Income Tax Annual Digest 2024: ITAT Cases [Part 2]

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.

Consideration from Sale of Urban Agricultural Land is subject to Capital Gains Tax: ITAT upholds Revision Proceedings u/s 263 of Income Tax Act Dharam Pal Saini vs Pr. CIT Faridabad CITATION:   2024 TAXSCAN (ITAT) 202

The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) upheld revision proceedings under Section 263 of the Income Tax Act, 1961 ruling that consideration from the sale of urban agricultural land was subject to capital gains tax.

The two member bench of the tribunal comprising Astha Chandra ( Judicial member ) and N.K.Billaiya ( Accountant member ) concluded that the sale consideration of the disputed land was subject to capital gains tax in accordance with the relevant provisions of the Income Tax Act, 1961. Consequently, the appeal of the assessee was dismissed

ITAT directs AO to allow cost of Improvement with Indexation and Re-Compute Capital Gains u/s 48 of Income Tax Act Ashwin Kapur vs ACIT CITATION:   2024 TAXSCAN (ITAT) 196

The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) directed the Assessing Officer ( AO ) to allow the cost of improvement with indexation and to re-compute capital gains under Section 48 of the Income Tax Act, 1961

The two member bench of the tribunal comprising G.S.Pannu ( Vice president ) and C.N.Prasad ( Judicial member ) directed the Assessing Officer to permit the cost of improvement with indexation and to recalculate the capital gains accordingly. In the result, appeal of the assessee was allowed.

Taxable Contract Income is higher than fixed price contract value u/S 97 of Income Tax Act: ITAT deletes Income Tax Addition ST Engineering Electronics Ltd. vs ACIT CITATION:   2024 TAXSCAN (ITAT) 197

The Chennai bench of the the Income Tax Appellate Tribunal ( ITAT ) decided to delete the income tax addition, as it found that the taxable contract income exceeded the fixed price contract value under Section 97 of the Income Tax Act,1961

The two member bench of the tribunal comprising V. Durga Rao ( Judicial member) and Manoj Kumar Agarwal ( Accountant member) observed that a crucial aspect to consider was that the total contract revenue had been dutifully subjected to taxation throughout the entire contract period, spanning from the fiscal years 2012-13 to 2022-23. This was substantiated by the comprehensive details of invoices presented in the records.

Fees or management support u/s 9(1)(vii) of Income Tax Act is not FTS under India-Singapore DTAA: ITAT Cameron (Singapore) Pte Ltd vs ACIT CITATION:   2024 TAXSCAN (ITAT) 198

The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) observed that Fees or management support under Section 9(1) (vii) of Income Tax Act, 1961, was not fees for technical services ( FTS ) under India-Singapore Double Taxation Avoidance Agreement ( DTAA )

The two member bench of the tribunal comprising G.S Pannu ( Vice President ) and C.N Prasad ( Judicial member ) concluded that in accordance with the Tribunal’s decision for the assessment years 2013-14 to 2015-16, and the bench concluded that the fee received from Cameron Manufacturing India Pvt. Ltd. for management support services does not fall under the category of Fees for Technical Services ( FTS).

Failure to fulfill conditions u/s 44 AA of Income Tax Act: ITAT deletes penalty u/s 271 of Income Tax Act Amey Pravinbhai Brahmbhatt vs The ITO, Ward CITATION:   2024 TAXSCAN (ITAT) 199

The Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) deleted the penalty under Section 271 of Income Tax Act, 1961, due to the Assessing Officer’s failure to fulfill conditions under Section 44AA of the Income Tax Act, 1961.

The single member bench of the tribunal comparing Annapurna Gupta ( Accountant member )   nullified the order issued under Section 271A of the Income Tax Act, 1961, and the imposed penalty of Rs.25,000/- was instructed to be revoked. The grounds of appeal presented by the assessee were granted in accordance with the aforementioned terms. Consequently, the appeal filed by the assessee was allowed.

Relief to American Express: ITAT Allows Relocation Expenses u/s 40(a)(i) of Income Tax Act American Express (India) Pvt. Ltd. vs JCIT CITATION:   2024 TAXSCAN (ITAT) 200

The Delhi bench of the Income Tax Appellate Tribunal (ITAT) grants relief to American Express by allowing the deduction of relocation expenses under Section 40(a)(i) of the Income Tax Act, 1961.

The two member bench of the tribunal comprising Pradip Kumar Kediya (Accountant member) and Saktijit Dey (Vice President) Allowed of relocation expenses under Section 40(a) (i) of the Income-tax Act, 1961.

TDS u/s 194 C Deduction on Common Maintenance Charges: ITAT Accepts Additional Evidence Paramount Restaurants vs National Faceless Appeal Centre CITATION:   2024 TAXSCAN (ITAT) 201

The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) has accepted additional evidence regarding Tax Deducted at Source ( TDS ) under Section 194C of Income Tax Act, 1961, deduction on common maintenance charges.

The two member bench of the tribunal comprising Challa Nagendra prasad (Judicial member) and Shamim Yahya ( Accountant member ) accepted the additional evidence. Consequently, the matter was sent back to the Commissioner of Income Tax ( Appeals ) ( CIT (A) ) for a fresh examination, considering the implications of the Common Area Maintenance Agreement. It was imperative to note that the assessee should have been afforded the opportunity to present their case and be heard during this reconsideration process.

Dispute in Concessional Rate of Tax while processing Return of Income: ITAT directs to verify documents with respect to Form 10-IC Traxit Engineers Pvt. Ltd vs The Assessing Officer CITATION:   2024 TAXSCAN (ITAT) 195

Mumbai bench of Income Tax Appellate Tribunal (ITAT), directed to verify documents with respect to Form 10-IC in case of dispute in concessional rate of tax while processing of return of income.

After observing the submissions of both parties the two-member bench of  Padmavathy S, (Accountant member ) and Pavan Kumar Gadale, (Judicial Member) directed the assessee is to furnish the relevant details in support of the claim of applications of concessional rate of tax under section 115 BAA and co-operate with the appellate proceedings.

Percentage of Ownership Absent in Sale Deed: ITAT upholds addition made on Self-Occupied House Property in hands of Husband Shivani Madan vs ACIT CITATION:   2024 TAXSCAN (ITAT) 193

The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) upheld the addition made on the self-occupied house property in the hands of the husband due to the absence of a percentage of ownership in the sale deed.

After observing the submissions of both parties, the two-member bench of Anil Chaturvedi ( Accountant Member ) and Astha Chandra ( Judicial Member ) upheld the addition made on self-occupied house property in the hands of the husband due to the absence of a percentage of ownership in the sale deed.

