ITAT Weekly Round Up

A Round Up of the ITAT Cases Reported at Taxscan Last Week
ITAT Weekly Round Up - ITAT - Income Tax - income tax act - taxscan

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 10th August 2024 to 17th August 2024.

Advance Tax Payment Not Required For Reassessment Proceedings: ITAT overrules CIT(A) Order Manoj Kumar Motwani vs ACIT CITATION:   2024 TAXSCAN (ITAT) 886

The Indore bench of Income Tax Appellate Tribunal(ITAT)  set aside the CIT(A)’s m order, noting that advance tax payment under Section 249(4)(b) of the Income Tax Act,1961 was not applicable in this case, and remanded the case to the AO for a proper assessment.

The two member bench comprising Vijay Pal Rao (Judicial Member) and B.M. Biyani(Accountant Member) decided to remand the case to the AO for a fair assessment. The assessee must attend hearings and avoid delays. If the assessee does not cooperate, the AO may proceed based on the available information.

Availment of Presumptive Scheme of Taxation u/s 44AD Needs to Prove Eligibility: ITAT Upholds AO and CIT(A) Orders Anish Rajnikant Shah vs The Income-tax Officer CITATION:   2024 TAXSCAN (ITAT) 887

The Ahmedabad bench of Income Tax Appellate Tribunal(ITAT) upheld the lower authorities’ decision to treat Rs. 21,51,200 as unexplained cash credit under Section 68, as the assessee failed to provide legitimate sources or proof of the cash deposits, despite attempting to claim the benefits of a presumptive taxation scheme under Section 44AD of the Income Tax Act,1961.

The tribunal contended that despite the previous provisions of section 44AD(5) not requiring books of accounts, the assessee still needed to prove their eligibility and explain the cash deposits of Rs. 21,51,200.

Since the assessee did not meet these requirements, the provisions of section 68 were correctly applied. A single bench of Ramit Kochar (Accountant Member) on reviewing both the sides dismissed the appeal as the assessee could not prove the sources or legitimacy of the cash deposits, and the authorities’ actions were deemed appropriate.

Expense Disallowance u/s 14A exceeds Exempt Income, no Error or Revenue Prejudice Found: ITAT criticizes PCIT’s unnecessary revision Dr. Agarwals Health Care Limited vs The Principal Commissioner of Income Tax -1 CITATION:   2024 TAXSCAN (ITAT) 888

The Chennai Bench of Income Tax Appellate Tribunal ( ITAT ) criticized the Principal Commissioner of Income Tax for not recognizing that the assessee had already disallowed a higher amount of expenses than the exempt income they received and set aside the unnecessary revisional order of the PCIT.  It emphasized the essential of invoking section 236 of the Income Tax Act, 1961.

The two member bench Mahavir Singh (Vice President) and S.R Raghunatha (Accountant Member) observed both sides’ arguments and criticized that the PCIT simply carried out unnecessary exercises without proper analysis. The tribunal noted that the assessee received exempt income of Rs. 26,97,926 and assessee made disallowance of expense related to exempt income of Rs. 34,17,729 which is greater than the exempt income itself.

The tribunal focused on the fact that the PCIT has not noted any error or prejudice caused to the revenue by the assessment order. The Tribunal observed that the PCIT failed to satisfy the two essentials for invoking section 263 of the Income Tax Act.

The tribunal set aside the revisional order of the Principal Commissioner of Income Tax. The Tribunal allowed the appeal of the assessee.

21 months Delay in Filing Income Tax Appeal due to Covid Pandemic: ITAT condones Delay citing SC Ruling Lahari Impex (P) Ltd vs Income Tax Officer CITATION:   2024 TAXSCAN (ITAT) 889

The Hyderabad Bench of the Income Tax Appellate Tribunal (ITAT) set aside the Commissioner of Income Tax (Appeals) order and allowed 21 months of delayed income tax appeal due to the COVID-19 pandemic. The ITAT cited the Supreme Court ruling in deciding the matter.

The two-member bench of K. Narasimha Chary (Judicial Member) and Madhusudan Sawdia (Accountant Member) observed the arguments of both sides. The tribunal noted that the assessee delayed to appeal before the First Appellate Authority due to the pandemic situation and the Commissioner of Income Tax (A) denied condoning the delay.

