Income Tax Annual Digest 2024: ITAT Cases [Part 29]

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.

ITAT orders Condonation of 1809-Day Delay in FTC Disallowance Appeal After Verification of Form 67  Ram Avadhanulu Jonnavithula vs The Deputy Commissioner of Income Tax CITATION:   2024 TAXSCAN (ITAT) 1567

The Bangalore Bench of the Income Tax Appellate Tribunal ( ITAT ) passed a decision to condone a delay of 1809 days in a matter regarding disallowance of Foreign Tax Credit ( FTC ), while also advising the Assessing Officer ( AO ) to conduct due verification of Form 67. Ram Avadhanulu Jonnavithula, the Appellant-Assessee had filed an Income Tax Appeal against an ex parte order passed by the Commissioner of Income Taxes ( CIT(A) ) at the National Faceless Appeal Centre, Delhi (NFAC) with regards to the financials of the Assessee for the  Assessment Year (A.Y.) 2017-18.

Illiterate Assessee Running Mobile Shop fails to Comply with Income Tax Notice: ITAT imposes Fine  Krintesh Rameshbhai Patel vs DCIT CITATION:   2024 TAXSCAN (ITAT) 1568

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) set aside the order made income tax addition on unexplained income due to non compliance considering the assessee being an illiterate running a small mobile recharging shop. The bench also imposed a cost of Rs.5,000 as fine. Krintesh Rameshbhai Patel, the appellant-assessee, carrying on a small business of mobile recharging, failed to comply with notices, prompting the Assessing Officer to treat cash deposits of Rs.54,94,100 as unexplained income for A.Y. 2017-18.

The two member Bench comprised of Suchitra Kamble(Judicial Member) and Narendra Prasad Sinha(Accountant Member) noted that the AO did not fully consider the bank transactions, and it was important to assess the deposits and transfers as part of the same business activity. Therefore, the Tribunal decided to send the matter back to the AO with directions to give the assessee another opportunity to explain the deposits and produce the necessary evidence.

₹3 Crores Gift from NRI Son to Mother Deemed Valid and Non-Taxable: ITAT Citing Donor’s Sufficient Funds  DCIT vs Lalita Devi Agarwal CITATION:   2024 TAXSCAN (ITAT) 1569

The Mumbai Bench of the Income Tax Appellate Tribunal ( ITAT ) ruled that the assessee received Rs. 3 crores gift from her NRI son was deemed valid and non-taxable under the Income Tax Act citing the Donor’s sufficient funds. Lalita Devi Agarwal, the assessee received a gift of Rs 3 crores from her son, Barun Agarwal, a Non-Resident of India. She received the gift via RTGS transactions on 14.03.2011 and 17.03.2011.

The son was a hedge fund operator based in Hong Kong and transferred the funds from his Hong Kong account to his Indian account before gifting the amount. The assessee used the gifted amount to provide an unsecured loan of Rs.2.7 crores to Mangalam Vanijya Pvt. Ltd. and purchased shares in the same company.

Natural Justice Violated by unfair Deadline: ITAT Remands ₹1.3 Cr Addition case u/s 69C to AO  Super Sonic Impex vs The ITO CITATION:   2024 TAXSCAN (ITAT) 1576

The Surat bench of the Income Tax Appellate Tribunal ( ITAT ) in the case of supersonic impex held that a deadline of three days for submission of all relevant records of the assessee’s accounts was unfair and such unfair deadline was indeed a violation of natural justice principles. The assessee had appealed against an order passed by the Commissioner of Income Tax (Appeals) [CIT(A)], National Faceless Appeal Centre ( NFAC ) under Section 250 of the Income Tax Act 1961, for the assessment year (AY) 2018-19.

The two-member bench, consisting of Pawan Singh ( Judicial Member ) and Bijayananda Pruseth ( Accountant Member ), held that it is settled that natural justice and fair play require that the affected party be given sufficient opportunity to be heard to present his case.

ITAT rescinds Ex-Parte Addition of Rs.36L u/s 69A, directs Explanation of Disputed Financial Records  Ajjahar Ghaniwala vs The ITO CITATION:   2024 TAXSCAN (ITAT) 1578

The Ahmedabad Bench of the Income Tax Appellate Tribunal ( ITAT ) recently directed denovo Assessment of an Assessee’s matter observing that the Assessing Officer (AO) had conducted ex-parte addition of Rs.36,01,500/- under Section 69A of the Income Tax Act, 1961 after duly assessing all financial records adducible by the Assessee.

