ITAT Cuttack

Depreciation not allowed on Leasehold Rights as same is not Intangible Assets

Mahanadi Coalfields Ltd. Vs DCIT (ITAT Cuttack)

The issue under consideration is whether the leasehold rights is considered as intangible assets and hence eligible for depreciation under section 32(1)(ii)? ITAT hold that the lease hold rights are not eligible for depreciation u/s.32(1)(ii) of the Act considering it as intangible rights and, accordingly, dismiss the ground of appeal of ...

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Treatment of Interest on Fixed Deposit – ITAT remanded case Back to AO

Angul Sukinda Railway Ltd. Vs ITO (ITAT Cuttack)

Angul Sukinda Railway Ltd. Vs ITO (ITAT Cuttack) We find that during the course of assessment proceedings the assessee explained before the AO with regard to interest on mobilization advance is a capital receipt, therefore, it has been reduced from the capital work-in-progress and in case of interest earned on fixed deposit/flexi deposits...

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Section 14A disallowance should be as per Rule 8D Calculation Method

National Aluminium Company Ltd. Vs ACIT (ITAT Cuttack)

National Aluminium Company Ltd. Vs ACIT (ITAT Cuttack) The issue under consideration is whether disallowance u/s 14A without following calculation method mentioned under rule 8D is justified in law?...

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In absence of new facts reopening of already examined issue was invalid

Mina Kumari Sahoo Vs ITO (ITAT Cuttack)

Assessing Officer has taken into consideration the facts and estimated the profit taking into deposits in the bank accounts. Thereafter, there were no new facts before the Assessing Officer which could justify the reopening. On these facts, it was nothing more than change of mind by the Assessing Officer, and a reopening of assessment on ...

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AO cannot reopen a case to re-examine issue examined during original assessment

DCIT Vs Indian Metals & Ferro Alloys Ltd (ITAT Cuttack)

DCIT Vs Indian Metals & Ferro Alloys Ltd (ITAT Cuttack) In this case there is nothing to suggest that all the primary facts were not disclosed by the assessee at the time of original assessment completed u/s 143(3) of the Act nor any failure on the part of the assessee to disclose fully and truly […]...

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Higher depreciation on Lorry not eligible if party used for own

GVV Construction Pvt. Ltd. Vs. DCIT (ITAT Cuttack)

GVV Construction Pvt. Ltd. Vs. DCIT (ITAT Cuttack) If the assessee uses motor lorries partly for own use and for hire charges he is not entitled to claim excess depreciation @ 30% as per the provisions of Section 32 of the Income Tax Act. Case Summary: – Facts of the case: The assessee filed return […]...

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Percentage Completion Method for Revenue Recognition not mandatory for Construction Companies till AY 2016-17

Hi-tech Estates & Promoters Pvt Ltd. Vs PCIT (ITAT Cuttack)

The issue under consideration is whether as per Section 43CB, profits and gains of a construction company mandatorily be determined on the basis of percentage completion method for revenue  recognition?...

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AO cannot change valuation method from DCF to book value method

Alishan Palace Resorts Pvt Ltd. Vs ITO (ITAT Cuttack)

Alishan Palace Resorts Pvt Ltd. Vs ITO (ITAT Cuttack) in the instant case, the value adopted and computed by the assessee as per Rule 11UA(2)(c)(b) by following DCF method at Rs.51/85 and the assessee company has received shares and issued/allotted @ Rs.50 per share including premium and this rate has not been contested or challenged [&he...

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Section 271(1)(c) Penalty notice without any Specific allegation is unjustified

Dr. Subash Chandra Jena Vs ACIT (ITAT Cuttack)

Both assessment and the penalty order do not specify as to on which limb the AO intends to impose penalty u/s.271(1)(c) of the Act either for concealment of particulars of income or for furnishing of inaccurate particulars of such income....

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No TDS u/s 194H for Prepaid SIM & 194J for Roaming Charges

Vodafone Idea Limited Vs ACIT-TDS (ITAT Cuttack)

AO considered assessee as assessee in default in respect of non-deduction of TDS under Section 194H and 194J of the Act on payment of commission and fees for professional or technical services and passed an order under Section 201(1) & 201(1A) of the Act....

