This annual digest analyzes all the ITAT stories published in 2023 at taxscan.in
The Raipur bench of the Income Tax Appellate Tribunal (ITAT) held that the society not being wholly/substantially financed by the government cannot raise a claim for exemption under Section 10(23C) (iiiab) of the Income Tax Act, 1961.
The Two-member bench comprising of Ravish Sood (Judicial member) and Arun Khodpia (Accountant member) held that the assessee society which admittedly not being wholly and substantially financed by the government was disentitled from raising a claim for exemption under Section 10(23C)(iiiab) of the Income Tax Act, to have applied for registration and raised a claim of exemption under Section 10(23C)(vi) of the Income Tax Act.
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) sustained the addition made by the Assessing Officer for the failure of the assessee to submit the information regarding the cost involved in furnishing flats.
The Two-member bench comprising of Amit Shukla (Judicial member) and S. Rifaur Rahman (Accountant member) held that there was a huge difference in the rent collected by the assessee from M/s.Hover India Automotive and M/s.Anmol Rice Mills Pvt. Ltd., and both are claimed to be furnished apartments.
It was observed from the record that the assessee has not submitted any information regarding the cost involved in furnishing of above flats to the tax authorities. During the hearing, the bench asked the assessee to submit the balance sheet of the assessee company as well as the sister concern i.e., M/s Lalco Services Apartment LLP but no such information was submitted subsequently and till date. Therefore, the addition made by the Assessing Officer was sustained and the appeal of the assessee was dismissed.
The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) held that the assessee has neither concealed the particulars of income nor has furnished inaccurate particulars of income so as to levy of penalty under Section 271(1)(c) of the Income Tax Act,1961.
The Bench comprising of Waseem Ahmed, Accountant Member and Siddhartha Nautiyal, Judicial Member observed that the sum of Rs. 5,10,090/- was the interest paid / credited on the aforesaid cash credits as well as seized liability and therefore, since this issue has been decided in favour of the assessee by the ITAT, the Tribunal is of considered view that this is not a fit case for levy of penalty under Section 271(1)(c) of the Income Tax Act. The Tribunal held that this is not a case where the assessee has concealed the particulars of income or has furnished inaccurate particulars of income so as to levy of penalty under Section 271(1)(c) of the Income Tax Act. Hence the appeal of the assessee is allowed.
The Pune bench of the Income Tax Appellate Tribunal (ITAT) quashed the revision order on the ground of deduction made towards the remuneration of partners which was not covered within the scope of limited scrutiny.
The Two-member bench comprising of R.S. Syal (Vice-President) and Partha Sarathi Chaudhury (Judicial member) held that the scope of the Assessing Officers verification did not cover the issue of remuneration to partners. The CCIT did not make any case of converting ‘limited scrutiny’ into ‘complete scrutiny’ as a ground for revision. It is, therefore, held that the CCIT was not justified in branding the assessment order erroneous and prejudicial to the interest of the Revenue. Thus, the appeal was allowed.
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) held that the municipal tax shall be allowable as expenditure under Section 24 of the Income Tax Act, 1961 when the assessee paid the proportionate tax to the society.
The Two-member bench comprising of Amit Shukla (Judicial member) and S. Rifaur Rahman (Accountant member) held that this system of collection of municipal taxes are common in the housing societies where the ownership of the building is with the society and the land belongs to 3rd parties as land owners. The municipality register or receipt will not have the name of the flat owners, but the name of the land owners. Therefore, the claim of the assessee was proper in this case and the Assessing Officer was directed to allow the claim after verification. Thus, the appeal of the assessee was allowed.
The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) held that Denial of export benefits merely due to non-availability of International Private Leased Circuit connection when the evidence for rendering of services, invoicing for the services done and realization of foreign currency are established, is not justified.
