ITAT Pune Judgments — June 2019

DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE - 12, PUNE vs BHAGINI NIVEDITA SAHAKARI BANK LIMITED, PUNE

ITA 613/PUN/2018[2014-15]Status: Disposed28 Jun 2019AY 2014-15Dismissed

The tribunal held that the tax effect in the present appeal was less than the revised monetary limit. Therefore, the appeal was dismissed on the grounds of low tax effect.

RAMCHANDRA DADA SHINDE,PUNE vs DEPUTY COMMISSIONER OF INCOME TAX,

ITA 185/PUN/2017[2006-07]Status: Disposed28 Jun 2019AY 2006-07Allowed

The Tribunal held that the seized cash should be adjusted against the tax liability from the date of the assessee's request. The Tribunal followed its coordinate bench's decision and directed the AO to give credit for the seized cash.

DEPUTY COMMISSIONER OF INCOME-TAX vs JAIN IRRIGATION SYSTEM LTD., JALGAON

ITA 1184/PUN/2016[2008-09]Status: Disposed28 Jun 2019AY 2008-09Partly Allowed

The Tribunal dismissed the appeal regarding unabsorbed depreciation, noting that the relevant High Court decision had overturned the Special Bench ruling relied upon by the Revenue. For the business loss of the amalgamating company, the issue was remanded to the Assessing Officer for fresh adjudication.

ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE - 13, PUNE vs M/S.VANDERLANDE INDUSTRIES PVT.LTD, PUNE

ITA 8/PUN/2018[2012-13]Status: Disposed28 Jun 2019AY 2012-13Dismissed

The Tribunal held that the appeal was to be dismissed on account of low tax effect, as it fell below the revised monetary limit set by the CBDT.

INCOME TAX OFFICER vs M/S. SHAH BAFNA ASSOCIATES, PUNE

ITA 199/PUN/2017[2013-14]Status: Disposed28 Jun 2019AY 2013-14Dismissed

The Tribunal held that the assessee is entitled to a pro-rata deduction under Section 80IB(10) for the completed flats, following a previous precedent. The Revenue's appeals were dismissed.

DEPUTY COMMISSIONER OF INCOME TAX vs M/S . PUNE MERCHANTS CO-OPERATIVE BANK LTD, PUNE

ITA 183/PUN/2017[2013-14]Status: Disposed28 Jun 2019AY 2013-14Dismissed

The Tribunal held that the CIT(A) was correct in deleting the addition on unclaimed dividends as it did not fall under Section 41(1). Regarding interest on NPAs, the Tribunal followed High Court decisions stating that prudential norms of RBI are binding and interest on NPAs is not taxable on accrual basis for cooperative banks.

NILESH VASANT SHENDE,PUNE vs ASSISTANT COMMISSIONER OF INCOME-TAX,

ITA 670/PUN/2016[2009-10]Status: Disposed28 Jun 2019AY 2009-10Allowed

The Tribunal held that the assessment order was bad in law and void-ab-initio because the Assessing Officer failed to obtain the mandatory prior approval from the administrative Commissioner before making additions outside the CASS scope. Consequently, the assessment order was quashed.

KLAUS MULTIPARKING SYSTEM PVT.LTD,PUNE vs DEPUTY COMMISSIONER OF INCOME TAX, PUNE

ITA 864/PUN/2017[2013-14]Status: Disposed28 Jun 2019AY 2013-14

INCOME TAX OFFICER vs M/S. SHAH BAFNA ASSOCIATES, PUNE

ITA 181/PUN/2017[2012-13]Status: Disposed28 Jun 2019AY 2012-13Dismissed

The Tribunal held that the assessee is entitled to a pro-rata deduction under Section 80IB(10) for the completed flats, following a previous precedent. The Revenue's appeals were dismissed.

