank account, finding the Assessing Officer's calculation to be correct. The appeal filed by the assessee was dismissed.

The Tribunal held that the assessee was entitled to claim deduction under Section 10A/10B as it had obtained the necessary approvals and met the conditions for being a 100% EOU. The Tribunal also noted that even if the wrong section was quoted, the AO should have guided the assessee.

The Tribunal found merit in the Revenue's contention that the assessee's new stand regarding prior period depreciation needed verification by the Assessing Officer. Similarly, the claim for write-off of boiler materials and the issue of bad debts related to BOBR Wagon rent required fresh verification by the Assessing Officer.

The tribunal, following established precedents for non-prosecution, decided to dismiss the appeal. This decision was made due to the assessee's consistent failure to appear or pursue their case.

The Tribunal held that the payments made to overseas entities for logistic services were not chargeable to tax in India. The assessee was neither acting as an agent for the overseas entities nor was its place of business considered a PE of the overseas entities.

The Tribunal held that the AO disallowed the purchases based on a general statement without providing an opportunity for cross-examination. Since the assessee provided documentary evidence and the AO accepted the corresponding sales, the disallowance of purchases was not justified.

The Tribunal upheld the CIT(A)'s deletion of both additions. For the first issue, it followed a consistent view in the assessee's own case. For the second, it found the loan transaction was duly recorded and adjusted in the assessee's books.

The Tribunal held that the investment in the private limited company was made out of business profits and for furthering the society's objects. It also noted the principle of consistency as exemption was allowed in previous years.

The Tribunal found that while the assessee had attempted to reconcile the difference, there was a lack of documentary evidence. Therefore, the matter was restored to the Assessing Officer for a fresh decision after giving the assessee another opportunity to reconcile the difference.

The Tribunal held that the penalty order was invalid because the show-cause notice under Section 274 did not specify whether the penalty was for furnishing inaccurate particulars or concealing income. Following precedent, the penalty was cancelled.

The Tribunal held that the appeal of the revenue deserved to be dismissed in limine due to low tax effect, as per CBDT Circular No. 21/2015. The circular applies retrospectively to pending appeals.

The Tribunal held that the CIT(Appeals) dismissed the appeal without giving proper and sufficient opportunity of being heard, violating the principles of natural justice. Therefore, the impugned order was set aside.

The Tribunal found that the assessee had submitted documentary evidence of interest payment to the CIT(Appeals) before the impugned order was passed. The CIT(Appeals) failed to consider this evidence.

The Tribunal noted that the CBDT's circular increasing the monetary limit for appeals is applicable retrospectively. Following the CBDT's instruction to withdraw or not press appeals below the specified limit, the Tribunal treated the appeal as withdrawn.

The Tribunal allowed the miscellaneous expenses, finding that the CIT(A) had restricted the disallowance without proper reasoning. For the 80IB claim, the Tribunal remanded the issue back to the AO for fresh consideration due to the non-submission of Form 10CCB.

The Tribunal noted that the tax effect was below the revised monetary limit of Rs. 10,00,000/- for filing appeals, as per CBDT Circular No. 21/2015. Following the CBDT's instructions, the appeal was treated as withdrawn.

The Tribunal held that the CIT failed to provide specific reasons or findings to demonstrate that the AO's order was erroneous and prejudicial to the revenue. The CIT's direction for a de novo assessment without addressing the assessee's contentions was found to be unsustainable.

The Tribunal held that the assessee was not seriously interested in prosecuting the appeal due to their non-appearance and failure to provide a valid address. The appeal was therefore dismissed for non-prosecution.

The Tribunal, citing established legal principles and case law, held that the law aids the vigilant and not those who sleep on their rights. The appeal was treated as unadmitted due to the assessee's non-prosecution.

The Tribunal held that the CIT(A) violated principles of natural justice by dismissing the appeal ex parte without giving a proper and sufficient opportunity of being heard. The order of the CIT(A) was set aside.

The Tribunal found merit in the Revenue's contention that the CIT(Appeals) violated Rule 46A by accepting fresh evidence without giving the AO a proper opportunity to verify it. Consequently, the Tribunal set aside the CIT(Appeals)'s order.

The Tribunal found sufficient cause for the assessee's non-compliance, attributing it to an address change. Therefore, the ex parte order of the CIT(A) was set aside.

The Tribunal held that CBDT Circular No. 21/2015, which increased the monetary limit for filing appeals to Rs. 10,00,000/-, applies retrospectively. Therefore, the appeals filed by the Revenue were contrary to the Department's policy decision.

The Tribunal held that the claim for car rent made in response to a notice under section 148 was not entertainable as it should have been made through a revised return. However, the building repair expenses were considered revenue in nature as they were for replacement and renewal of parts of the building, not for creating a new asset.

The Tribunal held that commission expenses should be allowed based on orders procured by agents, especially when consistently followed and supported by bills and TDS. The donation deduction was allowed upon submission of the required exemption certificate.