This annual digest analyzes all the ITAT stories published in 2023 at taxscan.in
The Income Tax Appellate Tribunal (ITAT), Jaipur bench, held that the purchase/sale of immovable property for business purposes did not attract Section 50C of the Income Tax Act, 1961. Therefore, the bench deleted the addition made by the assessing office
After considering the facts submitted and the circumstances, the two-member bench of Rathod Kamlesh Jayantbhai (Accountant Member) and Dr. S. Seethalakshmi (Judicial Member) concluded that the purchase/sale of immovable property for business purposes did not attract Section 50C of the Income Tax Act.
The Bangalore Bench of Income Tax Appellate Tribunal (ITAT) has deleted the addition under Section 69B of the Income Tax Act 1961 as the bank accounts extract evidencing payment of purchase of jewellery was produced. The two-member Bench of Chandra Poojari, (Accountant Member) and Madhumita Roy, (Judicial Member) dismissed the appeal filed by the assessee holding that the value of jewellery as on 31.3.2016 was Rs.2,611/-p.gm., the CIT(A) had arrived at the possible quantity of gold with the assessee as on 31.3.2016 weighing at 9089 gms. and thus, the quantity of gold found during the course of search was 8650.81 gms., which was lesser than the possible gold to be with assessee as on 31.3.2016 at 9089 gms. As such, he gave a relief to the assessee for having the gold, which is less than the possible gold to be with the assessee as on 31.3.2016.
The Bangalore Bench of Income Tax Appellate Tribunal (ITAT) has directed re-adjudication holding that the amounts invested by the cooperative societies as per Karnataka Co-operative Societies Act are entitled to deduction under Section 80P(2)(a)(i) of the Income Tax Act
“If the amounts are invested in compliance with the Karnataka Co-operative Societies Act, necessarily, the same is to be assessed as income from business, which entails the benefit of deduction u/s 80P(2)(a)(i) of the I.T.Act. Insofar as deduction u/s 80P(2)(d) of the I.T.Act is concerned, we make it clear that interest income received out of investments with cooperative societies is to be allowed as deduction.”
The Jaipur Bench of Income Tax Appellate Tribunal (ITAT) has deleted the penalty under Section 271B of the Income Tax Act 1961, as the turnover was below 2 crores as prescribed under Section 44AD of Income Tax Act 1961.
Thus, on conjoint reading of the Section the Bench held that the assessee was eligible to avail the benefit of presumptive taxation up to Rs. 2 crores turnover and the assessee had not controverted the provisions of Section 44AB of the Income Tax Act and since turnover was not exceeding the revised limit of Rs. 2 crores.
The Jaipur Bench of Income Tax Appellate Tribunal (ITAT) has quashed the revision order under Section 263 of the Income Tax Act 1961, holding that every loss of revenue as a consequence of the order of the Assessing officer (AO) could not be treated as prejudicial to the interest of revenue.
The Bench quashed the impugned order relying upon the Supreme Court decision in the case of CIT vs. Max India Ltd which held that, “The phrase ‘prejudicial to the interests of the Revenue’ in s. 263 of the IT Act, 1961, has to be read in conjunction with the expression ‘erroneous’ order passed by the AO. Every loss of revenue as a consequence of an order of the AO cannot be treated as prejudicial to the interests of the Revenue. For example, when the AO adopts one of two courses permissible in law and it has resulted in loss of revenue, or where two views are possible and the AO has taken one view with which the CIT does not agree, it cannot be treated as an erroneous order prejudicial to the Revenue, unless the view taken by the AO is unsustainable in law.”
The Ahmedabad Bench of Income Tax Act Appellate Tribunal (ITAT) held that children education, helper & uniform attire reimbursement, the same are coming under the purview of Section 10(14) of the Income Tax Act,1961 thus allowed tax free allowance on these perquisites.
The Bench comprising of Smt. Annapurna Gupta, Accountant Member and Ms. Suchitra Kamble, Judicial Member observed that it is pertinent to note that the incentive such as car reimbursement, driver salary reimbursement and telephone reimbursement comes under the purview of taxable income and thus the AO has rightly disallowed the same as they are perquisites. But, as regards to children education, helper & uniform attire reimbursement, the same are coming under the purview of Section 10(14) of the Income Tax Act and hence are allowable.
