This yearly digest analyzes all the ITAT stories published in the year 2023 at taxscan.in
The Bangalore Bench of Income Tax Appellate Tribunal (ITAT) has held that the interest charged under Section 234C of the Income Tax Act, 1961 against EY global Delivery Services India should be levied on the returned income and not upon the assessed income.
The Bench further directed the Assessing Officer (AO) to restrict the levy of interest under Section 234C of the Income Tax Act to the returned income instead of the assessed income. Similar issue has been decided in Strides Pharma Science Ltd. vs Dy. Commissioner of Income Tax which held that, “As per the provisions of section 234C of the Act, interest is levied either on failure to pay advance tax by the assessee or on shortfall in payment of advance tax as compared to tax due on returned income. While remitting the matter to the department for re-computation of interest, the Tribunal held that “In the present case, the dispute is whether the interest under section 234C of the Act would be calculated on “returned income” or on “assessed income”
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the penalty under Section 271(1)(c) of the Income Tax Act 1961 could not be levied merely because the claim was not accepted or not found to be acceptable.
The two-member Bench of Chandra Mohan Garg, (Judicial Member) and Pradip Kumar Kedia, (Accountant Member) deleted the penalty holding that “Assessing Officer dismissed claim of expenditure of assessee on account of violation of section 40A(3) of the Income Tax Act, without raising any other allegation or ground of dismissal and as the assessee disclosed and recorded entire claim on medical emergencies in its books of accounts then neither it can be alleged that assessee has furnished inaccurate particulars of income or has concealed particular of its income.”
The Delhi Bench of Income Tax Act has held that the receipts from centralised service income by Radisson Hotels international would not be taxable as fees for technical services (FTS) or fees for included services (FIS) under Article Double Taxation Avoidance Agreement (DTAA).
The Bench further observed that, “Rather than centralised service income being ancillary and incidental to royalty income, in reality, it is a reverse situation. In such a scenario, it cannot be said that centralised service income, being ancillary and incidental to royalty income, would fall under Article 12(4)(a) of the Tax Treaty.”
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) held that capital gains cannot be taxable when the transfer of land took place in the previous year of the assessment proceedings.
The two-member bench comprising Prashant Maharishi (Accountant) and Sandeep Singh Karhail (Judicial) held that land was transferred by the assessee along with the other 17 co-owners to the builder/developer in the previous year and therefore, capital gains, if any, thereon cannot be taxed in the year of assessment while allowing the appeal filed by the assessee.
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) held that the deposition of Employees contribution to Provident fund (PF) or Employee State Insurance (ESI) after the due date would trigger disallowance under section 36(1)(va) of the Income Tax Act,1961.
The two-member panel comprising B.R. Baskaran (Accountant) and Rahul Chaudhary (Judicial) held that disallowance made by the assessing officer while processing the return of income under Section 143(1) of the Income Tax Act was as per the law while dismissing the appeal filed by the assessee.
The Bangalore bench of the Income Tax Appellate Tribunal ( ITAT) directed the assessing officer to re-adjudicate the assessment order without giving sufficient opportunity to the assessee.
The two-member bench comprising Chandra Poojari (Accountant) and Beena Pillai (Judicial) directed the assessing officer to re-adjudicate the matter by giving an opportunity of hearing to the assessee while allowing the appeal filed by the assessee.
Quashing the Income Tax addition,the Delhi Bench of Income Tax Appellate Tribunal (ITAT) held that the difference of service tax return and the revenue that occured due to the wrong exchange rates applied to export income transaction while filing the service tax return is a ‘mere mistake’ and not ‘suppression of income’ by the assessee.
The Tribunal held that the difference between service tax return and the revenue was occurred due to the wrong exchange rate applied to export income transaction while filing the service tax return, which being a genuine mistake and that the Department has not alleged or proved any mens- rea on the part of the assessee who has also tried to revise the service tax return.
