ITAT Raipur Judgments — December 2022

The Tribunal held that the AO erred by not conducting independent inquiries (like summoning donors or calling for information) to verify the genuineness of the gifts before treating them as unexplained cash credits. The matter was restored to the AO for fresh adjudication.

The Tribunal held that the AO failed to provide evidence that the commission paid was excessive or unreasonable. The approach of restricting commission based solely on sales increase compared to the previous year was deemed fallacious.

The Tribunal held that the assessment order was liable to be quashed because the notice under Section 148 was issued by a non-jurisdictional officer. Consequently, the subsequent assessment framed by the jurisdictional AO was invalid.

The Tribunal found that the CIT(A) erred in not considering the additional evidence (confirmations from commission agents) submitted by the assessee under Rule 46A. The matter was restored to the CIT(A) for re-adjudication after considering this evidence.

The Tribunal held that the assessee failed to provide details for allocating significant expenses like employee benefits and work contract costs to the housing project. Since the assessee did not discharge the onus to prove no diversion of expenses, the AO's apportionment based on receipts was upheld.

The Tribunal held that the Assessing Officer failed to adopt the prescribed yardsticks for determining the reasonableness of director's remuneration. The disallowance was vacated as the assessee provided evidence of benefits derived from the directors' full-time services.

The Tribunal directed the AO to verify the total build-up area of two flats sold jointly, considering them as one unit if they share a single kitchen and entrance. If the area exceeds 1500 sq.ft, the deduction should be recalculated on a pro-rata basis, excluding the excess units.

The Tribunal admitted additional evidence regarding the imitation jewellery business. It held that part of the cash withdrawals could be considered for sourcing the deposits and restored the matter to the AO for re-adjudication after considering the new evidence.

The Tribunal held that the assessee failed to substantiate the authenticity of the purchases. However, the arbitrary 25% disallowance was not justified. The addition should be restricted to bringing the Gross Profit (GP) rate of the bogus purchases in line with that of genuine purchases.

The Tribunal allowed Ground No. 3 and 4, dismissing Ground No. 2 and 6. Ground No. 5 was set-aside to the AO for verification of additional evidence. The Tribunal followed its previous order for AY 2010-11 regarding security deposits.

The Tribunal noted that the CIT(A) had not decided the first two grounds of appeal. Therefore, the matter was remanded back to the CIT(A) for adjudication on these specific grounds.

The Tribunal held that the assessee had an admitted default in deducting TDS on finance charges paid to NBFCs. Since the assessee failed to satisfy the authorities that the taxes were paid by the deductees or provide a good and sufficient reason for the default, the levy of demand and interest was upheld.

The Tribunal held that the assessee had an admitted default in deducting TDS on finance charges paid to NBFCs. Since the assessee failed to satisfy the authorities that the taxes were paid by the deductees or provide a good and sufficient reason for the default, the levy of demand and interest was upheld.

The Tribunal upheld the disallowance of commission and job work expenses as the assessee failed to provide adequate evidence to prove the genuineness of these payments. However, the ad-hoc disallowance on vehicle and telephone expenses was reduced.

The Tribunal found that the claim for capital loss was raised for the first time before the appellate authority and was not claimed in the belated return. The CIT(A) had denied the claim without proper appreciation of facts.

The Tribunal noted that the appellant failed to comply with directions despite opportunities, but acknowledged potential technical issues with submissions. The principle of natural justice was emphasized.

The Tribunal held that the assessee had an admitted default in deducting TDS on finance charges paid to NBFCs. Since the assessee failed to satisfy the authorities that the taxes were paid by the deductees or provide a good and sufficient reason for the default, the levy of demand and interest was upheld.

The Tribunal held that bank accounts cannot be considered 'books of account' for the purpose of Section 68 additions for simple cash deposits. Furthermore, the AO failed to demonstrate how the interest expenditure was related to earning exempt income, making the disallowance under Section 14A unsustainable.

The Tribunal upheld the AO's assumption of jurisdiction under Section 147, finding sufficient material to form a belief that income had escaped assessment. The Tribunal also found that the purchases were not genuine, as the supplier was involved in iron and steel trading and the vehicle details in the bills were incompatible with the claimed load.

The Tribunal held that the addition for bogus purchases should be restricted to the extent of profit the assessee would have made by procuring goods at a discounted value from the open market, by bringing the Gross Profit (GP) rate of bogus purchases to the same rate as genuine purchases.

The Tribunal held that income from warehousing activities should be treated as business income, not income from house property. This decision was based on previous rulings in the assessee's own case and Supreme Court judgments.

The Tribunal held that the addition for bogus purchases should be restricted to the extent of profit the assessee would have made by procuring goods at a discounted value from the open market, by bringing the Gross Profit (GP) rate of bogus purchases to the same rate as genuine purchases.

The Tribunal upheld the addition of Rs.2,05,699/- as unexplained money. The assessee failed to substantiate the source of this amount, and the cash book presented was considered an eyewash.

The Tribunal upheld the addition of Rs. 6 lac from the mother's gift, finding it unsubstantiated due to the donor's limited income. The addition of Rs. 3,56,269/- from cash and bank balances was also upheld for lack of evidence.

The tribunal upheld the order treating the assessee as an 'assessee in default' for non-deduction of TDS, as the liability arises at the time of payment. However, the levy of late filing fees under Section 234E was held to be bad in law for the assessment year in question, following precedent.