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) while granting relief to Laxmi Narayan mandir trust held that Section 13(2)(a) of the Income Tax Act, 1961 doesn’t authorize the revenue to compute the notional interest when no such interest is charged by the trust.
Thus, in a case when no real interest was accrued or received nor the same was recorded by the assessee in its books of accounts, there were no merits in the findings of the CIT(A) in upholding the addition made by the Assessing Officer by computing the notional interest and adding the same to the total income of the assessee. Accordingly, the Assessing Officer was directed to delete the addition of Rs. 1,66,77,849 on account of notional interest income. As a result, the appeal of the assessee was allowed.
The Income Tax Appellate Tribunal (ITAT), Raipur bench, held that depreciation cannot be claimed on hired vehicles used in a Mining Contract. Therefore, the bench upheld the revision order.
The tribunal, while considering the appeal, observed that the hiring of vehicles in terms of Section 32 could not be specified. Further, the PCIT had rightly observed to disallow such additional depreciation when the vehicles are used in the assessee’s own business and not on hire. After reviewing the contentions of both parties, the two-member bench of Arun Khodpia (Accountant Member) and Ravish Sood (Judicial Member) upheld the revision order passed by the PCIT.
The Income Tax Appellate Tribunal (ITAT), Chennai bench, held that no enhanced cost was paid for the transfer of the textile spinning unit acquired through an auction sale of Bank of Baroda. Therefore, the bench allowed the depreciation.
After reviewing the contentions of both parties, the two-member bench of Manjunatha.G (Accountant Member) and Mahavir Singh (Vice President) allowed the depreciation claimed on the textile spinning unit acquired through an auction sale.
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the maintenance charges received from corporate members are governed by principle of mutuality and are exempted from tax.
In the instant case, as stated (supra), the maintenance charges received by the Assessee association from its corporate members would be exempt from tax on the basis of principle of mutuality. Merely because the same had been subjected to deduction of tax at source by the payer, the receipt would not partake the character of the taxable receipt. The receipt of said maintenance charges from corporate members would be still exempt in the hands of the Assessee and the Assessee would be eligible to claim refund of TDS on filing the returns.
The Income Tax Appellate Tribunal (ITAT) Mumbai bench while deleting the penalty imposed under Section 270A Income Tax Act, 1961 observed that no information received was by assessee in respect of interest on income tax refund to tax available at time of filing return of income.
After reviewing the contentions of the both parties the two member bench of Dr B.R.R. Kumar (Accountant Member) and C.M. Garg (Judicial Member) observed that the explanation of the assessee for not offering the interest on income tax refund while filing its return of income is bona fide. Therefore, the bench held that non-declaration of interest on income tax refund cannot be said to be under reporting of income by the assessee within the meaning of Section 270A of the Income Tax Act.
The Income Tax Appellate Tribunal (ITAT) Chennai bench held that excess gold jewellery stock found during the survey proceedings as stock transferred from proprietary concern to partnership firm, which was not an unexplained investment under Section 69B of the Income Tax Act, 1961.
After reviewing the contentions of the both parties the two member bench of Manjunatha.G (Accountant Member) and Mahavir Singh, (Judicial Member) held that excess gold jewellery in stock found during the survey proceedings as stock transferred from proprietary concern to partnership firm is not an unexplained investment under Section 69B of the Income Tax Act, thus directing to tax the same as business income of assessee.
The Income Tax Appellate Tribunal (ITAT ) Kolkata bench held that long Term Capital Gain (LTCG) from sale of equity shares of penny stock companies listed with Bombay Stock Exchange (BSE) is not eligible for exemption under Section 10(38) of Income Tax Act, 1961.
