This annual round-up analytically summarizes all the Income Tax related Orders of the Income Tax Appellate Tribunal (ITAT) Benches of India reported at Taxscan.in during 2024.
The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) allowed the appeal, emphasising that the reasonableness of business expenditure should be judged from the point of view of the businessman and not the Revenue.
The tribunal allowed the claim of the assessee, stating that legitimate deductions under Section 80C should not be disallowed without proper justification. It was observed by the bench that the reasonableness of business expenditure should be judged from the point of view of the businessman and not the Revenue. The two-member bench, comprising Siddhartha Nautiyal (Judicial Member) and Makarand V. Mahadeokar (Accountant Member), upheld the addition of Rs. 2,13,800 due to cash payments in light of the provisions of Section 40A(3) and deleted the remaining addition confirmed by the CIT(A).
The Ahmedabad Bench of the Income Tax Appellate Tribunal ( ITAT ) held that an assessee cannot be penalized for the fault of their Chartered Accountant ( CA ) and accordingly condoned an exorbitant delay of 1430 days in filing an appeal against an order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre ( NFAC ), Delhi.
The two-member bench, comprising Judicial Member Suchitra Kamble and Accountant Member Narendra Prasad Sinha, emphasised that the assessee acted promptly upon discovering the orders and that the delay should not impede the assessee’s right to contest the appeal on its merits.
The bench condoned the delay and remanded the matter back to the CIT(A) for adjudication on merits, ensuring due process and adherence to principles of natural justice. The CIT(A) will decide the matter on merit as per due process of law and will provide the assessee with an opportunity of hearing, following the principles of natural justice.
The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) set aside the appellate order and directed the Assessing Officer(AO) to offset the loss against the long-term capital gain. It was held that the loss on sale of shares on the stock exchange could be set off against the long-term capital gain (LTCG) from sale of unlisted shares if STT duly paid.
The Tribunal noted that the assessee’s case is directly supported by the decision in Royal Calcutta Turf Club vs. CIT, where Section 10(27) of the Act excluded only the income from livestock breeding, poultry, or dairy farming, not the entire business Under Section 256(1) of the Act, the loss suffered by the assessee was allowed as a deduction in computing the total income. The two-member bench of Sonjoy Sarma (Judicial Member) and Rajesh Kumar (Accountant Member) based on the facts and previous decisions allowed the set-off of the loss from selling shares on a stock exchange against the LTCG from selling unlisted section.
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) found no wrongdoing in jewelry being kept in the maternal family by a married daughter, leading to the deletion of the related addition.
The two-member bench of Pradip Kumar Kedia (Accountant Member) and Sudhir Kumar (Judicial Member) found merit in the appellant’s argument that jewelry belonging to a married daughter could be kept with the maternal family for safety and must be considered while evaluating the unexplained jewelry.
“We find traction in the aforesaid plea raised on behalf of the assessee. We are convinced with the assertions raised on behalf of the assessee that jewelry are, at times, kept by the married daughters with the maternal family. There is no warrant to deny credit of 500 gms on account of married daughter in terms of CBDT Instruction No. 1916 dated 11th May, 1994. The assessee thus gets the relief to the extent of 500 gms as against aggregate 603.97 gms for which the additions were sustained before the CIT(A).” The bench stated.
Accordingly, relief for 500 grams of jewelry was granted, and the remaining 103.97 grams were conceded by the appellant to be treated as unexplained to avoid prolonged litigation. The ITAT emphasised principles of natural justice and directed the Assessing Officer (AO) to reconsider the assessee’s case. This decision came after the assessee faced challenges in presenting evidence regarding a cash source. The tribunal noted that the assessee should be granted a reasonable opportunity to justify their case. The AO is required to consider any new evidence presented and issue a detailed order outlining their reasoning.
In a ruling the Income Tax Appellate Tribunal Bangalore condoned the delay of 1999 days in filing appeal by the assessee on reasonable grounds.
The single bench of the Income Tax Appellate Tribunal comprising Beena Pillai observed the assessee’s plea condoned the delay in filing appeal and re-emitted the appeals back to CIT(A) to consider the issues raised by assessee based on evidence submitted by him. And both the appeals raised by assessee were partly allowed for statistical purposes.
The Kolkata bench of the Income Tax Appellate Tribunal ( ITAT ) held that the benefit of Section 80G of the Income Tax Act, 1961 cannot be denied due to technical errors that occurred in making the application because of the confusion and misunderstanding properly interpreting the relevant provision.
