This yearly digest analyzes all the ITAT stories published in the year 2023 at taxscan.in
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) upheld the addition made on account of cash deposited in the bank account due to failure to explain the source.
After reviewing the facts and submissions, the two member bench of the tribunal comprising Dr. B. R. R. Kumar (Accountant Member) and Yogesh Kumar U.S (Judicial Member) upheld the addition made by the Assessing officer due to failure to explain the source cash deposited in the bank. Thus, the bench dismissed the appeal filed by the assessee.
The Delhi bench of Income Tax Appellate Tribunal (ITAT) held that, if the assessee was not guilty of non-maintaining of books of accounts, the presumption would be that he shall not required to maintain the books of accounts and directed the Assessing authority to delete the penalty.
The Bench comprising of Kul Bharat Judicial Member and M. Balaganesh, Accountant Member observed that the penalty was initiated under Section 271A of Income Tax Act for non-maintenance of books of accounts as well as under Section 271A of Income Tax Act for not complying with the provisions of Section 44AB of the Income Tax Act regarding the auditing of the account.
The Tribunal further observed that if the assessee was not guilty of non maintaining of books of accounts, the presumption would be that he shall not required to maintain the books of accounts.
Thus, the Bench held that imposing penalty for non auditing of books of accounts is not justified. Therefore, directed the AO to delete the penalty.
The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) upheld the imposition of penalty under section 271(1)(c ) of the Income Tax Act,1961 on the ground of furnishing the inaccurate particulars of income by the assessee. The bench observed that the assessee had not been able to substantiate the business rationale of the traveling expense and the assessee only gave a general explanation, which was rejected by the assessing officer.
The two-member panel comprising Annapurna Gupta (Accountant) and Siddhartha Nautiyal (Judicial) held that the Commissioner of Income Tax (Appeals) decided the case on merit and as per the law. Thus the levy of penalty was liable to be sustained while dismissing the appeal filed by the assessee.
The Delhi bench of Income Tax Appellate Tribunal (ITAT) held that the Assessing Officer (AO), has failed to discharge the secondary onus of demolishing/disproving the genuineness of the documentary evidences filed by the Assessee and thus addition made under Section 68 of the Income Tax Act,1961 which was sustained by the Commissioner of Income Tax (Appeals) CIT(A) was deleted.
The Bench comprising of Dr.B.R.R Kumar, Accountant Member and Yogesh Kumar U.S., Judicial Member observed that the assessee had provided all the details to discharge the onus to prove the identity, creditworthiness and genuineness of the investors, the onus will shift to Income Tax Authorities to disprove the documents furnished by the assessee.
The Tribunal further stated that CIT(A) has not made any further investigation on the claim made by the assessee or the document produced by the assessee. Thus, the addition cannot be sustained merely based on the inferences without gathering tangible evidence and the AO has failed to discharge the secondary onus of demolishing/disproving the genuineness of the documentary evidences filed by the Assessee.
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) held that the assessee has proved the genuineness, identity and creditworthiness of the creditors and the Assessing Officer(AO) is directed to delete the addition made under Section 68 of the Income Tax Act, 1961
The Bench comprising of G.S Pannu, President and Challa Nagendra Prasad, Judicial Member observed that the AO did not make any efforts to analyse the transactions and after having PAN number of the two parties he did not examine the same from the returns of these two companies. And also held that the assessee has proved the genuineness, identity and creditworthiness of the creditors and the Assessing Officer is directed to delete the addition made under Section 68 of the Income Tax Act.
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) granting relief to Haryana Rifle Association ruled that charging of fees for conducting matches or tournaments in rifle shooting is not commercial activity.
The two member bench of the tribunal comprising N. K. Billaiya (Accountant Member) and C.N. Prasad (Judicial Member) held that the association is not running on profit motive and, therefore, is very much eligible for registration under Section 12AA Income Tax Act.
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) held that management support services provided to various hotels in India are not Fee for Technical Service as per Article 12(4) of India -Singapore Double Taxation Avoidance Agreement (DTAA). Therefore, the bench deleted the addition.
The two-member bench of the tribunal comprising N.K. Billaiya (Accountant Member) and Challa Nagendra Prasad (Judicial Member) directed the assessing officer to delete the addition.
The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) held that the revision order under section 263 of the Income Tax Act,1961 against a deceased person was invalid.
The bench observed that a notice issued /order passed in the name of a dead person was not a valid notice/order. The two-member bench comprising Annapurna Gupta (Accountant) and Siddhartha Nautiyal (Judicial) quashed the revision order passed by the Commissioner under section 263 of the Income Tax Act while allowing the appeal filed by the assessee.
