This yearly digest analyzes all the ITAT stories published in the year 2023 at taxscan.in
The Income Tax Appellate Tribunal (ITAT), Mumbai Bench held that the Centralized Processing Centre (CPC) was not authorized to carry out adjustment for disallowance of deduction under Section 80P of the Income Tax Act, 1961.
The Bench comprising Om Prakash Kant, Accountant Member and Pavan Kumara Gadale, Judicial Member observed that “We uphold that the CPC was not authorized to carry out such adjustment for disallowance of deduction under Section 80P of the Income Tax Act. The adjustment made by the CPC is accordingly deleted on this ground also.”
In a significant ruling, the Income Tax Appellate Tribunal (ITAT) of Varanasi Bench has held that an addition can’t be deleted in absence of incriminating material showing the purchase of furniture and fixtures including decoration.
The Coram Shri Vijay Pal Rao, Judicial Member and Shri Ramit Kochar, Accountant Member viewed that this furniture and fixture including decoration and furnishing of the showroom were found from the business premises of the assessee and presumption u/s 292C shall apply that it belongs to the assessee. This presumption is rebuttable but the assessee has to bring on record cogent and credible evidence/explanation to rebut the presumption.
In a major setback to Deutsche India Pvt Ltd, the appellant, Mumbai Bench of the Income Tax Appellate Tribunal (ITAT), confirmed the disallowance on delayed payment of the employee’s contribution to the provident fund.
The Bench consisting of Om Prakash Kant, Accountant Member and Sandeep Singh Karhail, Judicial Member observed that “Respectfully following the decision of the Supreme Court in Checkmate Services (P.) Ltd, we find no infirmity in the impugned order passed by the CIT(A).”
The Income Tax Appellate Tribunal (ITAT), Jaipur Bench, has recently in an appeal filed before it, while deleting the penalty, held that disallowance of claim does not mean that particulars furnished by the assessee are wrong.
Thus, allowing the assessee’s appeal, the Jaipur ITAT thus, held: “Disallowance of expenses per se cannot mean that the assessee has furnished incorrect particulars of income. Concealment involves penal action. It has to be proved as a conscious act. Although it is true that direct evidence may not be available in every case yet it must be proved as a necessary corollary from the facts and circumstances established on record. In view of the above deliberation, the appeal of the assessee is allowed.”
The Income Tax Appellate Tribunal (ITAT), Kolkata Bench, has recently, in an appeal filed before it, refused to condone delay of 329 days on the ground of unavailability of tax consultant and illness of grandson, as the same were not proved by the assessee.
The Kolkata ITAT held: “The only explanation given in the application above is that sometimes the Tax Consultant was not available to the assessee or illness of his Grandson. No affidavit in support of the delayed filing of appeals is filed. No other medical document in support of illness is being filed. Therefore, we do not deem it fit to condone the delay in filing these appeals. These appeals are dismissed being time-barred.”
In a significant case, the Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has held that an addition on bogus capital expense based on a statement under section 132(4) of the Income Tax Act, 1961 is not valid when the assessee has rebutted by furnishing evidence.
A Coram comprising of Shri B.R. Baskaran (AM) & Smt. Kavitha Rajagopal (JM) viewed that the assessee has rebutted the admission by furnishing evidence in support of the expenses. The Tribunal, while allowing the appeal, set aside the order passed by CIT(A) and directed the AO to delete the addition of Rs.39,02,582/-.
The Pune bench of Income Tax Appellate Tribunal (ITAT) has recently held that section 54B of Income Tax Act 1961 provided income tax deduction and it was a beneficial provision hence it should be interpreted strictly.