The two-member Bench of Sanjay Garg ( Judicial Member ) and Rakesh Mishra ( Accountant Member ) held that if the assessee is granted final approval by the CIT(E) then, the benefit of approval under section 80G of the Act, available to the assessee before the Amendment brought vide Amending Act of 2020, will be deemed to be continued without any break. While partly allowing the appeal, the ITAT directed the CIT(Exemption) to grant final approval to the assessee under Clause (iii) to First Proviso to section 80G(5), if the assessee is otherwise found eligible.
The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) allowed the claim for tax deduction under Section 54 of the Income Tax Act, 1961, for an investment in a new residential property.
The Income tax appellate bench observed that the assessee had provided details, including a registered sale deed and payment of Municipal Tax, which indicated a legal transfer of the property.
The Tribunal distinguished the present case from the decision in Suraj Lamp & Industries Pvt. Ltd. and relied on the Supreme Court’s ruling in Sanjeev Lal vs. CIT, which held that a valid transfer could take place through an agreement to sell if the subsequent sale deed execution was delayed due to circumstances beyond the assessee’s control. The ITAT allowed the assessee’s appeal, granting the deduction under Section 54 of the Income Tax Act.
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) held that the difference between the average sale rate and the actual transaction value should be treated as “on-money”. However, if the average sale rate is found to be higher than the actual transaction value, then the difference should be considered as “on-money” paid in cash for the purchase of the flat and added to the total income of the assessee under Section 69 of the Income Tax Act, 1961.
The two member bench of the ITAT comprising Narendar Kumar Billaiya (Accountant member) and Sandeep Sigh Karhail ( Judicial member) directed that if the average sale rate for the assessment year 2014-15 of the flat is found to be lower than the actual transaction value in the case of the assessee, then no addition on account of “on money” be made in the hands of the assessee.
However, if the average sale rate is found to be higher than the actual transaction value, then the difference should be considered as “on money” paid in cash for the purchase of the flat and added to the total income of the assessee under Section 69 of the Income Tax Act.
Accordingly, the impugned order is set aside and the appeal by the assessee was partly allowed for statistical purposes.
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT), consisting of M. Balaganesh (Accountant Member) and Vimal Kumar (Judicial Member), has ruled that Built Operate and Transfer (BOT) projects are considered intangible assets, highlighting that the assessee is entitled to claim depreciation at 25% on road construction as admissible on intangible assets.
In a significant ruling, the special Bench of the Income Tax Appellate Tribunal (ITAT) in Hyderabad has set a precedent by recognizing rights under Build-Operate-Transfer (BOT) projects as intangible assets. This decision was rendered in the case of ACIT Hyderabad versus M/s. Progressive Construction Limited.
The tribunal’s judgment revolved around the interpretation of Section 32(1)(ii) of the Income Tax Act, which pertains to the depreciation of intangible assets. Drawing from the precedent set by the Supreme Court in the case of Techno Shares and Stocks Ltd., the ITAT concluded that the right to operate toll roads and collect toll charges under BOT contracts qualifies as a business or commercial right. Consequently, this right is categorized as an intangible asset under the law, making it eligible for depreciation.
In view of the above material facts and well-settled principles of law, the bench highlighted that the assessee is entitled to claim depreciation at 25% on road construction as admissible on intangible assets. Therefore, the impugned orders are not legal and deserve to be set aside. Hence, the appeal of the assessee was allowed for statistical purposes.
The New Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) held that the indexation benefit is allowable based on the cost of acquisition of property sold by the taxpayer. It was held that the assessee is entitled to avail of the benefit of carrying forward of long-term capital loss on the sale of residential property.
The two member bench of Saktijit Dey (Vice-President) and M. Balaganesh (Accountant Member) observed while completing the assessment, the Assessing Officer did not allow set off and carry forward of long term capital loss. As the assessee raised objections on the issue, the DRP directed the Assessing Officer to allow set off of long term capital loss as per law by passing a speaking order.
However, while passing the final assessment order, though, the Assessing Officer set off the long term capital gain computed on sale of commercial property against long term capital loss on sale of residential property, however, he did not allow carry forward of the long term capital loss remaining after set off.
The ITAT held that the assessee is entitled to avail the benefit of carry forward of long term capital loss. Accordingly, the Assessing Officer is directed to verify the issue factually and allow carry forward of long term capital loss claimed by the assessee.
