ITAT Weekly Round Up

This is the weekly round of the Income Tax Appellate Tribunal ( ITAT ) that were published at Taxscan.in from March 16, 2024 to March 22 are analytically summarized in this Round-Up. AO blindly relied Investigation Wing report for Reopening Assessment, No application of mind: ITAT quashes Reassessment Order Akik Marketing India Pvt. Ltd vs ITO CITATION: 2024 TAXSCAN (ITAT) 383 The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) has nullified the Reassessment Order, pointing out that the Assessing Officer ( AO ) relied blindly on the Investigation Wing report for reopening the assessment without due diligence The two-member bench of the tribunal, comprising M. Balaganesh ( Accountant member ) and Anubhav Sharma ( Judicial member ), noted the unreasonableness of the reassessment proceedings. They observed a lack of application of mind by the AO during the recording of reasons, coupled with vague and unjustified justifications. Ultimately, the ITAT decision highlighted the importance of AO’s independent assessment and diligent consideration of tangible evidence before initiating reassessment proceedings, rather than mere reliance on reports without proper scrutiny. Rental Income Shall be treated as Income from House Property, not Income from Other Sources: ITAT grants Relief to Piramal Enterprises M/s. Piramal Enterprises vs Dy. Commissioner of Income Tax CITATION: 2024 TAXSCAN (ITAT) 384 In a recent decision, the Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) granted Piramal Enterprises relief by ruling that rental income from RP House should be treated as income from house property, not income from other sources, contrary to the CIT(A)’s decision. The coordinated bench of the Tribunal, comprising S. Rifafur Rahman ( Accountant Member ) and Kuldip Singh ( Judicial Member ), accordingly following the order passed by the co-ordinate Bench of the Tribunal on the identical issue AO is directed to assess the rental income of let out portion of RP house as income from house property. This ground was decided in favour of the assessee Burden Shifts on AO to prove that cause Lacks Bonafide when Taxpayer shows reasonable cause for accepting Cash Loan: ITAT Mani Sundaram vs The Income Tax Officer CITATION: 2024 TAXSCAN (ITAT) 385 The Chennai Bench of the Income Tax Appellate Tribunal ( ITAT ) held that the burden shifts on the Assessing Officer ( AO ) to prove that cause lacks bonafide when taxpayer shows reasonable cause for accepting cash loan. A Two-Member Bench comprising V. Durga Rao, Judicial Member and Manjunatha, G., Accountant Member observed that “The assessee furnished copies of the confirmation letters from the lender, which were filed before the authorities below and find that assessee’s father-in-law as well as assessee’s wife, who have confirmed that the loan amount shall be treated as gift. The assessee’s mother passed away and produced death certificate. Moreover, the assessee has shown reasonable cause for receiving money towards purchase of machineries. Thus, we are of the opinion that the explanation offered against show cause notice before the authorities below were reasonable and therefore, levy of penalty under section 271D of the Income Tax Act is untenable.” Interest and Dividend derived by one Cooperative Society From Investment with another one is eligible for Deduction u/s 80P(2)(D) of Income Tax Act: ITAT Konkan Education Society Sevak Sahakari Patpedhi Ltd vs Income Tax Officer CITATION: 2024 TAXSCAN (ITAT) 386 The Pune Bench of the Income Tax Appellate Tribunal ( ITAT ) observed that the interest and dividend derived by one cooperative society from investment with another one is eligible for deduction under Section 80p(2)(d) of the Income Tax Act, 1961. A Two-Member Bench comprising Partha Sarathi Choudhury, Judicial Member and GD Padmahshali, Accountant Member observed that “The interest and dividend earned by the appellant society from its investment held with co-operative banks namely RDCC, being a registered co-operative society under respective state laws, qualifies for deductions under Section 80P(2)(d) of the Income Tax Act. Consequently the views adopted by the tax authorities below are not