ITAT Lucknow Judgments — April 2025

The Tribunal held that interest earned on investments made as per statutory requirements (reserve funds) is attributable to the main business activity of the cooperative society and eligible for deduction under section 80P. Interest on provident fund balances held as custodian is not taxable income of the assessee.

The Tribunal noted that both the assessment order and the CIT(A) order were passed ex-parte without affording the assessee a reasonable opportunity. The appeals were allowed for statistical purposes, setting aside the CIT(A) order and restoring the matter to the Assessing Officer for a de novo assessment.

The Tribunal found that the CIT(A) dismissed the assessee's appeals ex parte without proper consideration. The Tribunal restored the matter to the AO for de novo assessment, directing the assessee to provide due compliance. Additions made on an estimate basis under Section 68 and disallowances for sundry creditors and advertising expenses were also restored.

The Tribunal condoned the delay in filing the appeal due to the assessee's illness. Considering the facts, particularly that the assessee has filed a return claiming taxable income and turnover, and in the absence of a finding of fact regarding the nature of deposits, the matter was restored to the AO for a de novo assessment.

The Tribunal found contradictions in the Assessing Officer's order regarding the acceptance of the assessee's declared value and the subsequent computation of capital gains based on stamp valuation. The Tribunal also noted it was unclear why the fair market value was referred to the DVO. Consequently, the Tribunal set aside the impugned order and restored the assessment for denovo assessment.

The tribunal noted that the assessee did not attend the proceedings despite multiple opportunities and failed to remove a defect regarding the appeal fee. Concluding that the assessee was not interested in prosecuting the appeal, the tribunal dismissed it as defective.

The Tribunal dismissed the appeal as withdrawn, following an application by the assessee who informed that the case was being settled under the Vivad se Vishwas Scheme, 2024.

The Tribunal held that interest earned on funds invested in bank deposits, which were statutorily required to be maintained as reserve funds as per the U.P. Cooperative Societies Act, is attributable to the business activities of the society and therefore eligible for deduction under section 80P. The interest earned on provident fund balances of seasonal employees was also held not to be income of the assessee.

The Tribunal held that the assessee's explanation regarding cash deposits from past savings and for meeting emergency medical expenses was reasonable and acceptable given the circumstances, including the assessee's age and medical conditions. The orders of the lower authorities were found to be erroneous.

The Tribunal noted that one appeal had been fixed before another bench and the hearing was adjourned. The assessee requested to withdraw the present appeal, which was permitted.

The Tribunal held that the assessee deserved another opportunity to present its case. The matter was restored to the Assessing Officer for fresh adjudication, with a direction to provide a reasonable opportunity of hearing.

The Tribunal held that Section 10(5) of the Income Tax Act, 1961, and Rule 2B clearly indicate that exemption for LFC is only for travel within India. The inclusion of a foreign leg in the journey, even if the destination is in India, disqualifies the exemption. The bank's claim of a bona fide belief was not accepted as a reasonable explanation for non-deduction.

The Tribunal held that Section 10(5) of the Income Tax Act, 1961, read with Rule 2B, allows exemption only for travel within India. The inclusion of a foreign leg in the journey, even if the ultimate destination is in India, does not entitle the employee to exemption. Therefore, the assessee was liable to deduct TDS.

The Tribunal found that the addition was made due to the assessee's failure to establish the title of the property purportedly sold. The Tribunal, considering the facts, decided to give the assessee one more opportunity to present her case and produce necessary evidence regarding the ownership of the property.

The Tribunal upheld the CIT(A)'s decision, affirming that the commission income earned by the Cane Development Councils and Cooperative Cane Development Unions is directly attributable to their business activities of production and marketing of sugarcane, as defined by the U.P. Sugarcane Act and Rules, and therefore eligible for deduction under Section 80P. Consequently, all appeals filed by the Revenue were dismissed.

The Tribunal condoned the delay in filing the appeal as the Revenue had no objection. The Tribunal set aside the ex-parte order of the CIT(A) and directed a de novo decision on merits after providing an opportunity of being heard to the assessee.

The Tribunal held that the commission received by the Cane Development Councils and Cooperative Cane Development Unions from sugar mills for their role in production and marketing of sugarcane is attributable to their business activities. Therefore, it is eligible for deduction under section 80P as business income, not income from other sources.

The Tribunal held that the denial of relief solely on the technical ground of Form 10E not being uploaded electronically was not justified, especially when documentary evidence like Form 16 was available. The assessee was given another opportunity.

The Tribunal considered the functions of Cane Development Councils and Cooperative Cane Development Unions under the U.P. Sugarcane (Regulation of Supply & Purchases) Act, 1953 and Rules, 1954. It found that the commission income received from sugar mills was directly attributable to the societies' role in sugarcane production and marketing activities. Therefore, the Tribunal upheld the CIT(A)'s decision, ruling that the commission income constituted business receipts eligible for deduction under Section 80P, and dismissed all appeals filed by the Revenue.

