ITAT Kolkata Judgments — December 2019

The Tribunal set aside the orders of the lower authorities and restored the matter to the Assessing Officer. The AO is directed to adjudicate the issue based on the decision of the Hon'ble Apex Court in the case of M/s. Exide Industries Ltd.

The Tribunal set aside the ex-parte order of the CIT(Appeals) and remitted the matter back for fresh adjudication on merits. The CIT(Appeals) was directed to provide the assessee with another opportunity of being heard.

The Tribunal held that the AO had conducted a detailed inquiry, collected necessary documents from the assessee and the broker, and was satisfied with the explanation. Therefore, the Pr. CIT's assumption of jurisdiction under Section 263 was based on erroneous premises and lacked jurisdiction.

The Tribunal held that the AO violated natural justice by not sharing the adverse material with the assessee. Therefore, the order of the CIT(A) was set aside.

The Tribunal held that the lower authorities erred in law and fact by making the addition. The genuineness of the agreement and part payment was not doubted, and there was no material to restrict the statutory provision to registered agreements only.

The ITAT set aside the CIT(A)'s order and remanded the matter back for de novo adjudication. The CIT(A) was directed to pass a speaking order after affording sufficient opportunity to the assessee.

The Tribunal upheld the CIT(A)'s deletion of retention money, stating it's not taxable until realized, following the principle of conservatism. It also upheld the deletion of capital gains, agreeing that the transfer for equity shares did not constitute a slump sale as per judicial precedents.

The Tribunal held that the reassessment proceedings were not sustainable as the AO had not formed a valid reason to believe that taxable income had escaped assessment. The reasons recorded did not establish that the assessee had resorted to fraudulent client code modification or that undisclosed income had escaped assessment.

The Tribunal held that the CIT(A) failed to provide a proper hearing and did not adjudicate the case on merits. Therefore, the matter was restored to the CIT(A) for fresh adjudication after providing an opportunity to the assessee.

The Tribunal held that the AO should obtain a valuation report from the Departmental Valuation Officer (DVO) to determine the cost of acquisition for LTCG. The AO was directed to compute the LTCG after considering the DVO's report and the assessee's objections.

The Tribunal held that the PCIT erred in law and fact by terming the assessment order erroneous. It was noted that Section 92BA(i) was omitted retrospectively by the Finance Act, 2017, rendering the PCIT's direction to refer to the TPO invalid. The AO had also conducted inquiries regarding the transactions.

The Tribunal upheld the CIT(A)'s decision regarding the delayed deposit of employee contributions, stating it was allowable if paid before the return filing due date. For the cessation of liability issue, the Tribunal found that the AO had not conducted proper inquiries and set aside the CIT(A)'s order, remanding the issue back to the AO for fresh adjudication.

The Tribunal set aside the orders of the lower authorities and restored the matter to the Assessing Officer (AO). The AO was directed to adjudicate the issue based on the final decision of the Hon'ble Apex Court in the case of M/s. Exide Industries Ltd.

The Tribunal held that the disallowance under Rule 8D(2)(iii) should only consider investments that yielded dividend during the previous year. The Assessing Officer's calculation of 0.5% of average investment was deemed incorrect.

The Tribunal found that the CIT(A) failed to consider the assessment records and submissions, violating natural justice. Therefore, the matter was restored to the CIT(A) for fresh adjudication on merits.

The Tribunal held that the Assessing Officer erred in imposing penalty under Section 271(1)(b) as the assessment order was passed under Section 143(3), indicating sufficient compliance by the assessee. The penalty was deleted.

The Tribunal held that the CIT(Exemption) failed to consider the evidence and written submissions of the assessee and did not provide an opportunity of being heard, violating principles of natural justice. Therefore, the matter was restored to the CIT(Exemption) for fresh adjudication.

The Tribunal held that the assessee was engaged in the business of commodity trading, as evidenced by its Memorandum of Association, registration with commodity exchanges, and the treatment of commodity transactions in its Profit & Loss account. Therefore, the interest expenses incurred on loans for commodity purchases were allowable.

The Tribunal held that the assessee was engaged in the business of commodity trading, as evidenced by its Memorandum of Association, registration with commodity exchanges, and the treatment of commodity transactions in its Profit & Loss account. Therefore, the interest expenses incurred on loans for commodity purchases were allowable.

The Tribunal held that the generation of electricity is a manufacturing activity eligible for additional depreciation. It also ruled that interest received by the assessee as an implementing agency for government funds, which was subsequently remitted back, was not taxable income.

The Tribunal found that the CIT(A)'s conclusion about the non-receipt of the remand report was contrary to the record. Consequently, the Tribunal restored all issues to the Assessing Officer for fresh adjudication.

The Tribunal decided that disallowance under Section 14A cannot be added to book profits under Section 115JB as it is not listed in Explanation 1 to Section 115JB(2). It also directed interest under Section 234C to be charged on tax due on returned income.

The Tribunal deleted the ad hoc disallowance of general charges, finding it unwarranted and based on surmises. It also dismissed the Revenue's grounds related to Rule 46A, unpaid cess, interest on security deposit, and bad debts, finding no infirmity in the CIT(A)'s orders.

The Tribunal held that the assessee's bad debt claim satisfied the conditions under Section 36(1)(vii) and (2) of the Act, as the debt was written off after remaining outstanding for a significant period and the legal position supports deduction upon write-off.

The Tribunal held that the advances were part of the assessee's consistent accounting system and were adjusted against the sale price of motorcycles. The Tribunal found no ambiguity in the system followed and noted that the sale was disclosed in the return of income.

