This yearly digest analyzes all the ITAT stories published in the year 2023 at taxscan.in
The Income Tax Appellate Tribunal (ITAT) Hyderabad Bench upheld the penalty levied under section 271(1)(b) of Income Tax Act, 1961 due to non compliance of notice.
It was also observed that the assessee, despite several opportunities, had not filed any reply before the Assessing Officer. Thus once there is deliberate or willful default on the part of the assessee then the penalty should be imposed. Therefore, the two member bench of the tribunal comprising R.K. Panda (Accountant Member) and Laliet Kumar, ( Judicial Member) upheld the penalty imposed due to non compliance of notice.
The Income Tax Appellate Tribunal (ITAT) Bangalore Bench held that payment of bonus made to employees before the due date of filing return of income under Section 139(1) of Income Tax Act, 1961 are sufficient for compliance of section 43B of Income Tax Act.
The two member bench of the tribunal comprising Dr. B.R.R.Kumar, (Accountant Member) and Kul Bharat, (Judicial Member) observed that since the amount of bonus to employees has been paid before due date of filing of return of income under Section 139(1) of the Income-Tax Act and this is sufficient compliance of provisions of section 43B of the Income-Tax Act.
The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT), held that the assessee has discharged the onus cast under Section 68 of the Income Tax Act, 1961 by Furnishing Identity and Creditworthiness of Parties and directed the Assessing Officer (AO) to delete the income tax addition.
The Tribunal held that the assessee has discharged the onus cast under Section 68 of the Income Tax Act with respect to receipt of share application money from Ramesh Vardhan. Therefore, we hereby direct the AO to delete the addition made by him.
The Income Tax Appellate Tribunal (ITAT) Pune Bench, confirmed the income tax addition of 6 Lakhs given for the admission in college is not donation to charitable trust and thus is taxable.
The Bench comprising of R.S. Syal, Vice President, observed that it is clear from the letter of Ms. Suprabha D. Galakatu, who gave specifically complete narration of the circumstances of entering the college, that she did payed a sum of Rs.6.00 lakh to the assessee but that was in lieu of admission of her sister’s son, Mr. Soham Deshmukh and not as donation.
The Income Tax Appellate Tribunal (ITAT) Delhi Bench ruled that penalty under Section 272(1)(d) of Income Tax Act, 1961 should not be levied if the assessee has reasonable cause for non-compliance of statutory notices.
The two member bench of the tribunal comprising Dr. B.R.R.Kumar, (Accountant Member) and Kul Bharat, (Judicial Member) determined that there was a reasonable cause for non-compliance of the statutory notices sent by the Department to the assessee. Therefore, the bench allowed the appeal.
The Income Tax Appellate Tribunal (ITAT) Delhi bench dismissed appeal filed by assessee as defective due to continuous absence by assessee during appellate proceedings.
The two member bench of the tribunal comprising Kul Bharat (Judicial Member) dismissed the appeal as defect due to continuous absence by assessee during appellate proceedings. Om Prakash, appeared for the revenue before the tribunal.
The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) held that the income received from letting out of the property on a commercial basis qualifies as business income.
The two-bench member comprising of Annapurna Gupta (Accountant member) and Siddhartha Nautiyal (Judicial member) are in view that the Commissioner of Income Tax (Appeal) has erred in facts and in law in holding that the income qualifies as business income of the assessee. Thus, the appeal of the Department is dismissed.
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) held that the internal Comparable Uncontrolled Price Method (CPU) is the most appropriate method for undertaking the determination of the arm’s length price.
The two-bench member comprising of C.N. Prasad (Judicial member) and B.R.R Kumar (Accountant member) held that the internal CUP is the most appropriate method for undertaking the determination of Arm’s Length Price. Hence, it was directed that the economic analysis be conducted afresh by taking into consideration the like with the like and following the right foreign currency conversion. The Assessing Officer was directed to accord reasonable and accurate adjustments to Product characteristics, contractual terms, risk incurred, and geographical factors.