The Tribunal found that while the registered sale deed amount was Rs. 4 lakhs, the assessee's claim of Rs. 30 lakhs as sale proceeds was supported by certain facts like cheque payments to co-owners and the timing of the deposit. However, due to a lack of irrefutable evidence, the matter was remitted back to the AO for fresh verification.

The Tribunal held that interest income earned by a cooperative society on its investments with a cooperative bank is eligible for deduction under Section 80P(2)(d). The Tribunal also allowed deduction for dividend income received on shares of a cooperative bank.

The Tribunal held that the assessment framed by the jurisdictional AO based on a notice issued by a non-jurisdictional AO is devoid of legal force. Therefore, the assessment order is liable to be quashed for want of valid assumption of jurisdiction.

The Tribunal held that the AO erred by not allowing the assessee to cross-examine Rajnish Jain before relying on his statement. This violated the principles of natural justice, thus the matter was restored to the AO for re-adjudication.

The Tribunal found that the assessee claimed the cash deposits were recorded in his books of account, not directly from agriculture income. It noted that the lower authorities had not properly verified the authenticity of the cash book.

The Tribunal held that the disallowance under Section 143(1) was not sustainable because the amendment to Section 143(1)(a)(v) that enabled such disallowance for Section 80P deductions was effective only from AY 2021-22, and not applicable for AY 2018-19.

The Tribunal held that constructing an additional floor to an existing building does not qualify for deduction under Section 54F, as it is not considered a new residential house. However, the issue of joint ownership of the sold property was remanded to the AO.

The ITAT held that the CIT(A) admitted additional evidence without giving the AO an opportunity to examine and comment on it, violating Rule 46A(3). The matter was restored to the CIT(A) for compliance.

The assessee's representative filed a withdrawal application for the appeal. The Departmental Representative had no objection to the withdrawal.

The Tribunal permitted the assessee to withdraw the appeal as it had opted for the Direct Tax Vivad Se Vishwas Scheme. Consequently, the appeal was dismissed as withdrawn.

The Tribunal held that the income arising from the transfer of the property should be taxed in the hands of the actual owners, not the power of attorney holder who merely facilitated the sale. The assessee had no vested interest in the property beyond his role as an agent.

The Tribunal permitted the withdrawal of the appeal as per the instructions from the Revenue's representative. The appeal was dismissed as withdrawn.

The Tribunal upheld the CIT(A)'s order, remitting the matter to the AO for verification of whether the payees included the interest income in their returns. The Tribunal followed its own previous decisions and the Delhi High Court's ruling on the retrospective applicability of the second proviso to Section 40(a)(ia).

The Tribunal held that the CIT(A) rightly deleted the addition because the ITAT had previously quashed the Section 263 revision order. Since the assessment order was a consequence of the quashed revision order, the assessment order itself did not survive.

The Tribunal admitted an additional ground of appeal concerning the validity of the assessment order due to the alleged non-issuance of a proper notice under Section 143(2) of the Income Tax Act. The Tribunal found that the notices issued were either by a non-jurisdictional AO or beyond the stipulated time period, rendering the assessment invalid.

The Tribunal held that the addition of Rs. 3 lacs made by the Assessing Officer was not justified as the books of account were not specifically rejected and the surrendered income was incorporated. The claim for depreciation on shuttering materials was also allowed.

The Tribunal set aside the order of the CIT(E) and remanded the matter back for denovo adjudication. The assessee was directed to provide all necessary details to the CIT(E).

The Tribunal held that the assessment order was bad in law as it was framed without valid assumption of jurisdiction and proper notice under Section 143(2). The notice was either issued by a non-jurisdictional officer or after the expiry of the stipulated time limit.

The Tribunal dismissed the disallowance under Section 40(a)(ia) due to the assessee's failure to provide necessary certificates. However, it vacated ad-hoc disallowances on fuel, lubricants, repair, and travelling expenses for lack of specific evidence, and remanded the disallowance on transportation charges for re-adjudication.

The Tribunal held that VAT, being a tax, is not covered under the disallowance provisions of Section 40(a)(iib) of the Income Tax Act, 1961, especially in light of the Supreme Court's ruling in Kerala State Beverages Manufacturing & Marketing Corporation Ltd. vs. ACIT. Therefore, the Pr. CIT's revision order was set aside.

The Tribunal held that the levy of late fee under Section 234E for periods prior to June 1, 2015, was not permissible as the Assessing Officer was not empowered to levy such fees while processing TDS statements under Section 200A. The amendment to Section 200A was prospective.

The tribunal held that employees' contributions deducted from salary are held in trust and must be deposited within the statutory due dates to be eligible for deduction. Since the assessee failed to meet this condition, the disallowance was upheld.

The Tribunal held that the levy of late fee under Section 234E for periods prior to June 1, 2015, was not permissible as the Assessing Officer was not empowered to levy such fees while processing TDS statements under Section 200A. The amendment to Section 200A was prospective.

The Tribunal permitted the withdrawal of the appeal as the assessee's claim was subsequently accepted by the AO in the consequential assessment.

The Tribunal held that disallowance of interest expenses was not justified as the assessee had sufficient interest-free funds. Regarding car expenses, the Tribunal found the 20% disallowance to be excessive and restricted it to 10%.