After considering the facts submitted and circumstance, the two member bench of Dr. Manish Borad, (Accountant Member ) and Sanjay Garg, (Judicial Member) dismissed the appeal of the assessee
The Income Tax Appellate Tribunal (ITAT) Pune bench held that, while noting the development of commercial projects by assessee along with residential projects directed readjudication for claiming deduction under Section 80IB (10) of the Income Tax Act, 1961
After considering the facts submitted and circumstances, the two member bench of G.D. Padmahshali (Accountant Member) and Partha Sarathi Chaudhury (Judicial Member) restored to the file of the NFAC for adjudication as per law and the assessee was directed to submit the details of residential units. The adjudicating authority was also directed to decide the case in accordance with natural justice principles.
The Bangalore Bench of Income Tax Appellate Tribunal (ITAT) remanded the ex-parte order to the files of Assessing Officer for re-adjudication in regards to the disallowance of deduction on business expenses for the payment of penalties to clients or customers for contract violations.
The Two Member Bench comprising of Chandra Poojari, Accountant Member and Ms. Madhumita Roy, Judicial Member observed that having regard to the penalty compensatory in nature and the assessment order is ex-parte, to meet the ends of justice it would be fit and proper to remit the issue to the file of the AO to verify the same afresh and to pass a reasoned order. The AO was further directed to give an opportunity of being heard to the assessee and to consider the evidence / judgment to be relied upon by the assessee during the course of hearing of the matter. Hence, the appeal filed by the assessee was allowed for statistical purposes.
The Chennai Bench of Income Tax Appellate Tribunal (ITAT) held that the donor has amply expressed the intention that the advances were given merely as gifts since the inception thus upheld the order of Commissioner of Income Tax (appeals) [CIT(A)] in deleting penalty under Section 271D of Income Tax Act.
The Bench comprising of V. Durga rao, Judicial Member and Manoj Kumar Aggrawal, Accountant Member observed that this transaction was recorded by the assessee in the accounts as “gift” which was evident from assessee’s capital account as furnished along with return of income. To support the same, the assessee has obtained confirmation letter from his aunt and furnished it before the AO. The assessee always considered the transaction as gift and never changed his stand at any point of time. It was only the donor who had given the confirmation letter and submitted the affidavit clarifying the transaction in the course of assessment proceedings. Thus, the donor has amply expressed the intention that the advances were given merely as gifts since the inception. This being the case, the impugned penalty has rightly been deleted by CIT(A). Therefore, the Tribunal did not find any reason to interfere in the same. Thus the appeal of the Revenue was dismissed.
The Income Tax Appellate Tribunal (ITAT) Delhi bench held that receipts from Indian Hotel Owners towards the centralized services provided by Westin Hotel Management are not taxable in India as Fee for Technical Service
After reviewing the facts and circumstances the two member bench of Dr. B.R.R. Kumar (Accountant Member) and Saktijit Dey (Vice-President) relied upon the decision of Delhi High Court in case of Director of Income-tax vs. Sheraton International Inc. and observed that revenue received by the assessee for providing centralized services is not in the nature of Fee for Technical Services (FTS) under Section 9(I)(vi) Explanation of Income Tax Act, but it is a business income. Since the assessee is not having any PE in India, its business income earned is not taxable in India. Therefore the bench dismissed the appeal filed by the revenue.
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has upheld the addition of capital gain on slump sale of sugar unit on failure to furnish purchaser company confirmation and documentary evidence on conveyance deed.
The two-member Bench of Chandra Mohan Garg, (Judicial Member) and M. Balaganesh, (Accountant Member) dismissed the appeal filed by the assessee observing that the appellate had failed to furnish confirmation from the purchaser company and the documentary evidence particularly conveyance deed dated 08.09.2014 clearly revealed that the assessee received sale consideration of Rs. 75.50 crores in four instalments through banking channels from the purchaser company and therefore there was no reason to interfere with the findings of Assessing Officer making impugned addition to the capital gain income of assessee.
The Income Tax Appellate Tribunal (ITAT ) Delhi bench deleted the penalty under section 271AAA of the Income Tax Act, 1961 due to lack of opportunity to explain the undisclosed income source during the search proceedings.
