ITAT Kolkata Judgments — June 2017

The Tribunal upheld the CIT(A)'s decision, finding no infirmity in deleting the addition on account of capital introduction as the partner's books and the firm's books reflected the transaction and the partner was a regular assessee. Similarly, the bad debt write-off was allowed as the assessee had written it off in its books and provided necessary details.

The Tribunal held that the assessee was entitled to a deduction for bad debts written off as irrecoverable in its accounts, provided the conditions under Section 36(1)(vii) read with Section 36(2) of the Income Tax Act were met. Following the Supreme Court's decision in TRF Ltd., the Tribunal found the conditions satisfied.

The Tribunal held that the assessee failed to discharge the burden of proof to establish the genuineness and creditworthiness of the share applicants. Therefore, the addition made by the AO under Section 68 was upheld.

The Tribunal held that the AO had adequately inquired into and verified all the issues raised by the Principal CIT. The mere non-discussion of these inquiries in the assessment order did not imply a lack of application of mind by the AO.

The Tribunal held that while the omission to compute book profit was a mistake apparent from the record, the actual computation of book profit under Section 115JA in this case was a highly debatable issue. Therefore, rectification under Section 154 was not permissible.

The Tribunal noted the assessee's lack of interest in prosecuting the appeals. Citing legal principles and ITAT Rules, the Tribunal treated the appeals as unadmitted and dismissed them for non-prosecution.

The Tribunal noted the assessee's consistent absence and lack of interest in prosecuting the appeal. Citing legal principles and relevant case law, the Tribunal decided to treat the appeal as unadmitted.

The Tribunal held that the assessee satisfied the conditions under Section 36(1)(vii) and 36(2) of the Income Tax Act, as the bad debt was written off in the books and had been accounted for in computing income in earlier years. The Tribunal also found no merit in the revenue's ground regarding the admission of additional evidence.

The Tribunal upheld the CIT(Appeals)'s decision on most grounds, finding that the assessee failed to provide sufficient evidence to substantiate claims for certain expenses and the inclusion of specific receipts in turnover. Some grounds were dismissed as not pressed.

The Tribunal upheld the CIT(Appeals)'s order, which directed the Assessing Officer to verify the assessee's status as a Cooperative Society based on documentary evidence. The Tribunal found no grievance for the Revenue in this direction.

The Tribunal restored the issue of disallowance for leave encashment to the AO for fresh adjudication, awaiting a Supreme Court decision. The issue of interest under Section 234C was not pressed and dismissed. Consequential relief for interest under Sections 234D and 244A was directed.

The ITAT held that the order passed by the CIT(A) in the name of a deceased person is a nullity. Following the precedent set by the Hon'ble Madhya Pradesh High Court, the ITAT set aside the impugned order.

The Tribunal held that no addition could be made for undisclosed purchases if the sources for payments were explained. However, the net profit on the differential sum should be taxed.

The Tribunal held that the penalty order was invalid because the show-cause notice under Section 274 did not clearly specify whether the penalty was for furnishing inaccurate particulars or for concealing particulars of income. Following precedent, the penalty was cancelled.

The Tribunal found that the credits in the SBI account represented commission income and that the assessee and his wife had declared their respective gross commission incomes, which matched TDS certificates. The AO had not properly examined these facts. Therefore, the matter was set aside for fresh adjudication.

The Tribunal held that the Assessing Officer did not make independent inquiries with M/s Mehul Traders and did not reject the assessee's books of accounts. The payment was made through a disclosed bank account, and the closing stock related to these purchases was accepted. Therefore, the addition was deleted.

The Tribunal found that the lower authorities had not examined the details of the prize money received by the assessee. Therefore, the Tribunal set aside the appeals to the file of the AO for fresh adjudication after verifying the supporting documents.

The Tribunal held that the disallowance of brought forward losses cannot be considered 'undisclosed income' as defined under section 271AAA. Therefore, the penalty imposed was not sustainable.

The Tribunal held that the purchase of sales tax exemption certificates was a commercial transaction and therefore revenue expenditure. The CIT(A)'s deletion of the addition made by the AO was upheld.

The Tribunal upheld the CIT(A)'s order, agreeing that the subsidy received by the assessee was capital in nature. This decision was based on a prior ruling by a coordinate bench in the assessee's own case for earlier assessment years.

The Tribunal upheld the deletion of additions made by the AO for both bogus purchases and stock differences. It found that the assessee provided sufficient evidence for the genuineness of purchases and a reasonable explanation for the stock difference, consistent with past practices.

The Tribunal noted that the assessee had amended the dissolution clause as suggested by the CIT(E) and had applied for the alteration. The Tribunal's decision is based on this subsequent action by the assessee.

The Tribunal held that since the assessment order was annulled due to a procedural defect (lack of notice u/s 143(2)), the consequential penalty order also falls. The penalty cannot survive without a valid assessment order.