Penalty Notice issued without deleting or striking off  inapplicable part: ITAT Deletes Penalty levied u/s 271(1)(c)  of Income Tax Act Supertech Construction Company vs Assistant Commissioner of Income Tax CITATION:   2024 TAXSCAN (ITAT) 194

Mumbai bench  of  Income Tax Appellate Tribunal (ITAT), while deleting the penalty levied under Section 271(1)(c) of the Income Tax Act, 1961 the bench held that penalty notice was issued without deleting or striking off inapplicable parts.

After observing the submissions of both parties the two-member bench Of  Prashant Maharishi, (Accountant member ) and  Rahul Chaudhary, (Judicial Member) directed the Assessing Officer to compute short credited interest under section 244A  of the Income Tax Act.

Unaccounted Money is Eligible for Deduction u/S 80IB(10) of Income Tax Act: ITAT M/s. Silicon Estates vs The Deputy Commissioner of Income Tax CITATION:   2024 TAXSCAN (ITAT) 189

The Bangalore bench of the Income Tax Appellate Tribunal ( ITAT ) observed that unaccounted money was eligible for deduction under Section 80IB(10) of the Income Tax Act, 1961.

The two member bench of the tribunal comprising Chandra Poojari ( Accountant member ) and Madumitha Roy ( Judicial member )  crucial to noted that Clauses (e) and (f) of Section 80I8(10) of the Income Tax Act, 1961, were introduced by the Finance Act (No.2), 2009, and are applicable to transactions initiated on or after 01.04.2010. This information is discerned from Circular No.5/2010 dated 03.06.2010.

Non-appearance before Appellate Authority is not Wanton Act: ITAT Allows TDS Liability u/S 201(1) of Income Tax Act Nirman RMBS Trust vs DCIT CITATION:   2024 TAXSCAN (ITAT) 190

The Income Tax Appellate Tribunal (ITAT) ruled that non-appearance before the appellate authority is not a wanton act and, consequently, allowed the Tax Deducted at Source ( TDS ) liability under section 201(1) of the Income Tax Act, 1961

The two member bench of the tribunal comprising Om Prakash Kant ( Accountant member ) and Pavn Kumar Gadale ( Judicial member) observed that  the counsel for the assessee contested this view, asserting that the assessee was actively engaged in gathering necessary information and that the non-appearance before the appellate authority was not a deliberate act. The grounds of appeal raised by the assessee challenge the Tax Deducted at Source ( TDS ) liability under section 201(1) and the interest payable under section 201(1A), of the Income Tax Act, 1961 as determined by the assessing officer. The counsel for the assessee argued that there could be various legitimate reasons for the non-appearance that should not be overlooked.

1190 Days Delay in Filing Appeal due to Medical Reason: ITAT Remands Escapement of Income Notice u/s 148 of Income Tax Act Milap Niranjanbhai Shah vs Income Tax Officer CITATION:   2024 TAXSCAN (ITAT) 191

The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) remanded an Escapement of Income notice under section 148 of the Income Tax Act, 1961, due to an 1190-day delay in filing the appeal, citing medical reasons.

The Single bench of the tribunal comprising Sujithra Kamble (Judicial member) observed that the assessee relocated to Halol in the Panchmahal District of Gujarat due to employment. During this period, the assessee faced challenges in coordinating with the tax consultant or professional regarding the appeal filed before the CIT (A). The delay in filing the appeal before the Tribunal, amounting to 1190 days, has been adequately explained due to the assessee’s medical reasons.

Disclosure of Address and Identity of Shareholders not Sufficient u/s 68 of Income Tax: ITAT Dismisses Appeal Midway Exim Pvt. Ltd vs Income Tax Officer CITATION:   2024 TAXSCAN (ITAT) 192

The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) dismissed an appeal, emphasizing that the mere disclosure of addresses and identities of shareholders was not sufficient under section 68 of the Income Tax Act, 1961

The two member bench of the tribunal comprising Dr. B.R.R. Kmar ( Accountant member) and Yogesh Kumar U.S ( Judicial member ) questioned the credibility of a sudden increase in share premium from Rs. 1,90,000 to Rs. 3,43,42,500, considering the company’s meager reported income. Citing legal precedents, the CIT(A) emphasized that the burden of proof under section 68 of the Income Tax Act, 1961 lies with the assessee, mere banking channel transactions are insufficient, and the mere provision of PAN and return copies does not discharge the burden.

Income earned from carrying out educational activity is eligible for exemption u/S 10 (23C)(vi) of Income Tax Act: ITAT Durgapur Society of Management Science vs Income Tax Officer CITATION:   2024 TAXSCAN (ITAT) 178

The Kolkata bench of the Income Tax Appellate Tribunal ( ITAT ) observed that Income earned from carrying out educational activity was eligible for exemption under Section 10 (23C) (vi) of the Income Tax Act 1961

The two member bench of the tribunal comprising Sanjay Kumar ( Judicial member ) and Dr. Manish Board ( Account member ) concluded that the focus shifted to contesting the revisionary order by the Commissioner of Income Tax ( Exemption ) [ CIT (E) ] under section 263 of the Income Tax Act 1961. The Durgapur Society of Management Science, mainly engaged in educational activities, faced scrutiny as gross receipts for the year totaled Rs. 3,97,86,089, with building rent exceeding 50% at Rs. 2,02,34,592.

Legal fiction created u/s 2 (22) (e) of Income Tax Act not to be extended further for broadening concept of shareholders: ITAT Pawa International Pvt. Ltd vs ACIT CITATION:   2024 TAXSCAN (ITAT) 186

The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) observed that legal fiction created under Section 2 (22)(e) of Income Tax Act, 1961, not to be extended further for broadening concept of shareholders

The two member bench of the tribunal comprising Astha Chandra ( Judicial member ) and N.K.Billaiya ( Accountant member ) carefully examined the directives issued by the authorities in this matter. After reviewing the chart delineating the distribution of shares, as presented elsewhere, it was evident that the assessee did not possess any shares in the contested company. The esteemed Jurisdictional High Court of Delhi, as established in the case of Ankitech Private Limited, unequivocally ruled that the legal fiction established under section 2 (22)(e) of Income Tax Act, 1961, served to expand the definition of dividend exclusively, and this legal fiction should not be extrapolated to further broaden the concept of shareholders.

Notice issued in stereotyped manner without applying mind is bad in law: ITAT deletes penalty u/S 271(1)(c) of Income Tax Act Orient Clothing Company vs ACIT CITATION:   2024 TAXSCAN (ITAT) 187

The Delhi bench of the Income Tax Appellate Tribunal ( ITAT) has nullified a penalty under Section 271(1)(c) of the Income Tax Act, 1961 stating that the Notice issued in a stereotyped manner without applying mind is bad in law.

