ITAT Patna Judgments — October 2023

The Tribunal held that the CIT(Appeals) had the power to consider additional evidence under Rule 46A(4) and that the notice issued for written submissions implicitly allowed for supporting material. The Tribunal found no miscarriage of justice in the CIT(Appeals)'s approach.

The Tribunal held that the AO had made sufficient inquiries regarding the increase in capital and the assessee's explanation for the sole proprietorship's balance sheet. The Pr. CIT's order was found to be unsustainable as it did not demonstrate how the AO's order was erroneous despite the assessee providing detailed explanations.

The Tribunal held that the CIT(Appeals) erred in deleting the additions made under Section 40A(3) and 40(a)(ia) solely on the basis of unreliable books, and that specific disallowances were warranted. However, the Tribunal upheld the deletion of an addition of Rs. 66,99,500/- made under Section 68, finding it to be an accounting error rather than an unexplained cash credit.

The Tribunal held that if income is offered under Section 44AD and the AO does not dispute the applicability of this section, then the 8% estimation covers all expenses, and further disallowances or penalty for under-reporting are not justified.

The Tribunal held that the PCIT failed to pinpoint the error in the AO's assessment or demonstrate how the contractual receipt led to escapement of income. The PCIT's action under Section 263 was not sustainable as it did not establish the assessment order as erroneous.

The Tribunal held that the Assessing Officer failed to make adequate inquiry regarding the cash payments and the applicability of Rule 6DD. Therefore, the Commissioner rightly exercised his power under Section 263.

The Tribunal held that the rectification order under Section 154 was unsustainable because the issues raised were debatable and required detailed inquiry, not just obvious mistakes. Furthermore, there was no proof of proper service of the notice to the assessee.

The Tribunal condoned the delay, holding that the CIT(A) erred in interpreting Section 43CA by requiring full payment at the time of agreement. The matter concerning four sale deeds was remanded to the AO to determine stamp duty valuation on the date of agreement.

The Tribunal held that the disallowance of labour expenditure based on industrial norms without specific defects was arbitrary. It also found the addition on partner's capital contribution and notional interest on advances to be unsustainable.