ITAT Pune Judgments — January 2019

The Tribunal noted the Revenue's request for withdrawal due to low tax effect, which was below the Rs. 20 lakhs limit specified in CBDT Circular No. 3/2018. Since the withdrawal was in favor of the assessees, the appeals were dismissed on this ground.

The Tribunal held that interest income earned on fixed deposits with scheduled banks constitutes business income for a co-operative society and is eligible for deduction under Section 80P(2)(a)(i).

The Tribunal noted the Revenue's request for withdrawal due to low tax effect, which was below the Rs. 20 lakhs limit specified in CBDT Circular No. 3/2018. Since the withdrawal was in favor of the assessees, the appeals were dismissed on this ground.

The Tribunal noted the Revenue's request for withdrawal due to low tax effect, which was below the Rs. 20 lakhs limit specified in CBDT Circular No. 3/2018. Since the withdrawal was in favor of the assessees, the appeals were dismissed on this ground.

The Tribunal noted the Revenue's request for withdrawal due to low tax effect, which was below the Rs. 20 lakhs limit specified in CBDT Circular No. 3/2018. Since the withdrawal was in favor of the assessees, the appeals were dismissed on this ground.

The Tribunal held that the assessee had no business activity, and therefore, no business loss could be claimed. Consequently, the set off of business loss against income from other sources was not permissible.

The Tribunal noted the Revenue's request for withdrawal due to low tax effect, which was below the Rs. 20 lakhs limit specified in CBDT Circular No. 3/2018. Since the withdrawal was in favor of the assessees, the appeals were dismissed on this ground.

The Tribunal found that the CIT(Appeals) order lacked specific factual verification regarding the nature of the land and the assessee's intention. Therefore, the matter was restored to the Assessing Officer for detailed inquiry.

The tribunal held that the ex-parte order violated principles of natural justice. The impugned order was set aside, and the appeal was restored to the CIT(A) for fresh adjudication.

The Tribunal found that the CIT(Appeals) order lacked specific factual verification regarding the nature of the land and the assessee's intention. Therefore, the matter was restored to the Assessing Officer for detailed inquiry.

The Tribunal held that the amendment to Section 40(a)(ia) by the Finance Act, 2012, with its second proviso, is curative and applies retrospectively. The additional evidence filed by the assessee showing the recipient offered the interest to tax was admitted.

The Tribunal held that the exemption under Section 10(23C)(iiiab) is to be considered at the level of the society as a whole, not on an institution-specific basis. The Tribunal relied on a previous High Court decision in the assessee's own case.

The Tribunal held that if an assessee has sufficient interest-free funds (like cash profits or capital) available, advances made out of these funds, even to sister concerns, do not warrant disallowance of interest paid on borrowed funds. The advances were also found to be in the course of business.

The Tribunal held that if an assessee has sufficient interest-free funds (like cash profits or capital) available, advances made out of these funds, even to sister concerns, do not warrant disallowance of interest paid on borrowed funds. The advances were also found to be in the course of business.

The Tribunal noted that the assessee had produced documents evidencing the trail of goods. Considering a previous ITAT decision where 10% was applied when the trail of goods was substantiated, the Tribunal decided to remand the matter.

The Tribunal held that the TNMM method was appropriate for benchmarking international transactions, following previous decisions in the assessee's own case. It also upheld the deletion of disallowances related to IT service charges and Section 14A, citing lack of proper satisfaction by the Assessing Officer.

The Tribunal held that Section 14A cannot be invoked if the assessee has not earned any exempt income during the relevant assessment year. Therefore, the disallowance made was not justified.

The Tribunal held that the Explanation to Section 80IB(10) clearly states that in case of multiple approvals, the first approval by the local authority is relevant. Therefore, the Assessing Officer erred in linking the approval date to the owner instead of the project itself.

The Tribunal upheld the CIT(A)'s decision, stating that securities classified as HTM are part of the stock-in-trade and should be valued at cost or market value, whichever is lower. The Tribunal found no malafide in the assessee's method of valuation and considered the issue to be settled by various High Court and Supreme Court judgments.

The Tribunal held that the recovery of loans and advances (Rs. 2,50,000) and cash deposited out of withdrawals (Rs. 8,00,000) and business cash receipts (Rs. 2,84,095) were sufficiently explained. However, the gift from the father (Rs. 2,20,000) lacked documentary evidence.

