ITAT Raipur Judgments — April 2018

The Tribunal held that the disallowance of plinth construction expenses was not justified, especially since similar expenses were allowed for a co-owner. Regarding the other sources income, the Tribunal found that since the assessee had voluntarily disclosed and paid tax on it, it should be accepted as is, and treating it as unexplained expenditure was incorrect.

The Tribunal held that Section 54B does not require the assessee to derive agricultural income, only that the land be used for agricultural purposes. It also ruled that Section 68 is not applicable to opening credit balances and that the AO's addition based on a recast trading account was without basis.

The Tribunal held that the proviso to Section 2(15) was not applicable to the assessee's case. The assessee's activities were not solely commercial, and there was no material to suggest deviation from its charitable objects.

The Tribunal held that the ex-parte assessment order was valid. However, it directed the Assessing Officer to accept the net profit rate declared by the assessee, considering its past history. The claim for depreciation was allowed, and the disallowance of interest was restored to the Assessing Officer for fresh adjudication.

The Tribunal held that the assessment order had to be quashed based on Supreme Court precedent regarding the right to cross-examination. The Tribunal found the share transactions to be genuine, supported by documentary evidence like broker contract notes and demat account transfers.

The Tribunal restored the matter to the AO, directing the assessee to provide proof that the NBFCs included the finance charges in their income. The AO was instructed to verify this and decide the issue afresh.

The Tribunal held that the assessee had discharged its onus under Section 68 as the identity of the donor was established, transactions were through banking channels, and the source of funds in the donor's account was also evident from bank statements. The proviso to Section 68 was not applicable for the assessment year in question.

The Tribunal found that the lower authorities ignored direct evidence such as confirmations, bank accounts, and the attendance of a director from the investor companies. The AO's disbelief was based on irrelevant questions, and the Tribunal considered the evidence sufficient to justify the share application money.

The Tribunal held that indirect expenses debited to the Profit and Loss account were not pre-operative and should be allowed. It also found that additions based on loose papers from a third party, without corroborative evidence or proper inquiry, were unsustainable.