After hearing both the parties, two member bench of the tribunal consisting of Beena Pillai (Judicial member) and Chandra Poojari (Accountant member) held that the denial of export benefits merely due to non-availability of International Private Leased Circuit connection when the evidence for rendering of services, invoicing for the services done and realisation of foreign currency are established, is not justified. Thus the appeal was allowed.
The Pune bench of the Income Tax Appellate Tribunal (ITAT), when ruling on the appeal, noted that the Income Tax Department had erred by classifying partners’ remuneration as salary income.
After considering the facts submitted and circumstances, the two member bench of G.D. Padmahshali (Accountant Member) and Partha Sarathi Chaudhury (Judicial Member) remanded the file back to NFAC for readjudication of remuneration given to a partner by the partnership firm. Pramod Shingte, counsel appeared for the assessee and Ganesh Budruk, counsel appeared for the revenue.
The Bangalore Bench of Income Tax Appellate Tribunal (ITAT) has upheld the addition under Section 56(2) (viib) of the Income Tax Act as the share premium received by the company was in excess of the Fair market value of share.
The two-member Bench of Chandra Poojari, (Accountant Member) and Madhumita Roy, (Judicial Member) having regard to the facts and circumstances of the case, upheld the finding of the authorities and dismissed the appeal filed by the assessee holding that the share premium received by the company was in excess of fair market value of the share, the addition thus made under Section 56(2)(viib) of the Income Tax Act was found to be just and proper.
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has directed the Departmental Valuation Officer (DVO) to determine the Fair Market Value (FMV) holding that the two FMV reports could not be considered for the same property on a particular date.
The two member Bench of Vikas Awasthy, (Judicial Member) and S.Rifaur Rahman, (Accountant Member) observed that on pursuing first proviso to clause (x) would make it clear that where the date of agreement fixing the amount of consideration for the transfer of immovable properties and the date of registration are different, the stamp duty value on the date of agreement shall be taken into consideration for the purpose of section 56(2)(x) of the Income Tax Act. The second proviso to clause (x) further clarifies that the first proviso shall apply where the assessee had paid part consideration by way of cheque or bank draft or through electronic clearing system of on or before the date of agreement.
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the Assessing Officer (AO) could not reject the valuation report of share merely based on the absence of DCF method in rule 11UA of Income Tax Rules, 1962 at the time of issuance of shares.
The two-member Bench of N.K. Billaiya, (Accountant Member), And Anubhav Sharma, (Judicial Member) observed that the Assessing Officer had not pointed out any flaw, infirmity or error in the valuation of the fair market value determined by DCF method and had simply rejected because on the date of issue of shares, DCF method was not there in Rule 11UA of the Income Tax rules, but was subsequently introduced. In our considered opinion, this could not be a valid reason for discarding the valuation.
The Bench dismissed the appeal filed by the revenue, upholding the decision of Commissioner of Income Tax Appeals as the Assessing officer had simply rejected the valuation of the assessee on the ground that on the date of issue of shares, DCF method was not there in Rule 11 UA of Income Tax Rules.
The Income Tax Appellate Tribunal (ITAT) Mumbai bench held that no transfer pricing applicable to income from operation carried out through qualifying ships taxed under Tonnage Tax Scheme(TTS).
After considering the facts submitted and circumstances, the two member bench of Padmavathy S (Accountant Member) and Vikas Awasthy (Judicial Member) held that “transfer pricing regulations do not apply to the assessee to the extent of operations carried out through operating qualifying ships where the income is taxed under TTS.”
The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) while granting relief to the assessee held that the incorrect accounting and wrong grouping of headings cannot be termed as a bogus investment.
The Two-member bench comprising of Sanjay Garg (Judicial member) and Manish Borad (Accountant member) held that it is not a case of bogus investment but it is a case where proper accounting under the correct group heading has not been done which has thus, giving rise to the issue in question before us.
The Income Tax Appellate Tribunal (ITAT) Mumbai bench while deleting additions made towards the allocation of head office expenses held that qualifying activities under Tonnage Tax Scheme (TTS) are outside provisions of Transfer Pricing (TP).
