ITAT Kolkata Judgments — August 2016

The Tribunal observed that the assessee's conduct indicated a lack of serious interest in prosecuting the appeal. Applying the principle of vigilance and considering the ITAT Rules, the appeal was treated as unadmitted and dismissed.

The Tribunal held that the Revenue's appeal was not maintainable due to low tax effect, following CBDT Circular No. 21/2015. Consequently, the assessee's cross-objection was rendered infructuous.

The Tribunal held that the penalty proceedings were invalid due to a defective show cause notice under Section 274, which did not specify the grounds for penalty. Consequently, the penalty imposed was cancelled.

The Tribunal held that the transactions with M/s. Ganesh Wheat Product Pvt. Ltd. constituted a current account with mutual benefit, not a loan or advance falling under Section 2(22)(e). Previous decisions of the Tribunal and the jurisdictional High Court were followed.

The Tribunal held that the lorry owners were not sub-contractors as they were only responsible for carriage of goods and had no other liabilities. Therefore, the provisions of Section 194C were not applicable.

The Tribunal held that the CIT(A) did not rely on any new evidence and considered only the material available before the AO. The Tribunal also found that the assessee paid the sales tax during the year under consideration and was entitled to deduction under Section 43B on a payment basis.

The Tribunal held that the AO failed to conduct proper and adequate inquiries regarding the assessee's claim of long-term capital loss on government securities. Therefore, the PCIT was justified in invoking Section 263 to direct a fresh assessment on this issue.

The Tribunal held that the commission payment to the sister concern was not justified due to lack of evidence of services rendered. However, the addition made by the AO for under-valuation of closing stock was deleted, upholding the CIT(A)'s order.

The Tribunal held that the penalty proceedings were invalid due to a defective show cause notice under Section 274, which did not specify the grounds for penalty. Consequently, the penalty imposed was cancelled.

The Tribunal held that the CIT(A) erred in directing the AO to initiate proceedings under Section 147 by issuing a notice under Section 148 after annulling the assessment order. The Tribunal reasoned that under Section 251(1), the CIT(A) has the power to confirm, reduce, enhance, or annul an assessment. By annulling the assessment order, the CIT(A) exhausted its powers. The Tribunal found that the CIT(A) had no authority to direct the AO to initiate fresh proceedings under Section 147. The Tribunal also noted that the assessment order being challenged was an offshoot of a Section 263 revision, which was based on the AO's order being erroneous and prejudicial to the revenue, not on the AO's belief of escaped income. The Tribunal stated that the CIT(A) cannot convert revision proceedings into proceedings for assessing escaped income. Consequently, the Tribunal quashed the part of the CIT(A)'s order containing the directions to initiate proceedings under Section 147. The appeals of the Assessees were allowed.

The Tribunal upheld the deletion of the addition for undisclosed sales, finding no defect in the assessee's audited financial statements. For depreciation on buildings, the matter was restored to the AO for verification of composite payment for land and building.

The Tribunal held that the CIT(A)'s order was not a speaking order as it lacked reasons for confirming the Assessing Officer's additions. The Tribunal set aside the CIT(A)'s order and remanded the matter for fresh disposal.

The Tribunal upheld the CIT(A)'s order, finding that the AO made additions on surmise without cogent evidence or defects in the books. The Tribunal noted that the CIT(A) had correctly observed that the AO failed to establish the applicability of Section 40A(2) or provide market rates for the expenses.

The Tribunal held that the addition of Rs. 95,70,953/- as deemed dividend under Section 2(22)(e) was not justified because the assessee was not a shareholder in the lending company, and the beneficiary shareholder was not the registered shareholder. The appeal was allowed.

The Tribunal held that the credit entries in the undisclosed bank accounts originated from disclosed accounts and were not income from undisclosed sources. It also ruled that the cash payments were made due to business expediency and the genuineness of the transactions was not doubted.

The Tribunal held that the penalty notice issued under Section 274 of the Income Tax Act was defective as it did not specify the grounds for imposing the penalty. Following the precedent set by the Karnataka High Court, the penalty was deemed invalid.

