ITAT Visakhapatnam Judgments — August 2019

The Tribunal held that the residential unit was constructed after the transfer of the capital asset and directed the AO to allow deduction under Section 54F. The Tribunal found the department's approach inconsistent regarding the cost of construction for assessment and deduction purposes.

The Tribunal held that the Assessing Officer's order was neither erroneous nor prejudicial to the revenue. It further noted that the PCIT could not exercise revisionary powers under Section 263 if the Assessing Officer's order was prima facie invalid.

The Tribunal found a prima facie mistake in the AO's valuation of the closing stock, as the interpretation of 'pairs' as two sets might be incorrect. Therefore, the matter was remitted back to the AO for fresh verification and correct valuation.

The Tribunal held that the Revenue's appeal was not maintainable as it should have filed two separate appeals. The assessee's cross-objection was partly allowed as it raised a valid point regarding the appeal filing.

The Tribunal held that the disallowance of consultancy charges was not justified as the issue was decided in favour of the assessee in earlier years on identical facts. Similarly, the belated payment of employee's PF contribution was allowed as it was paid before the due date of filing the return of income, following consistent tribunal rulings.

The Tribunal held that the CIT(A) should have examined the issues in detail and passed an order on merits, even if passing ex-parte orders. The Tribunal decided to give the assessee one more opportunity for a fresh decision on merits.

The Tribunal held that prior claims of exemption under Section 11 cannot be the sole ground for rejecting a Section 12AA registration application. The CIT(E) should examine the assessee's objects and genuineness of activities, conducting inquiries if necessary.

The Tribunal condoned the delay in filing the appeals, finding sufficient cause for the non-compliance. The matter was set aside to the CIT(A) to decide on merits after considering a condonation application.

The Tribunal held that the penalty under Section 271B was not justified because the assessee had a bonafide belief that the transaction resulted in capital gains, not business income. The Tribunal noted that it was a single transaction and followed a coordinate bench's decision in a similar case.