ITAT Visakhapatnam Judgments — September 2021

The Tribunal condoned the delay of 228 days in filing the appeal, finding the reasons provided by the assessee to be bonafide and unintentional, also considering the COVID-19 lockdown period. On the merits, the Tribunal noted that while an opportunity for verification of the MOA and submission of a detailed reply was given for 13/09/2019, and the assessee's representative attended, the assessee claimed to have also appeared on 19/09/2019 with amendments. The Tribunal observed that the impugned order did not advert to the facts of the appearance on 19/09/2019 and the amendment to the MOA. Crucially, the Tribunal highlighted that the proviso to Section 12AA(1) mandates a reasonable opportunity of being heard before passing a rejection order. It concluded that, based on the facts, an adequate and reasonable opportunity of being heard was not given to the appellant before refusing registration. Therefore, the Tribunal did not delve into the controversy of whether the representative appeared on 19/09/2019. The case was remanded to the CIT(E) for a fresh decision after affording reasonable opportunities of being heard to the assessee. The appeal was allowed for statistical purposes.

The Tribunal held that the loss on forward contracts was not allowable as revenue expenditure. However, it also found that the waiver of loan amounts did not fall under Section 41(1) and that Section 28(iv) was not applicable as the receipt was in the nature of cash or money.

The Tribunal held that the AO had properly verified the capital gains computation during the assessment. Since the assessee transferred only 50% of the land for development and retained the other 50%, capital gains should be computed only on the transferred portion.

The Tribunal upheld the CIT(A)'s decision, finding that the cash deposits were explained by the assessee's cash balance and the long-term capital gains were properly accounted for. The Tribunal also found that the CIT(A) had sufficient material to decide the appeal without remitting it to the AO.

The Tribunal held that there was no fresh cash credit or infusion of capital. The increase in share application money was a book entry resulting from the transfer of sundry creditors, which was later reversed and paid. Therefore, Section 68 was not applicable.

The Tribunal held that the AO's reasons for reopening were vague and based on suspicion rather than a reasonable belief of income escapement, as required by law. The notice under Section 148 was therefore invalid.

The Tribunal held that the notice issued under Section 148 in the name of the deceased assessee was void and unenforceable in law. Consequently, the reassessment order passed based on this invalid notice was also bad in law.

The Tribunal held that the appeal filed by the Revenue Department was liable to be dismissed. The cross-objection filed by the assessee, being in support of the Commissioner's order, had become infructuous and was also dismissed.

The Tribunal held that the loss on forward contracts was not allowable as revenue expenditure. However, it also found that the waiver of loan amounts did not fall under Section 41(1) and that Section 28(iv) was not applicable as the receipt was in the nature of cash or money.

The Tribunal upheld the CIT(A)'s decision to delete the addition made by the AO on the cost of staff quarters, finding that the assessee had explained the source and demonstrated the cost, including other amenities. The Tribunal also dismissed the revenue's appeal regarding depreciation and staff quarters maintenance.

The Tribunal held that the appeal filed by the Revenue Department was liable to be dismissed. The cross-objection filed by the assessee, being in support of the Commissioner's order, had become infructuous and was also dismissed.

The Tribunal held that the loss on forward contracts was not allowable as revenue expenditure. However, it also found that the waiver of loan amounts did not fall under Section 41(1) and that Section 28(iv) was not applicable as the receipt was in the nature of cash or money.

The Tribunal held that the AO had properly verified the capital gains computation during the assessment. Since the assessee transferred only 50% of the land for development and retained the other 50%, capital gains should be computed only on the transferred portion.

The Tribunal held that if employees' contributions to ESI and PF are deposited before the due date of filing the return of income, no disallowance can be made. The Tribunal followed the principle that in case of divergent views, the one favoring the assessee should be adopted.

The Tribunal decided to add 50% of the machinery hire charges to the assessee's income, considering that the income had already been estimated at 8% and to balance the contentions of both parties.

The Tribunal held that Section 41(1) applies when the assessee (debtor) obtains a benefit by way of remission or cessation of liability, typically by writing it off in their own books. Since the assessee had not written off the liability, even though the creditor had, the addition under Section 41(1) was not justified.

The Tribunal upheld the CIT(A)'s order, stating that the Assessing Officer's mind was not clear regarding the limb under which penalty was to be levied. The penalty is not leviable if the notice does not specify the charge for the assessee to reply and defend.

The Tribunal upheld the CIT(A)'s deletion of the addition, finding that the canteen's cash deposits were from legitimate sales to police personnel and not unaccounted money. The Tribunal also found the admission of additional evidence justified given the assessee's circumstances.

The Tribunal held that adjustments for debatable issues like the disallowance of employees' PF and ESI contributions are not permissible under Section 143(1). It further held that if such contributions are paid before the due date of filing the return of income, deduction is allowable.

