ITAT Surat Judgments — February 2018

THE ACIT,VAPI CIRCLE, VAPI vs M/S. DAMAN HOSPITALITY PVT.LTD., NANI DAMAN

ITA 1859/AHD/2012[2009-10]Status: Disposed22 Feb 2018AY 2009-10Remanded

The Tribunal held that the CIT(A) erred in admitting additional evidence without allowing the AO an opportunity to examine and comment on it as per Rule 46A(3) of the Income Tax Rules. Consequently, the first appellate order was set aside.

HARSHABEN J. PARMAR,SURAT vs THE INCOME TAX OFFICER, WARD-2(2), SURAT

ITA 870/AHD/2015[2010-11]Status: Disposed22 Feb 2018AY 2010-11Partly Allowed

The Tribunal, considering that the books of accounts were audited and the fall in Gross Profit Rate was explained by increased turnover, decided to restrict the disallowance from 10% to 5% of the expenses.

M/S. AVON ENTERPRISE,BHARUCH vs THE INCOME TAX OFFICER, WARD-1, BHARUCH

ITA 2168/AHD/2014[2001-02]Status: Disposed7 Feb 2018AY 2001-02Dismissed

The Tribunal upheld the disallowance of interest paid to partners. It reasoned that if the firm paid interest on capital to partners but advanced that capital to another entity without charging interest, it indicated diversion of funds for non-business purposes.

SMT. VARSHABEN R. MAVANI,SURAT vs THE INCOME TAX OFFICER, WARD-3(3)(4), SURAT

ITA 559/AHD/2015[2010-11]Status: Disposed7 Feb 2018AY 2010-11Allowed

The Tribunal held that penalty under Section 271(1)(c) cannot be levied merely because the AO did not accept the assessee's explanation, especially when additions were made solely based on the deeming provisions of Section 50C and all relevant facts were disclosed bonafide.

THE ITO, WARD-1, NA

ITA 1011/AHD/2017[2012-13]Status: Disposed5 Feb 2018AY 2012-13Dismissed

The Tribunal upheld the CIT(A)'s decision, finding that the property was purchased by a partnership firm in the assessee's name, and the source of investment was from the firm's bank accounts and shown in its balance sheet.

SHRI ASHOK PODDAR,SURAT vs THE INCOME TAX OFFICER, WARD-1(2)(1), SURAT

ITA 1739/AHD/2016[2012-13]Status: Disposed5 Feb 2018AY 2012-13Partly Allowed

The Tribunal held that interest expenses incurred for business purposes are allowable even if claimed under the wrong head. It also ruled that disallowances under Section 40(a)(ia) are not applicable if the payee has declared and paid tax on the income, and that delayed submission of Form 15G/15H due to holidays should not lead to disallowance.

VIBRANT PROCESSOR PVT. LTD.,SURAT vs THE INCOME TAX OFFICER, WARD-4(1), SURAT

ITA 2249/AHD/2015[2012-13]Status: Disposed2 Feb 2018AY 2012-13Withdrawn

The tribunal allowed the assessee to withdraw the appeal. The appeal was dismissed as withdrawn because it had become infructuous.

THE ITO, WARD-2(4), SURAT vs M/S. GUNJAN EXPORTS, SURAT

ITA 2860/AHD/2014[2011-12]Status: Disposed1 Feb 2018AY 2011-12Dismissed

The Tribunal held that the interest income earned on FDRs, which were placed as security for business borrowings and were integral to the business operations, is part of business income. Therefore, deduction under Section 10AA is allowable on such interest income.

THE ACIT, CIRCLE-1(2), SURAT vs M/S. GUNJAN EXPORTS, SURAT

ITA 3550/AHD/2015[2012-13]Status: Disposed1 Feb 2018AY 2012-13Dismissed

The Tribunal held that the interest income earned on FDRs, which were placed as security for business borrowings and were integral to the business operations, is part of business income. Therefore, deduction under Section 10AA is allowable on such interest income.