ITAT Rajkot Judgments — January 2018

The Tribunal held that the assessee's activity of dividing land into smaller plots was a one-off measure to facilitate the sale of a long-held capital asset and not an adventure in the nature of trade. The Tribunal agreed with the CIT(A) that the gains should be treated as long-term capital gains.

The Tribunal restored the matter to the file of the CIT(A) for fresh adjudication on merits after giving one more opportunity of hearing to the assessee. The assessee was directed to proactively approach the CIT(A) within 30 days.

The Tribunal upheld the CIT(A)'s decision to restrict the addition on account of on-money to Rs. 4 lakhs, finding no justification to extend it to all flats. It also confirmed the CIT(A)'s allowance of interest paid at 15% to specified persons, deeming it not excessive or unreasonable.

The Tribunal held that the amortization of premium paid on investments by the cooperative bank was allowable. It also dealt with issues related to brought forward losses of an amalgamated bank and commission income.

The Tribunal found that the assessee, being elderly and having no other liabilities, could have saved a portion of his pension and maintenance receipts. Therefore, the addition was restricted.

The Tribunal upheld the CIT(A)'s decision to provide substantial relief by re-estimating the profit, considering the disclosed income and other factors. The addition of disclosed income was not considered double taxation.

The Tribunal held that the assessee failed to substantiate the claim that the income from the property sale was business income. The Tribunal found no error in the CIT(A)'s decision to tax the transaction under capital gains as per Section 50C and enhance the income.

The Tribunal held that penalty was not justified for excess stock valuation and doubtful expenses as the additions were treated as business income and were tax neutral. However, the penalty related to machinery investment and cash shortage was remitted for fresh adjudication.

The Tribunal held that the appeal was not maintainable as the tax effect was below the limit prescribed by CBDT Circular No. 21/2015, and no exceptions applied.

The Tribunal upheld the CIT(A)'s deletion of additions made by the AO based on impounded papers, finding that the AO relied on surmises and lacked corroborative evidence. The Tribunal also dismissed grounds related to estimated low household withdrawals.