ITAT Kolkata Judgments — August 2023

The Tribunal allowed the deduction under Section 35AD, following its own prior decisions and the assessee's own case. It also allowed the loss on sale of assets for the abandoned clinic expansion, considering it a justifiable business expenditure.

The Tribunal held that only the real income earned by the assessee, which is the commission of 5%, should be taxed, not the notional income. The balance payments were directly made to transporters and the truck operators had offered income to tax.

The Tribunal held that the penalty notice was bad in law as it failed to specify the exact charge against the assessee, violating the principles of natural justice. Therefore, the penalty orders were vitiated and liable to be deleted.

The Tribunal held that the period between the issuance of the Section 148 notice and the filing of the return fell within the COVID period, which the Supreme Court directed to be excluded from limitation. Therefore, the return should be treated as valid.

The Tribunal held that the penalty notice was bad in law as it failed to specify the exact charge against the assessee, violating the principles of natural justice. Therefore, the penalty orders were vitiated and liable to be deleted.

The Tribunal held that the CIT(A) acted within his powers by dismissing the appeal as withdrawn, as the assessee consciously opted for an alternative remedy under Section 264. The assessee's subsequent attempt to revive the appeal before the CIT(A) after failing to get relief under Section 264 was not entertained.

The Tribunal held that the CIT(A) acted within his powers by dismissing the appeal as withdrawn, as the assessee consciously opted for an alternative remedy under Section 264. The assessee's subsequent attempt to revive the appeal before the CIT(A) after failing to get relief under Section 264 was not entertained.

The Tribunal upheld the CIT(A)'s decision, finding that the assessee had discharged its onus by providing details of investors and their sources of funds. The revenue's appeal was dismissed.

The Tribunal held that the filing of the contribution report is directory, not mandatory, and substantial compliance is sufficient. Given the reasonable cause and the report being filed before the completion of assessment, the denial of exemption was incorrect.

The Tribunal held that the assessee was entitled to claim salary and interest on capital as per the partnership deed, and the disallowance was due to a technical mistake in the audit report. The Tribunal set aside the CIT(A)'s order.

The Kolkata Bench of the ITAT held that it lacked jurisdiction to hear the appeal as the assessment was made by an officer in Varanasi. Consequently, the appeal was dismissed.

The Tribunal held that the AO failed to comply with the mandatory procedural requirement of Section 142(3) by not providing the assessee with material gathered during enquiries and an opportunity to be heard. This non-compliance vitiates the assessment.

The Tribunal upheld the CIT(A)'s decision, finding the AO's addition to be arbitrary and lacking any basis in law or accounting principles. The addition was made on a random and ad-hoc basis without proper justification.

The Tribunal found that the appeal was decided ex-parte and, in the interest of justice, restored the appeal to the CIT(A) for a decision on merits. The assessee was directed to cooperate in the disposal.

The Tribunal held that the AO failed to comply with the mandatory provisions of Section 142(3) of the Income Tax Act by not providing the assessee with material gathered during inquiries and an opportunity to be heard. This procedural lapse vitiated the assessment.

The Tribunal found merit in the assessee's grounds, noting that the CIT(A) had passed an ex-parte order without dealing with the merits of the case. The matter was restored to the CIT(A) for fresh adjudication.

The Tribunal held that the AO had conducted proper inquiries and taken a possible view in allowing the exemptions. It found that the CIT(Exemptions) had erroneously usurped revisional jurisdiction as the issues raised were based on mistakes of fact or proper documentation was available. Therefore, the order passed by the CIT(Exemptions) was quashed.

The Tribunal held that the reopening of assessments for AY 2009-10 and 2010-11 was not sustainable. The Tribunal noted that the proviso to Section 147 of the Income Tax Act, 1961, restricts the AO's power to issue a notice under Section 148 after four years from the end of the assessment year, unless income escaped assessment due to the assessee's failure to disclose all material facts fully and truly. In this case, the assessments under Section 153A were passed on March 30, 2015, and no notice under Section 148 was issued before March 31, 2015. The Tribunal found that the AO did not possess complete information demonstrating that income had escaped assessment due to the assessee's failure to disclose material facts. The information received from the Investigation Wing was treated as gospel truth without collecting supporting material. Furthermore, no incriminating material was unearthed during the search conducted after the amalgamation. Therefore, the Tribunal quashed the reassessment orders. The appeals were allowed.