The bench concluded that the Assessing Officer issued notices under section 274 read with Section 271(1)(c)of the Income Tax Act, 1961 without specifying the relevant limb for initiating the penalty proceedings, it appears evident that the notices were issued in a standardized manner without due consideration. This approach, being legally flawed, renders the notices insufficient to validate the imposition of a penalty under Section 271(1)(c) of the Income Tax Act, 1961. In light of these circumstances, the court aligned with the view, upheld by various courts, including the Supreme Court, that under such conditions, the penalty was not applicable. In the result, the appeal filed by the Assessee stands allowed.

Pending Assessment get Abated u/S 153 A of Income Tax Act, after Conducting Search and obtaining Information: ITAT Shri Rajender Agarwal vs The A.C.I.T CITATION:   2024 TAXSCAN (ITAT) 185

The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) observed that Pending assessment get abated under Section 153 A of Income Tax Act, 1961 after conducting search and obtaining information

The two member bench of the tribunal comprising Astha Chandra ( Judicial member ) and N.K.Billaiya ( Accountant member ) contention was that even if the assessments were in progress, the occurrence of a search and the subsequent revelation of information to the Revenue triggered the abatement of pending assessments, as outlined in Section 153A of the Income-tax Act. It was crucial to note that proceedings under section 153C were a direct consequence of actions initiated under Section 153A. Therefore, as established by the Supreme Court in the case of Vikram Singh Bhatia, the contested assessment order should have been formulated in accordance with the provisions of Section 153C of the Act.

LTCG without indexing Cost of Acquisition is to be considered for computing Tax Liability u/s 115JB of Income Tax Act: ITAT Thomas Cook (India) Limited vs Asst., CIT CITATION:   2024 TAXSCAN (ITAT) 183

The Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) observed that Long Term Capital Gain ( LTCG ) without indexing cost of acquisition is to be considered for computing tax liability under Section 115JB of income Tax Act 1961.

The two member bench of the tribunal comprising Kavitha Raja Gopal ( Judicial member ) and S. Rifaur Rahman ( Account member ) emphasized the allowance of indexation benefits, particularly as the assessee company was established as a Special Purpose Vehicle for the transfer of Land and Building.

Relief to UTI India Fund Unit Scheme: ITAT grants Exemption u/S 10(23D) of Income Tax Act as Offshore Fund Scheme maintained is approved unit by SEBI Dy. Commissioner of Income Tax (E)-2(1) vs M/s UTI India Fund Unit Scheme 1986 C/o UTI Tower CITATION:   2024 TAXSCAN (ITAT) 181

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has granted relief to UTI India Fund Unit Scheme by exempting it under section 10(23D) of the Income Tax Act 1961. This decision stems from the acknowledgment that the offshore fund scheme maintained by UTI India Fund Unit Scheme was an approved unit according to the Securities and Exchange Board of India (SEBI).

The two member bench of the tribunal comprising Narendra Kumar Chaudhary (Judicial member) and S. Rifaur Rahman (Account member) noted that the assessee fund was part of Schedule II (Sr. No. 37) of the Repeal Act, vested with UTI Mutual Fund. Despite the Act’s restructuring, the assessee, established for offshore funds, retained its distinct identity, maintained separate books of accounts, and used the same PAN. The assessee was registered under various schemes in Schedule II of UTI Mutual Fund, with its scheme approved by SEBI. The assertion that separate SEBI registration was necessary, as suggested by the Assessing Officer for section 10(23D) of the Income Tax Act 1961. Exemption was unwarranted. The documents submitted by the assessee confirmed SEBI’s approval of its offshore fund scheme.

Non-Responsiveness to Statutory Notice and failure to produce evidence in assessment u/S 143(3) of Income Tax Act: ITAT dismisses appeal SSC Hospitality Pvt. Ltd vs Income-tax Officer CITATION:   2024 TAXSCAN (ITAT) 182

The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) dismissed the appeal due to non-responsiveness to statutory notices and the failure to produce evidence during the assessment under Section 143(3) of the Income Tax Act, 1961.

The two member bench of the tribunal comprising M. Bala Ganesh ( Account member ) and Saktijith Dey ( Judicial member ) Addressing the issue of the assessee’s claim about the absence of adequate opportunity, assessment was unawed. The available documentation indicates that the assessee has consistently defaulted in every stage of the process, considering this established pattern of non-compliance, there is no compelling reason to challenge the decision of the first appellate authority. As a result, the grounds presented by the assessee were dismissed. Accordingly, the appeal was dismissed.

Loan payments made through bank transfers and not bearer Cheques: ITAT deletes penalty imposed u/s 271E of Income Tax Act Shri Pawan Kumar vs JCIT CITATION:   2024 TAXSCAN (ITAT) 180

The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) has nullified the penalty imposed under section 271E of the Income Tax Act, 1961 citing that loan payments are executed through bank transfers rather than bearer cheques.

The two member bench of the tribunal comprising N.K Billaiya ( Account member) and Astha Chandra ( Judicial member) concluded that  the assessee contended that initiating penalty proceedings were illegal and invalid as no proceedings for A.Y. 2014-15 were pending. The CIT (A) clarified that the return for A.Y. 2014-15, filed on 12.03.2015, had been processed under section 143(1) of the Income Tax Act, 1961, and the order under section 143(1) (a) of the Income Tax Act, 1961 did not include findings by the then Assessing Officer ( AO ) regarding the applicability of section 269T of the Income Tax Act, 1961.

ITAT Resolves Boeing India’s transfer Pricing battle: Clears INR 21,52,899 adjustment on grounds of Operational Inactivity and BCIL Merger Boeing India Private Limited vs DCIT CITATION:   2024 TAXSCAN (ITAT) 227

In a recent development, Boeing India Private Limited ( BIPL ) successfully resolved a tax dispute, with the Income Tax Appellate Tribunal ( ITAT ) cancelling a hefty INR 21,52,899 adjustment. The dispute revolved around BIPL’s operational status and its merger with Boeing Corporation India Ltd. ( BCIL ).

The ITAT bench, headed by Shamim Yahya and Challa Nagendra Prasad, agreed with BIPL’s arguments. They stressed that the disputed transaction was not with BIPL and that there was no involvement of the Transfer Pricing Officer ( TPO ) in BIPL’s case. The TPO’s order, forming the basis of the adjustment, pertained to BCIL, an entity that merged with BIPL on April 1, 2017. Consequently, the tribunal ruled that adjustments in BCIL’s case should not impact BIPL’s assessment.

Re-Assessment proceedings initiated beyond period of 4 years from end of relevant AY: ITAT sets aside proceedings u/s 147 of Income Tax Act Income Tax Officer vs Indian Packaging Products CITATION:   2024 TAXSCAN (ITAT) 218

The Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) has set aside the reassessment proceedings initiated under Section 147 of the Income Tax Act, 1961 when they were commenced beyond the statutory period of four years from the end of the relevant assessment year.

The two member bench of the tribunal comprising Annapurna Gupta ( Accountant member ) and Siddhartha Nautiyal (Judicial member ) concluded that the 147 of the Income Tax Act, 1961, proceedings are liable to be set-aside, in the result, the appeal of the revenue was dismissed.

