This yearly digest analyzes all the ITAT stories published in the year 2023 at taxscan.in
The Indore bench of Income Tax Appellate Tribunal (ITAT) held that no addition can be made on unexplained income which was received as gift from the family members for personal use.
The two member bench comprising of Vijay Pal Rao (Judicial Member) and B.M. Biyani (Accountant Member) held that gift received from family members, namely father and mother for personal use which do not required any special occasion like birthday, marriage, etc and the affidavit given by donors, being father and mother, themselves explained that they made gifts to assessee for “personal use”. The bench directed the assessing officer to re-adjudicate to delete the addition made under Section 69A of Income Tax Act, 1961 while allowing the appeal filed by the assessee.
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) held that the penalty imposed under Section 270A of the Income Tax Act, 1961 on grounds of non-disclosure of interest income in Return of Income (ROI) is valid.
The two-member bench comprising B.R. Baskaran (Accountant Member) and Pavan Kumar Gadale (Judicial Member) observed that a penalty order was passed by the Assessing Officer, Tax Circle at Mumbai, Whereas under the Provisions of 253(1)(a) of the Income Tax Act, 1961, the appeal to the appellate tribunal was filed against the order passed by the Commissioner of Income Tax Appeals under Section 270A of the Income Tax Act, 1961 by the Assessee. It was also held that the penalty imposed by the assessing officer was valid and according to the relevant provisions of law. Thus, the appeal filed by the assessee was dismissed.
The Bangalore bench of the Income Tax Appellate Tribunal (ITAT), held that Co-operative Societies are eligible for Exemption under Section 80P(2)(d) of the Income Tax Act, 1961 on the interest income received by it from investments made in Co-operative Banks.
The two-member bench of Chandra Poojari (Accountant Member) and Beena Pillai (Judicial Member) observed that Section 80P(2)(d) of the Income Tax Act, 1961 allows deduction in respect of any income by way of interest or dividends derived by the Co-operative society from its investments with any other cooperative society. The bench also noted that there was no stipulation or prerequisite in the provision regarding the nature of the funds. The bench referred to decisions of the Supreme Court and the High Court and held that the deduction under Section 80P(2)(d) of the Income Tax Act, 1961 applies to all cooperative societies, regardless of their main business activity. The bench allowed the appeal, setting aside the order of CIT(A) and restored the issue to AO for de novo consideration.
The Hyderabad Bench of the Income Tax Appellate Tribunal (ITAT) recently confirmed the penalty for deliberate income concealment under Section 271(1)(c) of the Income Tax Act.
The Bench consisting of Judicial Member Laliet Kumar and Accountant Member R.K. Panda observed that the assessee had failed to explain the source of the undisclosed investment of Rs. 30,50,000/- for property purchase and Rs. 6 lakhs for villa interiors. The explanation of the assessee was that the undisclosed investment offered to avoid litigation was rejected since it was a result of the search and incriminating evidence. The confirmation from M/s. Trident Constructions was deemed unhelpful due to its updated nature and the fact that the assessee had already paid Rs. 50 lakhs without explaining the source, the tribunal bench noted. The Bench further added that the additions made under Section 69B of the Income Tax Act were not voluntary but based on seized material during the assessment proceedings. Therefore, the penalty imposed by the Assessing Officer and upheld by the CIT(A) was observed to be justifiable by the tribunal. As a result, the appeal filed by the assessee was dismissed by the ITAT.
The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) has deleted the penalty under Section 271(1)(c) of the Income Tax Act, 1961 holding that the difference in income declaration by assessee and Assessing Officer would not amount to furnishing inaccurate particulars.
The two-member Bench of Waseem Ahmed, (Accountant Member) and Siddhartha Nautiyal, (Judicial Member) observed that no allegation evidencing that the amount of expenses claimed by the appellant assessee was genuine or correct. As such, the AO had disallowed the same only for the reason that the interest expense was capital in nature. The Bench thus deleted the penalty levied under Section 271(1)(c) of the Income Tax Act holding that AO had calculated different total income than the income declared by the assessee and the difference between the income declared by assessee and assessed by the AO would not amount to furnishing of inaccurate particulars of income or concealment of income per say.
The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) has set aside the exparte order as the notice was received via email despite the request for physical service of notice in Form No.35.
