ITAT Pune Judgments — June 2018

The Tribunal held that since the services were rendered outside India and the non-resident had no permanent establishment in India, the commission was not taxable in India. Therefore, no TDS was required to be deducted, and the disallowance was not justified.

The Tribunal held that not providing an opportunity to cross-examine witnesses whose statements were used for re-opening assessments violates principles of natural justice. The appeals were restored to the CIT(A) for this purpose.

The Tribunal held that the foreign exchange fluctuation gain should be considered part of the operating income. For the manufacturing segment, the Tribunal found the issues identical to a previous year and allowed the assessee's grounds, implying TNMM was appropriate.

The Tribunal held that the foreign exchange fluctuation gain should be considered part of the operating income. For the manufacturing segment, the Tribunal found the issues identical to a previous year and allowed the assessee's grounds, implying TNMM was appropriate.

The tribunal held that the penalty orders were bad in law because the Assessing Officer initiated proceedings for concealment of income but also included furnishing inaccurate particulars of income in the notice and penalty order, creating ambiguity. This violated the principle that penalty must be levied on the specific charge for which satisfaction was recorded.

The Tribunal restored the issue of excess cash and stock to the Assessing Officer for re-adjudication with fresh evidence, considering the assessee's plea for substantiation. Similar directions were given for disallowances under Section 40(a)(ia) and issues related to partner's capital accounts.

The Tribunal held that the foreign exchange fluctuation gain should be considered part of the operating income. For the manufacturing segment, the Tribunal found the issues identical to a previous year and allowed the assessee's grounds, implying TNMM was appropriate.

The Tribunal restored the issue of excess cash and stock to the Assessing Officer for re-adjudication with fresh evidence, considering the assessee's plea for substantiation. Similar directions were given for disallowances under Section 40(a)(ia) and issues related to partner's capital accounts.

The Tribunal held that the impugned order was passed in a summary manner, violating the principles of natural justice by not providing a proper opportunity of hearing. The matter was remitted back to the Pr. Commissioner for fresh adjudication.

The Tribunal held that the Assessing Officer had properly examined the issue of the medical shop during scrutiny and accepted it as incidental to the trust's objects. It also found no merit in the PCIT's objection regarding trainee services, considering it an arrangement for training.

The Tribunal upheld the CIT(A)'s decision to delete the addition on the settlement receipt, finding it to be a capital receipt. It also upheld the deletion of excess depreciation, agreeing that Explanation 10 to Section 43(1) was not applicable. The disallowance under Section 14A was also deleted as no exempt income was earned.

The Tribunal held that the assessee failed to discharge the onus of proving the genuineness of the investments and the source of funds. The CIT(A)'s decision to confirm the additions was found to be fair and reasonable.

The Tribunal held that the additional evidence regarding the cost of acquisition of structures was relevant to the quantum of income. It directed the CIT(A) to admit the additional evidence and adjudicate the issue afresh.

The Tribunal held that the Assessing Officer's satisfaction for initiating penalty proceedings was vague and ambiguous, failing to clearly specify whether the penalty was for concealment of income or furnishing inaccurate particulars. This lack of clarity vitiated the penalty proceedings.

The Tribunal upheld the Commissioner of Income Tax (Appeal)'s decision, finding that the assessee failed to discharge the onus of proving the genuineness of transactions and the source of funds. The additions made by the Assessing Officer were deemed justified.

The Tribunal noted that the nature of the interest (whether under Section 23(1A)/23(2) r.w.s. 28 or Section 34 of the Land Acquisition Act) was not clearly established. Therefore, the issue was remitted back to the Assessing Officer for de novo adjudication.

The Tribunal held that the assessee is entitled to claim deduction under Section 80I(A) even if the claim was made for the first time in a revised return filed within the due date. This decision followed a previous ruling by the Tribunal on a similar issue.

The Tribunal, following a coordinate bench's decision on identical facts for a prior assessment year, restricted the disallowance under Section 14A. The ground regarding software expenses was dismissed as not pressed.

The Tribunal held that the Assessing Officer's satisfaction notice and penalty order were ambiguous, failing to specify which limb of Section 271(1)(c) was violated. This lack of clarity renders the penalty unsustainable.

