ITAT Kolkata Judgments — September 2018

The Tribunal found that the AO did not properly follow the directions given by the CIT under Section 263 for fresh assessment, specifically regarding independent inquiries into shareholders and money trails. The CIT(A)'s order was also considered cryptic.

The Tribunal upheld the CIT(A)'s decision that the writing pads were not 'freebies' and the disallowance under Section 37(1) was not sustainable. The Tribunal also noted that the revenue's appeal had a low tax effect.

The tribunal upheld the addition of Rs. 23,13,286/- for unexplained cash credits due to lack of supporting documents. However, it deleted the disallowance of labour charges and the addition for remission of liability, finding them to be made on an ad-hoc basis without proper justification.

The Tribunal found that the assessee was not served with all the notices of hearing by the CIT(A). Therefore, the appeal was restored to the CIT(A) for fresh adjudication.

The Tribunal upheld the lower authorities' decision that the claimed long-term capital gains were bogus. The transactions were considered accommodation entries to generate exempt income without paying taxes.

The Tribunal held that the loan received by the assessee from OSIL was not taxable as dividend income. It found that OSIL was a registered NBFC and lending money constituted a substantial part of its business, fulfilling the conditions of the exception under Section 2(22)(e)(ii).

The ITAT held that employee PF contributions deposited before the due date of filing the return are allowable. They also found that ad hoc disallowances for entertainment and gift expenses were not justified. For bank charges, the matter was remanded to the AO for de novo assessment.

The Tribunal held that the AO's conclusion of a Nil balance was factually incorrect, as the creditor had confirmed supply of materials and an amount receivable. Furthermore, the Tribunal stated that no addition can be made under Section 68 in respect of a trade creditor when purchases are not disputed.

The Tribunal accepted the explanation for the excess silver, noting that melting services are only provided to bullion dealers and the conversion was done through the assessee's concern. However, the explanation for the excess cash was rejected due to discrepancies in the property sale agreement, including anti-dating.

The High Court held that one issue was covered by the Supreme Court judgment in CIT vs. Woodward Governor India P.Ltd and not by Section 43A. For other issues, the High Court declined to answer due to the small amount involved and the passage of time, not wishing to investigate factual findings.

The Tribunal held that the reopening of the assessment was invalid because the AO failed to record in the reasons that the assessee had failed to disclose fully and truly all material facts necessary for the assessment. The Tribunal emphasized that the reasons recorded must establish a vital link between the reasons and the evidence, which was missing in this case.

The Tribunal directed the AO to grant the deduction of the brought forward business loss from AY 2007-08 in accordance with law. The AO was instructed to verify the facts and figures submitted by the assessee.

The High Court held that one issue was covered by the Supreme Court judgment in CIT vs. Woodward Governor India P.Ltd and not by Section 43A. For other issues, the High Court declined to answer due to the small amount involved and the passage of time, not wishing to investigate factual findings.

The CIT(Appeals) deleted the disallowance, noting the assessee had suo motu disallowed a higher amount of interest than that calculated by the AO under Rule 8D(ii). The CIT(Appeals) also found no basis for disallowance under Rule 8D(iii) as no overhead expenses were debited.

The Tribunal held that the CIT(A) erred by setting aside the AO's order and remanding it back to the AO for further inquiry, instead of conducting the inquiry itself. The Tribunal quashed the orders of the authorities below, relying on a High Court judgment.

The Tribunal upheld the lower authorities' decision that the claimed long-term capital gains were bogus. The transactions were considered accommodation entries to generate exempt income without paying tax.

The Tribunal upheld the cancellation of the penalty under Section 271(1)(c) as the assessee acted in good faith and with due diligence. The Tribunal also found the transfer pricing adjustment itself to be unsustainable.

The Tribunal held that the issue of share capital needed re-examination by the AO due to procedural lapses and the assessee's claim of proving identity, genuineness, and creditworthiness. The disallowance of expenditure related to exempt income was not sustainable as the assessee had not derived any exempt income.

The Tribunal upheld the lower authorities' decision that the claimed long-term capital gains were bogus. The transactions were considered accommodation entries to generate exempt income without paying tax.

The Tribunal upheld the lower authorities' decision that the claimed long-term capital gains were bogus. The transactions were considered accommodation entries to generate exempt income without paying tax.

The Tribunal held that the CIT(A) erred by setting aside the AO's order and remanding it back to the AO for further inquiry, instead of conducting the inquiry itself. The Tribunal quashed the orders of the authorities below, relying on a High Court judgment.

The Tribunal upheld the lower authorities' decision that the claimed long-term capital gains were bogus. The transactions were considered accommodation entries to generate exempt income without paying tax.

The Tribunal upheld the lower authorities' decision that the claimed long-term capital gains were bogus. The transactions were considered accommodation entries to generate exempt income without paying tax.

The Tribunal upheld the cancellation of the penalty under Section 271(1)(c) as the assessee acted in good faith and with due diligence. The Tribunal also found the transfer pricing adjustment itself to be unsustainable.

