ITAT Kolkata Judgments — July 2017

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

The Tribunal held that since the assessment order on which the penalty was based was annulled, the penalty itself had no foundation and was liable to be cancelled. The CIT(Appeals) order cancelling the penalty was upheld.

The Tribunal held that the AO had made due inquiries regarding the Section 80IB deduction and customer advances, and the CIT's order was a non-speaking order. Therefore, the CIT's order was quashed.

The Tribunal held that the AO's failure to conduct a thorough inquiry into the share capital transactions empowers the CIT to revise the assessment order under Section 263. The CIT's order was upheld as valid.

The Tribunal held that the AO's failure to conduct a thorough inquiry regarding share capital and premium justified the CIT's revisionary powers under Section 263. The assessment order was deemed erroneous and prejudicial to revenue due to inadequate investigation.

The Tribunal held that the disallowance under Section 40(a)(ia) should be remanded to the AO to verify if the payees declared the income. For bad debts, the Tribunal found no merit in the AO's stand, directing remand for a limited purpose of checking if the debt was written off by squaring off accounts.

The Tribunal found that the issue of updated Form 26AS and the claim of joint ownership of land required fresh examination by the Assessing Officer. Therefore, the matter was remanded back for proper adjudication.

The Tribunal held that the advertisement expenses were incurred within the parameters of medical service guidelines and were not a violation of any act. Therefore, the enhanced addition by the CIT(A) was not justified.

The Tribunal held that the addition made by the AO lacked basis, as the assessee's method of revenue recognition was consistent and accepted in prior assessments. The AO's remand report also admitted the lack of material to quantify suppression.

The Tribunal accepted the assessee's plea that the appeal had become academic. Therefore, the appeal was dismissed as infructuous.

The Tribunal held that the assessee was an investor in shares and not a businessman in shares, confirming the order of the CIT(A). The Tribunal relied on its previous decision in the assessee's own case for AY 2008-09.

The Tribunal held that the CIT wrongly invoked Section 263 as the issue was debatable with two possible views. The AO had already considered the facts and made a decision, and the CIT did not clearly specify how the AO's order was erroneous.

The Tribunal held that the CIT was justified in revising the assessment order due to the AO's inadequate inquiry into share capital received at a premium. The Tribunal upheld the CIT's order, finding it consistent with previous rulings on similar issues.

The Tribunal held that the AO's inquiry was inadequate, giving the CIT power to revise the assessment order. The revision was upheld as the assessment was erroneous and prejudicial to the revenue's interest.

The Tribunal held that the evidence on record was sufficient to conclude that the donation was towards the corpus fund. The CIT's conclusion that there was no material to support this was based on assumptions and surmises, thus the order under Section 263 was quashed.

The Tribunal held that the right to collect service charges, acquired for a lump sum consideration, constitutes an intangible asset eligible for depreciation under Section 32(1)(i) of the Income-tax Act. The Tribunal also directed the deletion of a disallowance of professional charges made on an estimated basis.

The Tribunal held that the tax effect was below the revised monetary limit of Rs.10,00,000/- for filing appeals by the Revenue, as per CBDT Circular No. 21/2015. Therefore, the appeal was treated as withdrawn/not pressed.

The Tribunal held that notional interest cannot be taxed in the absence of any provision in the Act or an agreement to charge interest. It also directed that the disallowance under Section 14A cannot exceed the exempt income earned by the assessee.

The Tribunal dismissed the revenue's appeal concerning the reopening of assessment, as the grounds were not challenged. For AY 2006-07, the Tribunal upheld the CIT(A)'s deletion of additions for sports/recreation and environment expenses, following a coordinate bench decision. The assessee's additional ground regarding net profit calculation was admitted and remitted to the CIT(A) for fresh adjudication.

The Tribunal dismissed the revenue's appeal concerning the reopening of assessment, as the grounds were not challenged. For AY 2006-07, the Tribunal upheld the CIT(A)'s deletion of additions for sports/recreation and environment expenses, following a coordinate bench decision. The assessee's additional ground regarding net profit calculation was admitted and remitted to the CIT(A) for fresh adjudication.

The Tribunal held that the issue of subsidies being eligible for deduction under Section 80IC is no longer res integra, citing the Supreme Court's decision in Meghalaya Steels Ltd. The CBDT circular also directs officers to allow such deductions.

The Tribunal found that the assessee was prevented by sufficient cause for the hearing before the CIT(A). Therefore, the ex-parte order was set aside.

The Tribunal upheld the CIT(Appeals)'s decision to cancel the reassessment, finding that the reopening was based on a mere change of opinion without any new material. The reasons recorded by the Assessing Officer did not support the reopening.

The Tribunal upheld the CIT(A)'s order, stating that derivative trading in a recognized stock exchange is not a speculative transaction as per the proviso to Section 43(5). Therefore, the loss was correctly treated as a business loss.

