ITAT Kolkata Judgments — June 2016

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 appeal filed by the Revenue was contrary to the policy decision.

The Tribunal held that the primary object of Section 40A(3) is to curb tax evasion and encourage banking habits. Since the transactions were genuine, payments were directly deposited into the companies' bank accounts, and the AO verified them, there was no evasion of tax. Therefore, the disallowance was not justified.

The Tribunal held that salary received in India by a non-resident is taxable in India as per Section 5(2)(a) of the Act, irrespective of where the services were rendered. The fact that the income was received in India in the assessee's bank account was the determining factor.

The Tribunal held that allowing depreciation on assets whose cost was treated as application of funds does not amount to double deduction, especially when High Courts have consistently ruled in favour of this practice. The CIT's order under Section 263 was found to be erroneous as there were two possible views.

The Tribunal held that the CIT has the power to revise assessment orders where the Assessing Officer has failed to conduct a proper or thorough inquiry. The Tribunal upheld the orders of the CIT, finding that the issues were covered by previous decisions.

The Tribunal held that the subsidies received by the assessee were directly related to the cost of production and thus constituted profits derived from the business. Relying on the Supreme Court's decision in CIT vs Meghalaya Steels Ltd., which confirmed the Gauhati High Court's ruling, the Tribunal found that the PCIT's order was erroneous and prejudicial to the assessee's interest.

The Tribunal held that disallowance under Section 14A read with Rule 8D should only consider assets held as investments and not stock-in-trade. Relying on previous judicial precedents, the Tribunal upheld the CIT(A)'s order.

The Tribunal held that the show cause notice for penalty was defective as it did not specify whether the penalty was for concealment of income or furnishing inaccurate particulars. Following precedent, the penalty order was deemed invalid.

The Tribunal held that the provisions of the Act cannot be overridden by the Rules and that the assessee should be given the benefit of exemption under Section 10(10C) to the extent of Rs. 5 lacs. The non-consideration of relevant judgments by the AO and CIT(A) constituted a mistake apparent on record, rectifiable under Section 154.

The Tribunal held that the provisions of the Act cannot be overridden by the Rules and that the assessee should be given the benefit of exemption under Section 10(10C) to the extent of Rs. 5 lacs. The non-consideration of relevant judgments by the AO and CIT(A) constituted a mistake apparent on record, rectifiable under Section 154.

The Tribunal held that the provisions of the Act cannot be overridden by the Rules and that the assessee should be given the benefit of exemption under Section 10(10C) to the extent of Rs. 5 lacs. The non-consideration of relevant judgments by the AO and CIT(A) constituted a mistake apparent on record, rectifiable under Section 154.

The Tribunal held that the provisions of the Act cannot be overridden by the Rules and that the assessee should be given the benefit of exemption under Section 10(10C) to the extent of Rs. 5 lacs. The non-consideration of relevant judgments by the AO and CIT(A) constituted a mistake apparent on record, rectifiable under Section 154.

The Tribunal held that the provisions of the Act cannot be overridden by the Rules and that the assessee should be given the benefit of exemption under Section 10(10C) to the extent of Rs. 5 lacs. The non-consideration of relevant judgments by the AO and CIT(A) constituted a mistake apparent on record, rectifiable under Section 154.

The Tribunal held that the provisions of the Act cannot be overridden by the Rules and that the assessee should be given the benefit of exemption under Section 10(10C) to the extent of Rs. 5 lacs. The non-consideration of relevant judgments by the AO and CIT(A) constituted a mistake apparent on record, rectifiable under Section 154.

The Tribunal held that the provisions of the Act cannot be overridden by the Rules and that the assessee should be given the benefit of exemption under Section 10(10C) to the extent of Rs. 5 lacs. The non-consideration of relevant judgments by the AO and CIT(A) constituted a mistake apparent on record, rectifiable under Section 154.

The Tribunal held that the provisions of the Act cannot be overridden by the Rules and that the assessee should be given the benefit of exemption under Section 10(10C) to the extent of Rs. 5 lacs. The non-consideration of relevant judgments by the AO and CIT(A) constituted a mistake apparent on record, rectifiable under Section 154.

The Tribunal held that the provisions of the Act cannot be overridden by the Rules and that the assessee should be given the benefit of exemption under Section 10(10C) to the extent of Rs. 5 lacs. The non-consideration of relevant judgments by the AO and CIT(A) constituted a mistake apparent on record, rectifiable under Section 154.

The Tribunal found that the assessee had provided sufficient evidence, including bank withdrawals, cash book, and balance sheets, to prove the source of the cash deposit. Therefore, the addition made by the AO was deleted.

The Tribunal held that additional depreciation is not allowable on plant and machinery installed in sales outlets as it falls under the proviso to Section 32(1)(iia) excluding office premises. However, it allowed 80% depreciation on the Genset, following a High Court decision that electric generators fall under renewable energy devices.

The Tribunal held that the assessee had disclosed the transaction and the issue was a bonafide mistake in claiming exemption, not concealment of income. Therefore, penalty under Section 271(1)(c) could not be imposed.

The Tribunal held that the issues of prior period loss and employee's contribution to PF/ESI were debatable. Therefore, the AO's order under Section 154, which sought to rectify these issues, was beyond jurisdiction and bad in law.

The Tribunal held that the CIT(A) had correctly deleted the disallowance for services rendered outside India where no tax withholding was required. For other disputed expenses, the Tribunal found no infirmity in the CIT(A)'s decision to remand the issue back to the AO for proper examination.

The Tribunal held that the CIT(A) had correctly deleted the disallowance for services rendered outside India where no tax withholding was required. For other disputed expenses, the Tribunal found no infirmity in the CIT(A)'s decision to remand the issue back to the AO for proper examination.