The Tribunal held that the penalty notice was bad in law as it did not clearly specify the default. Following the Karnataka High Court's decision, the Tribunal cancelled the penalty.

The Tribunal held that rejecting purchases solely because some notices were unserved is not a valid reason, especially when sales are accepted and supporting documents are produced. The CIT(A)'s deletion of the addition was upheld.

The Tribunal held that the CIT(E) ought to have given the assessee an opportunity to be heard before rejecting the application. Since no proper opportunity was granted, the matter was remanded back to the CIT(E) for fresh consideration.

The Tribunal held that the ex-parte nature of the orders meant the assessee's plea regarding reimbursement of expenses and the non-debiting of amounts in the Profit & Loss account were not considered. These aspects needed to be decided de novo by the Assessing Officer.

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

The Tribunal held that Section 14A can only be invoked if there is exempt income. Since the assessee had no exempt income, no disallowance under Section 14A was warranted. However, as the assessee did not appeal the CIT(A)'s partial disallowance, the AO was directed to adopt that amount.

The Tribunal held that while the principle of disallowance was justified if withdrawals exceeded capital introduced, the assessee's claim regarding TDS receivable not being a withdrawal needed verification. A proportionate disallowance was to be made for one proprietorship concern, while the other was confirmed.

The Tribunal held that the rejection of books of account was unjustified as the consolidated accounts included the branch accounts, even if audited later. The matter was restored to the Assessing Officer for de novo assessment.

The Tribunal found that the impugned order of the CIT(A) was ex parte and that the assessee should be given an opportunity to present their case on merit. The matter was remitted back to the CIT(A) for a fresh decision.

The Tribunal found that the assessee had sufficient cause for non-compliance and was not given a proper opportunity to be heard, violating the principles of natural justice. Therefore, the ex-parte order of the CIT(A) was set aside.

The Tribunal held that for computing capital gains, the deemed sale consideration under Section 50C (stamp duty value) should be applied. However, for claiming deduction under Section 54EC, the investment should be based on the actual sale consideration received by the assessee.

The Tribunal held that there was no legal infirmity in the reopening of assessment. It found that the reasons were supplied upon request and at least one reason was consistent with those recorded, making the notice valid. The CIT(Appeals)'s order annulling the assessment was set aside.

The Tribunal held that cash payments made to WBSEDCL are covered by the exception under Rule 6DD(b) of the IT Rules, as WBSEDCL is owned and controlled by the Government of West Bengal. Therefore, no disallowance under Section 40A(3) can be made.

The Tribunal found it appropriate to remand the issue to the CIT(A) for fresh adjudication. This was done in the interest of justice, allowing the assessee an adequate opportunity to be heard and present evidence.

The Tribunal dismissed the ground related to personal expenses, finding no violation of Rule 46A as no fresh evidence was admitted. However, for the long-term capital gains issue, the Tribunal agreed that the CIT-A admitted fresh evidence (deed of cancellation) without giving the AO an opportunity, thus violating Rule 46A.

The Tribunal found that the CIT(A) had allowed fresh evidence in appeal without following Rule 46A, and restored the matter to the AO for fresh adjudication after verifying the actual cost of closing stock.

The Tribunal held that the issue was covered by a previous decision of the Calcutta High Court, which had allowed similar expenses. The department's appeal against that decision was dismissed by the High Court, and a subsequent SLP was also dismissed.

The Tribunal noted the assessee's lack of interest in prosecuting the appeals due to non-appearance and insufficient address. Following legal principles and precedent, the appeals were treated as unadmitted.

The Tribunal held that penalty under Section 271(1)(c) cannot be levied when tax is paid under MAT provisions and additions are made under normal provisions, as the concealment did not lead to tax evasion in this scenario.

The Tribunal held that the interest income earned on the balance of UI charges belonged to the Government (WBERC) and not the assessee. Although the assessee's PAN was used for convenience, it did not make the income taxable in the hands of the assessee.

The Tribunal found that the additional evidence presented by the assessee was not verified by the lower authorities. Therefore, in the interest of justice, the issues were set aside to the AO for fresh adjudication.

The Tribunal found the CIT(A)'s estimation of 1.5% to be high, considering the assessee's past profit declarations. It directed the AO to re-compute profit at 0.80% of turnover, partly allowing the assessee's appeal.

The Tribunal held that the AO had conducted proper and sufficient inquiries during the assessment proceedings, and his conscious view could not be replaced by the PCIT's view under Section 263. Therefore, the revisionary order passed by the PCIT was quashed.

The Tribunal held that the CIT erred in exercising powers under Section 263 as the assessee was not given proper notice regarding the grounds for revision, and the CIT failed to provide specific findings on the assessee's explanations. The Tribunal also noted that one of the issues raised by the CIT was already decided by the CIT(A).