ITAT Nagpur Judgments — June 2022

The Tribunal upheld the CIT(A)'s decision, agreeing that the share transactions were genuine and the land sale constituted long-term capital gains. The assessee's statement indicated an intention to be an investor, not a trader.

The Tribunal held that the Principal CIT erred in invoking Section 263. This was primarily because the dispute had been settled under the Direct Tax Dispute Resolution Scheme, 2016, which provides immunity from further proceedings. Additionally, the Tribunal noted that the AO had applied its mind and the PCIT's view amounted to a 'change of opinion'.

The Tribunal held that the reopening of assessment was legally tenable as there was tangible material. However, on merits, relying on previous judgments concerning similar facts and transactions, the Tribunal found that the assessee had sufficiently proved the genuineness of the unsecured loans.

The Tribunal upheld the CIT(A)'s deletion of the addition. It ruled that Section 56(viib) was not applicable for the assessment year in question and that share premium is a capital receipt. The Tribunal also noted that the AO made the addition based on suspicion without adverse material.

The Tribunal held that a survey action under Section 133A does not empower the Assessing Officer to initiate proceedings under Section 153A. Furthermore, a search at the partners' residence, without a valid search against the firm itself, does not confer jurisdiction under Section 153A. If incriminating material was found at the partners' residence, action should have been initiated under Section 153C.

The Tribunal held that the assessee had discharged its onus by providing confirmations from investor companies, their financial statements, and bank statements, which were examined by the AO. The CIT(A) had correctly deleted the addition, noting that for the period prior to the Finance Act, 2012 amendment, explaining the 'source of source' was not mandatory.

The Tribunal condoned the delay in filing the appeal, citing sufficient cause due to the medical emergency. The Tribunal restored the appeal to the CIT(A) for fresh adjudication, allowing the assessee an opportunity to be heard.

The Tribunal held that the cash found during the search was explained by the income assessed in various years, applying the principle of telescoping. However, the issue regarding the income of the charitable trust was not fully resolved in favor of the assessee.

The Tribunal upheld the deletion of additions made by the AO, agreeing with the CIT(A) that the transactions, though circular and within a limited period, represented real income. The Tribunal found no rational basis to add the entire value of purchases and sales, as the assessee had offered a reasonable net profit.

The Tribunal held that since the assessee declared gross receipts from her construction business under Section 44AD, and these receipts were accepted by the AO, cash deposits in the bank account, if less than the declared gross receipts, are plausibly from the business. Therefore, the additions made by the AO were directed to be deleted.

The Tribunal upheld the CIT(A)'s decision to treat sales tax incentives as capital receipts, relying on previous orders and Supreme Court decisions. The Tribunal also agreed with the CIT(A) that expenses on issuing debentures were allowable.

The CIT(A) rightly deleted the addition made by the AO, holding that the assessee had maintained records of donor names and addresses as required by Section 115BBC. The Tribunal found no infirmity in the CIT(A)'s order, relying on judicial precedents.

The Tribunal held that the CIT's order under Section 263 was not in accordance with the law. The Tribunal found that the AO's original assessment was not erroneous or prejudicial to the revenue's interest, especially considering the substantive addition was settled under the Vivad se Vishwas scheme.

The Tribunal held that the CIT(E) cannot exercise revisionary powers under Section 263 for inadequate inquiry, only for lack of inquiry. Since the AO had made inquiries and was satisfied, the CIT(E)'s order was not sustainable.

The Tribunal found that the PCIT's assumption of jurisdiction under Section 263 was not justified as the PCIT did not conduct independent inquiries to establish that the assessment orders were indeed erroneous and prejudicial to revenue. The AO had conducted detailed verification as per the assessment order.

The Tribunal allowed the assessee's claim for premium on zero percent fully redeemable non-convertible debentures. It held that TDS was not deductible at source when the payee could not be identified, and that TDS was correctly deducted at the time of redemption.