The tribunal stated that the entire country was locked down due to COVID-19 starting from March 25, 2020. The Tribunal cited the Supreme Court in the Suo Motu proceedings in the case of M.A.No. 21/2022 in M.A.No. 665/2021 in SMW(C) No.3 of 2020 order dated 10.01.2022 held that the limitation which expired from 15.03.2020 and 28.02.2022 will have extension period of 90 days from 01.03.2022.

The tribunal that observed the assessee will be covered under the Supreme Court order and decided to allow the appeal by setting aside the CIT(A) impugned order. The appeal by the assessee deserves to be heard on merits.

The tribunal thus allowed the appeal for statistical purposes.

Requirement of Filing Audit Report In Form 10B is only Procedural: ITAT grants Income Tax Exemption Shambhu Dayal Modern School vs ITO (Exemption) CITATION:   2024 TAXSCAN (ITAT) 891

In a recent case, the Delhi Bench of the Income Tax Appellate Tribunal ( ITAT) held that the requirement of filing an audit report in Form 10B is only procedural and allowed exemption under Income Tax Act, 1961.

The two member bench of M. Balaganesh Accountant Member and Anubhav Sharma , Judicial Member observed that the only reason for denial of claim of exemption under section 11 of the Act to the assessee in the instant case is for non-furnishing of fresh registration under section 12AB of the Act.

It was observed that fresh registration could be granted only from the year in which application was preferred by the assessee. At the cost of repetition, the said application made by the assessee for seeking fresh registration under section 12AB of the Act is well within time allowed by CBDT.

The ITAT  held that From AYs 2022-23 to 2026-27, the assessee would be eligible for exemption under section 11 of the At given the fresh registration obtained under section 12AB of the Act. Hence, for AY 2021-22 the assessee would be duly entitled for claim of exemption under Section 11 of the Income tax law.

‘Beyond Scope’ of Section 153A: ITAT quashes Assessment Order Late Ghanshyam Das Agarwal vs Deputy Commissioner of Income Tax CITATION:   2024 TAXSCAN (ITAT) 892

The Kolkata bench of the Income Tax Appellate Tribunal ( ITAT ) quashed the assessment order passed beyond the scope of Section 153A of the Income Tax Act, 1961.

The bench, consisting of Rajpal Yadav (Vice President) and Rakesh Mishra (Accountant Member), held that after the judgment of the Hon’ble Supreme Court in the case of Abhisar Buildwell (P) Limited, these additions are not sustainable. The ITAT bench allowed the appeals in favor of the assessee and deleted the additional disallowance of losses made by the AO in all three assessment orders as they were passed beyond the scope of Section 153A of the Income Tax Act, 1961.

Ex-Parte Dismissal without Adjudicating Unexplained Cash Deposits Unsustainable u/s 250(6): ITAT Sardarbhai vs The Income Tax Officer CITATION:   2024 TAXSCAN (ITAT) 893

The Ahmedabad Bench of the Income Tax Appellate Tribunal ( ITAT ) set aside the Ex-Parte dismissal order by the Commissioner of Income Tax (Appeals) [ CIT(A)] without adjudicating the unexplained cash deposit as  it is not sustainable under section 250(6) of the Income Tax Act, 1961.

The tribunal stated  that the CIT(A) is required to adjudicate the issues on merit in accordance with the law provided under section 250(6) and the CIT(A) cannot simply dismiss the appeal due to non-appearance or didn’t comply with the notice such order is not sustainable under section 250(6) of the Income Tax Act. The tribunal ordered CIT(A) to allow the assessee to present the additional evidence and decide the matter on its merits.

 The tribunal set aside the impugned order passed by the CIT(A) and allowed the appeal for statistical purposes.

Genuineness of small-time Investments: ITAT directs AO to delete Additions of Rs.22,02,620/- ACIT Central Circle vs Subharti Media Ltd CITATION:   2024 TAXSCAN (ITAT) 894

In a recent decision by the Delhi Bench of the Income Tax Appellate Tribunal ( ITAT ), the question of the genuineness of investments made by small-time investors in a limited company was addressed. In light of the observations made by the Bench, the Assessing Officer ( AO ) was directed by the Bench to delete Additions it had made to the income of the Assessee alleging failure to produce requisite details to verify the shareholders’ creditworthiness.

The two-member Bench of the Delhi ITAT comprising Challa Nagendra Prasad, Judicial Member and Avdhesh Kumar Mishra, Accountant Member observed that a considerable number of shareholders are all small time investors who have invested amounts ranging from Rs.480/- to Rs.60,000/-.