The two-member Bench of Waseem Ahmed, (Accountant Member) and T.R. Senthil Kumar, (Judicial Member) observed that the assessee had clearly mentioned “not to send” notices and communications by email, but the notices were sent by email and not by physically. The Bench thus ordered to provide due opportunity to the assessee.
The Surat bench of Income Tax Appellate Tribunal (ITAT) has recently held that no addition could be made on absence of corroborative and supporting evidence regarding satakat found during survey of third party business premises.
The tribunal observed that the Assessing Officer solely relied upon the documents found at the business premises of third-party. The Assessing Officer neither called upon Vasudev Goplani, Advocate during re-assessment proceedings nor made any independent investigation on fact from the purchasers namely Niral Apoorva Bhatu. Thus the AO made the addition in absence of corroborative and supporting evidence. Therefore the single member bench of Pawan Singh, (Judicial Member) deleted the addition made by the lower Authority. Jaikishan Goel, appeared for the assessee. Vinod Kumar, appeared for the revenue.
The Bangalore bench of Income Tax Appellate Tribunal (ITAT) has recently held that Advertising Marketing Price (AMP) expenditure incurred for promoting and marketing the product manufactured by assessee, does not come within purview of international transaction.
The two member bench of Beena Pillai, (Judicial Member) and Padmavathy S, (Accountant Member) determined that “The expenditure incurred by assessee is to carry out its day to day business activity of distribution and are directly linked with the business carried out by assessee in India”. Thus, the tribunal bench allowed the appeal filed by the assessee.
The Mumbai bench of Income Tax Appellate Tribunal (ITAT) has recently deleted an addition made on account of disallowance of interest expenses accrued on account of investment made in shares and securities. The appeal was filed by assessee Hitesh Shantilal Mehta against the orders passed by the Commissioner of Income Tax (Appeals) for the Assessment Year 1993-94.
It was pointed out by the tribunal that, while adjudicating this issue in assessee’s appeal for assessment year 2012-13 has observed that the assesee’s ground is similar to ground no. 1 raised in the case of Sudhir S. Mehta in for assessment year 2009-10. The tribunal further observed that while deciding the issue of liability of interest expenses in the case of Sudhir S. Mehta the bench had concluded as follows, “In view of our aforesaid discussion we set aside the order of the CIT(A) and direct the AO to allow deduction in respect of said interest accrued and calculated at 12% per annum amounting to Rs.2,64,72,208/- after disallowing proportionate interest in respect of the investment in shares amounting to Rs.3,51,176/- after verifying the calculation of the interest quantification.” The two member bench of Vikas Awasthy, (Judicial Member) and Amarjit Singh, (Accountant Member) allowed the appeal filed by the assessee and deleted the addition made by the AO.
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has recently held that Foreign Currency Convertible Bond (FCCB) issue expenses included as part of Foreign Currency Convertible Bond (FCCB) premium expenses are allowable as deduction.
After considering the facts and circumstances the tribunal observed that issue of disallowance of FCCB issue expenses have also been considered by the co-ordinate bench in assessee’s own case for assessment year 2008-09 and the relevant part of the decision have been extracted in the earlier part of this order. Therefore the two member bench of Amit Shukla (Judicial Member) and Padmavathy S (Accountant Member) allowed the appeal filed by the assessee.
The Indore bench of Income Tax Appellate Tribunal (ITAT) directed re adjudication to the assessing officer for the completion of reassessment under Section 147 of Income Tax Act, 1961 without proper hearing. Rakhi Gautam, the appellant assessee filed appeal against the order of Commissioner of Income Tax (Appeals) for confirming yhe addition made by assessing officer in reassessment proceedings under Section 147 of the Income Tax Act, 1961.
The two member bench comprising of Vijay Pal Rao (Judicial Member) and B.M. Biyani (Accountant Member) held that the assessee was not aware of the notices issued by the Commissioner due to the fact that they were issued to their registered email ID. It was also observed that the assessee was given one more opportunity to present her case before the Commissioner and the matter was remanded to the Commissioner for fresh adjudication while allowing the appeal filed by the assessee.
The Kolkata bench of Income Tax Appellate Tribunal (ITAT) quashed the order passed by the commissioner of income tax( appeals) for deleting the disallowance of education cess claim made by the assessing officer under Section 115JB of Income Tax Act, 1961 without proper verification.
