ITAT Rajkot Judgments — December 2019

The Tribunal held that since the additions forming the basis of the penalty were reversed, the penalty could not survive. Therefore, the deletion of penalty by the CIT(A) was upheld.

The Tribunal held that the claim for brought forward losses from earlier assessment years (AY 2005-06 and 2006-07) could not be denied in the current assessment year, as the revenue had not challenged these claims in previous assessments. For AY 2013-14, the issue of set-off of brought forward losses was directed to be adjudicated by the AO considering the outcome of the appeal for AY 2012-13.

The Tribunal held that the CIT(A) ought to have considered the additional evidence submitted by the assessee, as per the principles of natural justice. The issue was remitted back to the CIT(A) for fresh disposal.

The Tribunal held that if the recipient of commission income has paid taxes, the disallowance under Section 40(a)(ia) is not attracted, citing a Delhi High Court decision. For car expenses, since the assessee made no submissions, the order of the authorities below was upheld.

The Tribunal found that the assessee could not claim the benefit of Section 194C(6) and that the conditions for Section 194C(5) were not met. However, it held that if the recipients had paid taxes, there would be no disallowance, citing a Delhi High Court decision on the retrospective application of the second proviso to Section 40(a)(ia).

The Tribunal dismissed the appeal regarding fixed conveyance allowance and incentive bonus, citing lack of evidence and the nature of incentive bonus as salary. The appeal regarding household expenses was partly allowed by the CIT(A) and the Tribunal found no infirmity in that order.

The Tribunal held that persons acquitted by the CESTAT cannot be considered members of the AOP. It also ruled that while the value of diverted goods is taxable, the assessee is entitled to a deduction for expenses incurred, including the Rs. 10 lakhs paid to compensate for import duty.

The ITAT dismissed the assessee's grounds related to conveyance allowance and incentive bonus, stating that the onus was on the assessee to provide evidence and that incentive bonus is part of salary with no provision for deduction. The appeal was partly allowed.

The Tribunal held that the assessee is entitled to deductions for partner remuneration/interest and unabsorbed depreciation against the income declared under the head 'other sources'. This is based on the principle that such income, when declared, should be treated as business income and allowed corresponding expenses.