This yearly digest analyzes all the ITAT stories published in the year 2023 at taxscan.in
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that the additional income tax on dividends paid by domestic companies to non-resident shareholders should be at rate prescribed under Section 115-O of Income Tax Act, 1961and not as per Double Taxation Avoidance Agreement (DTAA).
The two-member Bench of B R Baskaran, (Accountant Member) and Kuldip Singh, (Judicial Member) referred to Total Oil India Pvt. Ltd. vs. CIT & ors. which held that “Where dividend is declared, distributed or paid by a domestic company to a non-resident shareholder(s), which attracts Additional Income Tax (Tax on Distributed Profits) referred to in Sec.115-O of the Act, such additional income tax payable by the domestic company shall be at the rate mentioned in Section 115 O of the Act and not at the rate of tax applicable to the non-resident shareholder(s) as specified in the relevant DTAA with reference to such dividend income.” The Bench dismissed the cross objection filed by the assessee.
The Pune bench of Income Tax Appellate Tribunal (ITAT) has held that share capital credited through the journal entries are not unexplained share capital. The bench upheld the deletion of addition made under Section 68 of Income Tax Act, 1961.
The two member bench of R.S. Syal, (Vice President) and Partha Sarathi Chaudhury, (Judicial Member) allowed the appeal filed by the assessee and observed that transfer to share capital account was only by means of transfer entries, which, obviously, could not lead to addition under Section 68 of the Income Tax Act. Keyur Patel, counsel appeared for the revenue. Jayant Pendse, counsel appeared for the assessee.
The Visakhapatnam bench of the Income Tax Appellate Tribunal( ITAT) quashed the assessment order passed by the assessing officer for non-issuance of proper notice under section 148 of the Income Tax Act,1961.
The bench observed that the revenue had failed to establish that there was proper service of notice under sections 147 / 148 of the Income Tax Act before passing the assessment order. A single-member bench comprising Duvvuru Rl Reddy ( Judicial) held that the assessment order passed by the assessing officer was not as per the law and is liable to be quashed while allowing the appeal filed by the assessee.
The Pune bench of Income Tax Appellate Tribunal (ITAT) has held that engineering and development costs incurred for manufacture and sale of seats for passenger cars are revenue expenditure.
The Tribunal found that it is a case of payment in the nature of royalty for the use of such Technology, being an item of revenue nature After considering the facts the two member bench of R.S. Syal (Vice President) and Partha Sarathi Chaudhury (Judicial Member) allowed the appeal filed by the assessee and deleted the disallowance made by the assessing officer. Keyur Patel appeared for the revenue and Dhanesh Bafna appeared for the assessee.
The Jaipur bench of Income Tax Appellate Tribunal (ITAT) has held that deduction under Section 54 F Income Tax Act, 1961 should not be denied by reason of sale amount not deposited in Capital Gain Account.
The bench determined that the assessee has invested the entire actual sales consideration received by him in the purchase and construction of new house in accordance with the provision of section 54F(1) Income Tax Act thereafter the provision of section 50C Income Tax Act has not been applicable . After considering the facts, a single member bench of Sandeep Gosain, (Judicial Member) allowed the appeal filed by the assessee.Monisha Choudhary , counsel appeared for the revenue. Mahendra Gargieya, counsel appeared for the assessee.
The Mumbai bench of the Income Tax Appellate Tribunal ( ITAT) upheld the addition made by the assessing officer to the business income of invalid purchases on the ground of the nonsubmission of necessary documents during assessment proceedings.
The two-member panel comprising Kuldip Singh (Judicial) and Gagan Goyal (Accountant) held that the addition made by the assessing officer of bogus purchase was as per the law and sustainable while dismissing the appeal filed by the assessee.
The Chandigarh Income Tax Appellate Tribunal (ITAT) held that the trust activities of sale of plots, flats and commercial booths and also its income earned form non construction fee, transfer fee, penal interest and compounding fees are charitable in nature and thus allowed exemption under Section 11 of the Income Tax Act,1961.
