ITAT Kolkata Judgments — April 2017

The Tribunal upheld the CIT(A)'s order, following the jurisdictional tribunal's decision. The disallowance under Section 14A was not to be considered for computing book profits under Section 115JB.

The Tribunal held that since the tax borne by the employer on expatriate employees' salary was already grossed up and exemption under Section 10(10CC) was not claimed, there could be no disallowance under Section 40(a)(v). The appeal by the Revenue on this ground was dismissed.

The Tribunal upheld the CIT(A)'s decision to delete the addition. It was held that Section 43B is not attracted when the assessee has not claimed the sales tax/VAT as an expenditure or deduction.

The tribunal held that the order passed by the CIT(A) on a deceased person is not maintainable. The appeal was restored to the CIT(A) for fresh adjudication after bringing on record the legal representatives.

The Tribunal set aside the appeal to the file of the CIT(A) on the grounds of natural justice. The assessee was directed to appear before the CIT(A) for fresh adjudication.

The Tribunal held that the addition for undervaluation of closing stock was arbitrary as the assessee consistently followed the method and the revenue accepted it. It also allowed expenses for local clubs/societies as they were for maintaining a harmonious business environment. A 10% disallowance was deemed appropriate for travelling, telephone, and conveyance expenses.

The Tribunal held that the assessee had admitted to the bank account being undisclosed and the deposits/withdrawals being unexplained. Considering the recycling of funds, the Tribunal directed the AO to reassess the deposits as per the peak credit theory.

The Tribunal held that the assessee's share transactions were investments, not business, as consistently treated by the assessee and accepted by the department in earlier and subsequent years. Furthermore, Section 14A was not applicable as the assessee, a salaried employee, did not prepare a profit and loss account or claim any expenses.

The Tribunal held that the CIT(A) was justified in treating the assessee as a Trust registered under Section 12A. The issue was covered by a previous judgment in the assessee's own case.

The Tribunal found the AO's estimation of profits inconsistent and unreasonable. While disagreeing with the CIT(A)'s formula of giving weightage to rejected books, the Tribunal directed estimation based on the average assessed net profit percentage of earlier years.

The Tribunal held that the jewellery found in the possession of the assessee's minor sons and his employee was within the limits prescribed by CBDT Instruction No. 1916/1994, considering it as explained. Therefore, the additions sustained by the CIT(A) were deleted.

The Tribunal held that the new premises were acquired in lieu of the surrender value of tenancy rights, and the fair market value of the acquired property should be considered as the cost of acquisition. The transaction was akin to receiving sale consideration and using it to acquire the property.

The Tribunal held that the notice issued by the Assessing Officer under Section 271(1)(c) was defective as it did not specifically state whether the penalty was for concealment of income or furnishing inaccurate particulars. Therefore, the penalty needed to be deleted.

The Tribunal held that the loss on sale of investment was a capital loss and disallowed it, but allowed the appeal regarding the disallowance of interest paid without TDS, deeming Section 40(a)(ia) inapplicable for that period. The disallowance of administrative expenses was partly allowed.

The Tribunal held that since the assessee's Section 12AA registration was valid, the cancellation of its Section 80G(5) registration was unjustified. The CIT(E) was directed to grant approval under Section 80G(5).

The Tribunal held that the interest income on delayed payment of an award amount is taxable in the years it accrued, not when received, following Supreme Court judgments. The Tribunal also allowed additional depreciation for mining activities, citing jurisdictional High Court and Tribunal precedents.

The Tribunal held that depreciation on quarry land and development is allowable as the assessee rearranged the assets under appropriate blocks of assets. Regarding Section 80HHC, the Tribunal confirmed the CIT(A)'s view that 'net interest' should be considered for calculating the deduction, not 'gross interest'.

The Tribunal upheld the deletion of the Rs. 40 crores addition, finding no evidence of a relationship attracting Section 40A(2) and no basis for deeming the payment excessive. The Tribunal also upheld the deletion of the Rs. 1,20,975 disallowance, following a High Court ruling that TDS under Section 194C is not applicable without a contract for carriage of goods.

The Tribunal found the AO's estimation of profits inconsistent and unreasonable. While disagreeing with the CIT(A)'s formula of giving weightage to rejected books, the Tribunal directed estimation based on the average assessed net profit percentage of earlier years.

The Tribunal noted that the assessee failed to produce evidence for the claimed transactions and that notices were unserved. While the revenue objected to a remand, the Tribunal, in the interest of justice, remanded the issue to the CIT(A) for fresh consideration and proper service of notices.

The Tribunal found the AO's estimation of profits inconsistent and unreasonable. While disagreeing with the CIT(A)'s formula of giving weightage to rejected books, the Tribunal directed estimation based on the average assessed net profit percentage of earlier years.

The Tribunal held that the AO was justified in adding peak credit for undisclosed investment in the business. However, it also noted that the CIT(A) had directed a set-off for peak credit additions in subsequent years, but failed to provide the same direction for the year under consideration, leading to a partial allowance for the assessee in that specific aspect.

The ITAT found that the assessee's rights and duties were not determined by the CIT(A). Therefore, the case was remitted back to the CIT(A) for fresh adjudication on merits after providing an adequate opportunity of hearing.

The Tribunal held that depreciation on quarry land and development is allowable as the assessee rearranged the assets under appropriate blocks of assets. Regarding Section 80HHC, the Tribunal confirmed the CIT(A)'s view that 'net interest' should be considered for calculating the deduction, not 'gross interest'.

The Tribunal held that the AO was justified in adding peak credit for undisclosed investment in the business. However, it also noted that the CIT(A) had directed a set-off for peak credit additions in subsequent years, but failed to provide the same direction for the year under consideration, leading to a partial allowance for the assessee in that specific aspect.