The Tribunal upheld the CIT(A)'s decision to allow the alternate deduction claim under Section 10A. The Tribunal found the CIT(A)'s order to be fair and reasonable, relying on its own prior decision for a similar assessment year.

The Tribunal held that the assessee failed to discharge the onus of proving the genuineness of the investments and the source of funds. The CIT(A)'s decision to confirm the additions was found to be fair and reasonable.

The Tribunal observed that the assessee could not establish the trail of goods and that the case might fall under specific clauses of a previous judgment regarding bogus purchases. Considering the grounds raised by the assessee, the Tribunal decided to grant one more opportunity.

The Tribunal held that while the purchases were from grey market suppliers, the assessee had provided evidence of goods' movement and consumption. Therefore, the addition should be restricted to 10% of the alleged bogus purchases over the Gross Profit.

The Tribunal held that the assessee failed to discharge the onus of proving the genuineness of the investments and the source of funds. The CIT(A)'s decision to confirm the additions was found to be fair and reasonable.

The Tribunal decided to remand the issue to the Assessing Officer for a fresh adjudication, as the applicability of Section 50C to the transfer of development rights was not properly examined by the lower authorities.

The Tribunal held that the civil construction and foundation work for a windmill are integral parts of the windmill and are specifically designed for its operation. Therefore, depreciation at the higher rate applicable to the windmill should also be allowed for these civil structures.

The Tribunal upheld the CIT(A)'s orders, finding no merit in the Revenue's grounds of appeal. The Tribunal noted that the CIT(A) had relied on documents already on record and dismissed the Revenue's claims of additional evidence being admitted improperly.

The Tribunal held that gains earned from investments in securities using specialized professional services of PMS should be taxed under the head 'Capital Gains' and not 'Business Income'. The Tribunal affirmed the CIT(A)'s findings, stating that the assessee's investment objective was growth, and the PMS provider's actions to achieve this objective do not alter the nature of the income.

The Tribunal held that gains earned from investments in securities using specialized professional services of PMS should be taxed under the head 'Capital Gains' and not 'Business Income'. The Tribunal affirmed the CIT(A)'s findings, stating that the assessee's investment objective was growth, and the PMS provider's actions to achieve this objective do not alter the nature of the income.

The Tribunal held that gains earned from investments in securities using specialized professional services of PMS should be taxed under the head 'Capital Gains' and not 'Business Income'. The Tribunal affirmed the CIT(A)'s findings, stating that the assessee's investment objective was growth, and the PMS provider's actions to achieve this objective do not alter the nature of the income.

The Tribunal held that gains earned from investments in securities using specialized professional services of PMS should be taxed under the head 'Capital Gains' and not 'Business Income'. The Tribunal affirmed the CIT(A)'s findings, stating that the assessee's investment objective was growth, and the PMS provider's actions to achieve this objective do not alter the nature of the income.

The Tribunal held that while the purchases were not entirely genuine, disallowing the entire amount was not justified. Instead, an addition of 10% of the bogus purchases over the Gross Profit shown by the assessee was directed to be made.

The Tribunal noted that the assessee failed to establish the trail of goods. However, considering the Pune Bench's decision in M/s. Chhabi Electricals Pvt. Ltd., the Tribunal decided to remand the issue to the CIT(A) for further consideration.

The Tribunal noted that the assessee failed to establish the trail of goods. However, considering the Pune Bench's decision in M/s. Chhabi Electricals Pvt. Ltd., the Tribunal decided to remand the issue to the CIT(A) for further consideration.

The Tribunal upheld the CIT(A)'s decision that the notice issued under Section 148 during the pendency of scrutiny assessment proceedings was void ab-initio and illegal. Consequently, the assessment order passed based on this notice was quashed.

The Tribunal held that the assessee had a reasonable cause for the delay in filing the TDS return, as the issue was due to a bank error and not willful negligence. Therefore, the penalty imposed under Section 272A(2)(k) was not sustainable.