The Bench comprising of Shri A.D. Jain, Vice President and Shri Vikram Singh Yadav, Accountant Member held that the second proviso to Sections 2 (15) and 13 (8) of the Income Tax Act are not applicable to this case, and so, the aggregate receipts of the assessee trust from its activities of sale of plots, flats and commercial booths and also its income earned form non-construction fee, transfer fee, penal interest and compounding fee, etc., are held to be entitled for exemption under Section 11 of the Income Tax Act.
The Chandigarh bench of the Income Tax Appellate Tribunal ( ITAT) held that the additional income which was not derived from the unexplained sources should be taxable at normal tax rates as same as that of the business income.
A single-member bench comprising Sanjay Garg (Judicial) directed the assessing officer to re-adjudicate the matter for the calculation of tax amount on the surrendered income of the assessee at normal rates as applicable to the business income while allowing the appeal filed by the assessee.
The Pune bench of the Income Tax Appellate Tribunal ( ITAT) directed the assessing officer to re-adjudicate the rejection of the claim for deduction of loss on sale of shares due to invalid filing of revised return of income(ROI).
The two-member bench comprising Inturi Rama Rao (Accountant) and S. S. Viswanethra Ravi (Judicial) held that the assessing officer had to re-examine the validity of the revised return of income filed by the assessee company for claiming the loss arising on the sale of shares while allowing the appeal filed by the assessee.
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has upheld the disallowance as the fee paid for late filing of professional tax return was penal in nature.
The two-member Bench of Prashant Maharishi, (Accountant Member) and Kuldip Singh, (Judicial Member) upheld the disallowance made by the Commissioner of Income Tax Appeals (CIT(A)) and set aside the impugned order. The Bench observed that it was an accepted notion that the penalty or fine levied on the assessee was allowed as expenditure under provisions of Section 37(1) of the Income Tax Act only on the basis of their nature, whether such fine or penalty was of compensatory nature or penal nature, here the fee was penal in nature and liable to be disallowed.
The New Delhi bench of the Income Tax Appellate Tribunal ( ITAT) directed the assessing officer to re-adjudicate the rejection of registration under section 12AA of the Income Tax Act,1961 due to the non-falling of the trust within the ambit of ‘charitable purpose’.
The two-member bench comprising C.M. Garg (Judicial) and M. Balaganesh (Accountant) directed the assessing officer to re-adjudicate the matter to grant registration under section 12AA of the Income Tax Act to the assessee trust while allowing the appeal filed by the assessee.
The New Delhi bench of the Income Tax Appellate Tribunal ( ITAT) directed the assessing officer to re-adjudicate the assessment order made on the ground of non deposition of Tax Deducted at Source (TDS) in the books of account.
The two-member panel comprising C.M. Garg (Judicial ) and M. Balaganesh (Accountant) directed the assessing officer to re-adjudicate the matter by applying the second proviso to section 201(1) of the Income Tax Act which had been held to be retrospective in operation while allowing the appeal filed by the assessee.
The Indore bench of the Income Tax Appellate Tribunal (ITAT) directed the assessing officer to re-adjudicate the assessment order passed without giving the sufficient opportunity of hearing to the assessee.
The two-member bench comprising Vijay Pal Rao ( Judicial) and B.M. Biyani ( Accountant) directed the assessing officer to re-adjudicate the matter by giving sufficient opportunity to the assessee for presenting his case while allowing the appeal filed by the assessee.
The Indore bench of the Income Tax Appellate Tribunal (ITAT) directed the assessing officer to re-adjudicate the disallowance made on the ground of utilization of expenses for personal use or nonbusiness purposes.
The two-member bench comprising Vijay Pal Rao ( Judicial ) and B.M. Biyani ( Accountant) directed the assessing officer to delete the entire disallowance made by the authorities while allowing the appeal filed by the assessee.
The New Delhi bench of the Income Tax Appellate Tribunal (ITAT) held that no addition can be made on any unaccounted share capital when it was already taxed under the category of ‘source of income’.