After considering the facts submitted and circumstances, the two member bench of Dr. B. R. R. Kumar (Accountant Member) and C.M. Garg (Judicial Member) deleted the penalty under section 271AAA of the Income Tax Act due to lack of opportunity to explain the undisclosed income source during the search proceedings and due compliance with the all requirements of mandate of law envisaged in sub section (2) of Section 271AAA of the Income Tax Act.
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) held that Transaction of shares not being in penny stocks canoot be covered by CBDT circular owing to low tax effect
After hearing both the parties, the two member bench of the tribunal consisting of Chandra Mohan (Judicial member) and Girish Agrawal (Accountant member) held that the Revenue is dismissed owing to the low tax effect. However, liberty was granted to the Revenue, if the learned Assessing Officer finds that appeal is not hit by the aforesaid CBDT Circular, he may approach the Tribunal in accordance with the appropriate provisions of law. Thus the appeal was dismissed.
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) held that appellant failed to substantiate source of claim of investment in the said property for the purpose of Section 54F of the Income Tax Act and hence upheld the addition of Rs. 15,03,000/- made by the Assessing Officer (AO).
The Bench comprising of N. K. Billaiya, Accountant Member and Anubhav Sharma, Judicial Member held that addition of Rs. 15,03,000/-, there are no evidences except self serving affidavits of family members. The CIT(A) has rightly observed that AO has logically related the investment and availability of funds with the appellant, while holding that appellant failed to substantiate source of claim of investment in the said property for the purpose of Section 54F of the Income Tax Act. Hence the appeal of the assessee was dismissed on this ground.
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) held that the onus which lays upon the assessee to explain that the entries made are real and not fictitious, has been duly discharged.
The two member bench consisting of Chandra Mohan Garg (Judicial member) and Pradip Kumar Kedia (Accountant member) were thus in agreement with the pith and substance of plea advanced on behalf of respondent assessee and endorsed the action of the CIT(A). Thus the appeal was dismiss
The Hyderabad Bench of Income Tax held that the assessee was not present before the Commissioner of Income Tax Appeals [CIT(A)] in the appellate proceedings and has not filed any document to substantiate his case, thus remanded the case to the file of Assessing Officer(AO) to review the claim of deduction under Section 54F of the Income Tax Act,1961.
The Single Member Bench comprising of Laliet Kumar, Judicial Member observed that it is abundantly clear that the assessee was not present before the CIT(A) in the appellate proceedings and has not filed any document to substantiate his case. Therefore the Tribunal remanded back the matter to the file of AO with a direction to review the claim of deduction under Section 54F of the Income Tax Act made by the assessee specifically with respect to the application of Section 50C of the Income Tax Act and the eligibility for deduction under Section 54F of the Income Tax Act. In case, the assessee failed to file any documents in support of his case, the AO shall decide the matter in accordance with the law. Hence, appeal of the assessee was allowed for statistical purposes.
The Bangalore Bench of Income Tax Appellate Tribunal (ITAT) held that addition under Section 69 of the Income Tax Act was not justifiable when the income was estimated under Section 44 A.D of the Income Tax Act,1961.
The Bench comprising of Chandra Poojari, Accountant Member and Ms. Madhumita Roy, Judicial Member refered the decision of the Cochin Bench that addition under Section 69 of the Income Tax Act was not justifiable when the income was estimated under section 44 A.D of the Income Tax Act.
The Bench comprising of Chandra Poojari, Accountant Member and Ms. Madhumita Roy, Judicial Member refered the decision of the Cochin Bench that addition under Section 69 of the Income Tax Act was not justifiable when the income was estimated under section 44 A.D of the Income Tax Act.
The Income Tax Appellate Tribunal (ITAT) Pune bench when deleting penalty imposed under Section 271AA of the Income Tax Act, 1961 held that the failure to produce the audit report by assessee in Form No.3CEB required under Section 92E Income Tax Act, 1961 occurred due to the opinion of Chartered Accountant (CA) of the assessee company.