The Decision was given by the Ahmedabad ITAT while hearing an Income Tax Appeal filed by the Appellant-Assessee Ajjahar Ghaniwala against the order dated 30.11.2023 passed by the Commissioner of Income Taxes (Appeals) (CIT(A)) at the National Faceless Appeal Centre under Section 250 of the Income Tax Act. Against the financials of the Assessee for the Assessment Year (A.Y.) 2017-18.

Delay in filing Form 10B by Charitable Trust for Sec.11 Exemptions: ITAT directs CIT(A) Adjudication on Potential Condonation by CIT(E)  Sri Jagadguru Shivanand Human Welfre Association Gadag vs ITO CITATION:   2024 TAXSCAN (ITAT) 1579

The Income Tax Appellate Tribunal ( ITAT ), Bangalore recently issued directions to the Commissioner of Income Taxes ( Appeals ) ( CIT(A) ) to conduct renewed consideration of an Appeal on the basis of possible condonation of delay by the Commissioner of Income Taxes ( Exemptions ) ( CIT(E) ) in a matter concerning delay in filing Form 10B by a Charitable Trust.

The Appeal against the Order of the CIT(A), Prayagraj pertained to Assessment Year (A.Y.)  2022-23, and was filed before the Bangalore ITAT by Sri Jagadguru Shivanand Human Welfare Association, a charitable trust seeking to avail exemptions under Section 11 of the Income Tax Act, 1961.

Unexplained Cash Credit During Demonetization Period: ITAT upholds CIT(A) Deletion  Deputy Commissioner of Income Tax vs Bongaon Co Operative Credit Society Limited CITATION:   2024 TAXSCAN (ITAT) 1580

The Kolkata Bench of Income Tax Appellate Tribunal(ITAT) upheld the CIT(A)’s decision to delete the addition of unexplained cash credit during the demonetization period, rejecting the Revenue’s appeal.

The Revenue-appellant challenged the order passed by CIT(A) dated 23.08.2023, which was issued under section 250 of the Act for the Assessment Year(AY) 2017-18. This order was passed in response to the assessment order under section 143(3) of the Act, dated 15.12.2019.

Section 14A Disallowance: ITAT Directs Restricting Disallowance to Rs. 12 Lakh, Following Previous Year’s Ruling  Rasna Private Limited 905 vs ACIT CITATION:   2024 TAXSCAN (ITAT) 1570

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) set aside the matter for the Assessment Year (AY) 2016-17, directing the disallowance under section 14A of the Income Tax Act, 1961 to be restricted to Rs. 12 lakhs, based on errors in the CIT(A)’s order.

The two-member bench comprising Smt. Annapurna Gupta (Accountant Member) and Shri Siddhartha Nautiyal (Judicial Member) set aside the matter for AY 2016-17, partly allowing the appeal of the assessee and restricting the disallowance under section 14A of the Act to Rs. 12 lakhs. In Conclusion, the appeal was partly allowed, with the disallowance under section 14A of the Act restricted to Rs. 12 lakhs.

Reassessment of Alleged Bogus LTCG/STCG Based on AO’s Assumptions u/s 143(3) of Income Tax: ITAT remands case to CIT(A) Trishla Vyapaar Pvt. Ltd vs DCIT CITATION:   2024 TAXSCAN (ITAT) 1571

In a recent case, the Ranchi bench of the Income Tax Appellate Tribunal ( ITAT ) held that mere allegations of fake transactions cannot be the basis of further judicial proceedings. If any allegation arises against a party, it should be investigated in depth.

The Tribunal consisting of Partha Sarathi Chaudhury (Judicial Member) and Ratnesh Nandan Sahay (Accountant Member) held that the modus operandi adopted by the CIT(A) is not satisfactory as no proper investigation had been done and to uphold the objective of justice directed to remand the matter back to the file of the CIT(A) to decide on the matter after considering all of the issues in depth. The tribunal also directed the assessee to comply with the investigation to be taken up by the CIT(A) and produce all necessary documents before the CIT(A) to make its case.

Karta of Hindu Undivided Family Wins Partial Relief at ITAT: Tribunal Sets Aside Addition for Re-calculation  Kothari Sanjay Manilal vs The DCIT CITATION:   2024 TAXSCAN (ITAT) 1572

The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT), while partly allowing the appeal, held that a Hindu Undivided Family (HUF) is entitled to capital gain exemption under Section 54F of the Income Tax Act, 1961, on investment in new residential property.