The Chennai bench of the Income Tax Appellate Tribunal ( ITAT ) held that as per section 144 C of the Income Tax Act, 1961 the Assessing Officer ( AO ) must pass a draft assessment order to the eligible assessee if he proposes to make any variation in the income or loss returned which is prejudicial to the interest of such assessee.
The two member bench of Manu Kumar Giri (Judicial Member) and Manoj Kumar Aggarwal (Accountant Member) while expanding the scope of Sec 144C by defining eligible assessee as a non-resident not being a company, observed that AO is quite empowered to issue draft assessment order even in cases where he proposes to make any variation which is prejudicial to the interest of the assessee.
The Bench partly allowed Assessee’s appeal and restored the matter to the AO to re-examine whether the Assessee could be considered as a beneficial owner of royalty.
In a recent case, the Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) held that the services rendered for product certification, which include evaluating technical quality and issuing certificates, do not fall under the definition of Fees for Technical Services as per Section 9(1)(vii) of the Act.
The two-member Bench of T.R. Senthil Kumar (Judicial Member) and Makarand V. Mahadeokar (Accountant Member) observed that the royalty is payable to the vendor only upon the activation of the software by the end user, which creates a time gap between the provision made by the assessee and the actual activation by the end user.
The Tribunal viewed that the provision for royalty expenses is made at the time of recording sales, but the actual payment is not immediately due to the third-party vendor as the end user has not yet activated the software.
The ITAT deleted the additions made by AO under section 40(a)(i) while concluding that the payments are not liable for withholding tax under section 195 and dismissed the appeal.
The Chennai bench of the Income Tax Appellate Tribunal ( ITAT ) held that the Assessing Officer ( AO ) cannot make income additions solely based on the retracted statement of third parties. It was viewed that once the assessee has denied payments made by him, then he cannot be expected to prove the negative.
The two member Bench of Aby T. Varkey (Judicial Member) and Manoj Kumar Aggarwal (Accountant Member) held that addition could not be made on mere presumption and suspicion. The AO has to bring cogent positive evidences to sustain addition based on third party statement / material.
The Bench found that the AO retracted the statement of R. Sabapathy within a span of three months and R. Sabapathy stated that loan of Rs.17 Crores was received from Rakesh whereas the balance of Rs.8 Crores was out of sale of excess stock. The tribunal found that AO failed to conduct any independent enquiry relating to the value of the property purchased or did not refer the same to the valuation officer and merely relied on the statement given by the seller, the same would be fatal to additions.
The Income Tax Tribunal viewed that the impugned additions are merely unsubstantiated additions which could not be sustained in law. The ITAT deleted the additions confirmed by the Commissioner of Income Tax (Appeals) and allowed the Assessee’s appeal. Shri Rajagopal Saravanan
The New Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) deleted the addition under section 69 of the Income Tax Act, 1961 as the cash sales can’t take place before commencement of business.
The two member bench of Madhumita Roy (Judicial Member) and Avdhesh Kumar Mishra (Accountant Member) observed that the purchases are entirely through imports. Also found that the revenue has also failed to place any material on the record to demonstrate that the VAT returns of the relevant year have not been accepted by the VAT authority and the Custom authority has not accepted the imports/purchases.
The ITAT deleted the addition made under section 69A and dismissed the appeal filed by Revenue.
The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) has set aside the appellate order and allowed the deduction of Rs. 52,51,027 in respect of traded goods written off on account of damaged, obsolete, or expired stock.
The two-member ITAT bench, consisting of Pradip Kumar Kedia, ( accountant member ), and Yogesh Kumar ( judicial member ), based on the facts and previous decisions, found merit in the ground claimed by the assessee and deleted the disallowance made by the A.O. which has been confirmed by the CIT(A) and thus the appeal was partly allowed.
Recently the Income Tax Appellate Tribunal (ITAT) Chennai dismissed an appeal made for the deletion of penalty imposed under section 271 of the Income Tax Act 1961 (ITA), as ordered by the Commissioner of Income Tax (Appeals) [CIT (A) ]
The bench comprising Mr Mahavir Singh and Mr SR Raghunatha heard the appellant’s arguments. The bench observed that the company failed to provide sufficient evidence for the delay, highlighting that the company had been compliant in filing audit reports for other years. It was also observed that the appellant’s side had no other contentions besides that they are a law abiding citizen who couldn’t file the income tax return on time due to litigation and the financial struggles that followed. The tribunal didn’t find any merit in the issues raised by the appellant. Consequently, the appeal was dismissed and the penalty imposed was upheld.