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) held that interest received from a loan given from the overdraft is not taxable hence deleted the additions.
The two-bench member comprising of Pavan Kumar Gadale (Judicial member) and Rifaur Rahman (Accountant member) held that the action of the Assessing Officer in making an addition of deemed interest is not tenable and we set aside the order of the Commissioner of Income Tax (Appeal) and allow the ground of appeal in favour of the assessee. Therefore, the appeal filed by the assessee is partly allowed.
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) held that the disallowances cannot be made under Section 14A of the Income Tax Act, 1961 earnings from the exempt income hence deleted the additions made in income.
The two-bench member comprising of Pavan Kumar Gadale (Judicial member) and Rifaur Rahman (Accountant member) held that the Commissioner of Income Tax (Appeal) had relied on the facts, judicial decisions, and provisions of the Act in respect of disallowance under Section 14A r.w.r 8D of the Income Tax Act. Prima facie, the assessee has not earned any exempt income, and therefore the provisions of Section 14A r.w.s 8D of the Income Tax Act cannot be invoked.
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT), held that the claim of capital gain exemption under Section 54 of the Income Tax Act, 1961 on construction of residential house completed within 3 years is allowed and the penalty levied under Section 271(1)(c) of the Income Tax Act was deleted.
The Bench comprising of Vikas Awasthy, Judicial Member and Amarjit Singh, Accountant Member held that the assessee is eligible to claim exemption under Section 54 of the Income Tax Act as the construction of residential house completed within three years from the relevant date. The Tribunal further observed that merely for the reason that the assessee had made claimed of exemption under Section 54 of the Income Tax Act which was not acceptable to the Assessing Officer, penalty under section 271(1)(c) of the Income Tax Act cannot be levied, thus deleted the penalty levied under Section 271(1)(c) of the Income Tax Act.
The Income Tax Appellate Tribunal (ITAT) Delhi Bench held that benefit allowed assessment orders should not be withdrawn by exercising power under Section 154 of Income Tax Act, 1961.
The two member bench of the tribunal comprising Anil Chaturvedi (Accountant Member) and Anubhav Sharma (Judicial Member) held that benefits allowed in the assessment order should not be withdrawn by exercising power under Section 154 of Income Tax Act, 1961.
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) ruled that Tax Deduction at Source in form 26AS for assessment year should be allowed, if return of income and Tax Deduction at Source are correctly filed. Thus, the bench directed the assessing officer to verify the claim of assessee regarding TDS credits.
The two member bench of the tribunal comprising N.K. Billaiya (Accountant Member) and Challa Nagendra Prasad (Judicial Member) directed the Assessing Officer to verify the claim and allow credit of TDS if the income is shown in the year under consideration.
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) held that the activities carried out by the assessee falls within the ambit of “services”, the expression used in Section 10AA of the Income Tax Act,1961 and the profits and gains derived from such services rendered from SEZ (Special Economic Zone ) would be eligible for deduction under Section 10AA of the Income Tax Act.
The Bench comprising of Vikas Awasthy, Judicial Member and Om Prakash Kant, Accountant Member observed that the activities carried out by the assessee falls within the ambit of “services”, the expression used in Section 10AA of the Income Tax Act and the profits and gains derived from such services rendered from SEZ would be eligible for deduction under Section 10AA of the Income Tax Act. Hence, the Tribunal found no infirmity in the impugned order, thus upheld the CIT (A) order and the appeal of Revenue is dismissed being devoid of any merit.
The Income Tax Appellate Tribunal (ITAT) Bangalore Bench deleted late fee levied on belatedly filed Tax Deduction (TDS) at Source before the amendment in section 234E of Income Tax Act, 1961.
The two member bench of the tribunal comprising Laxmi Prasad Sahu, (Accountant Member) and George George K, (Vice President) delete the late fee charges under section 234E of the Income Tax Act, for the Assessment Years 2013-14 to 2015-16.
