The ITAT Rajkot significantly reduced an addition made under Section 69, ruling that in cases of alleged “on-money” payments found during a search, only the embedded profit component is taxable. Following the Gujarat High Court precedent, the Tribunal restricted the unexplained investment addition of Rs.1.25 lakh to just 30% (Rs.37,500).
ITAT Rajkot deletes a ₹70,000 penalty under Section 271(1)(b) because the notices and order were issued to a deceased individual. The Tribunal held that proceedings initiated against a dead person are void ab initio, emphasizing that legal heirs must be brought on record first.
ITAT Rajkot held that a one-day delay in filing objections before the DRP should not defeat justice. The Tribunal condoned the delay and remanded the case for fresh adjudication, emphasizing that natural justice must prevail over technical lapses.
The ITAT Rajkot ruled that a political donation made through a banking channel cannot be disallowed if the donor provides complete evidence of the payment and the recipients registration. The Tribunal held that the donor cannot be penalized for the recipient political party’s failure to report the amount in its own return.
The ITAT Rajkot deleted a ₹61 lakh addition made under Section 69A, ruling the funds belonged to clients of the assessee who acted as a sub-share broker. The Tribunal held that Section 69A is inapplicable as the assessee was not the owner of the money, which was meant for derivative transactions.
PCIT initiated a Section 263 revision over AO’s failure to disallow cash payments under Section 40A(3). ITAT held that since AO had conducted adequate inquiry and taken a plausible view, revision was an invalid overreach and quashed order. The ruling affirms that a mere difference in opinion doesn’t satisfy twin conditions for invoking Section 263.
AO was wrong in disallowing the entire direct expenditure claimed towards sub-contractors for stevedoring and transport services and at the same time, assessee had not proved beyond doubt that the expenditure claimed was fully genuine. Considering all these inconsistencies, CIT(A) righlyl disallowed 20% of the expenditure claimed.
The ITAT Rajkot significantly reduced an income tax addition made under Section 69A based on seized on-money documents lacking direct evidence. The Tribunal ruled that the entire cash component couldn’t be treated as undisclosed income, instead taxing only 8% of the disputed amount as a profit element at normal rates.
The ITAT Rajkot allowed a taxpayer’s appeal, setting aside the CIT(A)’s order which confirmed over Rs. 1.17 crore in tax additions. The Tribunal ruled that the lower authorities violated natural justice by failing to provide a reasonable opportunity to explain disputed creditors and expense disallowances.
ITAT Rajkot confirmed that for a small trader opting for Section 44AD, the presumptive income covers the cash deposits related to the business cycle, making any separate addition for unexplained money (Section 69A) unjustifiable. The entire addition was deleted as the tax authorities acted on mere suspicion without bringing any contrary evidence to disprove the business nature of the deposits.
