ITAT Pune Judgments — September 2018

The Tribunal held that the addition made by the Assessing Officer on account of sale of scrap was not sustainable. It also allowed the assessee's claim for depreciation on a bungalow occupied by the MD, considering it as a business asset.

The Tribunal held that the addition made by the Assessing Officer on account of sale of scrap was not sustainable. It also allowed the assessee's claim for depreciation on a bungalow occupied by the MD, considering it as a business asset.

The Tribunal held that the AO's satisfaction for initiating penalty proceedings was ambiguous, as it mentioned 'concealment of income' while the penalty was levied for 'undisclosed income'. This ambiguity renders the penalty order unsustainable in law.

The Tribunal held that the reasons provided by the assessee constitute a reasonable cause for the delay in filing the TDS return. Following previous decisions, the Tribunal ruled that the assessee is not liable for the penalty.

The Tribunal held that the AO exceeded jurisdiction by making additions beyond the scope of the limited scrutiny initiated under CASS without proper approval. Therefore, the assessment order was deemed bad in law. However, the issue of whether cash deposits had a nexus with business receipts under Section 44AD required further examination.

The Tribunal dismissed the Revenue's appeal without going into the merits of the case. This was based on the CBDT Circular which raised the monetary limit for filing appeals to Rs. 20 lakhs, and the tax effect in this appeal was below that limit.

The tribunal considered the assessee's request to withdraw the appeal. The Revenue had no objection to the withdrawal.

The Tribunal held that the notice issued under Section 153C of the Income Tax Act was invalid for both Assessment Years 2010-11 and 2011-12. The Tribunal found that the documents seized pertaining to the assessee were non-incriminating. For Assessment Year 2010-11, no documents whatsoever were seized. The Tribunal distinguished the cases relied upon by the revenue, stating that the facts in Ganpati Fincap Services Pvt. Ltd. involved unsigned documents like indemnity bonds and MOUs, which were not present in the current case. Similarly, the RRJ Securities Ltd. case dealt with hard disk working papers. The Tribunal concluded that the expression 'documents' in Section 153C refers to incriminating documents. Since the seized documents were non-incriminating, the notice under Section 153C was held to be invalid. Consequently, the adjudication of the issues raised on merits by the assessee became an academic exercise, and the regular grounds raised by the assessee were dismissed as academic. The additional ground raised by the assessee regarding the validity of the Section 153C notice was decided in favor of the assessee.

The Tribunal held that the AO's reasons for reopening the assessment were not independently formed and were merely a rehash of information received from the Investigation Wing, thus vitiating the proceedings. The addition was also found to be based on presumptions without corroborative evidence.

The Tribunal held that the Commissioner of Income Tax (Appeals) was correct in deleting the addition. The assessee had furnished sufficient evidence for genuine purchases and sales, and the fall in GP was explained by a change in traded products.

The Tribunal held that the Commissioner of Income Tax (Appeals) lacked the jurisdiction to initiate penalty proceedings under Section 271(1)(c) for an addition made by the Assessing Officer. The satisfaction for initiating penalty must be recorded by the officer making the addition.

The Tribunal held that the notice issued under Section 153C of the Income Tax Act was invalid for both Assessment Years 2010-11 and 2011-12. The Tribunal found that the documents seized pertaining to the assessee were non-incriminating. For Assessment Year 2010-11, no documents whatsoever were seized. The Tribunal distinguished the cases relied upon by the revenue, stating that the facts in Ganpati Fincap Services Pvt. Ltd. involved unsigned documents like indemnity bonds and MOUs, which were not present in the current case. Similarly, the RRJ Securities Ltd. case dealt with hard disk working papers. The Tribunal concluded that the expression 'documents' in Section 153C refers to incriminating documents. Since the seized documents were non-incriminating, the notice under Section 153C was held to be invalid. Consequently, the adjudication of the issues raised on merits by the assessee became an academic exercise, and the regular grounds raised by the assessee were dismissed as academic. The additional ground raised by the assessee regarding the validity of the Section 153C notice was decided in favor of the assessee.

The Tribunal held that the Assessing Officer failed to consider the High Court decisions regarding the utilization of borrowed funds for investments and the availability of interest-free funds. The issue of disallowance under Rule 8D(2)(ii) was remitted to the Assessing Officer for verification. For Rule 8D(2)(iii), the Assessing Officer was directed to reduce the suo-moto disallowance made by the assessee.

The Tribunal held that the Assessing Officer failed to consider High Court decisions regarding the utilization of borrowed funds for investments and the availability of interest-free funds. The issue of disallowance under Rule 8D(2)(ii) was remitted to the Assessing Officer for verification. For Rule 8D(2)(iii), the Assessing Officer was directed to reduce the suo-moto disallowance made by the assessee.

The Tribunal held that the Assessing Officer failed to consider High Court decisions regarding the utilization of borrowed funds for investments and the availability of interest-free funds. The issue of disallowance under Rule 8D(2)(ii) was remitted to the Assessing Officer for verification. For Rule 8D(2)(iii), the Assessing Officer was directed to reduce the suo-moto disallowance made by the assessee.

The Tribunal held that the Assessing Officer failed to consider High Court decisions regarding the utilization of borrowed funds for investments and the availability of interest-free funds. The issue of disallowance under Rule 8D(2)(ii) was remitted to the Assessing Officer for verification. For Rule 8D(2)(iii), the Assessing Officer was directed to reduce the suo-moto disallowance made by the assessee.

