ITAT Visakhapatnam Judgments — September 2018

The Tribunal held that the interest charged on the loan was at arm's length as it was higher than the LIBOR rate. It also held that providing a corporate guarantee to a 100% subsidiary, without incurring any cost, does not constitute an international transaction.

The Tribunal upheld the CIT(A)'s order, finding that the director, an NRI, had sufficiently explained the sources of funds through foreign remittances and bank loans. The identity, creditworthiness, and genuineness of the transaction were established.

The Tribunal upheld the CIT(A)'s order, finding that the director, an NRI, had sufficiently explained the sources of funds through foreign remittances and bank loans. The identity, creditworthiness, and genuineness of the transaction were established.

The Tribunal considered the assessee's request for withdrawal of the appeals. As the Departmental Representative raised no objection, the Tribunal allowed the withdrawal.

The Tribunal held that the AO had not examined the issue of interest on borrowed funds and advances in the original assessment, and the reasons for reopening were sufficient. However, it found that the lower authorities lacked specific findings on the diversion of borrowed funds and earning of dividend income.

The Tribunal held that the assessee had furnished sufficient details to establish the identity, genuineness, and creditworthiness of the share applicants. The addition made by the AO was therefore deleted.

The Tribunal held that in the interest of justice, the assessee should be given another opportunity to present evidence. The matters were remitted back to the Assessing Officer for fresh adjudication.

The Tribunal permitted the assessee to withdraw the appeal. The appeal was accordingly dismissed as withdrawn.

The Tribunal held that the department failed to provide specific evidence of unaccounted cash payments made by the assessee. General statements about the company's practice of receiving cash were insufficient to prove the addition.

The Tribunal considered the assessee's request for withdrawal of the appeals. The Departmental Representative did not raise any objection to the withdrawal request.

The Tribunal held that the payment of interest to PIPDIC required TDS deduction as it was neither a statutory corporation nor a notified institution. Therefore, the disallowance under Section 40(a)(ia) was rightly confirmed by the CIT(A).

The Tribunal held that the assessee failed to prove the creditworthiness of creditors and the genuineness of unsecured loan transactions. Similarly, the assessee did not provide explanations for the cash payment for land purchase or for the non-deduction of TDS on interest payments to non-residents.

The Tribunal held that the department failed to provide specific evidence of unaccounted cash payments made by the assessee. General statements about the company's practice of receiving cash were insufficient to prove the addition.

The Tribunal dismissed the revenue's appeal as not maintainable due to the low tax effect as per CBDT Circular. The assessee's cross-objection was also dismissed due to a significant delay and lack of sufficient cause for condonation.

The Tribunal upheld the CIT(A)'s order, following its own precedent that payments to LIC for group gratuity schemes are allowable on an actual payment basis. The revenue's appeal was dismissed.

The Tribunal held that the appeal filed by the Revenue was not maintainable due to the low tax effect, as per CBDT Circular No. 03/2018. The circular applies retrospectively to pending appeals.

The Tribunal held that the revenue's appeal was not maintainable due to the low tax effect as per CBDT Circular No. 03/2018. The assessee's cross-objection was dismissed as it supported the CIT(A)'s order.

The Tribunal held that the appeal filed by the Revenue was not maintainable. This was based on the CBDT circular which applies retrospectively to pending appeals.

The Tribunal upheld the CIT(A)'s order, following its own precedent that payments to LIC for group gratuity schemes are allowable on an actual payment basis. The revenue's appeal was dismissed.

The Tribunal held that the revenue cannot take contradictory stands by treating the amount as undisclosed income during assessment and then initiating penalty proceedings for accepting loans in cash. The penalty was cancelled based on this inconsistency.

The Tribunal upheld the addition of Rs. 10,97,000/- as unexplained cash credit. It found that the creditors lacked the means to provide such loans, based on their agricultural income, white ration cards, and low annual income.

The Tribunal dismissed the appeal. Regarding the issue of sale consideration, the Tribunal held that the assessee could not evade stamp duty for state government purposes and simultaneously claim exemption from Income Tax Act by declaring a higher sale consideration than what was recorded in the registered sale deed. The Tribunal cited the Supreme Court case of Coimbatore Spinning & Weaving Co. Ltd. and the Punjab & Haryana High Court case of Paramjit Singh v. Income-tax Officer, which emphasized that oral evidence contradicting a registered sale deed is inadmissible under Sections 91 and 92 of the Indian Evidence Act, 1872. The Tribunal found that the assessee failed to provide any evidence to support the claim of Rs.28,00,000/- as sale consideration. The statement of the witness also supported the lower figure. Therefore, the Tribunal upheld the addition of Rs.13,03,000/- as unexplained income under Section 69A, rejecting the assessee's claims under Sections 54 and 54F. The ground related to the sale of other articles and upgrades was dismissed as not pressed due to lack of evidence and arguments.