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) held that ‘Reasonable Cause’ needs to be substantiated for failure of filing of return in order to claim exemption to penalty under Section 271F of the Income Tax Act 1961 and ignorance that the income earned from the partnership firm is liable to tax is not a reasonable cause for late filing of Income Tax Returns (ITR).
The Tribunal stated that Ignorantia juris non excusat which means “ignorance of law is no excuse” holds applicable not only to a common man but also to a person who has to hold the integrity of the law of land. ITAT drew the inference that the reason stated by the assessee for the failure in filing the ITR is not a ‘reasonable cause’ nor is it sufficient to delete the impugned penalty levied by the A.O. and confirmed by the CIT (A), hence the assessee is liable to pay the penalty.
The Mumbai bench of Income Tax Appellate Tribunal (ITAT) has held that lease rental income received from letting out of school buildings with amenities should be treated as Income from House Property.
The two- members bench Vikas Awasthy (Judicial Member) and S. Rifaur Rahman (Accountant Member)observed that the assessee declared the income earned from letting of school building with amenities under the Head `income from House Properties’ from assessment year 2009-10. This issue was decided by the CIT(A) and ITAT in favour of the assessee till the assessment year 2012-13 Therefore, the bench allowed the appeal filed by the assessee.
The Chennai Bench of Income Tax Appellate Tribunal (ITAT) has held that no disallowance on a claim of capital loss is computed after the transfer of possession of the property.
The two-member bench of Durga Rao (Judicial Member) And Manjunatha. G (Accountant Member) observed that since, the possession of the property has been handed over to the buyer in the financial year 2014-15 relevant to the assessment year 2015-16, in our considered view, the transfer has been defined under Section 2(47)(v) r.w.s.53A of Transfer of Property Act, 1882, took place in the assessment year 2015-16 only. Therefore, the bench allowed the appeal filed by the assessee.
The Delhi bench of Income Tax Appellate Tribunal (ITAT) has recently quashed assessment framed in the name of an artificial juridical person instead of local authority.
The single member bench of Kul Bharat, (Judicial Member) held that the AO could not have changed the status from ‘Local Authority’ to ‘Artificial Juridical person’ and therefore the assessment framed by the AO is liable to be cancelled.
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) quashed the order of the assessing officer (AO) for rejecting the claim of long-term capital gain (LTCG) under section 10(38) of the Income Tax Act,1961 on grounds of non-submission of documents.
The two-member panel comprising Vikas Awasthy(Judicial) and S Rifaur Rahman (Accountant) held that the Commissioner’s exercise of the power of enhancement made an addition in respect of business income by disallowing the losses holding them to be fictitious and bogus and also made an addition in respect of the Long-Term Capital Gains which otherwise are exempted under the provisions of section 10 (38) of the Income Tax Act. Thus, liable to be deleted while allowing the appeal filed by the assessee.
The Chennai bench of Income Tax Appellate Tribunal (ITAT) has quashed the assessment order passed during the Covid -19 period without providing proper opportunity to the assessee.
It was observed by the tribunal that the CIT(A) has failed to grant a proper opportunity to the assessee since the assessee was unaware about the NFAC scheme/hearing and the concerned staff, auditor and counsel who were handing all the appeal papers were passed away in the Covid 19 period and the assessee became handicapped to approach the NFAC on the hearing.
As a result, the first appellate order was overturned by the two-member bench of V. Durga Rao (judicial member) and Manoj Kumar Aggarwal (accountant member), who also directed the CIT(A) to offer the assessee one more chance to be heard.
The Amritsar Bench of Income Tax Appellate Tribunal (ITAT) held that the appeal order is not maintainable for violation of Section 249(4) of Income tax Act, 1961 for non-payment of the admitted tax.
The Tribunal remitted back the matter to the Commissioner of Income Tax (Appeal) for fresh adjudication of the issue in regards to contravention of Section 249(4) of the Income Tax Act and allowed the appeal for statistical purposes.
