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426 orders · Page 2 of 9
The Tribunal held that disallowance under Section 14A read with Rule 8D cannot exceed the exempt income earned. It also held that no disallowance under Section 14A can be made while computing book profit under Section 115JB, though expenditure for earning exempt income can be disallowed as per Explanation 1(f) to Section 115JB.
The Tribunal held that the AO's reliance on statements recorded behind the assessee's back, without providing an opportunity for cross-examination, was improper. The Tribunal found no evidence linking the assessee or her brokers to price rigging or manipulation.
The Tribunal admitted additional evidence filed by the assessee, including affidavits and a Gram Panchayat certificate, to substantiate its agricultural income claim. The issue was restored to the Assessing Officer for de novo adjudication after examining these new evidences.
The Tribunal held that provisions of Section 2(22)(e) are not attracted when advances are given for business purposes. It also found it illogical that the assessee would derive benefit from one debtor company advancing funds to another debtor company.
The Tribunal examined the inclusion of specific comparables. It found that TSR Darashaw Ltd. was functionally different from the assessee's business and therefore should not be considered a comparable.
The Tribunal held that the compensation received was a capital receipt, not chargeable to tax as capital gains. This was because the assessee was compensated for the extinction of its right to sue due to a fraudulent agreement and not for the transfer of a capital asset.
The Tribunal held that the CIT erred in invoking Section 263 as the AO had made elaborate enquiries and applied his mind. The land was agricultural and located beyond 8 kms from municipal limits, thus exempt from capital gains tax under Section 2(14).
The Tribunal held that the split of fees between the Indian branch and the German head office, as per the India-Germany DTAA, makes the head office's share non-taxable in India. The Tribunal also found that the transfer pricing adjustment was not sustainable once the attribution and taxability of the head office and branch office income were accepted.
The Tribunal held that the commission paid to directors was an ascertained liability pertaining to the turnover of sales of the impugned assessment year. Following the matching concept, the expenditure should be allowed as a deduction in the current year.
The Tribunal held that the assessee had provided sufficient evidence, including a registered sale deed and other corroborating documents, to establish joint ownership of the flat with his mother. The addition made by the Assessing Officer was therefore incorrect.
The Tribunal held that the assessee deserves an opportunity to explain its case before the Commissioner (Appeals). Therefore, the impugned order was set aside for de novo adjudication.
The Tribunal held that since the additions/disallowances that formed the basis for the penalty were no longer extant due to the Tribunal's earlier order, the penalty could not survive. Therefore, the penalty was deleted.
The Tribunal held that the CIT(A)'s reliance on a previous year's order without appeal was not a valid precedent. It further found that if creditors have written off liabilities, the assessee cannot continue to carry them as liabilities, and such amounts are liable to be added under Section 41(1). The issue of whether amounts were actually written off and the existence of other liabilities were remitted to the Assessing Officer.
The Tribunal found that the CIT(A)'s estimation of agricultural income was on the lower side and that the assessee had provided sufficient documentary evidence. The Tribunal re-estimated the income at Rs. 50,000 per acre.
The Tribunal held that since the assessee had sufficient own interest-free funds exceeding its investments generating tax-free income, the interest disallowance was deleted. Regarding the uncharged interest on the loan, the Tribunal applied the principle of taxing real income and deleted the addition, citing that the principal amount was unrecovered.
The Tribunal restored the issue of undisclosed income and commission income to the Assessing Officer for fresh adjudication. It was held that the assessee could explain the source of cash and silver if sufficient funds were available, and the valuation of silver was accepted based on the assessee's statement.
The Tribunal held that RPM was the most appropriate method for benchmarking the transactions, as the assessee was reselling imported goods without value addition. The Tribunal also directed the inclusion of two previously excluded comparable companies.
The Tribunal observed that while the purchases were bogus, the profit rate applied by the AO and sustained by the CIT(A) was too high. It was held that a profit rate of 5% would be reasonable to account for savings like non-payment of VAT.
The Tribunal upheld the order of the CIT(A), sustaining the addition of Rs. 1,31,440 after considering the appeal effect and the profit margin in similar businesses. The first ground of appeal regarding reopening was dismissed as not pressed.
The Tribunal held that for vacant properties, the Annual Letting Value (ALV) should be determined based on the municipal rateable value. Enhancements made by the AO and CIT(A) without proper basis were set aside.
The Tribunal found that the AO's estimation of profit at 12.5% on disputed purchases was not commensurate with the facts. Therefore, the Tribunal directed the AO to estimate the profit at 5%.
The tribunal noted that the tax effect did not exceed the monetary limit of Rs.20,00,000/- as per CBDT Circular No. 3/2018. The learned DR agreed with this assessment.
The Tribunal found the initial disallowance of 12.5% on disputed purchases to be on the higher side. It directed the AO to restrict the disallowance to 5% of the disputed purchases for both assessment years.
The Tribunal decided that AMP expenses are not an international transaction and that convention expenses are not disallowable under the MCI regulations. It also allowed depreciation on non-compete fees, treating it as capital expenditure.
The Tribunal followed its own previous order in the assessee's own case and the Bombay High Court's decision, holding that the deduction under Section 80IB(10) was allowable. The Revenue's appeal was dismissed.
The Tribunal held that an addition cannot be made solely based on an income offer made in an ITSC petition without any supporting evidence or incriminating material found during a search.
