ITAT Kolkata Judgments — October 2023

The Tribunal condoned the delay in filing the appeal. However, it treated the appeal as withdrawn/not pressed due to low tax effect as per CBDT Circular No. 17/2019 and dismissed it.

The Tribunal condoned the delay in filing the appeal due to sufficient cause. The Tribunal restored all issues to the CIT(A) for fresh adjudication, noting the ex-parte nature of the previous order and lack of opportunity for the assessee.

The Tribunal condoned the delay in filing the appeal. It was held that the CIT(A) should provide an adequate opportunity of being heard to the assessee and pass a speaking order after dealing with the merits of the case.

The Tribunal restored all issues to the CIT(A) for fresh adjudication, allowing the assessee adequate opportunity to present submissions and documents. The CIT(A) was directed to pass a speaking order on merits.

The Tribunal held that the filing of Form 67 is directory in nature, not mandatory. Even if filed belatedly, the assessee is eligible to claim FTC, and the CIT(A) was justified in allowing the claim.

The Tribunal deleted the addition on replantation subsidy, stating the nexus with income is not a valid reason to deny exemption. It also deleted the disallowance on shade tree sale proceeds as the assessee had already added back 30% of the receipts.

The Tribunal condoned the delay in filing the appeal. It was held that the CIT(A) should provide an adequate opportunity of being heard to the assessee and pass a speaking order after dealing with the merits of the case.

The Tribunal noted that the issue was squarely covered in favour of the assessee by the decision of a co-ordinate bench in the assessee's own case for AY 2014-15 (ITA No. 2149/Kol/2017). The Revenue had appealed this decision before the Hon'ble Calcutta High Court in ITA No. 26/2022, which vide its order dated 25.07.2022, sustained the Tribunal's order. Therefore, following the judgment of the Hon'ble Calcutta High Court, the Tribunal sustained the order passed by the CIT(A) and dismissed the grounds raised by the Revenue. The principle established is that if a co-ordinate bench's decision in the assessee's own case has been upheld by the jurisdictional High Court, subsequent benches should follow that precedent.

The Tribunal held that offering additional advance tax during a survey does not, by itself, justify additions to income. The Assessing Officer failed to point out any defects in the accounts or suppressed sales/profits.

The Tribunal held that the CIT(A)'s order was indeed ex-parte and lacked proper adjudication. The matter was restored to the Assessing Officer for fresh adjudication after providing the assessee a reasonable opportunity to be heard.

The Tribunal allowed the expenses on nurseries and young tea maintenance as revenue expenditure, citing previous years' treatment and High Court/ITAT decisions. The issue regarding bought leaf income was remanded to the AO for fresh adjudication.

The Tribunal held that the gain on sale of depreciable assets held for more than three years is short-term capital gain and not eligible for concessional tax rates. It also ruled that dividend distribution tax is payable as per Section 115O irrespective of DTAA provisions for non-resident shareholders.

The Tribunal held that the assessee had discharged its initial onus by providing documents for identity, creditworthiness, and genuineness of the transactions. The AO failed to conduct independent inquiries to verify these details, making the addition unsustainable.

The Tribunal held that the Principal Commissioner could not invoke revisionary powers under Section 263 for DDT liability as it is separate from the assessment of total income under Section 143(3). It also found that the revisionary order was not justified on the issue of capital gains calculation.

The Tribunal held that if the charges are not specified in the show cause notice, the penalty is not leviable. The Tribunal referred to various High Court and Supreme Court decisions supporting this view.

The Tribunal set aside the CIT(A)'s order, restoring the matter to the Assessing Officer. The AO was directed to decide the issues afresh after giving the assessee a proper opportunity to present its case.

The Tribunal held that the AO cannot estimate profit under Section 44AD without first rejecting the assessee's books of accounts. Since the books were not rejected and no findings were given on their inadequacy, the addition made by the AO was deleted.