The Bench further affirmed that the creditworthiness of these small-time investors cannot be doubted merely on the basis that the Assessee has not filed ITRs and bank statements of these investors; if the identities of the shareholders have been duly established by the Assessee, it shall suffice. In conclusion, the Bench directed the AO to delete the addition of Rs.22,02,620/- on the basis of the above findings.

Transfer of Assets of firm to Rural Area: ITAT allows Income Tax Exemptions u/s 54 G to assessee having Rs.1.22 crore Investment Hasmukhbhai Makanbhai Padariya vs The ITO CITATION:   2024 TAXSCAN (ITAT) 895

The Income Tax Appellate Tribunal (ITAT), Rajkot Bench, held that to claim exemption under Section 54 of the Income Tax Act, 1961, the assessee should have made investment in an undertaking that has been shifted to a rural area, and it need not be acquired in the name of the assessee.

The bench, comprising of Arjun Lal Saini( Accountant Member) and Dinesh Mohan Sinha (Judicial Member), held that in the above case, the assessee had invested an amount of Rs.1.22 crore in the firm as a partner, and the assessee has shifted the existing plant and machinery, along with all important business plans, to a rural area, and therefore the whole manufacturing undertaking has been shifted to a rural area. Thus, the assessee is eligible for exemption under Section 54G of the Act. The firm name is only a compendious name given to the partnership for the sake of convenience.

The bench allowed the exemption claimed by the assessee and held that in the assessee’s case, each partner is owner of the assets to the extent of his share in the partnership.

The ITAT bench held that the primary condition is that the assessee should have made investment in the undertaking shifted to a rural area, and under Section 54G of the Income Tax Act, it is no where stated that assets should be acquired in the name of the assessee.

The bench deleted the addition made by the AO.

Deduction Claim on Building Construction Expenses: ITAT deletes Penalty on Trust for Bona Fide Error Shree Gunatit Jyot Mahila Trust vs ITO CITATION:   2024 TAXSCAN (ITAT) 896

The Ahmedabad Bench of the Income Tax Appellate Tribunal ( ITAT ) canceled the penalty levied on the assessee under Section 271(1)(c) of the Income Tax Act, 196. The ITAT found that the assessee made a bonafide error in claiming the deduction on building construction expenses and there is no actual impact on the taxable income.

The CIT(A) counsel represented by Mamta Singh relied on the orders of the lower authority. The Tribunal heard both sides’ arguments and noted that despite the wrong claim, the overall deduction allowed was still within the permissible limit of the ‘income before application of income’. Thus, the claim had no impact on the taxable income for the current or future years.

The tribunal noted that the AO erred in imposing the penalty under Section 271(1)(c) of the Act and the assessee made a bonafide mistake, which has no impact on the taxable income.

The assessee’s appeal was allowed.

Submission of Professional Fee Records Deemed Sufficient: ITAT deletes Addition of Professional Fees Paid to Doctors The ACIT vs M/s.LA Renon Healthcare Pvt.Ltd CITATION:   2024 TAXSCAN (ITAT) 897

The Ahmedabad Bench of the Income Tax Appellate Tribunal ( ITAT ) deleted the addition of Rs. 2 crores  made due to the disallowance of professional fees paid to doctors under Section 37(1) of the Income Tax Act.

The two-member bench comprising Siddhartha Nautiyal and Marakand V. Mahedeokar observed that the AO did not question the authenticity of the payments made. It was noted that the assessee had already submitted comprehensive documentation, including logbooks, agreements with various doctors, summaries of professional fees paid, copies of scientific brochures, training manuals, and research papers which is sufficient.

It was noted that CIT(A) recognized that the facts were identical to a previous case and upheld the tribunal’s decision, leading to the deletion of the disallowance. The bench found no fault in the CIT(A)’s order, and thus, the Revenue’s appeal was dismissed.

ITAT upholds CIT (A) Ruling deleting Addition Made by AO on Bogus LTCG Due to Lack of Inquiry ITO vs PrakashmalMalraj Jain CITATION:   2024 TAXSCAN (ITAT) 898

The Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) dismissed the revenue’s appeal, upholding the Commissioner of Income Tax (Appeals) [ CIT(A) ]’s decision to delete the addition made by the Assessing Officer ( AO ). The ITAT noted that the AO had not found any issues with the documents provided by the assessee and had relied solely on a general report from the Investigation Wing without conducting an independent inquiry.