The two-member Bench composed of T R Senthil Kumar(Judicial Member) and Narendra Prasad Sinha(Accountant Member) held that the AO’s approach was incorrect because the assessee did not sell the land directly but relinquished rights. Therefore, the sale consideration should be based on what the assessee received from the societies (Rs. 6,16,49,843). The AO had wrongly applied the sale rate at which the societies sold the land.

Delay in Filing of Form 67 not ground to Deny Relief u/s 90 of Income Tax: ITAT  Ratanlal Bhura vs DCIT CITATION:   2024 TAXSCAN (ITAT) 1573

The Kolkata Bench of the Income Tax Appellate Tribunal ( ITAT ) held that filing of form 67 is not mandatory in 128 (9) of Income Tax Rules,1962, and delay in filing of form 67 cannot be a ground for denial of Foreign Tax Credit under Section 90 of the Income Tax Act.

The two-member bench comprising Pradip Kumar Choubey ( Judicial Member ) and Sanjay Awasthi ( Accountant member ) referenced Sobhan Lal Gangopadhyay vs ADIT, CPC, Bengaluru which held that rule 128(9) of the Income Tax Rules does not provide any consequences for non-compliance of filing form 67 and therefore it is not mandatory but only directory in nature.

No Incriminating Material Found against Oswal Fab Knits: ITAT deletes Additions  Oswal Fab Knits Ltd vs The DCIT CITATION:   2024 TAXSCAN (ITAT) 1574

In a significant ruling, the Income Tax Appellate Tribunal ( ITAT ) in Chandigarh has dismissed additions made against Oswal Fab Knits Ltd. and related entities by the Income Tax Department.

The tribunal upheld the principle that mere re-evaluation of existing records cannot justify additions in cases of completed assessments without substantial evidence of wrongdoing.

ITAT Dismisses Revenue’s Appeal as Tax Effect Falls Below Rs. 60 Lakhs, in Accordance with CBDT  DCIT vs Coforge Ltd. CITATION:   2024 TAXSCAN (ITAT) 1575

The Delhi Bench of the Income Tax Appellate Tribunal ( ITAT ) dismissed the appeal filed by the Revenue as the tax effect was below Rs. 60 lakhs, and by the Central Board of Direct Taxes (CBDT) circular, appeals in which the tax effect does not exceed Rs. 60 lakhs will be dismissed.

The ITAT, comprising Pradip Kumar Kedia (Accountant Member ) and Anubhav Sharma ( Judicial Member )noted that in the present case, the tax effect on the disputed issues raised by the Revenue was below Rs. 60 lakhs. The bench dismissed the appeal filed by the Revenue.

Inapplicability of 12A(1)(ba) Amendment for 2017-18 AY: ITAT grants Temple Trust Exemptions u/s 11&12  Shri Siddhanath Mahadev Temple Trust vs The CIT(Exemption) CITATION:   2024 TAXSCAN (ITAT) 1577

The Surat bench of the Income Tax Appellate Tribunal ( ITAT ), in the case of Shri Siddhanath Mahadev Temple, held that the temple trust is entitled to tax exemptions under Sections 11 and 12 of the Income Tax Act  1961. The assessee-appellant, Shri Siddhanath Mahadev Temple, filed an appeal against the order passed by the Commisiioner of Income Tax ( Exemptions ) [CIT(E)] dates 28.03.2024 under Section 263 of the Act.

The tribunal, consisting of Pawan Singh ( Judicial Member ) and Bijayanada Pruseth ( Accountant Member ), further asserted that the AO was not justified in denying the assessee the benefit of exemption under Sections 11 and 12 of the Act and directed the AO to compute income following the said provisions. The tribunal set aside the CIT(E) order and, as a result, allowed the assessee to appeal.

Eligibility of Interest Income for Deduction u/s 80P(2)(d) of Income Tax Act: ITAT Upholds CIT(A)’s Order  Deputy Commissioner of Income Tax vs Bongaon Co Operative Credit Society Limited CITATION:   2024 TAXSCAN (ITAT) 1580

The Kolkata Bench of Income Tax Appellate Tribunal ( ITAT ) upheld the Commissioner of Income Tax(Appeals)[CIT(A)]’s order granting relief on the eligibility of interest income for deduction under section 80P(2)(d) of the Income Tax Act,1961.

The two member bench comprising Sonjoy Sarma(Judicial Member)and Sanjay Awasthi(Accountant Member) reviewed the arguments and authorities presented by both sides. It noted that the CIT(A) granted relief on interest income by relying on section 80P(2)(d) of the Act, concluding that the amount of Rs. 29,11,418/- was eligible for deduction.

