This yearly digest summarises all the ITAT stories published at taxscan.in in 2023
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that the deduction under Section 80I of the Income Tax Act 1961 should be construed liberally as the intention of the legislature was the promotion of growth and development of infrastructure.
The two-member Bench of PRASHANT MAHARISHI, (Accountant Member) and KAVITHA RAJAGOPAL, (Judicial Member) noted that the CIT(A) had placed reliance on the earlier assessment order of the assessee for about nine years where the said claim of the assessee was allowed by the A.O. The A.O. had also failed to establish that the claim of the assessee was not eligible for deduction as per the scheme of Section 80IA of the Income Tax . There had also been no change in facts during the impugned year which was brought on record by the A.O. The Bench dismissed the appeal filed by revenue relied on the decision of the Bombay High Court in the case of CIT vs ABG Heavy Industries Ltd wherein it was held that in case of deduction claimed under Section 80IA of the Income Tax Act the intention of the legislature was to promote growth and development of infrastructure which had to be construed liberally.
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) held that that there is no reason to disbelieve the value of closing work in progress disclosed by the assessee, thus set aside the order passed by the Commissioner of Income Tax (Appeals) [ CIT(A)] and directed the Assessing Officer (AO) to accept the value of closing work in progress declared by the assessee and delete the consequential addition made.
The Bench comprising of B.R. Baskaran Accountant Member and Rahul Chaudhary Judicial Member noted that assessee has received arbitration award of Rs.24,88,231/- and Rs.6,16,571/during the years relevant to the AY 2018-19 and 2019-20. The above said awards were adjusted against the value of closing stock. After the receipt of above said award, the value of closing stock stood at Rs.7,95,000/- .
The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) condoned a delay of 264 days in filing appeal and held that the assessee is eligible for set off of excess application of income of Asessment Years (AY) 1999-2000 to 2001-02 from the current year’s income.
The Bench comprising of George George K., Vice President and Laxmi Prasad Sahu, Accountant Member condoned delay of 264 days since he Finance Manager came to know about the dismissal of the appeal by the CIT(A) during October, 2022 close to the Annual General Meeting and there was a change in the officer bearers
and new committee members, who were informed about the dismissal of appeal by the CIT(A). It was further observed that the claim made by the assessee for the previous three assessment years excess application has been denied stating that it is not permissible, but the AO has not disputed the figures claimed by the assessee.
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) held that there is no vacillation to hold that the source of the cash deposited in the bank account has been undisputedly proved, hence deleted the addition made by the Assessing Officer (AO).
The entire bank statement showing the cash deposit reflected the regular deposit of cash received from newspaper vendors throughout the year. The fact that the assessee is involved in the newspaper agency was also on record. The daily sale of newspapers of Economic Times, Navbharat Times, Times of India and sale of other newspapers at bus stand and other vends has been examined. Daily credit receipt and sale register were perused. Therefore, the Two Member Bench comprising of Dr. B. R. R. Kumar, Accountant Member and Yogesh Kumar US, Judicial Member held that it has no vacillation to hold that the source of the cash deposited in the bank account has been undisputedly proved, and directed the deletion of the addition made by the AO. Thus, the the appeal of the assessee was allowed.
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has deleted addition holding that the provisions of Section 41(1) of the Income Tax Act would be attracted only if some trading liability has been written back.
The two-member Bench of G. S. Pannu, (President), and Amit Shukla, (Judicial Member) referred to the decision of Supreme Court in the case of Mahindra & Mahindra wherein the Court, after discussing the various provisions as contained in Section 41(1) and also under Section 28 of the Income Tax Act, held that there was a difference in trading liability and other liability.
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) held that Life being insured by transaction would not alter the basic character of transaction under Section 10(10D).
The two member bench consisting of Dr.B.R.R Kumar (Accountant member) and Kul Bharat (Judicial member) held that it can be construed that the receipt fell under the head “capital gains” but not under “income from other sources”. The AO was directed to allow indexation benefit and tax the amount under the head “capital gains”.
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) imposed a cost to make assessee understand the seriousness of the income tax proceedings.
The Two-member bench comprising of B.R. Baskaran (Accountant member) and Sandeep Singh Karhail (Judicial member) held that the assessee may be provided with one more opportunity to present his case properly before the CIT(A). The assessee should be imposed a cost in order to make him understand the seriousness of the income tax proceedings. A cost of Rs. 2000/- was imposed upon the assessee, which shall be paid to the credit of the income tax department as ‘other fees’ within two months from the date of receipt of this order.