The Tribunal held that the Rs. 21 lacs payment was a genuine mistake and should be credited to AY 2007-08. Consequently, the interest u/s 234B for AY 2007-08 needed to be recomputed.

The Tribunal held that the Assessing Officer failed to provide the reasons for reopening the assessment to the assessee despite a specific request. Relying on judicial precedents, the Tribunal found the reassessment order invalid.

The Tribunal upheld the CIT(A)'s order, ruling that transactions in shares/MF units through PMS should be treated as capital gains and hire charges for furniture, being integral to the rental of premises, should be assessed under 'Income from House Property'.

The Tribunal held that tax or levy should not be included in the transfer price for Section 80-IA deduction and that DEPB receipts, when export turnover exceeds Rs. 10 crores, should be excluded from 'profits of the business' under Explanation (baa) to Section 80HHC, following the Apex Court's decision.

The Tribunal found that the assessee had provided explanations for their absence and submitted documents during remand proceedings. However, the AO and CIT(A) failed to consider this material, resorting to estimation without proper verification.

The Tribunal held that the Explanation to Section 73 of the Income Tax Act was not applicable if the principal business of the assessee was trading in shares, or if the assessee was engaged in lending and advances. Based on the volume of business activity, the Tribunal concluded that the assessee's principal business was not share trading.

The Tribunal held that tax or levy should not be included in the transfer price for Section 80-IA deduction and that DEPB receipts, when export turnover exceeds Rs. 10 crores, should be excluded from 'profits of the business' under Explanation (baa) to Section 80HHC, following the Apex Court's decision.

The Tribunal upheld the CIT(A)'s order, finding that the cash deposits were explained as opening balance and the sale of shares was supported by contract notes and ledger accounts. The Tribunal found no infirmity in the CIT(A)'s deletion of additions.

The Tribunal found that the name of a creditor, Sulali Agarwal, was not present in the provided lists, suggesting a potential error in the AO's addition. The Tribunal decided to set aside the matter to the AO for fresh disposal, emphasizing the importance of substantial justice over technicalities.

The Tribunal set aside the disallowance under Section 40A(3) to the Assessing Officer for fresh verification of the cash book. Similarly, the issue of outstanding transport charges was remanded to the Assessing Officer to verify subsequent payments.

The Tribunal held that tax or levy should not be included in the transfer price for Section 80-IA deduction and that DEPB receipts, when export turnover exceeds Rs. 10 crores, should be excluded from 'profits of the business' under Explanation (baa) to Section 80HHC, following the Apex Court's decision.

The Tribunal held that the CIT(A) erred in upholding the addition of Rs. 60 lakhs from the ladies, as the assessee had provided evidence that the money belonged to them. The Tribunal also noted that the AO's reasoning for doubting the source was based on unfounded facts.

The Tribunal held that the Commissioner erred in invoking Section 263 as the Assessing Officer had made necessary inquiries and the order was not demonstrably erroneous or prejudicial to the revenue. The Tribunal emphasized the distinction between 'lack of inquiry' and 'inadequate inquiry'.

The Tribunal held that the assessee did not request the reasons for reopening the assessment, thus the proceedings are not bad in law. Furthermore, the Tribunal found no material to support the assessee's claim regarding the sale date and possession, and upheld the AO's application of Section 50C, as the deemed sale price was higher than the actual consideration received.

The Tribunal held that the AO failed to conduct proper verification on several aspects highlighted by the CIT. Relying on the judgment in Gee Vee Enterprises Vs. ACIT, the Tribunal found no reason to interfere with the CIT's order.

The Tribunal upheld the CIT(A)'s decision to delete the additions. It found that the 'contractory wages' were a typographical error and TDS was duly deducted. The AO's method for calculating undisclosed production was incorrect, and scrap generation was not considered. The bad debts were properly accounted for as claims and rebates.

