This weekly round-up analytically summarizes the key stories related to the Income Tax Appellate Tribunal ( ITAT ) reported at Taxscan.in during the previous week from March 26 to march 30, 2024.
The Ahmedabad Bench of the Income Tax Appellate Tribunal ( ITAT ) determined that a vehicle exclusively used by a business entity qualifies for depreciation claims.
It was noted by the two member bench of Waseem Ahmed ( Accountant Member ) and Madhumita Roy (Judicial Member) noted that, “purchase of a car was made by the appellant company which is also reflected in the books of account of the appellant company and therefore it can be well said that the car is commercially used for the purpose of business of the company and the depreciation thereon cannot be denied; moreso, the interest on car loan and car insurance was allowed by the department.”
The Bangalore Income Tax Appellate Tribunal ( ITAT ) Bench held that the payment made by Google India to the assessee does not fall under the category of royalty or Fees for Technical Services (FTS).
The tribunal bench of Accountant Member Laxmi Prasad Sahu and Vice President Geroge George K held that the payments made by Google Ireland Limited to the assessee cannot be taxed in the hands of the assessee as royalty.
The Delhi Bench of the Income Tax Appellate Tribunal ( ITAT ) has directed a reassessment of the Institute of Company Secretaries of India’s ( ICSI ) income tax exemption claim.
The Tribunal Bench of Astha Chandra (Judicial Member) and N.K. Billaiya (Accountant Member) has partially upheld the appellant’s appeal and remanded the case to the Assessing Officer for further examination, acknowledging the intricacies and nuances involved.
The Delhi Bench of the Income Tax Appellate Tribunal ( ITAT ) has directed a reassessment of the Institute of Company Secretaries of India’s ( ICSI ) income tax exemption claim.
The Tribunal Bench of Astha Chandra (Judicial Member) and N.K. Billaiya (Accountant Member) has partially upheld the appellant’s appeal and remanded the case to the Assessing Officer for further examination, acknowledging the intricacies and nuances involved.
The Bangalore bench of the Income Tax Appellate Tribunal ( ITAT ) deleted the penalty under Section 271D of the Income Tax Act, 1961 emphasizing a reasonable cause for cash loan availment and demonstrating compliance with Section 273B of the Income Tax Act.
The two member bench of the tribunal comprising Laxmi Prasad Sahu (Accountant member) and George George K. (Vice President) observed that the matter needs fresh examination by the AO. Accordingly, the matter is restored to the file of the AO. The AO was directed to examine whether there is “reasonable cause” as mandated under section 273B of the Act, for assessee to avail cash loans from its Directors. Accordingly appeal of the assessee was allowed
In recent ruling, the Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) deleted addition under Section 68 of Income Tax Act as genuineness of purchase and sale of shares is proven by producing documentary evidence.
The single-member bench of the tribunal, comprising Pavan Kumar Gadale ( Judicial member ) directed AO to delete the additions and allow the grounds of appeal in favor of the assessee, resulting in the allowance of the appeal filed by the assessee.
The Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) has upheld the revision of bad debts allowed under Section 36(1)(vii) of the Income Tax Act, 1961 as there was no enquiry conducted by the Assessing Officer (AO).
The two member bench of the tribunal comprising Sandeep Singh Karhail (Judicial member) Prashanth Maharishi (Accountant member) observed that “During the course of assessment proceedings neither there is any discussion not there is any detail called for by the assessing officer and therefore we do not find infirmity in the order of the learned principal Commissioner of income tax in holding that not making any enquiry by the learned assessing officer on this aspect makes the order of the learned AO erroneous so far as judicial to the interest of the revenue.”
The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) upheld the Commissioner of Income Tax (Appeals) [CIT(A)]’s decision to delete the addition of Rs. 11.6 lakhs pertaining to sales tax refund, which was made by the Assessing Officer (AO) under section 43B of the Income Tax Act, 1961.
The Coram of T.R.Senthil Kumar (Judicial member) and Annapurna Gupta (Accountant member) do not see any reason to interfere with the order of the
CIT(A) holding the assessee’s claim of sales tax refund waived during the year amounting to Rs. 11,68,847/- as allowable expenditure.
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) restored the trust’s 80G(5) Registration Application back to the Commissioner of Income Tax (Exemption) (CIT (E)) despite a 6-year delay.
The two-member bench of the tribunal comprising Pradip Kumar Kediya (Accountant member) and Kul Bharat (Judicial member) set aside the order and restored the application before CIT(E) for decision afresh in accordance with the law. Accordingly, the assessee’s appeal stands allowed for statistical purposes.
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) confirmed the addition of unutilized Central Value added Tax (CENVAT) credit, mandating its inclusion in the closing stock value as per Section 145 of the Income Tax Act.
The two member bench if the tribunal comprising Pavan Kumar Gadale ( Judicial member) and Prashanth Maharishi ( Accountant member) find any infirmity in the order of the lower authorities in including the above sum in the closing stock of the assessee and thereby increasing the total income. Accordingly, the appeal was dismissed.
