The ITAT held that warranty provisions based on past experience are deductible even if a sizeable opening balance exists. Estimated future obligations from past sales qualify as allowable business expenditure.
The issue was whether appeals dismissed as time-barred should be revived when delay was caused by a tax consultant. The Tribunal condoned the delay and restored the cases for merits-based adjudication.
The ITAT ruled that section 69A cannot be invoked unless ownership of cash is established. Mere third-party seized ledgers without recovery of money are insufficient to sustain an addition.
The Tribunal ruled that unexplained money provisions cannot be applied on conjectures when the source of cash is reasonably explained. With no dispute on withdrawals and savings, the demonetisation-period addition failed on merits.
The ITAT emphasised that dismissal of appeals without dealing with substantive grounds is legally untenable. NFAC was directed to rehear the reassessment appeals after granting reasonable opportunity.
The Tribunal ruled that CIT(A) must pass a speaking order addressing all grounds raised. Failure to do so vitiates the appellate order, regardless of assessee’s non-compliance.
The Tribunal held that once the Assessing Officer has examined and accepted the source of property investment, the Commissioner of Income Tax (Exemption) cannot reopen the issue under section 263. The ruling emphasizes finality of AO’s findings.
The appeal was filed late due to ongoing police proceedings against the assessee. The Tribunal held this to be sufficient cause and restored the appeal for fresh consideration.
The Tribunal held that a bad debt claim involving factual and legal analysis cannot be disallowed during section 143(1) processing. Such issues must be examined through regular assessment proceedings, not summary adjustments.
The appeals were dismissed solely due to delay without examining merits. The Tribunal held that substantive justice requires condonation, though costs may be imposed for repeated defaults.