After Reviewing the facts submitted and the circumstances, the two member bench of Padmavathy S (Accountant Member) and Vikas Awasthy (Judicial Member) directed the assessing officer/TPO to delete the adjustment made towards the qualifying activities under TTS only.
The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) held that Section 14A of Income Tax Act,1961 applies when shares are held as “stock -in-trade” for the purpose to trade in those shares and earn profits.
The Bench comprising of Smt. Annapurna Gupta, Accountant Member and Siddhartha Nautiyal, Judicial Member relied on the decision of Supreme Court in the case of Maxopp Investment Ltd. wherein it has been held that when the shares are held as ‘stock-in-trade’, by virtue of Section 10 (34) of the Income Tax Act, this dividend income is not to be included in the total income and is exempt from tax, which triggers the applicability of Section 14A of the Income Tax Act which is based on the theory of apportionment of expenditure between taxable and non-taxable income as held in Walfort Share & Stock Brokers (P.) Ltd. case.
The Income Tax Appellate Tribunal (ITAT), Delhi bench, held that receipts from providing satellite telecommunication services to Indian customers are not Royalty under India-Netherlands Double Taxation Avoidance Agreements (DTAA).
After reviewing the facts and records, the two-member bench of G. S. Pannu, (President ) and Challa Nagendra Prasad (Judicial Member) held that amounts received by the assessee for the use of transponder of tele-communication service charges are not royalty under section 9(1)(vi) of the Income Tax Act and also under Article 12(8) of Indo Netherland DTAA.
The Income Tax Appellate Tribunal (ITAT), Delhi bench, dismissed the appeal due to non-compliance with the notice issued by the Income Tax Department for determining the value of land under Section 50C of the Income Tax Act, 1961.
After reviewing the facts and records, the two-member bench of Rathod Kamlesh Jayantbhai (Accountant Member) and Sandeep Gosain (Judicial Member) dismissed the appeal due to non-compliance with the notice issued by the Income Tax Department for determining the value of land under Section 50C of the Income Tax Act.
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has granted relief to Cleartrip holding that the proviso to Section 68 of the Income Tax Act would not be applicable to non-resident investors.
The two-member Bench of Prashant Maharishi, (Accountant Member) and Sandeep Singh Karhail, (Judicial Member) observed that it was correctly stated that though the identity of assessee decided in earlier years could be accepted but how the creditworthiness of the investor and genuineness of transaction needs to be tested with respect to each transaction independently. The Bench dismissed the appeal filed by the revenue holding that the assessee fairly showed their identification, creditworthiness, and the sincerity of the move. An investor who was not a resident was not covered by Section 68 of Income Tax Act. Even in the absence of other evidence, the assessee had independently demonstrated the type and source of the funds held by the non-resident 100% holding company investor.
The Bangalore Bench of Income Tax Appellate Tribunal (ITAT) has held that no tax is leviable on interest accrued on FD subjected to Central Bureau of Investigation’s (CBI) prohibitory order.
The Two-member Bench of Chandra Poojari,(Accountant Member) and Madhumita Roy, (Judicial Member) observed that the the lower authorities had committed an error in bringing the interest accrued on FD, which was subject to a prohibitory order by CBI Hyderabad, into tax in these assessment years under consideration and the same had to be taxed in the assessment year when it was actually received by the assessee or the right to receive accrued to the assessee.
The Bench partly allowed this ground of appeal filed by the assessee holding that because of the restraint order of the Court, there was no right accruing to the assessee to receive the income and accordingly the amount could not be treated as its income for the assessment year under consideration.In other words, the assessee had to pay the tax on the same on actual accrual of right to receive this impugned interest by the assessee in any assessment year and not in these assessment years.
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) held that the extent that the date of allotment letter is relevant for determining FMV of asset/flat.