The Delhi bench of Income Tax Appellate Tribunal (ITAT) observed that the purpose of granting subsidy under TUFS (Technology Up-gradation Fund Scheme) by the Ministry of Textiles, Government of India was for overall growth and generation of employment and held that interest reimbursement received by the assessee is a capital receipt.
The Tribunal relied on the decision of CIT Vs. Ponni Sugars & Chemicals Ltd which held that the purpose of granting subsidy under TUFS by the Ministry of Textiles, Government of India was for overall growth and generation of employment and, therefore, the ‘Purpose Test’ was laid. Considering the facts of the case in totality, the Bench did not find any reason to interfere with the findings of the CIT (A), thus appeal filed by assessee was dismissed.
The Bangalore Bench of Income Tax Appellate Tribunal (ITAT) held that in the interest of justice and equity an opportunity should be granted to the assessee to prove the source of cash deposits and the matter was restored to the Assessing Officer (AO) for denovo consideration.
The Single Bench comprising of George George K, Vice President, observed that the assessee neither before the AO nor the CIT(A), has explained the source of cash deposited with the sale proceeds of LPG cylinders. Hence, in the interest of justice and equity, the Tribunal granted one more opportunity to the assessee to prove the source of cash deposits. Hence, the matter was restored to the AO for denovo consideration.
The Income Tax Appellate Tribunal (ITAT) Ahmedabad Bench, allowed the claim for deduction under Section 80HHC of the Income Tax Act, 1961 on the sale of scrap and parts.
The Tribunal stated that it has gone through order of the CIT(A) and see no reason to interfere in the matter, the CIT (A) has recorded a finding of the fact that scrap and stores sold, arose from the business activity of the assessee-company. Considering the uncontroverted facts, the Bench held that the assessee is entitled to claim deduction under section 80HHC of the Income Tax Act and thus he grounds raised by the Revenue are accordingly dismissed.
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) held that the delayed deposit of employees contribution indicated in the Audit Report is sufficient to make income tax addition and to disallow employees contribution to Provident Fund (PF)/Employees’s state Insurance Corporation (ESIC) under Sections 36(i)(va) r.w.s. 43B of the Income Tax Act, 1961.
The Bench comprising of Chandra Mohan Garg, Judicial Member and Pradip Kumar Kedia, Accountant Member observed that the issue towards taxability of belated employees contribution to Provident Fund/ESIC is no longer res integra. Hence, the Tribunal held that, “We thus, do not see any warrant to any reason to interfere with the order of CIT(A)”
The Income Tax Appellate Tribunal (ITAT) Delhi Bench upheld the disallowance made on interest expenses incurred for taking loans for making investment in shares. The assessee RRPR Holding Private Limited is an Investment Holding Company set up to acquire and hold shares of NDTV Ltd and its Group Cos. The Original return filed by the assessee was subjected to scrutiny assessment by issuance of notice under Section 143(2) Income Tax Act, 1961.
The two-member bench of the tribunal comprising Pradip Kumar Kedia (Accountant Member) and Challa Nagendra (Judicial Member) upheld disallowance made by AO on Interest Expenses incurred for taking Loans for making Investment in Shares.
The Income Tax Appellate Tribunal (ITAT) of Bangalore Bench held that the payment of bonus made to employees before the due date of filing a return of income under Section 139(1) of Income Tax Act are sufficient for compliance of Section 43B of Income Tax Act, 1961.
Two member benches of the tribunal comprising Chandra Poojari (Accountant Member) and Beena Pillai (Judicial Member) assessee are directed to establish all relevant details to substantiate its claim in line with the above applicable instructions as applicable to the present facts of the assessee.
The Income Tax Appellate Tribunal (ITAT) Ahmedabad Bench while upholding the order of Commissioner of Income Tax (Appeal) held that deduction under Section 80P of Income Tax Act, 1961 should not be allowed on interest earned from nationalized banks.
