ITAT Visakhapatnam Judgments — March 2018

The Tribunal held that for AY 2007-08, the issue of determining the fair market value of lands was restored to the file of the AO. The Tribunal noted that the lands were brought into the assessee's books in the financial year relevant to AY 2006-07, thus constituting opening stock for AY 2007-08. The Tribunal left open the question of whether opening stock can be modified without modifying the closing stock of the earlier year and whether the AO can examine the cost of goods acquired in an earlier year, for the AO's consideration during set-aside proceedings. For AYs 2006-07 and 2008-09, the Tribunal held that the assessment orders were liable to be quashed because the reasons for reopening were recorded after the notices under Section 148 were issued, violating the mandatory requirement of Section 148(2). The Tribunal followed the precedents cited by the assessee and quashed the assessment orders for these two years due to lack of valid jurisdiction. The assessee's legal ground regarding limitation and additional grounds for AY 2008-09 were not pressed or declined adjudication respectively.

The Tribunal held that for AY 2007-08, the issue of determining the fair market value of lands was restored to the file of the AO. The Tribunal noted that the lands were brought into the assessee's books in the financial year relevant to AY 2006-07, thus constituting opening stock for AY 2007-08. The Tribunal left open the question of whether opening stock can be modified without modifying the closing stock of the earlier year and whether the AO can examine the cost of goods acquired in an earlier year, for the AO's consideration during set-aside proceedings. For AYs 2006-07 and 2008-09, the Tribunal held that the assessment orders were liable to be quashed because the reasons for reopening were recorded after the notices under Section 148 were issued, violating the mandatory requirement of Section 148(2). The Tribunal followed the precedents cited by the assessee and quashed the assessment orders for these two years due to lack of valid jurisdiction. The assessee's legal ground regarding limitation and additional grounds for AY 2008-09 were not pressed or declined adjudication respectively.

The Tribunal held that for AY 2007-08, the issue of determining the fair market value of lands was restored to the file of the AO. The Tribunal noted that the lands were brought into the assessee's books in the financial year relevant to AY 2006-07, thus constituting opening stock for AY 2007-08. The Tribunal left open the question of whether opening stock can be modified without modifying the closing stock of the earlier year and whether the AO can examine the cost of goods acquired in an earlier year, for the AO's consideration during set-aside proceedings. For AYs 2006-07 and 2008-09, the Tribunal held that the assessment orders were liable to be quashed because the reasons for reopening were recorded after the notices under Section 148 were issued, violating the mandatory requirement of Section 148(2). The Tribunal followed the precedents cited by the assessee and quashed the assessment orders for these two years due to lack of valid jurisdiction. The assessee's legal ground regarding limitation and additional grounds for AY 2008-09 were not pressed or declined adjudication respectively.

The Tribunal held that the Assessing Officer did not have an opportunity to examine the documents submitted to the CIT(A), and the CIT(A) failed to obtain a remand report. Therefore, the matter was remitted back to the CIT(A) for fresh examination.

The Tribunal held that the penalty order was barred by limitation as it was passed beyond the six-month period stipulated in Section 275(1)(c) of the Income Tax Act. Therefore, the penalty order is quashed.

The ITAT held that the CIT's order under section 263 was invalid as it was passed without referring to incriminating material in a non-abated search assessment. Consequently, the revised assessment order based on the invalid CIT(A) order was also deemed invalid.

The Tribunal found merit in the assessee's contentions. It acknowledged a contradiction between the assessee's explanation to the AO (claiming to be a co-signatory receiving only Rs. 1,00,000) and the sale deed's recital of her receiving the entire Rs. 9,00,000. However, the Tribunal noted that the Pr.CIT drew inferences without examining the title to the property or parent documents. The Tribunal emphasized that capital gains liability arises only for original owners, necessitating determination of actual ownership through examination of parent documents. It also agreed that the assessee should have had an opportunity to exercise her right to object to the SRO's valuation under section 50C. Consequently, the Tribunal set aside the Pr.CIT's direction and restored the issue to the AO for a fresh examination denovo, with an opportunity for the assessee to present her case and exercise her statutory rights. The AO was cautioned not to be influenced by the Pr.CIT's observations and to examine the issue objectively.

The Tribunal held that the orders passed under section 263 by the CIT were quashed by a coordinate bench of the ITAT and the jurisdictional High Court. Therefore, the revised assessments based on these orders were also invalid.

The Tribunal held that the orders passed under section 263 by the CIT were quashed by a coordinate bench of the ITAT and the jurisdictional High Court. Therefore, the revised assessments based on these orders were also invalid.