The two member bench comprising of Sanjay Garg (Judicial Member) and Girish Agrawal (Accountant Member) held that they does not find any justification on the part of commissioner in deleting the impugned disallowance made by the assessing officer while computing the book profit under Section 115JB of the Income Tax Act, 1961 and are liable to be quashed. It was also held that the disallowance of educational cess claim made by the assessing officer is valid under Section 115JB of Income Tax Act, 1961 while dismissing the appeal filed by the assessee.
The Mumbai bench of Income Tax Appellate Tribunal (ITAT) has recently held that no addition could be made on sponsorship contributions received from friends and relatives.
It was observed by the tribunal that e assessee is filling the application for admission of additional evidences under Rule 29 of ITAT rules with the sponsorship confirmation from ICICI Lombard General Insurance, Sponsorship amount confirmation from Central Bank Of India, and confirmations of friends and relatives who have sponsored the mountaineering event, which were not available earlier and could not produce before the lower authorities. It was also pointed out that evidence plays an important role in decision making in the adjudicating proceedings. Thus the bench opinion that the assessee should not suffer for non-filing of material information, as the evidence played a vital role in decision making and we admit the additional evidence. Therefore, the two member bench of Pavan Kumar Gadale (Judicial Member) and Padmavathy S (Accountant Member) restored the entire disputed issues along with the additional evidence to the file of the assessing officer and allowed the appeal.
The Mumbai bench of Income Tax Appellate Tribunal (ITAT) has recently while providing relief to Sabre Travel Network (India) deleted additions made on account of foreign exchange loss incurred from marketing services.
The two-member bench of Vikas Awasthy (Judicial Member) and Gagan Goyal (Accountant Member) allowed the appeal filed by the assessee and observed that the assessee had been claiming foreign exchange loss in the past and the AO has consistently disallowed the same. The Tribunal in by the assessee has allowed foreign exchange loss in the past. In Assessment Year 2013-14, the Co-ordinate Bench had followed the order of Tribunal in assessee’s own case allowing deduction towards foreign exchange loss.
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has upheld the disallowance towards late deposit of employees’ contribution to Provident Fund or Employees State Insurance Corporation (PF/ESIC) under Section 36(i)(va) of the Income Tax Act 1961.
He further contended that the delayed deposit of employees’ contribution indicated in the Audit Report was sufficient for adjustment under Section 143(1) of the Income Tax Act, as held by the Pune Bench of the Tribunal in the case of Cemetile Industries vs ITO. A Single Bench of Chandra Mohan Garg, (Judicial Member) upheld the action of revenue holding that the issue towards taxability of belated employees’ contribution to Provident Fund/ESIC was no longer res integra in the light of the judgement of Supreme Court in the case of Checkmate Services (P.) Ltd. vs CIT
The Income Tax Appellate Tribunal (ITAT), Bangalore Bench has quashed the Assessment Order of the Commissioner of Income Tax (Appeals) (CIT(A)) for the reason that a mandatory notice under Section 143(2) of the Income Tax Act, 1961 was not served to the assessee prior to the completion of the assessment proceedings.
The two-member bench consisting of Shri. Laxmi Prasad Sahu (Accountant Member) and Shri. George George K (Judicial Member) has set aside the assessment order. In conclusion, the appeal filed by the assessee was allowed, and the assessment order was set aside due to the non-service of the mandatory notice under section 143(2) of the Income Tax Act.
The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) has held that the oil wells are eligible for depreciation as plant and machinery. The assessee company, Joshi Technologies International Inc was engaged in exploration of crude oil from Dholka and Weevil oil fields. The crude was exported to ONGC Central Storage for further refining process. For the impugned assessment year, the assessee filed return of income declaring “Nil” total income.
The Division Bench of Annapurna Gupta, (Accountant Member) and Siddhartha Nautiyal, (Judicial Member) allowed the appeal filed by the assessee following the decision of assessee’s own case in which oil wells were eligible for depreciation as “plant and machinery”. The Bench directed AO to re-compute the depreciation on “oil wells” on opening WDV.
The Income Tax Appellate Tribunal (ITAT), Chandigarh Bench has invalidated the addition of rental income under the head “Income from Other Sources” wherein the assessee has already offered the same to tax under the head “Income from House Property.” The decision effectively strikes down the case of double taxation of the same income imposed on the assessee.