Rs.52.25 Lakh Addition u/s 69A for Unaccounted Fees: ITAT Orders Deletion Due to Evidence of Proper Accounting  Future Education & Research Trust 10B - Deputy Commissioner of Income Tax CITATION:   2024 TAXSCAN (ITAT) 1582

The Kolkata Bench of Income Tax Appellate Tribunal ( ITAT ) ordered the deletion of Rs.52.25 Lakh addition under section 69A of the Income Tax Act,1961 for unaccounted fees due to evidence of proper accounting.

Future Education & Research Trust,appellant-assessee,was registered under sections 12A and 10(23C)(vi) of the Act, with the main objective of providing education. It filed its return of income for the assessment year 2013-14 on September 24, 2013, declaring nil income. The case was selected for scrutiny, and notices were issued and served.

Cash Gift from Father and Father-in-Law Not Taxable Under Income Tax Act: ITAT  Krishna Nand Rai vs Income Tax Officer CITATION:   2024 TAXSCAN (ITAT) 1583

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) ruled that cash gifts from a father and father-in-law are not taxable under the Income Tax Act,1961.

A single-member bench comprising Madhumita Roy(Judicial Member) examined the evidence in detail and found the assessee's claim credible. It observed that the supporting documents, such as proof of agricultural income and the marriage card, were consistent and had not been disputed by the authorities. The tribunal concluded that the addition was unsustainable, as the assesssee had successfully demonstrated the genuineness of the gifts and their source. As a result, the addition of Rs. 10,80,000 was deleted, and the appeal was decided in favor of the assessee.

32-Day Delay in Filing Appeal: ITAT Remands Matter to CIT(A) for Adjudication on Exemption Claim u/s 10(10C)  Altab Husen Ismail Vahora Gulshah Colony vs The ITO CITATION:   2024 TAXSCAN (ITAT) 1584

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) condoned a 32-day delay in filing the appeal and remanded the matter to the Commissioner of Income Tax(Appeals)[CIT(A)] for adjudication on the exemption claim under section 10(10C) of the Income Tax Act,1961.

The two-member bench comprising T.R Senthil Kumar(Judicial Member) and Annapurna Gupta(Accountant Member)reviewed the assessee’s submissions and found a reasonable cause for the 32-day delay in filing the appeal. It also noted that the assessee paid the disputed tax demand within three days of receiving the notice. Since the assessee, being a salaried person, had no prior experience with income tax litigation, the tribunal condoned the delay.

Security Deposit Taxable Upon Arbitration Award Due to Earlier Uncertainty: ITAT  The Income Tax Officer vs Shri Govindappa Jayaram Doddiah (HUF) CITATION:   2024 TAXSCAN (ITAT) 1585

The Bangalore Bench of Income Tax Appellate Tribunal ( ITAT ) ruled that the refundable security deposit is taxable only after the arbitration award due to earlier uncertainty regarding its treatment as income.

The two-member bench comprising Soundararajan K(Judicial Member) and Waseem Ahmed(Accountant Member) reviewed the case and the arbitration award dated 01/07/2024, where the assessee and developer agreed on a compensation of Rs. 1,18,30,789/- for the shortfall in built-up and car park areas. The dispute over the security deposit was resolved on 01/07/2024, so the amount was considered income from that date. The assessee agreed to report this amount as income for the AY 2024-25.

Procedure u/s 50C must follow while Sale consideration differs from Stamp Value: ITAT  Shri Ranganath Ashok Meharwade vs The Income Tax Officer CITATION:   2024 TAXSCAN (ITAT) 1586

The Bangalore Bench of Income Tax Appellate Tribunal ( ITAT ) ruled that when the sale consideration in the sale deed differs from the stamp duty value, the Assessing Officer ( AO ) must follow the procedures outlined under Section 50C of the Income Tax Act,1961.

The two member bench comprising Soundararajan ( Judicial Member ) and Waseem Ahmed ( Accountant Member ) reviewed the arguments and materials provided. It found that when the sale consideration in the sale deed differs from the stamp value, the AO must follow the procedures under section 50C of the Act, which was done in this case.

Capital Gains Tax Applies to Owner Proven by Registered Sale Deeds: ITAT  Shri Ranganath Ashok Meharwade vs The Income Tax Officer CITATION:   2024 TAXSCAN (ITAT) 1586

The Bangalore Bench of Income Tax Appellate Tribunal ( ITAT ) ruled that capital gains tax applies to the owner as proven by registered sale deeds.

