This yearly digest analyzes all the ITAT stories published in the year 2023 at Taxscan.in
The Pune Income Tax Appellate Tribunal (ITAT) determined that the reimbursement of severance cannot be regarded as salary for the purposes of taxation due to terms in the secrecy and non-compete agreement that were read with the memorandum of understanding between the assessee and Vedanta Ltd. Thus, such a sum cannot be considered income.
The bench of Inturi Rama Rao (Accountant Member) and Partha Sarathi Chaudhury (Judicial Member) observed that when a particular amount is actually not retained by an assessee, then there does not arise any question of tax for that amount. The amount which has already been refunded back cannot be brought within purview of tax since the chargeability to tax of such refunded amount does not arise.
The Delhi Income Tax Appellate Tribunal has recently by observing the non-implementation of Dispute Resolution Panel directions by assessing officers directing the government to issue necessary guidelines.
The ITAT bench comprising G.S.Pannu, ( President) And Saktijit Dey, (Judicial Member) allowed the appeal filed by the assessee and observed that in several instance the assessing officer did not implement the directions issued by the DRP it was a very disturbing trend and reflects poorly on the credibility of the department and shakes the confidence of taxpayers.
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has directed re-adjudication upholding the demand against MUFG Bank on taxability of interest on income tax refund under Indo-Japan DTAA.
The Division Bench of G.S. Pannu (President) and Saktijit Dey, (Judicial Member) directed for adjudicating the matter by directing the AO to consider the rectification application by the assessee. “Assessing Officer, in fact, he has followed the directions of the Tribunal as well as learned DRP and has charged tax on the interest income on Income Tax refund at 10% by applying the provisions of Article 11 of India – Japan tax treaty. In case, the Assessing Officer has made any computational error while computing the tax rate, that can be a subject matter of rectification and not an issue to be decided by us in the present appeal. Since, the Assessing Officer has held that the interest income on Income Tax refund is to be taxed at 10%.”
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the satellite transmission services would not be taxable in India as royalty under Indo-US treaty.
The Delhi Bench of G.S. Pannu, (President) And Saktijit Dey, (Judicial Member) found that the issue was a recurring issue between the parties from assessment year 2006-07 onwards and had been consistently decided in favor of the assessee, not only by the Tribunal, but even by Hon’ble Jurisdictional High Court.
The Chennai Bench of Income Tax Appellate Tribunal (ITAT) has held that the assessee could not be said to have carried out agricultural activities merely because the land had few coconut trees.
The Division Bench of G. Manjunatha (Accountant Member) and V. Durga Rao (Judicial Member) dismissed the appeal and observed that assessee had not carried any agricultural activities as except adangal, there was no evidence brought on record that the assessee had carried agricultural operations. The adangal filed by the assessee showed that there were few coconut trees. Simply because, there were coconut trees, it would not mean that the assessee had agricultural operation,
The Chennai Bench of Income Tax Appellate Tribunal (ITAT) has held that the capital gain deduction under Section 54F of the Income Tax Act 1961 could not be denied if the assessee had entered into agreement to sell within one year of sale of original asset.
The Division Bench of V. Durga Rao (Judicial Member) and G. Manjunatha (Accountant Member) dismissed the appeal filed by the revenue holding that the authorities had erred in not considering the agreement to sale between the parties to allow the benefit of deduction under section 54F of the Income Tax Act.
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that the appellate authority should not cite procedure as a tool or ruse to deny the just claim of an assessee.
The Division Bench of Om Prakash Kant (Accountant Member) and Aby T. Varkey (Judicial Member) allowed the appeal and set aside the impugned order observing that, “We find that adjustments made by CPC do not fall under any of the permitted adjustments u/s 143(1) of the Act as discussed. When the CPC has erred while processing the return of an assessee which causes tax liability on an assessee, then the appellate authorities should not cite procedure as a tool/ruse to deny the just claim of an assessee”
The Pune Income Tax Appellate Tribunal (ITAT) has recently held that the difference between amounts shown in Form No.26AS and reflected in Profit and Loss Account could not be brought to Income Tax.
The division bench of ITAT Comprising Rama Rao (Accountant) and. S. S. Viswanethra Ravi, (Judicial Member) allowed the appeal filed by the assessee and observed that the appellant firm had been following the cash system of accounting. Even in the cash system of accounting, every receipt cannot be taxed unless the receipt of money is on account of accrual of income.
The Income Tax Appellate Tribunal (ITAT), Amritsar, has recently, in an appeal filed before it, while allowing TDS credit, held that the assessee cannot suffer due to the delay on part of the deductor in updating the PAN of legal heir.
The Amritsar ITAT held: “In the above view, we accept the grievance of the assessee as genuine. As such, we conclude that the assessee would not be made to suffer because of delay on the part of the deductor in updating the PAN of the legal heir. Accordingly, the AO is directed to allow credit of the TDS claimed by the appellant on verification of form 26 issued for the relevant quarters of the financial year in the name of deceased person as per Rule 37 BA of Income Tax Rules.”
The Income Tax Appellate Tribunal (ITAT), Delhi Bench, has recently, in an appeal filed before it, held that expenditure towards customer contracts and assembled workforce are “capital” in nature.
The Delhi ITAT held: “Thus, in our view, the action of learned Commissioner (Appeals) in reducing the value of customer contract and goodwill, as determined by the independent Valuer is wholly inappropriate, hence, unsustainable. Accordingly, we reverse the decision of the learned Commissioner (Appeals) on the issue of valuation. Consequently, the computation of the Assessing Officer in allowing depreciation at 25% on the amount of Rs.22, 16,276,000/- is upheld. Grounds are partly allowed.”
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that conducting or participating in exhibitions by the Gem &Jewellery Export Company within India or overseas would not be treated as commercial activity.
The Division Bench of Om Prakash Kant (Accountant Member) And Shri Rahul Chaudhary (Judicial Member) set aside the impugned order and granted relief under Sections 11 and 12 of the Income Tax Act 1961. “We are of the opinion that the assessee is not hit by the proviso to section 2(15) of the Act as far as the activity of conducting or participating in exhibitions within India or overseas and therefore the disallowance of exemption claimed by the assessee made by the Assessing Officer and the finding of the Ld. CIT (A) on the issue in dispute is set aside and matters restored back to grant the benefit of sections 11 and 12 as per provisions of law.” The bench was further observed.
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that the stamp duty valuation as on the date of allotment letters could be considered to impose Income Tax under Section 56(2) (X) of the Income Tax Act 1961.
The Division Bench of B.R. Baskaran (Accountant Member) and Pavan Kumar Gadale (Judicial Member) allowed the appeal relying upon Sajjanraj Mehta vs. ITO and observed that, “We hold that the respective allotment letters issued to the assessee should be considered as “Agreement to sell” for the purposes of sec.56(2)(x) of the Act. Since the assessee has paid the parts of consideration as per the terms and conditions of allotment through banking channels prior to the execution of Sale agreement, we are of the view that the provisions to sec.56 (2) (x) shall apply to the facts of the present case. Accordingly, the stamp duty valuation as on the date of respective Allotment letters should be considered for the purposes of sec.56 (2) (x) of the Act”
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT ) has held that the deduction should be allowed towards allocation of Research and Development (R & D) expenses for eligible units under Section 80IB and 80IC of the Income Tax Act 196
The Division Bench of Om Prakash Kant (Accountant Member) And Sandeep Singh Karhail (Judicial Member) Relying upon the finding of the Bombay High Court in CIT vs. Continental Warehousing Corporation allowed this ground of appeal and deleted the disallowance of deduction consequent to allocation of R & D expenses.
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