ITAT Pune Judgments — September 2024

The Tribunal held that the excess stock and cash offered to tax constituted disclosed business income, not unexplained investment. Therefore, the assessment order was not erroneous, and the PCIT's revisionary powers were wrongly invoked.

The Tribunal condoned the delay in filing the appeal and restored the issue to the Assessing Officer. The assessee was granted one opportunity to substantiate their case.

The Tribunal held that the excess stock and cash offered to tax constituted disclosed business income, not unexplained investment. Therefore, the assessment order was not erroneous, and the PCIT's revisionary powers were wrongly invoked.

The Tribunal held that the NFAC's restriction of the gross profit addition to 0.5% for undisclosed business turnover was arbitrary and not based on evidence. Consequently, the NFAC's order was vacated, and the assessment order was restored.

The Tribunal held that the Assessing Officer (AO) failed to record findings on the assessee's submissions and did not establish how inaccurate particulars were furnished. The grounds raised by the Revenue regarding revised returns were not discussed in the penalty order.

The Tribunal held that the assessee was given an unreasonably short period to comply with the notice u/s 142(1), which violates the principles of natural justice. Therefore, the assessment order was set aside.

The Tribunal, considering the circumstances and in the interest of justice, restored the issue to the Assessing Officer. The assessee was granted one more opportunity to substantiate its case with requisite details.

The Tribunal held that the literal interpretation of Section 80G(5) proviso clause (iii) leads to an absurd and unjust result for institutions that commenced activities before provisional approval. They interpreted 'earlier' as 'later' to allow such institutions to apply within six months prior to the expiry of provisional approval.

The Tribunal restored the issue to the CIT(A)/NFAC to decide the penalty appeal afresh after the quantum appeal is decided. The CIT(A)/NFAC was directed to provide an opportunity of being heard to the assessee.

The Tribunal condoned the delay in filing the appeals. It held that the notice issued by the CIT(Exemption) provided an unreasonably short period for compliance, violating principles of natural justice.

The Tribunal condoned the delay in filing the appeals. It held that the notices issued by the CIT(Exemption) provided an unreasonably short period for compliance, violating principles of natural justice.

The Tribunal condoned the delay, finding sufficient cause. It held that the CIT(A)'s ex-parte order violated Section 250(6) of the Act by not providing reasons for the decision. The matter was restored to the CIT(A) for fresh adjudication.

The Tribunal found that while the assessee claimed the increase was due to merging personal and business balance sheets, the available income after taxes and presumed personal expenses was insufficient to explain the entire amount added to the opening capital. Therefore, a portion of the addition was considered unexplained.

The Tribunal found that there was a reasonable cause for the delay in filing the appeal. It directed the CIT(A) to condone the delay and decide the appeal on its merits, emphasizing substantial justice over procedural technicalities.

The Tribunal held that the penalty on the returned income of Rs. 13,06,380/- was not sustainable as it did not represent specified assets under Section 271(1)(c) Explanation-5A. For the subsequent assessment year, the Tribunal quashed the penalty under Section 271(1)(c) as Section 271AAA was the applicable provision.

The Tribunal held that cooperative societies engaged in providing credit facilities to their members are entitled to deduction under Section 80P(2)(a)(i) on interest income from deposits. It also held that interest income earned on investments with other cooperative societies is eligible for deduction under Section 80P(2)(d).

The Tribunal allowed the deletion of additions related to professional fees paid to Dr. Rashmi Kochar, finding sufficient evidence. However, it upheld the addition for petrol and diesel expenses due to lack of specific evidence. The addition for salary and wages was also directed to be deleted.

The Tribunal held that the enhancement in disallowance made through the Section 154 rectification order was not sustainable in law as it was made without issuing a statutory notice under Section 154(3) of the Act. The earlier notice cited by the revenue was issued before the initial processing under Section 143(1).

The Tribunal condoned the delay in filing the appeal, finding sufficient cause. It restored the matter to the CIT(E) for fresh consideration, directing the assessee to provide all required details and granting an adequate opportunity of being heard.

The Tribunal quashed the proceedings under Section 263 initiated by the PCIT. Consequently, the order passed by the Assessing Officer and upheld by the CIT(A)/NFAC was rendered infructuous.

The Tribunal held that the due date for deposit of ESIC contributions, as per the relevant statute, is the determining factor for deductibility, not the due date for filing the return. The landmark decision in Checkmate Services P. Ltd. was cited.

The Tribunal held that the payment received by the assessee was a voluntary, ex-gratia compensation for the loss of employment due to the plant closure, not in lieu of salary. Therefore, it is a capital receipt and not taxable under Section 17(3)(i).

