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 30, 2024 to April 5
The Income Tax Appellate Tribunal (ITAT), Hyderabad Bench ruled that the Commissioner cannot invoke Revisional Jurisdiction to cancel Assessment.
The coram L.P.Sahu and S.S.Godara while allowing the appeal of the assessee in the light of the decision of the Apex court in the cases of Malabar Industrial Co. vs. CIT, CIT vs. Max India Ltd., and CIT vs. Kwality Steel Suppliers Complex held that an assessment or reassessment, as the case may be, could only be revised in case it satisfies the twin conditions of erroneous as well as causing prejudice to the interest of revenue; simultaneously. There is no such indication in the Pr. CIT’s above-extracted directions. Coupled with this, he has also directed the Assessing officer to cancel the assessment himself which the latter has no jurisdiction to do as per Section 263 of the Act.
The Delhi bench Income Tax Appellate Tribunal ( ITAT ) deleted the addition made on the accrual basis with respect to the interest income earned from the arbitration award.
The bench comprising N.K. Billaiya, ( Accountant Member ) & Astha Chandra ( Judicial Member )relied upon the decision of Supreme Court in the case of Shoorji Vallabhji and in the case of Godara Electricity Observed that the income which has to be recognized as per the system of accounting followed by the assessee in view of section 145 of the Income Tax Act if the income does not result at all, there cannot be a tax, even though in book-keeping, an entry is made about a hypothetical income, which does not materialize.
The Ahmedabad bench Income Tax Appellate Tribunal (ITAT) confirmed the upward adjustment made towards the guarantee fee in favor of the bank with respect to transactions carried out by Associate Enterprise.
The bench comprising Annapurna Gupta (Accountant Member) & Siddhartha Nautiyal, (Judicial Member) observed that The assessee during the course of assessment proceedings has himself accepted to charge guarantee fee @ 0.8% as observed by CIT(A) in the appellate order. Accordingly, in view of the judicial precedents on the subject and the assessee’s own acceptance placed on record before the AO / TPO, we find no infirmity in the order of CIT(A)
The Income Tax Appellate Tribunal (ITAT), Chennai bench has held that the loan taken from close relatives and friends cannot be treated as unexplained cash credit in order to attract section 68.
Tribunal held that “In this case, the assessee has filed all details to prove the identity of the loan creditors genuineness of transactions and creditworthiness of the parties. In fact, the loans are taken from close family members and friends. It is not a case of the AO that the assessee had taken loans from certain unknown people whose identity is doubtful. Therefore, we are of the considered view that, the AO is completely erred in making additions towards the loan taken from above parties as unexplained credit u/s.68 of the Act.”
The Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) has quashed the assessment order after finding that the Assessing Officer ( AO ) failed to verify the adequacy of agricultural expenditure under Section 143(3), of the Income Tax Act, 1961 stating that it is not sustainable in the interest of revenue.
A two member bench of the tribunal comprising Wassem Ahemed (Accountant member) and M.s Madumita Roy (Judicial member) observed that the agricultural receipts and the issue of adequacy of agricultural expenditure were not verified by the assessing officer, the order dated 01.02.2021 passed under Section 143(3) of the Income Tax Act was erroneous insofar as prejudicial to the interest of Revenue is palpably bad, not sustainable in the eye of law and therefore quashed. Accordingly, the appeal of the assessee was allowed.
The Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) directed re-adjudication, ruling that interest on non-recovery of loans falls within the purview of business activity only and not under income from other sources.
The two member bench of the tribunal comprising Waseem Ahemad ( Accountant member ) and T.R. Senthil Kumar ( Judicial member ) found it fit to remand this issue to the file of the Assessing Officer for verification of the facts with proper materials and allow the claim in accordance with law. Accordingly this ground raised by the assessee was partly allowed.
The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) responded to the taxpayer’s challenge against the Assessing Officer’s disallowance, which was deemed inconsistent with Section 115JB of the Income Tax Act, 1961 by directing the restoration of the matter for factual verification.
The two member bench of the tribunal comprising Dr B.R.R Kumar ( Accountant member ) and Sakti Jit Dey ( Vice President ) observed that the assessee’s claim of deduction for computing book profit under Section 115JB of the Income Tax Act required fresh verification in the light of the Chart furnished by the assessee, which has been reproduced in the order.
The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) has granted relief to Hindustan Times by allowing expenditure incurred on paintings, deeming it essential for creating a conducive business environment.