The two-member benches, Soundararajan ( Judicial Member ) and Waseem Ahmed ( Accountant Member ), examined the paper book submitted by the appellant, which included sale deeds and translations. The sale deed of 03/02/2015 indicated that the appellant, Shri Ranganath, was the seller and had bought 71 guntas of land in 2013. It also stated that the appellant owned 20 plots, 8 of which were sold due to financial difficulties.

ITAT Reduces Income Assessment to 0.3% of Credits, Considering similar Assessment in Subsequent Year  New Edge Shares & Securities Pvt.Ltd vs ITO CITATION:   2024 TAXSCAN (ITAT) 1587

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) reduced the income assessment to 0.3% of the total credits received, considering a similar assessment in the subsequent year.

The two member bench comprising Vimal Kumar ( Judicial Member ) and Pradip Kumar Kedia ( Accountant Member ) reviewed the submissions and found that the assessee had received INR 6,39,55,000/- in credits from Jain Group entities, with INR 6,39,50,000/- being passed to other entities in the accommodation entry scheme.

Disallowance of Commission Payments for Non-Deduction of TDS: ITAT Directs Fresh Assessment  Kokila Cotton Export Ltd vs The A.C.I.T CITATION:   2024 TAXSCAN (ITAT) 1588

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) directed a fresh assessment in a case involving the disallowance of commission payments for non-deduction of TDS under Section 40(a)(ia) of the Income Tax Act,1961, considering additional evidence submitted under Rule 29 of the ITAT Rules, which was previously unavailable due to financial difficulties and legal proceedings related to loan defaults.

The two member bench comprising T.R.Senthil Kumar ( Judicial Member ) and Narendra Prasad Sinha ( Accountant Member ) decided to remand the case to the AO, directing them to review the additional documents and pass a fresh assessment order by the law, giving the assessee a fair opportunity to be heard. The assessee was instructed to cooperate and provide all relevant documents for a proper decision.

Lack of Incriminating Material in 153C Proceedings: ITAT upholds CIT(A)’s Decision to quash Assessments  DCIT VS Kohli Tent House CITATION:   2024 TAXSCAN (ITAT) 1589

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) upheld the Commissioner of Income Tax (Appeals)[CIT(A)]’s decision to quash the assessment finding no incriminating material in the 153C proceedings.

The two member bench comprising Yogesh Kumar US ( Judicial Member ) and Shamim Yahya ( Accountant Member ) noted that the CIT(A), in the order dated 30.06.2023 for AY 2013-14, found no incriminating material related to the year in question. The AO’s addition was based on documents from AY 2016-17 and 2017-18, and no seized material or statements supported the addition for AY 2013-14.

Top Stories Rs.19 Lakh ‘Unexplained Money’ with Golgappa Vendor: ITAT Remands Income Tax matter Directing Opportunity for Personal Hearing  Sunny vs The ITO CITATION:   2024 TAXSCAN (ITAT) 1590

The Income Tax Appellate Tribunal (ITAT), Chandigarh recently remanded an income tax matter while directing the provision of personal hearing opportunity to a golgappa vendor who landed in a soup, after being slapped with Notices under Section 142(1) of the Income Tax Act, 1961 querying the source of Rs.19 lakh which was classified as ‘unexplained money’ by the revenue.

The two-member Bench of the ITAT, Chandigarh comprising Vikram Singh Yadav, Accountant Member and Paresh M. Joshi, Judicial Member, held that both the Assessment order under Section 144 and the first appellate order under Section 250(6) to not be meritorious in nature, observing that income computation during a year must be done on real time basis after considering submissions by both the opposing parties.

Procedural Delay in Filing Form 67 not a ground to deny Foreign Tax Credit: ITAT  Narendra Vishnubhai Mistry vs Income Tax Officer CITATION:   2024 TAXSCAN (ITAT) 1591

The Ahmedabad Bench of Income Tax Appellate Tribunal held that procedural delay in filing Form 67 cannot be a ground to deny Foreign Tax Credit (FTC).

The two member bench comprising Dr. BRR Kumar (Vice President) and Suchitra Kamble (Judicial Member) noted that the assessee had paid taxes in both India and abroad, and the foreign taxes were eligible for credit. Since this was not disputed, the delay in filing could not affect the assessee’s right to claim FTC. The bench directed the Revenue to allow the FTC and make the necessary corrections.

Disallowance of Excess Loan Interest: ITAT allows Full Deduction  Bhaveshkumar Vinodbhai Patel Asian Parivar vs The ACIT CITATION:   2024 TAXSCAN (ITAT) 1592

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) allowed full deduction of loan interest claimed under Section 24 of the Income Tax Act,1961 by the assessee, despite the Assessing Officer ( AO )’s disallowance of the excess interest.

