ITAT Kolkata Judgments — September 2023

The Tribunal found that the AO did not conduct preliminary inquiries like verifying PAN or other documents submitted by the assessee. The Tribunal restored the issue to the CIT(A) for re-examination, directing them to consider the documents filed and provide the assessee with a reasonable opportunity to be heard.

The ITAT set aside the ex parte order of the CIT(A) and restored the matter for fresh decision. The CIT(A) was directed to provide adequate opportunity to the appellant to present their case.

The Tribunal upheld the CIT(A)'s decision to delete the commission expense addition, finding no infirmity in the CIT(A)'s reasoning. It also confirmed the CIT(A)'s approach of restricting additions to 15% of the purchase value for bogus purchases.

The tribunal held that the principle of mutuality does not exempt interest income earned by clubs from bank fixed deposits from taxation. This decision is based on a Supreme Court ruling on the same issue.

The Tribunal found that the expenses were indeed business-related given the nature of the assessee's liaisoning business. Therefore, the disallowances made by the lower authorities were not justified.

The Tribunal noted that the assessee's own case for subsequent assessment years had already established its charitable activities and allowed exemption under Section 11. Therefore, the denial of exemption for the current year was incorrect.

The CIT(A) found that the assessee had provided bank statements and ledger accounts showing that the Rs. 2.53 crores was a return of an advance made by the assessee to M/s Unisys Software & Holding Industries Ltd. within the same financial year. Therefore, the CIT(A) held that the transaction was explained and not a case of unexplained income.

The ITAT held that the CIT(A) exceeded his powers under Section 251(1)(a) by remanding the issue back to the AO for fresh adjudication. The Tribunal set aside the CIT(A)'s order on this issue and restored it to the AO for de novo adjudication.

The Tribunal held that the notice under Section 143(2) was issued by an authority lacking valid jurisdiction, making the subsequent assessment proceedings invalid. Therefore, the assessment order was quashed.

The Tribunal upheld the CIT(A)'s decision to delete the commission expense addition, finding no infirmity in the CIT(A)'s reasoning. It also confirmed the CIT(A)'s approach of restricting additions to 15% of the purchase value for bogus purchases.

The tribunal held that the principle of mutuality does not exempt interest income earned by clubs from bank fixed deposits from taxation. This decision is based on a Supreme Court ruling on the same issue.

The Tribunal held that the addition was made solely on the ground of non-appearance of directors, without finding any discrepancy in the documents filed by the assessee. The Tribunal noted that the share subscribers were registered NBFCs with sufficient funds and had complied with notices.

The Tribunal held that a valid notice under Section 143(2) by an officer with competent jurisdiction is mandatory for valid assessment proceedings. Since the notice was issued by an officer without jurisdiction, the assessment order was deemed bad in law.

The Tribunal held that the qualified dividend income was indeed part of the ordinary dividend and should not be taxed twice, thus deleting the addition. The issue of long-term capital loss carry forward was not adjudicated by the lower appellate authority.

The ITAT found the CIT(A)'s order to be non-speaking and cryptic, failing to appreciate the details on record. The tribunal set aside the CIT(A)'s order and restored the matter for a fresh decision on merits.

The Tribunal held that the disallowance made by the Assessing Officer is in line with the Supreme Court's decision in Checkmate Services Pvt. Ltd. vs. CIT. The delayed deposit of employees' contribution to PF/ESI is not deductible even if deposited before the due date of filing the return.

The Tribunal held that the disallowance made by the Assessing Officer is in line with the Supreme Court's decision in Checkmate Services Pvt. Ltd. The delayed deposit of employees' contribution to PF/ESI is not deductible even if deposited before the due date of filing the return.

The Tribunal held that the PCIT was justified in invoking Section 263 as the AO failed to examine a significant issue related to TDS on foreign remittances. The assessment order was considered erroneous and prejudicial to the revenue's interest due to the AO's lack of inquiry.

The Tribunal allowed the assessee's request to withdraw the appeal, subject to the observation that this withdrawal does not grant immunity from tax demands by the department.

The Tribunal noted that while employees' contribution not paid within the due date is disallowable, the employer's contribution, if paid before the return filing due date, is deductible. The CIT(Appeals) failed to consider this factual distinction.

The Tribunal held that the Revenue failed to provide a reasonable and cogent explanation for the inordinate delay in filing the appeal. Citing various High Court and Supreme Court judgments, the Tribunal emphasized that the law of limitation applies equally to government departments and that diligence is expected.

The Tribunal granted the assessee's request to withdraw the appeal. The appeal was dismissed as withdrawn.

The Tribunal held that the Revenue failed to provide a reasonable and cogent explanation for the inordinate delay in filing the appeal. Citing various High Court and Supreme Court judgments, the Tribunal emphasized that the law of limitation applies equally to government bodies and that diligence is expected.

The assessee's counsel stated that the assessee was not interested in prosecuting the appeal and requested it be dismissed as withdrawn. The Tribunal noted its reservations but dismissed the appeal as withdrawn.

On the first issue, the Tribunal, following the judgment of the Hon'ble Delhi High Court in PCIT Vs. Era Infrastructure (India) Ltd., held that the amendment to Section 14A by the Finance Act, 2022, is prospective and that disallowance under Section 14A cannot exceed the exempt income earned. Since the assessee did not earn any exempt income, the disallowance of Rs. 22,807/- was set aside and deleted. On the second issue, the Tribunal found merit in the assessee's contention that if the loss from the sale of shares is not a business loss, it should be treated as a capital loss. Given the failure to provide details to the Assessing Officer, the Tribunal restored the issue to the Assessing Officer to examine the genuineness of the transactions and, if found genuine, grant liberty to the assessee to claim such capital loss to be carried forward. This issue was allowed for statistical purposes.