The Tribunal upheld the CIT(A)'s rejection of the cash flow statement due to lack of explanation for sources and destinations of funds. However, it set aside the peak credit issue and remitted it back to the AO for fresh consideration of all bank accounts.

The Tribunal noted that as per CBDT Circular No. 03/2018, appeals with a tax effect below Rs. 20 lakhs are not maintainable. The Departmental Representative did not object.

The Tribunal found that the CIT(A) had passed an ex-parte order. Following the principles of natural justice, the Tribunal decided to give the assessee another opportunity.

The Tribunal held that the land was a capital asset as it was situated within the GVMC limits, making capital gains tax applicable. The exemption under section 54B was also correctly denied by the lower authorities.

The Tribunal held that the advances received for plot booking, where no plots were identified or registered and no developmental activities were commenced, should be treated as capital receipts. Consequently, expenses incurred in connection with these advances cannot be treated as revenue expenditure.

The Tribunal upheld the Commissioner's order, agreeing that the Assessing Officer's failure to examine the depreciation claim, particularly regarding lorry ownership, made the assessment erroneous and prejudicial to revenue.

The Tribunal held that for ascertaining the fair market value of the land as on 01/04/1981, the SRO value is not the fair market value. The Assessing Officer overlooked the valuation certificate issued by the Government Registered Valuer, which valued the land at Rs. 100/- per sq.yrd. However, the assessee also did not file any sale deed to support the fair market value. Therefore, the Tribunal opined that the fair market value of the land as on 01/04/1981 would be Rs. 65/- per sq.yrd. and directed the Assessing Officer to adopt this value and recalculate the capital gains. Regarding the cost of construction of the building, the Tribunal noted a significant variation between the Government Registered Valuer's certificate (Rs. 200/- per sq.ft.) and the SRO's certificate (Rs. 34.10 ps. per sq.ft.). In the interest of justice, the Tribunal directed the Assessing Officer to take the cost of construction as Rs. 65/- per sq.ft. as on 01/04/1981 and recompute the long-term capital gains. For the cost of improvement, the Tribunal found that the assessee could not produce bills/vouchers to substantiate the expenditure. The CIT(A) had allowed 50% of the claimed expenditure, which the Tribunal considered fair, reasonable, and justifiable, and thus dismissed this ground of appeal. The issue regarding the assessee's share in the property was not pressed before the CIT(A) and was dismissed. The appeals were partly allowed.

The Tribunal found no reason to interfere with the CIT(A)'s order, which directed the AO to follow the commission rate adopted in previous assessment years. The Revenue's appeal was dismissed as not maintainable due to low tax effect.

The Tribunal directed the AO to re-compute the profit from the IMFL business at 5% of the purchase price, following a coordinate bench decision. However, the additions made by the AO for unexplained expenditure and unsecured loans were upheld due to the assessee's failure to provide evidence.

The Tribunal found merit in the assessee's argument for retrospective registration but noted insufficient details. Therefore, the case was set aside for the Commissioner to re-examine the eligibility for retrospective 12A registration.

The Tribunal held that the assessee's submission of not being aware of the Section 263 proceedings was false, as a show-cause notice was issued and the assessee's representative had appeared. Therefore, there was no sufficient cause for the delay.

The Tribunal held that the transactions between JHPL and SIPL were genuine business transactions and not loans or advances to shareholders. Therefore, they do not fall under the purview of Section 2(22)(e) of the Income Tax Act.

The Tribunal held that the Revenue's appeal was not maintainable due to the low tax effect, as per the CBDT circular. The assessee's cross-objection was dismissed as it supported the CIT(A)'s order.

The Tribunal noted that as per CBDT Circular No. 03/2018, appeals with a tax effect below Rs. 20 lakhs are not maintainable. The Departmental Representative did not object.

The Tribunal noted that as per CBDT Circular No. 03/2018, appeals with a tax effect below Rs. 20 lakhs are not maintainable. The Departmental Representative did not object.

The Tribunal noted that as per CBDT Circular No. 03/2018, appeals with a tax effect below Rs. 20 lakhs are not maintainable. The Departmental Representative raised no objection.

The Tribunal held that the transactions between JHPL and SIPL were genuine business transactions and not loans or advances to shareholders. Therefore, they do not fall under the purview of Section 2(22)(e) of the Income Tax Act.

The Tribunal held that the transactions between JHPL and SIPL were genuine business transactions and not loans or advances to shareholders. Therefore, they do not fall under the purview of Section 2(22)(e) of the Income Tax Act.

The Tribunal held that the transactions between JHPL and SIPL were genuine business transactions and not loans or advances to shareholders. Therefore, they do not fall under the purview of Section 2(22)(e) of the Income Tax Act.

The Tribunal noted that as per CBDT Circular No. 03/2018, appeals with a tax effect below Rs. 20 lakhs are not maintainable. The Departmental Representative raised no objection.

