ITAT Kolkata Judgments — September 2022

The Tribunal held that the Revenue erred in comparing stock valuations from two different software systems. The assessee had demonstrated through audited accounts that taxable income was computed using the ORIEL POS software, making the addition unsustainable.

The Tribunal held that the CIT(A) had inadvertently dismissed the appeal as withdrawn due to a misunderstanding of which assessment order was covered by the Vivad Se Vishwas Scheme. The appeal was therefore restored to the CIT(A) for fresh adjudication.

The Tribunal upheld the addition of Rs. 107.43 crores made under Section 68 of the Income Tax Act. The assessee consistently failed to appear before the AO, CIT(A), and the Tribunal, indicating a lack of plausible explanation for the huge share capital and security premium.

The Tribunal affirmed the PCIT's order under Section 263, finding that the issue of penny stock and bogus LTCG was covered by the Calcutta High Court's decision.

The Tribunal restored the issue to the CIT(A) for adjudication on merits, granting the assessee another opportunity to be heard. The CIT(A) was directed to pass a speaking order after providing a proper hearing.

The Tribunal held that the assessee failed to explain the source of alleged cash credit and prove the identity, creditworthiness, and genuineness of the transaction. Therefore, the addition made under Section 68 was confirmed.

The Tribunal held that payments for leave encashment are allowable on payment basis and that provisions for director benefits, if made on a scientific basis, are allowable on accrual basis. It also upheld the deletion of interest disallowance and allowed royalty payments as revenue expenditure.

The Tribunal upheld the addition made by the AO under Section 68, finding that the assessee failed to prove the identity, creditworthiness, and genuineness of the cash creditors for the substantial share capital and premium received by a newly incorporated company.

The Tribunal noted that the Assessing Officer subsequently passed rectification orders waiving the interest under Section 234B. In light of these rectification orders, the assessee sought to withdraw the appeals.

The Tribunal restored the case to the file of the AO for a fresh examination of the issues. The assessee was directed to cooperate and produce all evidence and comply with the AO's directions.

The Tribunal held that since the provision was made on a reasonable and concrete basis derived from advanced negotiations, it constituted an ascertained liability. Therefore, it was deductible in the current assessment year.

The Tribunal held that the Assessing Officers and CIT(A) correctly applied an inferential process to conclude that the share transactions were manipulated, given the steep rise in share prices of little-known companies within a short period. The assessees failed to prove the genuineness of their gains.

The Tribunal held that the Assessing Officers and CIT(A) correctly applied an inferential process to conclude that the share transactions were manipulated, given the steep rise in share prices of little-known companies within a short period. The assessees failed to prove the genuineness of their gains.

The Tribunal held that the penalty notice issued by the AO was invalid as it was a mechanical, standard format notice that did not specify the exact charge against the assessee. Consequently, the penalty imposed was quashed.

The tribunal held that the CIT(A) order was unsustainable as it failed to state the points for determination and the reasons for the decision, as required by Section 250(6). The matter was remitted to the Assessing Officer for re-adjudication.

The Tribunal held that the penalty notice issued by the AO was invalid as it was a mechanical, standard format notice that did not specify the exact charge against the assessee. Consequently, the penalty imposed was quashed.

The Tribunal held that the Assessing Officers and CIT(A) correctly applied an inferential process to conclude that the share transactions were manipulated, given the steep rise in share prices of little-known companies within a short period. The assessees failed to prove the genuineness of their gains.

The Tribunal held that the PCIT's revisionary jurisdiction under Section 263 was invalid because the assessee's appeal against the original assessment order was already pending before the Commissioner of Income Tax (Appeals).

The Tribunal held that the Assessing Officers and CIT(A) correctly applied an inferential process based on surrounding circumstances, including trade volume, period of trading, buy/sell orders, and the proximity of time between transactions, to assess the genuineness of the gains. The assessee failed to prove the genuineness of the steep rise in share prices.

The Tribunal held that the penalty notice issued by the AO was invalid as it did not specify the exact charge, depriving the assessee of an opportunity to respond. Consequently, the penalty imposed was quashed.

The Tribunal upheld the order of the CIT(A) and dismissed the assessee's appeal. The assessee failed to provide evidence to prove the identity, creditworthiness, and genuineness of the cash credit transaction.

The Tribunal noted that the Assessing Officer subsequently passed rectification orders waiving the interest under Section 234B. In light of these rectification orders, the assessee sought to withdraw the appeals.

The Tribunal held that the Assessing Officers and CIT(A) correctly applied an inferential process to conclude that the share transactions were manipulated, given the steep rise in share prices of little-known companies within a short period. The assessees failed to prove the genuineness of their gains.

The Tribunal held that the assessee failed to prove the identity, creditworthiness, and genuineness of the share capital and security premium transactions. Consequently, the addition made by the AO under Section 68 was upheld.

The Tribunal held that the penalty notice issued by the AO was invalid as it was a mechanical, standard format notice that did not specify the exact charge against the assessee. Consequently, the penalty imposed was quashed.