Recently, Income Tax Appellate Tribunal ( ITAT ) Ahmedabad ruled in favour of the appellant in an appeal filed against the order of the Assessment Officer (AO) made under Section 143(3) read with Section 143(5) of the Income Tax Act, 1961.
The bench comprising Ms. Suchitra Kamble and Mr Makarand V Mahadeokar observed that the effective borrowing cost, including the guarantee fee, was lower than the interest rate quoted by the bank and this justifies the payment of guarantee fee. It was also observed that the argument made by the AO which stated that “no real service were provided” was considered not compelling enough, noting that the economic benefits derived from lower interest rates supported the arm’s length nature of the transaction.
The tribunal further focused on emphasizing the importance of consistency in decisions, especially given that cases of similar facts and circumstances were already judicially decided before. By stressing on the aforementioned points, the tribunal ruled in favor of the appellant and deleted the adjustment made by the Assessing Officer.
In the recent ruling, the Delhi bench Of Income Tax Appellate Tribunal (ITAT) quashed the penalty for disallowing Rs. 21,89,970 in non-compete fee depreciation due to conflicting High Court rulings and the Supreme Court’s pending review.
The Tribunal on considering the facts and materials on record found that the penalty was imposed due to the disallowance of Rs. 21,89,970 for depreciation on non-compete fee. The Tribunal stated that The CIT(A) had relied on the High Court decision in the case Sharp Business System Vs. CIT which is currently under appeal in the Supreme Court.
The two-member bench of Yogesh Kumar U.S (Judicial Member) and Pradip Kumar Kedia(Accountant Member) contended that Section 271(1)(c) cannot be applied in this case and quashed the penalty order dated 31/03/2019 for the Assessment Year 2014-15.
The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) set aside an assessment order that was passed without the application of mind. The order was quashed as it was contrary to Section 153 of the Income Tax Act observing that the mechanical approval of superior authority for income tax search defeats the purpose of Section 153D of the Act.
The two-member ITAT bench, comprising Pradeep Kumar Kedia and Yogesh Kumar US, held that the approvals granted under Section 153 of the Income Tax law do not pass the test of legitimacy. The impugned assessment is non-est and a nullity and has been quashed by the bench. Thus, the appeal filed by the assessee was allowed.
The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) has held that bank charges and bank guarantee charges do not partake in the character of interest and had been wrongly included as interest while making disallowance under section 14A of the Income Tax Act, 1961.
The two-member bench of G.S. Pannu (Vice President) and Kul Bharat (Judicial Member) has observed that the assessee had disallowed the expenditure related to administrative expenses. Concerning the disallowance of the interest, it was stated that the assessee was having sufficient interest-free funds and also it was stated that the AO had wrongly computed the disallowance by including the bank charges and bank guarantee charges.
The tribunal held that CIT(A) as well as the assessing authority has not brought any material suggesting that the interest-free funds were diverted for earning tax-free income. The ITAT deleted the disallowance under section 14 A of the Income Tax Act made in respect of interest expenditure.
The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ), set aside an assessment order as by the exception provided under Section 9(1)(vii)(b) of the Income Tax Act, 1961 where the income earned by non-residents cannot be considered to accrue or arise in India, and the fees for technical services cannot be taxed.
The bench, comprising B.R.R. Kumar and Sudhir Kumar, held that in this present case, there is a clear application of Section 9(1)(vii)(b) of the Income Tax statute, and the income earned by non-residents cannot be deemed to accrue or arise in India, and the fees for technical services cannot be taxed. As the work order was issued outside the country to generate income outside the country, the amount paid comes within the purview of the exception provided under Section 9(1)(vii)(b) of the Income Tax Act. Thus, it is not required for the assessee to deduct tax at source.
The appeal was allowed, and the addition made by the AO and which was confirmed by CIT(A) has been deleted by the bench.
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that Long-Term Capital Gain (LTCG) on sale of shares by Mauritius Company is not liable to be taxed in India.
The two member bench of Vikas Awasthy (Judicial Member) and Naveen Chandra (Accountant Member) has observed that the assessee had claimed long-term capital gains arising from the sale of shares as exempt from tax in light of Article 13(4) of India-Mauritius DTAA.
