ITAT Visakhapatnam Judgments — July 2018

The Tribunal held that the assessee failed to discharge the burden of proving the source of capital introduced, both from his own funds and from friends. Therefore, the addition made by the Assessing Officer was upheld.

The Tribunal held that the reopening of assessment under Section 147 was valid as the AO had reason to believe income had escaped assessment. However, regarding the addition on sale of 9 flats, the Tribunal found that the assessee had correctly admitted income as per the stage of construction completion and deleted the addition.

The Tribunal upheld the CIT(A)'s deletion of the addition for unrecognised power sale income, stating that income accrues only when the right to receive it is established. Regarding gratuity, the Tribunal allowed deduction for the actual premium paid to LIC, following the jurisdictional High Court's decision that payments to unapproved gratuity funds are deductible under Section 37.

The Tribunal found that the assessee's income after expenditure was Rs. 2,52,320.98. Therefore, it directed the Assessing Officer to consider this amount for taxation.

The Tribunal held that the subsidy received by the assessee should be reduced from the actual cost of the asset for depreciation calculation, as it was adjusted against the loan for interest calculation purposes. It also held that trading profits are not derived from the operation of a cold storage business and thus not eligible for deduction under Section 80IB.

The Tribunal held that CPWD rates are generally higher than local rates and include contractor profit, thus allowing a 15% reduction for rate variation and a 10% reduction for self-supervision from the DVO's valuation. It also directed the AO to accept Rs. 5 lakhs from rent and gifts and Rs. 6,39,074/- from agricultural and business income as valid sources for construction.

The Tribunal held that 5% of purchase price is a reasonable profit margin for IMFL business, following a coordinate bench decision. For unsecured loans, the assessee failed to discharge the onus of proving genuineness and creditworthiness, leading to confirmation of additions.

The Tribunal found no infirmity in the Commissioner's order regarding the initial rejection. However, it directed the Commissioner to consider the amended objects, which were pending, for examination under Section 10(23C)(vi).

The Tribunal considered the assessee's submission and, with no objection from the Department, permitted the withdrawal of the appeal. Consequently, the appeal was dismissed as withdrawn.

The Tribunal held that the sale of plots should be treated as capital gains, not business income, as the assessee was not a regular trader. The Tribunal also found the gifts from the mother to be genuine, discharging the assessee's burden of proof.

The Tribunal held that the Commissioner correctly invoked Section 263 as the Assessing Officer failed to examine the capital loss claim and the substantial improvement expenditure. The assessment order was deemed erroneous and prejudicial to the revenue.

The Tribunal held that while the estimation of profit was justified due to unverifiable expenses, the rate of 9% was on the higher side. Therefore, the net profit estimation was reduced to 8% of gross receipts.

The Tribunal held that the Pr.CIT cannot conclude that the AO failed to examine an issue when the material was available and examined. Inadequate enquiry, as opposed to a lack of enquiry, does not render the assessment order erroneous and prejudicial to the revenue.

The Tribunal held that the sale of plots should be treated as capital gains, not business income, as the assessee was not a regular trader. The Tribunal also found the gifts from the mother to be genuine, discharging the assessee's burden of proof.

The Tribunal held that Section 14A disallowance is not applicable when no exempt income is earned during the relevant assessment year. Following precedents, it was decided that no disallowance can be made in the absence of exempt income.

The Tribunal held that provision for standard assets is not an allowable deduction. Following coordinate bench decisions, the Tribunal set aside the CIT(A)'s order and restored the AO's order regarding the provision for standard assets.

The Tribunal held that provision for standard assets is not an allowable deduction. Following coordinate bench decisions, the Tribunal set aside the CIT(A)'s order and restored the AO's order regarding the provision for standard assets.

The ITAT held that appeals filed by the department with a tax effect of Rs. 50 lakhs and below are not maintainable, following a CBDT circular. Consequently, these appeals were dismissed as withdrawn.

