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522 orders · Page 2 of 11
The Tribunal held that the issue regarding the non-passing of a draft assessment order under Section 144C was a significant procedural flaw. The Tribunal noted that Section 144C mandates the AO to forward a draft assessment order to an 'eligible assessee' if any variation prejudicial to the assessee's interest is proposed. The assessee, being a non-resident, clearly falls within the definition of an eligible assessee. The AO's failure to follow this mandatory procedure renders the assessment order void and without jurisdiction. Therefore, the Tribunal decided to quash the assessment orders on this ground. Consequently, the Tribunal did not delve into the other grounds of appeal, as the primary issue of jurisdiction was decided in favour of the assessee. The Tribunal's reasoning is based on the clear mandate of Section 144C and the definition of an eligible assessee. The ratio decidendi is that an assessment order passed without adhering to the mandatory procedural requirements of Section 144C, when applicable, is a nullity. The operative direction is to quash the assessment orders. No issue was expressly left undecided.
The Tribunal noted continuous non-compliance by the assessee despite specific opportunities and directions. The appeal was listed for hearing multiple times, but the assessee or their representative did not appear.
The Tribunal held that for unabated assessment years, additions under Section 153A can only be made based on incriminating material found during a search. The statement recorded under Section 132(4) of the Act, referring to the partner's work, was not considered sufficient incriminating material for disallowance. Furthermore, the remuneration was paid to the partner for services rendered, and it was offered to tax in the partner's hands, making the disallowance unsustainable on merits as well.
The Tribunal held that the Arm's Length Price (ALP) of services cannot be treated as NIL simply because the revenue authorities deem them worthless or unnecessary. The assessee had provided documentary evidence to substantiate the need, rendition, and benefit of the services received, along with cost allocation details.
The Tribunal held that the Assessing Officer was mandated to issue a draft assessment order under Section 144C before passing the final assessment order, especially for non-residents who are defined as eligible assessees. Failure to do so renders the assessment order void.
The Judicial Member reversed the CIT(A)'s order and allowed the Revenue's grounds. The Accountant Member remitted the matter back to the AO. The Third Member, however, confirmed the Judicial Member's order, establishing it as the majority decision. Consequently, the grounds raised by the Revenue were allowed, and the CIT(A)'s order was reversed.
The Tribunal held that the Assessing Officer's conclusion of a colorable device was irrational and unsustainable as the transactions were genuine. The law does not require an assessee to pay more tax if they arrange their affairs legitimately to reduce their tax liability.
The Commissioner deleted the addition, noting that while the shares were penny stocks, the Assessee traded them in the regular course of business to make a quick profit and was not part of a rigging nexus. The Commissioner also found that the AO erred in treating sale proceeds without considering purchase costs and that the Assessee incurred a net loss. The Tribunal upheld the Commissioner's decision.
The Tribunal held that the issue regarding the non-passing of a draft assessment order under Section 144C was a substantial issue. The assessee, being a non-resident, was an 'eligible assessee' under Section 144C(15). The AO was mandated to issue a draft assessment order if any variation prejudicial to the assessee's interest was proposed. The Tribunal noted that the AO had made additions, thus requiring a draft order. The Tribunal referred to the decision in the case of CIT vs. M/s. K.K. Investments (P) Ltd. and others, which held that the requirement of issuing a draft assessment order under Section 144C is mandatory for eligible assessees, and failure to do so renders the assessment order void ab initio. Therefore, the Tribunal found merit in the assessee's ground regarding the non-compliance with Section 144C. The Tribunal decided to quash the assessment orders for all relevant assessment years on this ground. Consequently, the other grounds of appeal, including the absence of incriminating material, re-computation of LTCG, disallowance of deduction under Section 35AC, ad-hoc addition of cash in hand, and assessment of rental income, were rendered infructuous and did not require adjudication. The issue regarding the application of Article 22 of the India-UAE DTAA was also not decided as the primary issue of the validity of the assessment order was decided in favour of the assessee.
The Tribunal held that the issue of double disallowance of provision for bad and doubtful debts and the non-grant of credit for advance tax paid required further verification. The matter was remanded to the Assessing Officer for necessary inquiries.
The Tribunal held that the assessee had maintained and furnished required documentation and information for transfer pricing. The Tribunal also noted that the primary reason for the penalty was the AO's view that the TNNM method was inappropriate without segmental financials, but the AO ultimately accepted the assessee's benchmarking. Furthermore, the Tribunal found that the issue was identical to a previous year where the penalty was deleted.
The Tribunal condoned the delay in filing the appeal. It restored the issue of rejection of books of accounts to the AO for de novo adjudication, directing the assessee to furnish all details and cooperate with the proceedings.