The Tribunal found the disallowance of Rs. 2,87,910/- to be on the higher side and restricted the disallowance to Rs. 1,50,000/-. The assessee received further relief.

The Tribunal noted that no addition was made by the AO in the assessment year under appeal based on this reference. Therefore, the appeal was considered premature.

The Tribunal observed that similar issues for earlier assessment years were remitted to the AO for fresh adjudication. Therefore, the Tribunal set aside the impugned order and restored the matter to the AO for fresh decision.

The Tribunal held that the liability to pay the additional 2% LBT arose in the extant year when the demand was raised by the authorities. Since the amount was paid during the year under consideration, it is not disallowable under Section 43B.

The Tribunal held that since the assessee had sufficient interest-free funds available to cover the advances made, no disallowance of interest was warranted. The Tribunal relied on the decision of the Bombay High Court in CIT vs. Reliance Utilities & Power Ltd.

The Tribunal upheld the additions made by the Assessing Officer, finding no material to suggest they were excessive or unwarranted. Consequently, the assessee's appeals were dismissed.

The Tribunal found that the assessee had valid reasons for absence during assessment proceedings. Therefore, the impugned order was set aside and the matter was restored to the Assessing Officer for fresh assessment.

The Tribunal held that if an assessee has sufficient interest-free funds (like cash profits or capital) available, advances made out of these funds, even to sister concerns, do not warrant disallowance of interest paid on borrowed funds. The advances were also found to be in the course of business.

The Tribunal upheld the additions made by the Assessing Officer, finding no material to suggest they were excessive or unwarranted. Consequently, the assessee's appeals were dismissed.

The Tribunal held that if an assessee has sufficient interest-free funds (like cash profits or capital) available, advances made out of these funds, even to sister concerns, do not warrant disallowance of interest paid on borrowed funds. The advances were also found to be in the course of business.

The Tribunal held that the AO's failure to clearly specify the charge for initiating penalty proceedings, and then mentioning both limbs of Section 271(1)(c) in the penalty order, violated the principles of natural justice. This ambiguity vitiated the penalty proceedings.

The Tribunal held that the Octroi refund received by the assessee under the Maharashtra Government Package Scheme of Incentives, 2007, is capital in nature. This decision followed a coordinate bench's ruling on identical facts, which in turn relied on Supreme Court and High Court precedents.

The Tribunal held that since the sale consideration was not fully received and possession was not transferred, the transaction did not materialize. Therefore, no capital gains arose and the assessee was not liable to pay tax.

The Tribunal held that the AO's failure to clearly specify the charge for initiating penalty proceedings, and then mentioning both limbs of Section 271(1)(c) in the penalty order, violated the principles of natural justice. This ambiguity vitiated the penalty proceedings.

The Tribunal held that the Assessing Officer's satisfaction for initiating penalty proceedings was ambiguous as it mentioned both 'concealment of income' and 'furnishing of inaccurate particulars of income' without specifying the correct limb. Therefore, the penalty order was unsustainable in law.

The Tribunal held that the amendment to the definition of 'built-up area' in Section 80IB(14) was substantive and not retrospective. Therefore, areas not included in the definition prior to the amendment should not be considered for projects approved before its effective date.

The Tribunal held that certain companies were not functionally comparable and should be excluded from the set of comparables for benchmarking the arm's length price. Forex exchange fluctuations were also held to be operating in nature and to be included in the margins.

The Tribunal held that certain companies were not functionally comparable and should be excluded from the set of comparables for benchmarking the arm's length price. Forex exchange fluctuations were also held to be operating in nature and to be included in the margins.

The Tribunal held that the amendment to the definition of 'built-up area' in Section 80IB(14) was substantive and not retrospective. Therefore, areas not included in the definition prior to the amendment should not be considered for projects approved before its effective date.

The Tribunal held that certain companies were not functionally comparable and should be excluded from the set of comparables for benchmarking the arm's length price. Forex exchange fluctuations were also held to be operating in nature and to be included in the margins.

The Tribunal held that a notice under Section 143(2) was mandatory before proceeding with the assessment under Section 147, even if no fresh return was filed in response to the Section 148 notice. The assessment order was therefore in violation of statutory provisions.