Income Tax Annual Digest 2024: ITAT Cases [Part 31]

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.

Disallowance of TDS Credit on IMP Transfer Due to assessed in wrong AY: ITAT directs to give Credit in Relevant AY  Vanitaben Gamalsingh Solanki vs The ITO CITATION: 2024 TAXSCAN (ITAT) 1667

The Surat Bench of Income Tax Appellate Tribunal ( ITAT ) held that Tax deducted at source ( TDS ) credit on immovable property shall be allowed only for the relevant assessment year for which the income is assessable and directed the AO to credit TDS in the relevant assessment year.

Vanitaben Gamalsingh Solanki (assessee) filed her income tax return on 03.03.2018 for the assessment year (AY)2018 -2019, declaring a total income of Rs. 6,40,220. The Assessee received sale consideration for her transfer of immovable property of Rs.4,50,00,000 for which she claimed credit of Tax deducted at source ( TDS ) of Rs. 4,50,000 and for other receipts of money she claimed TDS credit of Rs. 59,447. Therefore, she claimed a total TDS credit of Rs. 5,09,477 for the AY 2016-2017.

Rs. 27.04 Cr. Share Application Money Addition u/s 68: ITAT Directs Re-Examination of Financial Statements of Investors  DCIT vs Qyuki Digital Media Pvt. Ltd. CITATION: 2024 TAXSCAN (ITAT) 1668

In a recent ruling, the Mumbai Bench of the Income Tax Appellate Tribunal ( ITAT ) directed the re-examination of the financial statements of investors regarding the Rs. 27.04 crore share application money added under Section 68 of the Income Tax Act, 1961.

The assessee had issued shares to four investors: Mr Sekhar Kapur, Mr A.R. Rahman, Mrs Nishith Desai, and M/s CSI BD Mauritius. While shares were issued at Rs. 10 each to the first three, they were issued at Rs. 302.80 each to M/s CSI BD Mauritius. The company provided income tax returns and balance sheets for Mr. Sekhar Kapur and Mr. A.R. Rahman during the assessment. Still, it failed to furnish details for Mrs. Nishith Desai and M/s CSI BD Mauritius.

Contributions to approved Superannuation Fund deductible u/s 36(1)(iv) of Income Tax if within Prescribed Limits: ITAT  ACIT vs Syama Prasad Mookerjee Port CITATION: 2024 TAXSCAN (ITAT) 1669

The Kolkata Bench of Income Tax Appellate Tribunal ( ITAT ) held that contributions to approved superannuation funds were deductible if it was made within prescribed limits under section 36(1)(iv) of the Income Tax Act.

 Syama Prasad Mookerjee Port (assessee) provides port services under the supervision of the Ministry of Shipping under the Union Government. This batch of eight appeals was against the order of Commissioner of Income Tax (appeals) CIT(A) filed by the Revenue Department. The Assessee filed Cross objections to support the CIT(A) findings.

Only Exempt Income-Yielding Investments to be Considered for S.14A disallowance: ITAT directs for recalculation  EIH Limited vs Deputy Commissioner of Income Tax CITATION: 2024 TAXSCAN (ITAT) 1670

The Kolkata Bench of the Income Tax Appellate Tribunal ( ITAT ) held that disallowance under section 14A of the Income Tax Act should be made only on exempt income-yielding investments. The tribunal directed the Assessing Officer to recalculate.

EIH Limited (assessee) filed income tax returns for the assessment year 2018-19. The assessment of the assessee for the assessment year 2018-19 was completed on 28.02.2022, and several additions were made by the assessing officer (AO). Aggrieved by the order, the assessee raised this issue in the Dispute resolution panel(DRP).

Procedural delay in filing form 67 cannot override objectives of DTAA: ITAT directs to grant FTC  Neetu Agarwal vs ITO CITATION: 2024 TAXSCAN (ITAT) 1671

The Kolkata Bench of the Income Tax Appellate Tribunal ( ITAT ) held that procedural delay of filing form 67 could not override the objectives of DTAA and directed the Assessing officer to grant Foreign tax credit ( FTC ) to the assessee.

Neethu Agarwal (assessee) is a resident individual who filed her income tax return on 29.12.2021 for the financial year 2020-2021. She discharged her tax liability by tax deducted at source ( TDS ), self-assessment tax, and Foreign Tax Credit of Rs. 2,25,936. The Assessee belatedly filed form 67 on 25.01.2022 for FTC.

Depreciation Claim of 30.23 Cr on Intangible Assets Disallowed: ITAT upholds Revision of Assessment u/s 263  Agricom Foods Private Limited vs Pr. Commissioner of Income Tax – (Central) CITATION: 2024 TAXSCAN (ITAT) 1672

In а recent ruling, thе Mumbai benсh оf thе Income Tах Appellate Tribunal ( ITAT ) hеld thаt thе authorities must adequately investigate а deрreciаtiоn clаim fоr intаngible аssets, аnd thе аssessee is responsible for providing аll thе adequate documents as evidence for suсh а clаim.