in conformity with legal position and binding judicial precedents, hence deserves to be vacated. Resultantly, we set-aside the impugned order and reverse the denial of deduction.” Disallowance u/s 14A of Income Tax Act should be limited to Exempted Income: ITAT Ms. Ambika Ghorpade vs ACIT Circle-1 Bellary CITATION: 2024 TAXSCAN (ITAT) 387 The Two member bench of Income Tax Appellate Tribunal ( ITAT ) of Bangalore held that disallowance under Section 14A of the Income Tax Act, 1961 should be limited to exempted income. According to the decision of Karnataka High Court in the case of Biocon Ltd. Vs. DCIT wherein it was held that “when there is no exempt income, there could not be any disallowance under Section 14A of the Income Tax Act. In other words, it means that disallowance under Section 14A of the Income Tax Act should be limited to the exempted income”. After reviewing the facts the ITAT bench of George George K., Vice President and Chandra Poojari,( Accountant Member ) sustained the addition to the tune of Rs.31,600/- only up to the exempt income earned by the assessee. K.R. Pradeep & Ms. Girija GA counsel appeared for the assessee and Subramanian S.counsel appeared for revenue. Transfer of FD of Deceased Husband during Demonetisation Period for purchase Agriculture plot: ITAT Remands matter to AO for verification Mrs. Shantabai Jasraj Lodha vs The ITO CITATION: 2024 TAXSCAN (ITAT) 388 The single member bench of Income Tax Appellate Tribunal ( ITAT ) of Pune while observing the transfer of fixed deposits of deceased husbands during the demonetisation period for purchase of agricultural plots remands the matter to the file of Assessing Officer ( AO ) for verification. After reviewing the facts the ITAT bench of Partha Sarathi Chaudhury, ( Judicial Member ) remand the matter to the file of AO for complete verification of the submissions made by the assessee with respect to the FD transferred from the account of assessee husband . Source of Cash Deposit made in Corporation Bank is out of Advanced money received from Sale of Property: ITAT deletes addition Mr. Aashish Luthra vs ITO-19(2)(1) CITATION: 2024 TAXSCAN (ITAT) 389 The Two member bench of Income Tax Appellate Tribunal ( ITAT ) of Mumbai while deleting the addition made by the assessing officer the bench held that the source of cash deposit made in corporation bank is out of advance money received from the sale of property. It is observed by the tribunal that the assessee had an opening cash balance of Rs. 5,08,370.34 as per the financial for the year ended 31.03.2005. further noticed that the credits in the Corporation Bank up to 05.07.2005 ( before assessee leaving India ) total to Rs. 4,02,250/-. Therefore, there is merit in the contention that he assesses that the source for the amount deposited until the date of his leaving India is from the cash in hand which is declared in the return of income for the previous AY. Considering the facts and documentary evidence submitted by both parties the bench confirmed that the assessee has explained the source for the cash deposited during his stay in India which is fact is not disputed by the Revenue and that the affidavit of the father not being rejected by the Revenue. Therefore the Banglore bench allowed the appeal filed by the assessee. Territorial Jurisdiction of AO is determined on basis of place where assessee Resides or Carries Business or Profession: ITAT allows appeal Jeeri Keerthana Reddy vs Income Tax Officer CITATION: 2024 TAXSCAN (ITAT) 390 The Income Tax Appellate Tribunal ( ITAT ) of Pune bench while allowing the appeal filed by the assessee held that territorial jurisdiction of the AO is determined on the basis of place where the assessee resides and/or carries on his business or profession. After reviewing the facts the ITAT bench of C.V. Bhadang, ( President ) and B.R. Baskaran, ( Accountant Member ) held that the assessee was residing and carrying on her profession at Bangalore, the assumption of jurisdiction by the AO at Mumbai was invalid. Therefore The change of address in the records and/or migration of PAN are not strictly relevant in the matter where the jurisdiction is governed by the statutory provisions as contained in