The Tribunal held that diverting interest-bearing funds for non-business purposes without collecting interest distorts profits and does not reflect the true financial picture. The assessee failed to provide evidence of business purpose or efforts to collect interest.

The Tribunal held that the assessee had not provided any independent information to counter the DRI's findings or the authorities' assessments. Therefore, the grounds of appeal regarding independent inquiry and the applicability of Section 69C were dismissed.

The Tribunal held that the assessee had not provided independent evidence to counter the DRI's findings or the authorities' assessments. Therefore, the grounds of appeal regarding the independent nature of the assessment and the applicability of Section 69C were dismissed.

The Tribunal held that even if the income is not exempt under Section 11, it should be taxed at normal rates applicable to an Association of Persons (AOP), not at the maximum marginal rate, as per Section 164(2) of the Act.

The Tribunal upheld the CIT's order, finding that the AO's assessment was erroneous and prejudicial to revenue. The assessee failed to provide evidence that the AO had verified the diversion of funds or the sources for asset acquisition.

The Tribunal held that for Section 194C to apply, there must be an express or implied contract between the assessee and the transporter. Since the assessee only paid 'to pay' bills as per the supplier's instructions and did not engage the transporters directly, no TDS was required.

The Tribunal held that the assessee had withdrawn Rs. 95,00,000/- from their bank accounts in the immediately preceding financial year, and the time gap between withdrawal and deposit was short. Therefore, the source of the deposits was not suspicious.

The Tribunal held that the Assessing Officer had not examined the issues identified by the Commissioner. Therefore, the Commissioner rightly exercised his jurisdiction under section 263 to set aside the assessment order and directed a fresh assessment.

The Tribunal held that the assessee had not provided independent evidence to counter the DRI's findings or the authorities' assessments. Therefore, the grounds of appeal regarding the independent nature of the assessment and the applicability of Section 69C were dismissed.

The Tribunal held that the assessee had not provided independent evidence to counter the DRI's findings or the authorities' assessments. Therefore, the grounds of appeal regarding the independent nature of the assessment and the applicability of Section 69C were dismissed.

The tribunal held that as per CBDT circular no. 21/2015, the appeal filed by the revenue was not maintainable due to the low tax effect. No objection was raised by the Revenue.

The Tribunal found that the assessee failed to provide sufficient evidence regarding the non-availability of banking facilities. The Assessing Officer's notice was also issued with a very short timeframe. Therefore, the Tribunal set aside the CIT(A)'s order and remanded the case back to the AO for fresh adjudication.

The Tribunal held that the AO was justified in treating the cash deposits as unexplained. The assessee failed to provide verifiable details of the buyers or the sale transaction, despite being given opportunities.

The Tribunal found sufficient cause for the assessee's non-appearance before the CIT(A) based on the medical report. Therefore, the Tribunal decided to grant one more opportunity to the assessee.

The Tribunal found that neither the Assessing Officer nor the CIT(A) had properly examined the details of the disputed expenditure. Therefore, the matter was remitted back to the Assessing Officer for fresh consideration with proper evidence.

The CIT(A) correctly admitted an additional ground of appeal and cancelled the penalty, holding that the AO's notice was invalid as it was unclear whether the penalty was for concealment or inaccurate particulars. The Tribunal upheld this decision.

The Tribunal held that as per Section 50C(3) of the Act, if the value determined by the DVO exceeds the value adopted by the SRO, the SRO's value should be taken as the full value of consideration. Since the DVO's valuation considered the assessee's objections and still resulted in a higher value, no separate deduction for deficiencies was warranted. Therefore, the AO rightly adopted the SRO's value under Section 50C, and the CIT(A)'s order was upheld on this ground. Regarding interest under Sections 234B and 234C, the Tribunal relied on various High Court and Supreme Court decisions, including DIT v. Ericsson AB, which held that if the payer defaults in deducting tax at source, the non-resident is liable to pay tax, but the question of paying advance tax does not arise. Consequently, interest under Section 234B is not leviable to the extent of tax that should have been deducted at source by the purchaser. The Tribunal directed the AO not to levy interest under Section 234B to the extent of TDS that should have been made by the purchaser. The assessee's appeal on the interest issue was partly allowed.