The two-member bench comprising N.K.Billaiya (Accountant) and Anubhav Sharma (Judicial) directed the adjudicating authorities to re-adjudicate the matter while allowing the appeal filed by the revenue.
The New Delhi bench of the Income Tax Appellate Tribunal (ITAT) directed the assessing officer to delete the interest charged under section 201(1A) of the Income Tax Act,1961 on the ground of delay in remittance of Tax Deducted at source (TDS).
The two-member bench comprising C.M. Garg (Judicial) and M. Balaganesh (Accountant) held that the reason stated by the assessee was not false and the changeability of interest under section 201(1A) of the Income Tax Act, as rightly pointed out by the revenue was automatic, still the same cannot be levied on the assessee in the peculiar facts and circumstances of the instant case, as the interest liability had been fastened on the assessee for reasons beyond the control of the assessee. The bench also directed the assessing officer to delete the interest charged under section 201(1A) of the Income Tax Act for the alleged default while allowing the appeal filed by the assessee.
The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) deleted the additions made on the interest receipt without having jurisdiction by the Commissioner of Income Tax (Appeals) [(CIT(A)].
The two members of Rajpal Yadav, (Vice-President) and Rajesh Kumar (Accountant Member)allowed the appeal of the assessee and deleted the addition made by the CPC. Ranu Biswas appeared for the revenue. Abhishek Bansal appeared for the assessee.
The Pune bench of Income Tax Appellate Tribunal (ITAT) has held that assessment order passed without Document Identification Number (DIN) is violation of Central Board Direct Tax (CBDT) circular 2019. Therefore, the bench declared the order void ab initio.
The two members of Rajpal Yadav, (Vice-President) and Rajesh Kumar, (Accountant Member)observed that the assessment order bears no DIN in the body of the assessment. Thus, the order undisputedly was communicated in violation of Para-2 of CBDT Circular. Further, the Revenue failed to bring on record any material showcasing that the case of the assessee falls within any of the five exceptional circumstances provided in Para-3 and accompanying therewith further evidentiary documents establishing the regularisation of initial manual issuance in terms Para-5 thereof. The Counsel Prashant Gadekar appeared for the revenue and Percy Pardiwalla appeared for the assessee.
The Lucknow bench of Income Tax Appellate Tribunal (ITAT) has held that cash deposited through bank accounts of companies during the demonetisation period are not unexplained cash.
The two members of Sudhanshu Srivastava, (Judicial Member) and Shri Anadee Nath Misshra, (Accountant Member) restored the issue to the file of the respective Assessing Officers with the direction to pass de nono orders in accordance with law, after providing reasonable opportunities to the respective assessees and after due verification of facts and circumstances.
The Bangalore bench of the Income Tax Appellate Tribunal ( ITAT) held that no audit can be made under section 44AB of the Income Tax Act,1961 when the assessee has not been maintained the books of account.
The two-member bench comprising Chandra Poojari (Accountant) and Beena Pillai (Judicial) held that if the assessee has not maintained the books of accounts, the penalty proceedings cannot be initiated under section 271A of the Income Tax Act. Additionally, the bench held that the penalty imposed by the assessing officer was not as per the law and is liable to be deleted while allowing the appeal filed by the assessee.
The Bangalore Bench of Income Tax Appellate Tribunal (ITAT) has directed re-adjudication of 85% accumulation claim disallowed by the Assessing Officer (AO) on the ground of no specific purpose for which such accumulation was mentioned in Form 10.
The two member bench of Chandra Poojari (Accountant Member) and George George K (Judicial Member) restored the matter to the file of CIT(A) for readjudication.
The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) deleted the penalty imposed under section 272A(1)(d) of the Income Tax Act,1961 without giving proper opportunity to the assessee to prove the reason by the assessing officer.
The two-member panel comprising Chandra Poojari (Accountant) and Beena Pillai, Judicial held that the assessee was not guilty of apparent conduct to comply with the notice under section 142(1) of the Income Tax Act and thus it was not a fit case for levy of penalty under section 272A(1)(d) of the Income Tax Act and are liable to be deleted while allowing the appeal filed by the assessee.