Accepting stamp authority valuation not proof of incorrect sale consideration: ITAT removes penalty u/s 271(1)(c) of Income Tax Act Bankimbhai Natverbhai Patel vs Income Tax Officer CITATION:   2024 TAXSCAN (ITAT) 222

The Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) deleted the penalty under Section 271(1)(c) of the Income Tax Act, 1961, stating that merely agreeing to an addition based on the valuation made by the stamp valuation authority does not constitute conclusive proof that the sale consideration was  incorrect.

The two member bench of the tribunal comprising Anupama Gupta ( Accountant member ) and Siddartha Nautiyal ( Judicial member ) reached a conclusion regarding the imposition of penalties under Section 271(1)(c) of the Income Tax Act, 1961, in the current case. Firstly, it is evident that at the time of the sale of the mentioned immovable property, the assessee had already fulfilled tax obligations amounting to Rs. 5,42,120/- on 26.12.2014 (inclusive of tax deducted at source under Section 194 IA of the Income Tax Act, 1961).  Thus, there appears to be no intent to evade taxes on the short-term capital gain arising from the sale of the property.

ITAT allows Sale Expenditure on packing material in Jute Bags which have been rendered Unusable due to damage sustained during Loading and Unloading Income Tax Officer vs J. K. Patel & Brothers CITATION:   2024 TAXSCAN (ITAT) 220

The Ahamedabad bench of the Income Tax Appellate Tribunal ( ITAT ) allowed sale expenditure on packing material in jute bags that had been rendered unusable due to damage sustained during loading and unloading.

The two member bench of the tribunal comprising Anupama Gupta ( Judicial member ) and Siddartha Nautiyal ( Accountant member ) found that the Commissioner of Income Tax ( Appeals ) accurately determined in the ITO vs. M/s. J. K. Patel & Brothers for Assessment Years 2008-09 & 2009-10, that the entire expense of Rs. 1, 31,875/- was solely and exclusively for business purposes and was supported by evidence. Additionally, the bench  believed that this expenditure pertained to packing materials in jute bags that had been damaged or torn during loading and unloading, rendering them unusable and therefore written off as an expense in the Profit & Loss Account. Consequently, we saw no reason to question the decision of the Commissioner of Income Tax ( Appeals ) and thus found no grounds for intervention.

Assessee should be aware that Department have discovered escapement of income: ITAT deletes penalty u/s 271 (1) (C) of Income Tax Act Kapilaben Mahendrabha Patel vs DCIT CITATION:   2024 TAXSCAN (ITAT) 225

The Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) deleted the penalty under Section 271(1) (c) of the Income Tax Act, 1961, stating that the assessee should be aware that the Department has discovered escapement of income.

The single member bench of the tribunal comprising Anupama Gupta ( Accountant member ) held that the penalty levied under Section 271(1) (c) of the Income Tax Act, 1961, to the tune of Rs.1, 85,400/- to be unjustified and direct the deletion of the same.

Allotment of enquiry shares to subscribers is outside scope of Section 56(2)(viib) of Income Tax Act: ITAT ITO vs M/s. K V Global Pvt. Ltd CITATION:   2024 TAXSCAN (ITAT) 224

The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) observed that allotment of enquiry shares to subscribers was outside scope of Section 56(2) ( viib ) of the Income Tax Act, 1961

The two member bench of the tribunal comprising Yogesh Kumar ( Judicial member ) and Pradip Kumar Kediya s( Accountant member ) observed that when allotments are made to existing shareholders, the deeming provisions of Section 56(2)( viib ) of the Income Tax Act, 1961, would not typically apply .According to the valuation report, the Fair Market Value ( FMV ) has been determined at Rs. 14.815 per share, which aligns with the FMV at which shares were issued to the holding company.

Trust engaged in providing Bogus bills for donation: ITAT rejects deduction claimed u/s 35 (1) (ii) of Income Tax Act Haresh Acids and Chemicals Pvt. Ltd vs The Income Tax Officer CITATION:   2024 TAXSCAN (ITAT) 219

The Ahmadabad bench of the Income Tax Appellate Tribunal ( ITAT ) rejected the deduction claimed under Section 35(1)(ii) of the Income Tax Act, 1961, citing that the trust was involved in issuing bogus bills for donations.

The single member bench  of the tribunal comprising  Sujithra Kamble (  Judicial member ) observed that it was evident from the statement provided by the Director of the School of Human Genetics and Population Health Institute that the institute engaged in issuing bills disguised as donations, with funds subsequently funneled back to donors through various channels in the guise of purchases.

Failure to Confirm Authenticity of Activities and Compliance with Relevant Laws: ITAT Remands matter to Consider Registration of Trust u/s 12 AA of Income Tax Act Janata Gram Vikas Pratisthan vs CIT (Exemption) CITATION:   2024 TAXSCAN (ITAT) 223

The Pune bench of the Income Tax Appellate Tribunal (ITAT) remanded the matter for consideration of the registration of the trust under Section 12AA of the Income Tax Act, 1961, due to the failure to confirm the authenticity of activities and compliance with relevant laws.

The two member bench of the tribunal comprising R.S. Syal ( Vice President ) and Partha Sarathi Choudhari ( Judicial member) overturned the decision of the CIT(E) and referred the matter back to their office with the aforementioned directive. The CIT (E) was instructed to re-adjudicate the matter in accordance with the law, adhering to the principles of natural justice. The grounds of appeal of the assessee were allowed for statistical purposes.

Delay in finalizing late objection: ITAT directs AO to finalize assessment order u/S 144C of Income Tax Act Mavenir UK Holdings vs The ACIT CITATION:   2024 TAXSCAN (ITAT) 213

The Delhi bench of the Income Tax Appellate Tribunal (ITAT) directed the Assessing Officer to finalize the assessment order under Section 144C of the Income Tax Act, 1961 due to the delay in finalizing late objections.

The  two member bench of the tribunal comprising C.N. Prasad ( Judicial member) and Dr. B.R.R Kumar ( Accountant member) observed that the assessee , through a letter dated April 11, 2022, informed the Assessing Officer that objections had been filed before the office of DRP-II on April 6, 2022, challenging the draft Assessment Order.

Non Response to Notice u/s 133(6) of Income Tax Act doesn’t prove that entire Transaction is Bogus: ITAT ACIT vs M/s. Flagship Housing Development Pvt. Ltd CITATION:   2024 TAXSCAN (ITAT) 214

The Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) observed that no response to notice under Section 133(6) of Income Tax Act, 1961 that doesn’t prove that entire transactions are bogus

The two member bench of the tribunal comprising Gadan Goyal ( Accountant member ) and Amit Shukla ( Judicial member ) observed the status of these companies and found that most of them are still active and compliant with statutory requirements, which undermines the claim that they were formed solely for accommodation entries. Even though some parties did not respond to notices under Section 133(6), of Income Tax Act, 1961, this does not prove that the entire transactions are fraudulent, especially when all other documents demonstrating the identity and creditworthiness of the parties have been provided and remain unexamined by the AO.