The tribunal heard both sides of the parties and observed that the assessee purchased shares, dematerialized them, and later sold them through a registered broker, with all transactions done via banking channels. The demat statement provided by the assessee confirmed the entry and exit of the shares.As noted by the CIT(A), the AO did not find any issues with the documentation and did not conduct an independent inquiry, relying only on a general report from the Investigation Wing.

The tribunal relied upon the decision made by the Bombay High Court in the case of PCIT vs. Ziauddin A Siddique  and noted that the decision is applicable in the present case.

The division bench comprising Anikesh Banerjee ( Judicial Member ) and B.R Baskaran ( Accountant Member ) dismissed the appeal filed by the revenue, stating that there was no infirmity in the order of the Ld. CIT(A).

No Concealment of Income: ITAT rebukes CIT(A) for sustaining Penalty Order by AO under Wrong Provisions Shri Sarat Gopal Boppana vs Asstt. C. I. T CITATION:   2024 TAXSCAN (ITAT) 899

The Hyderabad Bench of the Income Tax Appellate Tribunal ( ITAT ) has overturned an order regarding Concealment of Income, passed by the Commissioner of Income Taxes (Appeals) ( CIT(A) ) pertaining to Assessment Year 2015-16. The ITAT in its judgment stated that the CIT(A) had erred in upholding the decision of the Assessing Officer ( AO ) under Section 271(1)(c), which in itself was passed on unsubstantiated grounds.

The Hyderabad Bench of ITAT comprising of Laliet Kumar, Judicial Member and Manjunatha G., Accountant Member after assessing the facts on record, held that none of the facts at hand indicate that the Assessee has partaken in any incriminating activity that would suggest that there has been concealment of income. The Bench further stated that the Appellant has further surrendered income in good faith, which does not fall under concealment of income.

The Bench tangentially dismissed a stay application filed by the Assessee seeking a stay on the proceedings that were to be undertaken by the CIT; since the order passed by the CIT(A) was already dismissed by the Bench, the Stay Application becomes infructuous.

ITAT deletes Penalty U/s 271(1)(c) for Co-operative Bank in Liquidation, Citing Full Disclosure and Lack of Concealment Swaminarayan Co-op. Bank Ltd vs The ACIT CITATION:   2024 TAXSCAN (ITAT) 900

The Ahmedabad bench of Income Tax Appellate Tribunal (ITAT)  allowed the appeal,deleted the penalty imposed under Section 271(1)(c) of the Income Tax Act, 1961 and noted that the co-operative bank in liquidation, had disclosed all relevant facts including the RBI’s cancellation of its banking license and the diversion of interest income to the Deposit Insurance and Credit Guarantee Corporation (DICGC) due to an overriding title.

The division bench comprising Suchitra Kamble (Judicial Officer) and Makarand V. Mahadeokar (Accountant Member)ound the penalty under Section 271(1)(c) unjustified, as the assessee had disclosed all material facts without intent to conceal income. The appeal was allowed, and the penalty of Rs. 36,58,434 was deleted.

Deduction u/s 54F of Income Tax Act Allowable  On Construction Of The New Dwelling/Residential Unit: ITAT Shri Chandra Bhavani Sankar vs The ITO CITATION:   2024 TAXSCAN (ITAT) 901

The Chennai Bench of Income Tax Appellate Tribunal (ITAT) has held that deduction under section  54F of Income Tax Act, 1961 is allowable on construction of the new dwelling/residential unit.

The two member bench of Aby T. Varkey (Judicial Member) and Amitabh Shukla (Accountant Member) has observed that the assessee had discharged the burden to prove construction of a residential house/dwelling unit (first floor with separate staircase, kitchen, new electrical connection, water connection, etc.), and it is not disputed that construction of the new dwelling/residential unit was within the time stipulated under Section 54F of the Income Tax Act.

While allowing the assessee’s appeal,the Tribunal held that it is not a requisite of Section 54 that construction could not have commenced prior to the date of transfer of the asset resulting in capital gain. If the amount of capital gain is greater than the cost of the new house, the difference between the amount of capital gain and the cost of the new asset is to be charged under Section 45 as the income of the previous year. If the amount of capital gain is equal to or less than the cost of the new residential house, including the land on which it is constructed, the capital gain is not to be charged.

Sathyanarayanan appeared on behalf of the appellant and P. Sajit Kumar appeared on behalf of the respondent.