The division bench of ITAT comprising Dr. Dipak P. Ripote (Accountant Member) and S.S.Godara (Judicial Member) dismissed appeal filed by the assessee. Further, the bench observed that, to be eligible for deduction under section 54B, the land should have been used for agricultural purpose in the preceding two years. But in case of assessee there were no agricultural activities has carried out on the impugned land in the preceding two years
The Pune Income Tax Appellate Tribunal (ITAT) denied the claim for exemption of income under section 11 of Income Tax Act on the ground that the Form No.10B was not filed along with the return of income nor before processing of the return of income.
After considering the contentions of the both parties the division benchof Inturi Rama Rao (Accountant Member) and S. S. Viswanethra Ravi (Judicial Member) dismiss the appeal filed by the assessee and observed that “the power of condonation of the delay in filing the Form No.10B had been delegated to the Commissioner of Income Tax and all such applications shall be disposed of by 30.09.2019 and the said date was extended up to 31.03.2020 vide CBDT Circular No.28/2019 dated 27.09.2019.
The Chennai Bench of Income Tax Appellate Tribunal (ITAT) has held that the re assessment without satisfying conditions of Section 147 of the Income Tax Act 1961 would be invalid.
The Division Bench of V. Durga Rao (Judicial Member) and G. Manjunatha (Accountant Member) dismissed the appeal filed by the revenue holding that the reasons recorded in the present case had not met the conditions stipulated under section 147 of the Income Tax Act. Since action under section 147 of the Income Tax Act was initiated after four years from the end of the relevant assessment year, both the conditions provided in section 147 of the Income Tax Act should have been satisfied for the reopening proceedings to be held as valid.
The Pune bench of Income Tax Appellate Tribunal (ITAT) denied income tax deduction under section 80IB (10) of Income Tax Act 1961 to a builder because of delay in completion of housing projects without statutory approval.
After considering the both contention the division bench of the ITAT comprising Partha Sarathi Chaudhury, (Judicial Member) and Inturi Rama Rao (Accountant Member) allowed the appeal filed by the revenue and observed that the assessee failed to prove that the permissions for construction of the housing project were obtained on 12.09.2005 for the first time except harping on that the permissions for obtain for the first time only on 12.09.2005.
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the filing of a fresh Income Tax Return was not necessary if the assessee felt that the earlier return should be considered for reassessment.
The Division Bench of E .N. K. Billaiya (Accountant Member) and Astha Chandra (Judicial Member) allowed the appeal observing that, “It is now well settled that the assessee need not file a fresh return on receipt of notice under section 148 of the Act if he feels that the earlier return should be treated for the purpose of re-assessment, he may inform the Ld. AO of his decision to treat his previous return as the return filed in response to the notice and then the previous return shall be treated as the fresh return submitted in response to the notice.”
The Income Tax Appellate Tribunal (ITAT) has held that the amendment to Section 40(a)(ia) of the Income Tax Act 1961 by Finance Act 2014 would not have the retrospective effect.
The Bench referred to the decision of the Hon’ble Supreme Court in the case of “Shree Choudhary Transport Company vs. Income Tax Officer”, wherein, the Hon’ble Supreme Court held that the amendment made by the Finance (No.2) Act, 2014, could not be stretched anterior to the date of its substitution so as to reach the assessment year 2005-06.
The Income Tax Appellate Tribunal (ITAT), New Delhi Bench, has recently, in an appeal filed before it, upheld the penalty u/s 271D, when the company couldn’t prove that cash loan was taken for urgent disbursal of salary.
Hearing the contentions of Sh. Sanjay Nargas, the Sr. DR, with no representation being made on behalf of the assessee, as well as perusing the materials available on record, the ITAT Panel composed of Yogesh Kumar US, the Judicial Member, along with Dr. B. R. R. Kumar, the Accountant Member noted: “We have also gone through the judgments quoted by the AR in his paper book at page no. 41 to 43. In the instant case, we find that though the assessee argued that the cash loan has been taken for urgent disbursal of the salary, the same fact could not be brought on record that the salary has been indeed paid from the loans taken.”
