ITAT Kolkata Judgments — May 2017

The Tribunal held that the penalty notice issued under Section 274 read with Section 271(1)(c) was bad in law because it did not specify whether the penalty was for concealment of income or furnishing inaccurate particulars of income. Following High Court precedents, the Tribunal cancelled the penalty.

The Tribunal found that the assessee failed to provide evidence of being a non-resident by staying outside India for more than 182 days. The cited High Court decision and CBDT circular were deemed not applicable due to lack of supporting evidence from the assessee.

The Tribunal held that the appeal filed by the Revenue was contrary to the CBDT's Circular No. 21/2015, which sets a monetary limit for filing appeals. Therefore, the appeal was dismissed in limine.

The Tribunal held that while the AO was justified in treating jute trading and interest income as 'income from other sources' due to the nature and scale of transactions, the disallowance of administration expenses was incorrect. The Tribunal noted that similar expenses were allowed in prior years and deleted the disallowance.

The Tribunal held that the penalty notices issued under Section 274 read with Section 271(1)(c) were defective as they did not specify whether the penalty was for concealment of particulars of income or furnishing inaccurate particulars. Following the Supreme Court's dismissal of an SLP in a similar case, the penalties were cancelled.

The Tribunal held that the addition could not be based on material not confronted to the assessee. In the interest of justice, the issue was remanded to the AO for fresh adjudication after serving the report to the assessee and providing an opportunity to rebut it.

The Tribunal upheld the CIT(A)'s decision, agreeing that the entire purchase amount could not be added as the source of funds was explained by credit purchases and subsequent payments. The Tribunal also found no error in the CIT(A) deciding the appeal based on existing records without a remand report.

The Tribunal held that the AO should examine all six cash books together to determine the consolidated cash balance. Regarding the profit rate, the Tribunal upheld the CIT(A)'s deletion of the addition, finding it to be based on presumption without any defect in the books.

The Tribunal held that MAT credit should be reduced from the tax payable first, and thereafter surcharge and education cess should be levied. The order of the CIT(A) allowing MAT credit before charging surcharge and education cess was upheld.

The Tribunal held that unabsorbed depreciation can be carried forward indefinitely as per the amended Section 32(2) of the Income Tax Act, following the Gujarat High Court's decision. The Tribunal also ruled that Section 14A and Rule 8D are not applicable for disallowances under the Minimum Alternate Tax (MAT) provisions.

The Tribunal held that the penalty notices were defective as they did not clearly specify whether the penalty was for concealment of income or furnishing inaccurate particulars. Furthermore, in cases where additions are based on estimation due to rejection of books, and no concrete evidence of concealment is found, penalty under Section 271(1)(c) is not sustainable.

The Tribunal held that the compensation received for the failure of machines to generate guaranteed electricity units has a direct nexus with the assessee's wind power generation business. Therefore, it is eligible for deduction under Section 80-IA.

The Tribunal held that the assessee, as the owner of the leased assets, was entitled to claim depreciation. The decision relied on Supreme Court judgments regarding ownership and depreciation on leased assets.

The Tribunal upheld the CIT(Appeals)'s decision to restrict the disallowance. It ruled that Rule 8D(2)(ii) and (iii) are not applicable to shares held as stock-in-trade, and that the investment in shares was made from the assessee's own funds, not borrowed ones.

The Tribunal noted that the issues for the current assessment year were also pending before the CIT(A). For consistency, the Tribunal decided to send the matter back to the CIT(A) for fresh adjudication.

The Tribunal held that the CIT(A) erred in admitting and relying on additional evidence without giving the Assessing Officer an opportunity to verify it, thus violating Rule 46A. The matter was restored to the Assessing Officer for fresh adjudication.

The ITAT noted that the order passed by the CIT under Section 263, which formed the basis for the subsequent assessment, was quashed by a prior ITAT order. Consequently, the ITAT held that the impugned CIT(A) order and the AO's order had no basis and were annulled.

The Tribunal upheld the order of the CIT(A), agreeing that the share transactions were a colourable device and also speculative in nature as per the explanation to Section 73 of the Income Tax Act. The assessee failed to provide any cogent material to controvert the findings.

The Tribunal upheld the CIT(A)'s decision, finding that the assessee had sufficient funds for investments, retention money was contingent on contract completion, and interest income from fixed deposits was business income as it was necessary for obtaining contracts.

The Tribunal upheld the deletion of disallowances for sales tax, stating it was not claimed as an expenditure. It also upheld the deletion of disallowances for consultancy charges, finding they were for software and hardware purchases, not services requiring TDS.

The Tribunal held that the assessee's omission to disclose the income in the original return was due to a misconception or misjudgment of Form 16A, and not a deliberate attempt to conceal income. The subsequent disclosure and payment of taxes with interest were considered bona fide.

The Tribunal upheld the CIT(A)'s decision, confirming that Section 14A and Rule 8D are not applicable to shares held as stock-in-trade, but only to investments. The dividend income in question arose from stock-in-trade.

The Tribunal held that the penalty notice issued under Section 274 read with Section 271 of the Act was bad in law because it did not clearly specify whether the penalty was for concealment of income or furnishing inaccurate particulars of income. Following High Court and Supreme Court precedents, the Tribunal confirmed the deletion of the penalty.