The ITAT held that the CIT's order under section 263 was invalid as it was passed without referring to incriminating material in a non-abated search assessment. Consequently, the revised assessment order based on the invalid CIT(A) order was also deemed invalid.

The Tribunal held that employee's contribution to PF paid before the due date of filing the return of income is allowable as a deduction. However, the claim for depreciation on leased equipment was rejected due to the assessee's failure to establish ownership and provide the relevant lease agreement.

The Tribunal held that the CIT erred in rejecting the application without proper reasoning and that the discrepancy in the incorporation date was not a valid ground for rejection. The Tribunal also noted that the assessee had responded to queries and argued that diffusion of knowledge for its members, who are from Scheduled Castes, also constitutes a charitable activity.

The Tribunal held that employee's contribution to PF paid before the due date of filing the return of income is allowable as a deduction. However, the claim for depreciation on leased equipment was rejected due to the assessee's failure to establish ownership and provide the relevant lease agreement.

The Tribunal held that employee's contribution to PF paid before the due date of filing the return of income is allowable as a deduction. However, the claim for depreciation on leased equipment was rejected due to the assessee's failure to establish ownership and provide the relevant lease agreement.

The Tribunal held that employee's contribution to PF paid before the due date of filing the return of income is allowable as a deduction. However, the claim for depreciation on leased equipment was rejected due to the assessee's failure to establish ownership and provide the relevant lease agreement.

The Tribunal held that the Assessing Officer failed to establish that the gold and jewelry were acquired from undisclosed income, as the assessee had provided explanations regarding their ownership. Therefore, the penalty under Section 271AAB was not leviable.

The Tribunal held that the excise duty refund was received in a fiduciary capacity until the final settlement by the Supreme Court. Therefore, it was rightly offered to tax in the assessment year 2013-14, and not in 2011-12.

The Tribunal held that the Assessing Officer failed to establish that the gold and jewelry were acquired from undisclosed income, as the assessee had provided explanations regarding their ownership. Therefore, the penalty under Section 271AAB was not leviable.

The Tribunal held that the loose sheet was a projection and not incriminating material proving undisclosed income. Since no undisclosed income or assets were found, the penalty under Section 271AAB was not leviable.

The Tribunal held that the excise duty refund was received in a fiduciary capacity until the final settlement by the Supreme Court. Therefore, it was rightly offered to tax in the assessment year 2013-14, and not in 2011-12.

The Tribunal upheld the CIT(A)'s decision, stating that the AO failed to prove the lease payments were excessive or unreasonable. The Tribunal also noted that directors had declared income under Section 44AE, and disallowance in the assessee's hands was not warranted.

The Tribunal held that contributions received for a specific purpose, and utilized for that purpose, cannot be regarded as income under Section 2(24) of the Act. However, interest paid on capital work-in-progress was upheld as capitalizable.

The Tribunal upheld the order of the CIT(A), holding that the payment was in the nature of royalty for the use of brand name and attracted TDS at 10% under Section 194J. The penalty under Section 271C for short deduction was also confirmed.

The Tribunal upheld the order of the CIT(A), holding that the payment was in the nature of royalty for the use of brand name and attracted TDS at 10% under Section 194J. The penalty under Section 271C for short deduction was also confirmed.

The Tribunal upheld the order of the CIT(A), holding that the payment was in the nature of royalty for the use of brand name and attracted TDS at 10% under Section 194J. The penalty under Section 271C for short deduction was also confirmed.

The Tribunal noted that the CIT(A) had deleted the addition based on a High Court decision. While the AO's grounds for addition were partially valid, the CIT(A)'s deletion was upheld, implying the addition was not sustainable as made.

The Tribunal held that the notice under Section 148 was not validly served on the assessee as it was affixed at a wrong address. Consequently, the Assessing Officer had not assumed valid jurisdiction for reassessment.

The Tribunal held that incentives passed on to retail dealers as trade discounts do not constitute commission or brokerage under Section 194H, as there is no principal-agent relationship. Therefore, TDS was not required, and the disallowance under Section 40(a)(ia) was not applicable. The assessment order was not erroneous or prejudicial to the revenue.

The Tribunal held that the grounds raised by the assessee regarding the validity of the assessment under Section 147 instead of Section 153C were technical and not raised before the CIT(A). In the interest of justice, the matter was remitted back to the CIT(A) for fresh adjudication on merits.