RAJESH G. GARGATTE,PUNE vs INCOME TAX OFFICER, PUNE

ITA 262/PUN/2017[2009-10]Status: Disposed28 Jun 2019AY 2009-10Allowed

The Tribunal held that for Assessment Year 2009-10, the amendment to Section 54F by the Finance (No.2) Act, 2014, which restricted the deduction to one residential house, was not applicable. Relying on the Madras High Court decision, the Tribunal ruled that prior to the amendment, multiple flats at the same location were eligible for deduction.

JIJABRAO ANADRAO PATIL,DHULE vs ASSISTANT COMMISSIONER OF INCOME TAX,

ITA 2916/PUN/2016[2010-11]Status: Disposed27 Jun 2019AY 2010-11Remanded

The Tribunal held that an ad-hoc addition of 10% of bogus purchases is not warranted. Instead, the addition should be restricted to the difference between the gross profit rate on genuine purchases and hawala purchases.

BANK OF MAHARASHTRA,PUNE vs DEPUTY COMMISSIONER OF INCOME TAX, PUNE

ITA 635/PUN/2017[2012-13]Status: Disposed27 Jun 2019AY 2012-13Partly Allowed

The Tribunal held that the loss on valuation of HTM securities is allowable, following previous decisions and High Court rulings. Advertisement expenses incurred for publicity were also allowed under Section 37.

BANK OF MAHARASHTRA,PUNE vs DEPUTY COMMISSIONER OF INCOME TAX, PUNE

ITA 634/PUN/2017[2011-12]Status: Disposed27 Jun 2019AY 2011-12Partly Allowed

The Tribunal held that the loss on valuation of HTM securities is allowable, following previous decisions and High Court rulings. Advertisement expenses incurred for publicity were also allowed under Section 37.

SMT. SHRUTI RAHUL MANE,SANGLI vs PRINCIPAL COMMISSIONER OF INCOME-TAX : 1,

ITA 1056/PUN/2016[2010-11]Status: Disposed27 Jun 2019AY 2010-11Allowed

The Tribunal held that the Assessing Officer had conducted reasonable inquiries and taken a possible view, thus the assessment order was not erroneous. The amendment to Section 263 was also held to be prospective and not applicable to the assessment year under appeal.

DEPUTY COMMISSIONER OF INCOME TAX vs GENUINE SEEDS PVT.LTD., PUNE

ITA 2754/PUN/2016[2012-13]Status: Disposed27 Jun 2019AY 2012-13Dismissed

The Tribunal held that the activity of growing hybrid seeds is agricultural in nature, following the jurisdictional High Court's decision in CIT vs. Ajeet Seeds Ltd. Therefore, the assessee is entitled to claim exemption under Section 10(1) of the Act.

PIMPRI CHINCHWAD NEW TOWN DEVELOPMENT AUTHORITY,PUNE vs ASSISTANT COMMISSIONER OF INCOME-TAX,

ITA 929/PUN/2014[2003-04]Status: Disposed27 Jun 2019AY 2003-04Partly Allowed

The Tribunal held that lease premiums received by the assessee are revenue receipts and taxable. However, it allowed the grounds of appeal on merits concerning the deduction of costs/depreciation on leased assets, following the matching principle.

M/S. SAVA HEALTHCARE LTD,PUNE vs ASSISTANT COMMISSIONER OF INCOME TAX, PUNE

ITA 1062/PUN/2017[2007-08]Status: Disposed27 Jun 2019AY 2007-08Allowed

The Tribunal held that the DRP exceeded its jurisdiction by benchmarking new transactions not examined by the TPO and by making adjustments beyond its powers. The assessment order was deemed invalid and bad in law.

INCOME-TAX OFFICER vs PIMPRI CHINCHWAD NEW TOWN DEVELOPMENT AUTHORITY, PUNE

ITA 944/PUN/2014[2004-05]Status: Disposed27 Jun 2019AY 2004-05Partly Allowed

The Tribunal held that lease premiums received by the assessee are revenue receipts and taxable. However, it allowed the grounds of appeal on merits concerning the deduction of costs/depreciation on leased assets, following the matching principle.

