ITAT Kolkata Judgments — October 2024

The Tribunal decided to remand the matter back to the AO for fresh consideration. This was based on the submission of fresh evidence by the assessee, which was not available before the lower authorities, and in the interest of substantive justice.

The Tribunal held that the application for final approval was filed within the stipulated time frame, considering the commencement of activities and the period of provisional approval. The rejection of the application and cancellation of provisional approval by the CIT(E) were deemed unsustainable.

The Tribunal held that the CIT(E) erred in rejecting the application as time-barred. The Tribunal applied the legal maxim 'Lex non cogit ad impossibilia' (the law does not compel the impossible) and found the application to be filed within the permissible time frame based on the provisional approval period.

The Tribunal held that the CPC did not have the power to disallow deductions under Section 80P while processing under Section 143(1) for the assessment year in question, as the relevant amendment conferring this power was effective from a later date. Section 80AC, which bars such deductions for belated returns, could only be invoked in a scrutiny assessment under Section 143(3).

The Tribunal upheld the order of the CIT(A), confirming the addition of Rs. 25,00,00,000/-. The assessee's failure to establish the source of funds, creditworthiness of subscribers, and justification for the high premium led to the confirmation of the addition.

The Tribunal held that caution deposits and refundable fees are explained liabilities and not income, thus deleting the additions made by the AO. It also found that the cash deposits and interest income were duly explained and recorded in the books of account, leading to the deletion of those additions as well.

The Tribunal upheld the CIT(A)'s deletion of most additions, finding that the expenses were genuine business expenditures. However, it allowed the revenue's ground regarding the disallowance for delayed deposit of employees' contribution to PF & ESI, following a Supreme Court judgment.

The Tribunal found that the CIT(A) had not examined the crucial issue of whether the assessment order was communicated beyond the prescribed time limit. Therefore, the matter was remanded back to the CIT(A) for fresh examination.

The Tribunal held that the reopening of assessment was invalid as it was based on borrowed satisfaction without independent inquiry. The additions made under Section 68 and 69A were also found to be unsustainable.

The Tribunal held that the ex-parte order violated Section 250(6) of the Income Tax Act. Therefore, the appeal was restored to the CIT(A) for a decision on merit after providing a reasonable opportunity of hearing.

The Tribunal held that the reopening of assessment beyond four years was invalid as the AO failed to demonstrate the assessee's failure to disclose material facts. Therefore, the reassessment proceedings and the assessment order were quashed.

The Tribunal allowed the assessee one more opportunity to present its case before the AO. The issue was restored to the AO for fresh adjudication based on the evidence to be filed by the assessee.

The Tribunal held that the assessee's non-appearance was due to unavoidable circumstances and that justice would be served by giving the assessee an opportunity to present its case. The matter was restored to the CIT(A) for a fresh decision.

The Tribunal held that the addition of Rs. 11,51,000/- as unexplained cash credit and the disallowance of interest were not justified. The Tribunal noted that Shri Madanlal Siraswa had furnished all necessary details, appeared before the AO, and confirmed the loans. The explanation provided for the source of unsecured loans through bank statements of the lenders and their family members was considered. The Tribunal specifically examined the bank statement of Shri Madanlal Siraswa and found that only Rs. 17,000/- was deposited in cash before advancing the loan of Rs. 4,00,000/-, contradicting the AO's opinion that substantial cash was introduced before the loan. The Tribunal found the facts to be similar for the remaining lenders. Furthermore, the Tribunal respectfully followed a co-ordinate bench decision in the case of M/s Bhagwati Foods Pvt. Ltd. vs. DCIT, which held similar unsecured loans from the same parties to be genuine. Accordingly, the Tribunal set aside the order of the Ld. CIT(A) and directed the AO to delete the addition. The appeal for AY 2014-15 was also allowed on similar grounds.

The Tribunal held that the addition of Rs. 11,51,000/- as unexplained cash credit and the disallowance of interest were not justified. The Tribunal noted that Shri Madanlal Siraswa had furnished all necessary details, appeared before the AO, and confirmed the loans. The explanation provided for the source of unsecured loans through bank statements of the lenders and their family members was considered. The Tribunal specifically examined the bank statement of Shri Madanlal Siraswa and found that only Rs. 17,000/- was deposited in cash before advancing the loan of Rs. 4,00,000/-, contradicting the AO's opinion that substantial cash was introduced before the loan. The Tribunal found the facts to be similar for the remaining lenders. Furthermore, the Tribunal respectfully followed a co-ordinate bench decision in the case of M/s Bhagwati Foods Pvt. Ltd. vs. DCIT, which held similar unsecured loans from the same parties to be genuine. Accordingly, the Tribunal set aside the order of the Ld. CIT(A) and directed the AO to delete the addition. The appeal for AY 2014-15 was also allowed on similar grounds.

The Tribunal held that the assessee's non-appearance was due to unavoidable circumstances and that justice would be served by giving the assessee an opportunity to present its case. The matter was restored to the CIT(A) for a fresh decision.

The Tribunal held that the assessee's non-appearance was due to unavoidable circumstances and that justice would be served by giving the assessee an opportunity to present its case. The matter was restored to the CIT(A) for a fresh decision.