The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) refused to grant condonation for a 310-day delay, citing the taxpayer’s inability to substantiate the Chartered Accountant’s (CA) recommendation to transfer the case to an advocate and the advocate’s subsequent negligence in filing the appeal on time.
The two member bench of the tribunal comprising Beena Pillai (Judicial member) and Chandra Poojari (Accountant member) found no merit in the application for condonation of delay. Accordingly, ITAT considered the view that the assessee has failed to make out a sufficient and reasonable cause for condonation of delay and rejected the petition for condonation of delay.
The Mumbai Bench of the Income Tax Appellate Tribunal ( ITAT ) recently quashed a pre-drafted penalty notice that included both concealed and inaccurately furnished income particulars.
The bench, comprising Vikas Awasthy (Judicial Member) and S. Rifaur Rahman (Accountant Member), noted that when the Assessing Officer indicates satisfaction for imposing penalties based on Section 271(1)(c) of the Act, failure to strike out irrelevant portions renders the notice defective. This defect would compromise the penalty proceedings
The Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) while making directions to recompute the Short Term Capital Gain( STCG ), held that interest cost can not be claimed as business expenditure when the borrowed amount was utilized for making investment in shares.
After analyzing the submission of both parties, the bench comprising Narender Kumar Choudhry, ( Judicial Member ) & I Amarjit Singh, ( Accountant Member ) directs the assessing officer to treat the interest cost of Rs.122,26,476/- as cost of investment made towards purchasing the shares of M/s India Bull Real Estate Ltd. and re-compute the short term capital gain.
The Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ), after deleting the disallowance made by the assessing officer, held that Tax Deduction at Source ( TDS ) should not be deducted on account of commission income earned by foreign agents outside India.
The two-member bench of Annapurna Gupta ( Accountant Member ) and Pavan Kumar Gadale ( Judicial Member ) held that commission income earned by the agents cannot be termed to have incurred or arisen in India, and therefore, was not taxable in India.
The Mumbai bench Income Tax Appellate Tribunal (ITAT) held that there was no disallowance on payment towards the Provident Fund and Employee State Insurance (ESI) made before the due date of filing Income Tax Return under Section 139(1) of the Income Tax Act, 1961.
After analyzing the submission of both parties, the two member bench of Vikas Awasthy (Judicial Member) and Pramod Kumar (Vice President)held that disallowance does not come into play when the payment is made well before the due date of filing the income tax return under section 139(1) of Income Tax Act.
The Mumbai Bench of the Income Tax Appellate Tribunal ( ITAT ) while upheld the notice issued under Section 148 of the Income Tax Act,1961 observed that liability of directors continues even after dissolving the company under Section 248(5) of the Companies Act, 2013.
the two-member bench of Annapurna Gupta, ( Accountant Member ) and Pavan Kumar Gadale,( Judicial Member ) held that upheld the notice issued under Section 148 of the Income Tax Act, 1961 observed that liability of directors continues even though after dissolving the company under Section 248(5) of the Companies Act, 2013.
The Ahmedabad bench Income Tax Appellate Tribunal ( ITAT ) deleted the deduction claimed under Section 35(1)(ii) of the Income Tax Act, 1961 towards donation made to the ineligible scientific research trust.
The two member bench of Ramit Kochar, ( Accountant Member ) and Madhumita Roy, ( Judicial Member ) deleted the deduction claimed under Section 35(1)(ii) of Income Tax Act towards Donation made to ineligible Scientific Research Trust.
The Bangalore bench Income Tax Appellate Tribunal (ITAT) directed education with respect to the source of money trail related to unsecured loan.
The two member bench of Chandra Poojari, ( Accountant Member ) and George George K.( Vice President ).The tribunal observed that the onus on the assessee is not only limited to establish the identity of the person making the advance but also his capacity to make advances and it has to be proved that it had actually been received as a loan from the creditor.
The Mumbai bench, Income Tax Appellate Tribunal ( ITAT ) while allowing the deduction claimed by the HDFC Bank under Section 36(1)(vii) of the Income Tax Act, 1961 held that bead debts arising out of the business of credit card services is part of banking activities.
the two member bench comprising Kuldip Singh, (Judicial Member) & Padmavathy S, (Accountant Member) held that bad debts arising out of the business of credit card services is part of the banking activities and the loss arising on account of unrecovered balance is arising out of the normal course of banking business. Accordingly, the same shall be allowed as a deduction under section 36(1)(vii) of the Income Tax Act.
The Delhi bench Income Tax Appellate Tribunal (ITAT) directed readjudication in absence of cogent material to prove the cash transactions with respect to purchase of chemicals
The bench observed that the payments made to M/s Krishna Enterprise out of its regular banking channels In such a situation the revenue had not brought any material on record to prove that subsequent to payment by banking channels to the supplier, the supplier had in turn given back the cash to the assessee after reducing his / her commission if he / she is an accommodation entry provider. Therefore the entire addition has been made in the hands of the assessee only on suspicion.
