This weekly round-up analytically summarizes the key stories related to Income Tax Appellate Tribunal (ITAT) reported at Taxscan.in during the previous week from October 25 to October 30, 2021.
M/s Action Construction Equipments Ltd. Vs. DCIT
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has held that the penalty proceedings under section 271(1)(c) of the Income Tax Act, 1961 cannot be survived if the Assessing Officer does not clearly mention the reasons for the same in terms with the conditions specified in the provision.
While deleting the penalty proceedings, the Tribunal held that “the Assessing Officer has not given any reason as to why he dropped the penalty in Assessment Year 2010-11 and sustained the imposition of penalty for Assessment Year 2009- 10 under the same set of facts. Moreover, in the impugned penalty order, the Assessing Officer has stated that non-filing of the appeal goes to demonstrate the acceptance by the assessee of furnishing/concealing of income to the tune of Rs.15,96,494/-. This observation goes to demonstrate that the Assessing Officer had not specified the charge, whether it was far furnishing of inaccurate particulars of income or concealment of income. Therefore, looking into the facts where the Assessing Officer under the same set of facts has dropped the penalty in Assessment Year 2010-11, therefore, the penalty in this year also cannot be sustained, hence, deleted.”
DCIT Vs. M/s Niyati Constructions
The Income Tax Appellate Tribunal (ITAT), Ahmedabad bench has held that the amount of interest on fixed deposit/SSNL Bonds would constitute business income and the same can be included for calculating the remuneration of the partners.
The two-member bench comprising Judicial Member Mr. Mahavir Prasad and Accountant Member Mr. Amarjith Singh was considering an appeal filed by the Revenue against the assessee wherein the first appellate authority deleted an order of the Assessing Officer disallowing Rs. 10,18,000/- under Section 40(b) of the Act on account of remuneration to partner on the ground that remuneration of partner was not allowable on the amount of interest received on Fixed Deposit/SSNL Bonds which was treated as income from other sources.
ACIT Vs. M/s Dong Woo Surface Tech India Pvt. Ltd.
The Chennai bench of the Income Tax Appellate Tribunal (ITAT), while granting relief to Dong Woo Surface Tech India Pvt.Ltd, held that the supervisory fee paid by them to its parent company shall be deductible as expenditure as per the income tax law.
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) ruled that no TDS deductible on consideration for use of computer software by resident Indian distributors to non-resident computer software manufacturers.
The coram of Accountant MemberN.K.Billaiya and Judicial Member Amit Shukla held that the amounts paid by resident Indian end-users/distributors to non-resident computer software manufacturers/suppliers, as consideration for the resale/use of the computer software through EULAs/distribution agreements, is not the payment of royalty for the use of copyright in the computer software, and that the same does not give rise to any income taxable in India, as a result of which the persons referred to in section 195 of the Income Tax Act were not liable to deduct any TDS under section 195 of the Income Tax Act.
Nokia India Sales Pvt. Ltd. Vs. Addl. CIT
In a major relief to Nokia India, the Delhi Bench of Income Tax Appellate Tribunal (ITAT) deleted the disallowance as distributors furnished ITR and duly paid tax. The coram of Judicial Member, Amit Shukla and Accountant Member, Dr. B. R. R. Kumar held that the taxes had been duly received by the state from the recipient and any further action to recover the same from the assessee would amount to double taxation.
Confederation of Pharma Dealers Association Vs. CIT(E)
The Raipur Bench of Income Tax Appellate Tribunal (ITAT) held that mere leasing of developed plots to members on basis of contributions does not make the assessee i.e. Confederation of Pharma Dealers Association ineligible for registration as a charitable entity.
The coram of Judicial Member, Pawan Singh and Accountant Member, Pradeep Kumar Kedia ruled that merely leasing of developed plots to its members on the basis of their respective contributions does not make the assessee ineligible for registration as a charitable entity per se.
Sunrise Biscuit Co. Pvt. Ltd. Vs. ITO
In a major relief to the Sunrise Biscuit, the Income Tax Appellate Tribunal (ITAT), Gauhati Bench held that Capital Subsidy received by Assessee is liable to be excluded from the computation of book profit. The coram headed by Vice President P.M. Jagtap and Judicial Member, Aby T. Varkey allowed the grounds taken by the assessee and direct the AO to deduct the VAT subsidy of Rs. 8,78,84,902/- both while computing income under normal computational provisions and book profit under section 115JB of the Act for the relevant AY 2014-15.
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