The Bench comprising of Vikas Awasthy, Judicial Member and S.Rifaur Rahman, Accountant Member observed that a bare perusal of first proviso to clause (x) of Section 56 of Income Tax Act would make it clear that where the date of agreement fixing the amount of consideration for the transfer of immovable properties and the date of registration are different, the stamp duty value on the date of agreement shall be taken into consideration for the purpose of Section 56(2)(x) of the Income Tax Act.
The Tribunal directed the AO to adopt the Fair Market Value of the property`determined by the DVO as in the case of assessee’s brother. Hence appeal of the assessee was allowed.
The Ahmedabad Bench of Income Tax Appellate Tribunal held that expenses involving freebies to the doctors given by pharmaceutical companies is subject to disallowance under Section 37(1) of the Income Tax Act,1961.
The Bench comprising of Waseem Ahmed, Accountant Member and T.R Senthil Kumar, Judicial Member relied on the decision of Supreme Court in M/s Apex Laboratories (P.) Ltd. (P.)Ltd. v. Dy. CIT where it was held that the Circular applicable on pharmaceutical companies and holding the judgment against the assessee, highlighted on the essence where the freebies or gifts have the potential to influence or manipulate the prescription of a medical practitioner which can be incentivize the doctor’s intention to avail more luxurious and expensive freebies offered by the pharmaceutical companies.
Therefore the Tribunal held that only so much of the expenses involving freebies to the doctors shall be subject to disallowance. Thus set aside the issue to the file of the AO for fresh/ de-novo verification of the expenses falling under the category of freebies. Hence, the grounds of appeal of the revenue and the assessee were allowed for statistical purposes.
The Income Tax Appellate Tribunal (ITAT), Delhi bench, held that no addition should be made under Section 68 of the Income Tax Act, 1961, based on surmises and conjectures. Therefore, the bench directed readjudication to verify the repayment of loans.
After reviewing the facts and records, the two-member bench of Pradip Kumar Kedia (Accountant Member)and Chandra Mohan Garg (Judicial Member) held that no addition should be made under Section 68 of the Income Tax Act based on surmises and conjectures. Further, the bench remits the matter back to the file of the AO for the limited purpose of verifying aspects of repayment of loans that remained outstanding at the end of the financial year 2012-13, relevant to AY 2013-14 in question.
The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) held that the Assessing Officer has no power to reopen the assessment when an order is passed by the Income Tax Settlement Commission under Section 245D of the Income Tax Act, 1961.
The Two-member bench comprising of Suchitra Kamble (Judicial member) and Waseem Ahmed (Accountant member) held that the CIT(A) has rightly held that claims which are part of the resolution plan stood extinguished as well as once the Income Tax Settlement Commission has decided/settled the tax component between the assessee and the revenue, the revenue authorities do not have any power to reopen such assessment. Thus, the appeal filed by the revenue was dismissed.
The Raipur Bench of Income Tax Appellate Tribunal (ITAT) held that the penalty imposed by Assessing Officer (AO) during assessment proceeding under Section 271 of Income Tax Act,1961 is within the period of limitation contemplated in clause (a) of subsection (1) to Section 275 of the Income Tax Act.
The bench comprising of Ravish Sood, Judicial Member and Arun Khodpia, Accountant Member observed that the CIT(A) and, rightly so, the limitation for imposing penalty under Section 271(1)(b) of the Income Tax Act as per the time period contemplated in clause (a) of subsection (1) to Section 275 of the Income Tax Act, i.e six months from the end of the month in which appellate order was received. The ITAT order dated 17.12.2014, expired on 31.07.2015, therefore, the order dated 27.07.2015 imposing the aforesaid penalty was well within the limitation period.
It was held that unable to concur with the solitary contention advanced by the AR, i.e the penalty imposed by the A.O under Section 271(1)(b) of the Income Tax Act was barred by limitation, the Tribunal upheld the view taken by the lower authorities. Thus, the appeal of the assessee was dismissed.