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) directed the Assessing Officer (AO) to re-adjudicatethe addition made under section 115BBE of the Income Tax Act, 1961 on the ground of late filing of Return of Income (ROI).
The two-member bench comprising Prashant Maharishi (Accountant) and Kavitha Rajagopal (Judicial) held that section 115BBE of the Income Tax Act applies only when sections 68, 69, 69A, 69B, 69C, and 69D of the Income Tax Act are invoked and here it does not come under the mandate of section 115BBE of the Income Tax Act. Furthermore, the assessee’s appeal was allowed since the AO’s addition was erroneous, and the AO was ordered to re-adjudicate.
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) directed the Assessing Officer (AO) to delete the addition made under section 68 of the Income Tax Act,1961 based on mere suspicion.
The two-member bench comprising B.R Baskaran (Accountant) and Sandeep Singh Karhail (Judicial) held that the AO had not given any adverse comments or drawn adverse inferences on the documentary evidence submitted by the assessee and the addition made under section 68 of the Income Tax Act was merely on presumptions, suspicion, surmises, and conjectures disregarding the direct evidence placed on record and are liable to be deleted. While allowing the assessee’s appeal, the bench further instructed the AO to remove the addition made in accordance with Section 68 of the Income Tax Act.
The Pune Bench of Income Tax Appeal Appellate Tribunal (ITAT) held that where the stamp value of the immovable property is disputed by the assessee and where the assessee asserts that the stamp value is excessive on the ground mentioned in Section 50C(2) of Income Tax Act,1961, the Assessing Officer (AO) may refer the valuation of such property to the Departmental Valuation Officer (DVO).
The bench directed to set aside the impugned order and the matter was remitted back to the file of the AO for making a reference to the Departmental Valuation Officer (DVO) for determining the value of the property afresh. Thereafter, the computation of the capital gain will be done by the AO after allowing a reasonable opportunity of hearing to the assessee.
The Bangalore Bench of Income Tax Appellate Tribunal (ITAT) has allowed foreign travel expenses incurred for obtaining charitable donations.
The two-member Bench of Chandra Poojari, (Accountant Member) And George George K, (Judicial Member) observed that the expenditure incurred was for obtaining the donations from the various donors who were stationed abroad and the utilisation of the donation was also for the objects of the Trust.
The Bench allowed the appeal filed by the assessee and held that since the donations received were utilised for charitable purpose which was never doubted by the AO, the foreign travel expenses incurred for obtaining the above said donations should be allowed as an expenditure.
The Income Tax Appellate Tribunal (ITAT), Mumbai Bench, has held that the cash deposit made by the assessee with substantial proof of source shall not be treated as Unexplained Cash Credit under Section 68 of the Income Tax Act, 1961.
The two-member bench consisting of Shri Prashant Maharishi (Accountant Member) and Shri Pavan Kumar Gadale (Judicial Member), having found no merit in the revenue’s appeal, upheld the order of CIT(A) and dismissed the appeal filed by the revenue against the assessee.
The Ahmedabad bench of Income Tax Appellate Tribunal (ITAT) has upheld the addition made by the assessing officer on account of trading in penny stock shares of a shell company.
The two member bench of Annapurna Gupta, (Accountant Member) and Madhumita Roy, (Judicial Member) observed that no one appeared for assessee and did not appear while several chances were given to assesee. The bench upheld the addition made by the lower authority on account of trading in Penny Stock of Vax Housing Finance Corporation Ltd.and confirmed it was a sham transaction.
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has quashed the reopening of the assessment based on vague and innocuous information regarding accommodation entry provided to the entry operators.
The two-member bench of Chandra Mohan Garg (Judicial Member) and Pradip Kumar Kedia(Accountant Member) allowed the appeal filed by the assessee. Om Prakash, counsel appeared for the revenue. No one appeared for the assessee while the appeal was considered before the tribunal.