The Chandigarh Bench of Income Tax Appellate Tribunal (ITAT) has read judication observing that the sanction by Principal Commissioner of Income Tax (PCIT) for the reassessment under Section 147 of the Income Tax Act 1961 was mechanical approval without application of mind.
The Division Bench of Diva Singh, Judicial Member and Vikram Singh Yadav, Accountant Member allowed the appeal and observed that “Both the parties have fairly submitted that even though the assessee has raised this ground of appeal before the CIT(A), there is no adjudication and finding recorded by the CIT(A). In view of the same and also given that on other grounds of appeal, we have set-aside the matter to the file of CIT(A), we deem it appropriate to set-aside this ground of appeal as well as to the file of the CIT(A) to decide the same as per law after providing reasonable opportunity to the assessee.”
The Income Tax Appellate Tribunal (ITAT), Delhi Bench, has recently, in an appeal filed before it, held that payment of electricity duty is deductible u/s 43B of Income Tax Act.
Hearing the opposing contentions of either sides and thereby perusing the materials available on record, the ITAT Panel consisting of Pradip Kumar Kedia, The Accountant Member, along with C.N Prasad, the Judicial Member, observed: “Heard rival submissions and perused the orders of the authorities below. On perusal of the order of the Tribunal in the assessee’s own case for the assessment year 2014-15 in ITA. No. 7146/Del/2017 dated 2.11.2020, we find that identical issue has been decided by the Tribunal in assessee’s favor for the immediately succeeding assessment years i.e., 2014-15 and 2015-16 holding that no disallowance is warranted under section 43B of the Act in respect of Electricity Duty payable by the assessee.”
The Chandigarh Income Tax Appellate Tribunal (ITAT) has recently held that assessing officers are bound to give explanation for not accepting submissions of assessee through a speaking order under section 69 of Income Tax Act 1961.
After considering the contentions of the both parties the single bench of ITAT, Vikram Singh Yadav (Accountant Member) allowed the appeal filed by the assessee and observed that “assessee has offered business receipts amounting to Rs 41,81,800/- in his return of income which is sufficient to make business advances of Rs 8,05,000/- and thus, no separate addition is called for.”
The Income Tax Appellate Tribunal (ITAT), New Delhi Bench, has recently, in an appeal filed before it, held that deduction u/s 80(1C) is allowable, if form 10CB is filed before final assessment order.
The Delhi ITAT observed: “We have heard the rival submissions and perused the material available on record. The issue in the present ground is about the denial of claim of deduction u/s 80IC of the Act by AO but allowing the claim of the assessee by CIT (A). The only reason for denying the claim of deduction u/s 80IC of the Act by AO was that the Form 10CCB was uploaded by the assessee on the website of the Income-tax Department on 10.11.2017 whereas the return of income was filed on 24.10.2017 and the return of income was processed u/s 143(1) of the Act on 30.10.2018.”
The Pune Bench of Income Tax Appellate Tribunal (ITAT) has held that the interest granted by court order on enhanced compensation on land acquisition from the date of possession till the date of judgment would not be taxable.
The Division Bench of Inturi Rama Rao (Accountant Member) and S.S. Viswanethra Ravi (Judicial Member) allowed the appeal and held that the interest granted by the reference Court u/s. 28 of the Land Acquisition Act from the date of possession of land till the date of judgment of High Court was an accretion of the value of the land acquired.
The Ahmedabad Income Tax Appellate Authority (ITAT) has recently held that re-assessment of returns without the formation of belief of escapement of income based on incorrect facts is invalid.
After considering the contentions of both parties the single bench of the ITAT Annapurna Gupta (Accountant Member) allowed the appeal filed by the assessee and observed that the mere fact of cash deposits in the bank account alone could not lead to the formation of the belief of escapement of income by the assessing officer.
The Pune Income Tax Appellate Tribunal (ITAT) has recently allowed depreciation on goodwill under section 32(1) (ii) of the Income Tax Act 1961.