Тhe аssessee, Agricom Food Рrivаte Limited, is раrt оf Allana Group, which exports food products and agro commodities, including frozen meat, processed/frozеn food, edible products, etс. In 2016, the company acquired а mеаt prоcessing unit from J.S. Internаtiоnаl fоr 100Cr—тhe purchаsе аgreement аllocаted ₹30.23 сrores tо “intangible assets” without adequately breaking down this amount.

Verification Failures in Disputed Purchases and Labour Expenses: ITAT upholds 12.5% Addition on Alleged Bogus Purchases  Accost Media LLP vs DCIT CITATION: 2024 TAXSCAN (ITAT) 1673

In a recent ruling, the Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) upheld the 12.5% addition on alleged bogus purchases due to verification failures in disputed purchases and labour expenses.

This is a cross-appeal in which both the department and the assessee have appealed against the order of the Commissioner of Income Tax ( Appeals ) [ CIT( A) ] passed under Section 250 of the Income Tax Act, 1961 for the assessment year ( AY ) 2021-22. The assessee, Accost Media LLP, has been engaged in painting and advertisements like wall painting, digital wall painting, board advertising, etc.

Additions u/s 68 & 69A made without Examining Books of Accounts: ITAT remands case for Reassessment  Dinesh Saha vs ITO CITATION: 2024 TAXSCAN (ITAT) 1674

The Kolkata bench of the Income Tax Appellate Tribunal ( ITAT ) remanded the case to the assessing officer ( AO ) as the additions under Sections 68 and 69 of the Income Tax Act, 1961, were made without examining the book of accounts.

The assessing officer ( AO ) under the assessment order passed under Section 143(3) of the Income Tax Act, 1961 for the assessment year ( AY ) made the following additions, such as Rs. 5,47,443 on account of enhancement in profit and, on an estimate basis, Rs. 30,01,129 due to unverified sundry creditors under Section 68 of the Income Tax Act. The assessing officer added Rs. 56,45,000 on cash deposited during demonetisation under Section 69 A of the Income Tax Act.

ITAT Directs TPO to apply LIBOR Rate for Interest on Foreign Currency Receivables  Concur Technologies (India) vs The Assistant Commissioner of Income Tax CITATION: 2024 TAXSCAN (ITAT) 1675

In a recent ruling, the Bengaluru bench of the Income Tax Appellate Tribunal ( ITAT ) directed the Transfer Pricing Officer ( TPO ) to apply the LIBOR rate to calculate interest on foreign currency receivables.

In this case, the assessee has provided IT-enabled services regarding travel requests, travel bookings, and expense claims to its associated enterprises ( AEs ).

Contractor Ineligible for Deduction u/s 80IA(4) for Management of Solid Waste Management Systems: ITAT upholds CIT(A) Order  CES ONYX Pvt. Ltd vs The Asst. Commissioner of Income Tax CITATION: 2024 TAXSCAN (ITAT) 1676

In a recent ruling, the Chennai bench of the Income Tax Appellate Tribunal ( ITAT ) upheld the order passed by the Commissioner of Income Tax ( Appeals ) [CIT(A)], that a contractor engaged in solid waste management systems is not eligible for the deduction under Section 80IA(4) of the Income Tax Act, 1961. The appellant was involved in the collection and disposal of municipal solid waste.

During the assessment proceedings, the assessing officer thought that the assessee was not eligible to claim a deduction under Section 80iA(4) of the Income Tax Act, 1961, as the assessee is not operating and maintaining infrastructure facilities for a solid waste management system.

ITAT sets aside additions on Penny Stock gains, directs deletion of Related Expenses due to Lack of Evidence  Hiren D. Kubadia HUF vs Income Tax Officer CITATION: 2024 TAXSCAN (ITAT) 1677

In a recent ruling, the Mumbai bench of the  Income Tax Appellate Tribunal ( ITAT ) set aside the additions made on penny stock gains and related expenses due to lack of evidence on the part of the assessing officer ( AO ) to prove that the transactions entered by the assessee were manipulative.

In this case, the assessing officer observed a long-term capital gain of Rs. 79.7 lakhs declared by the assessee on the sale of shares of M/s. Tuni Textiles Limited claimed exemption under Section 10( 38 ) of the Income Tax Act, 1961, for the assessment year 2013-14.

ITAT sets aside Rs. 1.55 Crore Unexplained Investment Addition, Orders Fresh Assessment due to denial of Fair Hearing  Dinesh Ramanbhai Patel vs Income Tax Officer CITATION: 2024 TAXSCAN (ITAT) 1678

In a recent ruling, the Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) set aside the addition of Rs. 1.55 crore as an unexplained investment and directed a fresh assessment due to procedural lapses and denial of a fair hearing.