Section 120 read with Section 124 of the Income Tax Act and the notification issued by the Board. ITAT directs readjudication with respect to Disallowance made on expense incurred u/s 37(1) of Income Tax Act Ms. Ambika Ghorpade vvs ACIT CITATION: 2024 TAXSCAN (ITAT) 391 The Two member bench of Income Tax Appellate Tribunal ( ITAT ) of Bangalore directed readjudication with respect to disallowance made on expenses incurred under Section 37(1) of the Income Tax Act, 1961. After reviewing the facts the ITAT bench of George George K., Vice President and Chandra Poojari,(Accountant Member) partly allowed for statistical purposes. K.R. Pradeep & Ms. Girija GA counsel appeared for the assessee and Subramanian S.counsel appeared for revenue. Non-Grant of TDS credit: ITAT directs re adjudication Crisil Limited vs Addl. CIT CITATION: 2024 TAXSCAN (ITAT) 392 The Income Tax Appellate Tribunal ( ITAT ), Mumbai bench directed a readjudication with respect to the denial to grant Tax Deduction at Source ( TDS ). After analyzing the submissions of both parties, the bench comprising Aby T Varkey ( Judicial Member ) and S. Rifaur Rahman ( Accountant Member ) remitted this issue back to the file of the Assessing Officer with a direction to verify the records submitted by the assessee on merit and as per law. Dhanesh Bafna, the counsel appearing for the assessee, and Vachashpati Tripathi, counsel appearing for the Department representatives, were present during the proceedings. ITAT directs to allows Expenditure towards commission payment made to Agents who relate to Business Expenses Jai Trading Company vs ITO CITATION: 2024 TAXSCAN (ITAT) 393 The Two member bench of Income Tax Appellate Tribunal ( ITAT ) of Kolkata directed to allow expenditure towards the commission payment made to agents who relate to business expenses. Accordingly the bench comprising Sonjoy Sarma, ( Judicial Member ) and Dr. Manish Borad,( Accountant Member ) directed the AO to allow the claim of assessee such expenditure towards commission payment made to the various parties. ITAT directs Re adjudication with respect to Advance received against Booking of Flats M/s Cavalcade Properties Pvt. Ltd vs Dy.CIT, Circle-4 CITATION: 2024 TAXSCAN (ITAT) 394 The Two member bench of Income Tax Appellate Tribunal ( ITAT ) of Mumbai directed readjudication with respect to parties who advance received against booking of flats. Therefore the bench comprising Sandeep Singh Karhail ( Judicial Member ) and Om Prakash Kant ( Accountant Member ) restored the matter back to the file of the Assessing Officer for examining parties from whom advance was received against booking. Madhur Agarwal appeared for assessee and H.M. Bhatt appeared for revenue. Income from housing finance for Residential Purposes for a period of less than 5 years eligible for deduction u/s 36(1)(viii) of Income Tax Act: ITAT Housing Development Finance Corporation Limited vs The Additional Commissioner of Income-tax CITATION: 2024 TAXSCAN (ITAT) 395 The Two member bench of Income Tax Appellate Tribunal ( ITAT ) of Mumbai ruled that Income From housing finance for residential purposes for a period of less than 5 years should be eligible for deduction under Section 36(1)(viii) of Income Tax Act, 1961. Therefore the interest income earned from loans extended or construction or purchase of house for a period of less than 5 years should also be included in the profits for the purpose of deduction under section 36(1)(viii) of the Income Tax Act. Therefore the bench comprising Amit Shukla ( Judicial Member ) and Padmavathy S. ( Accountant Member ) allowed the above ground raised by the assessee. Management Service Fees paid to Non Resident AEs eligible for Deduction u/s 37(1) of Income Tax Act: ITAT Iris Worldwide Integrated Marketing Pvt. Ltd vs DCIT CITATION: 2024 TAXSCAN (ITAT) 396 The Income Tax Appellate Tribunal ( ITAT ) of Delhi held that management service fees paid to non-resident Associate Enterprises are eligible for deduction under Section 37(1) of the Income Tax Act, 1961. Therefore the bench comprising Anubhav Sharma ( Judicial Member ) and M. Balaganesh, ( Accountant Member ) observed that the common administration costs incurred by the parent