The ITAT held that since the investments were made by the assessee, a Mauritius company holding a valid TRC, the resultant capital gain is not liable to be taxed in India.
In a recent case, the Income Tax Appellate Tribunal ( ITAT ) of Chennai directed the Commissioner of Income Tax (Exemption) [ CIT (E) ] to consider the fresh application submitted by a Trust as per Section 80G(5)(iii) of the Income Tax Act, 1961 for registration.
The two member bench consisting of Mr. Mahavir Singh and Mr. R S Raghunatha condoned the delay as they found the contentions of the appellant to be reasonable. However, the income tax tribunal noted the appeal to be infructuous, as it was observed that the appellant has already applied afresh for registration under the extended time limit provided by CBDT circular no. 7/2024.
Thus, the issue at hand became academic and the primary reason behind the appeal does not survive. The tribunal directed the CIT(E) to consider the new application on its own merit, independent of the current appeal.
In light of the aforementioned observations, the appeal was dismissed by the bench
The Banglore Bench of Income Tax Appellate Tribunal (ITAT) directed the AO( Assessing Officer ) to delete the additions made by him as the disputed transaction comes outside the ambit of the Section 2(22)(e) of Income Tax Act, 1961.
The ITAT Bench of Shri Waseem Ahmed,Accountant Member and Shri Soundarajan K, Judicial Member held that in view of the above contentions it is held that the transaction in dispute was a commercial transaction and therefore it comes out of the ambit of the provisions of Section of 2(22)(e) of the Income Tax Act,1961. Accordingly, the findings of the CIT-A was set aside and the directed the AO to delete the addition made by him.
The appeal filed by the assessee was allowed.
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) quashed an Assessment Order passed by an Assessing Officer under Sections 144 and 147 of the Income Tax Act, 1961. The aforementioned Assessment Order was reopened by the Commissioner of Income Tax (Appeals) (CIT(A)) by issuing a second notice dated 30.03.2016 to the Assessee under Section 148 of the Income Tax Act. The Tribunal in its judgment observed that an earlier assessment order under Section 148 of the Income Tax Act had already been passed under Section 143(3) read with Section 147 of the Income Tax Act on 19.03.2015.
The Mumbai Bench of the ITAT panel comprising of Amit Shukla, Judicial Member and Ranesh Nandan Sahay, Accountant Member, further reinforced the Assessee’s position in law by stating that the dismissal of the appeal by the JCIT(A) is a result of a callous approach towards their duty as the CIT(A) dismissed the appeal ex-parte citing grounds of non-prosecution owing to the Assessee not honoring the multiple notices sent by the CIT(A) to the Assessee. In closing, the Bench further averred that the Assessing Officer and Authority should have paid closer attention to the facts on record and prevented the Assessee from having to pursue unwanted litigation while simultaneously quashing the impugned Assessment Order.
The Hyderabad bench of the Income Tax Appellate Tribunal ( ITAT ) allowed the weighted deduction in respect of the expenses incurred on clinical trials and held that the assessee is entitled to deduction under Section 35(2AB) of the Income Tax Act, 1961.
The two-member bench, comprised of K. Narasimha Chary (Judicial Member) and Madhusudan Sawdia (Accountant Member), based on the facts and previous decisions, held the issue in favour of the assessee and allowed weighted deductions in respect of the expenses incurred on clinical trials. The bench dismissed the appeal filed by the revenue, and the appeal of the assessee was allowed in part.
The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) contended that Section 54F of the Income Tax Act, 1961 allows for a deduction on long-term capital gains when these gains are reinvested in residential property.
The two-member bench comprising Suchitra Raghunath Kamble (Judicial Member) and Narendra Prasad Sinha (Accountant Member) directed the CIT(A) to adjudicate the matter afresh, decide the appeal on its merits, and provide the assessee with another opportunity to present their case. The assessee is expected to cooperate fully and should not seek adjournments without valid reasons.
The Delhi Bench of the Income Tax Appellate Tribunal ( ITAT ) ruled that employers should deposit Employee State Insurance ( ESI ) and Provident Fund ( PF ) on or before the due date as a condition for claiming income tax deduction 36(1)(va) of the Income Tax Act,1961 which deals with the deductions claimed by the businesses for employees contributions to welfare funds.