The tribunal considered the provisions of Rule 128(9) which states that Form 67 shall be furnished on or before the due date for filing the return of income. The tribunal noted that the Revenue contended this 'shall' to be mandatory, while the assessee relied on coordinate bench decisions holding the condition to be directory. Following the precedents of coordinate benches which have decided this issue in favor of the assessee, considering the delay in filing Form 67 as a procedural irregularity.
The Tribunal noted the assessee's decision to opt for the Vivad Se Vishwas Scheme. Consequently, the appeal was dismissed as withdrawn, with liberty granted to reinstate if the scheme application is not accepted.
The Tribunal held that the value determined by the Charity Commissioner for the sale of the property, which was subsequently registered at a higher price, should be considered the fair market value. Therefore, invoking Section 50C was not justified as the actual sale consideration was higher than the stamp duty valuation.
The Tribunal held that the assessee had discharged its onus by providing documentary evidence for the purchase and sale of shares through banking channels and the stock exchange. Since no adverse findings or allegations of price rigging were made against the assessee, the additions were deleted.
The Tribunal held that the reassessment proceedings were initiated without fresh tangible material and were therefore bad in law. Consequently, the assessment order passed under Section 147 was quashed.
The Tribunal noted that the CIT(A) had granted relief by following previous decisions of the Tribunal. The tax effect was below the threshold for filing appeals, and no one appeared for the assessee.
The Tribunal condoned the delay of 259 days in filing the appeal, considering the miscommunication as unintentional and bonafide. Due to the ex-parte nature of the assessment order, the Tribunal remanded the case back to the Assessing Officer for a fresh decision on merits.
The Tribunal held that the AO's reasons for reopening were based on a wrong assumption of facts. The information received by the AO mentioned an accommodation entry of Rs. 20,00,000/-, whereas the assessee had shown share application money of Rs. 99,00,000/- from six unrelated entities. Furthermore, the list of companies provided by Shri Pravin Jain did not include the six entities from which the assessee received share application money. Therefore, there was no live link nexus between the information and the income escaping assessment.
The Tribunal held that the addition made on account of alleged 'on money' payment was not justified. This decision followed a co-ordinate bench ruling on similar facts where the evidence was found insufficient to prove cash payment.
In the interest of natural justice, the Tribunal set aside the impugned order of the Ld. CIT(A) and restored all issues for fresh adjudication, granting the assessee another opportunity to present its case. This opportunity is conditional upon the assessee paying a cost of Rs. 2,000/- to the Income Tax Department within two months and cooperating with the Ld. CIT(A).
The Tribunal noted that the Assessee claimed not to have received notices from the Ld. Addl./Joint Commissioner. Considering the Assessee's submissions as genuine and plausible, and in the interest of natural justice, the Tribunal set aside the impugned order.
The Tribunal noted that although the assessee did not participate in the proceedings before the CIT(A) despite multiple opportunities, the impugned order was not based on a substantial discussion of merits. Therefore, to ensure justice and fair play, the matter was remitted back to the CIT(A) for adjudication on merits, with directions for the assessee to be diligent and for the CIT(A) to observe principles of natural justice.
The Tribunal held that the rejection was based on technical reasons, and the assessee's mistake in selecting the sub-clause was an inadvertent and rectifiable error. The CIT(E) should have given an opportunity to the assessee to rectify the mistake or could have treated the application under the correct clause suo motu.
The Tribunal noted that the assessee did not cooperate with the CIT(A), leading to an ex-parte order. However, in the interest of justice, the Tribunal set aside the ex-parte order and remitted the matter back to the CIT(A) for adjudication on merits, directing the assessee to cooperate.
The Tribunal held that the disallowance of opening stock debited to the P&L account was incorrect as these expenses were incurred in earlier years. The Revenue's appeal on this ground was dismissed.
The Tribunal condoned the delay in filing the appeals, considering the reasonable and sufficient cause shown by the assessee. The Tribunal found that it was in the interest of justice to provide the assessee with another opportunity to present their case.
The assessee's representative argued that the tax effect involved in both appeals was below the monetary limit prescribed by the CBDT circular for preferring appeals. The Tribunal, after considering the arguments and the record, agreed that the tax effect was below the monetary limit.
The Tribunal held that the disallowance of opening stock debited to the P&L account was incorrect as these expenses were incurred in earlier years. The Revenue's appeal on this ground was dismissed.
The Tribunal found that the reason provided for non-compliance was a sufficient cause. Therefore, the Tribunal set aside the order of the CIT(E) and restored the matter back for deciding afresh, providing one more opportunity to the assessee.
The appeal was dismissed as withdrawn. Liberty was granted to the appellant to revive the appeal if the settlement under the Vivad Se Vishwaas Scheme does not materialize.