group would be recharged on all the subsidiaries spread across the globe. Hence it was held that the management service fees paid by the assessee would be squarely allowable deduction under Section 37(1) of the Income Tax Act. Failure to controvert evidence with respect to Sale against Advance amount received from Trade Creditors by ITD: ITAT deletes addition Hiral Exports vs ITO Ward CITATION: 2024 TAXSCAN (ITAT) 397 The Two member bench of Income Tax Appellate Tribunal ( ITAT ) of Mumbai while deleting the addition made by the assessing officer held that the Income Tax Department failed to controvert evidence with respect to sale against advance amount received from trade creditors. It is observed that lower authorities have failed to controvert the relevant supporting evidences furnished by the assessee that they have made sales to the Vishal Gems & Jewel against the advance amount received by them from that concern and there was no unsecured loan obtained by the assessee from that concern. Therefore the bench comprising Rahul Chadhary, ( Judicial Member ) and Amarjit Singh,( Accountant Member ) deleted the addition made under Section 68 of the Income Tax Act, 1961. Loan received through State Government does not attract S.43B(d) of Income Tax Act: ITAT Tokai Sahakari Sakhar Karkhana Ltd vs The Income Tax Officer CITATION: 2024 TAXSCAN (ITAT) 398 The Income Tax Appellate Tribunal ( ITAT ), Pune bench ruled that loan received through the state government does not attract section 43B(d) of the Income Tax Act, 1961. After analyzing the submission of both parties the bench comprising S.S. Godara (Judicial Member ) and G.D. Padmahshali, ( Accountant Member ) observed that assessment year A.Y.2016-17 held that loans received through a state government does not attract section 43B(d) of the Income Tax Act. Therefore the bench allowed the appeal filed by the assessee. ITAT directs to Rectify Assessment Order passed u/s 143(3)of Income Tax Act regarding 80P deduction Town Vividodesha Sahakari Bhandara Niyamitha vs The Income Tax Officer CITATION: 2024 TAXSCAN (ITAT) 399 The Income Tax Appellate Tribunal ( ITAT ), Bangalore bench directed to rectify the assessment order passed under Section 143(3) of the Income Tax Act, 1961 regarding the 80P deduction . Therefore the bench further observed that AO while issuing show cause notice for rectification had not mentioned that the assessee had violated the principles of mutuality by dealing with nonmembers. After analyzing the submission of both parties the bench comprising George George K (Vice President) and Chandra Poojari, (Accountant Member) allowed rectification of the assessment order passed under Section 143(3) of the Income Tax Act, 1961 regarding the 80P deduction. No addition u/s 50C of IT Act when Income from Project of Redevelopment determined under PGBP: ITAT Tirupati Developers vs Additional Joint Deputy Assistant Commissioner of Income Tax CITATION: 2024 TAXSCAN (ITAT) 400 The Income Tax Appellate Tribunal ( ITAT ), Mumbai bench ruled that no addition shall be made under Section 50C of the Income Tax Act, 1961 when income from project of redevelopment determined under profit and gains of business of profession ( PGBP ). After analyzing the submission of both parties the bench comprising Narender Kumar Choudhry ( Judicial Member ) and Ms Padmavathy S, ( Accountant Member ) determined that In assessee’s case, the assessee being a Builder and Developer of property has offered the income from project of redevelopment under the head of and gains from business or profession following Project Completion Method and therefore the addition made by the assessing officer is not sustainable Income from Hotel related services provided to Indian Hotels not Royalty/FIS under Article 12 of India-USA DTAA: ITAT ACIT vs Westin Hotel Management L.P. A-109 CITATION: 2024 TAXSCAN (ITAT) 401 The Income Tax Appellate Tribunal ( ITAT ), Delhi bench ruled that income from the hotel related services provided to Indian hotels is not royalty/Fee including service ( FIS ) under Article 12 of the India USA Double Taxation Avoidance Agreements ( DTAA ). The tribunal observed that the issue in dispute is squarely covered in favour