Considering the ruling of the apex court in the above-mentioned case, the division bench of ITAT Saktijit Dey (VP), Dr. B. R. R. Kumar (Accountant Member) observed that none appeared for the assessee’s side and the appeal was dismissed on the ground that the assessee deposited the ESI/EPF beyond the due date so he was disallowed from the deductions.
The Chennai Bench of the Income Tax Appellate Tribunal ( ITAT ) ruled that the Tamil Nadu Advocates Welfare Fund is exempted from Income Tax under section 23 of the AWS Act, against the provisions of section 11 and section 2(15) of the Income Tax Act,1961 which deals with tax exemption of income derived from the property held under trust for charitable or religious purposes and definition of charitable purposes respectively.
The Chennai Bench of the Income Tax Appellate Tribunal ( ITAT ) ruled that the Tamil Nadu Advocates Welfare Fund is exempted from Income Tax under section 23 of the AWS Act, against the provisions of section 11 and section 2(15) of the Income Tax Act,1961 which deals with tax exemption of income derived from the property held under trust for charitable or religious purposes and definition of charitable purposes respectively.
The case of assessee was taken for scrutiny assessment by issuing a notice under section 143(2) of the Act, the appeal was filed by the assessee against the rejection of exemption claimed with respect to section 10(38) of the Income Tax Act.
The division bench of Pavan Kumar Gadale and Girish Agrawal observed that the purchase took place in an offline mode and the sale of shares were undertaken via SEBI (stock exchange platform) and the consideration was routed through normal exchange.
While making the additions the AO didn’t point out any disparity in the details furnished by the assessee. Assessing officer relied upon the search and survey operations of the department’s investigation wing. According to him, the sharp jump in the share prices of the scrip is not justified . The conclusions drawn by the AO are unsupported by any cogent material hence is purely presumptuous.
Considering the totality of facts and circumstances of the case the division bench deleted the addition made u/s 68 towards proceeds of sale of listed shares of PS IT which gave rise to Long Term Capital Gain on the said sale, claimed exempt by the assessee u/s 10(38). As a result, appeal of the assessee was allowed.
ITAT Mumbai Bench dismisses the appeal filed by the Revenue due to the lack of Territorial Jurisdiction. An appeal was filed by the Revenue, challenging the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre passed under Section 250 of the Income Tax Act,1961 regarding the Assessment Year 2010-11, 2016-17 and 2017-18.
The ITAT Mumbai Bench consisting of Shri Narendra Kumar Billaiya, AM and Ms. Kavitha Rajagopal, JM observed that “As it is now a settled proposition of law that the jurisdiction of the ITAT in adjudicating an appeal would lie within the jurisdiction of the Assessing Officer who had passed the assessment order which is the subject matter of appeal before the Tribunal, we, therefore, are inclined to dismiss these appeals filed by the Revenue with the liberty to the Revenue to file these appeals before the ITAT having jurisdiction over the assessing officer who had passed the assessment order in these cases, i.e., the Bangalore Bench. The delay in filing the appeal shall be condoned as if the assessee has filed the appeal in the first instance within the period of limitation”.
All the appeals filed by the Revenue were dismissed for statistical purposes. As the facts are identical in all the three appeals, the bench passed a consolidated order in all these appeals.
The Hyderabad bench of the Income Tax Appellate Tribunal (ITAT) has ruled against the deduction of interest paid on Foreign Currency Convertible Debentures (FCCD) under the Tonnage Tax Scheme, deeming the claim for deduction invalid.
The bench dismissed the assessee’s argument that they were entitled to deductions on the interest paid as part of the pro-rata term on Foreign Currency Convertible Debentures (FCCD). They argued that the investments were made from free funds. However, this argument was found to lack merit as it was not demonstrated before the CIT (A) that the investments were indeed made from free funds available due to the liquidation of FCCD Bonds.
The bench concluded that, given the specific prohibition in Section 115VG against claiming any other deductions, the argument of mixed funds does not apply. Consequently, the tribunal dismissed the ground raised by the assessee, affirming that the claim for deduction was invalid under the Tonnage Tax Scheme.
In a recent judgment, the Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) deleted the adjustment on the Section 80P deduction as the taxpayer filed their Income Tax Return ( ITR ) within the due date under Section 139(1).
The bench noted that the assessee, a Cooperative Housing Society registered under the Maharashtra Society Act 1960, had filed its returns of income within the due dates under Section 139(1) for the assessment years 2012-13 and 2014-15. Under the amended provisions, no prima facie adjustment on account of deduction under Section 80P could have been made.