The Tribunal held that the reopening of assessments for AY 2009-10 and 2010-11 was not sustainable. The Tribunal noted that the proviso to Section 147 of the Income Tax Act, 1961, restricts the AO's power to issue a notice under Section 148 after four years from the end of the assessment year, unless income escaped assessment due to the assessee's failure to disclose all material facts fully and truly. In this case, the assessments under Section 153A were passed on March 30, 2015, and no notice under Section 148 was issued before March 31, 2015. The Tribunal found that the AO did not possess complete information demonstrating that income had escaped assessment due to the assessee's failure to disclose material facts. The information received from the Investigation Wing was treated as gospel truth without collecting supporting material. Furthermore, no incriminating material was unearthed during the search conducted after the amalgamation. Therefore, the Tribunal quashed the reassessment orders. The appeals were allowed.

The Tribunal held that for assessment years prior to AY 2023-24, provisions for gratuity, when quantified and charged to the income and expenditure account based on actuarial valuation, should be considered as application of income. This is because the liability has crystallized and is not contingent, even if payment is made in a subsequent year.

The Tribunal held that the medical equipment in question qualified as life-saving equipment and allowed depreciation at 40%. However, it dismissed the grounds related to delayed PF/ESI contributions, following the Supreme Court's decision. Other grounds were remanded to the AO for fresh adjudication.

The Tribunal held that the lower authorities were not justified in making the additions. The assessee had provided sufficient explanation and evidence regarding the identity, creditworthiness, and genuineness of the transactions with the shareholders.

The Tribunal upheld the CIT(A)'s deletion of additions, finding that the assessee had proven the identity and creditworthiness of the creditors and the genuineness of the transactions. The Tribunal also noted that the creditor company was regularly assessed and no additions were made in its case for the same assessment year.

The Tribunal held that for assessment years prior to AY 2023-24, provisions for gratuity, when quantified and charged to the income and expenditure account based on actuarial valuation, should be considered as application of income. This is because the liability has crystallized and is not contingent, even if payment is made in a subsequent year.

The Tribunal held that stamp and registration charges for leasehold properties are revenue in nature, following its own precedent and High Court decisions. The disallowance made by the AO was directed to be deleted.

The Tribunal held that Section 2(22)(e) is not applicable as the assessee company itself is not a shareholder in Apeejay Tea Ltd. Disallowances for delayed PF/ESI contributions were confirmed based on Supreme Court rulings. Interest on delayed TDS was confirmed, while interest on delayed service tax was to be examined and allowed if applicable.

The Tribunal noted that the NCLT's order approving the resolution plan made it binding on all stakeholders, including the Income-tax Department. Consequently, the appeal was rendered infructuous.

The tribunal dismissed the assessee's appeal because the official liquidator was no longer interested in pursuing it. The tribunal noted that the liquidator is supposed to watch the interest of the assessee company and that tax authorities can proceed as per relevant provisions.

The Tribunal held that the penalty was not sustainable because the show-cause notice issued by the Assessing Officer did not specify whether the penalty was for concealment of income or furnishing inaccurate particulars of income. The Tribunal followed the decision of the Calcutta High Court on this issue.

The Tribunal held that Section 2(22)(e) is not applicable as the assessee company itself is not a shareholder in Apeejay Tea Ltd. Disallowances for delayed PF/ESI contributions were confirmed based on Supreme Court rulings. Interest on delayed TDS was confirmed, while interest on delayed service tax was to be examined and allowed if applicable.

The Tribunal held that Section 2(22)(e) is not applicable as the assessee company itself is not a shareholder in Apeejay Tea Ltd. Disallowances for delayed PF/ESI contributions were confirmed based on Supreme Court rulings. Interest on delayed TDS was confirmed, while interest on delayed service tax was to be examined and allowed if applicable.

The Tribunal held that Section 2(22)(e) is not applicable as the assessee company itself is not a shareholder in Apeejay Tea Ltd. Disallowances for delayed PF/ESI contributions were confirmed based on Supreme Court rulings. Interest on delayed TDS was confirmed, while interest on delayed service tax was to be examined and allowed if applicable.

The Tribunal held that the assessee was entitled to claim the deduction for the cost of construction along with its indexation for computing long-term capital gains. The Assessing Officer was directed to recompute the capital gains accordingly.

The Tribunal held that delayed deposit of employees' contribution to PF cannot be claimed as a deduction, even if deposited before the due date of filing the return. The conditions stipulated in the Explanation to Section 36(1)(va) must be satisfied.