The Tribunal held that penalty under Section 271(1)(c) is not leviable when the assessee makes a full disclosure in the return of income, even if prompted by a survey. The penalty proceedings were initiated based on the AO's satisfaction at the time of assessment, not during the survey.

The Tribunal upheld the CIT(A)'s orders, finding no merit in the Revenue's grounds of appeal. The Tribunal noted that the CIT(A) had relied on documents already on record and dismissed the Revenue's claims of additional evidence being admitted improperly.

The Tribunal held that since the issues were identical to those decided in favour of the assessee in previous years, and no contrary material was presented, the Revenue's appeal should be dismissed.

The Tribunal held that Section 40A(3) cannot be invoked when presumptive income under Section 44AD is accepted. The provisions of Section 44AD are meant to simplify taxation, and further disallowances under Section 40A(3) would negate this purpose.

The Tribunal found a need to remand the issues to the AO due to ex-parte assessment and lack of proper reasoning by the revenue authorities. Additional evidence and grounds presented by the assessee required fresh adjudication.

The Tribunal allowed deduction for electricity commission and bank interest based on previous rulings and CBDT circulars. For MSEB deposit interest and advertisement income, the matter was set aside to the Assessing Officer for fresh adjudication.

The Tribunal held that gains earned from investments in securities using specialized professional services of PMS should be taxed under the head 'Capital Gains' and not 'Business Income'. The Tribunal affirmed the CIT(A)'s findings, stating that the assessee's investment objective was growth, and the PMS provider's actions to achieve this objective do not alter the nature of the income.

The Tribunal held that the capital gains withdrawn from the Capital Gain Account Scheme are liable to be taxed in the assessment year relevant to the previous year in which the withdrawal occurred, i.e., AY 2010-11, as per the proviso to Section 54 of the Act. The proviso states that unutilized amounts not used for purchasing a new asset within the specified period shall be charged to tax under Section 45 as income of the previous year in which the period of three years from the date of transfer of the original asset expires. Since the assessee withdrew the amount prematurely, it was correctly offered to tax in AY 2010-11. Consequently, the AO erred in taxing the capital gains in AY 2009-10 and reopening the assessment under Section 147 for this purpose was bad in law and liable to be set aside. The assessee's appeal was allowed, and the Revenue's appeal was dismissed. The specific issues regarding the cost of acquisition and cost of improvement were rendered infructuous due to the setting aside of the reassessment.

The Tribunal held that the capital gains withdrawn from the Capital Gain Account Scheme are liable to be taxed in the assessment year relevant to the previous year in which the withdrawal occurred, i.e., AY 2010-11, as per the proviso to Section 54 of the Act. The proviso states that unutilized amounts not used for purchasing a new asset within the specified period shall be charged to tax under Section 45 as income of the previous year in which the period of three years from the date of transfer of the original asset expires. Since the assessee withdrew the amount prematurely, it was correctly offered to tax in AY 2010-11. Consequently, the AO erred in taxing the capital gains in AY 2009-10 and reopening the assessment under Section 147 for this purpose was bad in law and liable to be set aside. The assessee's appeal was allowed, and the Revenue's appeal was dismissed. The specific issues regarding the cost of acquisition and cost of improvement were rendered infructuous due to the setting aside of the reassessment.

The Tribunal held that income must accrue or arise during the previous year to be taxable. It also found that the sale of land in Gat No. 86 occurred in a subsequent assessment year and that an amount added on a protective basis was already offered to tax by the recipient.

The Tribunal held that the manner in which penalty proceedings were initiated suffered from a technical defect due to ambiguity in the Assessing Officer's satisfaction notice. The penalty order was quashed as a result.

The Tribunal upheld the addition of Rs. 5,50,000/-. The assessee failed to provide sufficient evidence to demonstrate the existence, sale, and flow of funds from the alleged 'other items' sold along with the land.

The Tribunal admitted additional evidence in the form of a correction deed showing a revised market value of Rs. 44,35,380/-. The matter was remanded to the AO for fresh adjudication.

The Tribunal held that the AO's satisfaction for initiating and levying penalty was ambiguous, as it oscillated between 'concealed income' and 'furnished inaccurate particulars'. This lack of clarity rendered the penalty order unsustainable in law.