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) held that the penalty levied under Section 271(1)(c) of the Income Tax Act,1961 is liable to be cancelled in the instant cases since the additions have been made on estimated basis.
The ITAT Bench comprising of B.R. Baskaran, Accountant Member and Rahul Chaudhary, Judicial Member observed that during assessment proceedings, the addition was made on estimation at 12.5%. In first appeal, the addition was restricted to 3% and on further appeal to the Tribunal by the Revenue, the addition was enhanced to 6%. The entire addition right from assessment stage to the Tribunal was merely on estimations.
Thus, the Bench held that the penalty levied under Section 271(1)(c) of the Income Tax Act is liable to be cancelled in the instant cases since the additions have been made on estimated basis.
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) held that if the payment has been made with respect employees’ contribution after the due date of the Income Tax Act, 1961, the same has to be disallowed and cannot be allowed as deduction and therefore, adjustment has rightly been made and the Assessing Officer (AO) is directed to restrict the disallowance to the extent of employee contribution. The bench comprising of Aby T. Varkey, Judicial Member and S. Rifaur Rahman, Accountant Member observed that it is undisputed fact that payment of PF & ESI amounting to ₹ 4,00,168/- was not made within the due date prescribed under the PF & ESI Act, but payment has been made much before the due date of filing the return of income.
Further, the Tribunal relied on the decision of Supreme court in Checkmate Services Private Limited vs. CIT, where it was held that “if the payment has been made with respect employees contribution after the due date of the respective acts, the same has to be disallowed and cannot be allowed as deduction and therefore, adjustment has rightly been made”.
The Chennai Bench of Income Tax Appellate Tribunal (ITAT) held that the turnover alone could not be considered as source of loan as advanced to the assessee, thus directed the Assessing Officer (AO) to delete the impugned addition.
The bench comprising of V. Durga Rao, Judicial Member and Manoj Kumar Aggarwal, Accountant Member, observed that the assessee had discharged its primary onus of fulfilling the three ingredients of Section 68 of the Income Tax Act. The lender, in sworn statement, admitted the fact of granting of loan and thus, the assessee stood discharged. The onus was now on revenue.
Thus the Tribunal held that the turnover alone could not be considered as source of loan as advanced to the assessee and hence directed the AO to delete the impugned addition of Rs.16.47 Lakhs.
The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) held that no disallowance was made under section 40(a)(ia) of the Income Tax Act,1961 for short deductions of tax by the assessee.
The bench observed that the assessing officer made disallowance under section 40(a)(ia) of the Income Tax Act on the ground that the assessee company had made short deductions of tax and thus was in violation of section 197(1) of the Income Tax Act.
The two-member bench comprising Annapurna Gupta (Accountant) and Siddhartha Nautiyal (Judicial) upheld the decision of the Commissioner while dismissing the appeal filed by the revenue.
The Pune Bench of Income Tax Appellate Tribunal has quashed the revisionary order passed by the Principal Commissioner of Income Tax (PCIT) under Section 263 of the Income Tax Act, 1961.
The bench consisting of S S Viswanethtra Ravi (Judicial Member) and G. D. Padmahshali (Accounting Member) allowed the appellant’s appeal and quashed the PCIT’s revisionary order.
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) held that the proceeds received on the sale of carbon credit is a capital receipts and not business income.
The two-member bench comprising of Amit Shukla (Judicial member) and Prashant Maharishi (Accountant member) directed the assessing officer to verify the amount of carbon credit received by the assessee during the year. It was also directed to consider it as a capital receipt and compute the income of the assessee accordingly.
The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) held that penalty proceeding under Section 271A of the Income Tax Act, 1961 cannot be initiated on proper maintenance of books of accounts.
The two-bench member comprising of Chandra Poojari (Accountant member) and Beena Pillai (Judicial member) held that the filing of an audit report is possible only after auditing of books of accounts. Thus, it means that the assessee has maintained the books of accounts. In the present case, the penalty has been levied for non-maintenance of books of accounts under Section 271A of the Income Tax Act.
The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) held that depreciation is allowable only on fixed assets not used for commercial purpose.
The two- member comprising of Waseem Ahmed (Accountant member) and Senthil Kumar (Judicial member) held that the assessee is entitled to claim the depreciation as ‘plant and machinery’ as the assessee in promoting public objects which are activities in the nature of trade, commerce or business but without commercial motive. And the application of income shall precede accumulation by directing Assessing Officer to allow accumulation under Section 11(1)(a) of the Income Tax Act, from income remaining after deducting the amount applied for the objects of the assessee trust.