The Ahemdabad bench of Income Tax Appellate Tribunal (ITAT) held that the onus on the assessee of proving the genuineness of long term capital gains not being bogus is not discharged by merely filing documentary evidence and hence confirms the addition made on account of bogus long term capital gains under Section 68 of Income Tax Act,1961.
The bench stated that holding the burden in the said cases where the facts showed phenomenal and fanciful rise in shares in a short span of time and thereafter steep fall, all unsupported by the financials of the companies, was heavy and could not be said to be discharged by filing mere documentary evidences of sale and purchase of shares. The Tribunal confirmed the order of CIT(A) and allowed the addition under Section 68 of Income Tax Act made on account of bogus long term capital gains claimed by the assessee.
The Surat Bench of Income Tax Appellate Tribunal (ITAT) has held that the Internet subscription expenses incurred for members of housing society are not eligible for deduction under Section 57 of Income Tax Act, 1961.
The single member bench of Pawan Singh, (Judicial Member ) observed that under Section 57 of Income Tax Act deduction is to be made in respect of expenditure incurred solely for the purpose earning such income, provided the expenditure is not capital expenditure or personal in nature. Therefore, the bench dismissed the appeal filed by the assessee
The Cochin Bench of the Income Tax Appellate Tribunal (ITAT) has ruled that the imposition of late fees under section 234E of the Income Tax Act of 1961 should not apply to cases where the filing of Tax Deducted at Source (TDS) or Tax Collected at Source (TCS) returns was not done prior to the amendment of Section 200A of the Income Tax Act.
The two member bench of Sanjay Arora (Accountant Member ) and Aby T. Varkey (Judicial Member) deleted the levy of late ‘fee’ under Section 234E of the Income Tax Act being of Quarter-2 and Quarter-4 of the assessment year 2013-14 being prior to 01.06.2015.
The Cochin Bench of Income Tax Appellate Tribunal (ITAT) has held that the Co-operative department auditor failed to furnish audit report of account within the specified date under section 44AB of Income Tax Act, 1961.
The two member bench of Sanjay Arora (Accountant Member ) and Aby T. Varkey (Judicial Member) observed the assessee has not been able to give any ‘reasonable cause’ for not levying a penalty under Section 271B of the Income Tax Act for failure to audit its account.
The Bangalore Bench of Income Tax Appellate Tribunal (ITAT) held that, a delay of 10 days in filing return cannot vitiate the Foreign Tax Credit (FTC) claimed to the extent of income earned outside India hence restored the matter to Assessing Officer (AO) for de novo consideration.
The Tribunal clarified that if the assessee had earned salary income outside India and declared it for taxation in India, then the assessee would be eligible to claim Foreign Tax Credit (FTC) for that portion. However, since there is no clear information available in the records regarding whether the entire salary income was earned in India or outside India, further investigation is required to determine the extent of FTC entitlement. Therefore,the ITAT bench restored the matter to the file of the AO for denovo consideration and directed the assessee to file the necessary evidences / documents to prove its case to the extent of FTC credit claimed.
The Chandigarh Bench of Income Tax Appellate Tribunal (ITAT) held that non compliance to the order of Commissioner of Income Tax (Appeals) [CIT (A)] during the entire proceedings cannot be the sole reason to allow addition on income tax return filed. Consequently, the ITAT overturned the previous order and reinstated it for a fresh assessment.
The ITAT Bench comprising of Sudhanshu Srivastava , Judicial Member and Vikram Singh Yadav, Accountant Member observed that the CIT(A) has passed the ex-parte order as according to it, the assessee was non-compliant during the whole proceedings before it, therefore one more opportunity should be given to the assessee to protect the interest of justice as the CIT(A) has not decided the appeal on merits.
Therefore, the Tribunal overturned the decision made by the Commissioner of Income Tax (Appeals) [CIT (A)] and returned the appeal back to the CIT (A) with instructions to reevaluate the case, granting the assessee a fair and ample opportunity to present their arguments. The Tribunal also instructed the assessee to cooperate fully throughout the proceedings.