Income Tax Addition On Interest Income Received Out Of FDs is Invalid In Absence Of Corroborative Evidence: ITAT DCIT vs Evita Construction Pvt. Limited CITATION:   2024 TAXSCAN (ITAT) 902

In a significant case, the Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has Income tax addition on interest income received out of Fixed Deposits ( FDs) is invalid in absence of corroborative evidence. The Tribunal further deleted the addition of the interest income received out of the fixed deposits.

The two member bench of Kavitha Rajagopal (Judicial Member) and B R Baskaran (Accountant Member) found that AO has failed to corroborate the fact that the FD made by the assessee is out of the surplus funds held by the assessee in a case where the assessee has borrowed huge advances from banks and has also availed of an of an overdraft facility for the purpose of its business, resultantly expending a higher rate of interest than that received out of the FD.

The court upheld the decision of CIT(A) and held that the assessee has established that the said funds were incidental to the assessee’s business activity and, therefore, the same cannot be said to be ‘income from other sources’.

 Pradip Kapasi appeared on behalf of the petitioner and P. D. Chougule appeared on behalf of the respondent.

Lack of Conclusive Evidence: ITAT quashes Revision Order u/s 263 alleging Cash Payment Nirav Chandrakantbhai vs The Pr.CIT CITATION:   2024 TAXSCAN (ITAT) 903

The Ahmedabad Bench of the Income Tax Appellate Tribunal ( ITAT ) recently quashed the Principal Commissioner of Income Tax ( PCIT ) revision order under Section 263 of the Income Tax Act, 1961. The revision order had alleged that the assessee, made a cash payment for an immovable property, but no conclusive evidence was provided to support this claim.

The two-member bench, comprising Nautiyal (Judicial Member) and Makarand V. Mahadeokar (Accountant Member), reviewed the case. The tribunal found that the impounded documents did not mention Bhalani’s name and that the PCIT failed to prove that the alleged cash payment was made by Bhalani.

The tribunal stated that for invoking Section 263, it must be demonstrated that the AO’s order was both erroneous and prejudicial to the interests of the revenue. Due to the lack of conclusive evidence, the ITAT set aside the PCIT’s revision order, allowing the assessee’s appeal.

ITAT allows Income Tax Exemptions u/s 80P, claimed by CIDCO CIDCO Employees Co–op. Credit Society vs ITO CITATION:   2024 TAXSCAN (ITAT) 904

The Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) allowed the appeal in favor of the assessee CIDCO and allowed income tax deduction under Section 80P(2)(a)(i) and 80P(2)(d) of the Income Tax Act.

The tribunal bench, comprising Gagan Goyal ( Accountant Member ) and Sunil Kumar Singh ( Judicial Member ) held that the AO should not have denied the benefit of Section 80P of the Act to the assessee society. The bench allowed the appeal in favor of the assessee and directed the AO to allow the benefit of deduction to the assessee under Section 80P(2)(a)(i) and 80P(2)(d) of the Income Tax Statute.

Exemption u/s 10(23C)(iv) cannot be rejected if Net Surplus is less than 20% of Total Receipts: ITAT M/s. Council for Leather Exports vs The Deputy Commissioner of Income Tax (Exemption) CITATION:   2024 TAXSCAN (ITAT) 905

 The Chennai bench of the Income Tax Appellate Tribunal ( ITAT ) held that the exemption claimed under Section 10(23C)(iv) of Income Tax Act, 1961, cannot be rejected if the net surplus is less than 20% of total receipts of the institution.

The bench, consisting of Aby T. Varkey (Judicial Member) and S. R. Raghunatha (Accountant Member), held that the lower authorities were erraneos in denying the exemption claimed by the assessee and observed that the net surplus of Rs. 7.62 crores is less than 20% of the total receipts of the institution, which is Rs. 42.82 crores, and the exemption u/s. 10(23C)(iv) cannot be rejected under Section 2(15) of ITA.

Thus, the bench allowed the appeal in favor of the assessee.

AO Must Record Proper Satisfaction Regarding Incorrectness of Taxpayer’s claim before Invoking Income Tax Rule 8D: ITAT The ACIT vs M/s.LA Renon Healthcare Pvt.Ltd CITATION:   2024 TAXSCAN (ITAT) 906

The Ahmedabad Bench of the Income Tax Appellate Tribunal ( ITAT ) emphasized that the Assessing Officer (AO) must properly record satisfaction regarding the incorrectness of the taxpayer’s claim before invoking Income Tax Rule 8D.

