ITAT Surat Judgments — February 2020

The Tribunal condoned the delay in filing the appeal before the CIT(A) due to medical emergencies and lack of awareness of legal provisions. The Tribunal also allowed the set-off of shares business loss against undisclosed income, citing Section 71 of the IT Act and relevant judicial precedents.

The Tribunal held that the CIT erred in invoking Section 263 to direct verification of foreign exchange fluctuation depreciation as it was not part of the show-cause notice. It also allowed depreciation at 15% on electrical installations, following its own prior decisions.

The Tribunal held that the interest on ECB loans was not taxable in India as it fell outside the ambit of deemed income. The reimbursement of IT data line charges was also held to be a reimbursement of actual expenses without any markup, and thus not taxable.

The Tribunal held that the interest on ECB loans was not taxable in India as it fell under an exception. Regarding the IT data line charges, the Tribunal followed its own earlier decisions and decisions of the High Court, treating the remittances as reimbursement of actual expenses without any markup.

The Tribunal held that the addition under Section 41(1) was not justified as there was no remission or cessation of liability. Regarding the advance for property sale, the Tribunal found sufficient documentary evidence to establish the identity, creditworthiness, and genuineness of the transaction, thus disallowing the addition under Section 68.

The Tribunal held that the CIT erred in invoking Section 263 to direct verification of foreign exchange fluctuation depreciation as it was not part of the show-cause notice. It also allowed depreciation at 15% on electrical installations, following its own prior decisions.

The Tribunal held that a mere claim, even if unsustainable, does not amount to furnishing inaccurate particulars if all income and expenditure details were declared. The disallowance of expenses was passive and lacked justification in the assessment order.

Since the quantum addition was deleted in the main appeal, the penalty levied under Section 271(1)(c) which arose from that addition, does not survive. Therefore, the grounds raised by the assessees are allowed.

The Tribunal held that the CIT(Exemption) did not consider all the documents submitted by the assessee via email and violated the principle of natural justice by not providing a sufficient opportunity to be heard. Therefore, the matter was remanded for fresh consideration.

The tribunal held that the matter requires reconsideration by the CIT(Exemption) and restored the appeal to the CIT(Exemption) for a fresh decision, allowing one more opportunity to the assessee.

The Tribunal considered the assessee's request for withdrawal of the appeal. Since the revenue did not object, the Tribunal allowed the withdrawal.

The Tribunal held that the commission calculation was as per the agreement between the parties, and the recipient had confirmed the receipt. The disallowance was not in accordance with the intention and payments made by the assessee.

The Tribunal condoned the delay in filing the appeal before the CIT(A) due to medical emergencies and lack of awareness of legal provisions. The Tribunal also allowed the set-off of shares business loss against undisclosed income, citing Section 71 of the IT Act and relevant judicial precedents.

The Tribunal granted the assessee's request to withdraw the appeal. The revenue did not raise any objections to the withdrawal.

Since the quantum addition was deleted in the main appeal, the penalty levied under Section 271(1)(c) which arose from that addition, does not survive. Therefore, the grounds raised by the assessees are allowed.

Since the quantum addition was deleted in the main appeal, the penalty levied under Section 271(1)(c) which arose from that addition, does not survive. Therefore, the grounds raised by the assessees are allowed.

Since the quantum addition was deleted in the main appeal, the penalty levied under Section 271(1)(c) which arose from that addition, does not survive. Therefore, the grounds raised by the assessees are allowed.

The Tribunal noted that the AO had disallowed the deduction based on the due date for depositing employees' PF contribution. However, considering a co-ordinate bench decision, the Tribunal found that the due date should be considered with reference to the month of actual disbursement of wages and the grace period available under the PF Act. Therefore, the matter was restored to the AO for verification.

The Tribunal held that a mere claim, even if unsustainable, does not amount to furnishing inaccurate particulars if all income and expenditure details were declared. The disallowance of expenses was passive and lacked justification in the assessment order.

The Tribunal held that the fair market value of the land as on 01-04-1981 should be determined by taking the average of the three valuation reports (DVO, assessee's valuer, and another valuer). The AO was directed to recompute the capital gains based on this average value.

The Tribunal held that the assessee had discharged its initial onus by providing sufficient evidence for the unsecured loans, and the AO had failed to conduct further inquiries with the lenders' AO. The Tribunal also found that the disallowance of labour wages and freight expenses was made without a show-cause notice and lacked justification, especially considering the nature of the workforce and comparative expenses in prior years.

The Tribunal condoned the delay in filing the appeal before the CIT(A) due to medical emergencies and lack of awareness of legal provisions. The Tribunal also allowed the set-off of shares business loss against undisclosed income, citing Section 71 of the IT Act and relevant judicial precedents.

The Tribunal held that the Principal Commissioner of Income Tax (PCIT) was justified in invoking Section 263 as the AO's order was erroneous and prejudicial to the revenue. The AO failed to conduct necessary inquiries into the cash deposits and real estate transactions.

The Tribunal held that only the profit element embedded in the unrecorded receipts, not the entire receipts, should be taxed. The Tribunal estimated a net profit of 6% on the unrecorded receipts.