The Tribunal held that the RSBY enrollment expenditure is an allowable revenue expenditure, following its own previous orders. It also held that the legal expenses incurred to settle the suit with Microsoft are allowable as business expenditure.

The Tribunal held that notional rent on unsold units held as stock-in-trade by a builder is to be assessed as 'Business Income' and not 'Income from House Property'. The intention of the assessee to sell the flats was paramount.

The Tribunal held that the disallowance of interest under section 36(1)(iii) was not merited as the assessee had sufficient interest-free funds. It also found that commission and salary payments were covered by a previous year's favorable Tribunal order. The Tribunal upheld the CIT(A)'s deletion of consignment expenses, finding them to be business-related and supported by evidence.

The Tribunal condoned a 16-day delay in filing the appeal. It admitted additional evidence regarding cash flow statements and remanded the issue of 'peak negative cash balance' to the AO for fresh examination. Other grounds were either dismissed or not pressed.

The Tribunal held that notional rent on unsold units held as stock-in-trade by a builder is to be assessed as 'Business Income' and not 'Income from House Property'. The intention of the assessee to sell the flats was paramount.

The Tribunal condoned a 16-day delay in filing the appeal. It admitted additional evidence regarding cash flow statements and remanded the issue of 'peak negative cash balance' to the AO for fresh examination. Other grounds were either dismissed or not pressed.

The Tribunal dismissed the Revenue's appeal, and consequently the assessee's cross-objection, solely on the grounds of low tax effect as per the prevailing CBDT circular. The merits of the case were not adjudicated.

The Tribunal held that the disallowance of interest under section 36(1)(iii) was not merited as the assessee had sufficient interest-free funds. It also found that commission and salary payments were covered by a previous year's favorable Tribunal order. The Tribunal upheld the CIT(A)'s deletion of consignment expenses, finding them to be business-related and supported by evidence.

The Tribunal considered the assessee's request for withdrawal and, with no objection from the Revenue, allowed the withdrawal of the appeals.

The Tribunal dismissed the Revenue's appeal as the tax effect was below the monetary limit prescribed by CBDT Circular No. 3/2018. The Revenue can seek restoration if exceptions in the circular apply.

The Tribunal found that the assessee had furnished documents to substantiate the services received. It set aside the assessment order and remitted the issue back to the TPO/Assessing Officer to determine the ALP of the transactions in accordance with the law.

The Tribunal considered the assessee's request for withdrawal and, with no objection from the Revenue, allowed the withdrawal of the appeals.

The Tribunal found that the assessee had furnished documents to substantiate the services received. It set aside the assessment order and remitted the issue back to the TPO/Assessing Officer to determine the ALP of the transactions in accordance with the law.

The Tribunal considered the assessee's request for withdrawal and, with no objection from the Revenue, allowed the withdrawal of the appeals.

The Tribunal dismissed the appeal filed by the Revenue. This was done solely on the grounds of low tax effect, as per the CBDT Circular.

The Tribunal held that the perquisite value of rent-free accommodation should be computed based on the actual lease rent paid or payable by the employer, not on a notional basis of interest on security deposits. This was in line with Rule 3 of the Income Tax Rules and a Bombay High Court judgment.

The Tribunal held that the assessment proceedings initiated for assessment year 2005-06 were beyond the period available under the proviso to section 153C read with proviso to section 153A of the Act. Therefore, the AO lacked jurisdiction.

The Tribunal held that since the assessee's books of account were audited and not rejected, the Assessing Officer could not rely on a Valuer's report to disallow expenses. The CIT(A)'s direction to re-verify expenses in a future year was also reversed.

The Tribunal held that TDS credit should be allowed in the year the TDS certificate is issued, even if the income was offered in an earlier year, provided the TDS was booked by the deductor in the later year. The addition on account of advance was deleted as it was offered to tax in a subsequent year.

The Tribunal held that the reassessment proceedings were bad in law because the Assessing Officer failed to provide the reasons for reopening to the assessee despite specific requests. This failure deprived the assessee of their right to object to the reopening.

The Tribunal held that the 'Sales Tax Benefit' is revenue in nature and not eligible for deduction under Section 80IA of the Income Tax Act, as it is not directly derived from the industrial undertaking's operations.

The Tribunal held that the 'Sales Tax Benefit' is revenue in nature and not eligible for deduction under Section 80IA of the Income Tax Act, as it is not directly derived from the industrial undertaking's operations.

The Tribunal held that the issue of retention money has been consistently decided in favour of the assessee in its own cases for earlier assessment years. Following the judicial discipline and previous pronouncements, the Tribunal upheld the CIT(A)'s deletion of the addition.

The Tribunal held that the 'Sales Tax Benefit' is revenue in nature and not eligible for deduction under Section 80IA of the Income Tax Act, as it is not directly derived from the industrial undertaking's operations.

The Tribunal held that the Assessing Officer failed to invoke Explanation-7 to Section 271(1)(c) and did not specify the exact charge (concealment or inaccurate particulars) for levying the penalty, rendering the order ambiguous.

The Tribunal held that the appeal was not pressed/withdrawn due to being in contravention of the CBDT Circular. The Revenue was granted liberty to re-institute the appeal if exceptions in the circular were met.