The Tribunal held that adjustments for debatable issues like employees' PF and ESI contributions are not permissible under section 143(1). Following previous judgments, the Tribunal decided that if these contributions are paid before the due date for filing the return of income, no disallowance can be made.

The Tribunal held that adjustments for debatable issues are not permissible under Section 143(1). Furthermore, it was held that employees' contribution to PF and ESI, if paid before the due date for filing the return of income, is allowable as a deduction.

The Tribunal held that adjustments under section 143(1) are not for debatable issues. It further held that employees' contribution to PF and ESI, if paid before the due date of filing the return of income, is allowable as a deduction.

The Tribunal held that Section 68 of the Income Tax Act is applicable only to cash credits found in the assessee's books of accounts, not to deposits made in a bank account. A bank passbook or statement is not considered the assessee's books of accounts for the purpose of Section 68.

The Tribunal concurred with the CIT(A) that Section 69A was not applicable as no money was found during the survey, only information suggesting higher sale prices. The estimation of profit at 15% on unaccounted receipts was upheld as it was based on a High Court judgment and in favor of the Revenue.

The Tribunal held that if employees' contributions to ESI and PF are deposited before the due date of filing the return of income, no disallowance can be made. The Tribunal followed the principle of favoring the assessee when there are divergent judicial views.

The Tribunal upheld the CIT(A)'s deletion of additions related to TDS disallowance and interest payments, finding that the assessee had complied with TDS provisions and that interest payments were matched by receipts. The addition for cash deposits under Section 69A was also deleted as the source was explained and recorded in books.

The Tribunal held that if employees' PF contribution is deposited on or before the due date of filing the return of income, no disallowance can be made. The assessment order, taken in accordance with law and favorable to the assessee, cannot be termed erroneous.

The Tribunal upheld the deletion of additions related to interest expenditure and cash deposits, finding no revenue loss or lack of explanation. However, the addition related to Rs. 77,000/- was remitted back to the AO for re-examination due to insufficient details.

The Tribunal held that the land in question was beyond 8 km from the municipality as per the Central Government notification of 1994, and no subsequent notification was issued. Therefore, it was to be considered agricultural land.

The Tribunal held that the CIT(A) erred by passing orders without waiting for the remand report and without providing the assessee an opportunity to comment on it, violating principles of natural justice.

The Tribunal upheld the CIT(A)'s order, finding no reason to interfere as the CIT(A) had made a specific finding regarding the disallowance relatable to fund diversion. The Tribunal also upheld the deletion of disallowance under Section 14A as the assessee had not earned any exempt income.

The Tribunal held that the AO erred in taxing the entire land area as capital gains, as the assessee was entitled to only a portion of the built-up area. It also directed the AO to allow pro-rata expenses for development charges, recomputing the capital gains accordingly.

The Tribunal held that the CIT(A) erred by passing orders without waiting for the remand report and without providing the assessee an opportunity to comment on it, violating principles of natural justice.

The Tribunal held that the AO erred in taxing the entire land area as capital gains, as the assessee was entitled to only a portion of the built-up area. It also directed the AO to allow pro-rata expenses for development charges, recomputing the capital gains accordingly.

The Tribunal held that the AO erred in taxing the entire land area as capital gains, as the assessee was entitled to only a portion of the built-up area. It also directed the AO to allow pro-rata expenses for development charges, recomputing the capital gains accordingly.

The Tribunal held that the CIT(A) was correct in deleting the additions as the Revenue failed to provide corroborating evidence to support the claims of on-money receipts. The seized material alone was not sufficient to establish the receipt of unaccounted income.

The Tribunal held that the CIT(A) was correct in deleting the additions as the Revenue failed to provide corroborating evidence to support the claims of on-money receipts. The seized material alone was not sufficient to establish the receipt of unaccounted income.

The Tribunal held that no disallowance under Section 14A is required if the assessee has not earned any exempt income. The CIT(A)'s deletion of the addition was upheld as the department did not provide contrary material.

The Tribunal upheld the CIT(A)'s deletion of the disallowance. It ruled that Section 14A can only be invoked if exempt income has actually been earned by the assessee.

The Tribunal held that the cash deposits were duly reflected in the assessee's books of accounts and the source was explained as sales proceeds. Therefore, the addition under Section 69A was not sustainable.

The Tribunal upheld the CIT(A)'s order deleting the addition made by the AO. It was held that Section 69A was not applicable as the assessee had recorded the source of funds in their books and offered the income to tax under the appropriate section, with no adverse findings from the AO despite details being provided.

The Tribunal allowed the assessee's application to withdraw the appeal as the assessee had availed the Vivad se Vishwas scheme. The assessee was granted liberty to seek recall of the order if unforeseen circumstances arise.

The Tribunal noted that the assessee had availed the Vivad se Vishwas scheme and the Income Tax Department accepted the application. Therefore, the appeal was dismissed as withdrawn.