ITAT Kolkata Judgments — March 2024

The Tribunal found that the rejection of books of account requires satisfactory proof of unreliability. Given the explanation of an inadvertent error causing a temporary negative cash balance, the Tribunal decided to remit the matter back to the AO for re-examination.

The Tribunal condoned the delay in filing the fresh application, stating that the rejection was due to technical reasons and not the assessee's fault. The CIT(E) should have allowed rectification or treated the application under the correct clause.

The Tribunal held that investments not yielding exempt income should be excluded from disallowance computation under Rule 8D(2)(iii). It also directed to give credit for the assessee's suo moto disallowance and to verify the TDS credit claim.

The Tribunal held that hedging transactions entered into by the assessee to safeguard against price fluctuations in its core business of bullion trading are part of normal business and not speculative. Therefore, the loss incurred on such hedging should be allowed as a business loss.

The Tribunal held that the provisions of Section 68 and 115BBE were wrongly invoked as the disclosed income was related to business activity and not an unexplained credit in books. The Tribunal found that the assessee had provided explanations for the source of income, which were not rebutted.

The Tribunal observed that the appeal was decided without considering the assessee's submissions. In the interest of justice, the assessee was granted another opportunity to defend its case before the AO on merits.

The Tribunal held that the reopening of assessment was bad in law and the additions made on merits were not sustainable. The revenue failed to provide any evidence of the alleged transactions.

The Tribunal held that Section 50C applies only to capital assets being land or building or both, and not to leasehold rights in land. Leasehold rights are distinct from ownership of land or building and are not included within the scope of Section 50C.

The Tribunal held that the provisions of Section 68 and 115BBE were wrongly invoked as the disclosed income was related to business activity and not an unexplained credit in books. The Tribunal found that the assessee had provided explanations for the source of income, which were not rebutted.

The Tribunal held that the revisionary order under Section 263 was passed against a non-existent entity, as the original company had been amalgamated prior to the revisionary proceedings. Therefore, the revisionary order was invalid.

The Tribunal held that the assessee had discharged its onus to prove the identity, creditworthiness, and genuineness of the share transactions by providing necessary documents. It also held that Section 14A is not applicable when no exempt income is earned.

The Tribunal found that the nature and source of the deposits were explained and substantiated by the material on record. The mismatch in PAN was due to the bank not updating the surrendered PAN. The assessee had offered income from these transactions in her return.

The Tribunal held that the addition on account of cessation of liability under Section 41(1) was not justified as the sundry creditor was an active company and had confirmed the outstanding balance. The Tribunal deleted this addition.

The Tribunal held that the reopening of assessment under Section 147 was invalid and without jurisdiction because the AO failed to record in the reasons to believe that the assessee had failed to disclose truly and fully all material facts during the original assessment. Consequently, the reassessment order was quashed.

The Tribunal noted that the Assessing Officer had not examined the effect of the NCLT order approving the Resolution Plan when passing the assessment orders. Therefore, the matter was restored to the Assessing Officer to examine the impact of the NCLT order and decide accordingly.

The Tribunal noted that the Assessing Officer had not examined the effect of the NCLT order approving the Resolution Plan when passing the assessment orders. Therefore, the matter was restored to the Assessing Officer to examine the impact of the NCLT order and decide accordingly.

The Tribunal held that the CIT(A) erred in passing an ex-parte order without giving the assessee a reasonable opportunity to be heard. The matter was restored to the CIT(A) for fresh adjudication.

The Tribunal held that the assessee had discharged its onus by providing sufficient documentation to prove the identity, creditworthiness, and genuineness of the share transactions. It also held that Section 14A is not applicable when no exempt income is earned.

The Tribunal held that the assessee had provided sufficient details for honorarium and scholarship expenses, and the disallowance of depreciation was incorrect as no claim was made. The Tribunal also found that the donation was adequately explained with documentary evidence.

The Tribunal upheld the CIT(A)'s decision, stating that since the VAT paid on purchases was not claimed as an expenditure by the assessee, the refund of such VAT cannot be treated as income. The reopening of assessment was also found to be based on a change of opinion.