The Chennai Bench of Income Tax Appellate Tribunal (ITAT) held that in the absence of any new tangible material, the case could not be reopened on mere change of opinion,the reassessment proceedings were nothing but the review exercise undertaken by Assessing Officer (AO) which is impermissible. Therefore,the reassessment proceedings are bad in law and hence, quashed.
The Bench comprising of V. Durga Rao, Judicial Member and Manoj Kumar Aggarwal, Accountant Member observed that in the absence of any new tangible material, the case could not be reopened on mere change of opinion. It was also stated that the AO has power to reopen the case of the assessee provided there is ‘tangible material’ to come to conclusion that there is escapement of income from the assessment.
The Tribunal held that the reassessment proceedings were nothing but the review exercise undertaken by AO which is impermissible. Therefore,the reassessment proceedings are bad in law and hence, liable to be quashed.
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) held that the penalty cannot be sustained on the fact that the notice issued doesn’t disclose a specific charge, the penalty imposed under Section 271(1)(c) of the Income Tax Act, 1961.
The Two-member bench comprising of Kul Bharat (Judicial member) and B.R.R Kumar (Accountant member) held that the facts are not under dispute regarding the notice being defective. Therefore, the impugned penalty imposed under Section 271(1)(c) of the Income Tax Act by the Assessing Officer was deleted.
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) held that the commission earned from the provision of accommodation entry shall be added to the total income of the assessee.
The two-member bench comprising of Amarjit Singh (Accountant member) and Sandeep Singh Karhail (Judicial member) held that the assessee was found to be involved in the process of providing accommodation entries at the behest of Shirish C Shah. Therefore, the Assessing Officer was directed to consider 1% of the total sales declared during the year as net commission in the hands of the assessee for providing accommodation entry.
The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) held that the profit from bogus purchases can be added to taxable income.
The two-member bench comprising of Waseem Ahmed (Accountant member) and T.R. Senthil Kumar (Judicial member) confirmed the addition to the extent of 10% on account of the alleged bogus purchase. Thus, the appeal filed by the Revenue and Cross Objection filed by the Assessee was dismissed.
The Income Tax Appellate Tribunal (ITAT), Kolkata Bench deletd the addition made on account of loss from derivative trading adjusted with business Income.
After reviewing the facts and submissions, the two-member bench of the tribunal comprising Pradip Kumar Kedia (Accountant Member) and Challa Nagendra (Judicial Member) relied upon the Supreme Court case of Snow Ten Investment Ltd. vs PCIT observed that “ the insertion of clause (d) to the provision of section 43(5) of the Income Tax Act, the transaction in respect of trading in derivative as prescribed in clause (d) inserted in provision of section 43(5) would not be a speculative transaction”
Therefore, the views taken by the lower authorities are not in accordance with law. Thus the bench allowed the appeal of the assessee.
The Income Tax Appellate Tribunal (ITAT) Delhi Bench while quashing the reassessment order passed by the Assessing officer held that failure to issue notice for reassessment should not be curable under Section 292BB of Income Tax Act, 1961
After reviewing the facts and submission the single member bench of the tribunal Chandra Mohan Garg (Judicial Member) held that without valid jurisdiction AO passed the reassessment order.
The Income Tax Appellate Tribunal (ITAT) Delhi Bench upheld the addition made on account of unverifiable unsecured loan due to failure to prove creditworthiness of lenders.
After reviewing the facts and submission the two-member bench of the tribunal comprising Shamim Yahya (Accountant Member) and Yogesh Kumar U.S, (Judicial Member) held that “assessee has not proved the capacity, identity and creditworthiness of the lenders and also failed to provide any document to prove the genuineness of the transaction which ultimately resulted in making addition by the A.O. and confirmation of the addition by the CIT(A)”. Therefore, the bench dismissed the appeal of the assessee.
The Chennai Bench of Income Tax Appellate Tribunal (ITAT) held that the Tax Audit Report was made available to Assessing Officer before completion of assessment proceedings.
The Departmental Representative P. Sajit Kumar, contended that the reason stated for delay in preparation of submission of Audit Report by the assessee is not tenable and reasonable, hence it is a clear cut case of failure on the part of the assessee to get audit under Section 44AB of the Income Tax Act, completed within the prescribed time limit.
The Bench comprising of Durga Rao, Judicial Member and Arun Khodpia, Accountant Member relied on the case of Puducherry Tourism Development Corporation Ltd. v. ITO where it was observed that for the audit report under Section 44AB of the Income Tax Act were furnished during the course of assessment proceedings under Section 143(3) of the Income Tax Act, which was also considered by the Assessing Officer before concluding the assessment. Thus for venial technical breach without any mala fide intention, penalty cannot be levied under Section 271B of the Income Tax Act. Hence, the Tribunal set aside the order of CIT (A).