The Chandigarh bench of the Income Tax Appellate Tribunal (ITAT) held that the loss incurred by embezzlement is an admissible deduction.
The two-bench member comprising of Sudhanshu Srivastava (Judicial member) and Vikram Singh Yadav (Accountant member) affirmed the order of the Commissioner of Income Tax (Appeals) and dismissed the ground by the Department. Therefore, the appeal of the assessee stands partly allowed and the appeal of the Department stands dismissed.
The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) directed the assessing officer to re-adjudicate the rejection of a claim on loss of sale of discarded assets due to invalid filing of Income Tax Returns.
The two-member bench comprising Chandra Poojari (Accountant) and Beena Pillai (Judicial) directed the Commissioner of Income Tax (Appeals) to re-adjudicate the matter on merit after giving the opportunity of hearing to the assessee while allowing the appeal filed by the assessee.
The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) directed the assessing officer to re-adjudicate the addition made on the ground of non-reply of notice issued during the assessment proceedings.
The two-member bench comprising Chandra Poojari (Accountant) and Beena Pillai ( Judicial) held that the assessing officer did not give sufficient opportunity to prove the reason of the assessee during the assessment proceedings. Additionally, the bench directed the assessing officer to re-adjudicate the matter to pass an order after giving the opportunity of hearing to the assessee while allowing the appeal filed by the assessee.
The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) deleted the penalty imposed by the assessing officer under section 271(1)(c) of the Income Tax Act,1961 on the ground of concealment of income in return of income (ROI).
A single-member bench comprising Suchitra Kamble (Judicial) held that the penalty imposed by the assessing officer for the concealment of income or inaccurate particulars of income under section 271(1)(c) of the Income Tax Act was not as per the law and are liable to be deleted while allowing the appeal filed by the assessee.
The Income Tax Appellate Tribunal (ITAT) Delhi Bench upheld the disallowance of belated payment of employees’ contribution to provident fund and ESIC.
The two-member bench comprising Chandra Mohan Garg (Judicial Member) and Pradip Kumar Kedia (Accountant Member) affirmed the disallowance of employees’ contributions to Provident Fund/ESIC under Section 36(i)(va) in conjunction with Section 43B of the Income Tax Act.
The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) directed the assessing officer to re-adjudicate the rejection of the claim of deduction under section 80-IA of the Income Tax Act,1961 due to delay in filing the Income Tax Returns.
The two-member bench comprising Chandra Poojari (Accountant) and George George K (Judicial) directed the assessing officer to re-adjudicate the matter for allowing the claim of deduction under section 80-IA of the Income Tax Act while allowing the appeal filed by the assessee.
The Kolkata bench of Income Tax Appellate Tribunal (ITAT) held that Income received from the unexplained cash under Section 68 of the Income Tax, 1961 Act can’t be claimed as an exemption under Section 69C of the Income Tax Act, 1961.
The two-member bench consisting of Rajpal Yadav (Vice President) and Girish Agrawal (Accountant Member) concluded that the Revenue Authorities were justified in rejecting the assessee’s claim and making the necessary additions. As a result, the appeal filed by the assessee was dismissed.
The Chandigarh Bench of the Income Tax Appellate Tribunal (ITAT) has deleted the disallowance made under Section 80P of the Income Tax Act, 1961 on failure to file return of income in due date prior to amendment of section 143(1)(a)(v) of the Income Tax Act.
The two-member bench comprising A.D. Jain (Vice President) and Vikram Singh Yadav (Accountant Member) decided to revoke the disallowance and upheld the appeal filed by the concerned parties.
The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) held that the interest income earned from the scheduled banks would not be entitled to deduction under section 80P(2)(a)(i) or 80P(2)(d) of the Income Tax Act,1961.
A single-member bench comprising George George K (Judicial) held that interest income earned from scheduled banks was not entitled to the claim of deduction either under section 80P(2)(a)(i) or 80P(2)(d) of the Income Tax Act and directed re-adjudication while allowing the appeal filed by the assessee.
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