Corporate entity can’t logically incur Expenditure for Individual Property improvement: ITAT dismisses Appeal Arun Tulshidas Kharat vs The Deputy Commissioner of Income Tax CITATION:   2024 TAXSCAN (ITAT) 217

The Pune bench of the Income Tax Appellate Tribunal ( ITAT ) dismissed the appeal, stating that a corporate entity cannot logically incur expenditure for individual property improvement.

The two member bench of the tribunal comprising SS Vishwanethra Ravi ( Judicial member ) Dipak P Ripoti ( Accountant member ) found that this declaration does not provide meaningful support to the assessee’s case. Furthermore, it was important to consider that Wings Travel Management India Private Limited was a corporate entity and cannot feasibly incur expenditure for an individual’s flat.

Pending Insolvency Proceedings before NCLT: ITAT orders Jet Airways to pay costs of Rs 25,000 to PM Relief Fund Jet Airways (India) Ltd vs Dy. CIT, CC-5(2) CITATION:   2024 TAXSCAN (ITAT) 221

The Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) has ordered Jet Airways, amidst pending insolvency proceedings before the National Company Law Tribunal ( NCLT ), to pay costs amounting to Rs 25,000 to the Prime Minister’s Relief Fund.

The two member bench of the tribunal comprising Vikas Aswathy ( Judicial member ) and Pathmavathy ( Accountant member ) remitted the issue back to the AO for a denovo consideration of the various issues.

Banking company as per section 2(c) of Banking regulations Act, would be eligible for claim of deduction u/S 80P(2)(d) of Income Tax Act : ITAT Minority Co-op. Credit Society Ltd vs ITO Ward-1 CITATION:   2024 TAXSCAN (ITAT) 210

The Bangalore bench of the Income Tax Appellate Authority ( ITAT ) observed that Banking company as per Section 2(c) of Banking regulations Act, 1949, would be eligible for claim of deduction under Section 80P(2)(d) of Income Tax Act, 1961

The two member bench of the tribunal comprising Madumitha Roy ( Judicial member ) and Chandra Poojari ( Accountant member ) affirmed that the interest income acquired by a cooperative society from investments held with a cooperative bank lacking a license under section 22 of the Banking Regulation Act 1949 was excluded from the definition of “Banking Company” as per section 2(c) of the Banking Regulations Act, 1949.

ITAT allows Deduction on Investment made for Mosque constructed used for Religious purposes in Residential Property u/s 54F of Income Tax Act Asstt. CIT Circle 6(1) Hyderabad vs Shri Iqbal Ali Khan CITATION:   2024 TAXSCAN (ITAT) 215

The Hyderabad bench of the Income Tax Appellate Tribunal ( ITAT ) has permitted a deduction for the investment made in the construction of a mosque utilized for religious purposes within a residential property under Section 54F of the Income Tax Act, 1961

The two member bench of the tribunal comprising R.K.Panda ( Vice president ) and Laliet Kumar ( Judicial member ) scrutinized the provisions of Section 54F, of the Income Tax Act, 1961, which provide for deductions. A straightforward interpretation of the section indicates that there is no provision for a proportional deduction, especially when a residence cannot be established within a Mosque.

Traveling to India and depositing cash in to NRO bank account: ITAT deletes addition u/s 69 A of Income Tax Act Viren Bakhru vs ACIT CITATION:   2024 TAXSCAN (ITAT) 209

The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) ruled that no addition shall be made under Section 69A of the Income Tax Act, 1961, for cash deposition into a Non-Resident Ordinary ( NRO )  bank account during travel to India.

The two member bench of the tribunal comprising Saktiji Dey ( Vice President ) and Dr.B.R.R Kumar ( Accountant member )  concluded that no addition under Section 69A of the Income Tax Act, 1961, was warranted. In the result, the appeal of the assessee was allowed.

Account of inadvertent mistake or ignorance included in income any amount is exempt from Income Tax Act: ITAT ITO-12(3)(1) vs M/s. Laxmi Realty and Advisory Pvt. Ltd CITATION:   2024 TAXSCAN (ITAT) 211

The Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) observed that Account of inadvertent mistake or ignorance included in income any amount is exempt from Income Tax Act

The two member bench of the tribunal comprising Amarjith Singh ( Accountant member ) and Aby T. Varkey ( Judicial member ) observed that the assessee that if taxation was not permitted under the law, tax cannot be imposed using the Doctrine of Estoppel. Article 265 of the Constitution of India states that no tax shall be levied or collected except by authority of law. Our position is further supported by the judgment of the  Supreme Court in the case of CIT Vs. Shelly Products, where the Court stated that if an assessee unintentionally included in their income any amount exempt from income tax or not considered income under the law, they can bring this to the attention of the tax authorities. If satisfied, the authorities may provide relief and refund any excess taxes paid

Transaction done through Bombay Stock Exchange on STT cannot be considered as Sham or Bogus Transaction: ITAT Duxton Hills Builders [P] Ltd vs A.C.I.T. CITATION:   2024 TAXSCAN (ITAT) 208

The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) observed that Transaction done through Bombay stock exchange on Securities Transaction Tax ( STT ) cannot be considered as sham or bogus transaction

The two member bench of the tribunal comprising Astha Chandra ( Judicial member ) and N.K.Billaya ( Accountant member ) observed that the  revenue’s attempt to provide compelling evidence to prove that the taxpayer benefited from declaring the alleged fraudulent loss fell significantly short. On the contrary, the available evidence indicated that the transaction had been conducted through the Bombay Stock Exchange, with Securities Transaction Tax ( STT ) duly paid, indicating its legitimacy and dispelling any notion of it being a sham or bogus transaction. Taking into account all the facts presented, we instructed the Assessing Officer to acknowledge the loss of Rs. 1,41,29,989/-.

Disallowance made on basis of delayed filing of GST return without vouching exact amount of GST discharged by extended due date: ITAT Directs readjudication Sharp Aluminium vs Asstt. Commissioner of Income Tax CITATION:   2024 TAXSCAN (ITAT) 233

The Pune bench of Income Tax Appellate Tribunal ( ITAT ) observed that disallowance made on the basis of delayed filing of Goods and Service Tax return without vouching the exact amount of GST discharged by extended due date. Therefore the bench directed readjudication

After reviewing the submissions, two-member bench of G. D. Padmahshal, ( Accountant member ) and Partha Sarathi Choudhury, ( Judicial Member ) remanding the matter back to the file of NFAC with a direction to deal with this limited issue in accordance with aforestated law & pass a speaking order in terms of section 250(6) of the Act.

