ITAT Kolkata Judgments — September 2016

The Tribunal upheld the CIT(A)'s decision to delete the additions made by the AO. It found that the CIT(A) had rightly accepted additional evidence and that the AO's objections, mainly concerning date discrepancies and the nature of petty expenses, were not sufficient to disallow the claims.

The Tribunal condoned the delay in filing the appeals before the CIT(A), citing a coordinate bench's decision in similar circumstances. The Tribunal then decided to send the issue back to the AO for fresh consideration in light of judicial pronouncements.

The Tribunal restored the issue of Rs. 3,80,600/- in Fixed Deposits to the Assessing Officer for verification of the claim that they were held prior to 31.03.2003. The Revenue's appeal was dismissed due to low tax effect.

The Tribunal held that the show-cause notices issued for penalty proceedings were defective as they did not specify the grounds for penalty. Consequently, the penalty orders were deemed invalid and cancelled.

The Tribunal held that the AO's initial calculation of interest under Section 244A in the order dated 31.03.2009 did not involve interest on interest. The AO's subsequent order under Section 154 was therefore unjustified as the issue was debatable and not an error apparent on record.

The Tribunal held that since the surrendered income was duly declared in the return of income and tax was paid, there was no concealment of particulars or furnishing of inaccurate particulars. The penalty was cancelled based on established legal precedents.

The Tribunal found the CIT(A)'s order to be ex parte and non-speaking, violating Section 250(6) of the Act. Therefore, the CIT(A)'s order was set aside for fresh adjudication.

The Tribunal held that securities held by banks, especially those classified as 'available for sale', constitute stock-in-trade, and notional losses on their revaluation are allowable deductions. For the salary arrears, the Tribunal directed the AO to examine the reasonableness of the provision based on the finalized pay scales.

The Tribunal held that while absence of vouchers warrants an adverse inference, the disallowance must be reasonable. It found the 20% disallowance arbitrary and reduced it to 3% of the expenses, considering the assessee's past profit history and the nature of expenses.

The Tribunal held that the dismissal of the appeal by the CIT(Appeals) without considering the adjournment application violated the principles of natural justice. Therefore, the impugned order was set aside.

The Tribunal held that the assessee was a licensee and not a deemed owner under Section 27(iiib) of the Act, as the agreement did not create an interest in the property and the assessee did not have exclusive possession. Therefore, the income could not be assessed under the head 'Income from House Property'.