The Tribunal held that the deduction under Section 36(1)(viia) cannot exceed the provision made in the books of accounts, upholding the CIT(A)'s decision. The Tribunal also upheld the CIT(A)'s decision allowing the club membership fees as revenue expenditure.

The Tribunal held that the CIT has the power to revise assessment orders where the Assessing Officer's inquiry was inadequate, even if the issue of share capital was not the primary reason for reopening the assessment. The scope of reassessment extends to other issues that come to the AO's notice during proceedings.

The Tribunal held that the SMS charges did not fall under section 194C as there was no contract for 'work' involving human intervention. It also found that the rebate under section 88E should be disallowed only to the extent of 10% of the claim.

The Tribunal held that the CIT has the power to revise assessment orders where the Assessing Officer's inquiry was inadequate or not logically concluded. The Tribunal upheld the CIT's orders, finding them to be properly passed and within the prescribed time limits.

The Tribunal held that the CIT had the power to revise assessment orders where the Assessing Officer's inquiry was inadequate or not properly concluded. It was also held that the CIT's revisionary power under section 263 was valid even if the AO had not made extensive investigations into share capital issues.

The Tribunal found that the AO's method of estimating profit was not sound. While upholding the rejection of books, the Tribunal determined the net profit at 1% of turnover to cover all deficiencies, thereby deleting other additions.

The Tribunal held that invoking Rule 8D is not automatic and the AO has discretion to estimate disallowance on a reasonable basis if Rule 8D leads to absurd results. The AO's satisfaction under Section 14A(2) is not limited to rejecting the assessee's claim.

The Tribunal held that the assessee's failure to appear and prosecute the appeals indicates a lack of interest. Therefore, the appeals are liable to be dismissed for non-prosecution.

The Tribunal held that Rule 8 of the Income Tax Rules, which applies to tea companies, is applicable for computing fringe benefits. Therefore, the taxable fringe benefit should be computed at 40% of the expenditure.

The Tribunal held that the CIT's order under Section 263 was not sustainable. Relying on judicial precedents, it was determined that the unabsorbed depreciation in question was eligible for carry forward and set off, and therefore, the Assessing Officer's order was not erroneous or prejudicial to the revenue.

The Tribunal held that the assessee had consistently followed the LIFO method for valuing its closing stock, which was accepted in previous years. The Tribunal also noted that closing stock cannot be construed as a source of profit and that the LIFO method is a recognized accounting principle.

The Tribunal held that unabsorbed depreciation, particularly from AY 1997-98 onwards, is governed by Section 32(2) as amended by the Finance Act, 2001, and can be carried forward and set off against future income without a time limit. The CIT(A)'s order was upheld.

The Tribunal upheld the CIT(A)'s decision, stating that the eligibility of transport subsidy for Section 80IC deduction was settled by a Supreme Court decision in favor of the assessee. Regarding transport charges, the Tribunal found the issue debatable and not rectifiable under Section 154.

The Tribunal held that if the assessment order leaves the control of the AO after the limitation date, it is presumed to be passed after the period of limitation. Following a precedent, the Tribunal found no reason to interfere with the CIT(A)'s decision.

The Tribunal held that the entire transactions in the joint bank account were duly considered in the daughter's return, which was also verified by the AO. The AO's rejection of the assessee's contentions was deemed unjustified.

The Tribunal held that the provisions of the Act cannot be overridden by the Rules and that the assessee should be given the benefit of exemption under Section 10(10C) to the extent of Rs. 5 lacs. The non-consideration of relevant judgments by the AO and CIT(A) constituted a mistake apparent on record, rectifiable under Section 154.

The Tribunal held that the show cause notice for penalty was defective as it did not specify whether the penalty was for concealment of income or furnishing inaccurate particulars. Following precedent, the penalty order was deemed invalid.

The Tribunal held that stamp duty and registration charges for leasehold properties, even for long tenures, are revenue expenditure, as they do not result in acquisition of capital assets or enduring benefit. Legal expenses related to title scrutiny for these leases were also allowed.

The Tribunal set aside both issues to the AO for verification. For the trading liability, the AO needs to verify if it was settled. For brokerage, the AO needs to verify the confirmations from suppliers regarding introductions by the broker.

The Tribunal held that in cases of destroyed records, external evidence like auditor's reports can be relied upon, reducing the TDS disallowance. Regarding the mutual fund investment, the Tribunal found it was a disclosed transaction redeemed within the same financial year and thus not an undisclosed investment.

The Tribunal held that applying Rule 8D is not automatic and the AO was satisfied with the assessee's detailed workings. The CIT's revision was an attempt to substitute his own opinion, which is not permissible under Section 263.

The Tribunal held that the CIT has the power to revise an assessment order if the AO's inquiry was not proper or adequate. Failure to conduct a thorough inquiry renders the assessment order erroneous and prejudicial to the revenue.

The Tribunal held that Section 43B allows deductions for provident and superannuation fund contributions on a payment basis, even if the liability arose in a prior year. However, one issue regarding a potential double deduction was remanded to the AO for fresh consideration.

The Tribunal held that the provisions of the Act cannot be overridden by the Rules and that the assessee should be given the benefit of exemption under Section 10(10C) to the extent of Rs. 5 lacs. The non-consideration of relevant judgments by the AO and CIT(A) constituted a mistake apparent on record, rectifiable under Section 154.

The Tribunal held that the CIT has the power to revise an assessment order if the Assessing Officer's inquiry was not proper or thorough. The Tribunal upheld the CIT's orders, finding them to be based on valid grounds and following previous precedents.

The Tribunal dismissed the addition related to advances from customers due to the assessee's failure to provide evidence. For unsecured loans, the Tribunal partly allowed the appeal, remanding the issue concerning two creditors for further examination by the AO.