Denial of deduction claimed u/s 80P(2)(d) of IT Act regard to interest received from Co-Operative Banks /Scheduled Banks : ITAT Directs Re adjudication S. K.Goldsmiths Industrial Co-operative Society Ltd vs ITO CITATION:   2024 TAXSCAN (ITAT) 230

The Bangalore bench of Income Tax Appellate Tribunal ( ITAT ) directed re adjudication upon the denial of deduction claimed under Section 80(2)(d) of the Income Tax Act , 1961 with regard to the interest received from cooperative banks /scheduled banks.

After observing the submissions of both parties the two-member bench Of  Laxmi Prasad Sahu, ( Accountant member ) and  George George K, ( Vice President )  directed readjudication upon the denial of deduction claimed under Section 80(2)(d) of the Income Tax Act , 1961 with regard to the interest received from cooperative banks /scheduled banks.

Receipts from Software Subscription Payments, Training and Professional Fees not taxable as FTS under India-Netherlands DTAA: ITAT Service Now Nederland BV vs ACIT CITATION:   2024 TAXSCAN (ITAT) 231

The Delhi bench of Income Tax Appellate Tribunal ( ITAT ) ruled that receipts from software subscription payments training and professional fees was not taxable in India as Fee For Technical Service( FTS ) under India-Netherlands Double Taxation Avoidance Agreements( DTAA ).

The two-member bench of Dr. B.R.R. Kumar ( Accountant member ) and Kul Bharat, ( Judicial Member ) held that, professional and training services rendered by the assessee does not fall within the definition of FTS both under the Income Tax Act as well as under the DTAA .

Non-deduction of TDS u/s 195(1) of Income Tax Act, leading to proposed disallowance u/s 40(a)(i) of Income Tax Act: ITAT ITO Ward-2 vs G. Tex Inc CITATION:   2024 TAXSCAN (ITAT) 212

The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) observed that non deduction of Tax Deducted at Source ( TDS ) under Section 195(1) of the Income Tax Act, 1961, leading to proposed disallowance under Section 40(a)(i) of the Income Tax Act, 1961

The two member bench of the tribunal comprising Chandra Poojari ( Accountant member) and Madhumita Roy ( Judicial member )  noted that the only allegation made was regarding the non-deduction of TDS under Section 195(1) of the  Income Tax Act, 1961, leading to a proposed disallowance under Section 40(a)(i) of the Income Tax Act, 1961. Consequently, nullified the reassessment order issued in this case based on this primary issue, particularly considering the proposed disallowance under section 40(a) (i) of the Income Tax Act, 1961

Disallowance u/s 14 A is allowable only on Investments that yielded Exempt Income: ITAT rules in favour of Reliance Power Ltd Reliance Power Ltd vs The Deputy Commissioner of income tax CITATION:   2024 TAXSCAN (ITAT) 236

In the case of Reliance Power Ltd, the Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) has held that disallowance under section 14 A of the Income Tax Act, 1961 is allowable only on Investments that yielded Exempt Income. The ITAT observed that while working out disallowance under section 14 A of administrative expenses under rule 8D (2) (iii) of the act, the assessing officer could have been made only after taking only those investments that have yielded exempt income.

A two-member bench comprising of  Shri Prashant Maharishi, AM and Shri Rahul Chaudhary, JM observed that when the assessee does not have any exempt income during the year, the assessee did not claim any exemption and therefore there cannot be any disallowance under section 14 A of the act. Further, the amendment made to the Income Tax Act is also applicable with effect from 1 April 2022. The Tribunal dismissed the appeal of the revenue and allowed the appeal of the assessee, however, there is no exempt income during the year, and such an issue becomes academic.

Failure to Substantiate Genuineness of Source of investment with Respect to Purchase of immovable Property: ITAT directs Readjudication Siddikha M. Pathan vs ITO, Ward-2 CITATION:   2024 TAXSCAN (ITAT) 234

The Pune bench of Income Tax Appellate Tribunal ( ITAT ) directs readjudication on account of failure to substantiate genuineness of source of investment with respect to purchase of immovable property

After observing the submissions of both parties the single -member bench Of  R.S. Syal, ( Vice President ) directs readjudication on account of failure to substantiate genuineness of source of investment with respect to purchase of immovable property . Bhuvanesh V. Kankani counsel appeared for assessee and Sourabh Nayak , counsel appeared for revenue.

Interest Income Derived by Co-operative Society from any other Co-operative Bank allowable as Deduction u/s 80P(2)(d): ITAT Reserve Bank Staff and Officers co-op credit society Ltd vs Income Tax Officer CITATION:   2024 TAXSCAN (ITAT) 235

In a recent judgement, the Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) has held that interest income derived by a co-operative society from any other co-operative bank is allowable as a deduction under section 80P(2)(d) of the Income Tax Act, 1961.

A two-member bench comprising Shri Prashant Maharishi, AM and Shri Rahul Chaudhary, JM observed that any income by way of interest or dividend derived by the cooperative society from its investment with any other cooperative society is also allowable as deduction fully under Section 80P(2)(d) of the Act, the facts are clear that assessee is a co-operative society and co-operative banks are also cooperative societies.

Non filing of TDS u/s 234 E of Income Tax Act for 8 years: ITAT dismisses Appeal Adithya Ferro Alloys Pvt.Limited vs AO CITATION:   2024 TAXSCAN (ITAT) 245

The Chennai bench of the Income Tax Appellate Tribunal ( ITAT ) dismissed the appeal due to the non-filing of Tax Deducted at Source ( TDS ) under Section 234E of the Income Tax Act, 1961, for a period spanning eight years.

The two member bench of the tribunal comprising Manomohan Das ( Judicial member ) and Manoj Kumar Agarwal ( Accountant  member ) concluded that there was no sufficient cause with the assesse seeking condonation of inordinate delay of more than 8 years before first appellate authority.

Addition u/s 68 of Income Tax Act cannot be made Without Examining Source of Cash Deposit: ITAT M/s. Mudhol Pattina Sahakari Sangh Niyamita vs ACIT CITATION:   2024 TAXSCAN (ITAT) 242

The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) observed that addition under Section 68 of the Income Tax Act, 1961, cannot be made without examining source of cash deposit

The single member bench of the tribunal comprising George George K (Vice President) observed that an addition under section 68 of the Income Tax Act, 1961, cannot be made without scrutinizing the source of the cash deposit. Consequently, for the limited purpose of scrutinizing the cash deposit’s source, the matter was referred back to the Assessing Officer. The assesse was instructed to provide evidence of the identity/source of the cash deposit and must satisfy the AO regarding the conditions stipulated under Section 68 of the Income Tax Act, 1961.