The Tribunal condoned the delay in filing the appeal in the interest of natural justice. Regarding the first issue, the Tribunal held that the assessee rightly claimed exemption under Section 54. It reasoned that while the Suraj Lamp judgment (referring to Section 54 of the Transfer of Property Act, 1882) states that transfer of immovable property is by a registered instrument and an agreement to sell does not confer title, the assessee's case involved a registered agreement to sell. Furthermore, the Supreme Court in Sanjeev Lal (Supra) held that the execution of an agreement to sell leads to extinguishment of rights and is treated as a transfer under Section 2(47) of the Income Tax Act, 1961. Therefore, the assessee's appeal was allowed on the first legal issue of the point of taxation, making the assessee eligible for exemption as construction was completed after the registered agreement date. The Tribunal found that the construction of a new residential house was completed after the registered agreement to sell, and the assessee had parted with possession on March 30, 2017. The observation that the property was used for office purposes was deemed inconsequential as the Act mandates purchase or construction of a residential house, and the fact of construction was not disputed. The Tribunal also noted that the AO accepted the sanctity and veracity of bills and vouchers in remand proceedings. Ground No. 3 regarding interest under Sections 234A, 234B, and 234C was considered consequential.

The Tribunal held that the additions were not sustainable as the statements were from disgruntled employees and not subjected to cross-examination. Furthermore, the assessee had been acquitted in a criminal trial and cleared in an anti-corruption bureau inquiry related to the same allegations.

The Tribunal held that the additions were not sustainable as the statements were from disgruntled employees and not subjected to cross-examination. Furthermore, the assessee had been acquitted in a criminal trial and cleared in an anti-corruption bureau inquiry related to the same allegations.

The Tribunal held that the additions were not sustainable as the statements were from disgruntled employees and not subjected to cross-examination. Furthermore, the assessee had been acquitted in a criminal trial and cleared in an anti-corruption bureau inquiry related to the same allegations.

The Tribunal admitted an additional ground of appeal raised by the assessee concerning the validity of the conveyance deed and the assessee's legal title to the land as of March 31, 2005. This additional ground was based on the District Judge's order dated February 29, 2020, which was passed after the impugned order. The Tribunal noted that this order set aside the Collector's order cancelling the auction and asked for a fresh decision. Given that this issue is fundamental to the case, and the District Judge's order was subsequent to the lower authorities' decisions, the Tribunal admitted the additional ground in the interest of substantial justice. Consequently, the Tribunal set aside the entire matter to the file of the Assessing Officer. The AO is directed to decide the issue afresh, taking into consideration the District Judge's order dated February 29, 2020, the proceedings before the Collector, and any other required documentation, after providing a reasonable opportunity to the assessee. Other contentions raised by the assessee were left open and not adjudicated upon, and were also set aside to the AO for fresh examination.

The Tribunal held that income from rent and service charges should be treated as income from house property, consistent with previous years. It also directed deletion of part of a cash credit addition while confirming the rest, and allowed deletion of another cash credit addition based on confirmation from the assessee's mother.

The Tribunal allowed the disallowance of Hamali expenses, finding that payments were not to a single individual exceeding the threshold for TDS. The matters of Jalau Lakdi and Bardana expenses, and interest paid to relatives were remanded to the AO for fresh examination.

The Tribunal held that since the VAT was paid before the due date of filing the return and there was no loss to the Revenue, the penalty proceedings were not justified. Therefore, the penalty order was set aside.

The Tribunal set aside the CIT(A)'s order and remanded the matter for fresh consideration. The Assessee was directed to participate in the proceedings before the CIT(A) without fail.

The Tribunal found that the assessee had indeed paid TDS well within the due date as per bank statements. The assessee also demonstrated due diligence by promptly writing to the bank to correct the recorded dates. The AO and CIT(A) erred in mechanically confirming the interest without verifying the actual payment dates.

The Tribunal held that the partnership deed was available with the Assessing Officer from a prior assessment year and there had been no change in its constitution. Therefore, the disallowances were directed to be deleted.

The Tribunal held that the orders passed by the Assessing Officer under Section 201(1)/201(1A) were indeed barred by limitation, as they were passed beyond the prescribed time limits from the filing of the last quarterly TDS statements. Consequently, these orders were set aside.

The Tribunal dismissed the appeals filed by the Revenue and the cross-objections filed by the assessees as withdrawn due to low tax effect. The Revenue was granted liberty to seek recall if the appeals met certain exceptions.

The Tribunal held that CBDT Circular No. 23/2019, which provides exceptions to monetary limits for filing appeals, has prospective effect and is not applicable to appeals filed before its issuance. Therefore, the monetary limits set by Circular No. 17/2019 are applicable.

