Additions made by attributing the commission income earned by PSPL as undisclosed income of the Assessees were held unsustainable in law and were directed to be deleted across all relevant assessment years as Revenue had failed to establish inflation of purchase prices; accrual of PSPL’s commission income to assessees; any flow back of funds to the Assessees; or that PSPL was a sham or fictitious entity.
The Chennai ITAT ruled that indexation benefits under Section 48 cannot be denied when construction details are already part of the registered sale deed. The Tribunal held that annexures forming part of the sale deed cannot be treated as additional evidence.
The ITAT Chennai ruled that funds received by a Chartered Accountant for remitting clients’ taxes could not be treated as unexplained money. Documentary evidence showing corresponding tax payments led to deletion of the additions.
The Chennai ITAT restored the matter to the CIT(A), holding that the appellate authority failed to examine a prior Tribunal decision in the assessee’s own case involving similar issues.
The ITAT Chennai held that an Assessing Officer cannot introduce a new addition while giving effect to an appellate order. Since the Tribunal had issued no direction to tax ₹5 crore as income from other sources, the addition was deleted.
The Chennai ITAT held that payments received by a UAE resident could not be taxed as Fees for Technical Services in India because the India-UAE DTAA lacks an FTS provision. In the absence of a Permanent Establishment, the income was treated as business profits not taxable in India.
ITAT Chennai held that late filing fees under Section 234E could not be levied through TDS processing for periods prior to 01.06.2015, as the enabling provision under Section 200A was introduced only prospectively.
ITAT Chennai held that estimating income at 8% of turnover was excessive where the assessee’s accounts were tax-audited and past profit history reflected lower margins. The Tribunal restricted the addition by adopting a 4% profit rate based on the facts of the case.
The ITAT held that compensation paid to terminate a land sale agreement was a business expenditure incurred for commercial reasons. The amount could not be treated as part of closing stock and was allowable under Section 37.
ITAT Chennai held that reopening an assessment after four years based on issues already examined during scrutiny amounted to an impermissible change of opinion. The key takeaway is that reassessment cannot be used as a tool to review a concluded assessment without fresh tangible material.
