ITAT Kolkata Judgments — November 2024

The Tribunal held that future development expenses were allowable as they related to projects where revenue was recognized, following a High Court decision. Regarding property valuation, the Tribunal applied the retrospective benefit of the increased tolerance band under Section 43CA, directing verification of the quantum.

The Tribunal held that Section 269T applies to the repayment of loans or deposits, not to the disbursement of loans. Therefore, the penalty under Section 271E was wrongly invoked as the society was acting as a lender, not a borrower.

The Tribunal held that interest expenditure incurred on loans for acquiring a property is admissible as part of the cost of acquisition for computing long-term capital gains under Section 48 of the Income Tax Act. This is based on existing legal precedents and the prospective nature of amendments to Section 48.

The Tribunal found merit in the AO's action regarding unverifiable expenses but considered the disallowance excessive. Therefore, the disallowance was restricted to 50% of the added amount.

The Tribunal held that the revision order by the Principal Commissioner of Income Tax (PCIT) was not sustainable. The AO had duly examined the records for the year under consideration and found the purchases from AVPL to be genuine, as they were finished goods that were subsequently sold and the profit offered to tax. Merely because purchases from AVPL were treated as bogus in another year did not automatically make them bogus for the current year.

The Tribunal held that the excessive claim of losses was detected from the material already available with the AO and not from any independent source. Therefore, a penalty under Section 271(1)(c) was not justified.

The Tribunal found that the case suffered from a lack of proper persuasion before the lower authorities and that detailed reconciliation of accounts could not be done at the ITAT level. Therefore, the matter was remanded back to the AO.

The Tribunal held that the assessee itself requested withdrawal of the appeal, and there was no statutory obligation for the CIT(A) to decide on merits when the assessee sought withdrawal. Therefore, the assessee's current appeal against the withdrawal is without merit.

The Tribunal found conflicting statements regarding the submission of documents for the bad debts claim. Therefore, the Tribunal decided to remand the issue back to the Assessing Officer for fresh examination.

The Tribunal held that the amendment enhancing the safe harbour limit from 5% to 10% (effective from 01.04.2021) is curative in nature and applies retrospectively. Therefore, the differential amount falls within the permissible limit and cannot be added.

The Tribunal held that the assessee's case was covered by earlier decisions in their favor for previous assessment years. It also noted that depreciation and certain other expenses are not subject to disallowance under Section 14A based on cited case law.

The Tribunal held that the assessee had provided sufficient documentation, including audited financial statements, sales invoice, and bank statements, to establish the genuineness of the transaction. Therefore, the addition made by the AO was unjustified.

The Tribunal held that the PCIT exceeded his jurisdiction in invoking Section 263. The AO had already examined relevant transactions and obtained necessary approvals for reassessment, and the additional amounts cited by the PCIT did not come to the AO's notice during the assessment proceedings.

The Tribunal dismissed the Department's appeals, upholding the CIT(A)'s decision to allow deductions for contributions to approved superannuation and gratuity funds. The Tribunal also deleted the disallowance for belated PF remittance, finding no specified due date under the relevant regulations.

The tribunal set aside the ex parte order of the CIT(A) and restored the matter for a fresh decision. The CIT(A) was directed to provide the assessee with a proper opportunity to be heard.

The Tribunal held that the denial of FTC due to the procedural delay in filing Form 67 was not justified. The Tribunal emphasized that the objective of the DTAA is to avoid double taxation and that substantive compliance with tax payment should not be compromised by procedural technicalities, especially when Form 67 was filed during rectification.

The Tribunal considered the assessee's admission of being an entry provider and the argument that income should be assessed as commission. However, the Assessing Officer and CIT(A) treated the transaction as a capital gain based on specific documentation.

The Tribunal held that the assessee had sufficiently proved the identity, creditworthiness, and genuineness of the share subscriber. It also found no justification for the ad-hoc disallowance of expenses and upheld the disallowance of the penalty.

The Tribunal held that additions made outside the scope of limited scrutiny are unsustainable. The issue of interest income was remitted to the Assessing Officer for re-examination.

The Tribunal dismissed the Department's appeals, upholding the CIT(A)'s decision to allow deductions for contributions to approved superannuation and gratuity funds. The Tribunal also deleted the disallowance for belated PF remittance, finding no specified due date under the relevant regulations.

The Tribunal condoned the delay in filing the appeal due to the reasons provided in the affidavit. Considering the interest of substantive justice, the matter was remanded to the Assessing Officer for a comprehensive presentation of facts by the assessee.

The Tribunal found that the AO may not have followed the mandatory procedure under Section 143(1)(a) by not issuing a notice of proposed enhancement to the assessee. The CIT(A) also did not adequately address this procedural issue.