of the assessee by the decision of the Tribunal and Jurisdictional High Court. Therefore the bench comparising Astha Chandra ( Judicial Member ) and Shamim Yahya, ( Accountant Member ) held that income from the hotel related services provided to Indian hotels are not covered royalty/Fee including service ( FIS ) under Article 12 of the India USA Double Taxation Avoidance Agreements ( DTAA ). Therefore the bench dismisses the appeal filed by the revenue. Hospital Building Construction Investment from Professional Receipts shall compute under Head of Business Income: ITAT Aniljit Singh Arora vs DCIT CITATION: 2024 TAXSCAN (ITAT) 402 The Chandigarh Income Tax Appellate Tribunal ( ITAT ) held that investment in construction of hospital buildings made out from the professional receipts are computed under head business income. After analyzing the submission of both parties the bench comprising Sanjay Garg (Judicial Member) and Vikram Singh Yadav (Accountant Member) held that investment in construction of hospital buildings made out from the professional receipts are computed under head business income. Procedure of disposal of appeal with respect to Investment in Equities not in accordance with mandate given u/s 250(6) Income Tax Act: ITAT directs Re adjudication Aryavrat Vintrade Pvt. Ltd vs Income Tax Officer CITATION: 2024 TAXSCAN (ITAT) 403 The Kolkata bench of Income Tax Appellate Tribunal ( ITAT ) while directing the readjudication observed that procedure of disposal of appeal with respect to investment in equities is not in accordance with mandate given under Section 250(6) of the Income Tax Act, 1961 After analyzing the submission of both parties the bench comprising Rajpal Yadav ( Vice-President ) and Dr. Manish Borad ( Accountant Member ) set aside this issue to the file of CIT (Appeals) and observed that the procedure of disposal of appeal with respect to investment in equities is not in accordance with mandate given under Section 250(6) of the Income Tax Act. ITAT directs to deletes addition made in respect of Capital Gains by adopting the value of property as per DVO Report Sri Arijit Chakraborty vs ITO, Ward-46(1) CITATION: 2024 TAXSCAN (ITAT) 404 The Kolkata bench of Income Tax Appellate Tribunal ( ITAT ) directed to delete additions made in respect of capital gain by adopting the value of property as per DVO report. The tribunal observed that the assessee as a prudent seller to get rid of the long time and continuous harassment due to interruption and obstacles of miscreants in peaceful use and enjoyment of the property, has made a distress sale of the property at Rs.30,00,000/ After analyzing the submission of both parties the bench comprising Sanjay Garg ( Judicial Member ) and Girish Agrawal, ( Accountant Member ) held that addition made by the Assessing Officer in respect of capital gains by adopting the value of the property as per the DVO report is ordered to be deleted. Method of Revenue Recognition and application of Accounting Standard properly verified by AO in Assessment Order: ITAT quashes Revision Order M/s Soham Buildcon vs PCIT-3 CITATION: 2024 TAXSCAN (ITAT) 405 The Ahmedabad bench Income Tax Appellate Tribunal ( ITAT ) while quashing the revision order held that the method of revenue recognition and application of accounting standard are properly verified by the assessing officer in the assessment order Therefore After analyzing the submission of both parties the bench comprising Madhumita Roy ( Judicial Member ) and Waseem Ahmed, ( Accountant Member ) observed that the method of revenue recognition and application of accounting standards are properly verified by the assessing officer in the assessment order. Therefore the bench quashed the revision order. No addition on account of Share Premium received in excess of FMV u/s 56(2)(viib) of Income Tax Act: ITAT DCIT vs Continental Corrugators Pvt. Ltd. CITATION: 2024 TAXSCAN (ITAT) 406 The Delhi bench of Income Tax Appellate Tribunal (ITAT) recently held that no addition shall be made on account of share premium received in excess of Fair Market Value (FMV) under Section 56(20(viib0 of the Income Tax Act, 1961. After analyzing the submission of both parties the bench comprising