PIMPRI CHINCHWAD NEW TOWN DEVELOPMENT AUTHORITY,PUNE vs ASSISTANT COMMISSIONER OF INCOME-TAX,

ITA 931/PUN/2014[2005-06]Status: Disposed27 Jun 2019AY 2005-06Partly Allowed

The Tribunal held that lease premiums received by the assessee are revenue receipts and taxable. However, it allowed the grounds of appeal on merits concerning the deduction of costs/depreciation on leased assets, following the matching principle.

GULAB MAHARU BADGUJAR (HUF),THANE vs ADDITIONAL COMMISSIONER OF INCOME-TAX, NASHIK

ITA 768/PUN/2017[2011-12]Status: Disposed27 Jun 2019AY 2011-12Allowed

The Tribunal held that the revisionary proceedings exercised by the CIT under Section 263 were incorrect. Consequently, the consequential order passed by the AO did not survive.

SAJ TEST PLANT PRIVATE LIMITED,PUNE vs JOINT COMMISSIONER OF INCOME TAX, PUNE

ITA 690/PUN/2017[2010-11]Status: Disposed27 Jun 2019AY 2010-11Allowed

The Tribunal held that an ad-hoc disallowance of foreign travel expenses is uncalled for when the travel is undertaken by employees/directors for business purposes and no family members accompanied them. The method of disallowance without a specific basis is unsustainable.

PIMPRI CHINCHWAD NEW TOWN DEVELOPMENT AUTHORITY,PUNE vs ASSISTANT COMMISSIONER OF INCOME-TAX,

ITA 930/PUN/2014[2004-05]Status: Disposed27 Jun 2019AY 2004-05Partly Allowed

The Tribunal held that lease premiums received by the assessee are revenue receipts and taxable. However, it allowed the grounds of appeal on merits concerning the deduction of costs/depreciation on leased assets, following the matching principle.

PRIMA PRIVATE LTD,PUNE vs DEPUTY COMMISSIONER OF INCOME TAX, PUNE

ITA 539/PUN/2017[2009-10]Status: Disposed27 Jun 2019AY 2009-10Allowed

The Tribunal held that the penalty was unsustainable as the assessee voluntarily corrected the mistake in good faith before assessment, demonstrating honesty. The correction was not due to the Assessing Officer's efforts.

PIMPRI CHINCHWAD NEW TOWN DEVELOPMENT AUTHORITY,PUNE vs ASSISTANT COMMISSIONER OF INCOME-TAX,

ITA 932/PUN/2014[2008-09]Status: Disposed27 Jun 2019AY 2008-09Partly Allowed

The Tribunal held that lease premiums received by the assessee are revenue receipts and taxable. However, it allowed the grounds of appeal on merits concerning the deduction of costs/depreciation on leased assets, following the matching principle.

M/S. SAVA HEALTHCARE LTD,PUNE vs ASSISTANT COMMISSIONER OF INCOME TAX, PUNE

ITA 1065/PUN/2017[2010-11]Status: Disposed27 Jun 2019AY 2010-11Allowed

The Tribunal held that the DRP exceeded its jurisdiction by benchmarking new transactions not examined by the TPO and by making adjustments beyond its powers. The assessment order was deemed invalid and bad in law.

SAJ TEST PLANT PRIVATE LIMITED,PUNE vs DEPUTY COMMISSIONER OF INCOME TAX, PUNE

ITA 691/PUN/2017[2013-14]Status: Disposed27 Jun 2019AY 2013-14Allowed

The Tribunal held that an ad-hoc disallowance of foreign travel expenses is uncalled for when the travel is undertaken by employees/directors for business purposes and no family members accompanied them. The method of disallowance without a specific basis is unsustainable.

AQUAPHARM CHEMICALS PVT.LTD.,PUNE vs DEPUTY COMMISSIONER OF INCOME TAX,

ITA 2633/PUN/2016[2012-13]Status: Disposed27 Jun 2019AY 2012-13Allowed

The Tribunal held that the premium paid to LIC for the group gratuity scheme is deductible as the scheme was approved. Disallowances on professional fees were held to be academic due to Section 10B deductions. Interest received from MIDC/MSEB was held to be business income eligible for Section 10B deduction. The re-working of profits under Section 10B(7) was not sustained due to lack of transfer of goods/services at non-market value.

