The ITAT set aside the additional tax demand raised by applying Section 50C through Section 154 (Rectification), ruling that this aspect of the transaction must be adjudicated simultaneously with the primary, remanded issues of cost of acquisition and cost of improvement. The final computation must await the fresh determination of the capital gains after the DVO report and verification of expenses.
The Revenue relied on suspicion and the principle of human probability to challenge cash deposits made by a crockery and electronics trader during the permitted demonetisation window. The Tribunal held that without first rejecting the books of accounts under Section 145(3), the AO cannot legally disregard the substantial cash-in-hand shown by the assessee’s audited records and verified festival season sales.
Description: The CIT(A) failed to adjudicate the core dispute of 2.46 crore bogus purchase disallowance, despite detailed submissions, due to a clerical error in the grounds of appeal. The ITAT ruled that this failure violated natural justice, set aside the appellate order, and remanded the matter to the Assessing Officer for fresh, proper verification and adjudication.
The AO virtually passed an ex parte order regarding a70 lakh addition, ignoring the assessee’s detailed submissions and denying a proper opportunity. The ITAT upheld the CIT(A)’s decision to set aside the assessment and remand the matter for a fresh adjudication, confirming that violations of natural justice necessitate a proper de novo inquiry.
The Revenue treated a documented sale of gold, with payment received via RTGS, as a bogus accommodation entry solely based on the buyer’s failure to reply to a section 133(6) notice. The Tribunal held that concrete evidence, including the full bank trail, stock records, and invoice, outweighs a general investigation report or the non-cooperation of a third party, and deleted the unjustified addition under section 69A.
The ITAT deleted the entire Rs.3.94 crore Transfer Pricing (TP) adjustment, ruling that three companies involved in product development, distribution, and proprietary software (Kellton, Magnasoft, Interglobe) were functionally dissimilar to a captive software service provider.2 The Tribunal held that excluding these companies brought the assessees margin of within the Arms Length Price (ALP) range.
The AO passed a final assessment order without waiting for the DRP’s directions, even though the assessee had filed timely objections against the draft order. The ITAT ruled the final assessment was illegal and void ab initio because the AO violated Section 144C, and it remanded the matter to the DRP for fresh adjudication on merits.
The AO mechanically reopened the case and made a 2.86 crore addition based only on an investigation alert, without being able to identify the alleged property. The ITAT upheld the quashing of the entire proceeding, ruling that simple reproduction of external information, without independent application of mind or tangible evidence, invalidates the reassessment notice.
The AO made a protective addition of Rs. 9.70 crore based solely on the uncorroborated statement of a seller recorded during a search. The ITAT deleted the addition, ruling that a bare Section 132(4) statement without any corroborative evidence (like seized material, book entries, or proof of delivery) is insufficient to prove the cash transaction against a third party.
Description: The Tribunal allowed the appeal of an Exemption-registered society that challenged its reassessment on the legal ground that the AO failed to issue a Section 143(2) notice. The ruling confirms that this notice is mandatory for assumption of jurisdiction under Section 143(3) read with 47, even if the return was filed belatedly.