The Tribunal condoned the delay in filing the appeals before the CIT(A)-NFAC, considering the impact of the Covid-19 pandemic and the exclusion of the limitation period. The matter was restored to the Assessing Officer for fresh adjudication.

The Tribunal held that cooperative societies engaged in providing credit facilities to their members are entitled to deduction under Section 80P(2)(a)(i) on interest income from deposits. It also held that interest income earned on investments with other cooperative societies is eligible for deduction under Section 80P(2)(d).

The Tribunal upheld the CIT(A)'s order, dismissing the Revenue's grounds of appeal. Regarding the first issue, the Tribunal found that the CIT(A)'s order was fair and reasonable. It noted that the assessee had presented arguments that each undertaking was independent, maintained separate accounts, and filed separate audit reports. The Tribunal also observed that the issue had been decided in favour of the assessee in their own case by the ITAT for earlier assessment years, and the Revenue had not pointed out any distinguishing features or brought any contrary material from higher judicial forums. The Tribunal held that merely because the Revenue challenged a favourable decision before the High Court, which was pending, was not a basis for taking a contrary view. The Tribunal also addressed the second issue concerning the initial assessment year for claiming deduction under section 80IA, referencing a previous decision of the Tribunal in the assessee's own case. The Tribunal held that the initial assessment year is the year in which the deduction was first claimed by the assessee after exercising their option under section 80IA(2), relying on decisions of the ITAT and the Madras High Court. The Revenue could not bring any contrary decision. Therefore, the relief granted by the CIT(A) on this issue was also upheld.

The Tribunal condoned the delay in filing the appeals before the CIT(A)-NFAC, considering the impact of the Covid-19 pandemic and the exclusion of the limitation period. The matter was restored to the Assessing Officer for fresh adjudication.

The Tribunal found that the AO did not verify the bank statement and the CIT(A) failed to adjudicate a ground raised by the assessee. Therefore, the order of the CIT(A) was set aside for de-novo adjudication.

The Tribunal upheld the CIT(A)'s order, dismissing the Revenue's grounds of appeal. Regarding the first issue, the Tribunal found that the CIT(A)'s order was fair and reasonable. It noted that the assessee had presented arguments that each undertaking was independent, maintained separate accounts, and filed separate audit reports. The Tribunal also observed that the issue had been decided in favour of the assessee in their own case by the ITAT for earlier assessment years, and the Revenue had not pointed out any distinguishing features or brought any contrary material from higher judicial forums. The Tribunal held that merely because the Revenue challenged a favourable decision before the High Court, which was pending, was not a basis for taking a contrary view. The Tribunal also addressed the second issue concerning the initial assessment year for claiming deduction under section 80IA, referencing a previous decision of the Tribunal in the assessee's own case. The Tribunal held that the initial assessment year is the year in which the deduction was first claimed by the assessee after exercising their option under section 80IA(2), relying on decisions of the ITAT and the Madras High Court. The Revenue could not bring any contrary decision. Therefore, the relief granted by the CIT(A) on this issue was also upheld.

The Tribunal condoned the 7-day delay in filing the appeal before the CIT(A)-NFAC. The appeal was restored to the CIT(A) for fresh adjudication on merits.

The Tribunal condoned the delay, finding sufficient cause. It held that the CIT(A) violated Section 250(6) by not deciding the appeal on merits and restoring the matter to the CIT(A) for fresh adjudication.

The Tribunal held that cooperative banks are also considered cooperative societies. Therefore, interest earned from deposits with them is eligible for deduction either under Section 80P(2)(a)(i) as business income or under Section 80P(2)(d) as income from investments with cooperative societies.

The Tribunal restored the issue to the file of the CIT(Exemption), granting the assessee one more opportunity to submit the required details and substantiate its case.

The Tribunal held that the penalty on the returned income of Rs. 13,06,380/- was not sustainable as it did not represent specified assets under Section 271(1)(c) Explanation-5A. For the subsequent assessment year, the Tribunal quashed the penalty under Section 271(1)(c) as Section 271AAA was the applicable provision.

The Tribunal held that interest income earned by a cooperative society from investments in other cooperative banks is eligible for deduction under section 80P(2)(d). Following various jurisdictional bench decisions, the Tribunal allowed the deduction claimed by the assessee.

The Tribunal condoned the delay in filing the appeals before the CIT(A)-NFAC, considering the impact of the Covid-19 pandemic and the exclusion of the limitation period. The matter was restored to the Assessing Officer for fresh adjudication.