The Tribunal held that the impugned order of the Ld. CIT(A) was an ex parte order. Considering the submissions made by the assessee, supported by an affidavit explaining the reasons for non-compliance, and in light of a coordinate bench's decision in identical facts for earlier assessment years where the matter was remanded, the Tribunal decided to set aside the impugned order. The matter was restored to the file of the Ld. CIT(A) for a fresh decision. The Tribunal emphasized that the Ld. CIT(A) would provide a proper and adequate opportunity of hearing to the assessee to present its case. The appeal of the assessee was allowed for statistical purposes.

The Tribunal dismissed the Revenue's appeal. This was based on the fact that the tax effect of the disputed additions was below the monetary limit prescribed by CBDT Circular No. 17/2019.

The Tribunal held that the PCIT substituted his own opinion for that of the AO without demonstrating the AO's order to be erroneous and prejudicial to revenue. The Tribunal noted that the assessee had provided necessary details and the PCIT's action was not justifiable.

The Tribunal held that the assessee had discharged its primary onus by providing sufficient documentary evidence for the identity, creditworthiness, and genuineness of the share transactions. The Assessing Officer failed to conduct independent inquiries to disprove these submissions.

The Tribunal partly allowed the appeals. It directed that a corporate guarantee rate of 0.5% be adopted, and the disallowance under Section 14A be worked out based on prior findings. The disallowance on lease rental was to apply with consequential relief, and the issue of education cess was remanded. Credit for TDS was to be given after verification, and interest under Section 234B/C was to be charged at the time of giving effect to the order.

The Tribunal held that the appellant should not suffer due to a minor oversight or misinterpretation of the new registration scheme. The matter was remanded back to the CIT(E) for de-novo examination on merits.

The Tribunal held that the penalty notice issued under Section 271(1)(c) was invalid as it did not specify which limb of the section (concealment of income or furnishing inaccurate particulars) was invoked, thus violating the principles of natural justice. The penalty order was therefore quashed.

The Tribunal held that the appeal before the CIT(A) was dismissed due to non-compliance by the assessee, which was attributed to inadvertence and lack of communication. The Tribunal restored the case to the CIT(A) for a fresh decision.

The Tribunal held that salary, bonus, rent, and electricity expenses should be allowed in full, as evidence of their payment and the company's physical presence was presented. However, the addition for staff welfare expenses was confirmed due to lack of sufficient evidence.

The Tribunal held that filing Form-67 is a procedural formality and not mandatory. The denial of foreign tax relief solely for the delay in filing Form-67 was deemed erroneous, following previous coordinate bench decisions.

The Tribunal set aside the orders of the Assessing Officer and CIT(A) and remanded the case back to the Assessing Officer to provide the assessee an opportunity to present their case and supporting documents.

The Tribunal held that additions made under Section 153A require a link to incriminating material found during search, especially when the assessment was already completed. The Tribunal also deleted additions related to interest and brokerage on alleged cash loans, as the primary allegation of cash loans was dropped.

The Tribunal held that a statement recorded during a survey has no evidentiary value without corroborating incriminating material. The addition was based on surmises and conjectures and was also tax-neutral.

The Tribunal held that statements recorded from third-party entry providers during a search are not incriminating material. For completed/unabated assessment years, additions can only be made based on incriminating material found during the search.

The Tribunal held that the mere time gap between withdrawals and redeposits into the same bank account is not sufficient to treat the deposit as unexplained, especially when the assessee has substantial income and has explained the source. The AO did not provide evidence that the withdrawn money was used elsewhere.

The Tribunal held that Section 44AD is applicable and that duty drawback receipts are part of gross receipts for calculating presumptive income. The additions made by the AO and confirmed by the CIT(A) were set aside.

The Tribunal held that the Ld. CIT(A) had rightly deleted the additions made by the AO. For AYs 2013-14 and 2014-15, the Tribunal found that the AO had exercised jurisdiction under the fourth proviso to Section 153A without meeting the necessary preconditions. Specifically, no incriminating material was found during the search, and the condition regarding escaped income in the form of an asset of Rs. 50,00,000/- or more was not satisfied, as no undisclosed assets were discovered. For AYs 2015-16 to 2019-20, which were unabated assessments at the time of search, the Tribunal held that the AO lacked jurisdiction to make additions without seized incriminating materials. The Tribunal noted that the AO's additions were based on information from audit reports and post-search statements of entry operators, but crucially, no incriminating material was found during the search proceedings concerning these unsecured loans. Therefore, the AO's jurisdiction was confined to making additions based on incriminating material seized during the search for unabated/completed assessment years. The Tribunal upheld the Ld. CIT(A)'s order, finding it detailed and reasoned, and dismissed the revenue's appeals.