No Enquiries made AO in Respect of genuineness of Receipts of donation issued to Political party for Confirming Deduction Claimed u/s 80GGC of IT Act: ITAT Upholds Revision Order Rakesh Balubhai Padariya vs Commissioner of Income Tax-3 CITATION:   2024 TAXSCAN (ITAT) 232

The Ahmedabad bench  of  Income Tax Appellate Tribunal ( ITAT ), upheld the revision order and held that no enquiries was made by AO in respect of genuineness of receipts of the donation issued to the political party for confirming the deduction claimed under Section 80GGC of the Income Tax Act, 1961.

After observing the submissions of both parties the two-member bench of Annapurna Gupta, ( Accountant member ) and Siddhartha Nautiyal ( Judicial Member )held that the assessing officer simply allowed the claim of deduction of donation by the assessee, without carrying out the necessary enquiries Therefore the bench dismissed  the appeal filed by the assessee. And upheld the revision order.

ITAT upholds Reassessment Proceedings initiated on information of Investigation Wings with respect to Accommodation Entry Vilson Roofing Products Pvt. Ltd. vs Asstt. Commissioner of Income Tax CITATION:   2024 TAXSCAN (ITAT) 228

The Pune bench of Income Tax Appellate Tribunal ( ITAT ) upheld the reassessment proceedings initiated on information wings with respect to accommodation entry.

The single-member bench of G. D. Padmahshali, ( Accountant member ) held that notice u/s 148 of the Act was validly issued. Therefore the bench dismissed the ground of appeal filed by the assessee.

ITAT upholds Addition in Absence of Cogent Material for genuineness of Share Application/Subscription Transaction Vilson Roofing Products Pvt. Ltd. vs Asstt. Commissioner of Income Tax CITATION:   2024 TAXSCAN (ITAT) 228

The Pune bench of Income Tax Appellate Tribunal ( ITAT ), while upholding the addition made under section 68 of the Income Tax Act, 1961 held that the assessee failed due to the absence of cogent material to prove the creditworthiness and genuineness of share application /subscription transaction.

The single-member bench of G. D. Padmahshali ( Accountant member ) upheld the addition made by the assessing officer and observed that the assessee has failed due to absence of cogent material to prove the creditworthiness and genuineness of share application /subscription transaction.

Interest Income received from Co-operative Banks cannot be equated with interest received from Co-operative Society: ITAT not allowed deduction u/s 80P (2) (d) of Income Tax Act Bantwal Public Employees Consumers Co-operative Society vs ITO CITATION:   2024 TAXSCAN (ITAT) 244

The Bangalore bench of the Income Tax Appellate Tribunal ( ITAT ) disallowed deduction under Section 80P (2)(d) of the Income Tax Act, 1961, stating that interest income received from cooperative banks cannot be considered equivalent to interest received from a cooperative society.

The two member bench of the tribunal comprising George George k ( Vice President ) concluded that the assessee cannot claim deductions under Sections 80P(2)(a)(i) or 80P(2)(d) of the Income Tax Act, 1961 for interest income received from scheduled banks/cooperative banks.

Pure Charity Performance of Activity without Consideration is not Envisioned u/s 2(15) of Income Tax Act as GPU object: ITAT Media Research Users Council vs Asst. Director of Income Tax CITATION:   2024 TAXSCAN (ITAT) 246

The Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) observed that Pure Charity Performance of Activity without Consideration is not envisioned under Section 2(15) of the Income Tax Act, 1961, as General Public Utility ( GPU ) object

The two member bench of the tribunal comprising Gangan Goyal ( Accountant member ) and Amit Shukla ( Judicial member ) observed that the concept of pure charity, the performance of an activity without consideration was not envisioned under the Act, however, as long as GPUs object involves activities which also generates profits, it can be granted exemption provided the quantitative limit under second proviso to Section 2(15) of the  Income Tax Act, 1961, for receipts from such profits, was  adhered to

Delay in Filing form 10 A: ITAT Rejects Registration of Trust u/s 12A of Income Tax Act LTCL Palaniappa Charities Trust vs The Commissioner of Income Tax CITATION:   2024 TAXSCAN (ITAT) 238

The Chennai bench of the Income Tax Appellate Tribunal (ITAT) rejected the registration of the trust under Section 12A of the Income Tax Act, 1961, due to the delay in filing Form 10A.

 Hence, The two member bench of the tribunal comprising Manjunatha G ( Accountant member ) and Mahavir Singh ( Vice President ) set aside the appeal and the matter was remitted back to the file of the CIT (E) who will allow assessee to file application in form No. 10A along with other required details and the  CIT (E) will examine entire aspect relating to registration under Section 12AB of the Income Tax Act, 1961 as well as under Section 80G of the Act and then will decide the appeal accordingly.

Deduction u/s 80 P of Income Tax Act does not apply to Interest earned on FDRs from Bank of Baroda: ITAT Matar Taluka Local Board vs D.C.I.T CITATION:   2024 TAXSCAN (ITAT) 226

The Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) observed that deduction under Section 80 P of the Income Tax Act, 1961 does not apply to interest earned on Fixed Deposit Receipts ( FDRs ) from Bank of Baroda

The single member bench of the tribunal comprising Suchithra Kamble ( Judicial member ) Regarding the interest earned from Bank of Baroda, expenses incurred for earning interest income on Fixed Deposit Receipts ( FDRs ) from Bank of Baroda should be allowed, but deduction under Section 80P of the Act will not be applicable to the interest earned on the FDR from Bank of Baroda. Therefore, the appeal of the assessee was partly allowed.

Capital Gains arising on Sale of Shares cannot be regarded as Sham Profit: ITAT deletes additions made u/s 69A of Income Tax Act Sarika Bindal vs ITO CITATION:   2024 TAXSCAN (ITAT) 229

The Delhi bench of Income Tax Appellate Tribunal ( ITAT ), while deleting the addition made under Section 69A of the Income Tax Act, 1961 held that capital gain arising on sale of shares could not be regarded as sham profit.

After observing the submissions of both parties the two-member bench Of Pradip Kumar Kedia, ( Accountant member ) and  Challa Nagendra Prasad ( Judicial Member ) held that capital gains arising on sale of shares cannot be regarded as sham profit and consequently, additions under section 69A of the Act is not justified. Therefore the bench allowed the appeal filed by the assessee.

Extension of due date under CBDT circular is Dependent upon Quantification of Interest u/s 234 of Income Tax Act: ITAT Tata Rao Gali vs Income Tax Officer CITATION:   2024 TAXSCAN (ITAT) 237

The Hyderabad bench of the Income Tax Appellate Tribunal ( ITAT ) observed that extension of due date under Central Board of Direct Taxes ( CBDT ) circular is Dependent upon Quantification of Interest under Section 234 of the Income Tax Act , 1961

The two member bench of the tribunal comprising Rama Kanta ( Vice President ) and K.Narasimha Chary ( Judicial member )  observed that  the first clarification provided in the circular lacks clarity regarding the specific date for assessing the interest liability under section 234A of the Income Tax Act , 1961.