The bench comprising M. Balaganesh, (Accountant Member) directs readjudication in absence of cogent material to prove the cash transactions with respect to purchase of chemicals .
The Mumbai bench Income Tax Appellate Tribunal ( ITAT ) directed readjudication on account of failure to establish legal expenses incurred from the trading loss as civil expenditure.
The tribunal observed that the assessee is a stock broker and was in the business as stock broking services and due to trading in the clients account, the client has filed the criminal case. However the assessee could not establish with the supporting evidence that the claim of the assessee is a civil expenditure allowable under the Income Tax Act.
The Ahmedabad bench Income Tax Appellate Tribunal (ITAT) deletes disallowance made towards the staff welfare expenses without giving opportunity.
The tribunal observed that during the course of hearing, the AO had rejected the books of accounts of the assessee and estimated the income of the assessee by applying 10% to the gross turnover of the assessee. Therefore it was observed after examining the order of CIT(A) did not find any merit in the anomaly of salary mismatch between that reflected in the bank and that claimed by the assessee in its books as noted by the AO.
The Hyderabad bench of the Income Tax Appellate Tribunal ( ITAT ) quashed the ex parte assessment order passed without considering the Valuation report under Section 12A of the Income Tax Act, 1961.
The single-member bench of Laliet Kumar (Judicial Member)quashed the ex parte assessment order passed without considering the Valuation report under Section 12A of the Income Tax Act, and the appeal of the assessee is remanded back to the file of the CIT(A) to call for the remand report from the AVO and estimate the correct value of the property.
The Mumbai bench Income Tax Appellate Tribunal ( ITAT )quashed the assessment order passed on violation of principle of natural justice.
The Two member bench of Girish Agrawal, ( Accountant Member ) & Sanjay Garg ( Judicial Member )observed that dherence to principles of natural justice is recognized by all civilized States and is of supreme importance when a quasi judicial body embarks on determining disputes between the parties, or any administrative action involving civil consequences is in issue. Natural Justice is the essence of fair adjudication, deeply rooted in tradition and conscience, to be ranked as fundamental.“
The Chennai bench of the Income Tax Appellate Tribunal ( ITAT ) has ruled that the Section 155(14) of the Income Tax Act, 1961 cannot restrict the Tax Deduction at Source ( TDS ) credit if the income is properly disclosed in the Income tax Returns ( ITR ).
The bench of V. Durga Rao (Judicial member) and Manoj Kumar Agarwal (Accountant member) directed the AO to allow full TDS credit to the assessee which is otherwise available as per Form 26AS. Accordingly the appeal of the assessee was allowed.
The Chennai bench of the Income Tax Appellate Tribunal ( ITAT ) directed the Commissioner of Income Tax (Appeals) [(CIT(A)] to condone the 857-day delay in filing the appeal a the assessee has given proper explanation provided for the delay, encompassing 56 pre-COVID days.
e bench of Justice C.V. Bhadang and Manjunatha G. (Accountant member) considered the view that the CIT (A) ought to have condoned the delay in filing of appeal to advance substantial justice. ITAT directed the first appellate authority to condone the delay in filing of appeal and admit the appeal for hearing and decide the issues involved on merit, after providing reasonable opportunity of hearing to the assessee. Accordingly, appeal filed by the assessee was allowed.
The Kolkata bench of the Income Tax Appellate Tribunal ( ITAT ), deleted addition under Section 56(2)(x) of the Income Tax Act, 1961 as the orders of both the lower authorities are not sustainable because the assessee has demonstrated that it has made payment for purchase of this property through account payee cheque in installments on different dates.
The two member bench consisting Girish Agrwal ( Accountant member ) and Rajpal Yadav ( Vice President ), while deleting the addition, sets aside the file back to the assessing officer for reconsideration
In a recent ruling, the Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) ruled that the sale of software products does not constitute royalty income and is not taxable under Article 12 of India- Japan Double Taxation Avoidance Agreement ( DTAA ).
The two member bench of the tribunal comprising Dr.B.R.R Kumar ( Accountant member ) and Anubhav Sharma ( Judicial member ) observed that the CIT (A) had fallen in error in making the deletion. It was observed that “After the judgement of Hon’ble Supreme Court in the case of Engineering Analysis Centre of Excellence Private Limited vs CIT (supra), the issue with regard to taxability of the income from the sale of Software licenses subscription, stands settled and same is followed by ld. CIT(A), so there is no infirmity in the impugned orders, requiring interference.”
The Income Tax Appellate Tribunal ( ITAT ) of Delhi, allowed depreciation claim under Section 80IC of Income Tax Act, 1961, for building, furniture, and plant machinery blocks.
The bench of Pradip Kumar Kediya (Accountant member) and Saktijit Dey (Vice president) opined that the assessee’s claim of depreciation was allowable. Even, otherwise also, the disallowance of depreciation would only enhance the profit of the assessee, which was otherwise eligible for claim of deduction under Section 80IC of the Income Tax Act.
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