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the capital gain derived by the sale of equity shares is not taxable in terms of Article 13(4) of the India Mauritius Double Taxation Avoidance Agreement (DTAA).
The two-member Bench of G.S. Pannu, (President) and Saktijit Dey, (Vice-President) allowed the appeal filed by the assessee holding that the allegation of the Assessing Officer regarding absence of commercial rationale or substance behind setting up of the assessee company, was also in the realm of imagination, rather than based on any concrete evidence. Moreover, the departmental authorities had miserably failed to establish the fact of the assessee, being a conduit company with reference to Article 27A of India-Mauritius DTAA, holding that the assessee, having been granted a valid TRC, had to be treated as tax resident of Mauritius and would be eligible to avail benefit under India-Mauritius DTAA.
The Kolkata Bench of Income Tax Appellate Tribunal (ITAT) has deleted the estimated addition made by the Assessing Officer (AO) in a hypothetical way by making disallowance of loss claimed by the assessee under Section 41 of the Income Tax Act 1961.
The two-member Bench of Rajpal Yadav, (Vice President) and Girish Agrawal, (Accountant Member) observed that Section 41(1) of the Income Tax Act had been incorporated in the Act to cover a particular fact situation. This Section would apply where a trading liability was allowed as a deduction in earlier years in computing the business income of the assessee and the assessee had opted a benefit in respect of such trading liability in later year by way of remission or cessation of the liability. The Bench allowed the appeal filed by the assessee holding that the principle behind the Section was that a provision intended to ensure that the assessee would not get away with a double benefit namely once by way of a deduction in an earlier assessment year and again by not being taxed on the benefit received by him in a later year with the reference to the liability earlier allowed as a deduction.
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that the foreign Tax Credit (FTC) could not be denied if form no.67 prescribed under rule 128 of the Income Tax Rules were not filed before the completion of the assessment.
The two-member Bench of Prashant Maharishi, (Accountant Member) and Rahul Chaudhary, (Judicial Member) allowed the appeal file by the assessee observing that, In the present case Form No. 67 had been filed by the Appellant before the processing the return of income under Section 143(1) of the Income Tax Act. The Bench further referred to the decision of the Mumbai Bench of the Tribunal in the case of Sonakshi Sinha which held that, “The assessee is eligible for foreign tax credit, as she has filed form number 67 before completion of the assessment, though not in accordance with rule 128 (9) of The Income-tax Rules, which provided that such form shall be filed on or before the due date of filing of the return of income.”
The Income Tax Appellate Tribunal (ITAT) Mumbai bench held that there shall be no disallowance of expenditure under section 14A of Income Tax Act, 1961 in absence of dividend Income from the investments in equities. Hence the two member bench of S. Rifaur Rahman (Accountant Member) and Sandeep Singh Karhail (Judicial Member) directed to deleted disallowance computed under Section 14A read with Rule 8D in the absence of dividend Income from investments in equities.
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the Assessing Officer (AO) could not question the tax residency of entity holding the valid Tax Residency Certificate (TRC) as per the India-Mauritius Double Taxation Avoidance Agreement (DTAA).
The two-member Bench of G.S. Pannu, (President) and Saktijit Dey, (Vice-President) allowed the appeal filed by the assessee holding that it had been a well settled that once the tax resident of Mauritius was holding a valid TRC, the Assessing Officer in India could not go behind the TRC to question the residency of the entity.
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) held that the revenue recognition method adopted by Red Hat India Pvt ltd. cannot be disturbed when duly supported by the mandate of Accounting Standard-9.
The Two-member bench comprising of Amit Shukla (Judicial member) and Gagan Goyal (Accountant member) held that the Assessing Officer had clearly erred in changing the consistently followed method of revenue recognition adopted by the assessee. There were due merits of the revenue recognition adopted by the assessee which is duly supported by the mandate of AS-9.
The Chennai bench of the Income Tax Appellate Tribunal (ITAT) held that Donation paid by the assessee to another charitable trust cannot be treated as income of the appellant trust.
The single member bench consisting of Manjunatha G. (Accountant member) held that the receiving trust is also registered under Section 12A of the Act and entitled for a benefit of Section 11 of the Income Tax Act. Therefore, it was held that the Assessing Officer and CIT(A) had erred in taxing donation paid to other charitable trust as income of the assessee. Thus, the Assessing Officer was directed to delete additions made towards donation paid to other charitable trust as income of the assessee.
The Chennai bench of the Income Tax Appellate Tribunal (ITAT) held land in question cannot be treated as non-agricultural land and to be treated as agricultural land not liable for tax on capital gain on sale.