The two-member bench, comprising Nautiyal (Judicial Member) and Makarand V. Mahadeokar (Accountant Member), reviewed the arguments. The tribunal observed that the AO appeared to have predetermined the disallowance, as indicated by the early show-cause notice issuance. The tribunal referenced the decision in Pidilite Industries Ltd., reinforcing that the AO must document specific dissatisfaction with the taxpayer’s claim before invoking Rule 8D.

The ITAT noted that a similar principle was upheld in two other cases, emphasizing that AO must express specific dissatisfaction with the assessee’s computation before invoking Rule 8D under section 14D.

Based on the evidence provided by the assessee and the lack of proper satisfaction recorded by the AO, the tribunal deleted the disallowance of Rs.36,30,382 on account of interest expenses. Thus, the revenue appeal was dismissed.

None appeared on behalf of Assessee for Hearing 33 Time Consecutively: ITAT dismisses Appeal M/s. P. Praful & Co. Agency (India) Private Limited vs The PR.CIT-3 CITATION:   2024 TAXSCAN (ITAT) 907

The Ahmedabad Bench of the Income Tax Appellate Tribunal ( ITAT ) dismissed the appeal due to non-cooperative and non-appearance of the assessee for consecutively 33 hearings.

The Tribunal observed that the assessee failed to produce any documents to prove his claims and did not cooperate with the hearings. The respondent’s counsel confirmed that the assessing officer had already given effect to the revision order. Due to a lack of evidence and material on record, the tribunal dismissed the appeal for non-prosecution.

ITAT Remands Case Back to CIT(A) for Reconsideration Due to Non-Compliance and Evidence Issues M/s Harichandanpur LAMPS vs ITO, Ward Keonjhar CITATION:   2024 TAXSCAN (ITAT) 908

In the recent case, the Cuttack bench of Income Tax Appellate Tribunal(ITAT) remanded the appeal by the assessee against the Commissioner Of Income Tax (Appelas)[CIT(A)]’s order after condoning a 69-day delay. The tribunal noted non-compliance and lack of documentation in the CIT(A)’s order and provided the assessee another chance to be heard. The appeal was partially allowed for statistical purposes.

The tribunal observed that the CIT(A)’s order indicated a lack of compliance by the assessee during the appeal process, leading to the dismissal of the appeal. Additionally, the assessment order showed that the assessee did not provide supporting documentation.

The bench stated that, to ensure fairness and allow the assessee a proper opportunity to present their case, the tribunal decided to send the issues back to the CIT(A) for reconsideration, with adequate opportunity for the assessee to be heard.           

A single bench consisting of George Mathan (Judicial Member) partially allowed the appeal for statistical purposes.

Lack of Adverse observations by AO: ITAT allows long-term Capital Gain Exemption Shah Sandeep Anantkumar HUF vs ITO-32(3)(4) CITATION:   2024 TAXSCAN (ITAT) 909

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) recently ruled in favor of an Assessee whose long-term capital gains exemption was disallowed by the Assessing Officer on the basis of uncorroborated evidence.

The Mumbai Bench of ITAT comprising Sandeep Singh Karhail, Judicial Member and Renu Jauhri, Accountant Member observed that no cash was paid by the Assessee for the purchase of 32,000 shares of M/s Regency Trust Ltd. and that the entire sales transactions had been carried out on the floor of the stock exchange through a SEBI registered stock-broker. The Bench further commented on the conduct of the AO in wholly ignoring the evidence adduced by the Assessee to prove the genuineness of their transactions, while relying solely on their investigated material which failed to prove any adverse findings that prejudiced the Assessee.

In light of all the findings, the ITAT Bench concluded that there is absolutely no merit in the impugned order passed by the AO and upheld by the CIT(A) which maintained the additions under Section 68 and 69A of the Income Tax Act, while disallowing the exemption of long-term capital gains that were claimed by the Assessee.

ITAT remands Assessment back to AO for Fresh Review due to Non-Receipt of Notices and Disputed Cash Payments Sitaram Fruits Co. vs Assessment Unit CITATION:   2024 TAXSCAN (ITAT) 910

In the recent case, the Cuttack Bench of the Income Tax Appellate Tribunal (ITAT) partially allowed the assessee’s appeal, remanding the assessment for assessment year(AY) 2020-2021 back to the assessing officer(AO). The tribunal noted issues with non-receipt of notices and directed a fresh review of disputed cash payments for salary and wages, ensuring the assessee’s opportunity to present their case.