The Tribunal held that the second proviso to Section 40(a)(ia) has retrospective effect from April 1, 2005. Therefore, the disallowance made by the Assessing Officer was not sustainable.

The Tribunal held that the absence of a dissolution clause in the trust deed is not an impediment to granting registration under Section 12AA, especially when the Maharashtra Public Trust Act provides for such contingencies. The Tribunal relied on jurisdictional High Court decisions supporting this view.

The Tribunal held that the orders passed by the Assessing Officer under Section 201(1)/201(1A) were indeed barred by limitation, as they were passed beyond the prescribed time limits from the filing of the last quarterly TDS statements. Consequently, these orders were set aside.

The Tribunal noted that the tax effect involved in the appeals was below the threshold stipulated by the CBDT circular. Consequently, the appeals were dismissed as withdrawn.

The Tribunal dismissed the appeals filed by the Revenue and the cross-objections filed by the assessees as withdrawn due to low tax effect. The Revenue was granted liberty to seek recall if the appeals met certain exceptions.

The Tribunal dismissed the appeals filed by the Revenue and the cross-objections filed by the assessees as withdrawn due to low tax effect. The Revenue was granted liberty to seek recall if the appeals met certain exceptions.

The Tribunal held that CBDT Circular No. 23/2019, which provides exceptions to monetary limits for filing appeals, has prospective effect and is not applicable to appeals filed before its issuance. Therefore, the monetary limits set by Circular No. 17/2019 are applicable.

The Tribunal held that CBDT Circular No. 23/2019, which provides exceptions to monetary limits for filing appeals, has prospective effect and is not applicable to appeals filed before its issuance. Therefore, the monetary limits set by Circular No. 17/2019 are applicable.

The Tribunal held that the income declared under Section 44AD should be accepted as there was no sufficient evidence to treat it as unexplained money under Section 69A. The addition made under Section 69A was directed to be treated as regular return of income.

The Tribunal allowed the assessee to produce additional evidence in the form of Form No. 27BA. The Tribunal set aside the impugned order and remanded the matter to the Assessing Officer to examine the facts in light of the additional evidence and pass a fresh order.

The Tribunal noted that the CIT(A) had already allowed the appeals on merits and deleted all additions. Considering the assessee's request and the fact that the appeals were filed on legal grounds as a precaution, the Tribunal dismissed the appeals as withdrawn.

The Tribunal set aside the order of the CIT(A) and remanded the matter back to the TDS officer. The TDS officer is directed to examine the assessee's claim of having already paid all taxes and to provide an opportunity for the assessee to be heard and produce documents.

The Tribunal held that depreciation on Air and Water Pollution Control Machines should be allowed, considering the Chartered Engineer's report and the fact that the same AO allowed depreciation on the same machinery in a subsequent year. The Tribunal also deleted the retained disallowance of selling and distribution expenses, noting that higher expenses were allowed in other years and the audited accounts were accepted.

The Tribunal held that the sale of the land was an isolated transaction and not a business activity. The long holding period and sale of the land in large chunks indicated it was a capital asset, not stock-in-trade.

The Tribunal held that the addition of Rs. 3,67,000 on account of opening capital under Section 68 was unjustified as it was accepted in the previous year. Consequently, the addition was deleted, and the returned income was accepted.

The Tribunal held that the Assessing Officer did not adduce sufficient evidence to treat the income under Section 69A, especially since the assessee had submitted sales accounts and capital position. The Tribunal directed that the income be treated as regular return of income and the returned income be accepted.

The Tribunal held that the addition of Rs. 3,65,000/- on account of opening capital under section 68 was not justified, as the previous year's closing balance was accepted by the department. Consequently, the addition was set aside and the returned income was directed to be accepted.

The Tribunal held that the assessee's declared income under Section 44AD should be accepted as there was no sufficient evidence to treat it as unexplained money under Section 69A. The Tribunal also directed that interest under Sections 234A, 234B, and 234C would not be leviable as the additions were deleted.

The Tribunal held that the assessee had provided sufficient details of brokerage income, including names of parties and amounts, which were available to the Assessing Officer. Therefore, Section 69A was not applicable, and the income should be treated as regular income.

The Tribunal held that the Assessing Officer had not adduced sufficient evidence to treat the income as unexplained money under Section 69A. It directed that the income declared under Section 44AD be accepted as the assessee's regular return of income.