ITAT Pune Judgments — November 2018

The Tribunal held that the reassessment proceedings were invalid because the reasons for reopening were not furnished to the assessee, making the reassessment order unsustainable. For the subsequent year, the addition for bogus purchases was partly allowed, directing the Assessing Officer to allow a GP rate of 10% over the declared rate.

The tribunal held that internal disputes among directors do not constitute reasonable cause for non-filing of the return of income, upholding the penalty under Section 271F. However, for the tax audit report, considering a similar deletion for the preceding year, the penalty under Section 271B was deleted.

The Tribunal restored the work-in-progress addition to the AO for verification of details. It upheld the addition for rental income and disallowance of proportionate expenses, but deleted the addition for interest on loans.

The Tribunal held that the Commissioner cannot exercise revisionary powers under section 263 when the assessment order was passed with the prior approval of the Additional CIT under section 153D. Therefore, the exercise of jurisdiction and the consequent order under section 263 were invalid.

The Tribunal held that since the substratum for the levy of penalty (the block assessment) had eroded due to being barred by limitation, the penalty proceedings could not survive. Therefore, the order of the CIT(A) deleting the penalty was upheld.

The Tribunal held that the reassessment order was invalid and bad in law because the assessee was denied an opportunity to file objections to the reopening. Failure to provide copies of relied-upon documents and allow cross-examination violated the principles of natural justice.

The Tribunal held that the reassessment order was invalid and bad in law because the assessee was denied an opportunity to file objections to the reopening. Failure to provide copies of relied-upon documents and allow cross-examination violated the principles of natural justice.

The Tribunal held that the Assessing Officer was ambiguous in recording satisfaction and levying penalty, invoking both concealment and furnishing inaccurate particulars. Furthermore, an incorrect claim in law does not amount to furnishing inaccurate particulars.

The Tribunal held that the provision for warranty was correctly made and deleted the AO's addition. It also held that the construction of a power coating room was revenue expenditure, but other expenses like CNC system, stabilizer, and computer fittings were capital in nature. The disallowance under Section 14A was directed to be limited to the extent of exempt income.

The Tribunal held that the Commissioner cannot exercise revisionary powers under section 263 when the assessment order was passed with the prior approval of the Additional CIT under section 153D. Therefore, the exercise of jurisdiction and the consequent order under section 263 were invalid.

The tribunal held that internal disputes among directors do not constitute reasonable cause for non-filing of the return of income, upholding the penalty under Section 271F. However, for the tax audit report, considering a similar deletion for the preceding year, the penalty under Section 271B was deleted.

The Tribunal held that the reassessment proceedings were invalid because the reasons for reopening were not furnished to the assessee, making the reassessment order unsustainable. For the subsequent year, the addition for bogus purchases was partly allowed, directing the Assessing Officer to allow a GP rate of 10% over the declared rate.

The Tribunal held that no disallowance under Section 14A read with Rule 8D is warranted when the assessee has not earned any exempt income. This decision was based on High Court judgments.

The Tribunal held that no disallowance under Section 14A read with Rule 8D is warranted if the assessee has not earned any exempt income in the relevant assessment year. This decision was based on various High Court judgments.

The Tribunal allowed the assessee's request to withdraw the appeal. The appeal was dismissed as withdrawn.

The Tribunal upheld the CIT(A)'s decision, allowing the deduction under Section 80P on interest income earned from banks. This was done by respectfully following the precedent set by the Pune Bench of the Tribunal.

The Tribunal held that the Commissioner cannot exercise revisionary powers under section 263 when the assessment order was passed with the prior approval of the Additional CIT under section 153D. Therefore, the revision orders passed by the CIT were invalid.

The Tribunal held that the Commissioner cannot exercise revisionary powers under section 263 when the assessment order was passed with the prior approval of the Additional CIT under section 153D. Therefore, the revision orders passed by the CIT were invalid.

The Tribunal held that the CIT(A)'s reasoning for treating the remaining ₹5 lakhs as bogus was incorrect. The assessee only needs to establish the creditworthiness of the lender on the date the loan was given, and the subsequent non-repayment does not make the loan bogus.

The Tribunal condoned the delay in filing the appeal before the CIT(A) based on the assessee's explanation of sufficient cause. The Tribunal directed the CIT(A) to admit the appeal and decide the issue on merits.

The Tribunal condoned the delay for AY 2013-14, citing humane reasons. It held that rental income earned by the APMC is eligible for exemption under Section 10(26AAB) of the Income Tax Act, following its own previous decision in the assessee's own case.

The Tribunal directed the Assessing Officer to restrict additions by applying a GP rate of 4% over the declared GP rate on admitted clandestine removal. The addition made under Section 40A(3) for cash purchases was deleted.

The Tribunal held that the assessee's request for remand was reasonable due to undisputed failures by the AO to provide seized papers, statements, and an opportunity for cross-examination. The appeal was allowed for statistical purposes with directions for fresh adjudication.

The Tribunal condoned the delay for AY 2013-14, citing humane reasons. It held that rental income earned by the APMC is eligible for exemption under Section 10(26AAB) of the Income Tax Act, following its own previous decision in the assessee's own case.

The Tribunal held that the Commissioner cannot exercise revisionary powers under section 263 when the assessment order was passed with the prior approval of the Additional CIT under section 153D. Therefore, the revision orders passed by the CIT were invalid.