In this case, the assessing officer ( AO ) added Rs. 1.55 under Section 69 of the Income Tax Act, 1961, as unexplained investments in immovable property. It is to be noted that the proceedings before the AO were ex parte, as the assessee’s tax consultant failed to file responses to the notices issued by the AO. Instead, the consultant only raised grievances on the tax portal without addressing the department’s queries.

Transactions in Agricultural Lands classified as Business Income as per Company Objectives: ITAT Deletes Addition u/s 56  ITO vs M/s. V Real Estate (India) Pvt. Ltd. CITATION: 2024 TAXSCAN (ITAT) 1679

The Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) held that Transactions and Commissions on agricultural lands would be considered business income if the company’s Memorandum of Association mentions activities related to such transactions as its objectives.

In this recent ruling, the revenue had filed an appeal against the order passed by the Commissioner of Income Tax(Appeals) [CIT(A)], National Faceless Appeal Centre ( NFAC ) for the assessment year ( AY ) 2011-12, dated 04.02.2024. The order was passed in favour of the assessee V Real Estate(India) Pvt.Ltd.

ITAT remands the Case Back to AO for Re-Assessment due to La ack of Proper Procedure in Capital Gains Adjustment  Divya Dugar vs ITO CITATION: 2024 TAXSCAN (ITAT) 1680

The Kolkata Bench of Income Tax Appellate Tribunal ( ITAT ) remanded the case of the assessee to the Assessing Officer ( AO ) for reassessment of the capital gain, highlighting the failure to follow the prescribed procedure under section 143(1)(a) of the Income Tax Act,1961.

Divya Dugar, the appellant-assessee, had filed a return of income for the Assessment Year 2018-19, which was processed by the Assessing Officer ( AO ) under Section 143(1).

Addition of Rs. 2.25 Crores on Unexplained Cash Deposits: ITAT directs De Novo Hearing  Jigar Patel vs The ITO CITATION: 2024 TAXSCAN (ITAT) 1681

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) directed a de novo hearing concerning adding Rs. 2.25 crores for unexplained cash deposits.

Jigar Patel,appellant-assessee, challenged the order dated 29/11/2023 passed by the Commissioner of Income Tax (Appeals)[CIT(A)]National Faceless Appeal Centre ( NFAC ), in proceedings under Section 250, for the assessment year 2017-18.

Genuineness of Share Capital: ITAT quashes Rs. 2.62 Crore Addition u/s 68  Megapix Vanijya Pvt. Ltd vs ITO CITATION: 2024 TAXSCAN (ITAT) 1682

The Kolkata Bench of Income Tax Appellate Tribunal ( ITAT ) quashed a ₹2.62 crore addition under Section 68 of Income Tax Act,1961, stating that the assessee had provided sufficient evidence to prove the genuineness of share capital.

Megapix Vanijya Pvt. Ltd,appellant-assessee, filed its income tax return on 26.09.2012, reporting a loss of ₹4,540/-. The case was scrutinised due to a hefty share premium of ₹2.62 crore received during the year.

Technical Glitches Prohibits Access to ITBA Portal: ITAT Remands Matter to CIT(A)  Bholaram Education Society vs The DCIT CITATION: 2024 TAXSCAN (ITAT) 1683

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) remanded the matter to the Commissioner of Income Tax(Appeals) [CIT(A)] for fresh adjudication after observing that technical glitches had prevented the assessee from accessing the Income Tax Business Application( ITBA ) Portal and complying with notices. Bholaram Education Society,appellant-assessee, challenged the order dated 3.10.2024 passed by CIT(A) for the Assessment Year(AY) 2018-19.

The assessee raised several grounds, including that the CIT(A) erred in dismissing the appeal ex-parte due to non-receipt of notices, which could not be complied with. The assessee also argued that two separate proceedings were initiated on the ITBA Portal for the same appeal, with different DIN numbers, and the orders could not be accessed.

Lack of Reasonable Cause: ITAT Denies Condoning 1350-Day Delay in Filing Appeal  Shri Betalish Dash vs CIT(Exemption) CITATION: 2024 TAXSCAN (ITAT) 1684

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) denied condoning the 1350-day delay in filing an appeal against the denial of registration under section 12AB of the Income Tax Act, 1961 due to the assessee’s failure to provide a reasonable cause, despite being aware of the registration denial and actively participating in assessment proceedings during the pandemic.

Betalish Dash Hummad Jain Chokhla Punch Sanchalit Keshavlal Maganlal,appellant-assessee, challenged the denial of registration under section 12AB of the Income Tax Act, 1961 (the Act) through an order dated 20.03.2020 issued by the Commissioner of Income Tax (Exemption)[CIT(E)].

Denial of Trust Registration u/s 12AB: ITAT Remits Case for Reassessment and Recalculation of Income as AOP  Shri Betalish Dash vs CIT CITATION: 2024 TAXSCAN (ITAT) 1684

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) remits matters to the Assessing Officer ( AO ) for reassessment and recalculation of income as Association of Persons ( AOP ) following the denial of trust registration under section 12AB of the Income Tax Act,1961.