The two-member bench consisting of Aakash Deep Jain (Vice President) and Vikram Singh Yadav (Accountant Member) has directed to delete the addition made by CPC and confirmed by CIT(A) as it resulted in double taxation of the same income. The appeal of the assessee was allowed for statistical purposes.
The Raipur bench of the Income Tax Appellate Tribunal (ITAT) has held that delay in filing Form 10B can be condoned only when it was filed before the “due date” of filing of return of income under section 139 of the Income Tax Act, 1961
A single-member bench comprising Ravish Sood, Judicial Member observed that the assessee-trust does not cumulatively satisfy the set of conditions specified in Para 4(i) of the CBDT Circular No.10 (supra), and also had not filed any application for condonation of delay under section 119(2)(b) of the Income Tax Act as provided in Para 4(ii) of the said circular, therefore, there remains no occasion for condoning the delay involved in the filing of Form 10B by the assessee beyond the stipulated period. The ITAT upheld the declining of the assessee’s claim for exemption under Section 11 of the Income Tax Act, but at the same time, restored the matter to the file of the A.O with a direction to consider the assessee’s claim for deduction of expenses as debited in the income and expenditure account.
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the moratorium declared by National Company Law Tribunal, (NCLT) has an overriding effect on the tribunal in view of insolvency and bankruptcy code.
The two member Bench of Chandra Mohan Garg, (Judicial Member) and Pradip Kumar Kedia, (Accountant Member) dismissed the appeal filed by the revenue and the assessee was estopped to pursue the captioned appeal in the light of decision of the Supreme Court CIT Vs. Monnet Ispat and Energy Limited and also in the light of the overriding provision of the code. The Bench further observed that, “In view of the moratorium declared by NCLT, all proceedings in the court of law, Tribunal etc. cannot continue in view of the overriding provisions of Insolvency & Bankruptcy Code as recognized in Section 178(6) of the Act.”
The Chandigarh Bench of the Income Tax Appellate Tribunal (ITAT) recently revived the assessment order and held that it was not justified for the PCIT to invoke the revisionary powers under Section 263 of the Income Tax Act. This decision was based on the evidence in the record, which showed that the Assessing Officer had conducted a thorough enquiry and passed the assessment order with due application of mind.
The Bench consisting of a Vice President A D Jain and an Accountant Member Vikram Singh Yadav observed that it was amply clear that due enquiry was carried out by the Assessing Officer in the Assessee’s case during the scrutiny proceedings, where-after, the assessment order was passed with due application of mind on requisite verification of the facts and documentary evidence filed concerning the issue of cash deposits. Complete books of account were produced and mention of the same has been made in the reply. The Assessing Officer, thus, took a possible view which could not have been sought to be substituted by the PCIT on a mere change / difference of opinion. The Bench added that the PCIT was not justified in invoking the revisionary powers under Section 263 of the Income Tax Act, when, as evident from the record, due enquiry had been carried out by the Assessing Officer and the assessment order was passed with due application of mind by the Assessing Officer. Accordingly, the grievance sought to be raised by the Assessee is found to be justified. Therefore, the assessment order was revived. In result, the appeal filed by assessee was allowed.
The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) has held that the exemption under Section 11 of the Income Tax Act 1961 should not be denied merely on account of delay in furnishing the audit report in Form 10B.
The two-member Bench of Waseem Ahmed, (Accountant Member) and T.R. Senthil Kumar, (Judicial Member) dismissed the appeal filed by Revenue holding that the assessee was eligible for claim of exemption under Section 11 of the Income Tax Act referring to the decision in Social Security Scheme of GICEA.
The Mumbai bench of Income Tax Appellate Tribunal( ITAT) held that the disallowance under section 14A of Income Tax Act,1961 cannot exceeds the limit of exempted income.
The two member bench comprising of Vikas Awasthy( Judicial ) and Amarjit Singh( Accountant) held that the disallowance under section 14Aof Income Tax Act cannot exceed the amount of exempt income earned during the year while dismissing the appeal filed by the revenue.
The Jaipur bench of the Income Tax Appellate Tribunal (ITAT) held that the reference made to the Transfer Pricing Officer (TPO) under section 92CA of the Income Tax Act, 1961 due to omission of law without a saving clause for pending proceedings was invalid.
