ITAT Rajkot Judgments — June 2020

The Tribunal held that penalty under Section 271(1)(c) cannot be imposed when the addition to income was made on an estimated basis. The penalty order was silent on how satisfaction for concealment or inaccurate particulars was arrived at.

The Tribunal held that while the assessee claimed health issues, the CIT(A) disregarded this due to lack of evidence. However, the CIT(A) did not address the assessee's submission of necessary details. The Tribunal found substantial compliance by the assessee and quashed the penalty.

The Tribunal held that the AO could not substitute the value of the capital asset as on April 1, 1981, under Section 55A of the Act, as the assessee had claimed a higher value based on a registered valuer's estimate, and the AO did not have the power to do so in such circumstances.

The Tribunal held that the assessee failed to provide evidence of the road's prior existence, making it impossible to determine if the expenditure was for repair or new construction. Consequently, the expenditure was considered capital in nature.

The Tribunal held that if the recipient of the interest income has offered it to tax, no disallowance under Section 40(a)(ia) should be made. The matter was remanded to the AO to verify this fact.

The Tribunal held that once a loan is repaid, addition under Section 68 is not permissible. Satisfied with the repayment documents, the addition was deleted.

The Tribunal held that the non-disclosure of interest income was inadvertent and the amount was meager compared to the total income, thus not attracting penalty. Similarly, the disallowed expenses were considered wrong claims rather than concealment.

The Tribunal held that while the assessee claimed health issues, the CIT(A) disregarded this due to lack of evidence. However, the CIT(A) did not address the assessee's submission of necessary details. The Tribunal found substantial compliance by the assessee and quashed the penalty.

The Tribunal held that penalty under section 271(1)(c) cannot be imposed when additions to income are made purely on an estimation basis. Therefore, the penalty levied was not justified.

The Tribunal held that the assessee had discharged his onus by furnishing sufficient details to ascertain the net result of his business. The Revenue failed to prove that the net result exceeded Rs. 1 crore. Therefore, the penalty under Section 271B was not sustainable.

The Tribunal held that Section 68 of the Income Tax Act is applicable only to credit entries found in the books of accounts and not to the closing cash balance. Therefore, the addition made under Section 68 was deleted.

The Tribunal held that the Principal CIT erred in revising the assessment order. Since the ITAT had previously ruled in favour of the assessee on a similar issue, and the Assessing Officer had taken a possible view, the order was not erroneous or prejudicial to the revenue.

The Tribunal held that the penalty was not sustainable because the Assessing Officer failed to specify whether the penalty was for concealment of income or furnishing inaccurate particulars. The Tribunal relied on jurisdictional High Court decisions stating that a clear finding on the specific charge is mandatory.

The Tribunal held that the AO's doubts regarding the genuineness of the job work expenses were not sufficiently substantiated. The assessee provided explanations and documents, including IT returns of job workers and their financial statements, which supported the claim.

The Tribunal held that the assessment order was void ab initio as the mandatory prior approval under Section 153D was not obtained before passing the assessment order. The Tribunal also considered the impact of the COVID-19 lockdown on the pronouncement of the order.

The Tribunal found that while the AO had raised queries regarding TDS credit and work orders, there was no specific enquiry about the mismatch in gross receipts reported in Form 26AS. Therefore, the order of the Principal CIT was not justified.

The Tribunal held that the CIT(A) should have condoned the delay in filing the appeal, as there was a sufficient cause preventing the assessee. Substantial justice should be preferred over technical defects, especially when there is no allegation of deliberate delay.

The Tribunal held that for penalty under Section 271(1)(c), there must be a deliberate act or omission by the assessee to furnish inaccurate particulars. Mere addition during quantum proceedings does not automatically justify penalty without evidence of conscious concealment.

The Tribunal held that only the profit element embedded in the business receipts, representing the difference between books and Form 26AS, is taxable. The profit rate was determined to be 3.25% based on the assessee's past records.