The two bench member consisting of Beena Pillai (Judicial member) and Chandra Poojari (Accountant member) held that land in question cannot be treated as non-agricultural land and has to be treated as agricultural land not liable for tax on capital gain. Since the bench has held that land is an agricultural land, other arguments raised by assessee did not require any adjudication.
The Income Tax Appellate Tribunal (ITAT) Hyderabad bench held that foreign assignment allowances received by the assessee during the employment for his company for services rendered outside india should not be taxed in India
After considering the facts submitted by both parties, the two member bench of RamaKanta Panda, (Vice President) and K. Narasimha Chary, (Judicial Member)held that foreign assignment allowance that was topped up to the TCC of the assessee, though it was transferred by the employer from their bank account in India to the Axis bank’s nostro accounts, is not taxable in India. Therefore the bench allowed the appeal filed by the assessee .
The Chennai Bench of Income Tax Appellate Tribunal (ITAT) stated that there is nothing on record which would show that any incriminating material was found during search operation which would show that the agricultural income belonged to the assessee instead of HUF (Hindu Undivided Family), thus held that the agricultural income is not to be considered in the hands of the assessee.
The Bench comprising of Mahavir Singh, Vice President and Manoj kumar Aggarwal, Accountant Member relied on the decision rendered in Pr. CIT vs. Abhisar Buildwell Pvt. Ltd. where it was held that where no incriminating material was found in case of any of assessee either from assessee or from third party, High Court rightly set aside assessment order passed under Section 153C of the Income Tax Act.
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) held that due opportunity shall be provided to the assessee for establishing a case of non-receipt of the statutory notice.
The Two-member bench comprising of Saktijit Dey (Vice-President) and M. Balaganesh (Accountant member) held that the proceedings before the departmental authorities were completed ex parte and the assessee did not get any opportunity to establish her case regarding non-receipt of statutory notices and the actual quantum of investment made by her in purchase of house property. Therefore, the order of CIT(A) was set aside and the issue was restored back to the Assessing Officer for de novo adjudication after providing due and reasonable opportunity of being heard to the assessee. The assessee is also directed to appear before the Assessing Officer and cooperate in finalizing the assessment proceedings. Thus, the appeal was allowed for statistical purposes.
The Surat bench of the Income Tax Appellate Tribunal (ITAT) held that the additions under Section 56(2)(x) of the Income Tax Act, 1961 shall not be sustainable when the conditions for purchase were as per the conditions mentioned in the allotment letter.
The Two-member bench comprising of Pawan Singh (Judicial member) and Arjun lal Saini (Accountant member) held that the CIT(A) deleted the additions by taking a correct view and there is no illegality or infirmity in the order passed by the CIT(A). Therefore, the order of CIT(A) was upheld and the ground of appeal was dismissed.
The Income Tax Appellate Tribunal (ITAT) Mumbai bench held that deduction allowable on warranty expenses of motor vehicles was ascertained based on the actual expenses incurred on settlement of warranty schemes in earlier years.
The tribunal observed that provision made by the assessee was ascertained based on the actual expenses incurred on settlement of warranty schemes in earlier years and was based on the scientific exercise of making provision for warranty clauses for each and every vehicle sold on a regular basis year on year.
After considering the facts submitted by both parties, the two member bench of G.S. Pannu, (President) and Sandeep Singh Karhai (Judicial Member) upheld the deletion of disallowance made on account of provision for warranty. Therefore, the bench dismissed the appeal filed by the revenue.
The Income Tax Appellate Tribunal (ITAT) Mumbai bench held that determination of income of assessee on certain estimate was not sufficient to constitute concealed income. Hence, the bench deleted the penalty imposed under Section 271(1)(c) of the Income Tax Act.
After considering the facts submitted by both parties, the two member bench of Amarjit Singh (Accountant Member) and Aby T Varkey (Judicial Member) held that determination of income of assessee on certain estimates was not sufficient to support the contention that the assessee had concealed his income. Therefore, the bench allowed the appeal filed by the assessee.
The Chandigarh bench of the Income Tax Appellate Tribunal (ITAT) held that the deeming provision of Section 69 of the Income Tax Act, 1961 doesn’t apply when the assessee provides a proper explanation regarding the unrecorded sale.
The Two-member bench comprising of Aakash Deep Jain (Vice-President) and Vikram Singh Yadav (Accountant member) held that the name of the person, the amount receivables, date, etc has been duly recorded in the diary, thus, the statement of the assessee duly stand corroborated by the contents of the diary so found during the course of survey.