The division bench, comprising George Mathan (Judicial Member) and Manish Agarwal (Accountant Member), remanded the issues to the AO for a fresh review, ensuring the assessee had sufficient opportunity to present his case. The tribunal further noted that if the assessee failed to cooperate, the AO could issue physical notices and take an unfavorable view if necessary.

ITAT Remands Case to CIT(A) Due to Incorrect Filing Date of Income Tax Return Income Tax Officer vs Emerlad Mining Private Limited CITATION:   2024 TAXSCAN (ITAT) 912

In the concerned case, the Cuttack bench of Income Tax Appellate Tribunal( ITAT ) partially allowed the appeal of the revenue appellant, by noting that the Commissioner of Income Tax (Appeals) [CIT(A)] had based their decision on an incorrect filing date of the return

The division bench comprising George Mathan (Judicial Member) and Manish Agarwal(Accountant Member),decided to restore the appeal to the CIT(A) for a decision on the merits.

Undeclared Foreign Income from House Property and Other Sources Declared in Rectified ITR: ITAT deletes Penalty u/s 271 Rohit Chatterji vs DCIT CITATION:   2024 TAXSCAN (ITAT) 913

The Mumbai Bench of the Income Tax Appellate Tribunal ( ITAT ) deleted the penalty of Rs.9,24,760 levied under section 271(1)(c) of the Income Act, 1961 for furnishing inaccurate particulars leading to concealment of income. The tribunal found that there was no willful intention on the part of the assessee to conceal the income which led to the penalty cancellation.

The two-member bench, consisting of Padmavathy S ( Accountant Member ) and Rahul Chaudhary ( Judicial Member ) observed that the assessee intended to file a revised return regardless of the assessment, due to the unavailability of certain information at the time of filing the original return. The tribunal noted that the assessee is a Singaporean and there was a time lag in getting the correct details of his Singapore income.

The tribunal observed that the assessee corrected the salary income in the revised return, reducing it from ₹11,43,06,874 to ₹11,36,98,894. This supported the assessee’s claim that the revised return was intended to correct errors in salary and interest income as per Form 26AS. Thus, the bench directed the Assessing Officer ( AO ) to delete the penalty, citing a Supreme Court ruling and noting that there was no intentional breach of the law by the assessee.

AO wrongly presumed that only interest-bearing funds were used for CWIP: ITAT deletes disallowance of Interest of Rs. 2.12 Cr Intas Biopharmaceuticals Ltd vs The Dy. Commissioner of Income Tax CITATION:   2024 TAXSCAN (ITAT) 914

The Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) allowed the ground taken by the assessee with reference to the disallowance of interest of Rs. 2, 12,94,836/- as made by the AO.

The bench, comprising Suchitra Kamble (Judicial Member) and Narendra Prasad Sinha (Accountant Member), found out that the AO had not provided a rationale for working out the proportionate interest disallowance on CWIP.

The tribunal bench further observed that the presumption of the AO that only the interest-bearing funds were utilized towards CWIP, was incorrect.

 The bench deleted the disallowance of interest of Rs. 2,12,94,836/- made by the AO under Section 36(1)(iii)

Rejection of Additional Evidence by weighted Deduction u/s 35(2AB): ITAT directs Re-adjudication Admitting Evidences Lumis Biotech Pvt Ltd vs DCIT CITATION:   2024 TAXSCAN (ITAT) 915

The Mumbai Bench of the Income Tax Appellate Tribunal ( ITAT ) directed the Commissioner of Income Tax (Appeals) to admit the additional evidence to substantiate the claim of weighted deduction under Section 35(2AB) of the Income Tax Act, 1961 and re-adjudicate the matter on merits after verifying the additional evidence. The two-member bench comprising Pavan Kumar Gadale (Judicial Member) and Girish Agrawal (Accountant Member) observed that the first appellate authority has erred in rejecting the additional evidence filed by the assessee. The Income Tax Appellate Tribunal stated that the assessee should not suffer for not filing the material information as evidence plays an important role in decision making. Thus, the tribunal set aside the CIT(A)’s order and directed to re-adjudicate the matter on merits after examining and verifying the evidence.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates

taxscan-loader