Kul Bharat(Judicial Member) and Pradip Kumar Kedia, (Accountant Member) held that no addition was made on account of share premium received in excess of Fair Market Value (FMV) under Section 56(20(viib0 of the Income Tax Act.Therefore the bench reverse addition mae by the assessing officer. No Interest on delayed realization of export proceeds from AEs: ITAT trides Pharma Science Limited vs The Deputy Commissioner of Income Tax Circle – 15(3)(2) CITATION: 2024 TAXSCAN (ITAT) 407 The Mumbai bench of Income Tax Appellate Tribunal (ITAT) held that no interest shall be levied on delayed realization of export proceeds from Associate Enterprises(AE) After analyzing the submission of both parties the bench comprising Vikas Awasthy (Judicial Member) and Amarjit Singh, (Accountant Member) held that imputing of interest on delayed payment of receivables from AEs is unwarranted. Expenditure incurred on Shelved Projects are Revenue Expenditure: ITAT deletes Disallowance The Tata Power Co. Ltd vs Additional Commissioner of Income Tax CITATION: 2024 TAXSCAN (ITAT) 408 The Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) recently held that expenditure incurred on sheleed projects are revenue expenditure and deleted the disallowance made by the assessing officer. Considering this fact the tribunal observed that the preceding Assessment Years the Tribunal has been consistently holding that such expenditure is on revenue account and has decided the issue in favour of the assessee. Therefore, the two member tribunal bench of Vikas Awasthy, ( Judicial Member ) and Padmavathy.S, ( Accountant Member ) held that expenditure incurred on sheleed projects are revenue expenditure. Source for cash deposit in Saving Bank Account is made out of Sale Proceeds of Flat: ITAT deletes Addition Siddharth Mehta vs ITO CITATION: 2024 TAXSCAN (ITAT) 409 The Delhi bench of Income Tax Appellate Tribunal ( ITAT ) while deleting the addition made by the assessing officer held that source for cash deposit in savings bank account is made out of sale proceeds of flat. After analyzing the submission of both parties the single bench of M. Balaganesh, ( Accountant Member ) held that source for cash deposit for Rs. 29 lakhs in the bank account is made out of sale proceeds received in cash is to be believe as there is no other source of income available to the assessee. Therefore the bench allowed the appeal filed by the assessee. ITAT directs re-adjudication with respect to LTCG of sold property which canceled by Civil court Smt. Mangalagiri Tulasi vs ITO CITATION: 2024 TAXSCAN (ITAT) 410 The Bangalore bench of Income Tax Appellate Tribunal ( ITAT ) directs re-adjudication with respect to Long Term Capital Gain of sold property which was canceled by the civil court. After analyzing the submission of both parties the bench comprising George George K, (Vice President) and Chandra Poojari, ( Accountant Member )directs re-adjudication with respect to Long Term Capital Gain of sold property which was canceled by the civil court. Dispute on Remittance of Employees Contribution towards Provident Fund and ESI: ITAT directs re-adjudication Gurusamy Aadhinarayanan vs The Income Tax Officer CITATION: 2024 TAXSCAN (ITAT) 411 The Chennai bench Income Tax Appellate Tribunal ( ITAT ) directs readjudication due to the dispute with respect to the remittance of employees contribution towards the provident fund and Employee State Insurance ( ESI ). After analyzing the submission of both parties the bench comprising V. Durga Rao (Judicial Member) and Manjunatha G (Accountant Member) directed readjudication due to the dispute with respect to the remittance of employees contribution towards the provident fund and Employee State Insurance. No addition u/s 41(1) of Income Tax Act on ground of Expiration of Limitation Period Alone: ITAT deletes Addition Ecokrin Hygiene Pvt. Ltd vs Deputy Commissioner of Income Tax CITATION: 2024 TAXSCAN (ITAT) 412 The Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) deleted the addition as no addition under section 41(1) of the Income Tax Act shall be made solely on the grounds of the expiration of the limitation period. The two member bench comprising Narendar Kumar Choudhari ( Judicial member ) and M.S Pathmavathy ( Accountant member ) noticed in Assessee’s case that the assessee as part of the financial statements reflecting the outstanding liability it would mean that it is an acknowledge liability and that the assessee was intending to settle the liability in the future date. Section 2(22) of Income Tax Act cannot be invoked against Non-Beneficiary Shareholders in company receiving Company Loans: ITAT Deputy Commissioner of Income Tax vs Eko Diagnostic Pvt. Ltd CITATION: 2024 TAXSCAN (ITAT) 413 The Kolkata bench of the Income Tax Appellate Tribunal ( ITAT ) ruled that Section 2 (22) of Income Tax cannot be invoked against Non-Beneficiary Shareholders in company receiving Company Loans. The Coram of Sanjay Garg (Judicial member) and Dr. Manish Borad (Accountant member) concluded that since the assessee company was not a beneficial shareholder in M/s. Calcutta Medical Imaging Institute Ltd., the loan received was a commercial transaction. Thus, Section 2(22)(e) could not be invoked. Consequently, the revenue’s grounds were dismissed Magnitude of Profit is not Decisive factor about Genuineness of existence of an Investee Company: ITAT Brajesh Narnolia vs Income Tax Officer CITATION: 2024 TAXSCAN (ITAT) 414 The Kolkata bench of the Income Tax Appellate Tribunal ( ITAT ) has observed that the magnitude of profit is not decisive factor about genuineness of existence of an investee company. It was reiterated that the legitimacy of the assessee’s investment could not be established based solely on the modest profit earned. Therefore, the Tribunal, led by Girish Agrwal ( Accountant member ) and Rajpal Yadav ( Vice President ), upheld the decision of the CIT(Appeals), dismissing the appeal. Interconnect usage charges paid to foreign Telecom Operators not Taxable in India under India-Sri Lanka DTAA: ITAT Dialog Axiata PLC vs Dy. CIT CITATION: 2024 TAXSCAN (ITAT) 415 In a recent ruling the Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) observed that Interconnect usage charges paid to foreign Telecom Operators Not Taxable in India under India-Sri Lanka Double Taxation Avoidance Agreement ( DTAA ) The bench of Om Prakash Kanth ( Accountant member ) and Kavitha Rajagopal ( Judicial member ) held that the payment made towards interconnect usage charges to foreign telecom operators does not accrue or arise in India and in the absence of any permanent establishment in India could not be brought to tax in India under Article 7 of DTAA. In the result, the appeal filed by the assessee is allowed. Loan advanced for Repayment of Business Operation Liabilities allowable as Business Expenditure u/s 37 (1): ITAT Ardom Towergen (P) Ltd vs DCIT CITATION: 2024 TAXSCAN (ITAT) 416 The Delhi bench of the Income Tax Appellate Tribunal ( ITAT) observed that loan advanced for repayment of business operation liabilities allowable as business expenditure under Section 37(1) of the Income Tax Act, 1961 The two member bench comprising Pradip Kumar Kediya ( Accountant member ) and Saktijit Dey (Vice President) found, as per submissions of Departmental Representative, it was the case of the Revenue that various agreements, which are not produced at earlier stages need to be examined for arriving at a proper conclusion on assessee’s claim of business. Further, in the interest of justice, the issue arising for consideration needs to be restored back to the Assessing Officer for de novo adjudication TDS on Salary paid to all Categories of Doctors shall be covered u/s 194J of Income Tax Act, not Section 192: ITAT ACIT (TDS) vs Artemis Medicares Services Ltd CITATION: 2024 TAXSCAN (ITAT) 417 The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) clarified the applicability of Tax Deducted at Source ( TDS ) provisions on salary payments to doctors, determining that such deductions fall under Section 194J of the Income Tax Act, 1961 rather than Section 192. Considering the submissions, the two-member bench comprising Anubhav Sharma (Judicial member) and M. Balaganesh (Accountant member) reaffirmed that TDS on salaries paid to doctors, across all categories, falls under Section 194J of the Income Tax Act. TDS filing Delayed due to Paucity of Funds and Interest