The Tribunal upheld the disallowance of interest expenses. It found that the claim for set-off under Sections 70 & 71 was not properly raised before the lower authorities and the current claim was also not supported by their findings.

The Tribunal held that the gifts from the father and followers were not taxable income, citing precedents for personal gifts and voluntary contributions. It also deleted the disallowance of Vraj Yatra expenses, considering the evidence provided and the assessee's role as a religious figure.

The Tribunal held that the second approval for the high-rise building project was for an entirely new project, not a continuation of the earlier row-house project approved before the cut-off date. Therefore, the assessee was not eligible for the deduction.

The Tribunal held that the addition was based on a temporary agreement due to the non-availability of explanations at the time of assessment. Since the source of the amount was subsequently explained and found acceptable, the addition was deleted.

The Tribunal, following its own previous decisions, found that the gross profit rate of 32% on disclosed sales was reasonable and appropriate. The addition was sustained at this rate.

The Tribunal held that the sale consideration of the property needed to be properly estimated by the Valuation Officer (DVO). The AO was directed to refer the land for valuation under Section 55A to ascertain the fair market value.

The Tribunal held that additions cannot be made solely on the basis of admissions recorded during a survey under Section 133A of the Income Tax Act, as such statements are not made on oath and require corroborative evidence. The Tribunal directed the deletion of the addition.

The Tribunal held that the policies, taken under a Long Term Reward Plan for employee-directors, were for the benefit of the company to mitigate financial burden. Therefore, the premium paid was an allowable business expenditure, even if not explicitly titled 'keyman insurance'.

The Tribunal held that for penalty under Section 271(1)(c) to be levied, there must be material to conclude that the amount represents assessee's income and that there was conscious concealment. The Tribunal found that the assessee's explanation was bonafide and not disproved, thus the penalty was not sustainable.

The Tribunal held that the refund of brokerage adjusted against client receivables was allowable, following its own prior decision. It also held that transaction charges paid to BSE/NSE were for facilities and not technical services, thus no TDS was deductible under Section 194J.

The Tribunal held that the entire bank deposits could not be added as unexplained income, especially when the assessee had disclosed income from retail business. The peak credit balance was also considered in relation to the declared net profit.

The Tribunal held that the cooperative society functioned as an alternative to banks, and the transactions were undertaken with a bona fide belief that the provisions of Sections 269SS and 269T were not applicable, thus constituting a reasonable cause for the breach.

The Tribunal followed its own prior decision in a similar case for a different assessment year. It directed that only 5% of the alleged bogus purchases should be disallowed, thereby partly allowing the assessee's appeal.

The Tribunal held that the assessee had discharged the initial onus by providing confirmations and details of the lenders. The Tribunal deleted the addition for unsecured loans and interest, and also deleted the addition for unexplained investment as it was capital in nature and properly explained.

The Tribunal held that the registered valuer's method for determining the fair market value of land as of 01.04.1981 was acceptable, directing the AO to use the assessee's claimed rate. The Tribunal also deleted the addition for unexplained investment as the payments were made outside the assessment year under consideration.

The Tribunal noted that the land was transferred on 24.07.2007 as per the agreement for sale, with possession handed over and a substantial part of the payment received. Therefore, the capital gain liability arose in AY 2008-09, not AY 2009-10.

The Tribunal held that while the entire cash deposits could not be added as income due to the possibility of business transactions, the assessee's explanation lacked evidence. Therefore, the AO was directed to estimate the net profit at 5% of the total turnover, allowing set-off for the income already disclosed.

The Tribunal held that since the cash deposits were linked to business transactions, only estimated net profit, not the entire turnover, should be added to the income. The AO was directed to estimate net profit at 8% of the total cash deposits.

The Tribunal held that the appeal was not maintainable due to the delay and the lack of a condonation application. Therefore, the appeal was dismissed without going into the merits of the case.

The Tribunal held that the first proviso to Section 12A(2) of the Income Tax Act is retrospective in nature. Therefore, the exemption under Section 11 should be granted even if registration was obtained after the assessment order, provided the application was made during the pendency of assessment proceedings.

The Tribunal held that since the quantum addition was deleted by the ITAT, the penalty proceedings arising from those additions do not survive. Therefore, the penalty imposed was not sustainable.

The Tribunal held that if additions are made based on peak credit and estimated income, no penalty is leviable. The assessee's explanation that the account represented retail business income was considered. Following precedents, the penalty was directed to be deleted.

The Tribunal held that the CIT(A) failed to adjudicate the legal grounds and made enhancements without proper notice, violating principles of natural justice. Therefore, the appeals were restored to the CIT(A) for fresh adjudication.

The Tribunal held that the CIT(A) failed to adjudicate the legal grounds and made enhancements without proper notice, violating principles of natural justice. Therefore, the appeals were restored to the CIT(A) for fresh adjudication.

The Tribunal held that the CIT(A) failed to adjudicate the legal grounds and made enhancements without proper notice, violating principles of natural justice. Therefore, the appeals were restored to the CIT(A) for fresh adjudication.

The Tribunal held that the CIT(A) failed to adjudicate the legal grounds and made enhancements without proper notice, violating principles of natural justice. Therefore, the appeals were restored to the CIT(A) for fresh adjudication.