The Tribunal held that interest income earned by a cooperative society from its investments in a cooperative bank is eligible for deduction under Section 80P(2)(d). The Tribunal followed its own previous decisions and High Court rulings that supported this view, even in the presence of conflicting judgments.

The Tribunal noted that the sale deed clearly indicated the sale consideration of Rs. 12,00,000 was received between April and May 2015, prior to the demonetization period. Therefore, the addition made by the AO was justified.

The tribunal condoned the delay of 64 days in filing the appeals before the CIT(A)-NFAC. The appeals were restored to the CIT(A)-NFAC for fresh adjudication on merits.

The tribunal held that the NFAC did not properly deal with the explanation for the delay and ought to have condoned it and decided the appeal on merits. The order of the NFAC was set aside.

The Tribunal noted that the issue of whether entrance fees are capital or revenue receipts requires examination of the society's bye-laws and RBI circulars. Following a previous order in the assessee's own case, the issue was remanded.

The Tribunal held that the reassessment proceedings initiated by the AO were not in accordance with law as they were based on suspicion rather than a belief that income chargeable to tax had escaped assessment. Consequently, the reassessment proceedings and the consequential order were quashed.

The Tribunal noted that a coordinate bench had already dismissed the assessee's former appeal on the same substantive grounds. Therefore, this current appeal was also dismissed.

The Tribunal held that the excess stock was due to unaccounted purchases for which purchase bills were missing at the time of survey. Since the expenditure was not claimed as a deduction and the stock was only on account of these purchases, no addition was warranted.

The Tribunal held that interest income earned by a cooperative society from its investments in cooperative banks is eligible for deduction under Section 80P(2)(d). The Principal CIT erred in exercising revisional jurisdiction to disallow this deduction.

The tribunal condoned the delay of 64 days in filing the appeals before the CIT(A)-NFAC. The appeals were restored to the CIT(A)-NFAC for fresh adjudication on merits.

The Tribunal found no substance in the Revenue's arguments, noting that the CIT(A) did not admit additional evidence in violation of Rule 46A. The Tribunal also observed no cash deposits were made that would trigger Section 69, as the assessee had merely rolled over matured deposits.

The Tribunal held that the CIT(A)/NFAC should have decided the appeal on merits even if it was ex parte. Since the NFAC failed to do so, the matter is remitted back for fresh disposal on merits.

The Tribunal held that the intimation under section 143(1) for AY 2018-19 did not reject the assessee's claim for unabsorbed depreciation. Therefore, the disallowance by the lower authorities was not sustainable in law.

The Tribunal held that the Section 153D approval granted by the revenue was conditional and common for all the impugned assessment years (2008-09 to 2014-15). Citing *Pr. CIT vs. Sapna Gupta*, *PCIT vs. Siddharth Gupta*, *PCIT vs. Shiv Kumar Nayyar*, *SMW Ispat (P.) Ltd. vs. ACIT*, and *ACIT vs. Serajuddin & Co.*, the Tribunal found that Section 153D approval must be granted on a standalone basis after perusing the entire records for each assessment year, rather than as a mechanical exercise. A conditional approval is not sustainable in law. Consequently, the Section 153A assessments, all dated March 22, 2016, were deemed not sustainable and were quashed. The penalty proceedings under Section 271 were also quashed as they were consequential to the invalid quantum assessment. All other pleadings on merits were rendered academic. The appeals were allowed in terms.

The Tribunal noted that clauses (e) and (f) of Section 80IB(10) were inserted by the Finance (No.2) Act, 2009, with effect from 01.04.2010. It referred to the Hon'ble Supreme Court's decision in CIT vs. Mandavi Builders (supra), which held that these clauses are prospective and apply to transactions entered into on or after 01.04.2010. The Supreme Court observed that if a residential unit was allotted prior to 01.04.2010, the assessee would be entitled to the deduction even if conveyance was registered subsequently. The Tribunal also cited the Ahmedabad Bench's decision in Patel Jashwantlal A vs. ITO (supra), which held that the amendment restricting allotment of more than one unit to the same person is not applicable to allotments made prior to 01.04.2010, and where payments were made before the amendment, the claim for deduction should be allowed. Since the lower authorities had not verified the payment details made prior to the amendment, the Tribunal restored the issue to the Assessing Officer. The AO was directed to verify the details of payments made on the basis of bookings and allotments prior to 01.04.2010 and, if substantial payments were made, to allow the deduction in light of the cited precedents. The grounds raised by the assessee were allowed for statistical purposes.