Betalish Dash Hummad Jain Chokhla Punch Sanchalit Keshavlal Maganlal,appellant-assessee, challenged the ex parte appellate order dated 29-11-2023 passed by the Commissioner of Income Tax (Appeals)[CIT(A)] concerning the assessment order under section 143(3) for the assessment year 2019-20.

Cash Deposits from Business Income during Demonetization cannot be treated as Unexplained Entirely: ITAT upholds 20% of Additions due to Unknown Source Yogesh Kumar Chandrakant Jariwala vs Income Tax Officer CITATION: 2024 TAXSCAN ( ITAT ) 1685

The Surat Bench of Income Tax Appellate Tribunal ( ITAT ) held that the cash deposits made during the demonetisation out of business income cannot be treated as unexplained cash deposits completely. Despite this, the tribunal upheld that 20% of the additions were valid as the assessee cannot substantiate the source.

Yogesh Kumar Chandrakant (assessee) is an individual engaged in the manufacturing of textiles and grey cloth; filed his Income tax return for the assessment year 2017-2018, declaring a total income of Rs. 3,63,060.

ITAT allows Goldman Sachs to claim a deduction for leave encashment paid before the due date of ITR filing u/s 43B(f)  Goldman Sachs (India) Securities Pvt. Ltd vs The National Faceless Assessment Centre, Delhi CITATION: 2024 TAXSCAN (ITAT) 1687

In a recent ruling, the Mumbai Bench of the Income Tax Appellate Tribunal ( ITAT ) allowed the assessee Goldman Sachs to claim a deduction for leave encashment paid before the due date of ITR filing under Section 43B(f) of the Income Tax Act, 1961.

In this case, the assessee, Goldman Sachs (India) Securities Pvt. Ltd., had raised several grounds in its appeal before the ITAT, and one of the grounds concerning the disallowance of a deduction for leave encashment of INR 63,94,246 under Section 43B of the Income Tax Act for AY 2017-18.

ESOP expenses should not be regarded contingent or notional: ITAT allows Goldman Sachs to claim deduction u/s 37(1)  Goldman Sachs (India) Securities Pvt. Ltd vs The National Faceless Assessment Centre, Delhi CITATION: 2024 TAXSCAN (ITAT) 1687

In a recent ruling, the Mumbai Income Tax Appellate Tribunal ( ITAT ) bench allowed Goldman Sachs to claim a deduction under Section 37(1) of the Income Tax Act 1961. It held that ESOP expenses should not be regarded as contingent or notional.

In this case, the assessee, Goldman Sachs (India) Securities Pvt. Ltd., had raised several grounds in its appeal before the ITAT. One of the grounds was concerning the disallowance of the amortisation cost by the department in respect of employee stock plans ( ESOP ) granted to its employees of  Rs. 38,28,70,712 incurred by the Appellant, on the basis that the ESOP costs are notional or contingent.

Interest u/s 234C to be calculated on Returned Income: ITAT in Goldman Sachs case  Goldman Sachs (India) Securities Pvt. Ltd vs The National Faceless Assessment Centre, Delhi CITATION: 2024 TAXSCAN (ITAT) 1687

In a recent ruling, the Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) held that interest under Section 234C of the Income Tax Act, 1961, should be calculated based on the returned income of the assessee, Goldman Sachs. 

In this case, the assessee, Goldman Sachs (India) Securities Pvt. Ltd., raised several grounds in its appeal before the ITAT. One of them was whether the assessing officer (AO) was justified in levying additional interest under Section 234C of the Income Tax Act, 1961, without considering that it should be calculated based on the returned income filed by the Appellant, as per the Act.

ITAT quashes Assessment Order: Transfer of Case without Section 127 Order held as Jurisdictional Error  SANGEETA WAHI vs INCOME TAX OFFICER CITATION: 2024 TAXSCAN (ITAT) 1688

The Income Tax Appellate Tribunal ( ITAT ), Delhi Bench, has quashed an assessment order passed by the Income Tax Officer ( ITO ), Ward 50(2), Delhi, under Section 144 of the Income Tax Act, 1961, for the Assessment Year 2017-18. The appellant, Sangeeta Wahi, had challenged the order passed by the Commissioner of Income Tax (Appeals), CIT(A).

The critical issue in this case was transferring the appellant’s file from one Income Tax Officer to another without following the procedural requirements laid down under Section 127 of the Act. The appellant argued that the initial notice under Section 142(1), dated 09.03.2018, was issued by the ITO, Ward 52(2), Delhi

ITAT allows Set Off of Accumulated Deficit against Current Year Surplus  VIDYA VIHAR NYAS SAMITI VS ITO CITATION: 2024 TAXSCAN (ITAT) 1689

In a recent ruling, the Income Tax Appellate Tribunal ( ITAT ), Delhi Bench, has allowed the Set off of Accumulated Deficit against Surplus. The case revolves around the refusal of the Income Tax Officer ( ITO ) to enable the set-off of an accumulated deficit against the current year's surplus.