Duly Paid: ITAT deletes Penalty u/s 272(2)(k) Ambience Developers & Infrastructure Pvt. Ltd vs JCIT CITATION: 2024 TAXSCAN (ITAT) 418 The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) deleted the penalty under section 272(2)(k) of the Income Tax Act, 1961 as Tax Deduction at Source ( TDS ) filing was delayed due to paucity of funds, with interest duly paid. The bench of Anubhav Sharma ( Judicial member ) and M. Balaganesh ( Accountant member ) held that this was not a fit case for levy of penalty under Section 272A (2) (k) of the Income Tax Act. Accordingly, the grounds raised by the assessee for all the years under consideration are allowed, and the appeals of the assessee are allowed. AO solely relies on DDIT Report for 15 Crores Income Escapement: ITAT quashes Reassessment Order ITO vs Surender Dalal CITATION: 2024 TAXSCAN (ITAT) 419 The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) has invalidated a reassessment order as the Assessing Officer’s sole reliance on DDIT report for the alleged 15 crore income escapement was deemed insufficient. The bench of G.N Pannu ( Vice President ) and C.N.Prasad ( Judicial member ) held that the reassessment made in the section 143(3) read with section 147 of the Act is bad in law and the re-assessment order was quashed, Accordingly, the appeal of the Assessee are allowed. ITAT dismisses Reassessment as AO fails to Pass Assessment Order within 4 weeks from Rejection of Taxpayers’ Objection Champalal Omprakash vs ITO CITATION: 2024 TAXSCAN (ITAT) 420 The Kolkata bench of the Income Tax Appellate Tribunal ( ITAT ) dismissed reassessment as Assessing Officer ( AO ) failed to pass assessment Order within 4 weeks from rejection of taxpayers’ objection. The bench of Manish Board ( Accountant member ) and Sanjay Garg ( Judicial member ) observed that the assessment framed by the Assessing Officer held to be bad in law and therefore, the consequential additions made by the Assessing Officer in the reopened assessment are not sustainable. ITAT decided the legal issue in favour of the assessee holding that the assessment framed in this case was bad in law, therefore, other grounds/issues taken by both the parties on merits are rendered academic in nature. Relief to Sahara India: ITAT deletes Addition of Interest Income for AO’s Failure to Appreciate Facts Properly A.C.I.T. vs M/s Sahara India Financial Corporation Ltd CITATION: 2024 TAXSCAN (ITAT) 422 The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) granted relief to Sahara India Financial Corporation Limited by deleting the addition of interest income. This action was taken due to the Assessing Officer ( AO )’s failure to properly appreciate the facts of the matter Upon thorough examination of the facts, the bench of Saktijit Dey (Judicial Member) and N. K. Billaiya (Accountant member) concurred with the view that the AO had not accurately understood the situation. Consequently, the tribunal declined to intervene, and the appeal of the revenue was dismissed accordingly. ITAT directs to compute Income earned from Sale of Property u/s 45(2) of Income Tax Act Dharani Developers Private Limited vs Deputy Commissioner of Income Tax CITATION: 2024 TAXSCAN (ITAT) 423 The Chennai bench Income Tax Appellate Tribunal ( ITAT ) directed to compute income earned from sale of property under Section 45(2) of the Income Tax Act, 1961. Therefore, the bench concluded that the assessee has furnish the details, such as how long the asset was treated as long term capital gain and when the assessee has converted the property into stock-in-trade and accordingly up to conversion of the property, the Assessing Officer has to treat it as capital asset and after conversion of the property, it has to be treated as business assessee. Although, neither the assessee nor the Assessing Officer properly computed the property of the assessee After analyzing the submission of both parties the bench comprising V. Durga Rao (Judicial Member) and Manjunatha G (Accountant Member) directed to compute income earned from sale of property under Section 45(2) of the Income Tax Act. Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates

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