The Tribunal condoned the delay in filing the appeals, considering the reasonable and sufficient cause shown by the assessee. The Tribunal found that it was in the interest of justice to provide the assessee with another opportunity to present their case.
The Tribunal found that the reason provided for non-compliance was a sufficient cause. Therefore, the Tribunal set aside the order of the CIT(E) and restored the matter back for deciding afresh, providing one more opportunity to the assessee.
The assessee's representative argued that the tax effect involved in both appeals was below the monetary limit prescribed by the CBDT circular for preferring appeals. The Tribunal, after considering the arguments and the record, agreed that the tax effect was below the monetary limit.
The Tribunal held that the addition of INR 9,14,000 on account of cash deposits was not sustainable as the assessee had sufficient cash-in-hand, which was duly disclosed in the audited financial statements. The Tribunal also held that the disallowance of interest of INR 1,23,117 was not sustainable as the assessee had sufficient own funds to grant interest-free loans, and there was no material to suggest that interest-bearing borrowed funds were utilized for this purpose.
The Tribunal noted that the assessee has amended the object clause of the MOA, which was the basis for rejecting the application. Therefore, in the interest of justice, the issue was restored back to the CIT(E) to examine the amended objects and grant liberty to the assessee to file a fresh application.
The Tribunal noted that the tax effect in the appeal was below the prescribed monetary limit for filing appeals to the Income Tax Appellate Tribunal. Therefore, the appeal was dismissed as withdrawn, with liberty granted to the revenue to file an application for recalling the appeal if it falls under any exceptions.
The Tribunal noted that while the CIT(A) afforded multiple hearing opportunities, the assessee did not participate. However, the CIT(A) passed an ex-parte order without substantial discussion on merits, failing to provide reasons for the decision as required by Section 250(6). The Tribunal deemed it appropriate to afford an opportunity to the assessee.
The Tribunal held that the reassessment proceedings were invalid as they were initiated beyond four years without any failure on the part of the assessee to disclose material facts. The reasons recorded did not indicate any such failure, and the original assessment had considered the car hire expenses.
The CIT(A) dismissed the assessee's appeal without condoning a delay of 1321 days, finding no 'sufficient cause' for the delay. The Tribunal, while noting the assessee's non-compliance and lack of documentary evidence, decided to grant one more opportunity in the interest of justice.
The Tribunal held that Section 154(7) of the Income Tax Act, 1961, prescribes a time limit of four years for passing a rectification order from the end of the financial year in which the order to be amended was passed. In this case, the original assessment order was passed on 28/12/2018, making the four-year period expire on 31/03/2023. Since the rectification order was passed on 25/07/2023, it was indeed time-barred.
The Tribunal held that the assessee had discharged the primary onus to prove the genuineness and creditworthiness of the lender by providing PAN, ITR, bank statements, and confirmations. The AO rejected these documents without independent inquiry, relying solely on an investigation wing report about M/s. Navkar Diamond providing accommodation entries. The Tribunal found the preponderance of evidence in favor of the assessee.
The Tribunal upheld the CIT(A)'s decision, finding no infirmity in deleting the addition. The assessee's contention that the income was not realized due to uncertainty, supported by statutory audits and accounting standards, was accepted.
The Tribunal dismissed the Revenue's appeal, affirming the Ld. Addl./Joint Commissioner's decision to restrict the addition to 12.5%. It found this reduction, based on the precedent from A.Y. 2009-10 where the AO had estimated income from bogus purchases at the same rate, to be reasonable, logical, and justified.
The Tribunal noted that while the assessee provided some documentation, specific evidence showing how and where the consultancy was provided and its application to specific projects was lacking. The lower authorities confirmed the disallowance, stating that an affidavit alone is not sufficient evidence. The Tribunal found it appropriate to set aside the CIT(A)'s finding.
The Tribunal noted that while the assessee provided some documentation, specific evidence showing how and where the consultancy was provided and its application to specific projects was lacking. The lower authorities confirmed the disallowance, stating that an affidavit alone is not sufficient evidence. The Tribunal found it appropriate to set aside the CIT(A)'s finding.
The Tribunal upheld the CIT(A)'s decision, finding no infirmity in deleting the addition. The assessee's contention that the income was not realized due to uncertainty, supported by statutory audits and accounting standards, was accepted.
The Tribunal referred to its previous order in the assessee's own case for AY 2011-12, which was identical in facts, where it had allowed the claim for exemption and accumulation of income. The Tribunal followed the Supreme Court judgment in K. C. Builder & another vs. ACIT, holding that once the additions are deleted, the penalty cannot survive. Thus, the penalty imposed by the AO was deleted.
The CIT(A) held that since the sales were accepted, the entire purchases could not be disallowed, and only a reasonable profit percentage should be added. The Tribunal, relying on similar High Court rulings, found no reason to interfere with the CIT(A)'s findings.