The appellant, Vidya Vihar Nyas Samiti, a charitable organisation based in Noida, had filed a Nil income return. However, during the assessment, the ITO completed the assessment under Section 143(3), determining the total income at Rs. 1,03,44,990.

Income Tax Reassessment gone wrong: ITAT sets aside Order for Incorrect Invocation of Section 148  SHEEL TRADING COMPANY vs ASSISTANT COMMISSIONER OF INCOME TAX CITATION: 2024 TAXSCAN (ITAT) 1690

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) quashed the reassessment initiated under an invalid notice issued under Section 148 of the Income Tax Act, 1961 and deleted additions amounting to ₹9,75,301.

Sheel Trading Company, the appellant-assessee, was engaged in trading activities and had filed its return of income for Assessment Years (AY) 2013-14 and 2014-15. For AY 2013-14, the assessee’s case was re-opened under Section 148 of the Act, and the re-assessment proceedings resulted in an addition of Rs. 9,75,301.

Non-compliance due to notice issue only via email: ITAT Remands Cash deposits during Demonetization Matter  Kishan Valjibhai Kheni vs The ITO CITATION: 2024 TAXSCAN (ITAT) 1691

The Surat Bench of Income Tax Appellate Tribunal ( ITAT ) remanded the matter concerning cash deposits made by the assessee during demonetisation for fresh assessment, considering the notice was issued only via email.

Kishan Valjibhai Kheni (assessee) filed his income tax return declaring a total income of Rs. 3,15,123. The assessing officer (AO) found that the assessee deposited Rs. 62,10,000 during demonetisation. The assessing officer observed that it was unexplained and unaccounted cash and added Rs. 65,25,123 to the assessee's total income.

Expenditure u/s 57 Justified with Established Income Nexus: ITAT allows to claim Deduction  Harsh Nareshbhai Patel vs The Income Tax Officer CITATION: 2024 TAXSCAN (ITAT) 1692

In a recent decision, the Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) allowed the assessee to claim a deduction of Rs. 30.4 lakhs under Section 57 of the Income Tax Act, 1961, as the assessee had established the nexus between the income earned and expenses incurred.

In this case, the assessee filed its income tax returns ( ITR ) for the assessment year ( AY ) 2017-18 on 31-10-2017 and declared a total income of Rs. 12,77,150. The assessee’s case was selected for scrutiny due to a significant deduction claimed under Section 57 of the Income-tax Act.

Co-operative Society Eligible for Deduction u/s 80P(2)(d) on Interest Earned from Fixed Deposits in Co-operative Bank: ITAT  Assistant Commissioner of Income-tax vs The Gujarat State Co. Op. Housing Finance Copn Ltd. CITATION: 2024 TAXSCAN (ITAT) 1693

The Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) held that the assessee, which is a co-operative society, is eligible for a deduction under Section 80P(2)(d) on interest earned from fixed deposits in a co-operative bank.

In this case, the revenue was in an appeal against the order by the Commissioner of Income Tax ( Appeals ) [ CIT( A ) ].

Unexplained Cash Deposits during Demonetization: ITAT Limits Addition to ₹10 Lakhs Considering Possible Cash Sales  Gaurangi Merchandise Pvt. Ltd vs Income Tax Officer CITATION: 2024 TAXSCAN (ITAT) 1694

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) limits the addition of unexplained cash deposits during demonetisation to ₹10 lakhs, considering the possibility of cash sales.

Gaurangi Merchandise Pvt. Ltd., appellant-assessee, challenged the order dated 06.01 .2024 passed by  CIT(A) for Assessment Year 2017-18.

Validity of Reopening u/s 148 for Verification Purposes: ITAT quashes Reopening as Legally Invalid  JHM Developers Pvt. Ltd. vs Income-tax Officer CITATION: 2024 TAXSCAN (ITAT) 1695

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) quashed the reopening of the case under section 148 of the Income Tax Act,1961, ruling that the reassessment initiated for verification purposes was legally invalid.

JHM Developers Pvt. Ltd,appellant-assessee, challenged the order dated 15.02.2024 passed by the National Faceless Appeal Centre (NFAC), for the assessment year 2011-12 in proceedings under section 250 of the Act.

Incorrect Invocation of S.69A for disclosed Cash Deposits: ITAT quashes Rs. 44.5 Lakh Addition  KAMLESH KAMPANI vs ITO CITATION: 2024 TAXSCAN (ITAT) 1696

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) quashed the addition of Rs. 44.5 lakh, ruling the incorrect invocation of Section 69A of the Income Tax Act, 1961 for disclosed cash deposits.

Kamlesh Kampani,appellant-assessee, was in the business of trading cloth, fabrics, and textiles. He filed his return for AY 2017-18 on 03/11/2017, declaring an income of Rs. 4,30,970/-. His case was selected for scrutiny, and notices under sections 143(2)/142(1) were issued.