The Tribunal upheld the CIT(A)'s decision on the estimated income for contract and sub-contract works, and the deletion of additions for payments to Prabhu Enterprises and cash deposits. However, the issue regarding insurance receipts was remanded for fresh adjudication.

The Tribunal held that the grounds raised by the assessee regarding the validity of the assessment under Section 147 instead of Section 153C were technical and not raised before the CIT(A). In the interest of justice, the matter was remitted back to the CIT(A) for fresh adjudication on merits.

The Tribunal held that the grounds raised by the assessee regarding the validity of the assessment under Section 147 instead of Section 153C were technical and not raised before the CIT(A). In the interest of justice, the matter was remitted back to the CIT(A) for fresh adjudication on merits.

The Tribunal held that the grounds raised by the assessee regarding the validity of the assessment under Section 147 instead of Section 153C were technical and not raised before the CIT(A). In the interest of justice, the matter was remitted back to the CIT(A) for fresh adjudication on merits.

The Tribunal held that the grounds raised by the assessee regarding the validity of the assessment under Section 147 instead of Section 153C were technical and not raised before the CIT(A). In the interest of justice, the matter was remitted back to the CIT(A) for fresh adjudication on merits.

The Tribunal partly allowed the assessee's appeal, setting aside the addition of Rs. 34,36,489/- related to construction material purchases under Section 40A(3) due to lack of party-wise details. The remaining addition of Rs. 9,36,009/- was upheld.

The Tribunal held that a mere wrong claim made with a bonafide belief, without concealing income or furnishing inaccurate particulars, does not attract penalty under Section 271(1)(c). The CIT(A)'s deletion of penalty was upheld.

The Tribunal upheld the CIT(A)'s decision on the estimated income for contract and sub-contract works, and the deletion of additions for payments to Prabhu Enterprises and cash deposits. However, the issue regarding insurance receipts was remanded for fresh adjudication.

The Tribunal noted that the CIT(A) had deleted the addition based on a High Court decision. While the AO's grounds for addition were partially valid, the CIT(A)'s deletion was upheld, implying the addition was not sustainable as made.

The Tribunal held that contributions received for a specific purpose and applied for that purpose cannot be regarded as income under Section 2(24) of the Act. However, interest paid on capital work-in-progress was upheld as capitalizable, and disallowance under Section 40(a)(ia) was confirmed.

The Tribunal held that contributions received for a specific purpose and applied for that purpose cannot be regarded as income under Section 2(24) of the Act. However, interest paid on capital work-in-progress was upheld as capitalizable, and disallowance under Section 40(a)(ia) was confirmed.

The Tribunal noted that the CIT(A) had deleted the addition based on a High Court decision. While the AO's grounds for addition were partially valid, the CIT(A)'s deletion was upheld, implying the addition was not sustainable as made.

The Tribunal found that it was unclear how much service tax was actually collected by the assessee. As the assessee's counsel could not provide details, the matter was remitted back to the Assessing Officer for fresh consideration.

The Tribunal held that contributions received for a specific purpose and applied for that purpose cannot be regarded as income under Section 2(24) of the Act. However, interest paid on capital work-in-progress was upheld as capitalizable, and disallowance under Section 40(a)(ia) was confirmed.

The Tribunal held that the CIT's revision order under Section 263 was not justified. The AO's estimation of income was considered reasonable given the lack of proper books, and allowing partner remuneration and interest was also deemed correct based on the partnership deed.

The Tribunal directed the AO to re-compute the income at 5% of the purchase price for the business income, following a coordinate bench's decision. However, the addition for unexplained advances was confirmed as the assessee failed to establish the source, identity, and genuineness of the creditors.

The Tribunal deleted the addition on agricultural income, finding no reason to disbelieve the assessee's declared income supported by landholding certificates. For gold and jewellery, the issue was remitted back to the AO for fresh verification of sources.

The Tribunal held that the CIT's revision order under Section 263 was not justified. The AO's estimation of income was considered reasonable given the lack of proper books, and allowing partner remuneration and interest was also deemed correct based on the partnership deed.

The Tribunal held that revision proceedings under Section 263 are not permissible for search assessments (under Section 153A) if no incriminating material was found during the search. Completed assessments cannot be interfered with based on entries in regular books of accounts without new material.

The Tribunal held that the reopening of assessment was bad in law as there was no fresh material and the AO misinterpreted amended provisions for earlier years. It also held that the assessee's R&D facility was approved and the manufactured goods were not mere office machines but specialized electronic equipment, thus eligible for deduction.