Consequently, the two-member bench of the tribunal, comprising Ratheesh Nandan Sahay (Accountant Member) and Amit Shukla (Judicial Member), held that the disallowance made by the CPC under Section 143(1)(a) on the claim of deduction under Section 80P was beyond the scope of adjustment under Section 143(1). Accordingly, the adjustment was deleted.
Concerning the case of Hero Motocorp, the Income Tax of Appellate Tribunal ( ITAT ) observed the discounted shares were incorrectly taxed under Section 28(iv) of Income Tax Act, 1961 instead of being treated as Long-Term Capital Gains ( LTCG ).
The CIT(A) had previously ruled that income from the sale of shares was capital gains, not business income. However, the AO later tried to change this by issuing a notice and arguing it was business income, applying section 28(iv). This was incorrect, as the CIT(A) had already determined the shares were investments and the income was capital gains.
The two-member bench of G.S. Pannu (Vice President) and Anubhav Sharma (Judicial Member) ruled that Section 28(iv) cannot be invoked if there is no business income from the sale of shares held as investment.
The Bangalore Bench of the Income Tax Appellate Tribunal ( ITAT ) ruled that the assessing officer cannot to interfere in the valuation of shares method selected by the assessee under section 56(2)(viib) of the Income Tax Act, 1961 read with Rule 11UA(2) Income Tax Rules, 1962.
The division bench of Waseem Ahmed ( Accountant Member ) and Soundararajan K ( Judicial Member ) heard both side’s arguments. The tribunal observed that the assessee adopted the DCF but the revenue adopted the NAV method. According to rule 11UA(2) of Income tax Rule, choosing any DCF or NAV method is optional and it is the assessee’s discretion.
The Tribunal ruled that AO cannot interfere in the method for the valuation of the shares but can scrutinize the contents or working adopted by the assessee. By relying on the Bombay HC and ITAT Bangalore judgments, the tribunal ruled in favor of the assessee.
The Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ), while granting LTCG ( Long Term Capital Gain) Income tax exemption to the assessee trust under Section 10(38) of the Income Tax Act, 1961 observed that mere change in section for claiming exemption before the first appellate authority cannot be considered as a fresh claim.
The tribunal stated that the assessee, a Trust registered as a Venture Capital Fund, claimed “pass-through entity” status under Section 10(23FB), which provides exemption on income earned by the VCF. However, since the claim for exemption was rejected by the tax authorities, the “pass-through entity” status is not accepted for this year, and the provisions of Section 115U do not apply.
A coram of Justice (Retd.) C.V. Bhadang (President) and B.R.Baskaran (Accountant Member) have given the views based on the grounds raised by the appellant assessee and partly allowed the appeal.
The Delhi Bench of the Income Tax Appellate Tribunal ruled that the Long term Capital Gain ( LTCG ) of Mauritius Company on the sale of shares of an Indian investment made before the 1st April 2024 is not taxable in India.
The Income Tax Tribunal noted that the Bombay High Court, referencing a press release dated 29.08.2016 issued by the Central Board of Direct Taxes ( CBDT ) following the amendment to the Mauritius DTAA effective from 01.04.2017, upheld the grandfathering of capital gains exemption under the erstwhile Mauritius DTAA.
Further, the bench added that the Bombay High Court ruled that the protocol mandates source-based taxation of capital gains arising from the alienation of shares acquired on or after 01.04.2017 in a company resident in India for FY 2017-18. Consequently, the court determined that investments made before 01.04.2017 are grandfathered and not subject to capital gains taxation in India. The situation in the present case before us is similar.
Therefore, the ITAT ruled in favor of the assessee and allowed the claimed tax exemption.
The Ahmedabad bench of Income Tax Appellate Tribunal ( ITAT ) allowed the interest expense claim of Rs. 8.3 crore of Axis bank citing both Income tax. The bench ruled in favor of Axis Bank Ltd. on the issue of interest disallowance under Section 14A of Income Tax Act, 1961 for A.Y. 2010-11, citing a previous ITAT decision and the fact that the bank’s own funds exceeded exempt investments. This decision was also applied to A.Y. 2011-12 due to similar issues.
The two member bench comprising Siddhartha Nautiyal(Judicial Member) and Annapurna Gupta(Accountant Member) ruled that as the facts and issues are identical for the A.Y. 2011-12, the appeal regarding the disallowance of interest expenses under Section 14A of the Act was allowed.
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