The Tribunal held that Schedule-I of ITR-7 applies only to amounts accumulated under Section 11(2) and not to deemed application under Explanation (1) to Section 11(1). It deleted the addition after finding that the lower authorities had incorrectly interpreted the ITR instructions.
The ITAT Lucknow upheld deletion of the addition after finding that the cash deposits represented business receipts arising from disclosed sales and were duly recorded in the books of account. It held that section 69A could not be invoked on the facts of the case.
The ITAT held that an assessee can contest a Section 143(1) adjustment in an appeal against the assessment order if the adjustment is retained therein. The case emphasizes that multiple statutory remedies may coexist.
ITAT Lucknow held that derivative losses incurred by a spouse using funds gifted by the assessee can be clubbed and set off under Section 64(1)(iv). The matter was remanded to verify the actual quantum of eligible losses.
The Tribunal ruled that the Assessing Officer erred in applying a 6% net profit rate without examining comparable cases engaged in the same line of business. The decision highlights the necessity of objective criteria while estimating profits after rejection of books.
The Tribunal held that deduction of tax under Section 194J cannot automatically classify receipts as professional income. Tax authorities must independently examine the nature of services before denying the benefit of Section 44AD. The matter was remanded for fresh assessment.
ITAT Lucknow held that disallowance of interest expenses cannot be sustained without evidence showing that interest-bearing funds were diverted for non-business purposes. The matter was remanded to the Assessing Officer for fresh examination.
The Lucknow ITAT held that reassessment proceedings cannot survive where the reasons recorded contain incorrect facts and lack proper application of mind. The reassessment order was quashed as the recorded reasons were found arbitrary and unsustainable.
The ITAT Lucknow held that acute depression prevented timely compliance with statutory notices and amounted to a reasonable cause under Section 273B. Consequently, the penalty under Section 272A(1)(d) was deleted.
ITAT ruled that appellate powers under Section 251 are confined to assessment year under appeal. Directions to reopen completed assessments for another year were held beyond jurisdiction.