The tribunal after reviewing the facts and submissions of the both parties and relied upon the decision of Totgars Cooperative Sales Society Ltd. Vs. ITO and State Bank of India (SBI) Vs. CIT the Two member bench of Annapurna Gupta (Accountant Member) and Madhumita Roy (Judicial Member ) dismissed the appeal filed by the assessee. Vijay Kumar Jaiswal, counsel appeared for the revenue. No one appeared for the assessee during the proceedings .
The Income Tax Appellate Tribunal (ITAT) Delhi Bench held that no cash paid for taking reversal of entry as commission through proper banking channel by assessee. Hence, held that the revision order passed under Section 263 of Income Tax Act 1961 has quashed.
According to the affidavit filed by the M/s Cardio Technovention , AO proved the fact that cash was not received by M/s Cardio Technovention. Hence, It was not self serving affidavit of the assessee but of concerned party from whom allegedly the assessee had benefited. The two member bench of the tribunal comprising Pradip Kumar Kedia (Accountant Member) and Challa Nagendra (Judicial Member) allowed the appeal filed by the assessee and quashed the revision order.
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) directed fresh adjudication on grounds of failing to make enquiry on the correctness of claim of sum received from mother -in-law by way of settlement of case in court.
The bench restore the assessment to the file of AO for making assessment afresh and directed the AO to verify the correctness of the claim of the assessee that the sum of INR 12,00,000/- was received from his mother-in-law and frame the assessment after providing adequate opportunity to the assessee.
The Income Tax Appellate Tribunal (ITAT) of Kolkata Bench directed readjudication due to mismatch found between contract receipts reflected in form 26AS and Income Tax Return.
The two-member bench of the tribunal comprising Girish Agrawal (Accountant Member) and Sanjay Garg (Judicial Member) observed that confirmation letter from Birla Corporation Ltd. along with ledger account from their books of account which demonstrates the reversal of the contract receipts as claimed by the assessee has not been considered by the authorities below. Thus, the bench took this additional evidence on record and remitted the matter back to the file of AO for verification of these documents in respect of difference in contract receipts reflected in Form 26AS and that reported in the income-tax return.
The Income Tax Appellate Tribunal (ITAT) Chandigarh Bench ruled that no penalty should be levied on profit rate of 8% estimated upon gross receipts as per provision of Section 44AD of Income Tax Act, 1961.
The assessee case is not covered by the said explanation especially where the assessee has pleaded that it has filed its return under Section 153A Income Tax Act and disclosed the income and paid taxes voluntarily though after the date of search. After reviewing the facts and submission, the two member bench of the tribunal comprising Vikram Singh Yadav (Accountant Member) and Aakash Deep Jain (Vice President) allowed the appeal filed by the assessee and and remand the matter to file of CIT(A).
The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) upheld the deletion of the addition made by the Commissioner of Income Tax (Appeals) on the ground of non consideration of the previous decision of assessment.
The bench observed that there was no change in the grant received by the assessee for the present assessment year and the present appeals issue was already decided in the previous assessment. The two-member panel comprising Waseem Ahmed (Accountant) and T.R. Senthil Kumar (Judicial) upheld the deletion of the addition made by the commissioner while dismissing the appeal filed by the revenue.
The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) upheld the allowance of deduction by the Commissioner of Income Tax (Appeals) under section 10AA of the Income Tax Act,1961 on the ground of proper electronic-filing of form 56F by the assessee.
The two-member panel comprising Annapurna Gupta (Accountant) and Siddhartha Nautiyal (Judicial) held the Commissioner had correctly allowed the appeal of the assessee in the instant set of facts and no interference was called for in the order while dismissing the appeal filed by the assessee.
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) held that mere non-production of evidence by the creditor of the assessee doesn’t result in the addition of income.