The Tribunal held that the addition made by the AO is not sustainable in law. The primary document (SVM-2) was found during a survey on M/s SVM Impex & Finance Pvt. Ltd., a group company, and not during a search on the assessee, thus not constituting incriminating searched material. The Tribunal noted that for additions in an unabated assessment year, the AO must rely on incriminating seized material. In the absence of such material found during a search on the assessee, the AO has no jurisdiction to make an addition. The Tribunal further observed that even if the document was found from a third party during a search/survey pertaining to the assessee, the AO should have framed the assessment under Section 153C. The Tribunal also found that both the AO and the CIT(A) failed to provide any substantive material to corroborate the disclosure made by Shri Srivardhan Mohta. Relying on the decision of the Hon'ble Apex Court in CIT Vs S. Khadher Khan (2013) 352 ITR 480(SC), the Tribunal concluded that a disclosure cannot be the sole ground for addition without corroborating material. Therefore, the addition was deleted. The issue of whether the assessment should have been framed under Section 153C was implicitly addressed by stating that the AO had no jurisdiction to make the addition under the circumstances.

The Tribunal upheld the CIT(A)'s decision, stating that since the VAT paid on purchases was not claimed as an expenditure by the assessee, the refund of such VAT cannot be treated as income. The reopening of assessment was also found to be based on a change of opinion.

The Tribunal noted that the Assessing Officer had not examined the effect of the NCLT order approving the Resolution Plan when passing the assessment orders. Therefore, the matter was restored to the Assessing Officer to examine the impact of the NCLT order and decide accordingly.

The Tribunal held that the addition made by the AO is not sustainable in law. The primary document (SVM-2) was found during a survey on M/s SVM Impex & Finance Pvt. Ltd., a group company, and not during a search on the assessee, thus not constituting incriminating searched material. The Tribunal noted that for additions in an unabated assessment year, the AO must rely on incriminating seized material. In the absence of such material found during a search on the assessee, the AO has no jurisdiction to make an addition. The Tribunal further observed that even if the document was found from a third party during a search/survey pertaining to the assessee, the AO should have framed the assessment under Section 153C. The Tribunal also found that both the AO and the CIT(A) failed to provide any substantive material to corroborate the disclosure made by Shri Srivardhan Mohta. Relying on the decision of the Hon'ble Apex Court in CIT Vs S. Khadher Khan (2013) 352 ITR 480(SC), the Tribunal concluded that a disclosure cannot be the sole ground for addition without corroborating material. Therefore, the addition was deleted. The issue of whether the assessment should have been framed under Section 153C was implicitly addressed by stating that the AO had no jurisdiction to make the addition under the circumstances.

The Tribunal condoned the three-day delay in filing the appeal before the CIT(A), finding it unintentional. The case was remitted back to the CIT(A) for adjudication on merits.

The Tribunal condoned the delay in filing the return, relying on a CBDT circular which authorized condonation for AY 2016-17. Consequently, the assessee was held to have fulfilled the conditions for accumulating surplus funds under Section 11(2).

The Tribunal held that the difference in opinion regarding the classification of expenditure as revenue or capital does not amount to furnishing inaccurate particulars of income. Therefore, the penalty levied under Section 271(1)(c) is not sustainable.

The Tribunal held that the addition made by the AO and confirmed by the CIT(A) in respect of jewellery items RPM/7 and RPM/8 was not justified. The Tribunal noted that the descriptions of these items, subject to minor differences, were mentioned in the wealth tax returns. It was not the department's case that these items were in addition to those disclosed in the wealth tax returns. The Tribunal found the valuation method of the departmental valuer to be inaccurate, evidenced by a significant difference of over Rs.1 crore in two valuation reports for the same items. The assessee's counsel had pointed out minute factors influencing diamond valuation and explained that minor variations in description and weight were due to the items being remade. The Tribunal concluded that the addition was made on account of minor variations and that the huge difference in valuation reports indicated inaccuracy. Therefore, the impugned order of the CIT(A) was set aside, and the addition made by the AO was ordered to be deleted. The Tribunal did not expressly leave any issue undecided.

The Tribunal found that the CIT(Exemption) passed the order prematurely without considering the assessee's explanation. Therefore, the impugned order was set aside, and the application was restored to the CIT(Exemption) for fresh adjudication.

The Tribunal held that the penalty notice issued under section 274 read with section 271(1)(c) was defective as it did not specify the exact charge against the assessee. Following jurisdictional High Court precedents, the penalty was deleted.