The two-member bench comprising Dr BRR Kumar(Vice President) and Suchitra Kamble (Judicial Member) reviewed the case and found that the CIT(A) upheld the AO’s order due to the appellant’s failure to provide supporting details for the 50% claim. However, a similar issue in AY 2016-17 had been resolved in the appellant’s favour after examination, with interest being allowed.

Addition of Rs. 21.98 Lakhs as Unexplained Deposit u/s 69A: ITAT Remands Matter to AO  Rakeshkumar Shamalbhai Sharma Sampa vs The ITO CITATION:   2024 TAXSCAN (ITAT) 1593

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) remanded the matter to the Assessing Officer ( AO ) regarding the addition of Rs. 21.98 Lakhs as an unexplained deposit under section 69A of Income Tax Act,1961.

The two member bench comprising Dr.BRR Kumar(Vice President) and Suchitra Kamble(Judicial Member) directed the assessee to pay a cost of Rs. 5,000/- to the Prime Minister’s National Relief Fund within two weeks of receiving the order. The case was sent back to the AO for further review and action. The assessee was instructed to cooperate fully with the AO, or the AO could take appropriate action according to the law

Penalty for Underreporting Income u/s 270A: ITAT deletes Rs. 5.28 Lakh Penalty  Baroda Gujarat Gramin Bank vs The Dy.CIT CITATION:   2024 TAXSCAN (ITAT) 1594

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) deleted a penalty of Rs. 5.28 lakh levied under Section 270A of the Income Tax Act,1961 for underreporting income.

The two-member benches, T.R. Senthil Kumar(Judicial Member) and Narendra Prasad Sinha (Accountant Member), reviewed the case and the materials on record. In response to the Section 142(1) notice, the assessee explained that Rs. 59,54,126/- declared as dividend income should be treated as STCG or business income. The assessee also requested the carried forward loss of Rs. 1,05,49,069/- from A.Y. 2017-18 to be set off against the current year’s income.

Depreciation Claim Disallowed Due to Error: ITAT Remands Matter to AO  Safikahmed Mehamudali Ansari vs Income Tax Officer CITATION:   2024 TAXSCAN (ITAT) 1595

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) remanded matter to the Assessing Officer ( AO ) after observing that a depreciation claim, disallowed due to an error, had been allowed in both preceding and succeeding years.

The two-member bench comprising Dr.BRR Kumar(Vice President) and  Suchitra Kamble(Judicial Member) observed that the assessee’s counsel submitted that the depreciation claim, which was allowed in both the preceding and succeeding years, had been disallowed in the relevant year due to an error.

Reassessment u/s 148 Based on Incriminating Materials: ITAT Quashes Reopening SHEEL TRADING COMPANY vs ASSISTANT COMMISSIONER OF INCOME TAX CITATION:   2024 TAXSCAN (ITAT) 1596

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT )  quashed the reassessment under Section 148 based on incriminating materials, directing that the reassessment should have been carried out under Section 153C of Income Tax Act,1961 instead.

A single member bench comprising Madhumita Roy (Judicial Member) agreed with the assessee counsel’s submission that the reopening under Section 148 was based on materials found during the search of M/s. Dhanuka Group on 13.03.2019. It stated that the re-opening should have been done under Section 153C instead. The judgments cited by the assessee counsel were also considered, and since the reopening under Section 148 was found to be incorrect, it was quashed.

Disallowance of Rs. 17.17 Lakh in Expenditure: ITAT Restores Matter for De Novo Assessment  Mayur Kanubhai Patel vs Income Tax Officer CITATION:   2024 TAXSCAN (ITAT) 1597

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) restored the matter to Assessing Officer (AO) for a de novo assessment in a case involving the disallowance of Rs. 17.17 lakh in expenditure.

The two member bench comprising Dr. BRR Kumar (Vice President) and Suchitra Kamble (Judicial Member), hearing the assessee counsel noted that the assessee would comply with the requirements before the AO if given the chance. In the interest of justice, the tribunal decided to send the matter back to the AO for a fresh assessment, allowing the assessee a proper opportunity to be heard.

₹3.28 Crore STCG Addition: ITAT Remands Matter to AO for Reverification Due to Insufficient Documentation Silicon Infracon Pvt. Ltd. vs DCIT Central Circle 4(4) CITATION:   2024 TAXSCAN (ITAT) 1598

The Kolkata Bench of Income Tax Appellate Tribunal ( ITAT )  remanded the matter to the Assessing Officer (AO) for verification of a ₹3.28 Crore Short-Term Capital Gain ( STCG ) addition due to insufficient documentation to prove that the transaction did not belong to the assessee.

