ITAT Visakhapatnam Judgments — May 2018

The Tribunal held that the reopening of assessment was bad in law as the assessees were not parties to the agreements relied upon by the AO. Furthermore, there was no evidence to prove that the assessees paid consideration over and above the registered sale deed.

The Tribunal held that the reopening of assessment was bad in law as the assessees were not parties to the agreements relied upon by the AO. Furthermore, there was no evidence to prove that the assessees paid consideration over and above the registered sale deed.

The Tribunal held that the reopening of assessment was bad in law as the assessees were not parties to the agreements relied upon by the AO. Furthermore, there was no evidence to prove that the assessees paid consideration over and above the registered sale deed.

The Tribunal held that the reopening of assessment was bad in law as the assessees were not parties to the agreements relied upon by the AO. Furthermore, there was no evidence to prove that the assessees paid consideration over and above the registered sale deed.

The Tribunal held that the reopening of assessment was bad in law as the assessees were not parties to the agreements relied upon by the AO. Furthermore, there was no evidence to prove that the assessees paid consideration over and above the registered sale deed.

The Tribunal held that the reopening of assessment was bad in law as the assessees were not parties to the agreements relied upon by the AO. Furthermore, there was no evidence to prove that the assessees paid consideration over and above the registered sale deed.

The Tribunal held that the reopening of assessment was bad in law as the assessees were not parties to the agreements relied upon by the AO. Furthermore, there was no evidence to prove that the assessees paid consideration over and above the registered sale deed.

The Tribunal held that the reopening of assessment was bad in law as the assessees were not parties to the agreements relied upon by the AO. Furthermore, there was no evidence to prove that the assessees paid consideration over and above the registered sale deed.

The Tribunal held that the reopening of assessment was bad in law as the assessees were not parties to the agreements relied upon by the AO. Furthermore, there was no evidence to prove that the assessees paid consideration over and above the registered sale deed.

The Tribunal held that for approval under Section 10(23C)(vi), an institution must exist solely for educational purposes. Since the assessee had non-educational objects which were considered primary and not ancillary, it did not meet this requirement.

The Tribunal held that the reopening of assessment was bad in law as the assessees were not parties to the agreements relied upon by the AO. Furthermore, there was no evidence to prove that the assessees paid consideration over and above the registered sale deed.

The Tribunal held that the assessee is entitled to the full exemption under Section 54F as the construction of the residential house was completed within the prescribed period. The Tribunal also dismissed the revenue's ground regarding the admission of additional evidence by the CIT(A).

The Tribunal held that the reopening of assessment was bad in law as the assessees were not parties to the agreements relied upon by the AO. Furthermore, there was no evidence to prove that the assessees paid consideration over and above the registered sale deed.

The Tribunal held that the reopening of assessment was bad in law as the assessees were not parties to the agreements relied upon by the AO. Furthermore, there was no evidence to prove that the assessees paid consideration over and above the registered sale deed.

The Tribunal held that interest paid on share capital by a cooperative society is an allowable expenditure as it reduces the interest collected from members and does not form part of profit. For the gratuity fund, the Tribunal remanded the issue for fresh consideration based on a previous year's order.

The Tribunal held that interest paid on share capital by a cooperative society is an allowable expenditure as it reduces the interest collected from members and does not form part of profit. For the gratuity fund, the Tribunal remanded the issue for fresh consideration based on a previous year's order.

The tribunal held that the disallowance of bonus and ex-gratia payment of Rs. 1,36,997/- was justified as it was not paid within the stipulated time. Similarly, the addition for leave encashment was upheld based on the CIT(A)'s order considering the stay granted by the Apex Court.

The tribunal held that the disallowance of bonus and ex-gratia payment of Rs. 1,36,997/- was justified as it was not paid within the stipulated time. Similarly, the addition for leave encashment was upheld based on the CIT(A)'s order considering the stay granted by the Apex Court.

