The ITAT Rajkot ruled that exporters with turnover below ₹10 crore are equally eligible for 80HHC deductions, following the Supreme Court’s Avani Exports ratio. The Tribunal held that retrospective amendments cannot deny benefits to smaller exporters. The full deduction claimed by the assessee was restored, overturning AO and CIT(A) adjustments.
Given the assessee’s admission of incorrect turnover and failure to get accounts audited, the Tribunal found income estimation justified. However, finding that the AO’s 4% rate was slightly high and unsupported by specific defects, it revised the rate to 3.5%. Key takeaway: estimation must be justified and proportionate to facts on record.
ITAT held that reassessment notices under sections 147/148 were invalid as the reasons were vague and lacked tangible evidence. Reopening cannot be used merely to verify or scrutinize transactions without proper justification.
The Tribunal ruled that duty drawback income recognized on cash receipt basis cannot be taxed on accrual, as consistent accounting practice caused no revenue loss.
The Tribunal held that AO must recompute capital gains considering purchase cost, indexation, and stamp duty, instead of merely adding the section 50C deemed value difference.
ITAT Rajkot partly allowed appeal, directing that 90% of cash deposited during demonetisation be accepted as explained, with only 10% taxable under normal income tax.
The Tribunal found that notices lacking classification as limited, complete, or manual scrutiny violated CBDT instructions. As a result, the assessment under section 143(3) was quashed as void ab initio.
ITAT held that Section 263 cannot be invoked when the AO has already examined the issues and applied his mind. Key takeaway: Mere preference for deeper enquiry does not make an assessment erroneous.
The Tribunal found no proof that the trust spent funds on a specific community. The matter was remanded for a fresh review of its 12AB and 80G applications.
Rajkot ITAT deleted an addition of ₹94.81 lakh, holding that interest received under Section 28 of Land Acquisition Act is accretion to compensation, not interest taxable under Section 56(2)(viii). Since acquired land was rural agricultural land (not a capital asset), compensation, including Section 28 interest, is wholly exempt from tax.
