ITAT Surat Judgments — October 2023

The Tribunal held that the reopening of assessment was valid. Following a coordinate bench's decision, it directed that the addition for bogus purchases should be sustained at 6% of the disputed amount.

The Tribunal held that the payment of additional sugarcane price, approved by the managing committee, is not a distribution of profit. Following the ratio of the jurisdictional High Court and Supreme Court, such payments are considered necessary business expenditure for ascertaining real profits.

The Tribunal held that principles of natural justice require granting sufficient opportunity to be heard. The CIT(A) did not pass an order on merit based on available material and submissions.

The Tribunal held that the assessee is eligible for deduction under Section 80P(2)(d) for interest earned from co-operative banks, following the jurisdictional High Court's decision. The disallowance of expenses was also found to be not sustainable.

The Tribunal upheld the CIT(A)'s decision to admit additional evidence, finding that the assessee had a valid reason for not submitting documents earlier. The AO's objections to the additional evidence were not applicable to the facts of the case.

The Tribunal held that the CIT(A) erred in restricting the addition of on-money receipts. The AO's estimation based on seized documents and admissions was found to be valid, and the assessee's claim of cancellations was not substantiated.

The Tribunal dismissed the ground regarding the disallowance of statutory deduction on rent income, holding that Section 11, 12, and 13 of the IT Act override general provisions. It allowed the appeal for statistical purposes concerning the addition on voluntary contributions, directing the AO to verify facts. The Tribunal allowed the appeal regarding the addition on cash deposits, finding the explanation of tuition fees sufficient and the bank account not undisclosed.

The Tribunal held that the payment of additional sugarcane price, approved by the managing committee, is not a distribution of profit but a legitimate business expenditure. This decision was based on the principle that such payments are necessary for ascertaining real profits and are incurred for commercial expediency.

The Tribunal held that the payment of additional sugarcane price, approved by the managing committee, is not a distribution of profit. Following the ratio of the jurisdictional High Court and Supreme Court, such payments are considered necessary business expenditure for ascertaining real profits.

The Tribunal found that the assessee had provided bank statements and cash details to the AO, which, upon reconciliation, explained the difference. The Tribunal noted contra-entries in the bank statements and a typographical error in the AO's calculation, concluding that the addition was not justified.

The Tribunal condoned the delay of 37 days, finding sufficient cause due to the assessee's circumstances and the mistake of their representative. The matter was then restored to the Assessing Officer for de novo adjudication in the interest of justice.

The Tribunal held that the issue is squarely covered by a previous decision of the same Tribunal in favour of the assessee. Therefore, the addition made by the Assessing Officer is deleted.

The Tribunal held that penalty under Section 271(1)(c) cannot be levied on additions made on an estimated basis. Following a precedent, the penalty imposed by the AO was deleted.

The Tribunal condoned the delay in filing the appeal, citing reasonable cause due to the death of the tax consultant and the pandemic. The Tribunal also noted that the CIT(A) order was ex-parte and non-speaking, violating principles of natural justice.

The Tribunal condoned the delay in filing the appeal, citing sufficient cause due to the accountant's medical condition and the pandemic. On merits, the Tribunal dismissed the appeal, finding that the assessee had already received substantial relief from the CIT(A) and that the Tribunal could not enhance the addition.

The Tribunal held that the assessee had provided sufficient explanation and documentary evidence for the cash deposit, shifting the onus to the Assessing Officer to disprove it. The addition was based on guesswork and not sustainable. However, to protect revenue interest, a disallowance of 10% of the amount was directed.

The Tribunal found that the income in question was already offered and assessed in the hands of Global Enterprises, a related party. The Assessing Officer's reopening was based on the premise that the profit should be taxed in the hands of the assessee based on its land ownership share, which was disputed.

The Tribunal found that the income in question was already offered and assessed in the hands of Global Enterprises, a related party. The Assessing Officer's reopening was based on the premise that the profit should be taxed in the hands of the assessee based on its land ownership share, which was disputed.

The Tribunal condoned the delay in filing the appeal before the CIT(A), citing the assessee's background and the accountant's error, and also noting the ex-parte and non-speaking nature of the CIT(A)'s order. The matter was restored to the CIT(A) for de novo adjudication on merits.

The Tribunal condoned the delay in filing the appeal, citing the assessee's age, lack of technical knowledge, and the consultant's oversight. The Tribunal also admitted an additional ground challenging the validity of reassessment proceedings as it was a legal issue with facts already on record.

The Tribunal held that principles of natural justice require the assessee to be given a sufficient opportunity of being heard. Therefore, the matter was set aside and remitted back to the Assessing Officer for fresh adjudication.

The Tribunal held that penalty under Section 271(1)(c) cannot be levied on additions made on estimation. Following a precedent from a co-ordinate bench, the Tribunal deleted the penalty.

The Tribunal found that the income in question was already offered and assessed in the hands of Global Enterprises, a related party. The Assessing Officer's reopening was based on the premise that the profit should be taxed in the hands of the assessee based on its land ownership share, which was disputed.

The Tribunal held that the assessee had provided sufficient evidence, including confirmations, ITRs, bank statements, and affidavits from the lenders. The Assessing Officer failed to refute these evidences. Therefore, the additions made under Section 68 were deleted.

The Tribunal found that the CIT(A) passed an ex parte order without granting the assessee's adjournment request. Consequently, both appeals were restored to the file of the Assessing Officer for a fresh adjudication.