The tribunal held that the disallowance of bonus and ex-gratia payment of Rs. 1,36,997/- was justified as it was not paid within the stipulated time. Similarly, the addition for leave encashment was upheld based on the CIT(A)'s order considering the stay granted by the Apex Court.

The tribunal held that the disallowance of bonus and ex-gratia payment of Rs. 1,36,997/- was justified as it was not paid within the stipulated time. Similarly, the addition for leave encashment was upheld based on the CIT(A)'s order considering the stay granted by the Apex Court.

The tribunal held that the disallowance of bonus and ex-gratia payment of Rs. 1,36,997/- was justified as it was not paid within the stipulated time. Similarly, the addition for leave encashment was upheld based on the CIT(A)'s order considering the stay granted by the Apex Court.

The Tribunal held that the absence of an amendment clause in the trust deed violates Rule 17A of the IT Rules, 1962, justifying the rejection of registration under section 12AA. However, the assessee can refile after incorporating the amendment clause.

The Tribunal held that the penalty notice issued under Section 274 read with Section 271 was invalid due to its vagueness. Consequently, the penalty imposed by the Assessing Officer was cancelled.

The Tribunal noted that while the Assessing Officer cannot entertain claims not made in the return, appellate authorities can. Regarding Section 14A, the Tribunal found that the Assessing Officer had not examined the issue of disallowance when there was no exempt income. Therefore, the matter was remitted back to the Assessing Officer for fresh consideration on merits.

The Tribunal held that the absence of an amendment clause in the trust deed violates Rule 17A of the IT Rules, 1962, and therefore the CIT(E) was justified in rejecting the registration. However, the assessee can refile after incorporating the amendment clause.

The Tribunal held that the reasons provided by the assessee were not sufficient cause to condone the delay. The assessee failed to properly explain the delay.

The Tribunal held that professional receipts pertaining to the current year, even if not recorded in books of account at the time of search, but offered for taxation in the return, cannot be treated as undisclosed income. The CIT(A)'s direction to allow telescoping of Rs. 9,70,000/- was upheld.

The Tribunal held that the CIT's revision order under Section 263 was time-barred as it was initiated beyond the prescribed limitation period from the original assessment. Therefore, the revision order was quashed.

The Tribunal upheld the CIT(A)'s decision, agreeing that the Assessing Officer was justified in restricting the interest deduction claim up to the date of conversion of the loan into an investment.

The Tribunal upheld the CIT(A)'s decision, finding that the expenses were justified by increased sales and profit, and that the assessee had discharged its onus regarding the identity and source of share capital. The revenue failed to prove the expenditure was bogus or the share capital lacked creditworthiness.

The Tribunal dismissed the assessee's appeal. Regarding the first issue, the Tribunal held that the SRO's value as on the date of the final sale (07/02/2008) was correctly adopted by the AO and confirmed by the CIT(A). The reasoning was that the registered sale agreement was valid only for one month, and the property was sold to a different vendee (M/s. Sri Ramdas Paper Boards (Pvt.) Ltd.) nearly two years later. Therefore, the agreement was not in force on the date of sale. The case laws relied upon by the assessee were held to be not applicable. Regarding the second issue, the Tribunal found no reason to interfere with the CIT(A)'s order. The CIT(A) had categorically found that the assessee failed to provide any evidence showing the expenditure was incurred from the cash available with his son and daughter-in-law, and no corresponding entries were made in their books of account. Thus, the addition of Rs. 2,61,926/- was upheld.

The Tribunal held that the assessee's request for one more opportunity to produce the original registration certificate issued by the Registrar of Societies was reasonable. The Tribunal found that the registration was rejected solely on a technical ground. Therefore, the order passed by the Commissioner (Exemptions) dated August 16, 2017, was set aside. The Commissioner was directed to reconsider the application for registration under Section 12AA of the Act, subject to the assessee fulfilling the conditions, specifically by producing the registration certificate. The ratio decidendi is that a reasonable opportunity should be granted for rectifying technical deficiencies in applications for registration under Section 12AA, especially when the assessee demonstrates a willingness to comply. The appeal filed by the assessee was allowed for statistical purposes, with the operative direction being to reconsider the application.