The Tribunal held that the interest income on the refund is not taxable in India. This decision was based on a previous ruling in the assessee's own case, which applied the beneficial provisions of the India-Italy DTAA via the MFN clause in the India-Netherlands DTAA, treating the refund as a debt claim.

The Tribunal found that the assessee had indeed deposited the DDT for FY 2016-17 (relevant to AY 2017-18) before the close of the financial year. Therefore, the Pr. CIT erred in raising the issue for AY 2018-19.

The Tribunal held that the AO cannot make additions for items that were not part of the reasons recorded for reopening, especially when no additions were made for the items that were the subject of the reasons. Therefore, the assessment order was quashed as invalid.

The Tribunal admitted the additional ground as it was a legal issue based on facts on record. It was held that the reopening was bad in law as the issue was already examined in the original assessment and there was no failure to disclose material facts.

The Tribunal modified the CIT(A)'s order, directing the AO to apply a rate of 10% on sales instead of 5% to estimate the net income, considering the possibility of bogus transactions.

The Tribunal held that the Revenue's appeal should be dismissed on account of low tax effect, which was below the prescribed limit of Rs. 50 Lakhs. The appeal was deemed not maintainable in view of CBDT Circular No. 17/2019.

The Tribunal held that Section 41(1) applies to trading liabilities, not unsecured loans. Therefore, the entire loan amount could not be added back. However, the interest expenditure claimed by the assessee on this loan was considered a deductible expenditure that had ceased to be payable.

The Tribunal held that the opening capital balance cannot be added as unexplained cash credit or investment in the current year, as its genuineness cannot be adjudicated in this assessment. Furthermore, the Tribunal ruled that Section 40A(3) cannot be invoked when income is declared on a presumptive basis under Section 44AD, as this presumption already accounts for purchases and sales.

The Tribunal held that the authorities below failed to examine the evidence filed by the assessee and made additions without proper verification. The AO's order was considered perverse as it lacked reasons for rejecting the explanation offered by the assessee.

The Tribunal found that the AO wrongly invoked Section 145(3) without identifying defects in the books. The financial crisis due to the bank declaring the cash credit account NPA and initiating recovery proceedings was a sufficient reason for the losses.

The Tribunal admitted the additional ground as it was a legal issue based on facts on record. It was held that the reopening was bad in law as the issue was already examined in the original assessment and there was no failure to disclose material facts.

The Tribunal condoned the delay in filing the appeal. It found that the impugned order of the CIT(A) was ex-parte due to the assessee's absence and lack of opportunity to present submissions. Therefore, the issues were restored to the CIT(A) for fresh adjudication.

The Tribunal noted the assessee failed to substantiate the cash sales theory. However, it also acknowledged that if accommodation entries were provided, the entire deposit shouldn't be added. Following precedents, the Tribunal directed the AO to apply a commission rate of 0.5% on the accommodation entries.

The Tribunal held that the authorities below failed to examine the evidence filed by the assessee and made additions without proper verification. The AO's order was considered perverse as it lacked reasons for rejecting the explanation offered by the assessee.

The Tribunal condoned the delay in filing the appeal before the CIT(A) due to the assessee's claim of receiving the hard copy on 29.01.2019 and the potential for e-mails to be missed. The issues were restored to the CIT(A) for fresh adjudication on merits.

The Tribunal held that the show-cause notice issued for levying the penalty was bad in law because it did not specify whether the penalty was for concealment of income or furnishing inaccurate particulars. Following a co-ordinate bench's decision, the Tribunal set aside the penalty.

The Tribunal noted the assessee failed to substantiate the cash sales theory. However, it also acknowledged that if accommodation entries were provided, the entire deposit shouldn't be added. Following precedents, the Tribunal directed the AO to apply a commission rate of 0.5% on the accommodation entries.

The Tribunal noted the assessee failed to substantiate the cash sales theory. However, it also acknowledged that if accommodation entries were provided, the entire deposit shouldn't be added. Following precedents, the Tribunal directed the AO to apply a commission rate of 0.5% on the accommodation entries.

The Tribunal noted the assessee failed to substantiate the cash sales theory. However, it also acknowledged that if accommodation entries were provided, the entire deposit shouldn't be added. Following precedents, the Tribunal directed the AO to apply a commission rate of 0.5% on the accommodation entries.

The Tribunal held that the penalty notice issued under Section 274 r.w.s. 271 of the Act was bad in law because it mentioned both concealment of income and furnishing inaccurate particulars without striking off the inapplicable one. This violated the principles of natural justice.

The Tribunal held that income exempt under Section 10 of the Act, other than specific exclusions, must be reduced from book profit computed under Section 115JB. The lower authorities erred in not allowing this reduction.

The Tribunal noted the assessee failed to substantiate the cash sales theory. However, it also acknowledged that if accommodation entries were provided, the entire deposit shouldn't be added. Following precedents, the Tribunal directed the AO to apply a commission rate of 0.5% on the accommodation entries.

The Tribunal held that the correct tax rate applicable to the assessee was 25% based on its turnover. It also held that the bonus paid before the due date of filing the return was not disallowable under Section 43B.

The Tribunal held that the correct tax rate applicable to the assessee was 25% based on its turnover. It also held that the bonus paid before the due date of filing the return was not disallowable under Section 43B.