The Tribunal held that the Ld. CIT(A) had rightly deleted the additions made by the AO. For AYs 2013-14 and 2014-15, the Tribunal found that the AO had exercised jurisdiction under the fourth proviso to Section 153A without meeting the necessary preconditions. Specifically, no incriminating material was found during the search, and the condition regarding escaped income in the form of an asset of Rs. 50,00,000/- or more was not satisfied, as no undisclosed assets were discovered. For AYs 2015-16 to 2019-20, which were unabated assessments at the time of search, the Tribunal held that the AO lacked jurisdiction to make additions without seized incriminating materials. The Tribunal noted that the AO's additions were based on information from audit reports and post-search statements of entry operators, but crucially, no incriminating material was found during the search proceedings concerning these unsecured loans. Therefore, the AO's jurisdiction was confined to making additions based on incriminating material seized during the search for unabated/completed assessment years. The Tribunal upheld the Ld. CIT(A)'s order, finding it detailed and reasoned, and dismissed the revenue's appeals.

The Tribunal held that the assessment under Section 153A of the Income-tax Act, 1961, was completed without considering any incriminating document. The notice under Section 153A was issued without considering any incriminating material, rendering it void ab initio and the assessment infructuous. The Tribunal relied on the judgment of the Hon'ble Apex Court in Principal Commissioner of Income-Tax v. Abhisar Buildwell P. Ltd., which clearly states that in the case of unabated/completed assessments, no addition can be made by the AO in the absence of any incriminating material found during the course of search. The Tribunal found that the addition of bogus LTCG was not based on any incriminating material unearthed during the search. Therefore, the assessment proceedings under Section 153A were beyond jurisdiction. The Tribunal found no infirmity in the impugned order of the CIT(A) and dismissed the grounds of appeal raised by the Revenue. The merit of the case was not pressed before the bench as arguments were confined to legal grounds.

The Tribunal held that the assessment under Section 153A of the Income-tax Act, 1961, was completed without considering any incriminating document. The notice under Section 153A was issued without considering any incriminating material, rendering it void ab initio and the assessment infructuous. The Tribunal relied on the judgment of the Hon'ble Apex Court in Principal Commissioner of Income-Tax v. Abhisar Buildwell P. Ltd., which clearly states that in the case of unabated/completed assessments, no addition can be made by the AO in the absence of any incriminating material found during the course of search. The Tribunal found that the addition of bogus LTCG was not based on any incriminating material unearthed during the search. Therefore, the assessment proceedings under Section 153A were beyond jurisdiction. The Tribunal found no infirmity in the impugned order of the CIT(A) and dismissed the grounds of appeal raised by the Revenue. The merit of the case was not pressed before the bench as arguments were confined to legal grounds.

The Tribunal held that the assessment under Section 153A of the Income-tax Act, 1961, was completed without considering any incriminating document. The notice under Section 153A was issued without considering any incriminating material, rendering it void ab initio and the assessment infructuous. The Tribunal relied on the judgment of the Hon'ble Apex Court in Principal Commissioner of Income-Tax v. Abhisar Buildwell P. Ltd., which clearly states that in the case of unabated/completed assessments, no addition can be made by the AO in the absence of any incriminating material found during the course of search. The Tribunal found that the addition of bogus LTCG was not based on any incriminating material unearthed during the search. Therefore, the assessment proceedings under Section 153A were beyond jurisdiction. The Tribunal found no infirmity in the impugned order of the CIT(A) and dismissed the grounds of appeal raised by the Revenue. The merit of the case was not pressed before the bench as arguments were confined to legal grounds.

The Tribunal held that the assessment under Section 153A of the Income-tax Act, 1961, was completed without considering any incriminating document. The notice under Section 153A was issued without considering any incriminating material, rendering it void ab initio and the assessment infructuous. The Tribunal relied on the judgment of the Hon'ble Apex Court in Principal Commissioner of Income-Tax v. Abhisar Buildwell P. Ltd., which clearly states that in the case of unabated/completed assessments, no addition can be made by the AO in the absence of any incriminating material found during the course of search. The Tribunal found that the addition of bogus LTCG was not based on any incriminating material unearthed during the search. Therefore, the assessment proceedings under Section 153A were beyond jurisdiction. The Tribunal found no infirmity in the impugned order of the CIT(A) and dismissed the grounds of appeal raised by the Revenue. The merit of the case was not pressed before the bench as arguments were confined to legal grounds.

The Tribunal held that the assessment under Section 153A of the Income-tax Act, 1961, was completed without considering any incriminating document. The notice under Section 153A was issued without considering any incriminating material, rendering it void ab initio and the assessment infructuous. The Tribunal relied on the judgment of the Hon'ble Apex Court in Principal Commissioner of Income-Tax v. Abhisar Buildwell P. Ltd., which clearly states that in the case of unabated/completed assessments, no addition can be made by the AO in the absence of any incriminating material found during the course of search. The Tribunal found that the addition of bogus LTCG was not based on any incriminating material unearthed during the search. Therefore, the assessment proceedings under Section 153A were beyond jurisdiction. The Tribunal found no infirmity in the impugned order of the CIT(A) and dismissed the grounds of appeal raised by the Revenue. The merit of the case was not pressed before the bench as arguments were confined to legal grounds.

