ITAT Kolkata Judgments — September 2019

The Tribunal held that the assessee's explanation regarding the inclusion of outstanding balances from preceding years in the TDS amount was not rebutted. Therefore, the addition could not be sustained.

The Tribunal condoned the delay in filing the first appeal, holding that substantial justice should prevail over technicalities. The CIT(A) was directed to decide the appeal on merits.

The Tribunal upheld the CIT(A)'s decision, agreeing that the AO failed to provide evidence to justify the higher valuation. The Tribunal noted that while municipal value is not binding, the AO did not conduct a proper exercise to determine market rent, and the assessee had consistently offered income based on received rent in prior years.

The Tribunal found the 20% disallowance to be on the higher side, considering the fluctuating net profit ratios and lack of comparative turnover figures. It restricted the disallowance to 10%.

The Tribunal held that passing an ex-parte order without disposing of the appeals on merits is not permissible in law. The matter was set aside to the CIT(A) for fresh adjudication.

The ITAT set aside the order of the CIT(A) and remanded the matter back for fresh adjudication. The assessee was directed to appear before the CIT(A) and cooperate in the proceedings.

The Tribunal held that passing an ex-parte order without disposing of the appeal on merits is not permissible in law. Therefore, the matter was set aside to the CIT(A) for fresh adjudication.

The ITAT set aside the order of the CIT(A) and remanded the matter back for fresh adjudication. The assessee was directed to appear before the CIT(A) and cooperate in the proceedings.

The Tribunal set aside the matter to the Assessing Officer for fresh adjudication due to confusion in accounting entries and reconciliation. The CIT(A) had passed an ex-parte order without considering the merits of the case.

The Tribunal held that the reopening of assessment was valid as it was based on tangible material found during the survey, even though it was done after four years. However, once the books of account were rejected, the AO should have estimated the profits rather than making separate additions for commission/incentive/discount.

The Tribunal dismissed the grounds related to Section 14A disallowance. For Section 40(a)(ia), the Tribunal restored the issue to the AO for verification of whether the payees had offered the income and paid taxes thereon.

The Tribunal restored the issue to the file of the Assessing Officer for fresh adjudication. The Assessing Officer was directed to verify the assessee's claim concerning reconciliation.

The Tribunal held that the AO cannot make ad-hoc disallowances without rejecting the assessee's books of accounts and resorting to best judgment assessment. Disallowances should be item-wise and based on lack of nexus or supporting bills.

The Tribunal held that the services rendered by Mr. Firpo were outside India and not taxable in India as they did not accrue or arise in India. Therefore, no tax deduction was required under Section 195 of the Act.

The Tribunal allowed the assessee to withdraw the appeal as the Departmental Representative had no objection. Consequently, the appeal was dismissed as withdrawn.

The Tribunal held that the cash deposited was not the assessee's income but rather a part of the employer's asset that was misappropriated and subsequently returned. The CIT(A) had correctly deleted the addition.

The Tribunal held that depreciation on trademark and brand name is allowable. It also ruled that cash discounts are incentives and not commission/brokerage, and that notional interest on advances to suppliers is not justifiable in the assessee's business. The disallowance under Section 14A was partly accepted, and the disallowance for TDS under Section 194H on seed purchases was deleted, treating it as a principal-to-principal transaction.

The Tribunal held that depreciation on trademark and brand name is allowable. It also ruled that cash discounts are incentives and not commission/brokerage, and that notional interest on advances to suppliers is not justifiable in the assessee's business. The disallowance under Section 14A was partly accepted, and the disallowance for TDS under Section 194H on seed purchases was deleted, treating it as a principal-to-principal transaction.

The Tribunal held that depreciation on trademark and brand name is allowable. It also ruled that cash discounts are incentives and not commission/brokerage, and that notional interest on advances to suppliers is not justifiable in the assessee's business. The disallowance under Section 14A was partly accepted, and the disallowance for TDS under Section 194H on seed purchases was deleted, treating it as a principal-to-principal transaction.

The Tribunal found that the issues regarding disallowance of labour charges and TDS required factual verification. The applicability of the second proviso to Section 40(a)(ia) also needed examination.

The Tribunal held that additions in search assessments must be based on incriminating material. Since no such material was found, the disallowance of deduction under Section 35(1)(ii) was not sustainable.

The Tribunal held that the lower authorities wrongly treated outright sales invoices as contractual payments. Therefore, the disallowance made on account of non-deduction of TDS was incorrect.

The Tribunal held that additions in search assessments must be based on incriminating material. Since no such material was found, the disallowance of deduction under Section 35(1)(ii) was not sustainable.

The Tribunal noted that the impugned income pertained to a sale deed executed in the preceding assessment year. Therefore, the matter was restored to the Assessing Officer for appropriate assessment in AY 2012-13.

The Tribunal found that the assessee did not receive sufficient opportunity to be heard in the lower proceedings. Therefore, the case was restored to the Assessing Officer for fresh adjudication on all issues.

The Tribunal found sufficient cause for the assessee's non-appearance as the notices were sent to an incorrect address. Therefore, the ex-parte order of the CIT(A) was set aside.

The Tribunal found that the assessee had sufficient cause for non-appearance before the CIT(A). Therefore, the ex-parte order of the CIT(A) was set aside, and the matter was remanded for fresh disposal on merits.