The Tribunal held that the CIT's revision order under Section 263 was time-barred as it was initiated beyond the prescribed limitation period from the original assessment. Therefore, the revision order was quashed.

The Tribunal held that since the interest on the bank loan was capitalized towards the godown purchase account and the books of accounts were closed and returns filed, a subsequent claim for set-off or reversal of entries for deduction was not permissible. Income for each year must be computed independently.

The Tribunal held that the purchase of packing material with the assessee's logo and specifications constitutes a contract for sale, not a works contract. Therefore, TDS provisions under Section 194C were not attracted, and the disallowance under Section 40(a)(ia) was not justified.

The Tribunal held that merely because the transactions were huge, it does not automatically classify them as business activity. The assessee's consistent treatment of shares as investments in financial statements and the rule of consistency from previous years supported the claim of capital gains.

The Tribunal held that the purchase of packing material with the assessee's logo and specifications constitutes a contract for sale, not a works contract. Therefore, TDS provisions under Section 194C were not attracted, and the disallowance under Section 40(a)(ia) was not justified.

The Tribunal found that the Assessing Officer had conducted proper inquiries and made correct findings regarding the cash payments and the unrecorded liability. Therefore, the order passed by the Assessing Officer was neither erroneous nor prejudicial to the interest of the revenue.

The CIT(A) admitted the additional evidence and considered the assessee's explanation that notices were sent to an old address. Based on the additional evidence and remand report, the CIT(A) found that the assessee had indeed purchased property in 1999 and sold it in 2004 and 2005.

The Tribunal held that once books of accounts are rejected, the AO should estimate income to cover all relevant expenses. It found the CIT(A)'s method of proportional disallowance without considering inflation to be incorrect.

The Tribunal held that the notice issued under Section 143(2) was invalid due to being issued beyond the limitation period and also by an officer without jurisdiction. Consequently, the assessment made based on this invalid notice was quashed.

The Tribunal held that merely because the transactions were huge, it does not automatically classify them as business activity. The assessee's consistent treatment of shares as investments in financial statements and the rule of consistency from previous years supported the claim of capital gains.

The Tribunal held that the assessee failed to discharge the burden of proving that the trade liabilities still subsisted, especially when the creditors were long outstanding and no further transactions had occurred. Mere continuation of accounting entries was insufficient.

The Tribunal held that the purchase of packing material with the assessee's logo and specifications constitutes a contract for sale, not a works contract. Therefore, TDS provisions under Section 194C were not attracted, and the disallowance under Section 40(a)(ia) was not justified.

The Tribunal held that the purchase of packing material with the assessee's logo and specifications constitutes a contract for sale, not a works contract. Therefore, TDS provisions under Section 194C were not attracted, and the disallowance under Section 40(a)(ia) was not justified.

The Tribunal held that the purchase of packing material with the assessee's logo and specifications constitutes a contract for sale, not a works contract. Therefore, TDS provisions under Section 194C were not attracted, and the disallowance under Section 40(a)(ia) was not justified.

The Tribunal held that Section 14A disallowance is applicable only when exempt income is actually earned. Since the assessee did not earn any exempt income, no disallowance is warranted.

The Tribunal held that the provision for standard assets is eligible for deduction under Section 36(1)(viia) if the total provision does not exceed the prescribed limits. The issue was remitted back to the AO to re-work the correct deduction.

The Tribunal held that higher depreciation at 30% is allowable only if vehicles are used for running on hire. Merely being part of a block of assets does not entitle the assessee to higher depreciation if the actual usage does not qualify.

The Tribunal held that the estimation of profit for IMFL business should be 5% of the purchase price, following a coordinate bench decision. Regarding the addition for creditors and loans, the Tribunal found it to be a double addition and directed its deletion, granting telescopic benefit.