The bench of Sakti Jit Dey ( Vice President ) and M. Balaganesh ( Accountant member ) observed that the cost of paintings are meant for aesthetic purpose and for having better environment and accordingly to be construed as expenditure wholly and exclusively incurred for the purpose of business of the assessee herein
The Income Tax Appellate Tribunal ( ITAT ) has granted relief to ISRO Employees Society by condoning the delay and directing National Faceless Assessment Centre ( NFAC ) to consider Section 80P(2)(d) deduction claims under Income Tax Act, 1961, taking into account the submitted affidavit.
A two member bench of the tribunal comprising Chandra Poojari ( Accountant member) and Beena Pillai ( Judicial member) deemed it appropriate to condone the delay as the reasons for the delay mentioned in the affidavits are sufficient to explain the delay caused in filing the present appeals before this Tribunal. ITAT therefore condoned the delay caused in filing the present appeals before this Tribunal in all the appeals under consideration. Accordingly, the application for condonation of delay dated 08.12.2023 stands allowed.
In a recent ruling, the Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) observed that the education cess cannot be allowed as allowable expense under Section 37 (1) of Income Tax Act, 1961.
The two member bench of Dr. B.R.R Kumar (Accountant member) and Yogesh Kumar U.S (Judicial member) held that the education Cess can’t be allowed as an allowable expense, accordingly the particular ground raised by the assessee was dismissed.
The New Delhi Bench of the Income Tax Appellate Tribunal (ITAT) held that the income tax addition under Section 69 of the Income Tax Income Tax Act, 1961 is not permitted without examining and finding fault in cash book produced by an assessee.
A Two-Member Bench comprising N K Billaiya, Accountant Member and Yogesh Kumar, Judicial Member observed that “In our considered opinion, the findings given by the CIT(A) on the cash book is baseless and perverse. The assessee having been produced the cash book and explained the cash found during the search and seizure operation contending that the cash found during the search are belongs to family members and considering the fact that even the Panchnama drawn during the search proceedings containing the names of the Assessee and other family members and the A.O. who has examined the cash book has not found fault on the same on the merit of it, in our considered opinion, the authorities have committed error in making/sustaining the addition.”
The Kolkata Bench of the Income Tax Appellate Tribunal ( ITAT ) held that the receipts by the taxpayer cannot be added to income for non-compliance of summons under Section 131 of the Income Tax Act, 1961.
A Two-Member Bench comprising Sonjoy Sharma, Judicial Member and Rajesh Kumar, Accountant Member observed that “In our opinion, once the assessee has filed the evidences as required by the AO in order to prove the share capital/share premium then the assessee has discharged his onus of filing the documents initially and the burden shifts to the Revenue. In other words, the AO has to carry out further verification/examination of these evidences and then come to a conclusion as to how the share capital/share premium is not proved and not merely on the ground that the assessee has not complied with the summons issued under Section 131 of the Income Tax Act.”
The Kolkata Bench of the Income Tax Appellate Tribunal ( ITAT ) ruled that the revisional jurisdiction under Section 263 of the Income Tax Act, 1961 is not invokable on simple disagreement with plausible views of the Assessing Officer (AO).
A Two-Member Bench comprising Sanjay Garg, Judicial Member and Rajesh Kumar, Accountant Member observed that “We are of the view that it can be said to be plausible and possible view on the basis of evidences before the AO and the PCIT cannot invoke the jurisdiction under Section 263 of the Income Tax Act on the ground that he does not agree with the view taken by the AO and direct the AO to add the entire cash deposits in the hands of the assessee. In our opinion, the jurisdiction under Section 263 of the Income Tax Act can be invoked if twin conditions are satisfied i.e. order is erroneous and is prejudicial to the interest of the revenue as has been decided in the case of Malabar Industrial Co. Ltd.”
The Mumbai bench Income Tax Appellate Tribunal ( ITAT ) upheld that transfer pricing adjustment made on purchase consideration paid under the scheme of amalgamation entered with the holding company.
Amarjit Singh, ( Judicial Member ) & Sandeep Singh Karhail, ( Accountant Member )entire merger transaction is a mere restatement of accounts of the subsidiary companies without the actual transfer of any asset and liability by DIHBV. Hence the lower authorities have rightly held that shares of the assessee now held by DIHBV represent the fair value of the aforesaid merger transaction.
