ITAT Surat Judgments — May 2020

The Tribunal upheld the CIT(A)'s order, deleting the addition on account of low GP. It directed the AO to recalculate the closing stock by including electricity expenses in the manufacturing cost, as per the CIT(A)'s prior directions.

The Tribunal upheld the CIT(A)'s order, deleting the addition on account of low GP. It directed the AO to recalculate the closing stock by including electricity expenses in the manufacturing cost, as per the CIT(A)'s prior directions.

The Tribunal held that the AO's reopening of assessment was not permissible as it was based on a change of opinion without new material. It also noted that the Gujarat High Court had already ruled that non-compete fees are capital receipts.

The Tribunal upheld the CIT(A)'s order, deleting the addition on account of low GP. It directed the AO to recalculate the closing stock by including electricity expenses in the manufacturing cost, as per the CIT(A)'s prior directions.

The Tribunal held that the assessee had discharged the initial onus under Section 68 by providing identity and creditworthiness of creditors through ITRs, bank accounts, and confirmations. The assessee is not expected to prove the source of the source of funds.

The Tribunal held that the AO's reopening of assessment was not permissible as it was based on a change of opinion without new material. It also noted that the Gujarat High Court had already ruled that non-compete fees are capital receipts.

The Tribunal held that the AO had duly considered the utilization of bogus capital and allowed it as a set-off against investments, thus not making a separate addition for the opening capital. Therefore, the reopening was considered in order, and the additional ground was dismissed.