The two member bench comprising Sonjoy Sarma (Judicial Member) and Sanjay Awasthi(Accountant Member) reviewed the arguments and documents. It found that the Sub-Registrar in Nagpur reported a property sale of Rs. 91,16,666/- on 02.04.2012 involving the assessee. The AO noticed that the assessee did not show any capital gains in their return, and the property was not listed in their balance sheet. The AO then calculated a STCG of Rs. 3,28,51,000/-.

Failure to Consider Service of Notices and Submissions Made by Assessee: ITAT Remands Matter to CIT(A)  Shantilal R Patel vs Income Tax Officer CITATION:   2024 TAXSCAN (ITAT) 1599

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) remanded the matter to the Commissioner of Income Tax(Appeals) [CIT(A)] for a fair review, highlighting the failure to consider the service of notices and the submissions made by the assessee,

A single-member bench comprising Suchitra Kamble(Judicial Member) heard both parties and reviewed the records. It noted that the CIT(A) did not consider the service of notices to the assessee or the submission made on 03.06.2023.

Rs. 1.6 Crore Unexplained Credit Addition: ITAT Remands Case to CIT(A) Trinity Touch Pvt Ltd vs The A.C.I.T CITATION:   2024 TAXSCAN (ITAT) 1600

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) remanded the matter to the Commissioner of Income Tax(Appeals)[CIT(A)] for fresh consideration in the case of Rs. 1.6 Crore unexplained credit addition.

The two member bench comprising Challa Nagendra Prasad(Judicial Member) and Naveen Chandra(Accountant Member) set aside the CIT(A)’s order and remanded the case for fresh consideration. It directed the assessee to cooperate and provide necessary evidence and instructed the CIT(A) to decide the case afresh after giving the assessee a fair opportunity to present its case.

Mere Cash Deposit Cannot Be Considered as Income: ITAT Deletes Income Tax Addition u/s 69  Dineshchandra Dudhwala VS Income Tax Officer CITATION:   2024 TAXSCAN (ITAT) 1601

In a recent case, the Surat bench of the Income Tax Appellate Tribunal (ITAT) held that mere cash deposits could not be considered income and deleted the tax addition under section 69 of the Income Tax Act, 1961. Further observed that every addition cannot be a basis for levying a penalty under section 271(1) unless there is a finding of AO that the assessee has deliberately furnished inaccurate particulars or concealed the income.

A two-member bench of Shri Pawan Singh, Judicial Member and Shri Bijayananda Pruseth, Accountant Member viewed that no penalty is leviable as mere cash deposit cannot be considered income of the assessee. The grounds of appeal raised by the assessee are allowed.

Addition of Unsecured Loans and Non-Admittance of Evidence: ITAT Remands Matter to CIT(A)  Amitkumar Chandulal Patel vs Income Tax Officer CITATION:   2024 TAXSCAN (ITAT) 1602

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) remanded the matter to the Commissioner of Income Tax (Appeal) [CIT(A)] for review of the addition of unsecured loans and non-admittance of evidence.

The two member bench comprising Dr. BRR Kumar (Vice-President) and Siddhartha Nautiyal (Judicial Member)reviewed the CIT(A)’s order, noting that the assessee was given a chance to submit details but failed to do so, resulting in the dismissal of the appeal.It also found that the assessment was completed due to the assessee’s lack of response to the show-cause notice.

Ex-Parte Dismissal of Appeal Against Addition of  Unexplained Income: ITAT Remands Matter to CIT(A)  Faridabanu Shaikh vs The ITO CITATION:   2024 TAXSCAN (ITAT) 1603

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) remanded the matter to the Commissioner of Income Tax Appeals [CIT(A)] after finding that the appeal was dismissed ex-parte against the addition of Rs.11 lakh as unexplained income.

The two member bench comprising Dr.BRR Kumar(Vice President) and Suchitra Kamble(Judicial Member)heard both parties and reviewed the case. It was noted that the appeal was filed 82 days late, with no explanation from the assessee. However, the CIT(A)’s order was found to be ex-parte, and the date of service of the order, as mentioned in Form No. 36, was 13/12/2023, so the delay was accepted.