The Mumbai bench Income Tax Appellate Tribunal (ITAT) directs re-adjudication with respect to the rectification application filed for Mistaken in Income Tax Return by the tax consultant.
the bench comprising Aby T. Varkey (Judicial Member) & S Rifaur Rahman, (Accountant Member) directs readjudication with respect to rectification application filed for Mistaken in Income Tax Return happened by the tax consultant
The Bangalore bench Income Tax Appellate Tribunal (ITAT), while directing re-adjudication with respect to genuineness of deposit made during demonetisation period held that not every deposit during demonetisation period would not fall under category of unaccounted cash.
the bench comprising Beena Pillai (Judicial Member) & Chandra Poojari, (Accountant Member) while directing re-adjudication observed that not every deposit during the demonetisation period would fall under category of unaccounted cash. However the burden is on the assessee to establish the genuineness of the deposit in order to fall outside the scope of unaccounted cash.
The Delhi bench, Income Tax Appellate Tribunal (ITAT) while quashing the reassessment proceedings held that the Assessing officer failure to provide proper reason with respect to escapement of income regarding investment in house construction.
The tribunal observed that In the reasons recorded the AO has not given any details as to how the income more than 15 crores has escaped assessment. Nothing in the reasons specified as to how the escapement of income has been arrived at more than 15 crores. There is no live link between the reasons recorded and the materials on record when the reasons were recorded.
the bench comprising G.S. Pannu, (Vice President) & Challa Nagendra Prasad, (Judicial Member)quashed the reassessment proceedings and held that the Assessing officer failed to provide proper reason with respect to escapement of income regarding investment in construction house .
The Bangalore bench of the Income Tax Appellate Tribunal ( ITAT ) viewed that the assessee couldn’t contact the Tax Consultant due to a dislocation of business and remanded the order passed under section 250 of the Income Tax Act, 1961.
Since notices from the Office of the CIT(A) were sent to the email ID of his tax consultant who did not observe the mail on account of his father’s ill health, the Two member bench comprising of Shri George George K, Vice President and Shri Chandra Poojari, Accountant Member directed to be provided with one more opportunity to represent his case.
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) decision to uphold the genuine nature of Sunrise Asian share sales resulted in granting Long Term Capital Gain (LTCG) claims under Section 10(38) of the Income Tax Act.
The bench noted that the Assessing Officer and the CIT (A), both, had moved on the incorrect premise that the Assessee was not involved in trading of shares or that the Assessee only dealt with the script of Sunrise Asian. The Assessee has been registered as a sub-broker affiliated with Mangal Kseshav Securities limited since 2007. The coram of S. Rifafur Rahman (Accountant member) and Aby. T. Varkey (Judicial member) allowed the appeal of the assessee. And directed the AO to allow the LTCG claim of the assessee and delete the addition of Rs 25,12,070/
The Income Tax Appellate Tribunal (ITAT) has provided relief to the Bank of Nova Scotia by permitting the expenditure incurred towards earning interest income exempt under Section 10(15) of the Income Tax Act, 1961
The two member bench of the tribunal comprising Vikas Aswathy (Judicial member) and Amarjith Singh (Accountant member) directed the assessing officer to delete the disallowance made under Section 14A r.w.Rule 8D in the case of the assessee. Accordingly, this ground of appeal of the assessee was allowed.
The Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT) observed that the taxpayer engaged in development work with statutory bodies eligible for deduction under Section 80-IA of Income Tax Act, 1961
The coram of Waseem Ahemad ( Accountant member ) and Siddhartha Nautical ( Judicial member ) observed that CIT (A) undertook a detailed analysis of the scope of work undertaken by the assessee and the various risks and responsibilities undertaken by the assessee and then came to conclusion that assessee qualifies as a “developer” and is eligible to claim of deduction under Section 80-IA (4) of the Income Tax Act. Accordingly, ITAT found no infirmity in the order of CIT ( Appeals ) so as to call for any interference.
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) deleted the disallowance of Rs. 116 crore as Commissioner of Income Tax (Appeals) failed to prove the non-genuineness of records pertaining to the unsecured loan.
The two member bench of the tribunal comprising Narendra Kumar Chaudhary ( Judicial member) and Amarjith Singh ( Accountant member) consider that decision of CIT(A) in sustaining the disallowance of interest payment made by the assessing officer purely on presumption basis without disproving the relevant supporting evidences brought on record by the assessee is not justified. Therefore, this ground of appeal of the assessee was allowed. Accordingly, the appeal of the assessee was allowed.
The Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) has held that CIT Appeal has no power under section 250 of the Income Tax Act, 1961 to dismiss an appeal on account of non-prosecution without discussing the merit of the case.
A two member bench comprising Smt Annapurna Gupta, Accountant Member & Shri Siddhartha Nautiyal, Judicial Member restored the matter to the file of CIT(A) for de Novo consideration. Assessing Officer nor CIT(A), the assessee is directly to promptly comply with all notices of hearing and in case of any further default on the part of the assessee to cause appearance, CIT(A) would be at liberty to pass orders based on materials available on record, under law. The appeals of the assessee are allowed for statistical purposes.
The Delhi bench of the Income Tax Appellate Tribunal( ITAT )has held that addition under section 68 is invalid when the creditworthiness of money was proved by a balance sheet showing legitimate fund transfer to the company.
Considering the assessment status of all the three share applicant companies, the two-member bench comprising Shri N K Billaiya, Accountant Member and Shri Yogesh Kumar U S, Judicial Member held that the assessee has successfully discharged the initial onus cast upon it by provisions of section 68 of the Act.
The two member bench of the Income Tax Appellate Tribunal ( ITAT ) Delhi, observed that chargeability of deemed income between holding and subsidiary contradicts intent of Section 56(2)(viib) of the Income Tax Act, 1961.
The Coram comprising N.K.Billaiya ( Accountant member ) and Astha Chandra ( Judicial member ) held that the objective behind the provisions of section 56(2) ( viib ) of the Income Tax Act is to prevent unlawful gain by issuing company in the garb of capital receipts. However, in the transaction between holding and its subsidiary company no income can be said to accrue to the ultimate beneficiary i.e. holding company.
The Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) has held that no addition can be made under section 68 of the Income Tax Act, 1961 based on turnover declared under 44 AD of the act.
A two-member bench comprising Shri Narender Kumar Choudhry, JM & Ms Padmavathy S, Am viewed that the addition made by the assessing officer under section 68 of the entire turnover which the assessee declared under section 44 AD of the act is not tenable. The Tribunal deleted the addition made by the assessing officer and dismissed the appeal of revenue.
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has directed the Assessing Officer (AO) to delete the addition of 1.43 crore on ground that maturity Life Insurance Corporation (LIC) amounts are exempted from taxability under section 10(10D) of Income Tax Act, 1961.
The two member bench of the tribunal comprising N.K Billaya (Accountant member) and Kul Bharat (Judicial member) considered that the authorities below were not justified in denying the benefit of exemption to the assessee. Maturity maturity Life Insurance Corporation (LIC) amounts are exempted from taxability under section 10(10D) of the Income Tax Act, The AO is directed to delete the addition of Rs. 1,43,08,000/-. Accordingly appeal of the assessee was allowed
In recent ruling the Delhi bench of the Income Tax Appellate Tribunal ( ITAT) observed that the State Bank of India is in default meaning under Section 201 (1) (1A) of Income Tax Act, 1961 for non-deduction of Tax Deducted at Source ( TDS ) under Section 192 of reimbursement of LTC ( Leave Travel Concession ) /LFC ( Leave Fare Concession ) and HTC ( Home Travel Concession ).
The two member bench of the tribunal comprising G.S.Pannu (Vice president) and Challa Nagendra Prasad (Judicial member) held that the assessee is in default within the meaning of Section 201(1)(1A) of the Act for non-deduction of tax under Section 192 of the Income Tax Act on the reimbursement of LTC ( Leave Travel Concession ) /LFC ( Leave Fare Concession ) and HTC ( Home Travel Concession ). Accordingly, the appeals of the assessee are dismissed.
The Mumbai bench of Income Tax Appellate Tribunal ( ITAT ) upheld the disallowance for delayed deposit of provident fund ( PF ) and employee state insurance corporation( ESIC ).
the issues Karnataka High Court in the case of Biocon Ltd the two member bench comprising Kavitha Rajagopal, (Judicial Member) & S Rifaur Rahman, (Accountant Member) observed that Madras High Court has cleared the ambiguity in interpreting the “due date” for the purpose of provision of section 36(1)(va) of the Act. On this observation, the arguments of the AR fails and the bench is inclined to dismiss the additional ground raised by the assessee.
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