The Tribunal, after perusing the records, found that typographical errors had indeed crept into its order dated 19/06/2023. It was held that the factual position recorded in paragraph 8, stating that the issue related to an addition made under Section 68 of the Income Tax Act, 1961, on account of loans received from three parties, was correct. Consequently, the Tribunal rectified the errors in paragraph 15, directing that the words "alleged share capital and share premium" should be read as "alleged loan" and "share subscribers" should be read as "loan creditors". Similarly, in paragraph 18, the words "share applicants" were directed to be read as "loan creditors". The operative direction was to correct these specific phrases in the aforementioned paragraphs of the original order.

The Tribunal, after perusing the records, found that typographical errors had indeed crept into its order dated 19/06/2023. It was held that the factual position recorded in paragraph 8, stating that the issue related to an addition made under Section 68 of the Income Tax Act, 1961, on account of loans received from three parties, was correct. Consequently, the Tribunal rectified the errors in paragraph 15, directing that the words "alleged share capital and share premium" should be read as "alleged loan" and "share subscribers" should be read as "loan creditors". Similarly, in paragraph 18, the words "share applicants" were directed to be read as "loan creditors". The operative direction was to correct these specific phrases in the aforementioned paragraphs of the original order.

The Tribunal held that the reopening of assessment was bad in law as the AO's reasons were factually incorrect and not verified with the assessee's records. The Tribunal found that the assessee had not received the alleged sum from M/s Rottex Mercantile Pvt. Ltd. during the year, making the addition unsustainable.

The Tribunal held that the assessee had discharged the initial burden by furnishing all necessary details and documents. The AO failed to conduct independent inquiries to verify the transactions, and the CIT(A) had made a categorical finding that the identity, creditworthiness, and genuineness were established.

The Tribunal held that the assessee should be given an opportunity to present its case before the Assessing Officer. The impugned order of the CIT(A) was set aside, and the matter was restored to the Assessing Officer for a fresh assessment on this issue.

The Tribunal set aside the CIT(A)'s order and restored the matter to the Assessing Officer. The assessee was given an opportunity to present their case and furnish necessary documents.

The Tribunal held that the enhanced monetary limits for departmental appeals are applicable to pending appeals. Therefore, the appeal was to be treated as withdrawn.

The Tribunal deleted the addition for unaccounted purchases, stating that investments made from accounted income cannot be added. The addition for suppressed profit was restricted, and the addition for suppressed sales was deleted to avoid double addition. The addition for suppressed duty drawback and salary disallowance were confirmed and deleted, respectively.

The Tribunal held that the CIT(A) erred in deleting the addition as the assessee failed to appear before the AO and CIT(A) to provide any supporting documents. Therefore, the order of the CIT(A) was set aside, and the AO's order was restored.

The Tribunal found that the orders of the lower authorities were based on incorrect facts and improper application of law. Specifically, the applicability of Section 73 and Section 43(5) of the Income Tax Act was not correctly considered.

The Tribunal held that the disallowance made by the Assessing Officer for delayed deposit of employees' contribution to PF/ESI is correct. The issue is covered by the Supreme Court's decision in Checkmate Services Pvt. Ltd. vs. CIT.

The Tribunal held that the reopening of assessment beyond four years was barred by the first proviso to Section 147 of the Income Tax Act. The original assessment had already examined the loan transactions, and no new material facts were disclosed by the assessee that were not already available or discoverable.

The Tribunal held that the short delays in depositing PF/ESI during the COVID-19 pandemic and when the due date fell on a Sunday were beyond the assessee's control. Therefore, the additions made by the CPC were not sustainable.

The Tribunal decided to remand the issue of building purchase consideration to the AO for fresh adjudication, considering the agreement for sale date. The delayed PF/ESI deposit addition was dismissed following the Supreme Court ruling. The disallowed expenses were restored to the AO for verification.