The Tribunal found that the PCIT's order might have been passed without considering the assessee's reply to the show-cause notice, possibly due to the COVID-19 pandemic. Therefore, the Tribunal set aside the PCIT's order and remanded the case back for fresh revisionary proceedings.

The Tribunal found that the CIT(A) had granted several opportunities, but the assessee did not avail them. However, considering the assessee's plea for one more opportunity, the Tribunal decided to remand the case back to the CIT(A).

The Tribunal held that the disallowance of deduction u/s 80IC based on a procedural irregularity in filing the return, especially when it's a debatable issue, is not permissible under Section 143(1). The appeal of the revenue was dismissed.

The Tribunal held that the disallowance under Section 14A was not applicable to the assessee, a cooperative society eligible for deduction under Section 80P, citing Supreme Court and High Court decisions. The Tribunal also dismissed the ground regarding bonus payment, accepting it as ex-gratia payment.

The Tribunal held that land is not a depreciable asset and the CIT(A) had digressed from the original issue. The Tribunal found the assessee's computation of long-term capital loss to be proper.

The Tribunal noted that the AO had already passed a rectification order accepting the assessee's Nil income after considering the particulars. Therefore, the revenue's grievance that the CIT(A) erred in directing the AO to seek correct particulars was already addressed.

The Tribunal found that the assessee had provided documentary evidence to support its claim for TDS credit, and the corresponding income was offered for taxation. The Revenue could not present any contrary evidence. Therefore, the Tribunal directed that the TDS credit be allowed.

The Tribunal noted the inadvertent mistake in the appeal form and the assessee's ignorance. Considering the interest of justice, the Tribunal restored the penalty issue to the CIT(A) for adjudication on merits.

The Tribunal held that the CIT(A) failed to adjudicate the assessee's grounds regarding the taxability of surplus income and exemption under Section 10(23C)(iiiad). The matter was restored to the CIT(A) for fresh adjudication.

The Tribunal condoned the delay in filing the appeal, citing sufficient cause and a justice-oriented approach. The penalty order was quashed because the show-cause notice for penalty was not specific enough regarding the charge of furnishing inaccurate particulars or concealment of income.

The Tribunal held that the assessment for the relevant years was unabated at the time of the search, as the original assessment had already attained finality. Consequently, the AO's jurisdiction under Section 153A was confined to the discovery of incriminating material seized during the search. The Tribunal noted that the CIT(A) had rightly concluded that no incriminating material was found during the search that justified the addition made by the AO. The seized document SS/2, detailing a house under construction, was found to be consistent with the assessee's books of accounts and did not cast doubt on the Section 54F claim. The Tribunal relied on the Supreme Court's decision in PCIT vs. Abhisar Buildwell P. Ltd., which held that in cases of unabated assessments, the AO cannot make additions without incriminating search material. Therefore, the cross-objections of the assessee were allowed, upholding the CIT(A)'s order, and the revenue's appeals were dismissed as infructuous.

The Tribunal held that the assessment for the relevant years was unabated at the time of the search, as the original assessment had already attained finality. Consequently, the AO's jurisdiction under Section 153A was confined to the discovery of incriminating material seized during the search. The Tribunal noted that the CIT(A) had rightly concluded that no incriminating material was found during the search that justified the addition made by the AO. The seized document SS/2, detailing a house under construction, was found to be consistent with the assessee's books of accounts and did not cast doubt on the Section 54F claim. The Tribunal relied on the Supreme Court's decision in PCIT vs. Abhisar Buildwell P. Ltd., which held that in cases of unabated assessments, the AO cannot make additions without incriminating search material. Therefore, the cross-objections of the assessee were allowed, upholding the CIT(A)'s order, and the revenue's appeals were dismissed as infructuous.

The Tribunal held that the deletion of the addition on account of share application money was justified. The Tribunal also found that the assessee's appeal regarding the closing stock addition should be restored to the Assessing Officer for verification.

The Tribunal held that the deletion of the addition on account of share application money was justified. The Tribunal also found that the assessee's appeal regarding the closing stock addition should be restored to the Assessing Officer for verification.

The Tribunal upheld the order of the CIT(A) which deleted the addition. The Tribunal found that the assessee had provided sufficient evidence regarding the identity, creditworthiness, and genuineness of the share transactions, and the Revenue failed to provide contrary evidence.

The Tribunal found that the assessee had executed commodity transactions through a registered broker, supported by contract notes and bank statements. Therefore, the profit earned was considered legitimate income from commodity trading, not an unexplained cash credit.