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Non-Availability of PAN of Deductee is not valid excuse for not filing TDS Return

Mahanadi Coal Fields Ltd. Vs JCIT (TDS) (ITAT Cuttack)

The assessee cannot escape himself for non-filing quarterly TDS merely stating that the PAN of the employees are not available. The penalty is provided in the Income Tax provisions u/s.272A(2)(k) of the Act is mandatory in nature except in case of reasonable cause proved by the assessee, which is lack in this case....

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Best judgment assessment- Salary & interest to partners can be disallowed

Eastern Engineering Venture Vs ITO (ITAT Cuttack)

ITAT held that As there was part non-compliance by assessee with first notice under section 142(1) and complete non-compliance with subsequent notice under section 142(1), the AO was right in framing assessment order under section 144 and in denying allowance of interest and salary paid to partners by taking support of provisions of secti...

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Income shown as Salary Income First and Later claimed as Business Income- ITAT Remands Matter Back to AO

Shri Jalendra Sahoo Vs ITO (ITAT Cuttack)

The appeal has been filed against the addition of Rs. 11,12,211/- made by the learned AO and confirmed by the learned CIT(Appeals) treating the said amount as not commission but as salary income without allowing deduction u/s. 37 of the IT. Act, 1961, the expenses incurred to earn the said commission. But in fact, the entire receipt is co...

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No addition in case of unabated assessment if no incrimination material was found

ACIT Vs Diamond Plaza (P) Ltd. & Vice-Versa (ITAT Cuttack)

Assessment under section 153A could not be made for making addition of unexplained income if assessment was unabated which had attained finality on the date of search and no incriminating material was found as per record. ...

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Penalty u/s. 271E cannot be levied in case of bonafide belief

Ms. Orison Transport Vs DCIT (ITAT Cuttak)

Penalty u/s.271E was not leviable as the belief of assessee that return of advance from customers was not prohibited by section 269T was a bonafide belief....

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Provisions of Section 68 Cannot be applied to Sundry Creditor

DCIT Vs Allied Infra suppliers (ITAT Cuttack)

The provisions of section 68 cannot be applied to sundry creditors and the assessee cannot be applied to sundry creditors and the assessee cannot be asked to prove the 3 ingredients of cash credits in respect of sundry creditors....

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Contribution to EPF & ESI deposited before Income Tax Return filing due date cannot be disallowed

Das & Sons Infracon Pvt. Ltd. Vs DCIT (ITAT Cuttack)

Das & Sons Infracon Pvt. Ltd. Vs DCIT (ITAT Cuttack) amount claimed on payment of PF and ESI having been deposited on or before due date of filing of returns, same could not be disallowed under section 43B or under section 36(1)(va). FULL TEXT OF THE ITAT JUDGMENT This is an appeal filed by the […]...

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CIT cannot disturb stock valuation method followed by Assessee consistently

M/s. Sree Alankar Vs PCIT (ITAT Cuttack)

M/s. Sree Alankar Vs PCIT (ITAT Cuttack) In the instant case, we find that it is not in dispute that the assessee is consistently following the same method of valuation of closing stock which was also followed in the year under consideration. The profit was deduced in accordance with the method adopted by the assessee. […]...

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Exemption U/s.11 cannot be denied for Mere surplus from Micro Finance activity

ITO Vs Adhikar (ITAT Cuttack)

ITO Vs Adhikar (ITAT Cuttack) In the instant case, it is not in dispute that the assessee is engaged in the activity of Micro Finance. The Assessing Officer considered the same as non-charitable activity within the meaning of section 2(15) of the Act on the ground that the activities were carried out on commercial lines. […]...

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Remuneration to partners cannot be disallowed merely because share of partners not fixed or deed not provides for manner of quantification of such remuneration

Panda Fuels Vs ITO (ITAT Cuttack)

Panda Fuels Vs ITO (ITAT Cuttack) We have heard the rival submissions, perused the orders of lower authorities and materials available on record. In the instant case the Assessing Officer disallowed deduction for remuneration paid to partners of Rs.6,64,923/- on the ground that the partnership deed does not provide for remuneration to par...

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Section 234E fees cannot be levied for Quarter ending before 01.06.2015

TB and ID Hospital Vs ITO (ITAT Cuttack)

When amendment made U/s. 200A of Income Tax Act which has come into effect on 1.6.2015 is held to be having prospective effect, no computation of fee for the demand or the intimation for the fee under Section 234E could be made for the TDS deducted for the respective assessment year prior to 1.6.2015....