After observation, the division bench of the ITAT comprising R.S. Syal (Vice President) and S.S. Viswanethra Ravi ( Judicial Member) dismissed the appeal filed by the revenue and confirmed the order of CIT(A).
The Kolkata Income Tax Appellate Tribunal (ITAT) has recently held that accepting of share application money was not loan under section 269SS of the Income Tax Act 1961, no penalty could be levied by the assessing officer.
After considering the contentions of the both parties the division bench of Rajpal Yadav (Vice-President) and Manish Borad (Accountant Member) dismiss the appeal filed by the revenue and observed that, Penalty under section 271D Income Tax Act 1961 can be imposed upon the assessee if the assessee has accepted any loan or deposit otherwise than by an account payee cheque or an account payee Bank Draft. But in the case of assessee this section did not apply because it was in the nature of sharing application money. Thus share application money received by the assessee company has no loan and deposits.
The Ahmedabad Income Tax Appellate Tribunal ( ITAT ) while deleting the penalty imposed by the assessing officer held that filing of revised return and payment of tax after receiving reassessment notice showed that no willful attempt to escape income.
After considering the contentions of the both parties the single bench of the ITAT Waseem Ahmed (Accountant Member) allowed the appeal filed by the assessee and further observed that “assessee under the bona fide belief not offered income on receipt from LIC in original return however rectified the same while filing the return under section 148 of the Act. The assessee also paid due tax on such receipt even before issuance of notice under section 148 of the Act. Thus, there was no willful attempt of the assessee to conceal his income”.
The Jaipur Bench of Income Tax Appellate Tribunal (ITAT) has held that the amount paid for acquiring the title of the property under dispute would be treated as expenditure for transfer of property.
The Division Bench Of Sandeep Gosain (Judicial Member) And Rathod Kamlesh Jayantbhai (Accountant Member) following the decision that any amount, the payment of which was absolutely necessary to affect the transfer would be an expenditure covered under section 48(1)(i)[ GopeeNath Paul & Sons Vs. DCIT 278 ITR 240(Cal)] held that, The payment of the said amount to settle the property dispute would be considered as the payment which was absolutely necessary to affect the transfer made by the assessee and would be considered as expenditure.
The Delhi Income Tax Appellate Tribunal (ITAT) recently, while deleting the penalty imposed by the assessing officer, held that share application money received in cash by the company did not attract provisions of Section 269SS of Income Tax Act, 1961.
After considering the contentions of the both parties the division bench of the Shamim Yahya (Accountant Member) and Challa Nagendra Prasad (Judicial Member) allowed the appeal filed by the assessee and further observed that receipt of share application monies from the three private limited companies for allotment of shares in the assessee-company could not be treated as receipt of loan or deposit.
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that the income from giving commercial properties for compensation as per Memorandum of Association (MOA) would be taxable as business income.
The Division Bench of Prashant Maharishi (Accountant Member) And Kavitha Rajagopal (Judicial Member) dismissed the appeal observing that the assessee company had been engaged in the business of real estate and had been giving commercial properties for compensation as per the objectives of the Memorandum of Association (MOA) of the assessee company. It was also observed that the assessee was having incidental and ancillary objects of renting out of the properties, which were not owned by the assessee company.
Penalties u/s 271(1)(b) and 271F of Income Tax Act cannot be Levied If there is “Reasonable Cause”: ITAT The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) has held that the penalties under Section 271(1)(b) and 271F of the Income Tax Act 1961 could not be levied if there was a reasonable cause on the part of the assessee.
The Division Bench of Waseem Ahmed (Accountant Member) and T.R. Senthil Kumar (Judicial Member) observed that, Section 273B had encompassed that certain penalties “shall” not be imposed in cases where “reasonable cause” was successfully pleaded. It is observed that penalties imposable under Section 271(1)(b) and under Section 271F were also included therein.