The Chennai Bench of Income Tax Appellate Tribunal (ITAT) held that providing uniforms, books or transport services to the students by the assessee trust are not its main objects and these been commercial in nature and disallowed the exemption under Section 11 of the Income Tax Act,1961.
A Single Judge bench comprising of Mahavir Singh, Vice President relied on the decision of CIT(A) and followed Supreme court’s judgement in the case of New Noble Educational Society vs. CIT, where it was stated that, “providing uniforms, books or transport services to the students by the assessee trust are not its main objects and these been commercial in nature.” Hence, the Tribunal confirmed the action of AO in disallowing the exemption on trust property under Section 11 of Income Tax Act.
The Income Tax Appellate Tribunal (ITAT) of Kolkata Bench has quashed scrutiny assessment proceedings initiated by the Assistant Commissioner of Income Tax (ACIT) initiated due to a defect in the issue of notice.
The tribunal observed that the assessee returned income was less than Rs. 20 lakhs and the jurisdiction were lying with the ITOs but the notice under Section 143(2) of the Income Tax Act has been issued by ACIT.
After reviewing the facts and submission, the two-member bench of the tribunal comprising Girish Agrawal, (Accountant Member) and Sanjay Garg (Judicial Member) observed that ACIT, had no valid jurisdiction over the assessee on the date of issuing notice under Section 143(2) of the Income Tax Act. Therefore, quashed the scrutiny proceedings as defect in issuance of notice.
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) held that the AO(Assessing Officer) /TPO(Transfer Pricing Officer) is not required to make the adjustment on notional basis when the assessee Extended Credit Period to Non-AE (Associated Enterprise) without charging interest on delayed payment
The bench comprising of Amit Shukla, Judicial Member and Amarjit Singh, Accountant Member observed that the assessee has extended credit period to its non-associated enterprises without charging any interest on delayed payment. Hence, the ground of appeal of the assessee was allowed that in such circumstances the AO/TPO is not required to make the adjustment on notional basis.
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) held that mere determination of the income based on surmise and conjecture is grossly illegal.
The Two-bench member comprising of Kul Bharat (Judicial member) and M. Balaganesh (Accountant member) held that the determination of income based on surmise and conjecture is grossly illegal and incorrect on the part of the Assessing Officer. Thus, the appeal of the revenue was dismissed.
The Income Tax Appellate Tribunal (ITAT) Delhi Bench while directing re-adjudication in cases related to loan advanced to Non-relative partners of the company without securing interest in absence of registered documents.
After reviewing the facts and submissions, the two-member bench of the tribunal comprising Anil Chaturvedi (Accountant Member) and N.K. Choudhry (Judicial Member) directed the Assessing Officer to inquire about the surrounding circumstances qua transactions entered into by the Assessee with FDPL, and the profile and work done by FDPL, by directing the Assessee to produce FDPL or summoning FDPL directly.
The Income Tax Appellate Tribunal (ITAT) Chennai Bench recently held that the payment made to dealers for sale of fertilizers are in the nature of rebates.Hence,no Tax Deduction at Source should be deducted from assessee.
After reviewing the facts and submissions, the two-member bench of the tribunal comprising Manoj Kumar Aggarwal (Accountant Member) and Mahavir Singh (Vice President) held that there was no obligation on assessee to deduct TDS on rebates given on transaction of sale. Therefore, the bench allowed the appeal of the assessee.
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has allowed the appeal of Tripoto.com Pvt. Ltd. and directed the Assessing Officer (AO) to re-adjudicate the claim of deduction for the late deposit of employees’ contribution to the Provident Fund (PF) and Employees’ State Insurance (ESI).
The Two member Bench of Saktijit Dey (Vice-President) and Girish Agrawal (Accountant member) allowed the assessee’s appeal for statistical purposes and remitted the matter back to the AO for verification of the actual payment dates.
The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) held that delay in filling appeal due to medical treatment and condones a delay of 259 days.
The Single bench member comprising of Waseem Ahmed (Accountant member) held that on the perusal of the payment details by the assessee to the builder it was noted that only a payment of Rs. 24,000/- was made in the year under consideration and the balance payment was not made in the year in dispute.
Therefore, the tribunal found force in the argument advanced by the Authorized Representative for the assessee. The payment which has been made by the assessee in the other year, the same can be the subject matter of dispute in another year and not in the year under consideration. Thus, an addition of Rs. 24,000/- was confirmed representing the payment to the builder in the year under consideration. Hence, the ground of appeal of the assessee was partly allowed.
