ITAT Kolkata Judgments — June 2016

The Tribunal held that debts written off in the first assessment year are eligible for deduction under Section 36(1)(vii) if they are written off as irrecoverable in the books of account and fulfill the conditions of Section 36(2). The Tribunal followed a coordinate bench decision and CBDT circular.

The Tribunal dismissed the appeal regarding subscription & donation and carriage outward due to the assessee's failure to provide supporting evidence. However, it allowed the appeal concerning home biri labour, finding that the CIT(A) had failed to consider crucial evidence and had enhanced the addition arbitrarily.

The Tribunal held that if cheques were deposited with the bank on or before the due date for depositing TDS, no interest would be chargeable, even if the credit was reflected later. This decision was based on the principle that the date of tendering the cheque to an authorized banker should be considered the date of payment.

The Tribunal addressed two main issues. Firstly, concerning the addition of Rs. 38,10,000 as share capital, the Tribunal noted that the assessee had produced acknowledgement slips from the ROC for Form No. 2, indicating that ROC formalities were accomplished. However, the remand report indicated that the ROC had not provided written confirmation, and the AO's attempts to verify the share applicants failed. The Tribunal found that the assessee had not fully discharged its onus to prove the genuineness of the share capital, particularly regarding the creditworthiness and identity of the applicants. Therefore, the Tribunal upheld the addition made by the AO. Secondly, regarding the disallowance of Rs. 1,06,050 as expenses for increasing authorized share capital, the Tribunal referred to the Supreme Court's judgment in Brook Bond India Ltd vs CIT. It held that expenses incurred for increasing authorized capital are capital in nature, even if they indirectly help the business. The Tribunal found that Rs. 70,000 of the disallowed amount was capital expenditure and upheld its disallowance. However, it directed that the remaining Rs. 36,050, incurred towards regular filing fees to the ROC, should be allowed as a deduction as it is revenue in nature. The appeal was partly allowed.

The Tribunal found that the AO did not provide specific findings that freight payments or expenses were inaccurately recorded or not for business purposes. The assessee had also provided comparable cases to justify its net profit ratios.

The Tribunal held that the penalty notice was invalid because it did not clearly specify the grounds for imposing the penalty. Following precedent, the penalty orders were cancelled.

The Tribunal found that the AO did not provide specific findings that freight payments or expenses were inaccurately recorded or not for business purposes. The assessee had also provided comparable cases to justify its net profit ratios.

The Tribunal found that the AO did not provide specific findings that freight payments or expenses were inaccurately recorded or not for business purposes. The assessee had also provided comparable cases to justify its net profit ratios.

The Tribunal found that the AO did not provide specific findings that freight payments or expenses were inaccurately recorded or not for business purposes. The assessee had also provided comparable cases to justify its net profit ratios.

The Tribunal found that the AO did not provide specific findings that freight payments or expenses were inaccurately recorded or not for business purposes. The assessee had also provided comparable cases to justify its net profit ratios.

The Tribunal found that the AO did not provide specific findings that freight payments or expenses were inaccurately recorded or not for business purposes. The assessee had also provided comparable cases to justify its net profit ratios.

The Tribunal held that the mistake in the Notes on Accounts was a bonafide typographical error, as confirmed by the auditor. The CIT(Appeals) had rightly deleted the addition made by the Assessing Officer.

The Tribunal held that the CIT's revision order under Section 263 was unsustainable. The AO had applied his mind and was satisfied that penalty proceedings under Section 271AAA were not leviable, and the CIT lacked sufficient material to deem the AO's order erroneous and prejudicial to revenue.

The Tribunal found that the penalty proceedings were not initiated under the conditions contemplated by Section 271(1)(c). Therefore, the imposition of penalty was not valid. The case was remanded to the Assessing Officer for verification of all details.

The Tribunal held that the show-cause notice issued under Section 274 of the Income Tax Act was defective as it did not specify whether the penalty was for concealment of income or furnishing inaccurate particulars. Following precedent, the Tribunal cancelled the penalty.

The Tribunal found that the AO did not provide specific findings that freight payments or expenses were inaccurately recorded or not for business purposes. The assessee had also provided comparable cases to justify its net profit ratios.

The Tribunal found that the AO did not provide specific findings that freight payments or expenses were inaccurately recorded or not for business purposes. The assessee had also provided comparable cases to justify its net profit ratios.

The Tribunal, citing the principle that law aids the vigilant and not those who sleep on their rights, decided to treat the appeal as unadmitted. Following various High Court and Supreme Court judgments, the Tribunal dismissed the appeal for non-prosecution.

The Tribunal, citing the principle that law aids the vigilant and not those who sleep on their rights, decided to treat the appeal as unadmitted. This decision was based on the assessee's consistent non-appearance and lack of prosecution.

The Tribunal dismissed the Revenue's appeal, finding no reason to interfere with the CIT(A)'s order which estimated profit at 10.5% of gross receipts. The assessee's cross-objection challenging this rate was also dismissed.

The Tribunal held that since the claim of depreciation was allowed under section 154, the Revenue's appeal had become infructuous. The Departmental Representative could not point out any infirmity.

The Tribunal held that an assessee can maintain dual portfolios for investment and stock-in-trade. The intention of the assessee, as evidenced by maintaining separate portfolios and consistent past treatment, is crucial in determining whether gains are capital or business income.