The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) has held that the lack of identical income tax rule is not a valid ground for denial of legitimate Tax collection at source (TCS) claim.
The single bench of N. V. Vasudevan (vice president) held that the facts of the present case applicable for TDS should also be applicable for TCS and merely because there is no rule identical to rule 37BA (2) (i) of the rules with reference to TCS provisions.
The Ahmedabad Income Tax appellate tribunal (ITAT) allowed 15 percent accumulation on profits and gains from pharmacy business incidental to business of charitable trust.
After considering the contentions of the both parties the division bench of the Annapurna Gupta (Accountant Member) and Madhumita Roy (Judicial Member) dismissed the appeal filed by the assessee and observed that,
The Ahmedabad Income Tax Appellate Tribunal (ITAT) has recently held that mere rejection of a claim would not invite levy of penalty under section 271(1)(C) of Income Tax Act, 1961.
After considering the contentions of the both parties the division bench of the Annapurna Gupta (Accountant Member) and Madhumita Roy (Judicial Member) allowed the appeal filed by the assessee and observed that, “Particulars relating to the source of investment of Rs.22,85,528/- made in immovable property was furnished by the assessee ,as invested by Rashmikant C. Patel. The same has not been found to be false or untrue by the Revenue therefore source of investment was furnished by the assessee which was not found to be inaccurate or even incorrect by the Revenue.
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has disallowed expenditure holding that the distribution of samples of infant milk substitute, feeding bottles and infant foods were legally prohibited activities.
The Mumbai Bench of O M Prakash Kant (Accountant Member) and Sandeep Singh Karhail (Judicial Member) upheld the order of the Commissioner of Income Tax Appeal (CIT (A)) and allowed the appeal. On perusal of section 4 of the Infant Milk Substitutes, Feeding Bottles and Infant Foods (Regulation of Production, Supply and Distribution) Act, 1992, the Bench held that distribution of samples of Infant Milk Substitutes, Feeding Bottles and Infant Foods had been prohibited under the Act.
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has held that the sale and purchase of mutual funds by Maruti Suzuki can be treated as Business Income if activities of investment are towards business profit.
A Coram comprising Shri Shamim Yahya, an Accountant Member & Shri Kul Bharat, and a Judicial Member set aside the impugned order to verify the claim of the assessee that the transaction in question is pure investments by the assessee.
The Income Tax Appellate Tribunal ( ITAT ), Jaipur Bench, has recently, in an appeal filed before it, held that there is no capital gain in case of agricultural land as the same is not a capital asset u/s 2(14)(iii)(b) of Income Tax Act.
“After hearing both the parties and perusing the materials available on record, the Bench finds that for want of no contrary material by the assessee, the Bench has no option except to confirm the order of the ld. CIT (A) on the issue in question. Hence, the Ground No. 3 of the assessee is dismissed. In the result, the appeal of the Revenue as well as assessee are dismissed.”
The Chennai bench of Income Tax Appellate Tribunal (ITAT) has recently held that no penalty would be levied if the audit report under section 44B of Income Tax Act 1961 was furnished along with Income Tax Return before completion of assessment.
After considering the contentions of the both side the division bench of the ITAT comprising V. Durga Rao, Judicial (Member) and G.Manjunatha (Accountant Member) allowed the appeal filed by the assessee and observed that, Assessee was required to get his accounts audited under section 44AB of the Act and filed within the due date. Since the assessee has not filed the tax audit report under section 44AB of the Act before the due date, the Assessing Officer levied penalty of Rupees 83,680/- under section 271B of the Income Tax Act 1961, But the present case audit report under section 44AB of the Income Tax Act 1961 were furnished along with return of income before the completion of assessment. Hence it was not a fit case for the levy of penalty under section 271B of the Income Tax Act 1961.
The Income Tax Appellate Tribunal (ITAT), Delhi Bench, has recently, in an appeal filed before it, held that disallowance cannot be made on dd-hoc basis without any specific allegation, merely on the basis of general remarks and observations.