The Tribunal allowed the assessee's application to withdraw the appeal, dismissing it as withdrawn and not maintainable because the assessee opted for the VSVS scheme. It was clarified that the assessee could seek restoration if the dispute was not settled under VSVS.

The Tribunal held that the CIT(A) was justified in accepting the assessee's legal heir's request to assess the income at 8% of gross receipts under section 44AD, considering the business turnover and the circumstances of non-compliance due to illness and demise.

The Tribunal held that the assessee society was registered under section 12A and should be assessed under sections 11, 12, and 13. The omission to fill a column in the return does not negate eligibility for exemption if other conditions are met.

The Tribunal condoned a 278-day delay in filing the appeal, noting the reason for delay and the lack of objection from the Sr. D.R. It restored the assessee's appeal to the National Faceless Appeal Centre (NFAC) to be heard on merits, granting the assessee another opportunity, while also cautioning strict compliance with NFAC notices.

The Tribunal held that the lower authorities negated the assessee's explanation for the cash deposit without cogent evidence. The gap of three months between withdrawal and deposit of cash does not by itself lead to the conclusion that the explanation was unacceptable. The addition was deemed bad in law and liable for deletion.

The CIT(A) allowed the assessee's appeal, finding that the property sold was not owned by the assessee firm but by a partner. The tribunal held that while the CIT(A)'s admission of additional evidence without giving the AO an opportunity violated Rule 46A, this did not materially impact the outcome. The tribunal agreed that capital gains could only be computed on assets owned by the firm.

The Tribunal condoned the delay in filing the appeal due to medical emergencies of the assessee and her mother-in-law. The Tribunal restored the case to the Assessing Officer to provide one more opportunity to the assessee to present her case and produce evidence.

The Tribunal held that the non-compliance by the assessee was not deliberate, as notices were not sent to the provided email addresses. Therefore, the matter was restored to the CIT(A) for fresh adjudication on merits, providing a proper opportunity to the assessee.

The Tribunal held that the assessee had provided sufficient documentary evidence to prove the genuineness of the transactions and the claim for exemption. The AO's denial based solely on an investigation report and the principle of preponderance of probability was not sustainable.

The Tribunal held that the assessee had not provided any reasonable cause for failure to deduct tax at source as required by Section 273B. The assessee's claim of a bonafide belief that tax was not deductible was not accepted as a reasonable explanation.

The Tribunal condoned the delay in filing the appeal before it, finding the explanation for delay reasonable. The Tribunal restored the case to the NFAC with a direction to decide the appeal on merits after providing the assessee an opportunity to present its case.

The Tribunal held that the reassessment proceedings were initiated based on incorrect information and without proper application of mind by the Assessing Officer. The initial information regarding the cash deposit amount was found to be erroneous, and the subsequent addition was not supported by evidence. The addition made by the Assessing Officer was quashed.

The Tribunal held that the assessee failed to provide any submissions or evidence during the appellate proceedings, despite multiple opportunities and notices. The appeal was dismissed as the assessee was not interested in pursuing it and had not provided necessary support for their grounds.

The Tribunal noted that the NFAC had deleted the additions made by the AO regarding interest income and prior period expenses, but remanded the issue of TDS credit to the AO for verification without providing a reasonable opportunity. The Tribunal followed its own precedent and restored the issue to the NFAC for fresh adjudication.

The Tribunal held that the assessee deserves another opportunity to present its case. Therefore, the appeal is restored to the NFAC for a hearing on merits.

The Tribunal held that the CIT(E) rejected the applications without affording a proper and sufficient opportunity to the assessee to clarify deficiencies. The orders were set aside, and the matter was restored to the CIT(E) for fresh consideration.

The Tribunal acknowledged the assessee's lack of familiarity with tax proceedings and the challenges faced in providing documentation. Therefore, to ensure substantial justice, the Tribunal restored the appeal to the AO, granting the assessee one last opportunity to present their case and evidence.

The Tribunal found that the CIT(A) erred by passing an ex-parte order without adjudicating the issues on merit and without providing a reasonable opportunity to the assessee. The Tribunal restored the case to the Assessing Officer for a fresh decision after granting an opportunity to the assessee.

The Tribunal held that the CIT(E) erred in rejecting the applications without affording a proper opportunity to the assessee to explain its case. The orders of the CIT(E) were set aside and the matters were restored to the CIT(E) for fresh consideration.

The Tribunal held that the transactions in derivatives, due to their volume, frequent purchase/sale, and short holding period, were indicative of trading for profit and not for investment. Therefore, the loss incurred was a business loss and not a capital loss, and thus eligible for set-off. The disallowance made under Section 14A was also deleted.

The Tribunal noted that the NFAC's direction to examine TDS credit without providing an opportunity to the assessee was similar to a previous case involving the same assessee. Following the precedent, the Tribunal restored the issue of TDS credit to the NFAC for fresh consideration with due opportunity to the assessee.

The Tribunal held that the rental income earned by the assessee from properties owned by it, even if it is in the business of developing and selling properties, should be assessed under the head 'income from house property'. The dominant object of the company and the nature of income from bare letting of property, without significant services, are key factors.