After considering the facts submitted and circumstances, the two member bench of Padmavathy S (Accountant Member) and Vikas Awasthy (Judicial Member) held that Failure to produce audit report in form No.3CEB required under Section 92E of Income Tax Act occurs due to opinion of CA of assessee company. Therefore, the bench deleted the penalty imposed under Section 271AA of the Income Tax Act.
The Income Tax Appellate Tribunal (ITAT) Chennai bench held that the assessing officer passed the assessment order without examining taxability of land sold by the assessee. Therefore the order is erroneous and in so far as it is prejudicial to the interest of Revenue.Hence the bench upheld the revision order passed under Section 263 of the income tax act, 1961.
After considering the facts submitted and circumstances, the two member bench of Manoj Kumar Aggarwal (Accountant Member) and V. Durga Rao, (Judicial Member) held that the assessment order passed by AO was without examining taxability of land sold by assessee. Therefore the bench upheld the revision order.
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has directed denovo benchmarking holding that the Resale Price Method (RPM) is the most appropriate method in international transactions of Celio future fashion pertaining to import of men’s wear for resale.
The Bench further noted that the Departmental Representative could not show us any reason to deviate from the aforesaid decision rendered in assessee’s own case and no change in facts and law was alleged in the relevant assessment year. Thus, respectfully following the order passed by the coordinate bench of the Tribunal in assessee’s own case the contention of the assessee in applying RPM as the most appropriate method had been upheld. Accordingly, this ground of appeal filed by the assessee was allowed and the order passed by the TPO/AO on this issue was set aside and the TPO/AO was directed to de novo benchmark the international transaction pertaining to import of men’s wear for resale‟ by applying RPM as the most appropriate method.
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has directed for verification of sources explained through the settlement before the settlement commission for addition under Section 69 of the Income Tax Act 1961.
The two-member Bench of Amit Shukla (Judicial Member) and Padmavathy S. (Accountant Member) noticed that the assessing officer did not call for any further details from assessee to provide any additional details to substantiate the claim. Further the CIT(A) had allowed the appeal of the assessee by relying on the decision in the case of India bulls Financial Services Ltd., which was one of the applicants before the settlement commission. The Bench allowed the appeal filed by the revenue sending back to the assessing officer for a fresh examination and to verify whether the source for the additions made in the hands of the assessee was explained through the settlement made before the settlement commission. The assessee was directed to submit the relevant details before the assessing officer and cooperate with the proceedings.
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) held that the disallowance under Section 37 of the Income Tax Act, 1961 cannot be made when the details have been furnished by the assessee for the business promotion expenditure.
The Two-member bench comprising of M. Balaganesh (Accountant member) and Anubhav Sharma (Judicial member) held that the CIT(A) has extensively dealt with the issue on the basis of the nature of the business of the assessee. The whole model of the business of the assessee is dependent upon the agents or distributors who are given incentives and there is business expediency with promotion of the business of the assessee due to these expenditures as in A.Y. 2013-14 so in the present assessment year also, as the assessee had brought on record the effect of business promotion expenses in the increase of the turnover and net profit.
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) deleted the addition under Section 69C of the Income Tax Act, 1961, and held that the share transaction cannot be treated as bogus just by the statement of the broker to have provided accommodation entries.
The Two-member bench comprising of Amit Shukla (Judicial member) and Amarjit Singh (Accountant member) held that where the transactions have been made both purchases and sales online and there was no adverse material or information except with some brokers stated in their statement that they have provided accommodation entry in various scrips in one such scrip involved, that does not lead to drawing any adverse inference to treat the share transactions as bogus done through stock exchange.
The Chennai bench of the Income Tax Appellate Tribunal (ITAT) held that the software is an integral part of the computer system and shall be eligible for the same rate of depreciation as applicable to the computer system.
The Two-member bench comprising of V. Durga Rao (Judicial member) and Manoj Kumar Aggarwal (Accountant member) accepting the submission of the assessee and the Commissioner of Income Tax (Appeal) [CIT(A)] concurred with the assessee’s submissions and directed the Assessing Officer to allow the higher depreciation of 60%. Thus, the appeal of the revenue was dismissed.
Support our journalism by subscribing to Taxscanpremium. Follow us on Telegram for quick updates