The Tribunal upheld the cancellation of the penalty under Section 271(1)(c) as the assessee acted in good faith and with due diligence. The Tribunal also found the transfer pricing adjustment itself to be unsustainable.

The Tribunal upheld the lower authorities' decision that the claimed long-term capital gains were bogus. The transactions were considered accommodation entries to generate exempt income without paying tax.

The Tribunal found that the assessee was not given a proper opportunity to present their case before the AO during the reassessment proceedings. Citing Supreme Court and High Court precedents, the Tribunal set aside the CIT(A)'s order.

The Tribunal allowed the claim for tyres and accessories upon reviewing the bills and allowed the interest deduction as the payees had disclosed the income and paid taxes, thus not making the assessee liable under Section 40(a)(ia).

The Tribunal held that a disallowance under Section 14A read with Rule 8D is not sustainable in the absence of any exempt income. Therefore, the impugned disallowance was deleted.

The Tribunal upheld the lower authorities' decision that the claimed long-term capital gains were bogus. The transactions were considered accommodation entries to generate exempt income without paying tax.

The Tribunal held that the CIT(A) erred by setting aside the AO's order and remanding it back to the AO for further inquiry, instead of conducting the inquiry itself. The Tribunal quashed the orders of the authorities below, relying on a High Court judgment.

The Tribunal held that the long-term capital gains claimed by the assessee were bogus and constituted unexplained cash credits. The transactions were found to be artificial and manipulated, lacking genuine market trends.

The Tribunal set aside the order of the CIT(Exemption) and directed him to grant the Section 80G approval. This was because the CIT(Exemption) overlooked the fact that the Section 12AA registration was granted on the same day.

The Tribunal held that the CIT(A) erred by confirming the AO's order without considering the assessee's written submissions or providing an opportunity to produce evidence regarding the source of funds for the property purchase. The AO's order was also passed without sufficient opportunity for the assessee to be heard.

The Tribunal noted that income tax proceedings are not adversarial and set aside the ex parte order of the CIT(A). It directed the CIT(A) to adjudicate the appeal on merits after affording the assessee an adequate opportunity.

The Tribunal held that the penalty imposed under Section 271(1)(c) was not sustainable as the assessee acted in good faith and with due diligence, and the additions made were also not sustainable. The CIT(A)'s order cancelling the penalty was upheld.

The Tribunal held that the appeal was not being pursued by the assessee. Citing previous judgments, the Tribunal concluded that an appeal requires active prosecution, not just filing.

The tribunal restored the transfer pricing issues covered by the APA to the Transfer Pricing Officer for factual verification. Other additions not covered by the APA or not argued by the assessee were confirmed.

The Tribunal found that the AO did not conduct independent inquiries as directed by the CIT under Section 263, despite shareholders confirming investments. The AO failed to investigate multiple layers of investment and identify ultimate controlling interests.

The Tribunal held that the Revenue had not appealed against the earlier CIT(A) order for AY 2010-11, which dealt with the same issue. Therefore, the issue had attained finality in favour of the assessee.

The Tribunal found that evidence regarding sales in the subsequent year was not produced before lower authorities. Therefore, the issue was remanded to the AO for fresh adjudication.

The tribunal restored the transfer pricing issues covered by the APA to the Transfer Pricing Officer for factual verification. Other additions not covered by the APA or not argued by the assessee were confirmed.

The Tribunal directed the Assessing Officer to await the decision of the Apex Court in the Exide Industries Ltd. case regarding the validity of Section 43B(f). For two of the assessees, the disallowance was upheld for now as no actual payment was made, while for the first assessee, factual verification was required to avoid double addition.

The Tribunal directed the Assessing Officer to await the decision of the Apex Court in the Exide Industries Ltd. case regarding the validity of Section 43B(f). For two of the assessees, the disallowance was upheld for now as no actual payment was made, while for the first assessee, factual verification was required to avoid double addition.

The Tribunal found that the CIT(A)'s order lacked detailed discussion on merits and there was no confirmation of service of notices. Therefore, the appeal was restored to the CIT(A) for fresh adjudication.

The Tribunal found that the CIT(A) failed to adjudicate the issues on merits and did not follow the procedure under Section 250(6) of the Act. The Tribunal restored the appeal to the CIT(A) for fresh adjudication.

The Tribunal upheld the Revenue's ground regarding MAT liability for units eligible for deduction. It partly allowed the appeal on Section 14A by directing the AO to consider only dividend-earning investments and dismissed the grounds related to depreciation and unexplained investments.

The Tribunal found that the CIT(A)'s order lacked detailed discussion on merits and there was no confirmation of service of notices. Therefore, the appeal was restored to the CIT(A) for fresh adjudication.

The Tribunal held that estimating net profits without rejecting the assessee's books of account is erroneous in law and on facts. Therefore, the estimation made by the lower authorities was not sustainable.

The Tribunal found merit in the assessee's submission that it did not receive a proper opportunity to be heard by the AO during reassessment proceedings. Citing Supreme Court precedent, the Tribunal set aside the CIT(A)'s order.