The Tribunal held that the addition should be restricted to 6% of the impugned purchases, considering it sufficient to cover the income component and prevent revenue leakage. The initial addition of the entire purchase amount was deemed excessive.

The Tribunal found that the CIT(A) passed an ex parte order without granting the assessee's adjournment request. Consequently, both appeals were restored to the file of the Assessing Officer for a fresh adjudication.

The Tribunal held that the addition should be restricted to 6% of the impugned purchases, considering it sufficient to cover the income component and prevent revenue leakage. The initial addition of the entire purchase amount was deemed excessive.

The Tribunal found that the assessee had explained the investment and the discount received matched the payments made. The confusion arose from the difference between the purchase value and the customs assessable value.

The Tribunal held that the assessment order passed against a dissolved firm, after being informed of its dissolution, is without jurisdiction and liable to be set aside. The issuance of notice and subsequent assessment against a non-existent entity is void ab initio.

The Tribunal held that while the reopening of assessment was valid, the entire amount deposited in the bank account cannot be treated as income. The addition should be restricted to the peak credit balance in the bank accounts, considering the assessee's cheque discounting business.

The Tribunal condoned the delay, citing principles of substantial justice over technicalities. It held that the assessee deserved another opportunity to contest the case on merit due to the ex parte nature of the lower authorities' orders.

The Tribunal condoned the delay, citing principles of substantial justice over technicalities. It held that the assessee deserved another opportunity to contest the case on merit due to the ex parte nature of the lower authorities' orders.

The Tribunal held that the issue under Section 14A was squarely covered by a previous decision in the assessee's own case, dismissing the Revenue's ground. For the Section 40A(2)(b) issue, the Tribunal found that the salary payments were justified given the employees' experience and loyalty in the peculiar nature of the diamond business, upholding the restricted addition made by the CIT(A).

The Tribunal held that the assessee had discharged its onus by providing lender details, confirmations, ITRs, and bank statements. The AO failed to conduct independent investigations, and the addition under Section 68 was unjustified. The Tribunal also noted that the advance for land purchase was supported by cheque payments and subsequent conveyance deeds.

The Tribunal condoned the delay, citing principles of substantial justice over technicalities. It held that the assessee deserved another opportunity to contest the case on merit due to the ex parte nature of the lower authorities' orders.

The Tribunal condoned the delay, citing principles of substantial justice over technicalities. It held that the assessee deserved another opportunity to contest the case on merit due to the ex parte nature of the lower authorities' orders.

The Tribunal held that the assessee had discharged its onus by providing lender details, confirmations, ITRs, and bank statements. The AO failed to conduct independent investigations, and the addition under Section 68 was unjustified. The Tribunal also noted that the advance for land purchase was supported by cheque payments and subsequent conveyance deeds.

The Tribunal found that the addition of 20% of contractual receipts was not prima facie justified and directed the AO to verify the actual receipt. Regarding bank deposits, the Tribunal held that only the profit element, not the entire gross receipt, can be taxed.

The Tribunal found that the additional evidence sought to be filed by the assessee was relevant and had a direct bearing on the issues. Therefore, the case was restored to the Assessing Officer to reconsider the grounds after allowing the assessee to file all supporting evidence.

The CIT(A) deleted the additions made by the Assessing Officer, holding that the assessee had discharged its onus by providing documentary evidence, including agreements and receipts, to substantiate the cash received as reimbursement of expenses from buyers. The Tribunal upheld the CIT(A)'s decision.

The Tribunal held that the mere absence of a stock register or low profit margins, without specific defects in the accounts, is not sufficient grounds to reject the books of accounts. The Tribunal also noted that transportation expenses borne by purchasers and trade advances are not valid reasons for rejection.

The Tribunal held that interest income earned from co-operative banks is eligible for deduction under Section 80P(2)(d), citing jurisdictional High Court and Tribunal precedents. However, the portion of the deduction related to interest earned in earlier years but offered in the current year was remanded for verification.

The Tribunal found that the assessee had submitted a registered trust deed and undertook to provide evidence of activities. Therefore, the matter was restored to the CIT(E) for fresh consideration, with the assessee directed to provide all necessary documentation.

The Tribunal upheld the CIT(A)'s decision to delete the addition. It found that the assessee's cash sales during the demonetization period were not abnormal and were supported by VAT returns and prior cash balances. The Tribunal also noted that the VAT authorities had accepted the assessee's sales.

The Tribunal condoned the six-day delay in filing the appeal, considering the reasons provided as justifiable. The Tribunal also restored the matter to the Assessing Officer for fresh adjudication on the merits of the TDS mismatch issue.

The Tribunal held that no penalty is leviable on estimated additions, especially when the addition was restricted to an average profit ratio. The penalty was deleted based on this reasoning.

The Tribunal upheld the CIT(A)'s decision to delete the additions. It found that the assessee had provided sufficient evidence to establish the identity, creditworthiness, and genuineness of the transactions, including confirmations and tax assessments of the lenders.

The Tribunal held that the addition was made without proper investigation and verification. The person from whom the documents were recovered denied knowledge of the land purchase, and the documents themselves lacked crucial details like the seller's name or signatures, failing to conclusively prove the payment.

The Tribunal allowed the assessee's appeal regarding the disallowance of the claim under Section 35(i)(ii), following precedents where donations made to institutions later found to be bogus were allowed if the assessee had no mechanism to verify their genuineness at the time of donation. The appeal was partly allowed.