The Tribunal condoned the delay in filing the appeal due to reasonable cause. However, it dismissed the appeal as the tax effect was below the prescribed monetary limit as per CBDT Circular No. 17/2019.

The Tribunal held that the reopening of assessment was bad in law as the AO had not applied his mind independently and relied on 'borrowed satisfaction' from the information received. The Tribunal quashed the reopening and the consequent assessment order.

The Tribunal restored the matter to the AO for fresh examination, considering the confusion caused by prior court orders and the assessee's claim of insufficient opportunity. The AO is to verify if employees offered LFC for taxation.

The Tribunal condoned the delay in filing the appeal. However, it held that the appeal was filed contrary to the Department's policy decision due to the low tax effect and dismissed the appeal in limine.

The Tribunal held that the assessee had furnished all necessary evidence regarding the identity and creditworthiness of the investors. The non-production of the managing director of the subscribing company, despite the assessee providing all other required details, was not a sufficient ground for addition.

The Tribunal quashed the reopening of assessment and the consequent order. It held that the AO did not independently apply his mind to the information received and the reasons recorded were vague and uncertain.

The Tribunal found that the AO did not conduct independent verification and relied solely on the investigation wing's report. The assessee's explanation of receiving share application money from related parties, supported by the balance sheet, was not properly appreciated.

The Tribunal held that there is no bar in claiming deduction under Section 80G for donations made as CSR expenses, provided the donee institution is eligible. The Tribunal followed a coordinate bench decision which held that specific restrictions for CSR contributions to only certain funds imply no general prohibition for other eligible cases.

The Tribunal held that the appeal filed by the Revenue was contrary to the policy decision of the Department as per the CBDT circular. Therefore, the appeal was dismissed in limine.

The Tribunal found the addition to be purely estimation-based without concrete material. It noted that the assessee's total salary and labor expenses were significantly lower than the estimated labor element for work-in-progress, making the addition unrealistic.

The Tribunal held that PF payment made on the day after the due date, which was a public holiday, is considered within the due date. It also found that the penalty amount was a typographical error by the tax auditor and not a genuine penalty paid.

The Tribunal held that the cash deposits, investments, and cash credit were sufficiently explained by the assessee through gifts from his father, salary income, and refunds from a property deal. The additions made by the AO and confirmed by the CIT(A) were deleted.

The Tribunal held that a reference to the DVO is mandatory when there's a difference between stamp duty value and purchase price if the AO intends to make an addition. The authorities below failed to adhere to this mandatory procedure.

The Tribunal held that the reopening of assessment after four years was invalid as the assessee had fully disclosed the facts in the original return and during the scrutiny assessment. The approval for reopening was also found to be mechanical.

The Tribunal condoned the delay in filing the appeal. It held that the reopening of assessment after four years was invalid as the conditions under the first proviso to Section 147 were not met, specifically the absence of a finding that income escaped assessment due to the assessee's failure to disclose material facts.

The Tribunal held that the assessee's activity of borrowing and lending money had been accepted by the revenue in preceding years. Citing precedents, it ruled that once capital is borrowed for business purposes, the interest paid is deductible, and the revenue cannot dictate business operations or disallow claims based on mere suspicion.

The Tribunal held that if the corresponding expenses are not disputed and allowed, then the sundry creditors related to such expenses cannot be disallowed and added to income under Section 68. The addition made by the AO was deemed unsustainable in law.

The Tribunal held that the Stamp Duty Valuation as on the date of the agreement (08.10.2014) should be considered, not the date of registration. Both revenue authorities failed to appreciate this crucial aspect and the potential for a lower Stamp Duty value on the agreement date.

The Tribunal found that the CIT(A) had correctly allowed the appeal on the legal issue of reopening of assessment, as it was based on a change of opinion. Therefore, the revenue's appeal was dismissed.

The Tribunal held that the assessee failed to provide any evidence of registration under Section 12AA of the Income Tax Act, either before the lower authorities or before the Tribunal. Therefore, the conditions for claiming exemption under Section 11 were not met.

The Tribunal restored the appeal to the Assessing Officer for a fresh assessment. This was done in the interest of justice and fair play, allowing the assessee to file necessary evidence and documents.

The Tribunal noted that the grounds of appeal for AYs 2013-14, 2014-15, and 2015-16 were similar to AY 2012-13, and the issue of repairs and maintenance was not applicable for AY 2013-14. Consequently, the appeals for these three years were dismissed as 'Not Pressed'.

The Tribunal condoned the delay in filing the appeal, citing a liberal interpretation of 'sufficient cause' to advance substantial justice. The Tribunal decided to hear the appeal on its merits.

The Tribunal restored the issue to the AO for fresh adjudication after affording a reasonable opportunity of hearing to the assessee, considering the interest of justice and fair play.