Late Filing of Audit Report Leads to Disallowance of S.11 Exemption: ITAT Directs Re-Adjudication Rajdhani Maitri Club Foundation vs Income-tax Officer CITATION: 2024 TAXSCAN (ITAT) 1697

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) directed re-adjudication of the appeal concerning the disallowance of section 11 of the Income Tax Act, 1961 exemption due to the late filing of the Form 10B audit report.

Rajdhani Maitri Club Foundation,appellant-assessee, challenged the order dated 30.11.2023 against The National Faceless Appeal Centre (NFAC), for the assessment year 2022-23. The assessee raised several grounds in the appeal (ITA No. 302/Del/2024), challenging the actions of the Additional/Joint Commissioner of Income Tax(JCIT)(A)-5, Mumbai, who agreed with the decisions of the Deputy Director of Income Tax(DDIT), Centralized Processing Centre(CPC), Bengaluru. First, the taxable income was set at Rs. 14,90,811/- despite a NIL return.

Eligibility for S.54F Deduction for Residential House Purchase: ITAT upholds AO’s decision Rejecting Claim  Prashant Chandulal Parikh, HUF vs Assistant Commissioner of Income Tax CITATION: 2024 TAXSCAN (ITAT) 1698

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) upheld the Assessing Officer(AO)’s decision rejecting the assessee’s claim for a ₹2.51 crore deduction under Section 54F of Income Tax Act,1961 for the purchase of a residential house.

Prashant Chandulal Parikh,appellant-assessee, filed his income tax return for A.Y. 2017-18, declaring ₹20,89,430. During demonetisation, the case was scrutinised for capital gains from agricultural land sales and cash deposits.

Addition of ₹24.48 Lakh for Unexplained Cash Deposits: ITAT allows ₹15.48 Lakh, confirms ₹9 Lakh as Unexplained  Prashant Chandulal Parikh, HUF vs Assistant Commissioner of Income Tax CITATION: 2024 TAXSCAN (ITAT) 1698

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) partially allows ₹15.48 Lakh of the ₹24.48 Lakh addition for unexplained cash deposits, confirming ₹9 Lakh as unexplained due to insufficient explanation for excess deposits,.

Prashant Chandulal Parikh, appellant-assessee, filed his income tax return for A.Y. 2017-18, declaring ₹20,89,430. During demonetisation, the case was scrutinised for capital gains from agricultural land sales and cash deposits. The Assessing Officer(AO) rejected the declared land valuation of ₹70 per square meter, recalculating it at ₹6.20, and partially disallowed a ₹2.51 crore deduction under Section 54F.

ITAT sets aside a Re-Assessment Order due to the lack of opportunity to be heard and the errors in employer-employee contributions  Q3 Infotech Pvt. Ltd vs DCIT, Circle-3(1) CITATION: 2024 TAXSCAN (ITAT) 1699

The Income Tax Appellate Tribunal ( ITAT ), Delhi Bench, has directed the Assessing Officer (AO) and the Centralized Processing Centre ( CPC ), Bangalore, to re-examine a case due to lack of opportunity of being heard and errors in employer-employee contributions.

Q3 Infotech Pvt. Ltd,  the appellant-assessee, which had been subject to certain additions due to errors in the tax audit report. The matter pertains to the assessment years 2018-19 and 2019-20, and the appeal was filed against the orders of the Commissioner of Income Tax (Appeals), CIT(A).

NRI’s Investment in Mutual Funds Held as Legitimate, ITAT Dismisses Revenue’s Appeal  BEFORE SHRI SAKTIJIT DEY, HON’BLE VICE PRESIDENT vs SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER CITATION: 2024 TAXSCAN (ITAT) 1700

In a recent ruling, the Income Tax Appellate Tribunal (ITAT), Delhi Bench, upheld the decision of the Commissioner of Income Tax (Appeals) CIT(A) in a case involving unexplained investment, income from house property, and capital gains.

The case relates to the appeals filed by the Revenue against the CIT(A)’s order for the Assessment Years 2015-16 and 2016-17. The Revenue had filed appeals challenging the deletion of additions made by the Assessing Officer (AO) in the assessee's income, Rajan Sehgal, regarding investments and capital gains. The case involved a non-resident individual and saw the ITAT examine the AO's actions' factual accuracy and procedural correctness.

ITAT quashes Addition of Rs. 179 Cr, Holds Share of Profit from LLP is Exempt  ITO vs Sh. Arun Sangal CITATION: 2024 TAXSCAN (ITAT) 1701

In a recent ruling, the Income Tax Appellate Tribunal (ITAT), Delhi Bench, dismissed the appeal filed by the Income Tax Department by Quashing the Additions of Rs.179 crore by stating that the share of profit from LLP is exempted.