The Tribunal held that the issue of interest income on fixed deposits was duly considered by the Assessing Officer and subsequently by the CIT(A). Therefore, the revision order passed by the CIT under Section 263 was unsustainable in law as the AO's order was neither erroneous nor prejudicial to the interest of revenue.

The Tribunal held that the forfeiture of share warrants amounted to a transfer under Section 2(47) of the Income Tax Act, and the loss arising therefrom was a capital loss eligible for adjustment. The Tribunal also upheld the CIT(A)'s decision to restrict the disallowance under Section 14A.

The Tribunal upheld the CIT(A)'s decision, finding that the AO's disallowances were arbitrary. The Tribunal noted that the assessee's inability to provide documents was due to a factory lockout and that the audited accounts showed a true and fair view of the business.

The Tribunal held that the penalty notice issued under Section 274 was defective as it did not specify the grounds for imposing the penalty. Following the decision of the Karnataka High Court, the Tribunal found the penalty order to be invalid.

The Tribunal held that the CIT(A) erred in upholding the addition of Rs. 60 lakhs from the ladies, as the assessee had provided evidence that the money belonged to them. The Tribunal also noted that the AO's reasoning for doubting the source was based on unfounded facts.

The Tribunal upheld the CIT(A)'s order, stating that the Revenue failed to provide evidence that the sale consideration was understated or that the transactions were not genuine. The sale of shares at a price less than the market value is not prohibited without such evidence.

The Tribunal held that the provisions of Section 194-I regarding TDS on machinery hire charges were not applicable for the assessment year 2006-07, as the amendment to include machinery was effective from 13.06.2006. Therefore, the disallowance under Section 40(a)(ia) was unjustified.

The Tribunal held that the penalty order was invalid because the notice issued under Section 274 did not specify whether the penalty was for concealment of income or furnishing inaccurate particulars. Following the Karnataka High Court's decision in CIT vs. Manjunatha Cotton and Ginning Factory, the penalty was cancelled.

The Tribunal held that the show cause notice issued under Section 274 of the Act was defective as it did not specify the grounds for imposing penalty. Following the decision of the Karnataka High Court, the penalty order was deemed invalid.

The Tribunal held that the CIT(A) correctly allowed the deduction under Section 80-IA, agreeing with the assessee's position. The Tribunal also upheld the CIT(A)'s order regarding the Section 80G deduction, finding no reason to interfere.

The Tribunal held that the assessee had provided sufficient documentary evidence to establish the identity, genuineness, and creditworthiness of the share applicants. The AO's conclusion that the funds were the assessee's own unaccounted money was not sufficiently substantiated.

The Tribunal held that the amount of Rs. 38,00,000/- was already included in the total credits of Rs. 2,65,30,000/- which were added in the block assessment proceedings. Therefore, making a further addition in the regular assessment would result in double taxation.

The Tribunal confirmed the disallowance of audit fee for non-deduction of TDS in the preceding year. It also confirmed the deletion of additions for prior period legal expenses and advances written off, treating them as business losses. The issue of club membership was restored to the AO for fresh adjudication.

The assessee requested to withdraw the appeal. The revenue did not object to this request. Therefore, the tribunal decided to dismiss the appeal as withdrawn.

The Tribunal found sufficient cause for the assessee's non-appearance before the CIT(Appeals). The impugned ex parte order was set aside, and the matter was remitted back to the CIT(Appeals) for fresh adjudication on merits.

The Tribunal confirmed the order of the CIT(A), holding that the peak credit as calculated by the CIT(A) was acceptable. The Revenue's appeal was dismissed.

The Tribunal held that the assessee, involved in blending and processing tea for export, qualifies as a manufacturer/producer for the purpose of Section 10B. This decision followed a Special Bench ruling in the assessee's own case for a different assessment year.

The Tribunal held that the reopening of assessment was invalid as it was based on a mere change of opinion without any tangible material. It also found that while there was a procedural violation regarding the notice under Section 143(2), the substance of the transaction (supervision charges) should prevail over its form, allowing the deduction.