The Chennai bench of Income Tax Appellate Tribunal (ITAT) has recently held that no penalty should be levied under Section 270A of Income Tax Act 1961 on inadvertently reported annual value of house property by an accountant.
The two member benches of Mahavir Singh, (Vice President) and Manjunatha. G, (Accountant Member ) deleted thepenalty levied under Section 270A of Income Tax Act towards under reporting of income in respect of annual value of house property.
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) upheld the disallowance made by the assessing officer on payment of interest expenditure under section 201(1A) of the Income Tax Act,1961 due to late payment of Tax Deducted at Source (TDS).
The two-member bench comprising Prashant Maharishi (Accountant) And Kavitha Rajagopal (Judicial) held that disallowance of interest expenses paid under section 201(1A) of the Income Tax Act on late payment of TDS was penal and not compensatory and upheld the disallowance made by the assessing officer while dismissing the appeal filed by the assessee.
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) quashed the penalty imposed under section 271(1)(c) of the Income Tax Act,1961 by the assessing officer without the application of mind.
The two-member bench comprising Vikas Awasthy (Judicial) and Amarjith Singh (Accountant) held that the notice issued by the assessing officer under section 274 of the Income Tax Act was defective and the penalty imposed under section 271(1)(c) of the Income Tax Act was not as per the law and are liable to be quashed while allowing the appeal filed by the assessee.
The Rajkot bench of the Income Tax Appellate Tribunal (ITAT) directed re-adjudication to the assessing officer for the rejection of the claim of deduction under section 54F of the Income Tax Act,1961 due to late filing of revised return of income (ROI).
The two-member bench comprising Annapurna Gupta (Accountant) and Madhumita Roy (Judicial) held that the assessee was entitled to get the deduction claimed under section 54F of the Income Tax Act and directed the assessing officer to re-adjudicate the matter for allowing the deduction to the assessee while allowing the appeal filed by the assessee.
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has deleted the disallowance of unamortized brokerage expense as the revised return filed within the time limit prescribed under Section 139(5) of the Income Tax Act, 1961 was a valid return.
The two-member Bench of B.R. Baskaran (Accountant Member) and Pavan Kumar Gadale (Judicial Member) dismissed the appeal filed by the revenue relying upon decision rendered by Supreme Court in Goetze P Ltd, which held that the assessee could make fresh claim by filing revised return of income.
The ITAT bench further held that even if the revised return of income was not filed, the tribunal could admit any fresh claim. In the instant case, the assessee had claimed the deduction of unamortized brokerage expenses through revised return so the same was admissible.
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has deleted the additions made under Section 56(2) (vii)(b) of the Income Tax Act 1961 holding that the stamp value was less than the agreement value.
The two-member Bench of Prashant Maharishi (Accountant Member) Rahul Chaudhary (Judicial Member) allowed the appeal and deleted the addition made under Section 56(2)(vii)(b) holding that as the stamp value as was less than the agreement value.
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has allowed the deduction holding that the Employees Stock Award Plan (ESOP) expenses could be claimed in the year of vesting.
The Two-member Bench of B.R. Baskaran (Accountant Member) and Pavan Kumar Gadale (Judicial Member) dismissed the appeal filed by the revenue and allowed the deduction in respect of Employee Stock Option Plan (ESOP) expenses referring to the decision in Biocon Ltd which held that the deduction could be claimed in the year of vesting.
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has disallowed the education expenditure under Section 37(1) of the Income Tax Act 1961 as the assessee failed to substantiate the expenditure had incurred exclusively for the purpose of business.
The two-member Bench of B.R. Baskaran, (Accountant Member) and Sandeep Singh Karhail, (Judicial Member) dismissed the appeal filed by the assessee as no sufficient basis was brought on record to show how the financial support provided by the assessee to its Director to pursue MSc in International Business Management was wholly and exclusively for assessee’s business purpose and has a direct relationship with the assessee’s business activity. The bench affirmed the disallowance of the Director’s education expenditure under Section 37(1) of the Income Tax Act.
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