The Tribunal held that interest paid on borrowed capital for reconstruction of an existing asset is not covered by the proviso to Section 36(1)(iii) and is therefore deductible. It also held that Section 45(1A) is inapplicable when the insurance claim received is less than the actual expenditure incurred on reconstruction.

The Tribunal held that the Commissioner cannot exercise revisionary powers under section 263 when the assessment order was passed with the prior approval of the Additional CIT under section 153D. Therefore, the revision orders passed by the CIT were invalid.

The Tribunal held that entering into a Development Agreement and receiving an advance does not constitute a transfer under Section 2(47) of the Income Tax Act, and therefore, capital gains tax is not exigible in the year of the agreement. The assessee is entitled to receive constructed flats in the future.

The Tribunal found that the CIT(A)'s order was passed without the assessee's presence and that notices were sent to an incorrect address. Therefore, the issue of denial of opportunity by the CIT(A) was allowed in favor of the assessee.

The Tribunal partly allowed the appeal. It directed the Assessing Officer to consider granting consequential benefits for opening stock valuation in the subsequent assessment year, thereby partially allowing the ground related to closing stock valuation.

The Tribunal held that interest paid on borrowed capital for reconstruction of an existing asset is not covered by the proviso to Section 36(1)(iii) and is therefore deductible. It also held that Section 45(1A) is inapplicable when the insurance claim received is less than the actual expenditure incurred on reconstruction.

The Tribunal held that the Assessing Officer should refer the valuation of the property as on the date of sale to the District Valuation Officer (DVO) under Section 50C(2) of the Act. The capital gains should be computed after obtaining the DVO's valuation.

The Tribunal held that the deduction under Section 10A is to be computed before setting off losses from non-eligible units. This is a settled legal proposition, and the Revenue did not provide any distinguishing facts or contrary decisions.

The Tribunal held that the CIT(A) does not have the power to dismiss an appeal for want of prosecution and is duty-bound to decide the appeal on merits. The impugned order was set aside.

The Tribunal held that the authorities below failed to consider the documents submitted by the assessee to substantiate the purchases. The matter was remanded back to the Assessing Officer for re-examination of the purchases and the assessee's claims for deduction under Section 10B and set-off of losses.

The Tribunal found that both lower authorities failed to examine the merits and true facts of the issue. Therefore, the issue was remitted back to the CIT(A) for fresh adjudication on merits.

The Tribunal held that offering additional income during assessment proceedings, when confronted with evidence, does not constitute a voluntary disclosure. The assessee's plea of no tax due due to TDS credit was also rejected as it does not absolve the obligation to declare total income.

The Tribunal held that the authorities below failed to consider the documents submitted by the assessee to substantiate the purchases. The matter was remanded back to the Assessing Officer for re-examination of the purchases and the assessee's claims for deduction under Section 10B and set-off of losses.

The Tribunal upheld the CIT(A)'s order deleting the penalty, as the addition itself was deleted by the ITAT in the assessee's own case for an earlier year. Similarly, the expenditure for AY 2012-13 was allowed by following the ITAT's decision.

The Tribunal upheld the CIT(A)'s order deleting the penalty for AY 2010-11, as the addition itself was deleted by the ITAT in the assessee's own case. For AY 2012-13, the Tribunal allowed the expenditure claim, following the ITAT's decision for AY 2010-11.

The tribunal held that interest-free advances made by the assessee were covered by its own sufficient funds, following the Reliance Utilities and Power Ltd. precedent. However, it found that expenses debited to the P&L account and not added back while computing total income were rightly disallowed.

The Tribunal found merit in the assessee's submission. Since the assessment order was based on a section 263 order that was subsequently held invalid by the Tribunal, the assessment order did not survive.

The Tribunal noted that the lower authorities did not have the benefit of a relevant Tribunal decision on bogus purchases. Therefore, the matter was remanded to the Assessing Officer to classify the purchases into one of the four categories as per the cited precedent.

The Tribunal held that the CBDT circular with retrospective effect mandates withdrawal or non-pressing of appeals where the tax effect is below the prescribed limit. Therefore, the appeal was not maintainable.

The Tribunal held that the erection and fabrication of factories are construction activities and not 'manufacture or production of an article or thing' as required for additional depreciation. However, the reassessment proceedings for a later year were found to be invalid due to being initiated beyond the four-year period without valid reasons.

The Tribunal noted that the lower authorities did not have the benefit of a relevant Tribunal decision on bogus purchases. Therefore, the matter was remanded to the Assessing Officer to classify the purchases into one of the four categories as per the cited precedent.

The Tribunal held that the erection and fabrication of factories are construction activities and not 'manufacture or production of an article or thing' as required for additional depreciation. However, the reassessment proceedings for a later year were found to be invalid due to being initiated beyond the four-year period without valid reasons.

The Tribunal condoned the delay in filing the appeal. On merits, the Tribunal remanded the issue to the Assessing Officer for fresh adjudication, directing the assessee to provide evidence that the payee had disclosed the interest income and paid taxes on it.

The Tribunal held that the erection and fabrication of factories are construction activities and not 'manufacture or production of an article or thing' as required for additional depreciation. However, the reassessment proceedings for a later year were found to be invalid due to being initiated beyond the four-year period without valid reasons.

The Tribunal held that both the foreign exchange loss and the interest expenditure are allowable as business expenditure. The Tribunal relied on various judicial precedents that support the allowability of such losses when a capital asset transaction does not materialize.