The two-member bench comprising of Sandeep Gosain (Judicial) and Rathod Kamlesh Jayantbhai (Accountant) held that the reference made to TPO under section 92CA of Income Tax Act,1961 was invalid and bad in law and hence consequential order passed by the transfer pricing officer and assessing officer was also not sustainable in the eyes of law and are liable to be quashed while allowing the appeal filed by the assessee.
The Amritsar Bench of the Income Tax Appellate Tribunal (ITAT) recently held that the investment of a co-operative society in another co-operative society’ s fixed deposit accounts are eligible for deduction under Section 80 P (2) (d) of Income Tax Act, 1961.
The Bench consisting of a Judicial Member Section 80P (2) (d) and an Accountant Member Dr. M. L. Meena observed that the appellant-assessee was a Co-operative Society and not a Co-operative Bank. The appellant assessee being a Co-operative Society, it is eligible for exemption on its entire interest income received from the investment with a Co-operative Bank as deductible under Section 80P (2) (d) of the Income Tax Act. The Bench further held that since, appellant society being a cooperative society and investment in FDR’s was made in another cooperative Society and hence, it is eligible for deduction under Section 80P (2) (d) of the Income Tax Act. In result, the appeal filed by the assessee was allowed and the addition of Rs. 54,00,164/- was deleted.
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that mere transaction through dematerialization account (DMAT) or sale of the shares on stock exchange could not be rebutted under Section 68 of the Income Tax Act 1961.
The two-member Bench of Shamim Yahya, (Accountant Member) and Anubhav Sharma, (Judicial Member) observed that no record was there to show that assessee/ appellant was able to discharge his burden under Section 68 of the Income Tax Act by rebutting the suspicious circumstances raised by the AO. The Bench held that mere transaction through DMAT account or sale of the shares on stock exchange could not be considered to be evidence to rebut the circumstances. The Bench dismissed the appeal filed by assessee as the modus operandi examined by the Tax Authorities remained unrebutted.
The Kolkata bench of Income Tax Appellate Tribunal( ITAT) held that the deduction under section 80P of Income Tax Act,1961 cannot be denied due to late filing of return of income (ROI).
The two member bench comprising of Sanjay Garg ( Judicial ) and Dr. Manish Borad (Accountant) held that order of the commissioner that the amendment in Section 143(1) made by Finance Act, 2021 which is not applicable for the present case. It was also held that the no hesitation in holding that the assessee cannot be denied the deduction under section 80P of the Income Tax Act on the ground that the return of income was not filed within the due date prescribed under section 139(1) of the Income Tax Act under proceedings made under section 143(1) of the Income Tax Act while allowing the appeal filed by the assessee.
The Surat bench of Income Tax Appellate Tribunal (ITAT) has recently held that deduction under Section 54B of Income Tax Act 1961 should not be disallowed if agricultural land is converted to Non- agriculture just before transfer of land to seller.
It was observed by the tribunal that nature of land was also converted from agriculture to non-agriculture purpose just before transfer of land and the same was considered as a transfer of agricultural land as far as the seller is concerned. Therefore the two member benches of Pawan Singh (Judicial Member) and Dr. Arjun Lal Saini, Accountant Member dismissed the appeal filed by the revenue.
The Delhi bench of Income Tax Appellate Tribunal (ITAT) ruled that the maintenance income received from building let out is treated as business income. The ITAT observed that the maintenance charges are no way connected to the rental income. Also, they are for the certain additional facilities provided to the tenants, which are unconnected to leasing out the tenanted premises. The bench further mentioned that a third party might have even supplied the amenities. Because the maintenance fees are unrelated to the rental income, they cannot be treated as income from house property since they are not included in the rental income.
The Two-member bench of G.S. Pannu, (President) and Saktijit Dey, (Judicial Member) held that maintenance income received by the assessee has to be treated as income from business.
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that no addition could be imposed based on evidence which had not been confronted to the assessee. A Single Bench of Chandra Mohan Garg, (Judicial Member) allowed the appeal filed by the assessee holding that the Assessing Officer was not correct and justified in making addition in the hands of assessee on the basis of document/books of accounts found & seized and statement of three persons including P. Mahalingam without confronting the same of the assessee.
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