ITAT Surat Judgments — October 2019

The Tribunal reduced the disallowance on expenses to 15% and deleted the addition on loans, finding that the assessee had discharged the onus under Section 68 by providing sufficient evidence of identity, genuineness, and creditworthiness of the lenders.

The Tribunal found that the issue regarding the disallowance of depreciation on intangible assets was decided in favour of the assessee in previous assessment years, and the High Court had also dismissed the Revenue's appeal. Therefore, the disallowance was deleted.

The Tribunal held that the assessee was eligible for the +/- 5% variation in ALP as per Section 92C(2) of the Act. It also ruled on the allocation of expenses and depreciation on intangible assets, allowing some claims and partly allowing others.

The Tribunal held that the addition was an estimation of income, not conclusive proof of concealment. Therefore, penalty under Section 271(1)(c) could not be levied on an estimated addition.

The Tribunal held that the employer had paid the TDS along with interest, and therefore, the assessee was entitled to credit for the TDS amount. The Tribunal also ruled that since the interest was charged from the employer for TDS default, it was not liable to be charged from the assessee.

The Tribunal held that amortization expenditure on government securities held as HTM is allowable as deduction, following various tribunal and High Court decisions. The addition for unexplained investment was also deleted as it was made without providing sufficient details to the assessee.

The Tribunal agreed with the lower authorities that the rejection of books of account was justified due to the failure to produce stock and production registers and the inability to explain the fall in GP rate. However, the Tribunal estimated the GP rate at an average of previous years and adjusted the addition.

The Tribunal held that since the substantive additions were confirmed in the hands of the assessee's father, the protective additions in the hands of the assessee were not sustainable. Therefore, the CIT(A)'s order deleting these additions was upheld.

The Tribunal held that the appeal was not maintainable due to the revised monetary limit for filing appeals before the Tribunal as per CBDT Circular No. 17/2019. The appeal was dismissed as withdrawn.

The Tribunal held that the entire cash deposits could not be treated as undisclosed income as the bank account also had debit entries indicating business transactions. Therefore, the net profit was estimated at 8% on the cash deposits.

The Tribunal held that amortization expenditure on government securities held as HTM is allowable as deduction, following various tribunal and High Court decisions. The addition for unexplained investment was also deleted as it was made without providing sufficient details to the assessee.

The tribunal found that the CIT(A) passed the order in the absence of the assessee. Therefore, the tribunal set aside the CIT(A)'s order and restored the issue to the CIT(A) for a fresh decision after giving the assessee an opportunity of being heard.