The Tribunal held that the assessee had discharged its onus to prove the identity, creditworthiness, and genuineness of the lenders. Therefore, the addition made by the Assessing Officer could not be sustained.

The Tribunal upheld the CIT(A)'s finding that the production figures were correctly reported by the assessee and that there was no discrepancy. It also agreed with the CIT(A) that Section 14A disallowance was not applicable as the assessee did not claim exemption.

The Tribunal held that the appeal filed by the Revenue was contrary to the revised CBDT circular regarding monetary limits for appeals. Therefore, the appeal was dismissed in limine.

The Tribunal decided that disallowance under Section 14A cannot be added to book profits under Section 115JB as it is not listed in Explanation 1 to Section 115JB(2). It also directed interest under Section 234C to be charged on tax due on returned income.

The Tribunal held that interest expenditure cannot be disallowed under Section 14A if borrowed funds were used for acquiring shares that generated dividends. It also directed a recomputation of disallowance under Rule 8D(2)(iii) considering only shares yielding dividend income.

The Tribunal found that the CIT(A)'s conclusion about the non-receipt of the remand report was contrary to the record. Consequently, the Tribunal restored all issues to the Assessing Officer for fresh adjudication.

The Tribunal held that TDS was not deductible on freight payments made to overseas airlines' agents. Therefore, the AO's assessment allowing these expenses was not erroneous or prejudicial to the revenue. Consequently, the PCIT's revision order was reversed.

The Tribunal condoned the delay in filing the appeal, emphasizing the principle of substantial justice over technicalities. The Tribunal found that the CIT(A)'s order was passed ex parte and the Assessing Officer's assessment order lacked proper reasoning for certain estimations.

The Tribunal held that the PCIT erred in revising the assessment as the deduction claim was not part of the latter assessment proceedings. Therefore, the PCIT could not have termed it as erroneous and prejudicial to the revenue.

The Tribunal set aside the ex-parte order of the CIT(Appeals) and restored the matter to the Assessing Officer for fresh assessment. The assessee was directed to cooperate fully to enable expeditious completion of the assessment.

The Tribunal held that the CIT(A)'s order was in violation of natural justice as it did not consider the assessment record or provide a sufficient opportunity to be heard. Therefore, the order was set aside.

The Tribunal held that the advances were part of the assessee's consistent accounting system and were adjusted against the sale price of motorcycles. The Tribunal found no ambiguity in the system followed and noted that the sale was disclosed in the return of income.

The ITAT found that the CIT(A) violated principles of natural justice by not providing a sufficient opportunity to be heard and by failing to adjudicate the issue on merits. The matter was restored to the CIT(A) for fresh adjudication.

The Tribunal held that the 5% tolerance margin under Section 50C is applicable retrospectively, thus accepting the assessee's first ground. For the second ground, the Tribunal directed the Assessing Officer to rely on the DVO's report for the cost of acquisition, finding fault with the lower authorities' reliance on the Land Acquisition Collector's report.

The Tribunal held that proportionate interest on interest-free advances to group concerns should be allowed, but the addition for unexplained cash credit is affirmed. Disallowance for non-deduction of TDS is restricted to 30%, and service tax provision disallowance is to be verified factually. Estimated disallowance for general expenses is restricted to 5%.

The Tribunal held that corporate guarantee was not an international transaction prior to the amendment of Section 92B. It also upheld the deletion of disallowance under Section 14A as the assessee had sufficient interest-free funds. The deduction under Section 80IC was allowed to include sales tax subsidy and written-back expenses.

The Tribunal noted a Karnataka High Court judgment stating that the late fee under Section 234E is not applicable for periods prior to 01.06.2015 as the provision has prospective effect. Following this and the principle of benefit of doubt to the taxpayer, the Tribunal deleted the late fee.

The Tribunal held that after the amendment to Section 36(1)(vii) of the Income Tax Act, 1961, it is not necessary to prove that a debt has become irrecoverable; it is sufficient if it is written off in the books of accounts. Therefore, the disallowance was incorrect.

The Tribunal held that the generation of electricity is a manufacturing activity eligible for additional depreciation. It also ruled that interest received by the assessee as an implementing agency for government funds, which was subsequently remitted back, was not taxable income.

The Tribunal held that the AO's disallowance was based on conjecture and personal belief, not on any material evidence. The Tribunal also noted consistency with previous and subsequent assessment years where such salary was allowed.

The Tribunal deleted the ad hoc disallowance of general charges, finding it unwarranted and based on surmises. It also dismissed the Revenue's grounds related to Rule 46A, unpaid cess, interest on security deposit, and bad debts, finding no infirmity in the CIT(A)'s orders.

The Tribunal upheld the CIT(A)'s finding that the production figures were correctly reported by the assessee and that there was no discrepancy. It also agreed with the CIT(A) that Section 14A disallowance was not applicable as the assessee did not claim exemption.

The Tribunal held that the assessee was engaged in the business of commodity trading, as evidenced by its Memorandum of Association, registration with commodity exchanges, and the treatment of commodity transactions in its Profit & Loss account. Therefore, the interest expenses incurred on loans for commodity purchases were allowable.

The ITAT held that the CIT(A)'s order violated the principles of natural justice by not affording the assessee a sufficient opportunity to be heard. The matter was restored to the CIT(A) for de novo adjudication.

The Tribunal held that the addition on account of cessation of liabilities was not sustainable, following a jurisdictional High Court decision. For labour and consultancy charges, the disallowance was restricted to 15% of the claimed amount.