The Income Tax Appellate Tribunal (ITAT), Jodhpur bench, held that late fees under Section 234E of the Income Tax Act, 1961, towards the belated filing of Tax Deduction at Source return should not be levied prior to 01.06.2016.
After reviewing the facts and records, the two-member bench of Rathod Kamlesh Jayantbhai (Accountant Member) and Dr. S. Seethalakshmi (Judicial Member) held that the late fees under Section 234E of the Income Tax Act could not have been levied in the intimation under Section 200A of the Income Tax Act for the delay in filing quarterly returns of TDS. The said power to levy fees has come into effect from 01.06.2015. Therefore, the bench vacated the levy under Section 234E of the Income Tax Act.
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) held that the amount declared as an advance in the year under consideration and offered to tax in the subsequent year cannot be again added to the income of the assessee as it will result in double taxation.
The Two-member bench comprising of Prashant Maharishi (Accountant member) and Sandeep Singh Karhail (Judicial member) held that the CIT(A) had correctly directed the Assessing Officer to delete the addition of Rs. 2,20,68,779, which was declared as advance by the assessee in the year under consideration and offered to tax in the subsequent year on the basis of project completion.
Therefore, the bench didn’t find any infirmity in the directions of the CIT(A) to restrict the credit of TDS only with respect to the income of Rs. 9,79,79,884 for the assessment year 2008-09 and the balance excess claim for TDS be allowed in the subsequent years in which the income has been offered to tax as per the consistent accounting practice followed by the assessee. Accordingly, the order passed by the CIT(A) was upheld and the appeal of the Revenue was dismissed.
The Income Tax Appellate Tribunal (ITAT), Jodhpur bench, held that the Income Tax Department has no power to levy late fee and interest in respect of Tax Deduction at Source (TDS) as per intimation under Section 200A of the Income Tax Act, 1961 prior to the amendment of the law.
After reviewing the facts and records, the two-member bench of Rathod Kamlesh Jayantbhai (Accountant Member) and Dr. S. Seethalakshmi (Judicial Member) held that the late fees under Section 234E of the Income Tax Act could not have been levied in the intimation under Section 200A of the Income Tax Act for the delay in filing quarterly returns of TDS. The said power to levy fees has come into effect from 01.06.2015. Therefore, the bench allowed the appeal of the assessee.
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) held that voluntary deposit of tax should not be considered as admission of guilt before receiving notice under Section 148 of the Income Tax Act, 1961. Hence, the bench deleted the penalty imposed under Section 271(1) of the Income Tax Act, 1961.
After considering facts and reviewing the records, the two-member bench of Astha Chandra (Judicial Member) and N. K. Billaiya (Accountant Member) held that voluntary deposit of tax should not be considered as admission of guilt before receiving notice under Section 148 of the Income Tax Act. M.P. Rastogi, counsel, appeared for the assessee, and Vivek Vardhan, counsel, appeared for the revenue.
The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) held that the deletion of the disallowance of Education Expenditure under Section 37 of the Income Tax Act,1961 is justified because the assessee provided detailed information regarding Director’s Education Fees.
The Single Member Bench comprising of Ms. Suchitra Kamble, Judicial Member observed that the reopening itself is not justified as the assessee has given all the details related to the education fees of the director during the assessment proceedings passed under Section 143(3) of the Income Tax Act. In fact, it is mere change of opinion. Thus, application filed by the assessee under Rule 27 of the Income Tax Appellate Tribunal Rules, 1963 was allowed. Thus, the appeal of the Revenue was dismissed.
The Income Tax Appellate Tribunal (ITAT) Mumbai bench held that municipal tax paid by the society on behalf of flat owners is eligible for deduction under Section 24 of the Income Tax Act, 1961.
After considering the facts submitted and the circumstances, the two-member bench of S. Rifaur Rahman (Accountant Member) and Amit Shukla (Judicial Member) held that municipal tax paid by the society on behalf of flat owners is eligible for deduction under Section 24 of the Income Tax Act. Therefore, the bench allowed the ground raised by the assessee.
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