The two-bench member comprising of Amit Shukla (Judicial member) and Prashant Maharishi (Accountant member) directed the Assessing Officer to delete the addition of Rs.11,81,755/-. With respect to the balance sum of Rs.1,38,580/-, the assessing officer has made the addition of sums to be paid to the two carpenters. Naturally, the nature of payment and the quantum is so small that non-receipt of confirmation from them under Section 133 (6) of the Income Tax Act cannot result in addition. It was further shown that these expenses are not debited to the Profit and Loss account but are added to the fixed assets on which depreciation is claimed and allowed.
The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) held that deposits made as a reserve amount for the business during the demonetization period do not amount to unexplained income. The two-bench member comprising of Sonjoy Sarma (Judicial member) and Girish Agrawal (Accountant member) that the approach taken by the Assessing Officer while making the addition of Rs. 24,07,000/- in the hands of the assessee by assuming that deposits made during the demonetization period are unexplained money was not correct.
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) held that amount paid for resale of computer software through End User License Agreement doesn’t amount to deduction in Tax under Section 195 of the Income Tax Act, 1961.
The two-bench member comprising of Saktijit Dey (Judicial member) and N.K Billaiya (Accountant member) followed the decision of the Supreme Court and the Assessing Officer was directed to delete the impugned addition. Thus, the appeal of the assessee was allowed.
The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) held that no additions can be made under Section 68 of the Income Tax Act, 1961 when the identities of the lenders are proved and loans are repaired.
The two-bench member comprising of Manish Borad (Accountant member) and Sonjoy Sarma (Judicial member) held that the given facts and circumstances of the case, are of the considered view since the assessee has successfully discharged its onus of proving the identity of the loan creditor, which in the instant case duly registered with Ministry of Corporate Affairs, having PAN and had filed return of income as well.
The Delhi bench of Income Tax Appellate Tribunal (ITAT) held that the disallowance should not exceed the exempt income of that year and upheld the decision of Commissioner of Income Tax (Appeals) [CIT(A)] of deletion of the disallowance made by invoking the provision of Section 14A of the Income Tax Act,1961.
The Bench comprising of Kul Bharat, Judicial Member and M. Balaganesh, Accountant Member relied on the decision of Supreme court in PCIT vs Caraf Builders & Constructions (P.) Ltd that, “he disallowance should not exceed the exempt income of that year”, and on the observation of High court in Pr. CIT v. Bharti Overseas (P.) Ltd. Thus, the Tribunal do not see any infirmity in the direction of CIT(A) therefore upheld the deletion of disallowance of Rs.9,68,85,199 made under Section 14A of the Income Tax Act.
The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) held that the income from the partnership firm having a separate identity from the partner cannot be added together under Section 69A of the Income Tax Act, 1961.
The two-bench member comprising of Manish Borad (Accountant member) and Sonjoy Sarma (Judicial member) held that the addition of Rs. 4,19,56,697/- made by the Assessing Officer under Section 69A of the Income Tax Act in relation to the cash deposited in Boral Union Cooperative Bank was unjustified as the same did not relate to her but belonged to her partnership firm M/s Champahati CS Shop in which both the bank accounts and the cash deposits from cash sales had been duly accounted in the regular books of accounts. Therefore, directed the Assessing Officer to delete the same.
The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) held that the income earned by the co-operative society is eligible for deduction under Section 80P(2)(a)(i) of the Income Tax Act, 1961.
The two-bench member comprising of Manish Borad (Accountant member) and Sonjoy Sarma (Judicial member) held that the alleged interest income earned by the assessee is a business income and the assessing officer erred in treating it as income from other sources. Therefore, the assessee is eligible for claiming deduction under Section 80P(2)(a)(i) of the Income Tax Act. The order of the Commissioner of Income Tax (Appeal) was set aside and deleted the disallowance of deduction under Section 80P(2)(a)(i) of the Income Tax Act.
The Jaipur bench of the Income Tax Appellate Tribunal (ITAT) held that income surrendered during search and seizure cannot be treated as an undisclosed, deleted penalty under Section 271AAB of the Income Tax Act, 1961.