The Tribunal acknowledged that the initial assessment was processed under section 143(1) and the reopening was valid. However, considering the nature of the assessee's business (trading in DGFT licenses), the disallowance was restricted to 6% of the disputed purchases.
The Tribunal held that the penalty on Rs. 2.20 crore was rightly deleted by the CIT(A) as the assessee substantiated the source of income. The penalty on the additional Rs. 20 lacs was also set aside as it was voluntarily disclosed in the return and taxes were paid.
The Tribunal held that the know-how was a self-generated asset with no ascertainable cost of acquisition. Therefore, the computation mechanism for capital gains failed, making the receipt not chargeable to tax under that head.
The Tribunal held that while the AO had made inquiries, the assessee also provided purchase bills and stock details. Since neither party fully proved their case, a reasonable profit element should be estimated on the alleged bogus purchases. The Tribunal upheld the CIT(A)'s decision to restrict the addition to 12.5% of the purchases.
The Tribunal directed the CIT(A) to admit the electronically filed appeal and decide it on merits after condoning the delay, considering the assessee acted on initial advice and later filed electronically.
The Tribunal held that a mere change in the name of the assessee association does not warrant disallowance of exemption under Section 10(23A), especially when there is no change in its objects or activities. The Tribunal directed the Assessing Officer to allow the exemption.
The Tribunal held that the balance portion of additional depreciation, which could not be allowed in the preceding assessment year due to the asset being put to use for less than 180 days, can be allowed in the subsequent assessment year. This decision was based on various judicial precedents.
The Tribunal upheld the CIT(A)'s decision to delete the additions. The deletion of estimated profit was based on the AO not pointing out defects in books and considering past NP rates. The deletion of cash credit was because it was part of total sales. The deletion of bogus creditors was based on ITAT's decision in the assessee's own case for earlier years.
The Tribunal acknowledged that the AO rightly reopened the assessment but found the 12.5% profit estimation to be high. It directed the AO to restrict the disallowance to 5% of the disputed purchases, considering the nature of the assessee's business.
The Tribunal followed its own prior decision in the assessee's own case for AY 2011-12, which relied on High Court judgments. The Tribunal held that transfers from shareholders' accounts to policyholders' accounts were capital in nature and not taxable, and that losses from pension funds should be excluded when determining actuarial valuation surplus.
The Tribunal held that the AO's failure to issue a draft assessment order before passing the final assessment order, as mandated by Section 144C of the Income-tax Act, 1961, rendered the assessment order void and without jurisdiction. Consequently, the impugned orders were quashed.
The Tribunal admitted additional evidence regarding TDS compliance and directed the AO to verify it, stating that if the payee paid taxes, the disallowance would be deleted. Regarding work-in-progress, the Tribunal found the AO's addition to be ad-hoc and deleted it, allowing the assessee's appeal on this issue.
The Tribunal decided to dispose of the appeals ex-parte due to the assessee's absence. The core issue revolved around whether Rs. 2 crores paid to a third party should be included in the sale consideration for capital gains tax.
The Tribunal held that no disallowance of interest expenditure under Rule 8D(2)(ii) was warranted as the assessee had sufficient interest-free funds. For administrative expenditure under Rule 8D(2)(iii), the disallowance should be restricted to investments yielding exempt income. The disallowance under Section 36(1)(iii) was also deleted due to sufficient surplus funds.
The Tribunal held that the penalty proceedings were initiated based on an invalid notice under Section 274 r.w.s. 271(1)(c) as the Assessing Officer failed to strike out the inapplicable portion of the notice. This non-application of mind rendered the penalty proceedings void ab initio.
The Tribunal held that the penalty orders were bad in law because the notice issued under section 271(1)(c) did not specify the limb of the section under which penalty was proposed, violating principles of natural justice. Additionally, for years where no returns were filed, penalty could not be levied.
The Tribunal noted that while the assessee had provided basic documentation, the AO had established a modus operandi of accommodation entries linked to Shri Pravinkumar Jain. However, to ensure natural justice, the Tribunal set aside the issue to the AO, allowing the assessee an opportunity to produce the parties for examination and cross-examination.
The Tribunal held that the penalty proceedings were initiated based on an invalid notice under Section 274 r.w.s. 271(1)(c) as the Assessing Officer failed to strike out the inapplicable portion of the notice. This non-application of mind rendered the penalty proceedings void ab initio.
The Tribunal held that the penalty orders were bad in law because the notice issued under section 271(1)(c) did not specify the limb of the section under which penalty was proposed, violating principles of natural justice. Additionally, for years where no returns were filed, penalty could not be levied.
The Tribunal noted that the tax effect on the disputed additions was below the monetary limit of ₹20 lakh. Therefore, the appeal filed by the Revenue was not maintainable.
The tribunal held that losses arising from foreign currency forward contracts, used by the assessee to hedge against foreign exchange fluctuations in its core business of import and export of diamonds, are to be treated as business losses. The court followed previous decisions of coordinate benches and the High Court on similar matters.
The Tribunal set aside the ex-parte order of the Commissioner (Appeals) and restored the appeal for de novo adjudication. The assessee was directed to appear and represent her case with relevant materials and explain any delay.
The Tribunal upheld the CIT(A)'s decision, stating that income cannot be taxed on a hypothetical basis when the actual asset (the flats) had not yet come into existence. The assessee had offered income from these flats in subsequent years when they were received.