No invocation of Section 201(1)/201(1A) of Income Tax Act as assessee cannot be termed “assessee in default” for non-deduction of TDS: ITAT Bharat Sanchar Nigam Ltd vs Deputy Commissioner of Income Tax CITATION:   2024 TAXSCAN (ITAT) 239

The Rajkot bench of the Income Tax Appellate Tribunal ( ITAT ) observed that no invocation of Section 201(1)/201(1A) of the Income Tax Act, 1961, as assessee cannot be termed “assessee in default” for non-deduction of Tax Deducted at Source ( TDS )

The two member bench of the tribunal comprising Waseem Ahammad ( Accountant member ) and Siddartha Nautiyal ( Judicial member )  observed that the Department had not analyzed this aspect/contention of the assessee that since the assessee had already deducted taxes at source at appropriate rates, there was no question of invoking the provisions of Section 201(1)/201(1A)  of the Income Tax Act, 1961, since the assessee could not be held to be an “assessee in default” for non-deduction of TDS, when the assessee had already deducted taxes at source at appropriate rates.

Debt does not Cease to Exist when there is no Writing in Books of Account, no Cessation of Liability u/s 41(1) of Income Tax Act: ITAT Total Environment Building Systems Pvt. Ltd vs DCIT CITATION:   2024 TAXSCAN (ITAT) 242

The Bangalore bench of the Income Tax Appellate Tribunal ( ITAT ) observed that debt does not cease to exist when there was no writing in books of account, no Cessation of Liability under Section 41(1) of the Income Tax Act, 1961

The two member bench of the tribunal comprising Madhumitha Roy ( Judicial member ) and Chandra poojari ( Accountant member ) observed that in the assessment year under consideration, this amount cannot be considered as cessation  liability under Section 41(1) ) of the  Income Tax Act, 1961. This ground of appeal of the assessee was allowed.

Goodwill is an Intangible asset, Depreciation Allowable u/s 32(1) of Income Tax Act: ITAT S&P Capital IQ (India) Private vs Asst. Commissioner of Income Tax CITATION:   2024 TAXSCAN (ITAT) 240

The Hyderabad bench of the Income Tax Appellate Tribunal ( ITAT ) observed that goodwill was an intangible asset, depreciation allowable under Section 32(1) of the Income Tax Act, 1961

The two member bench of the tribunal comprising Rama Kanta ( Vice President ) and N.K.Narasimha Chary ( Judicial member ) concluded that the denial of the deduction claim for depreciation on goodwill by the authorities below cannot be justified. Therefore, the bench observed that this disallowance should be overturned, and the claim for deduction of depreciation on goodwill should be accepted. Consequently, the grounds of appeal are allowed.

Unexplained Cash Deposits during the Demonetization period: ITAT remits matter to AO produce Bills and Vouchers for Purchase and Sale of Gold Bollam Sampath Kumar Jewellers vs Asstt. C. I. T. Circle 3(2) Hyderabad CITATION:   2024 TAXSCAN (ITAT) 216

The Hyderabad bench of the Income Tax Appellate Tribunal ( ITAT ) has remitted the matter to the Assessing Officer, directing them to produce bills and vouchers related to the purchase and sale of gold in response to unexplained cash deposits during the demonetization period.

The two member bench of the tribunal comprising Laliet Kumar ( Judicial member ) and R.K. Panda ( Vice President ) concluded that the  grounds raised by the assessee are accordingly allowed for statistical purposes. In the result, an appeal filed by the assessee was  allowed for statistical purposes.

Full Value of Consideration or Cost of Investment cannot be Substituted by Fair Market Value Except within Purview of Section 50 C of Income Tax Act: ITAT Asst.CIT vs s Satya Realtors Pvt. Ltd. CITATION:   2024 TAXSCAN (ITAT) 243

The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) observed that full value of consideration or cost of investment cannot be substituted by fair market value except within purview of Section 50 C of the Income Tax Act, 1961

The two member bench of the tribunal comprising Shamim Yahaya ( Accountant member ) and Yogesh Kumar U.S ( Judicial member ) observed that the agreed consideration stated in the sale documents or any other instrument should be considered as the “full value of consideration” or “cost of investment”. Substitution of the fair market value is only permissible in cases falling within the scope of Section 50C and Section 56(l)(vi)/(vii), of the Income Tax Act, 1961 where the circle rate exceeds the recorded transaction value. However, in this instance, the consideration in registered conveyance deeds consistently exceeds the circle rate valuation.

Services provided to Jet Airways and Jet Lite in Malaysia head office of Resident Indian Company are taxable in India: ITAT Malaysian Airline System Berhad vs DCIT CITATION:   2024 TAXSCAN (ITAT) 247

The Delhi bench of Income Tax Appellate Tribunal ( ITAT ) ruled that services provided to Jet Airways and Jet Lite in Malaysia head in the office of resident Indian companies are taxable in India .

After observing the submissions of both parties the two-member bench of G.S. Pannu, ( Vice President ) and Challa Nagendra Prasad, ( Judicial Member ) held that services provided to Jet Airways and Jet Lite in Malaysia head in the office of resident Indian companies are taxable in India.

Receipts from sale of Software License is not royalty under Article 12(3) of India Singapore DTAA: ITAT ACIT vs Newspage Pvt. Ltd CITATION:   2024 TAXSCAN (ITAT) 248

The Delhi bench of Income Tax Appellate Tribunal ( ITAT ) held that receipts from sale of software license is not royalty under Article 12(3) of India Singapore Double Taxation Avoidance Agreement.

After observing the submissions of both parties the two-member bench of G.S. Pannu, ( Vice President ) and Challa Nagendra Prasad, ( Judicial Member ) by determining the decision of Supreme Court in the case of Engineering Analysis Centre of Excellence Pvt. Ltd. Vs. CIT held that software license and receipts from provisions of services cannot be assessed as royalty/FTS in the hands of the assessee.

Income from Transfer of Channels being an Asset Outside India not Taxable u/s 9(1)(i) Income Tax Act: ITAT deletes Addition Star Television Entertainment Ltd vs Deputy Commissioner of Income Tax CITATION:   2024 TAXSCAN (ITAT) 249

The two member bench of Delhi Income Tax Appellate Tribunal ( ITAT ) comprising Amit Shukla ( Judicial Member ) and Padmavathy S. ( Accountant Member ) while deleting the addition held that Income from transfer of channels being an asset outside India should not be taxable under Section 9(1)(i) of the Income Tax Act,1961.

Accordingly the ITAT bench held that the income arising out of the transfer of STAR Vijay channel, being an asset outside India by the SARF to VTPL will not fall within the provisions of section 9(1)(i) and hence not taxable in India.

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