Thus, allowing the assessee’s appeal, the ITAT Panel comprising of ShamimYahya, the Accountant Member, along with Chandra Mohan Garg, the Judicial Member, held: “When the assessee has successfully demonstrated that the expense has been incurred wholly and exclusively for the purpose of business of assessee and the Assessing Officer has not point out any specific defect or deficiency therein then the disallowance cannot be made on ad-hoc basis without any specific allegation merely on the basis of general remarks and observations. Therefore, respectfully following the order of coordinate Bench of Raipur in the case of Shri Kailas Chand Agarwal (supra) the grounds of assessee are allowed and AO is directed to delete the entire disallowances.”
The Chennai bench of Income Tax Appellate Tribunal (ITAT) has recently held that capital gain exemption under section 54 of Income Tax Act 1961 should not be allowed in respect of two independent residential units.
The contentions of the both sides of the division bench of the ITAT comprising V. Durga Rao, Judicial (Member) and G. Manjunatha (Accountant Member) confirmed the decision of the lower authority and observed that, “The Assessing Officer restricted the deduction under section 54 of the Income Tax Act, 1961 to the investment in 3rd floor keeping in view of the amendment to section 54 of the Act eligible for one residential house. Admittedly, the assessee has not been able to establish that 3rd and 4th floor are not independent and thus, the Assessing Officer has correctly allowed the claim of deduction under section 54 of the Act for 3rd floor”.
The Mumbai bench of Income Tax Appellate Tribunal (ITAT) recently held that the revisional jurisdiction cannot be invoked if the assessing officer took one of the possible views of the matter.
The Coram comprising Pavan Kumar Gadale (Judicial member) B.r. Basakaran (accountant member) observed that “In our view, the decision so taken by the assessing officer forms within the ambit of one of the possible views. Merely because the commissioner of Income Tax (CIT(A)) was having a different view in this matter, the same would not render the assessment order erroneous and prejudicial to the interests of revenue’’.
The Pune bench of Income Tax Appellate Tribunal (ITAT) has recently held that if income tax return was not filed within the due date the co-operative society was not eligible for claiming deduction under section 80P of Income Tax Act 1961.
After considering the contentions of the both side the division bench of the ITAT comprising Partha Sarathi Chaudhury (Judicial Member) and Inturi Rama Rao (Accountant Member) denied the above ground of appeal filed by the assessee and observed that, assessee had failed to fulfill the conditions precedent for the purposes of claiming deduction under section 80P(2)(d) of the Income Tax Act 1961.Therefore, in terms of section 80AC(ii) of the Income Tax Act 1961, The assessee was not entitled to claim deduction under section 80P of the Income Tax Act 1961 as well.
The Delhi bench of Income Tax Appellate Tribunal (ITAT) has recently held that Payment for business support services from foreign companies have no Fee for Technical Services (FTS).
After considering the contentions of the both side the division bench of the ITAT comprising Anubhav Sharma (Judicial Member) and Shamim Yahya (Accountant Member) allowed the appeal filed by the assessee and observed that payment received in this case could not be treated as FTS under Article 12 (5) of India Netherlands DTAA.
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has deleted the addition as the assessing officer (AO) has failed to produce the evidence for cash sales.
The Division Bench of OM Prakash Kant (Accountant Member) and Sandeep Singh Karhail (Judicial Member) allowed the appeal observing that the assessee himself had submitted that those sales were fictitious sales, and the onus was on the Assessing Officer to establish whether it was cash sales. The income tax authorities had not produced evidence suggesting cash sales by the assessee.
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has directed re-adjudication noticing the death of assessee during the income tax assessment proceeding.
A single Bench of Kul Bharat (Judicial Member) allowed the appeal observing that in the assessment order, AO had not stated that the proceedings were continued against the legal heir nor there was any mention of passing away of the assessee.
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