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No Penalty U/s. 271E on cash refund of advance from customers under Bonafide Belief

M/s. Orison Transport Vs DCIT (ITAT Cuttack)

 M/s. Orison Transport Vs DCIT (ITAT Cuttack) Belief of the assessee that return of advance from customers is not prohibited by section 269T was a bonafide belief. Therefore, the levy of penalty u/s.271E of the Act of Rs.21,49,943/- cannot be sustained. FULL TEXT OF THE ITAT JUDGMENT This is an appeal filed by the assessee against [&hel...

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Trust cannot be denied exemption for mere receipt of income by way of training and consultancy fee

Xavier Institute of Management Vs ITO (ITAT Cuttack)

Xavier Institute of Management Vs ITO (ITAT Cuttack) The Cuttack bench of the Income Tax Appellate Tribunal (ITAT) has held that the income received by a charitable institution imparting education shall not be charged for receiving training and consultancy fee from corporates as the same cannot be treated as a ‘commercial activity’ fo...

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Books of account cannot be relied after rejection for making addition U/s. 69

Hemant Kumar Pradhan Vs ITO (ITAT Cuttack)

Hemant Kumar Pradhan Vs ITO (ITAT Cuttack) Original assessment u/s.143(3) of the Act was made by the AO by rejecting the books of accounts of the assessee and estimating the income of the assessee at 8% of the gross contract receipt of Rs. 49,10,212/-. It is trite law that once the books of accounts of […]...

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S. 271B No penalty for non-furnishing of audit report within due date if same was obtained before due date

Mr Prem Prakash Senapati Vs ITO (ITAT Cuttack)

We find that the audit report was obtained within section 139(1) time limit is not in dispute. It is also not in dispute that the copy of audit report was furnished to the Assessing Officer as and when the Assessing Officer called for the same. ...

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Section 40A(3) provisions not intended to restrict business activities

Sabita Panda Vs ITO ( ITAT Cuttack)

The provisions of section 40A(3) are not intended to restrict the business activities but to caution that payments exceeding Rs.20,000/- are made in cheque/draft. The provisions of section 40A(3) of the Act are to be in consonance with business expediency trade practice and other genuine relevant factors...

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Penalty Notice without Application of Mind by AO is Invalid

ITO Vs. Sri T.Biswanath Patro (ITAT Cuttack)

Assessing Officer has issued notice under section 274 r.w.s. 271(1)(c) of the Act dated 27.03.2015 without striking off the irrelevant words, the penalty proceedings show a non-application of mind by the Assessing Officer and is, thus, unsustainable....

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CIT may consider an order of AO erroneous if it is a stereo typed order

Cuttack Development Authority Vs. CIT (ITAT Cuttack)

CIT may consider an order of the AO to be erroneous not only it contains some apparent error of reasoning or of law or of fact on the face of it but also because it is a stereo typed order which simply accepts what the assessee has stated in his return and fails to make enquirers which are called for in the circumstances of the case....

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Reopening based on mere Tax Audit report Filed during Scrutiny Proceedings is Invalid

Mahanadi Coalfields Ltd. Vs ACIT (ITAT Cuttack)

Mahanadi Coalfields Ltd. Vs. ACIT, (ITAT Cuttack) In the present case found that thee Assessing Officer has initiated reassessment proceedings on the same facts which were available before him at the time of making assessment u/s.143(3) of the Act and no new tangible material has come on the basis of which it could be said […]...

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Leasehold Rights not eligible for Depreciation

Mahanadi Coalfields Ltd. Vs DCIT (ITAT Cuttack)

Lease hold rights are not eligible for depreciation u/s.32(1)(ii) of the Act considering it as intangible asset and, hence, dismiss this ground of appeal of the assessee....

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TDS U/s. 194C not applicable on hiring charges paid to transporter or truck owners in absence of any written or oral contract

Chandrakant Thackar Vs. Asst. CIT (ITAT Cuttack)

When hiring of trucks and payment thereof was not in consequence upon any written or oral agreement, the natural outcome is that the provisions of section 194C, as has been held in the decisions referred to herein before, were also not applicable to the assessee’s case ...