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) held that expenditure incurred on foreign currency on telecommunication charges and provision of technical services outside of India should not be excluded from export turnover for the purpose of computing under Section 10A of the Income Tax Act, 1961.
The Bench comprising of Amit Shukla, Judicial Member and Amarjit Singh, Accountant Member observed that expenses incurred in foreign currency on telecommunication charges and providing technical services outside India should be excluded from total turnover for the purpose of computation of deduction under Section 10A of the Income Tax Act held that the impugned expenditure has to be excluded from the total turnover.
Further, the Tribunal allowed the appeal of the assessee that expenditure incurred on foreign currency on telecommunication charges and provision of technical services outside of India should not be excluded from export turnover for the purpose of computing under Section 10A of the Income Tax Act, since this expenditure were not included in the export turnover of the assessee.
The Chennai Bench of Income Tax Appellate Tribunal (ITAT) held that non-filing of audit report within the due date is a venial technical breach without any mala fide intention on the part of the assessee and for venial technical breach without any mala fide intention, penalty cannot be levied. Thus, deleted penalty under Section 271B of Income Tax Act, 1961.
The Bench comprising of V. Durga Rao, Judicial Member and Arun Khodpia, Accountant Member, observed that Tax Audit Report was made available to the Assessing Officer before completion of assessment proceedings, then for venial technical breach without any mala fide intention of the assessee, the penalty cannot be levied under Section 271B of the Income Tax Act.
Further, the tribunal relied on the case of Balaji Logistics v. ACIT where it was decided that, “non-filing of audit report within the due date is a venial technical breach without any mala fide intention on the part of the assessee and held that for venial technical breach without any mala fide intention, penalty cannot be levied” Hence, the penalty levied under Section 271B of the Income Tax Act was deleted for the assessment years 2013-14, 2014-15, 2015-16 and 2016-17.
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) held that the bonus received in respect of employment shall be taxable only in the contracting state and not in any other state.
The Two-member bench comprising of Kul Bharat (Judicial member) and M. Balaganesh (Accountant member) held that during the period for which the bonus is received, the assessee was serving only in Singapore and not in India. Hence, the bonus received by the assessee, being a resident would be taxable for the year under consideration in India. However, in terms of Section 90 of the Income Tax Act, the entire taxes paid by the assessee in Singapore for the very same salary and bonus component would be eligible for the tax credit for the assessee.
The said determination of foreign tax credit by the Assessing Officer was rejected. The Assessing Officer was directed to allow the foreign tax credit in full in respect of tax paid in Singapore for the very same salary and bonus income. The ground raised by the assessee was allowed and the Assessing Officer was directed to give tax credit to the assessee accordingly. Thus, the appeal was allowed for statistical purposes.
The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) has deleted the disallowance of ocean freight charges paid to Korean-associated enterprises (AE)since the amount can be taxable only in contracting states.
The bench of Mahavir Singh (Vice President) and Manoj Kumar Aggarwal (Accountant Member) has observed that “the assessee’s case is covered by Article 8 of DTAA of India-Korea and therefore the rentals of the ship are like profit from the operation of ship or aircraft in international traffic carried on by an enterprise of a contracting state. The amount can be taxable only in the contracting state and not taxable in India. Hence, the assessee is not liable to deduct TDS and therefore, no disallowance by invoking the provisions of section 40(a) (i) of the Act.”
The Income Tax Appellate Tribunal (ITAT) Chennai Bench ruled that no disallowance on claim of prior period expenses on customs duty paid due to unable to perform Export
During the appeal proceedings, the tribunal observed that expenditure had crystallized only during the assessment year. Also, the incentive received in earlier years has been considered as income in earlier years. Thus, in this year, the assessee could not perform export obligation and accordingly, held liable to pay the said amount.
Therefore, the two member bench of the tribunal comprising Manoj Kumar Aggarwal (Accountant Member) and Mahavir Singh (Vice President) allowed deduction to assessee.
The Income Tax Appellate Tribunal (ITAT) Delhi Bench upheld the enhanced addition relating to advertising and marketing expenses due to failure to substantiate business purpose.
It was observed by the tribunal that the assessee did not furnish any detail or even in the name of Indian clients to whom the gifts, parties, lunches etc. were given. Moreover assessee has not produced supporting bills and vouchers before the authorities. Further, the credit card expenses incurred on account of advertisement and marketing the tribunal observed that information given by the assessee was vague and did not prove anything regarding the expense.
After reviewing the facts and submissions, the two member bench of the tribunal comprising M.Balaganesh (Accountant Member) and Chandra Mohan Garg (Judicial Member) dismissed the appeal of assessee.
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