Arun Sangal, a medical professional appellant-assessee, filed his returns for the Assessment Year (AY) 2018-19. The appeal concerned an addition of over Rs. 179 crore by the Assessing Officer (AO) under section 68 of the Income Tax Act, 1961, alleging unexplained cash credits in the assessee’s hands.

Inadequate Decision by CIT(A) on Rs. 11.45 Lacs Unexplained Money Addition: ITAT Remits Matter  Rajesh Kumar Vij vs Income Tax Officer CITATION: 2024 TAXSCAN (ITAT) 1702

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) remitted the matter back due to inadequate discussion by the Commissioner of Income Tax(Appeals)/National Faceless Assessment Centre[CIT(A)/NFAC] on the Rs. 11.45 lacs unexplained money addition under section 69A of Income Tax Act,1961.

Rajesh Kumar Vij,appellant-assessee, challenged the order dated 20.03 .2024 passed by NFAC for the Assessment Year 2017-18.

Disallowance of Indexed Construction Costs for Lack of Evidence: ITAT allows 50% as Reasonable Estimate  Meena Gupta vs ACIT CITATION: 2024 TAXSCAN (ITAT) 1704

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) allowed 50% of the claimed indexed construction costs as a reasonable estimate due to lack of sufficient evidence.

Meena Gupta,appellant-assessee, filed her income tax return declaring ₹23,74,730, but her income was assessed at ₹1,45,44,630 under Section 153C read with Section 144 of the Act. A February 28, 2014 search, targeting the Rama and Param Group uncovered incriminating documents linked to her for the relevant year. Based on these documents, the assessment included key additions such as ₹71,86,571 under Section 69A and ₹48,48,524 for construction/renovation expenses, totalling ₹1,45,44,634.

ITAT Deletes ₹9,640 Deduction Disallowance for LIC Premiums after AO Accepts Additional Evidence  Meena Gupta vs ACIT CITATION: 2024 TAXSCAN (ITAT) 1704

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT )deleted the ₹9,640 disallowance for Life Insurance Corporation of India ( LIC ) premium deduction after the Assessing Officer ( AO ) accepted the additional evidence provided by the assessee.

Meena Gupta, appellant-assessee, filed her income tax return declaring ₹23,74,730, but her income was assessed at ₹1,45,44,630 under Section 153C read with Section 144 of the Act. A February 28, 2014 search, targeting the Rama and Param Group, uncovered incriminating documents linked to her for the relevant year.

Improper Assumption of Jurisdiction u/s 147: ITAT Quashes Assessment Due to AO’s Non-Application of Mind  Reshma Kamal Abichandani, vs ACIT CITATION: 2024 TAXSCAN (ITAT) 1705

The Delhi Bench of Income Tax Appellate Tribunal(ITAT)  quashed the assessment for the Assessment Year 2018-19, ruling that the Assessing Officer (AO) improperly assumed jurisdiction under Section 147 due to the non-application of mind.

Reshma Kamal Abichandani,appellant-assessee, the assessment order passed by the AO dated January 29, 2024, for the Assessment Year 2018-19.

Reopening of Assessment invalid due to Inconsistency in Reasons and Addition: ITAT quashes Reassessment  Bhawani Castings P. Ltd. vs Deputy Commissioner of Income Tax CITATION: 2024 TAXSCAN (ITAT) 1706

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) quashed the reassessment proceedings due to inconsistency between the reasons for reopening and the addition made.

Bhawani Castings P. Ltd.,appellant-assessee,filed its income tax return for Assessment Year ( AY ) 2018-19 on 28.09.2018, reporting a loss of Rs. 12,52,594/-. A notice under section 148A(b) of the Act was issued, along with reasons for reopening the assessment. The assessee responded on 22.03.2022, stating it had not made purchases from the mentioned parties. However, the Assessing Officer ( AO ) rejected the objections and continued the reassessment.

AO Adds Purchases from Suppliers Issuing Fake Bills to Income, Labels Them Bogus: ITAT directs for Further Verification  A.M Enterprises vs The Income Tax Officer CITATION: 2024 TAXSCAN (ITAT) 1707

The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) directed further verification concerning the Assessing Officer (AO) treating entire purchases as bogus, citing that the suppliers were involved in issuing fake invoices without delivering goods.

A.M. Enterprises, a partnership firm, made purchases for Rs. 8,36,27,420, from Ratan Enterprises and Royal Enterprises, which were treated as bogus by the AO based on findings from the Karnataka Commercial Tax Department.

AO Adds Rs. 2.37 Crore u/s 56(2)(vii)(b) for Valuation Discrepancy in Agricultural Land Purchase: ITAT directs to obtain DVO report  Dhansukhbhai Thakorbhai Patel vs Income Tax Officer CITATION: 2024 TAXSCAN (ITAT) 1708

The Surat Bench of the Income Tax Appellate Tribunal ( ITAT ) directed the Assessing Officer (AO) to obtain the District Valuation Officer (DVO) report, as the AO added Rs. 2.37 under section 56(2)(vii)(b) of the Income Tax Act, 1961 for valuation discrepancy in the purchase of agricultural land. 