The Tribunal held that while the CIT cannot condone the delay, registration can be granted prospectively. It also referred to precedents suggesting that the assessee's activities, when considered in light of subsequent amendments and judicial pronouncements, might not disqualify it from charitable status.

The Tribunal noted that the AO had already given effect to the CIT's order under Section 263 by accepting the assessee's contentions. Therefore, the appeal filed by the assessee was rendered infructuous.

The Tribunal found that the CIT(A) violated Rule 46A by accepting fresh documents without a remand report and by not providing the AO with an opportunity to be heard. The Tribunal also noted contradictory findings regarding the filing of Form 10CCB.

The Tribunal held that the cash payments, though exceeding Rs. 20,000/-, were made directly into the bank account of the supplier, who was an authorized government agent. The Tribunal considered the genuineness of the transactions and the fact that the payments were ultimately deposited into the bank, aligning with the objective of Section 40A(3).

The Tribunal held that the CIT(Appeals) was justified in deleting the addition. It followed its own prior decision which held that freight, insurance, and other incidental charges should not be excluded from total turnover and export turnover when computing deduction under Section 10B.

The Tribunal held that the reopening of assessment beyond four years was invalid because the Assessing Officer failed to demonstrate that income had escaped assessment due to the assessee's failure to disclose material facts fully and truly. Consequently, the reassessment proceedings were quashed.

The Tribunal held that the reopening of assessment beyond four years was invalid because the Assessing Officer failed to demonstrate that income had escaped assessment due to the assessee's failure to disclose material facts fully and truly. Consequently, the reassessment proceedings were quashed.

The Tribunal held that the disallowance of expenses under Section 40(a)(ia) was not justified as the payees had offered the income to tax. The addition on account of sales difference was also deleted as the assessee had availed an option to pay tax on MRP as per a state government notification.

The Tribunal held that the prize money won on unsold lottery tickets is to be treated as business income, not income from other sources. The assessee had discharged its onus by providing details of the transactions, and the Revenue failed to provide contrary evidence.

The Tribunal held that the issue was covered by its own prior decision in the assessee's own case for AY 2004-05. Therefore, the disallowance made by the Assessing Officer regarding the carry forward of unabsorbed depreciation was deleted.

The Tribunal noted that the CBDT Circular No. 21/2015, which increased the monetary limit for appeals to Rs. 10,00,000, is applicable retrospectively. Consequently, the appeal was treated as withdrawn/not pressed.

The Tribunal upheld the disallowance of the commission expenditure, finding the assessee's claim of it being salary to be a self-serving afterthought without sufficient evidence. However, a disallowance on general charges and travelling expenses made solely on the basis of self-made vouchers was deleted.

The Tribunal upheld the CIT(A)'s decision, finding that the AO's addition was arbitrary and not based on proper findings. The Tribunal agreed that the assessee had satisfactorily explained the discrepancy by providing details of raw material consumption including chemicals and hydrogen gas, and correctly accounted for MODVAT credit.

The Tribunal upheld the CIT(A)'s decision to delete the additions. It found that the AO's additions were based on presumptions and estimations without sufficient evidence, and that the CIT(A) had correctly appreciated the facts and evidence presented by the assessee.

The Tribunal held that a claim for exemption not made in the original return or assessment proceedings cannot be considered a 'mistake apparent from the record' rectifiable under Section 154. Therefore, the Assessing Officer and CIT(Appeals) were justified in rejecting the rectification petition.

The Tribunal held that the issue was covered by its previous decisions in the assessee's own case for earlier assessment years. Following those precedents, the Tribunal upheld the deletion of the disallowance.

The Tribunal held that the payments were for hiring non-qualified personnel for clerical work, attracting Section 194C, not Section 194J. Regarding reimbursement expenses, the Tribunal found no basis for disallowance as income and expenditure were equal.

The Tribunal noted that the tax effect was below the revised monetary limit of Rs. 10,00,000/- as per CBDT Circular No. 21/2015. Following the CBDT's instructions, the appeal was treated as withdrawn/not pressed.

The Tribunal observed that the assessee was not interested in prosecuting the case. Following established precedents, the appeal was dismissed for want of prosecution.

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 Tribunal treated the appeal as withdrawn/not pressed.

The Tribunal noted the assessee's non-cooperation and lack of interest in prosecuting the appeal. Applying the principle of 'vigilantibus, non dormientibus, jura subvenient', the Tribunal treated the appeal as unadmitted.

The Tribunal held that the CIT failed to discuss the assessee's explanations on merits and did not specify the errors in the assessment order or the further inquiries required. Therefore, the CIT's order under Section 263 was not sustainable.

The Tribunal found that while the CIT(A) had reasons to doubt the medical certificates, in the interest of justice, the case should be remanded. The assessee was directed to produce necessary evidence to support their claim for condonation of delay.

The Tribunal held that the payments made to retailers were in the nature of trade discounts and not commission, thus Section 194H was not attracted. The addition for incentive payable was confirmed due to the lack of evidence and absence of an FIR for stolen documents.

The Tribunal held that the penalty under Section 271C was not sustainable because the CIT(A) had deleted the disallowance, and the Revenue had not challenged this deletion in its appeal before the Tribunal. Therefore, there was no default in TDS deduction.