The Tribunal noted that as per CBDT Circular No. 03/2018, appeals with a tax effect below Rs. 20 lakhs are not maintainable. The Departmental Representative raised no objection.

The Tribunal found no reason to interfere with the CIT(A)'s order, which directed the AO to follow the commission rate adopted in previous assessment years. The Revenue's appeal was dismissed as not maintainable due to low tax effect.

The Tribunal held that for ascertaining the fair market value of the land as on 01/04/1981, the SRO value is not the fair market value. The Assessing Officer overlooked the valuation certificate issued by the Government Registered Valuer, which valued the land at Rs. 100/- per sq.yrd. However, the assessee also did not file any sale deed to support the fair market value. Therefore, the Tribunal opined that the fair market value of the land as on 01/04/1981 would be Rs. 65/- per sq.yrd. and directed the Assessing Officer to adopt this value and recalculate the capital gains. Regarding the cost of construction of the building, the Tribunal noted a significant variation between the Government Registered Valuer's certificate (Rs. 200/- per sq.ft.) and the SRO's certificate (Rs. 34.10 ps. per sq.ft.). In the interest of justice, the Tribunal directed the Assessing Officer to take the cost of construction as Rs. 65/- per sq.ft. as on 01/04/1981 and recompute the long-term capital gains. For the cost of improvement, the Tribunal found that the assessee could not produce bills/vouchers to substantiate the expenditure. The CIT(A) had allowed 50% of the claimed expenditure, which the Tribunal considered fair, reasonable, and justifiable, and thus dismissed this ground of appeal. The issue regarding the assessee's share in the property was not pressed before the CIT(A) and was dismissed. The appeals were partly allowed.

The Tribunal held that for ascertaining the fair market value of the land as on 01/04/1981, the SRO value is not the fair market value. The Assessing Officer overlooked the valuation certificate issued by the Government Registered Valuer, which valued the land at Rs. 100/- per sq.yrd. However, the assessee also did not file any sale deed to support the fair market value. Therefore, the Tribunal opined that the fair market value of the land as on 01/04/1981 would be Rs. 65/- per sq.yrd. and directed the Assessing Officer to adopt this value and recalculate the capital gains. Regarding the cost of construction of the building, the Tribunal noted a significant variation between the Government Registered Valuer's certificate (Rs. 200/- per sq.ft.) and the SRO's certificate (Rs. 34.10 ps. per sq.ft.). In the interest of justice, the Tribunal directed the Assessing Officer to take the cost of construction as Rs. 65/- per sq.ft. as on 01/04/1981 and recompute the long-term capital gains. For the cost of improvement, the Tribunal found that the assessee could not produce bills/vouchers to substantiate the expenditure. The CIT(A) had allowed 50% of the claimed expenditure, which the Tribunal considered fair, reasonable, and justifiable, and thus dismissed this ground of appeal. The issue regarding the assessee's share in the property was not pressed before the CIT(A) and was dismissed. The appeals were partly allowed.

The Tribunal held that for ascertaining the fair market value of the land as on 01/04/1981, the SRO value is not the fair market value. The Assessing Officer overlooked the valuation certificate issued by the Government Registered Valuer, which valued the land at Rs. 100/- per sq.yrd. However, the assessee also did not file any sale deed to support the fair market value. Therefore, the Tribunal opined that the fair market value of the land as on 01/04/1981 would be Rs. 65/- per sq.yrd. and directed the Assessing Officer to adopt this value and recalculate the capital gains. Regarding the cost of construction of the building, the Tribunal noted a significant variation between the Government Registered Valuer's certificate (Rs. 200/- per sq.ft.) and the SRO's certificate (Rs. 34.10 ps. per sq.ft.). In the interest of justice, the Tribunal directed the Assessing Officer to take the cost of construction as Rs. 65/- per sq.ft. as on 01/04/1981 and recompute the long-term capital gains. For the cost of improvement, the Tribunal found that the assessee could not produce bills/vouchers to substantiate the expenditure. The CIT(A) had allowed 50% of the claimed expenditure, which the Tribunal considered fair, reasonable, and justifiable, and thus dismissed this ground of appeal. The issue regarding the assessee's share in the property was not pressed before the CIT(A) and was dismissed. The appeals were partly allowed.

The Tribunal held that the advances received for plot booking, where no plots were identified or registered and no developmental activities were commenced, should be treated as capital receipts. Consequently, expenses incurred in connection with these advances cannot be treated as revenue expenditure.

The Tribunal upheld the disallowances for professional charges and foreign travel expenses. However, it ruled that the assessee is entitled to Section 10A exemption on profits enhanced by these disallowances, following a Bombay High Court precedent.

The Tribunal held that while TDS on interest was largely accounted for, the unpaid service tax of Rs. 1,15,694/- was indeed disallowable under Section 43B and its non-addition was prejudicial to revenue. Therefore, the Pr.CIT's order on the service tax issue was upheld.