The Tribunal held that for AY 2016-17, the addition of Rs. 10,02,741/- on account of interest on unsecured loan from M/s Swarnapriya Vanijya Pvt. Ltd. was not justified. The Tribunal noted that the issue of the loan itself for the preceding AY 2015-16 had been decided in favour of the assessee on the ground that no incriminating material was found during the search. Since the interest issue was consequential, and the primary issue was decided in favour of the assessee, the addition was deleted. The order of the Ld. CIT(A) was set aside, and the AO was directed to delete the addition. For AY 2017-18, the addition of Rs. 2,55,00,000/- as unexplained cash credit was also deleted. The Tribunal observed that the loans were raised from parties from whom money was raised in earlier assessment years, which were unabated and decided in favour of the assessee. The AO's reliance on an old investigation report and statement was not considered sufficient to treat the loans as non-genuine. For AY 2016-17, the addition of Rs. 1,18,00,000/- for cash payment out of books was set aside. The Tribunal found that the AO made the addition based on loose documents which were rough notings and did not specify the location of expenditure. In contrast, the assessee had fully disclosed the expenditure, which was accounted for in the books with supporting bills and vouchers. Therefore, the addition was deleted. Similarly, for AY 2017-18, the addition of Rs. 42,00,000/- for cash payment out of books was allowed in favour of the assessee, following the decision in the AY 2016-17 appeal. All the appeals were allowed.

The Tribunal held that since no new investment was made during the year and the shares were allotted in 2004, Section 14A was not attracted. Therefore, the PCIT's order was not sustainable.

The Tribunal held that for AY 2016-17, the addition of Rs. 10,02,741/- on account of interest on unsecured loan from M/s Swarnapriya Vanijya Pvt. Ltd. was not justified. The Tribunal noted that the issue of the loan itself for the preceding AY 2015-16 had been decided in favour of the assessee on the ground that no incriminating material was found during the search. Since the interest issue was consequential, and the primary issue was decided in favour of the assessee, the addition was deleted. The order of the Ld. CIT(A) was set aside, and the AO was directed to delete the addition. For AY 2017-18, the addition of Rs. 2,55,00,000/- as unexplained cash credit was also deleted. The Tribunal observed that the loans were raised from parties from whom money was raised in earlier assessment years, which were unabated and decided in favour of the assessee. The AO's reliance on an old investigation report and statement was not considered sufficient to treat the loans as non-genuine. For AY 2016-17, the addition of Rs. 1,18,00,000/- for cash payment out of books was set aside. The Tribunal found that the AO made the addition based on loose documents which were rough notings and did not specify the location of expenditure. In contrast, the assessee had fully disclosed the expenditure, which was accounted for in the books with supporting bills and vouchers. Therefore, the addition was deleted. Similarly, for AY 2017-18, the addition of Rs. 42,00,000/- for cash payment out of books was allowed in favour of the assessee, following the decision in the AY 2016-17 appeal. All the appeals were allowed.

The Tribunal held that while the CIT(A) correctly observed that rejection of books was not justified solely on non-service of notices, the assessee's own offer to estimate profit at 0.77% based on historical data, given the unproven genuineness of some transactions, was a reasonable approach.

The Tribunal held that for AY 2016-17, the addition of Rs. 10,02,741/- on account of interest on unsecured loan from M/s Swarnapriya Vanijya Pvt. Ltd. was not justified. The Tribunal noted that the issue of the loan itself for the preceding AY 2015-16 had been decided in favour of the assessee on the ground that no incriminating material was found during the search. Since the interest issue was consequential, and the primary issue was decided in favour of the assessee, the addition was deleted. The order of the Ld. CIT(A) was set aside, and the AO was directed to delete the addition. For AY 2017-18, the addition of Rs. 2,55,00,000/- as unexplained cash credit was also deleted. The Tribunal observed that the loans were raised from parties from whom money was raised in earlier assessment years, which were unabated and decided in favour of the assessee. The AO's reliance on an old investigation report and statement was not considered sufficient to treat the loans as non-genuine. For AY 2016-17, the addition of Rs. 1,18,00,000/- for cash payment out of books was set aside. The Tribunal found that the AO made the addition based on loose documents which were rough notings and did not specify the location of expenditure. In contrast, the assessee had fully disclosed the expenditure, which was accounted for in the books with supporting bills and vouchers. Therefore, the addition was deleted. Similarly, for AY 2017-18, the addition of Rs. 42,00,000/- for cash payment out of books was allowed in favour of the assessee, following the decision in the AY 2016-17 appeal. All the appeals were allowed.

The Tribunal condoned the delay in filing the appeal, citing a liberal interpretation of 'sufficient cause' to advance substantial justice. The Tribunal decided to hear the appeal on its merits.

The Tribunal held that the reopening of assessment under Section 147 was invalid as it was based on borrowed satisfaction without independent application of mind by the AO. The AO failed to establish a live link between the information received and the formation of the belief that income had escaped assessment.

The Tribunal restored the case to the file of the AO to decide the issue de novo after affording the assessee a reasonable opportunity of hearing. This was done to ensure that the facts could be examined in the correct perspective.

The Tribunal noted that the grounds of appeal for AYs 2013-14, 2014-15, and 2015-16 were similar to AY 2012-13, and the issue of repairs and maintenance was not applicable for AY 2013-14. Consequently, the appeals for these three years were dismissed as 'Not Pressed'.