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69 orders · Page 2 of 2
The Tribunal held that in the absence of incriminating material found during the search, no additions could be made under Section 153A if the assessment had attained finality and was not abated at the time of the search.
The tribunal held that while the purchases were doubtful, the addition should account for the profit element. Following a precedent, the tribunal reduced the estimated profit on alleged bogus purchases from 12.5% to 3%.
The Tribunal, following a coordinate bench decision, directed the AO to estimate the income at 3% of the alleged bogus purchases, considering the assessee had already declared a GP ratio and the payments were made through banking channels.
The Tribunal held that the assessee had discharged its onus by filing extensive documents to prove the identity, genuineness of transactions, and creditworthiness of the parties. The Tribunal distinguished the cases relied upon by the AO and Revenue, such as *Major Metals vs Union of India* and *PCIT vs NRA Iron & Steel Pvt.Ltd.*, by noting that in the present case, the subscribers to the share capital were closely related to the assessee company, and all possible evidence was filed. The Tribunal followed the ratio laid down by various High Courts and the Supreme Court, including *CIT vs Lovely Exports Pvt.Ltd.* and *CIT vs Goa Sponge and Power Ltd.*, which state that once the initial burden is discharged by the assessee by filing necessary evidence to prove the identity of creditors, the department is free to investigate the creditors individually, but the sums received cannot be treated as undisclosed income of the assessee under Section 68. The Tribunal directed the AO to delete the additions made towards share capital under Section 68. No issue was expressly left undecided.
The Tribunal held that the assessee had commenced its business operations, justifying the deduction of expenses. It also found that the assessee had provided sufficient evidence to establish the genuineness of share application money received.
The Tribunal upheld the CIT(A)'s decision to restrict the addition to 12% of the alleged bogus purchases. The Tribunal found that while the assessee failed to conclusively prove the purchases, the AO also failed to carry the investigation to a logical conclusion.
The Tribunal restored the issue of F&O transactions being speculative or not to the CIT(A) for fresh adjudication, allowing the assessee to prove they were eligible transactions under Section 43(5)(d). The disallowance of expenses related to stock-in-trade transactions was also restored.
The Tribunal found that both parties failed to conclusively prove their case with necessary evidence. While upholding that the profit element embedded in suspicious purchases should be taxed, it found the 12.5% addition to be excessive.
The Tribunal agreed with the CIT(A) that while purchases from suspect parties were not genuine, the sales declared by the assessee were not doubted. Therefore, the disallowance was restricted to 12.5% of the bogus purchases.
The ITAT noted that the tax effect was below the revised monetary limit for filing appeals as per CBDT Circular No. 17 of 2019. The Departmental Representative conceded that the appeal was covered by the circular.
The Tribunal held that the penalty order was invalid because the AO issued a standard notice under Section 274 without striking off the inapplicable portions, failing to specify whether the penalty was for concealment of income or furnishing inaccurate particulars. This indicated a non-application of mind by the AO.
The tribunal held that while appellate authorities can dismiss appeals for non-appearance, it should be done on merits based on available records. Since the CIT(A) did not discuss the issues on merits, the case was set aside.
The Tribunal found that while the assessee failed to conclusively prove the genuineness of purchases, the AO also did not conduct thorough investigations. Following precedents, the Tribunal directed the AO to estimate 12.50% gross profit on alleged bogus purchases.
The ITAT noted that the tax effect was below the revised monetary limit for filing appeals before the ITAT as per CBDT Circular No. 17 of 2019. The Departmental Representative conceded that the appeal was covered by the circular.
The Tribunal held that once the revisional order passed by the PCIT under Section 263 was set aside by the ITAT, any consequential assessment order passed by the AO pursuant to those directions no longer survived. Therefore, the CIT(A) was correct in deleting the additions.
The Tribunal held that the penalty order was bad in law because the AO initiated penalty proceedings for furnishing inaccurate particulars but levied penalty for both inaccurate particulars and concealment without proper notice. The Tribunal set aside the penalty.
The Tribunal held that a disallowance under Section 14A cannot be made if the assessee has not earned any tax-exempt income. This is because the section pertains to expenditure incurred in relation to income that does not form part of the total income.
The Tribunal held that a disallowance under Section 14A cannot be made if the assessee has not earned any tax-exempt income. This is because the section pertains to expenditure incurred in relation to income that does not form part of the total income.
The Tribunal held that the purchase of shares was genuine, and therefore the sale could not be doubted. Regarding the jewellery sale, the Tribunal accepted the assessee's explanation of acquiring it as gifts and noted that the purchasers recognized the transactions in their financial statements.