The Tribunal found that the CIT(A)'s ex-parte order did not comply with the requirements of Section 250(6) of the Income Tax Act. Therefore, the order was set aside and the matter was remitted back for fresh disposal.

The Tribunal set aside the ex-parte order of the CIT(A) and remanded the matter back for a fresh disposal on merits. The assessee was directed to cooperate and comply with the proceedings before the CIT(A).

The Tribunal found merit in the Revenue's contention that the CIT(A) might not have considered the assessee's written submissions. Therefore, the CIT(A)'s order was set aside.

The Tribunal found sufficient cause for the assessee's non-appearance before the CIT(A) due to non-receipt of notices. The CIT(A)'s ex-parte order was also found to be non-compliant with statutory requirements.

The Tribunal found sufficient cause for the assessee's non-appearance and noted the CIT(A)'s order did not comply with statutory requirements. Therefore, the ex-parte order was set aside.

The Tribunal set aside the ex-parte order of the CIT(A) and remitted the matter back for fresh disposal on merits. This was due to the CIT(A)'s order not complying with the requirements of Section 250(6) and to provide the assessee with a proper opportunity to be heard.

The Tribunal held that the addition under section 56(2)(vii)(b) was not justified because the assessee had paid a part of the consideration through a cheque dated 04.04.2012, which was prior to the agreement date of 15.04.2012, satisfying the proviso to the section.

The Tribunal accepted the Revenue's miscellaneous applications, acknowledging an apparent error in its previous order. The appeals were restored to the Assessing Officer for fresh adjudication on the merits of cash deposits.

The Tribunal set aside the ex-parte order of the CIT(A) and restored the matter to the AO for fresh assessment. The assessee was granted an opportunity to produce directors and supporting evidence.

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

The Tribunal held that the Revenue's appeal should be dismissed due to the low tax effect, as per CBDT Circular No. 17/2019 which applies retrospectively. The circular clearly states that appeals should not be filed if the tax effect is below the specified monetary limit.

The Tribunal condoned the delay in filing the lower appeal. It directed the deletion of disallowance on freight charges, restricted the disallowance on loading/unloading charges, allowed the bad debts claim, and restored the issue of sundry creditors to the Assessing Officer for fresh verification.

The Tribunal partly allowed the assessee's appeal and dismissed the revenue's appeal. It found that while some commission expenses were not substantiated, the sales promotion expenses related to FOC (Free of Cost) items were allowable.

The tribunal recalled its earlier order due to a mistake apparent on record. It held that the issue of double deduction for depreciation in the case of a charitable trust was no longer res integra, citing a Supreme Court decision and the prospective nature of an amendment to Section 11(6).

The Tribunal partly allowed the assessee's appeal and dismissed the revenue's appeal. It found that while some commission expenses were not substantiated, the sales promotion expenses related to FOC (Free of Cost) items were allowable.

The Tribunal found that the Assessing Officer and CIT(A) lacked a proper basis for estimating the disallowances. Therefore, the Tribunal reduced the disallowance on labour charges to Rs. 5 lakhs and on cement claim to Rs. 2 lakhs.

The Tribunal held that the disallowance under Section 40A(3) was not justified. It was noted that the payments were made on days when banking operations were not available, and the payee had acknowledged the receipt of these payments, which were also reflected in the payee's income. The Tribunal adopted the reasoning of the CIT(A) in deleting the disallowance.

The Tribunal accepted the Revenue's miscellaneous applications, acknowledging an apparent error in its previous order. The appeals were restored to the Assessing Officer for fresh adjudication on the merits of cash deposits.

The Tribunal held that the CIT(A) rightly deleted the addition of Rs. 7,02,00,000/- made by the AO on account of unexplained cash credits. The Tribunal noted that the assessee had provided explanations, including receipts by cheque, supply of machinery, and payments for pathological tests, which were not doubted by the AO. The Tribunal found that the shareholder company's name had changed and that the AO had not conducted adequate corroborative inquiries, relying solely on the MCA site information. The Tribunal also affirmed the CIT(A)'s decision to allow the set-off of brought forward losses of Rs. 5,36,66,368/-. The Tribunal agreed that the shareholding criteria under Section 79 of the Act was met, as the same shareholders holding more than 51% of the voting power in the year of loss continued to do so in the year of set-off. Furthermore, the Tribunal concurred with the CIT(A)'s finding that Section 79 of the Act does not apply to brought forward losses on account of depreciation, citing the Supreme Court's decision in Shri Subhulaxmi Mills Ltd. The Tribunal dismissed the Revenue's appeal.

The Tribunal found that the Assessing Officer had not examined the assessee's detailed evidence. Therefore, the case was restored to the Assessing Officer for fresh adjudication.

The Tribunal deleted the disallowance under Section 40A(3) citing judicial precedents for genuine cash payments in waste paper purchases. It also deleted the disallowance under Section 40(a)(ia) for lorry hire charges due to lack of evidence of contractual liabilities. However, it upheld the addition for undisclosed purchases as the assessee failed to substantiate the difference.

The Tribunal held that the assessee had sufficient own funds (share capital and reserves) which were more than its investment in shares. Therefore, it was presumed that investments were made from own funds, not borrowed funds, making the disallowance unsustainable.

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