ITAT Visakhapatnam Judgments — December 2018

The Tribunal held that the CIT(A) was justified in confirming the AO's order by following the previous ITAT decision. The assessee's pleas regarding dissolution of the firm and applicability of Section 189(1) were already decided against them.

The Tribunal held that the AO cannot make adjustments to the book profit beyond the specific provisions of Section 115JB, especially when the accounts are prepared in accordance with the Companies Act and certified by statutory auditors. The profit not routed through the P&L account cannot be added for MAT purposes.

The Tribunal held that the Principal Commissioner rightly exercised powers under Section 263 to direct the initiation of penalty proceedings. Non-initiation of penalty proceedings in a case where it was warranted was considered erroneous and prejudicial to the revenue.

The Tribunal held that for the purpose of Section 54F, the 'net consideration' refers to the actual sale consideration received or accrued, not the deemed value under Section 50C. Since the assessee invested the entire net consideration in acquiring a new house, the capital gains are not chargeable.

The Tribunal held that the Principal Commissioner rightly exercised powers under Section 263 to direct the initiation of penalty proceedings. Non-initiation of penalty proceedings in a case where it was warranted was considered erroneous and prejudicial to the revenue.

The Tribunal held that the Principal Commissioner rightly exercised powers under Section 263 to direct the initiation of penalty proceedings. Non-initiation of penalty proceedings in a case where it was warranted was considered erroneous and prejudicial to the revenue.

The Tribunal held that the disallowance under Section 40(a)(i) is attracted in the year the expenditure is debited to the P&L account if TDS was not deducted. Since the assessee failed to deduct TDS on payment to the NRI, the expenditure was not allowable.

The Tribunal held that for M/s Jay Enterprise and Paramount Consulting, the assessee provided sufficient evidence of genuine transactions and payments, warranting deletion of the addition. However, for M/s Seemanth Trading Co., the assessee failed to establish the genuineness of the outstanding amount.

The Tribunal held that both short-term capital gains and business income/loss should be assessed. It noted that the AO and CIT(A) did not examine the issues of Section 45(2), Section 50C, and Section 43CA properly.

The Tribunal condoned the delay, citing principles of natural justice and the need for the assessee to be heard on merits. The order of the CIT(A) was set aside and the matter was remitted back for fresh adjudication.

The Tribunal observed that the tax effect was below the monetary limit prescribed by CBDT Circular No. 03/2018. Therefore, the appeal filed by the Revenue was not maintainable.

The Tribunal held that the assessee accepted the 8% estimation before the Assessing Officer after considering depreciation, interest, and remuneration. Therefore, the claim that the estimation was too high before appellate authorities was not considered valid.

The Tribunal found that the CIT(A) passed an ex-parte order without affording a proper opportunity to the assessee. Therefore, the assessee should be given another chance to present their case.

The Tribunal noted that the tax effect involved was below Rs. 20 lakhs. As per CBDT Circular No. 03/2018, such an appeal is not maintainable. The Departmental Representative did not object.

The Tribunal held that the penalty notice issued by the Assessing Officer was vague as it did not clearly specify whether the proceedings were for concealment of income or furnishing inaccurate particulars. Consequently, the penalty imposed was cancelled.

The Tribunal held that the addition on account of bogus purchases was directly related to the understatement of closing stock, which was the reason for reopening. Therefore, the additions made by the AO were considered valid and interlinked with the reasons for reopening.

The Tribunal held that the AO failed to establish that the turnover found pertained to the assessee firm and did not provide supporting material. The Tribunal found it reasonable to estimate income based on net profit at 3.23% on the difference in turnover for each year, as this was offered by the assessee and accepted for a subsequent year.

The Tribunal held that the AO's estimation of profit based on a different business type was not justified. Following a coordinate bench decision, the Tribunal directed the AO to estimate net profit at 5% of total purchases.

The Tribunal held that initiating revision proceedings under Section 263 solely based on an audit objection is not tenable in law. The Pr.CIT must apply an independent mind and cannot be influenced by audit objections.

The Tribunal upheld the CIT(A)'s order, finding no reason to interfere with the decision that Form 10B was adequately filled and the accumulation claim should be considered. The Revenue's appeal was dismissed.

The Tribunal held that the addition on account of bogus purchases was directly related to the understatement of closing stock, which was the reason for reopening. Therefore, the additions made by the AO were considered valid and interlinked with the reasons for reopening.

The Tribunal noted that the crucial aspect was whether Form 15H was filed by the recipients before the due date for depositing the tax. Since this was not clear from the lower authorities' orders, the matter was remitted back to the Assessing Officer for fresh examination.

The Tribunal held that the AO failed to establish the seized turnover belonged to the assessee firm and that the assessee had already offered additional income for AY 2011-12 based on a net profit rate. Therefore, taxing the gross profit again was not justified.

The Tribunal held that the AO failed to establish that the turnover found pertained to the assessee firm and did not provide supporting material. The Tribunal found it reasonable to estimate income based on net profit at 3.23% on the difference in turnover for each year, as this was offered by the assessee and accepted for a subsequent year.