INCOME TAX OFFICER, PUNE vs GENUINE SEEDS PVT.LTD, PUNE

ITA 793/PUN/2017[2013-14]Status: Disposed27 Jun 2019AY 2013-14Dismissed

The Tribunal held that the activity of growing hybrid seeds is agricultural in nature, following the jurisdictional High Court's decision in CIT vs. Ajeet Seeds Ltd. Therefore, the assessee is entitled to claim exemption under Section 10(1) of the Act.

INCOME-TAX OFFICER, WARD - 12(1), PUNE vs M/S. SHAMBHU PROPERTIES, PUNE

ITA 717/PUN/2018[2014-15]Status: Disposed27 Jun 2019AY 2014-15Dismissed

The Tribunal dismissed the Revenue's appeals without expressing an opinion on the merits. This was based on a CBDT circular stating that departmental appeals should not be filed if the tax effect is below a certain threshold, which was the case here.

INCOME-TAX OFFICER vs PIMPRI CHINCHWAD NEW TOWN DEVELOPMENT AUTHORITY, PUNE

ITA 945/PUN/2014[2005-06]Status: Disposed27 Jun 2019AY 2005-06Partly Allowed

The Tribunal held that lease premiums received by the assessee are revenue receipts and taxable. However, it allowed the grounds of appeal on merits concerning the deduction of costs/depreciation on leased assets, following the matching principle.

AQUAPHARM CHEMICALS PVT.LTD.,PUNE vs DEPUTY COMMISSIONER OF INCOME TAX,

ITA 2631/PUN/2016[2010-11]Status: Disposed27 Jun 2019AY 2010-11Allowed

The Tribunal held that the premium paid to LIC for the group gratuity scheme is deductible as the scheme was approved. Disallowances on professional fees were held to be academic due to Section 10B deductions. Interest received from MIDC/MSEB was held to be business income eligible for Section 10B deduction. The re-working of profits under Section 10B(7) was not sustained due to lack of transfer of goods/services at non-market value.

GULAB MAHARU BADGUJAR (HUF),THANE vs ADDITIONAL COMMISSIONER OF INCOME-TAX, NASHIK

ITA 765/PUN/2017[2006-07]Status: Disposed27 Jun 2019AY 2006-07Allowed

The Tribunal held that the revisionary proceedings exercised by the CIT under Section 263 were incorrect. Consequently, the consequential order passed by the AO did not survive.

M/S. SAVA HEALTHCARE LTD,PUNE vs ASSISTANT COMMISSIONER OF INCOME TAX, PUNE

ITA 1067/PUN/2017[2012-13]Status: Disposed27 Jun 2019AY 2012-13Allowed

The Tribunal held that the DRP exceeded its jurisdiction by benchmarking new transactions not examined by the TPO and by making adjustments beyond its powers. The assessment order was deemed invalid and bad in law.

JIJABRAO ANANDRAO PATIL,DHULE vs ASSISTANT COMMISSIONER OF INCOME TAX,

ITA 2917/PUN/2016[2011-12]Status: Disposed27 Jun 2019AY 2011-12Remanded

The Tribunal held that an ad-hoc addition of 10% of bogus purchases is not warranted. Instead, the addition should be restricted to the difference between the gross profit rate on genuine purchases and hawala purchases.

DEPUTY COMMISSIONER OF INCOME-TAX vs M/S. GKN SINTER METALS PVT. LTD., PUNE

ITA 2687/PUN/2016[2004-05]Status: Disposed27 Jun 2019AY 2004-05Dismissed

The Tribunal upheld the Commissioner's (Appeals) decision, finding no infirmity in the direction to recalculate profits by allocating head office expenses proportionally to turnover. The partial relief granted to the assessee was sustained.