The tribunal held that the issue regarding deduction under Section 80IA(4)(iii) was covered by previous orders of the tribunal against the assessee, as the project was not notified. Grounds related to TDS and interest were not pressed.

The tribunal held that the AO's action of not allowing cross-examination of adverse witnesses violated the principles of natural justice. Therefore, the assessment order was unsustainable.

The Tribunal held that the grounds challenging the jurisdiction of the AO and the validity of the notice under Section 143(2) were dismissed based on the assessee's participation in assessment proceedings without questioning jurisdiction and the Supreme Court's decision in Kalinga Institute. The issue regarding Section 43CA was remanded to the AO for reconsideration.

The assessee's counsel, on instructions from the client, requested to withdraw the appeal. The Department had no objection to the withdrawal.

The Tribunal held that the Assessing Officer erred by not considering the stock held by the assessee's sons, especially since the previous year had not yet ended. The Tribunal also noted that the assessee had already offered a sum towards stock discrepancies.

The Tribunal held that the assessee had discharged its primary onus by providing sufficient documents to prove the identity, creditworthiness of share applicants, and genuineness of the transactions. Therefore, the addition under Section 68 was not justified.

The Tribunal held that the AO insisted on personal appearance without examining furnished documents and that adverse inference cannot be drawn solely for non-compliance with summons if identity, creditworthiness, and genuineness are otherwise established. The CIT(A)'s order was set aside.

The Tribunal held that the assessee had provided sufficient details to explain the nature and source of the share capital and premium. The AO's findings were considered factually incorrect and based on surmises and conjectures.

The Tribunal found that the consideration received from the sale of the car was correctly reduced from the block of assets, and depreciation was claimed on the closing WDV. Therefore, the addition made by the Assessing Officer was erroneous.

The Tribunal held that the duration of approval granted by the Khadi and Village Industries Commission is not within the assessee's control. It was considered a technical violation for which the assessee should not be penalized by denying the exemption.

The Tribunal noted that the CIT(A) did not consider the assessee's expenditure against gross receipts. Due to the assessee's failure to present all facts and documents before the lower authorities, the matter was restored to the CIT(A) for fresh adjudication.

The Tribunal restored all issues to the CIT(A) for fresh adjudication. The CIT(A) is directed to pass a speaking order after considering the assessee's submissions and documents, providing adequate opportunity.

The Tribunal held that the assessee was eligible for deduction under Section 54F for the purchase of a new flat, as substantial compliance was made within the stipulated time. The Tribunal also deleted additions made under Sections 68 and 69, finding the explanation for cash deposits and investment sources satisfactory. The addition based on TDS entry was deleted as the investment was made by the assessee's husband.

The Tribunal held that the AO should have conducted the scrutiny based on the revised IND AS financial statements, as the GAAP financials became non-est. The CIT(A)'s order was also found to be non-speaking.

The Tribunal found that the assessee had sufficient brought forward losses from previous years. Therefore, the claim for set off of losses against current year income was legitimate and should be allowed.

The Tribunal held that for properties held as stock-in-trade and remaining vacant, the annual lettable value should be considered Nil. This is because Section 23(5) of the Act, which deals with stock-in-trade, was not applicable prior to AY 2018-19, and Section 22 exempts properties used for business purposes.

The CIT(A) directed the AO to verify the assessee's claim and delete the addition if found correct. The Tribunal found no merit in the revenue's appeal, considering it a waste of resources.

The Tribunal held that the CIT(A) erred by admitting additional evidence without giving the Assessing Officer a reasonable opportunity to examine it, violating Rule 46A(3). The issues were restored to the CIT(A) for fresh adjudication.

The Tribunal held that the disallowance under Section 14A should be computed only on investments yielding exempt income, not all investments. Consequently, the disallowance was restricted to Rs. 3,81,101/- after considering the suo motu disallowance. The book profit adjustment under Section 115JB was also modified accordingly.