Dhansukhbhai Thakorbhai Patel (assessee) is engaged in selling Milk and is also involved in agricultural activities. The assessee sold agrarian land for a consideration of Rs.1,00,00,000 crore, and the land registration was valued at Rs. 2.65 crore by the Stamp Valuation Authority. The assessee also purchased Rs. 26.51 lakh agricultural land, valued at Rs. 2.39 crores.

CIT(A) Fails to consider written submission and issued notice via email despite opted No in Form 35: ITAT Quashes Ex Parte order  Devang Arvindbhai Desai vs Income Tax Officer CITATION: 2024 TAXSCAN (ITAT) 1710

The Surat Bench of the Income Tax Appellate Tribunal (ITAT) quashed the Ex-parte order citing the Commissioner of Income Tax [appeal] [CIT(A)] failed to consider the written submission of the assessee and issued notice via email despite the assessee opting for “No” in form 35.

Devang Arvindbhai Desai (assessee) filed an income tax return for the Assessment Year 2011-2012. The Assessing Officer (AO) found some unexplained cash deposits, unexplained investments, and undisclosed income in the assessee’s assessment and added all into the assessee’s taxable income.

Unexplained Cash Deposits from Dairy Business: ITAT Sets Aside Ex-Parte Order  Vinodbhai Dahyabhai Patel vs Income Tax Officer CITATION: 2024 TAXSCAN (ITAT) 1712

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) set aside the ex-parte order on unexplained cash deposits from the dairy business and remanded the case for fresh adjudication.

Vinodbhai Dahyabhai Patel,appellant-assessee,was a dairy products business owner. For the Assessment Year 2017-18, he filed his return on 28-03-2018, reporting an income of Rs. 7,99,660/-. The return was selected for scrutiny after cash deposits totaling Rs. 11,17,55,600/- were made in his Bank of Baroda account, including Rs. 1,39,14,120/- during the demonetization period.

Objections to Draft Assessment Order filed beyond Statutory Time Limit: ITAT restores matter to DRP for Verification  Javith Anver Basha vs Assistant Commissioner of Income Tax CITATION: 2024 TAXSCAN (ITAT) 1714

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) restored the matter to the Dispute Resolution Panel ( DRP ) for verification after ruling that the objections filed by the assessee to the draft assessment order were not time-barred.

Javith Anver Basha,appellant-assessee,a non-resident living in Qatar with income from house property in India, bought a property in Bangalore for ₹1,40,00,000 during the assessment year. The Department then initiated proceedings under Section 147 and assessed an income of ₹14,15,000.

Unexplained Cash Deposits u/s 69A: ITAT Reduces Addition to Rs. 2.5 Lakh due to Partial Explanation of Source  Deepak Goyal vs Income Tax Officer CITATION: 2024 TAXSCAN (ITAT) 1716

The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) reduces addition to Rs. 2.5 Lakh for unexplained cash deposits under section 69A of the Income Tax Act,1961, providing relief of Rs. 8.47 Lakh due to partial explanation of source.

Deepak Goyal,appellant-assessee,challenged the order dated 30.11 .2023 passed by Commissioner of Income Tax(Appeals)/ National Faceless Assessment Centre[CIT(A)/NFAC] for the Assessment Year (AY) 2017-18.

Three-Day Delay in Filing Appeal During COVID Period: ITAT Sets Aside CIT(A) Order  Bharatbhai Ratanshi Shah vs DCIT CITATION: 2024 TAXSCAN (ITAT) 1717

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) set aside the Commissioner of Income Tax(Appeals) [CIT(A)] order, agreeing that the three-day delay in filing the appeal during the COVID period should be excluded under the Supreme Court’s extended filing deadlines.

Bharatbhai Ratanshi Shah,appellant-assessee, challenged the order dated 4 September 2024, for Assessment Year 2018-19, passed by CIT(A) under Section 250 of the Income Tax Act.

Profits from Sale of Jaggery is Taxable, Not considered as Agricultural Income: Madras HC  E.Palaniappan vs The Income Tax Officer CITATION: 2024 TAXSCAN (HC) 2544

In a recent ruling, the High Court of Madras held that profits from the sale of jaggery are taxable and that sugarcane and jaggery are different commodities and rejected the agricultural claim made by the assessee. It ruled that profit from the sale of jaggery falls beyond the ken of agricultural income.

The appellants have appealed against the Income Tax Appellate Authority ( ITAT ) order, which held that the profit from the sale of jaggery fell beyond the purview of agricultural income. The appellant’s main issue, in this case, was whether, according to Schedule III of the Tamil Nadu General Sales Tax Act, 1959, “gur” and “jaggery”  are distinct commodities or whether they are the same to determine the taxability of the profits from the sale of jaggery.

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