MADANLAL BASTIMAL CHORDIYA,NASHIK vs ASSISTANT COMMISSIONER OF INCOME TAX,

ITA 2944/PUN/2016[2013-14]Status: Disposed27 Jun 2019AY 2013-14Partly Allowed

The Tribunal held that the disallowance under Section 40A(3) was not justified. It noted that the purchase price of various plots of land was paid before the Registering Authorities in earlier years, and none of these purchases fell within the accounting period under consideration, except for one plot which resulted in a loss. Therefore, no disallowance could be made under Section 40A(3) for the current year as no such purchases were made. The Tribunal also found merit in the assessee's contention that the payments were made before the Sub-Registrar and the transactions were genuine, rendering the disallowance invalid. Accordingly, the order of the CIT(A) was reversed, and the addition of Rs. 26,46,185/- was deleted. Regarding the quantum of business income, the Tribunal observed that the assessee had purchased lands in earlier years (2008-2011) and claimed the sale proceeds as business income. However, the assessee also claimed that these assets were converted into stock-in-trade on 01.04.2012, leading to capital gains under Section 45(2) and subsequent business gains. Since neither the AO nor the CIT(A) had properly adjudicated this complex issue, the Tribunal remitted the matter back to the AO to determine the fair market value as on 01.04.2012, ascertain capital gains, and compute the business income on the sale of stock-in-trade, granting the assessee a reasonable opportunity of hearing.

M/S. GARUDA PLANT PRODUCT LTD,NASHIK vs ASSISTANT COMMISSIONER OF INCOME TAX,

ITA 2966/PUN/2016[2013-14]Status: Disposed27 Jun 2019AY 2013-14Partly Allowed

The Tribunal held that the investment in shares was for the purpose of business and that the disallowance of interest under Section 36(1)(iii) was not justified. For the second assessment year, the Tribunal also allowed the additional ground regarding disallowance under Section 14A as no exempt income was earned.

AQUAPHARM CHEMICALS PVT.LTD.,PUNE vs DEPUTY COMMISSIONER OF INCOME TAX,

ITA 2632/PUN/2016[2011-12]Status: Disposed27 Jun 2019AY 2011-12Allowed

The Tribunal held that the premium paid to LIC for the group gratuity scheme is deductible as the scheme was approved. Disallowances on professional fees were held to be academic due to Section 10B deductions. Interest received from MIDC/MSEB was held to be business income eligible for Section 10B deduction. The re-working of profits under Section 10B(7) was not sustained due to lack of transfer of goods/services at non-market value.

CIPY POYURETHANES PVT. LTD.,PUNE vs DEPUTY COMMISSIONER OF INCOME-TAX,

ITA 2181/PUN/2016[2010-11]Status: Disposed27 Jun 2019AY 2010-11Partly Allowed

The Tribunal allowed depreciation on the building, noting that an architect's completion certificate dated March 2, 2010, was provided and the building was used for business. Depreciation on furniture and fixtures was also allowed as invoices were dated prior to March 31, 2010, indicating prior use.

INCOME -TAX OFFICER, PUNE vs M/S. SHAMBHU PROPERTIES, PUNE

ITA 1261/PUN/2017[2013-14]Status: Disposed27 Jun 2019AY 2013-14Dismissed

The Tribunal dismissed the Revenue's appeals without expressing an opinion on the merits. This was based on a CBDT circular stating that departmental appeals should not be filed if the tax effect is below a certain threshold, which was the case here.

M/S. SANDVIK SYSTEMS DEVELOPMENT AB,PUNE vs DEPUTY COMMISSIONER OF INCOME TAX, PUNE

ITA 190/PUN/2017[2010-11]Status: Disposed27 Jun 2019AY 2010-11Partly Allowed

The Tribunal held that the payment for software user access does not constitute 'Royalty' under the DTAA. Similarly, software maintenance charges were not considered 'Fees for Technical Services' as they did not 'make available' technical knowledge to the recipient.