The Tribunal held that the assessment under Section 153A of the Income-tax Act, 1961, was completed without considering any incriminating document. The notice under Section 153A was issued without considering any incriminating material, rendering it void ab initio and the assessment infructuous. The Tribunal relied on the judgment of the Hon'ble Apex Court in Principal Commissioner of Income-Tax v. Abhisar Buildwell P. Ltd., which clearly states that in the case of unabated/completed assessments, no addition can be made by the AO in the absence of any incriminating material found during the course of search. The Tribunal found that the addition of bogus LTCG was not based on any incriminating material unearthed during the search. Therefore, the assessment proceedings under Section 153A were beyond jurisdiction. The Tribunal found no infirmity in the impugned order of the CIT(A) and dismissed the grounds of appeal raised by the Revenue. The merit of the case was not pressed before the bench as arguments were confined to legal grounds.

The Tribunal held that the assessment under Section 153A of the Income-tax Act, 1961, was completed without considering any incriminating document. The notice under Section 153A was issued without considering any incriminating material, rendering it void ab initio and the assessment infructuous. The Tribunal relied on the judgment of the Hon'ble Apex Court in Principal Commissioner of Income-Tax v. Abhisar Buildwell P. Ltd., which clearly states that in the case of unabated/completed assessments, no addition can be made by the AO in the absence of any incriminating material found during the course of search. The Tribunal found that the addition of bogus LTCG was not based on any incriminating material unearthed during the search. Therefore, the assessment proceedings under Section 153A were beyond jurisdiction. The Tribunal found no infirmity in the impugned order of the CIT(A) and dismissed the grounds of appeal raised by the Revenue. The merit of the case was not pressed before the bench as arguments were confined to legal grounds.

The Tribunal held that the Ld. CIT(A) had rightly deleted the additions made by the AO. For AYs 2013-14 and 2014-15, the Tribunal found that the AO had exercised jurisdiction under the fourth proviso to Section 153A without meeting the necessary preconditions. Specifically, no incriminating material was found during the search, and the condition regarding escaped income in the form of an asset of Rs. 50,00,000/- or more was not satisfied, as no undisclosed assets were discovered. For AYs 2015-16 to 2019-20, which were unabated assessments at the time of search, the Tribunal held that the AO lacked jurisdiction to make additions without seized incriminating materials. The Tribunal noted that the AO's additions were based on information from audit reports and post-search statements of entry operators, but crucially, no incriminating material was found during the search proceedings concerning these unsecured loans. Therefore, the AO's jurisdiction was confined to making additions based on incriminating material seized during the search for unabated/completed assessment years. The Tribunal upheld the Ld. CIT(A)'s order, finding it detailed and reasoned, and dismissed the revenue's appeals.

The Tribunal held that the Ld. CIT(A) had rightly deleted the additions made by the AO. For AYs 2013-14 and 2014-15, the Tribunal found that the AO had exercised jurisdiction under the fourth proviso to Section 153A without meeting the necessary preconditions. Specifically, no incriminating material was found during the search, and the condition regarding escaped income in the form of an asset of Rs. 50,00,000/- or more was not satisfied, as no undisclosed assets were discovered. For AYs 2015-16 to 2019-20, which were unabated assessments at the time of search, the Tribunal held that the AO lacked jurisdiction to make additions without seized incriminating materials. The Tribunal noted that the AO's additions were based on information from audit reports and post-search statements of entry operators, but crucially, no incriminating material was found during the search proceedings concerning these unsecured loans. Therefore, the AO's jurisdiction was confined to making additions based on incriminating material seized during the search for unabated/completed assessment years. The Tribunal upheld the Ld. CIT(A)'s order, finding it detailed and reasoned, and dismissed the revenue's appeals.

The Tribunal held that the assessment under Section 153A of the Income-tax Act, 1961, was completed without considering any incriminating document. The notice under Section 153A was issued without considering any incriminating material, rendering it void ab initio and the assessment infructuous. The Tribunal relied on the judgment of the Hon'ble Apex Court in Principal Commissioner of Income-Tax v. Abhisar Buildwell P. Ltd., which clearly states that in the case of unabated/completed assessments, no addition can be made by the AO in the absence of any incriminating material found during the course of search. The Tribunal found that the addition of bogus LTCG was not based on any incriminating material unearthed during the search. Therefore, the assessment proceedings under Section 153A were beyond jurisdiction. The Tribunal found no infirmity in the impugned order of the CIT(A) and dismissed the grounds of appeal raised by the Revenue. The merit of the case was not pressed before the bench as arguments were confined to legal grounds.