The Tribunal held that the penalty notice issued by the AO was invalid as it was a mechanical, standard format notice that did not specify the exact charge against the assessee. Consequently, the penalty imposed was quashed.

The Tribunal held that the penalty notice issued by the AO was invalid as it was a mechanical, standard format notice that did not specify the exact charge against the assessee. Consequently, the penalty imposed was quashed.

The Tribunal held that payments for leave encashment are allowable on payment basis and that provisions for director benefits, if made on a scientific basis, are allowable on accrual basis. It also upheld the deletion of interest disallowance and allowed royalty payments as revenue expenditure.

The Tribunal held that the Assessing Officers and CIT(A) correctly applied an inferential process to conclude that the share transactions were manipulated, given the steep rise in share prices of little-known companies within a short period. The assessees failed to prove the genuineness of their gains.

The Tribunal held that the Assessing Officers and CIT(A) correctly applied an inferential process to conclude that the share transactions were manipulated, given the steep rise in share prices of little-known companies within a short period. The assessees failed to prove the genuineness of their gains.

The Tribunal held that payments of employees' contribution to ESI & PF made before the due date of filing the return are allowable as a deduction. The issue regarding TDS disallowance was remitted to the Assessing Officer for re-adjudication.

The Tribunal held that the assessee had provided sufficient documentary evidence regarding the identity, creditworthiness, and genuineness of the share subscribers, including their financials, bank statements, and net worth. The non-appearance of directors in response to summons under Section 131 was not a sole ground for addition when documentary evidence was filed.

The Tribunal held that the Assessing Officers and CIT(A) correctly applied an inferential process to conclude that the share transactions were manipulated, given the steep rise in share prices of little-known companies within a short period. The assessees failed to prove the genuineness of their gains.

Since the assessee opted for the Vivad Se Vishwas scheme and it was accepted by the competent authority, the appeal no longer survives.

The Tribunal held that the Assessing Officers and CIT(A) correctly applied an inferential process to conclude that the share transactions were manipulated, given the steep rise in share prices of little-known companies within a short period. The assessees failed to prove the genuineness of their gains.

The Tribunal found that the assessee failed to provide any documentary evidence to explain the source of the share capital and premium. Therefore, the addition made by the Assessing Officer under Section 68 was upheld.

The Tribunal held that the additions made by the CPC were uncalled for as the income was already disclosed in the return. The Tribunal also directed the AO to verify the claim for TDS.

Since the assessee has successfully opted for the Vivad Se Vishwas scheme and the competent authority has accepted it, there is nothing left for the tribunal to adjudicate. Therefore, the appeal is dismissed as withdrawn.

The Tribunal held that if no exempt income has been earned by the assessee before the application of Finance Act, 2022, then no disallowance under Section 14A read with Rule 8D is to be made. The amendment by Finance Act, 2022, is prospective.

The Tribunal held that the assessment proceedings are invalid and bad in law due to the non-issuance of a fresh notice under Section 143(2) by the jurisdictional Assessing Officer after the transfer of the case. The assessment order was quashed.

The Tribunal held that the reassessment proceedings were invalid as the reopening was done beyond four years without any new material not disclosed by the assessee. Consequently, the assessment order was quashed.

The Tribunal noted that the issue of penny stocks and bogus long-term capital gains is covered by a recent Calcutta High Court decision. The High Court had affirmed additions made under Section 68.

The Tribunal held that if no exempt income has been earned by the assessee before the application of Finance Act, 2022, then no disallowance under Section 14A read with Rule 8D is to be made. The amendment by Finance Act, 2022, is prospective.

Since the assessee opted for and was accepted into the Vivad Se Vishwas scheme, the appeal had become infructuous. Therefore, the appeal was dismissed as withdrawn.

The Tribunal held that since the outstanding employee contributions were deposited before the due date of filing the return of income, and following the jurisdictional High Court's decision, no disallowance was warranted. Therefore, the order under Section 263 was quashed.

The Tribunal held that the deduction claim should not be denied without providing an opportunity for the assessee to substantiate its claim. The matter was restored to the Assessing Officer for fresh examination.

The Tribunal held that if employees' contributions to PF and ESI are paid before the due date of filing the return of income, the assessee is eligible for the deduction. The amendment by the Finance Act, 2021, was held to be prospective. Therefore, for the assessment year in question, the assessee's claim was valid.

The Tribunal allowed the assessee's appeal, finding that the gift of Rs. 1,65,000/- from the husband was substantiated by his balance sheet. It also found that the assessee had sufficiently explained her share transactions and the loss incurred.

The Tribunal held that the AO relied heavily on survey findings without faulting the audited books of accounts. Statements made during a survey lack evidentiary value without corroborating material. Additions based on estimation and surmises were not sustainable.

The Tribunal held that the assessee failed to discharge its onus to prove the purchase of land and the genuineness of unsecured loans. Therefore, the disallowance of loss on sale of land and the addition on account of unsecured loans were rightly confirmed by the lower authorities.