DEPUTY COMMISSIONER OF INCOME TAX, PUNE vs BANK OF MAHARASHTRA, PUNE

ITA 581/PUN/2017[2012-13]Status: Disposed27 Jun 2019AY 2012-13Partly Allowed

The Tribunal held that the loss on valuation of HTM securities is allowable, following previous decisions and High Court rulings. Advertisement expenses incurred for publicity were also allowed under Section 37.

ASSISTANT COMMISSIONER OF INCOME TAX vs JIJABRAO ANANDRAO PATIL, DHULE

ITA 243/PUN/2017[2010-11]Status: Disposed27 Jun 2019AY 2010-11Remanded

The Tribunal held that an ad-hoc addition of 10% of bogus purchases is not warranted. Instead, the addition should be restricted to the difference between the gross profit rate on genuine purchases and hawala purchases.

ASSISTANT COMMISSIONER OF INCOME TAX vs JIJABRAO ANANDRAO PATIL, DHULE

ITA 244/PUN/2017[2011-12]Status: Disposed27 Jun 2019AY 2011-12Remanded

The Tribunal held that an ad-hoc addition of 10% of bogus purchases is not warranted. Instead, the addition should be restricted to the difference between the gross profit rate on genuine purchases and hawala purchases.

AQUAPHARM CHEMICALS PVT.LTD.,PUNE vs DEPUTY COMMISSIONER OF INCOME TAX, PUNE

ITA 357/PUN/2017[2011-12]Status: Disposed27 Jun 2019AY 2011-12Allowed

The Tribunal held that the premium paid to LIC for the group gratuity scheme is deductible as the scheme was approved. Disallowances on professional fees were held to be academic due to Section 10B deductions. Interest received from MIDC/MSEB was held to be business income eligible for Section 10B deduction. The re-working of profits under Section 10B(7) was not sustained due to lack of transfer of goods/services at non-market value.

DEPUTY COMMISSIONER OF INCOME TAX, PUNE vs BANK OF MAHARASHTRA, PUNE

ITA 579/PUN/2017[2011-12]Status: Disposed27 Jun 2019AY 2011-12Partly Allowed

The Tribunal held that the loss on valuation of HTM securities is allowable, following previous decisions and High Court rulings. Advertisement expenses incurred for publicity were also allowed under Section 37.

M/S. SAVA HEALTHCARE LTD,PUNE vs ASSISTANT COMMISSIONER OF INCOME TAX, PUNE

ITA 1064/PUN/2017[2009-10]Status: Disposed27 Jun 2019AY 2009-10Allowed

The Tribunal held that the DRP exceeded its jurisdiction by benchmarking new transactions not examined by the TPO and by making adjustments beyond its powers. The assessment order was deemed invalid and bad in law.

INCOME TAX OFFICER, KOLHAPUR vs M/S. RDS CONSTRUCTION (JV), PUNE

ITA 623/PUN/2017[2012-13]Status: Disposed27 Jun 2019AY 2012-13Dismissed

The Tribunal held that the issue was covered by a previous decision in the assessee's own case, which followed the Supreme Court's judgment in CIT vs. Rajdeep & PMCC Infrastructure Ltd. Therefore, Section 40(a)(ia) read with Section 194C was not applicable to payments made by the assessee to its constituents.

M/S. SAVA HEALTHCARE LTD,PUNE vs ASSISTANT COMMISSIONER OF INCOME TAX, PUNE

ITA 1066/PUN/2017[2011-12]Status: Disposed27 Jun 2019AY 2011-12Allowed

The Tribunal held that the DRP exceeded its jurisdiction by benchmarking new transactions not examined by the TPO and by making adjustments beyond its powers. The assessment order was deemed invalid and bad in law.

M/S. SAVA HEALTHCARE LTD,PUNE vs ASSISTANT COMMISSIONER OF INCOME TAX, PUNE

ITA 1063/PUN/2017[2008-09]Status: Disposed27 Jun 2019AY 2008-09Allowed

The Tribunal held that the DRP exceeded its jurisdiction by benchmarking new transactions not examined by the TPO and by making adjustments beyond its powers. The assessment order was deemed invalid and bad in law.