The Hyderabad bench of the Income Ta Appellate Tribunal (ITAT) held that the deduction under Section 80G of the Income Tax Act, 1961 can be claimed when the assessee satisfies all the conditions.
The Two-member bench comprising of Rama Kanta Panda (Vice-President) and K. Narasimha Chary (Judicial member) held that the assessee satisfied the conditions of Section 80G of the Income Tax Act, the assessee is entitled to claim deduction under Section 80G of the Income Tax Act in respect of such donations which formed part of the spend towards CSR. Thus, the appeal of the assessee was allowed.
The Income Tax Appellate Tribunal (ITAT) Ahmedabad bench held that guarantee fees paid to the government of Gujarat in consideration of guarantee issued by it for the repayment of unsecured loan is revenue expenditure.
After considering the facts submitted by both parties, the two member bench of Waseem Ahmed (Accountant Member) and T.R. Senthil Kumar (Judicial Member) held that guarantee fees paid to the government of Gujarat in consideration of guarantee issued by it for the repayment of unsecured loans are revenue expenditure.
Therefore the bench dismissed the appeal filed by the revenue and partly allowed the appeal filed by the assessee.
The Chandigarh Bench of Income Tax Appellate Tribunal (ITAT) held that no reasons were recorded by the PCIT (Principal Commissioner of Income Tax) for holding assessment order by AO (Assessing Officer) to be erroneous and for application of Section 115 BBE of the Income Tax Act 1961, thus the Bench set aside revisionary order passed under Section 263 of Income Tax Act.
The Two Member Bench comprising of Aakash Deep Jain, Vice President and Vikram Singh Yadav, Accountant Member observed that there is no findings recorded by the PCIT as to how the deeming provisions are applicable in the instant case and the order so passed by the AO is erroneous, and it was held that merely stating that there was survey operation at the business premises of the assessee and provisions of Section 115BBE Income Tax Act are attracted, the same can be a basis for exercise of jurisdiction under section 263 of the Income Tax Act.
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) held that the gain arising on account of revaluation of the outstanding forward contract as on the last of the previous year as per the provisions of Accounting Standard 11 would have to be recognized as profits of the relevant previous year.
The Bench comprising of Prashant Maharishi, Accountant Member and Rahul Chaudhary, Judicial Member relied on the decision of Supreme Court Commissioner of Income Tax, Delhi Vs. Woodward Governor India Pvt. Ltd. where it was held that the loss/gain arising on account of foreign exchange fluctuation is to be recognized in the Profit & Loss Account for the relevant previous year.
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) held that mere fact that the delivery contract provides for delivery of the securities to the broker is not sufficient and does not meet the requirements of Section 15 of the Securities Contract (Regulation) Act, 1956 (SCRA).
The Bench comprising of Prashant Maharishi, Accountant Member and Rahul Chaudhary, Judicial Member stated that Section 15 of SCRA deals with a contract between a member of a recognized stock exchange and a non-member. Therefore, the conclusion drawn by the CIT(A) that the provisions of Section 15 of SCRA shall not apply to transaction between the Assessee and broker is not correct.
The Income Tax Appellate Tribunal (ITAT) Ahmedabad bench directed re-adjudication in respect of treatment of interest income /miscellaneous receipts earned from employees of Gujarat Electricity Cor[oration through advancing loan and facilities.
After considering the facts submitted by both parties, the two member bench of Waseem Ahmed (Accountant Member) and T.R. Senthil Kumar (Judicial Member) remanded the matter to the file of the CIT(A) for reconsideration.
The Income Tax Appellate Tribunal (ITAT) Mumbai bench held that guarantee fees paid to the holding company for loan advanced by assessee company to third party is business expediency. Therefore the bench allowed the deduction claimed under Section 37 of the Income Tax Act .
After considering the facts submitted by both parties, the two member bench of S. Rifaur Rahman,(Accountant Member ) and Rahul Chaudhary, (Judicial Member) held that guarantee fees paid to the holding company for loan advanced by assessee company to third party is business expediency thusIt should be allowable as deduction under Section 37 of the Income Tax Act.
The Chennai bench of the Income Tax Appellate Tribunal (ITAT) held that receipts constitute business receipts and nothing else and therefore, the same could not be held to be unaccounted money of the assessee.
The two member bench consisting of V. Durga Rao (Judicial member) and Manoj Kumar Aggarwal (Accountant member) held that In most cases, the clients opted for travelling at later dates. Thus, such receipts constitute business receipts and nothing else and therefore, the same could not be held to be unaccounted money of the assessee. Under such circumstances, making full addition thereof could not be held to be justified.
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