The Tribunal held that the assessee failed to prove the genuineness of the payment of labour charges, especially overtime wages, before the AO or CIT(A). The contractee's director denied any extra wages payment, and the overtime register was not authenticated.

The Tribunal held that the issue of subsidies being eligible for deduction under Section 80IC is no longer res integra, citing the Supreme Court's decision in Meghalaya Steels Ltd. The CBDT circular also directs officers to allow such deductions.

The Tribunal dismissed the revenue's appeal concerning the reopening of assessment, as the grounds were not challenged. For AY 2006-07, the Tribunal upheld the CIT(A)'s deletion of additions for sports/recreation and environment expenses, following a coordinate bench decision. The assessee's additional ground regarding net profit calculation was admitted and remitted to the CIT(A) for fresh adjudication.

The Tribunal held that the assessee's main object in its Memorandum of Association clearly indicates that its business is letting out property. Following Supreme Court judgments, the income from sub-licensing premises should be assessed as business income.

The Tribunal held that the deemed sale consideration under Section 50C is only relevant for Section 48 and not for determining 'net consideration' under Section 54F. It also upheld that depositing funds in the capital gains account scheme within the due date under Section 139(4) satisfies the conditions for Section 54F deduction.

The Tribunal dismissed the Revenue's appeal. This was based on the fact that the tax effect of the appeal was below Rs. 10 lakhs, making it not maintainable as per CBDT Circular No. 21/2015.

The Tribunal held that the AO's assumption of double-digit suppression in the assessee's document was not supported by any direct admission from the assessee's father or CFO regarding that specific document. The CIT(A)'s deletion of the addition was upheld.

The Tribunal held that the AO's assumption of double-digit suppression in the assessee's document was not supported by any direct admission from the assessee's father or CFO regarding that specific document. The CIT(A)'s deletion of the addition was upheld.

The Tribunal held that the AO's disallowance was solely based on non-deduction of TDS, and the CIT(A) could not have sustained the disallowance on a different ground (lack of proper vouchers). Since the payments were for the purchase of materials, Section 194C was not attracted.

The Tribunal held that the penalty for concealment of income was not justified as the assessee had a bona fide belief regarding the taxability of STCG from mutual fund switching. However, the Tribunal directed the AO to allow the set-off of short-term capital losses against STCG as per Section 70(2) of the Act.

The Tribunal held that the AO's assumption of double-digit suppression in the assessee's document was not supported by any direct admission from the assessee's father or CFO regarding that specific document. The CIT(A)'s deletion of the addition was upheld.

The Tribunal held that the CIT(A) was justified in deleting the addition as the assessee had provided sufficient explanation for the limestone raising cost, which was available to the AO. The AO's disallowance was made without proper appreciation of facts.

The ITAT set aside the order of the CIT(A) and remanded the matter back. The CIT(A) was directed to decide the application for condonation of delay afresh in accordance with law.

The Tribunal held that interest accrued on pledged fixed deposits, which was not passed on to the assessee until the release of the deposits, should not be taxed in the current year, especially when it was offered in a subsequent year and accepted by the AO. The addition for raw material purchases was deleted due to the AO not confronting adverse material obtained from the supplier with the assessee.

The Tribunal held that the income arising from the sale of fertilizers to nominal members was eligible for deduction under Section 80P(2)(a)(iv) of the Act. The Tribunal found that the sale transactions with nominal members did not violate the bye-laws or the West Bengal Co-operative Societies Act, 1940.

The Tribunal held that cash transactions between a firm and its partners are considered payments to self and do not attract the provisions of sections 269SS and 269T. Therefore, penalties under sections 271D and 271E are not leviable in such cases. For trade advances, the Tribunal noted that individual transactions were below the threshold limit and relied on High Court decisions.

The Tribunal held that cash transactions between a firm and its partners are considered payments to self and do not attract the provisions of sections 269SS and 269T. Therefore, penalties under sections 271D and 271E are not leviable in such cases. For trade advances, the Tribunal noted that individual transactions were below the threshold limit and relied on High Court decisions.

The Tribunal held that the activity of excavation and raising of coal amounts to production of an article or thing. Therefore, the assessee is eligible for additional depreciation.

The Tribunal upheld the CIT(A)'s decision, finding that the subscription expenses were business-related and allowable. Regarding unsecured loans, the Tribunal agreed that the assessee had discharged its onus by providing confirmations, banking channel transactions, and proof of creditors being income tax assessees with sufficient assets.

The Tribunal held that cash transactions between a firm and its partners are considered payments to self and do not attract the provisions of sections 269SS and 269T. Therefore, penalties under sections 271D and 271E are not leviable in such cases. For trade advances, the Tribunal noted that individual transactions were below the threshold limit and relied on High Court decisions.