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Interest on bank deposits when project is being setup is a capital receipt: POSCO India case

ACIT Vs. M/s. POSCO India Pvt Ltd. (ITAT Cuttack)

Taxability of income earned by an assessee during the period when the project was not complete and business had not commenced has remained a debatable point in many cases. ...

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Order passed u/s. 263 not sustainable if AO chosen one of the two views in respect of the claim of deduction u/s. 80IA(4)

ARSS Infrastructure Projects Ltd. Vs Asstt. Commissioner of Income-tax (ITAT Cuttack)

A perusal of the provisions of section 80IA(4) of the Act shows that in the explanation ‘infrastructure facility’ has been specified to mean a road including a toll road, a bridge or a rail system. Admittedly, the assessee is doing the business of development of railway tracks and bridges thereof as also roads....

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EPF / ESI contributions allowable, if paid before due date of filing I-T return

Gobindpada Bhanja Chowdhury Vs Income-tax Officer (ITAT Cuttack)

Amounts whether employees' contribution or the employer's contribution are not being shown as payable as on the last date of the Assessment Year cannot be brought to tax if the same has been paid before the due date of filing of the return....

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Mere discrepancies in books results not sufficient to change status of assessee

Asst. Commissioner of Income - tax Vs Cuttack Development Authority (ITAT Cuttack)

The discrepancies brought on record have culminated into rejection of the books result could not wash away the fact finding insofar as the assessee continues to be a local authority which it was prior to Assessment Year 2003- 04. The submissions of the learned Counsel for the assessee on the issue of the learned CIT(A) upholding the statu...

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Expense cannot be disallowed for Mistakes in form 15G

Pareek Electricals Vs Assistant Commissioner of Income-tax (ITAT Cuttack)

With respect to the deduction u/s.194-I,the learned Counsel for the assessee has submitted that the land lady being a senior citizen has submitted Form 15G to the assessee declaring that no tax should be deducted on the rent paid to her when the taxable limit for taxation in her hand was to be Rs. 1,95,000. ...

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Estimation of income in case of civil contract work at 6% of gross receipt is just where 80% of amount was towards purchase of material

Girish Chandra Nayak Vs Income-tax Officer (ITAT Cuttack)

In this view of the matter, the estimation at 8% confirmed by the learned CIT(A) by deleting these additions and disallowances made u/ss.68 and 69 we hold 7% profit as reasonable to be taxable income on the gross receipts disclosed by the assessee in its financial statements. ...

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Donation to corpus fund not asssassable u/s. 68

Asst. Commissioner of Income-tax Vs Vidya Jyoti Trust (ITAT Cuttack)

Corpus fund is the property of the Trust. The donors contributed the donations therefore could not form part of the income & expenditure account as prescribed by law. The development fees received later on was from students was to be identified by the assessee over and above the corpus funds when the students were made aware that they are...

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S. 80P not applies to District level Central Cooperative Bank

The Sundergarh District Central Co-operative Bank Ltd. Vs Dy. Commissioner of Income Tax (ITAT Cuttack)

Statute makes the amended provision Section 80P(4) inserted by Finance Act, 2006 to be effective from 1.4.2007, which therefore clearly indicates that it is applicable from the Assessment Year 2007-08 onwards. The said provision clearly mandates that the provisions of Section 80P shall not apply in relation to any co-operative bank other ...

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Section 194I – TDS not deductible on transmission and wheeling charges paid by power trading companies as same in not rent

M/s. Grid-Co Limited Vs Asst. Commissioner of Income- Tax (ITAT Cuttack)

GRID-CO Limited Vs. ACIT (ITAT Cuttack)-The Tribunal observed that Circular No. 5 and Circular No. 736 had given restricted meaning to the word ‘rent’. However, in view of the decisions relied by the tax department, the word ‘rent’ is to be given a wider meaning. Accordingly, the contention of the taxpayer on this aspect was rejec...

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In case of difference between sales as per books and TDS certificate only profit element is taxable

R.R. Caryying Corpn. Vs. ACIT (ITAT Cuttack)

Cuttack bench of the Income-tax Appellate Tribunal (the Tribunal) in the case of R.R. Caryying Corpn. v. ACIT [2009] 126 TTJ 240 (Cuttack) held that only the embedded portion of the profits is to be considered as taxable and not the entire amount in the case of discrepancies between the sales or receipt amount as per books of accounts ...

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