The Tribunal found that the assessee had provided sufficient documents to explain the identity, creditworthiness of the lenders, and genuineness of the transactions. It noted that similar additions in the hands of one of the lenders were deleted by the Tribunal and confirmed by the High Court. Therefore, the addition under Section 68 was not justified.

The Tribunal held that the assessee had provided sufficient documentation to establish the identity, creditworthiness of the lenders, and genuineness of the transactions. It noted that one of the lenders, Mahalakshmi Vinimay Pvt. Ltd., was a group concern and that additions made in its hands for the same assessment year were deleted by the Tribunal and upheld by the High Court.

The Tribunal held that the assessee had discharged its initial burden by providing details of the share subscribing companies, including their net worth and balance sheets. The AO failed to point out any discrepancies in the provided documents or conduct further investigation.

The Tribunal condoned the delay in filing the appeal, citing the principle that substance should prevail over technicalities. It held that the case needed to be restored to the Assessing Officer for a fresh decision after affording a reasonable opportunity of hearing to the assessee.

The Tribunal found merit in the assessee's contention that the penalty would automatically fall if the quantum additions were deleted. Therefore, the CIT(A)'s order confirming the penalty was set aside.

The Tribunal held that the adjustment made by the CPC, which resulted in a double taxation of the same amount, was an apparent error. The Tribunal allowed the appeal, deleting the addition and directing the income to be assessed at the originally declared figure.

The Tribunal found that the CIT(A) failed to comply with the duty to pass a speaking order and consider the assessment records. Therefore, the matter was remitted back to the CIT(A) for a proper disposal.

The Tribunal held that the payment made to the landowners for the land development was in the nature of capital expenditure, not revenue expenditure. Therefore, the disallowance of the claim by the Assessing Officer was upheld.

The Tribunal condoned the delay, finding a reasonable cause. It further held that since both the assessment and appellate orders were ex-parte and the assessee was denied a reasonable opportunity to be heard, the matter should be remanded.

The Tribunal held that the CIT(A) misconstrued the provisions of Section 80M. The Tribunal found that the provisions inserted by the Finance Act, 2020, were indeed effective from AY 2021-22 and set aside the CIT(A)'s order.

The Tribunal held that the payment made to the landowners for the land development was in the nature of capital expenditure, not revenue expenditure. Therefore, the disallowance of the claim by the Assessing Officer was upheld.

The Tribunal held that the CIT(A) failed to comply with the duty to provide a proper opportunity of hearing and pass a speaking order. The matter was remitted back to the CIT(A) for a fresh adjudication.

The Tribunal held that the profit derived from the activities was meager, making the proviso to Section 2(15) not applicable. Therefore, the assessee is entitled to exemption under Section 11.

The Tribunal held that the assessee had a reasonable cause for the delay in furnishing the tax audit report, as the appointment and completion of the statutory audit were beyond its control. Therefore, the penalty imposed under Section 271B was deleted.

The Tribunal held that the disallowance of interest on borrowed funds was uncalled for as the assessee had sufficient own funds to cover the increase in capital work in progress and the borrowings were for working capital. The disallowance of software service payment was also deleted as it was considered normal AMC charges not attracting TDS.

The Tribunal held that the disallowance of interest on borrowed funds was uncalled for as the assessee had sufficient own funds to cover the increase in capital work in progress and the borrowings were for working capital. The disallowance of software service payment was also deleted as it was considered normal AMC charges not attracting TDS.

The Tribunal held that the second revisional order passed by the PCIT was without jurisdiction as the conditions precedent under Section 263 were not satisfied. The Tribunal found that the PCIT had failed to demonstrate how the Assessing Officer's actions were not in accordance with any Board directions.

The Tribunal held that the additions made by the AO and confirmed by the CIT(A) were based on assumptions and presumptions, not on concrete evidence. The Tribunal found that the cash deposits tallied with the assessee's sales and that the books of account were not rejected.

The Tribunal found that both the AO and CIT(A) passed orders without proper adjudication on merits. The CIT(A) dismissed the appeal for non-prosecution, failing to meet statutory requirements. The Tribunal decided to remit the matter back to the AO for a fresh assessment.

The Tribunal held that the Assessing Officer (AO) lacked jurisdiction to propose transfer pricing adjustments without a proper reference to the TPO. Consequently, the assessee's ground related to this was allowed, and the revenue's grounds were dismissed.