The two-bench member comprising of Sandeep Gosain (Judicial member) and Rathod Kamlesh Jayantbhai (Accountant member) held that the income surrendered is not an undisclosed income as specified in Explanation (c) of Section 271AAB of the Income Tax Act. Thus, the appeal of the assessee was allowed.
The Delhi bench of Income Tax Appellate Tribunal (ITAT) held that the revenue authorities are expected at least to obtain the bank statement before issue of notice under Section 148 of the Income Tax Act, 1961 and completion of the assessment proceedings under Section 144 of the Income Tax Act, since the revenue could not bring anything on record with regard to the alleged deposits (bank statement) the addition made by the AO was deleted.
The Tribunal held that Since, the revenue could not bring anything on record with regard to the alleged deposits (bank statement) the tenets of “Best judge assessment” are grossly flouted. Thus, the addition made by the AO was hereby deleted.
The Pune bench of the Income Tax Appellate Tribunal (ITAT) held that Assessing officer’s failure in proper communication of specific circumstance to the assessee resulted in violation of the Principles of natural justice.
Relying on the judgment of CIT Vs Samson Pericherry, PCIT Vs Goa Dorado and ‚PCIT Vs New Era Sova Mine, the two bench members comprsing of S. S. Godara&G. D. Padmashalioverturned the order of NFAC and quashed the penalties imposed.
The Pune Bench of Income Tax Appellate Tribunal (ITAT) held that rejection of incorrect claim of deduction or expense made in the ITR, do not ispo facto tantamount to concealment of income or furnishing of inaccurate particulars, and set-aside the impugned order of NFAC(National Faceless Appellate Centre).
The two Judge Bench comprising of Partha Sarathi Chaudhury, Judicial Member and G. D. Padmahshali, Accountant Member, set-aside the impugned order of NFAC observing that rejection of incorrect claim of deduction or expense made in the ITR, do not ispofacto tantamount to concealment of income or furnishing of inaccurate particulars.
The Income Tax Appellate Tribunal (ITAT) Mumbai Bench held that no addition should be made on loan advanced to directors and sister concern of the company from interest free Fund.
After reviewing the facts and submissions, the two-member bench of the tribunal comprising OM Prakash Kant (Accountant Member) and Vikas Awasthy (Judicial Member) after examining the Balance Sheet of assessee company observed that assessee has sufficient interest free funds for advancing loans to related parties.
The Delhi Bench of Income Tax Appellate Tribunal held that the interest received by the assessee under Section 28 of the Land Acquisition Act, 1894 on enhanced compensation is part and parcel of the compensation, if the agricultural land of the assessee has been acquired under compulsory acquisition and, thus, the same is exempt income under Section 10(37) of the Income Tax Act, 1961.
The Bench comprising of Chandra Mohan Garg, Judicial Member observed that the authorities below have treated interest received by the assessee on enhanced compensation under Section 28 of the Land Acquisition Act as ‘Income from other sources’ and denied exemption under Section 10(37) of the Income Tax Act.
The Tribunal categorically held that the interest received by the assessee under Section 28 of the Land Acquisition Act on enhanced compensation is part and parcel of the compensation if the agricultural land of the assessee has been acquired under compulsory acquisition. Thus, the same is an exempted income under Section 10(37) of the Income Tax Act. Hence, directed the AO to delete the addition.
The Chennai bench of the Income Tax Appellate Tribunal (ITAT) held that the due date for payment of Provident Fund (PF)/Employee State Insurance (ESI) on a public holiday shall not result in disallowances.
The two-bench member of V. Durga Rao (Judicial member) and Arun Khodpia (Accountant member) held that since the deposit of contribution received from the employees was covered by the provisions of the General Clauses Act. Therefore, the same shall be treated as payment within the due date, thus no disallowance on this count was called for. The order of the Commissioner of Income Tax (Appeal) has been set aside.
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