Challenge on FMV Assessed Based on Occupancy Certificate: ITAT Upholds CIT(A) Order in Absence of Contrary Evidence  The Income Tax Officer vs Shri Govindappa Jayaram Doddiah CITATION:   2024 TAXSCAN (ITAT) 1604

The Bangalore Bench of Income Tax Appellate Tribunal ( ITAT ) upheld the Commissioner of Income Tax(Appeals)[CIT(A)]’s order, dismissing the Revenue’s appeal challenging the fair market value (FMV) assessed based on the occupancy certificate in the absence of contrary evidence.

The two-member bench comprising Soundararajan K(Judicial Member) and Waseem Ahmed(Accountant Member) considered the arguments and materials presented and noted that the AO acknowledged the expenses were related to the property but did not classify them as capital expenditure, arguing they were small works requested by tenants or buyers. The tribunal disagreed, stating that these improvements increased the property’s value and should be treated as capital expenditure.

Rejection of Registration of Trust Under Income Tax Act Due to Non-Compliance with Notices: ITAT Restores Matter to CIT(E)  Satvic Movement vs CIT(Exemption) CITATION:   2024 TAXSCAN (ITAT) 1605

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) restored the matter to Commissioner of Income Tax(Exemption)[CIT(E)] for fresh consideration in a case where the registration of a trust under Section 12A of the Income Tax Act,1961 was rejected due to non-compliance with notices.

The two member bench comprising Avdhesh Kumar Mishra (Judicial Member) and Yogesh Kumar US(Accountant Member)heard the parties and reviewed the material and noted that the assessee was asked to provide certain details and documents to support the registration claim under Section 12A and 80G(5) of the Act during the proceedings before the CIT(E). However, the applications were rejected because the assessee did not submit the required information.

775 Days Delay in filing Income Tax Appeal Due to Covid 19 Restrictions: ITAT Directs CIT(A) to Apply Delay Exclusion  Keshav Madhav Steel Pvt. Ltd. vs Income-tax Officer CITATION:   2024 TAXSCAN (ITAT) 1606

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) directed the Commissioner of Income Tax (Appeals)[CIT(A)] to apply the delay exclusion for a 775-day delay in filing the Income Tax appeal due to Covid-19 restrictions.

A single member bench comprising Satbeer Singh Godara ( Judicial Member ) heard both parties and noted that the CIT(A)/ NFAC had refused to condone the 775-day delay in filing the appeal, citing a lack of supportive material in the condonation petition.

Discrepancy in EDC Payment and Tax Liabilities: ITAT Remands Matter to AO  Santur Builders Private Limited vs Income Tax Officer CITATION:   2024 TAXSCAN (ITAT) 1607

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) remanded the matter to the Assessing Officer (AO) regarding the discrepancy in External Development Charges ( EDC ) payment and tax liabilities.

The tribunal considered the arguments and reviewed the evidence on record. It decided that the assessee should have a fair opportunity to present its case and that the Revenue must verify the EDC payments. The tribunal set aside the order and sent the matter back to the Assessing Officer (TDS) for verification and further action, directing the assessee to cooperate in the proceedings.

Challenge on Reduction of Net Profit % by CIT(A): ITAT Remands Matter for Re verification of Books of Accounts & Other Documents  Deputy Commissioner of Income Tax vs M/s M Z Enterprises CITATION:   2024 TAXSCAN (ITAT) 1608

In a recent case about the challenge was on reduction of net profit upheld by the Commissioner of Income Tax (Appeal)(CIT(A), the Ranchi bench of the Income Tax Appellate Tribunal (ITAT) remanded the matter for re verification of books of accounts & other documents.

A two member bench of Shri Partha Sarathi Chaudhury, Judicial Member and Shri Ratnesh Nandan Sahay, Accountant Member set aside the impugned order and remanded the matter back to the  file of the CIT(A) to re-examine this fact whether books of  account were actually produced and examined.

Rs. 42.26 Lakh Cash Deposit in Bank Unexplained: ITAT Sends Case Back to AO for Fresh Hearing Due to Non-Receipt of Notices  NIRMALA DASS vs ITO CITATION:   2024 TAXSCAN (ITAT) 1609

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) remitted a case involving an unexplained Rs. 42.26 lakh cash deposit in a bank back to the Assessing Officer (AO)  for fresh consideration, citing non-receipt of notices by the assessee.

A single member bench comprising Shamim Yahya(Accountant Member) heard both parties and reviewed the records. It was noted that the AO and CIT(A) mentioned the assessee had not responded to the notices. The assessee counsel stated the notices did not reach the assessee, causing non-compliance, and requested an opportunity to present the case before the AO.

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