The Tribunal held that while the assessee did not dispute the SRO valuation for stamp duty purposes, they did object to its adoption for capital gains computation, citing the leasehold nature of the property and the differential treatment compared to co-owners' sales. The Tribunal noted that the assessee did not explicitly request a reference to the DVO. However, considering the objections raised by the assessee regarding the non-exclusion of the tenant's share and the complexities involved, the Tribunal found that the AO should have, in fairness, referred the property's valuation to the DVO as provided under Section 50C(2) of the Income Tax Act, 1961. Since the AO ignored the assessee's objections and failed to refer the valuation to the DVO, the Tribunal decided to remit the matter back to the AO. The AO is directed to refer the valuation to the DVO to determine the fair market value of the property for computing capital gains. The Tribunal also noted that the assessee would be at liberty to raise other grounds before the AO upon remand. The orders of the CIT(A) were set aside, and the matter was remitted back to the AO for fresh adjudication.

The Tribunal held that the penalty notice was invalid as it was served after the date fixed for hearing. Furthermore, the AO had not initiated proper proceedings for non-furnishing of the FBT return or for non-payment of FBT. Therefore, the penalty levied was unsustainable.

The Tribunal held that while the assessee did not dispute the SRO valuation for stamp duty purposes, they did object to its adoption for capital gains computation, citing the leasehold nature of the property and the differential treatment compared to co-owners' sales. The Tribunal noted that the assessee did not explicitly request a reference to the DVO. However, considering the objections raised by the assessee regarding the non-exclusion of the tenant's share and the complexities involved, the Tribunal found that the AO should have, in fairness, referred the property's valuation to the DVO as provided under Section 50C(2) of the Income Tax Act, 1961. Since the AO ignored the assessee's objections and failed to refer the valuation to the DVO, the Tribunal decided to remit the matter back to the AO. The AO is directed to refer the valuation to the DVO to determine the fair market value of the property for computing capital gains. The Tribunal also noted that the assessee would be at liberty to raise other grounds before the AO upon remand. The orders of the CIT(A) were set aside, and the matter was remitted back to the AO for fresh adjudication.

The Tribunal held that while the assessee did not dispute the SRO valuation for stamp duty purposes, they did object to its adoption for capital gains computation, citing the leasehold nature of the property and the differential treatment compared to co-owners' sales. The Tribunal noted that the assessee did not explicitly request a reference to the DVO. However, considering the objections raised by the assessee regarding the non-exclusion of the tenant's share and the complexities involved, the Tribunal found that the AO should have, in fairness, referred the property's valuation to the DVO as provided under Section 50C(2) of the Income Tax Act, 1961. Since the AO ignored the assessee's objections and failed to refer the valuation to the DVO, the Tribunal decided to remit the matter back to the AO. The AO is directed to refer the valuation to the DVO to determine the fair market value of the property for computing capital gains. The Tribunal also noted that the assessee would be at liberty to raise other grounds before the AO upon remand. The orders of the CIT(A) were set aside, and the matter was remitted back to the AO for fresh adjudication.

The Tribunal held that the transactions in the undisclosed bank account belonged to the assessee and directed the AO to rework the peak credit balance correctly. For undisclosed purchases, the Tribunal upheld the CIT(A)'s estimation of gross profit at 15%.

The Tribunal held that since the assessee had admitted and accounted for his entire share of receipts from the hospital in his reconstructed books of accounts, which exceeded the amount admitted under Section 132(4) and the amount calculated by the AO, no separate addition was required.

The Tribunal held that the AO did not commit a change of opinion and that the reopening of assessment was valid. However, since the CIT(A) had not decided the issue on merits, the matter was remitted back.