The Tribunal found the AO's estimation of profits inconsistent and unreasonable. While disagreeing with the CIT(A)'s formula of giving weightage to rejected books, the Tribunal directed estimation based on the average assessed net profit percentage of earlier years.

The Tribunal held that depreciation on quarry land and development is allowable as the assessee rearranged the assets under appropriate blocks of assets. Regarding Section 80HHC, the Tribunal confirmed the CIT(A)'s view that 'net interest' should be considered for calculating the deduction, not 'gross interest'.

The Tribunal found the AO's estimation of profits inconsistent and unreasonable. While disagreeing with the CIT(A)'s formula of giving weightage to rejected books, the Tribunal directed estimation based on the average assessed net profit percentage of earlier years.

The Tribunal held that since the assessee was now ready to produce all relevant evidence before the AO, and the disallowances required further verification, the issues should be remanded to the AO for fresh consideration.

The ITAT held that the appeal was not maintainable in terms of the CBDT Circular No. 21/2015. Therefore, the appeal filed by the Revenue was dismissed.

The ITAT held that the appeal filed by the Revenue was not maintainable in terms of the CBDT Circular No. 21/2015. Therefore, the appeal was dismissed.

The Tribunal found that the CIT(A) issued multiple notices and the assessee sought adjournments. In the interest of justice, the Tribunal remitted the issue back to the CIT(A) for a fresh decision.

The Tribunal noted that the assessee had taken adjournments before the CIT(A) but it could not be presumed that they did not want to pursue the appeal. Since the rights and duties of the assessee were not determined, the case was remitted back to the CIT(A) for fresh adjudication.

The Tribunal held that the assessee was a developer, not a works contractor, and therefore eligible for the deduction under Section 80IA. The assessee's involvement in design, procurement, and overall project execution confirmed its developer status.

The Tribunal held that the assessee was a developer involved in the survey, design, and execution of the project, not merely a works contractor. Therefore, the deduction under Section 80IA was admissible.

The Tribunal held that the difference in nomenclature of assets like advances and debtors should not be a ground for disallowing the bad debt claim. It relied on the Supreme Court ruling in T.R.F. Ltd. stating that it is enough if the bad debt is written off as irrecoverable in the accounts.

The Tribunal permitted the assessee to withdraw the appeal as no objection was raised by the revenue. Consequently, the appeal was dismissed as withdrawn.

The Tribunal upheld the CIT(A)'s decision to restrict the addition for inflated purchases to Rs. 90,584, dismissing the ground of appeal. It also upheld the CIT(A)'s partial allowance of the Section 40A(3) disallowance, confirming the addition of Rs. 18,79,000. The Tribunal further confirmed the CIT(A)'s decision to uphold the AO's addition for TCS in closing stock.

The Tribunal held that the objects of the assessee are identical to those of the previously registered 'IRMA(old)', which was considered an institution for the charitable purpose of advancing general public utility. The Tribunal found no reason to deny the assessee registration on this basis. The Tribunal agreed with the assessee's contention that the dominant and prime objective should be considered, which is the advancement of the refractory industry in India, a general public utility. The fact that the assessee has a limited number of members does not negate the character of its object as being for general public utility. Therefore, the Tribunal held that the CIT(Exemption) was not justified in refusing registration under Section 12A. Consequently, the Tribunal directed that the registration under Section 12A and approval under Section 80G be granted to the assessee. No issue was expressly left undecided.

The Tribunal found that the CIT(A)'s addition was based on estimation and lacked tangible material. The Tribunal noted that the survey team did not conduct a proper physical inventory, and the difference could be attributed to errors within an acceptable margin.

The Tribunal deleted the addition of Rs. 8,00,213/- as it was made without any basis and the assessee's balance sheet was in order. The Tribunal also deleted the addition of Rs. 8,10,000/- as the fixed deposits were disclosed by the assessee's husband and made from his income.

The Tribunal held that the CIT(Exemption) had not doubted the charitable objects of the trust. The Tribunal found that the trust had carried out charitable activities by making donations and that there was no material to suggest these activities were not genuine, thus allowing registration and approval.

The Tribunal held that the notice issued by the AO under Section 271(1)(c) was defective as it did not specify whether the penalty was for concealment of income or furnishing inaccurate particulars. Therefore, the penalty was deleted.

The Tribunal held that the CIT(A) erred in dismissing the appeal without considering the delay condonation petition. In the interest of justice, the matter was remitted back to the CIT(A) to condone the delay and decide the appeal on merits.

The Tribunal held that both the AO and CIT(A) made additions based on estimation and conjecture without rejecting the assessee's books of account. Since no cogent evidence was brought on record to substantiate the claim of fictitious outstanding wages liability, the addition made by the CIT(A) was deleted.

The Tribunal held that the assessee is entitled to claim expenditure as a deduction when the undisclosed income is added to her total income. However, since the details of expenditure were not fully available before the lower authorities, the issue was remanded.

The Tribunal held that the CIT(A)'s deletion of addition for commission payments was not sustainable and remanded the issue to the AO for re-adjudication. However, the Tribunal upheld the CIT(A)'s deletion of addition for undisclosed liabilities.

The Tribunal confirmed the order of the CIT(A), holding that the assessee had discharged its liability regarding the cash credit and that the disallowances made by the AO were not justified.

The Tribunal held that the assessee has produced sufficient materials to establish that granting loans and advances is a business activity, and thus interest income from it is taxable as business income. The Tribunal reversed the lower authorities' orders on this point.

The Tribunal permitted the assessee to withdraw the appeal as no objection was raised by the Revenue. Consequently, the appeal was dismissed as withdrawn.