The Tribunal held that the assessee should not be penalized for the omission of their AR. Sufficient reasons were found for condoning the delay.

The Tribunal noted that the assessee had not received notices due to a change of address and could not present its case before the lower authorities. Therefore, the impugned order was set aside and the matter was remanded back to the AO for fresh adjudication.

The Tribunal upheld the CIT(A)'s decision, finding that the AO made the addition on mere suspicion without sufficient justification. The fact that the liabilities were subsequently discharged supported the genuineness of the claim.

The Tribunal held that the penalty notice was bad in law because it did not specify whether the penalty was for concealment of income or furnishing inaccurate particulars of income. Following High Court precedents, the Tribunal cancelled the penalty.

The Tribunal dismissed the revenue's appeal for AY 2009-10 based on the low tax effect as per CBDT Circular. For AYs 2010-11 and 2011-12, the Tribunal upheld the CIT(A)'s order, relying on a Special Bench decision that blending of tea is a manufacturing activity eligible for deduction under Section 10A.

The Tribunal held that the CIT(E)'s jurisdiction for Section 12AA registration is limited to verifying the charitable nature of objects and genuineness of activities. Finding no such grounds in the CIT(E)'s order, the matter was remitted back for fresh consideration.

The Tribunal allowed grounds related to disallowances under Section 40(a)(ia) for non-deduction of TDS on labour charges, finding the labour sardars were not suppliers. For other grounds, the Tribunal restored the issues to the AO for fresh examination due to lack of clarity or insufficient evidence.

The Tribunal held that accepting cash from a parent for business expediency, especially when the assessee was a layman and the auditors did not point out any violation, constitutes a reasonable cause. Therefore, the penalty under Section 271D was not applicable.

The Tribunal upheld the CIT(A)'s deletion of the addition, agreeing that the AO relied solely on the Director's statement during the survey without sufficient evidence. The Tribunal noted that the survey team did not establish a quantitative difference in stock and the assessee had provided reconciliations and purchase details.

The Tribunal found that the Assessing Officer's observation regarding a debit balance being treated as a credit balance was incorrect. Given the reconciliation statement and agreement from both parties, the matter was restored to the Assessing Officer for fresh examination.

The Tribunal accepted the assessee's prayer to withdraw the current appeal. The Tribunal noted that the present appeal had become infructuous due to the earlier ITAT order.

The Tribunal held that the AO had made adequate inquiries and that the issue of whether Sections 10A/10AA were deduction or exemption provisions was debatable. The Tribunal found that the AO's view was a possible view supported by case law, and therefore, the conditions for invoking Section 263 were not met.

The Tribunal held that payments made to the wholesale vendor, who acted as an agent of the State Government for regulating country liquor, fell under the exceptions provided in Rule 6DD(b) and 6DD(k) of the Income Tax Rules. Therefore, the disallowance under Section 40A(3) was deleted.

The Tribunal set aside the CIT(Appeals) order and restored the matter to the Assessing Officer. This was to allow the AO to verify additional evidence submitted by the assessee for the first time before the CIT(Appeals).

The Tribunal set aside the disallowance of interest expenses under Rule 8D(2)(ii) and remanded the issue to the AO for examination. For disallowance under Rule 8D(2)(iii), the AO was directed to consider only investments yielding tax-free income.

The Tribunal held that the reassessment proceedings were invalid as they were initiated without fresh tangible material, constituting a change of opinion. Regarding the Section 10A deduction, the Tribunal followed the Supreme Court's decision that such deductions are to be computed before setting off losses and depreciation.

The Tribunal held that the AO had made sufficient inquiries into the slump sale transaction and his acceptance of the assessee's claim was a plausible view. Therefore, the conditions for exercising revisional jurisdiction under Section 263 were not met.

The Tribunal held that the interest paid on debentures was an allowable business expenditure, as the debentures were held as business assets. This decision was based on previous rulings in the assessee's own case and a High Court judgment.

The Tribunal granted the assessee's request to withdraw the appeal. Consequently, the appeal filed by the assessee was dismissed as withdrawn.

The Tribunal held that the appeal of the Revenue deserved to be dismissed in terms of low tax effect as per CBDT Circular No. 21/2015. The circular's revised monetary limits were applicable retrospectively to pending appeals.

The Tribunal noted that the assessee did not want to press the appeal. Consequently, the Tribunal dismissed the appeal as withdrawn.

The Tribunal noted that the assessee did not want to press the appeal and the revenue had no objection. Consequently, the appeal was dismissed as withdrawn.

The Tribunal noted that the tax effect was below the CBDT's revised monetary limit for filing appeals. Following CBDT instructions, the appeal was treated as withdrawn and dismissed.

The Tribunal observed that the assessee was not seriously interested in pursuing the appeal due to repeated adjournments and non-appearance. Relying on judicial precedent, the Tribunal dismissed the appeal for non-prosecution.

The Tribunal found that the assessee was not afforded a proper opportunity of being heard. Therefore, the order of the CIT(Exemptions) was set aside, and the matter was remanded for fresh consideration.