ITAT Weekly Round-Up

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 June 18 to June 24, 2022

Shree Radheshyam Sharnam vs Commissioner of Income-tax - 2022 TAXSCAN (ITAT) 808

The Jaipur bench of the Income Tax Appellate Tribunal (ITAT) has been allowed to submit the required documents for the approval of exemption u/s 80G(5)(vi) before the CIT(Exemption) as a relief to the critical covid pandemic period.

Mr. Arihant Patni vs Income Tax Officer - 2022 TAXSCAN (ITAT) 807

While considering a bunch of appeals, the Pune bench of Income Tax Appellate Tribunal (ITAT) has held that property which was not let out during the assessing year is not applicable u/s 23(1)(c) of the Income Tax Act,1961.

Abhinav Sehgal vs ITO - 2022 TAXSCAN (ITAT) 796

In a significant ruling, the Delhi bench of the Income Tax Appellate Tribunal (ITAT) has held that reassessment made without serving notice u/s 148 is invalid and will not sustain.

Gulshan Polyols Ltd. vs ACIT - 2022 TAXSCAN (ITAT) 799

The Delhi bench of Income Tax Appellate Tribunal (ITAT) has held that deduction reduced on account of the interpretative process cannot be equated with the furnishing of inaccurate particulars of income and deleted the penalty u/s 271(1)(c) of the Income TaxAct,1961. Shri Pradip Kumar Kedia, AM & Shri Yogesh Kumar U S, JM observed that the disallowance of Rs.1,44,794/- was carried out on account of charity and donation, the same has not been incurred for charitable purposes. Further observed that there was no default contemplated under Section 271(1)(c) in respect of such addition and observed that the income reflected in the books may be attributable to the business undertaking but cannot be equated with the expression ‘derived from’ the manufacturing activity.

Shri. Jayaprakasha Rai vs DCIT -2022 TAXSCAN (ITAT) 805

The Income Tax Appellate Tribunal ( ITAT ) Bangalore bench presided by Mr N. V. Vasudevan, Vice President has directed Assessing Officer to examine the outcome of an application for transfer of licence since the assessee is not a licence holder to claim Tax Collection at Source (TCS) in Income Tax

City Manager Association vs Dy. CIT - 2022 TAXSCAN (ITAT) 806

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) has held that adjustment by way of computer-generated automated message under section 143(l)(a) is a debatable issue and rejects plea.

Egberts India Pvt. Ltd. vs DCIT - 2022 TAXSCAN (ITAT) 804

The Chennai bench of Income Tax Appellate Tribunal ( ITAT ) has held that no deduction of actual expenditure incurred on house property besides 30% statutory deduction on Income from House Property.

Prathamika Krishi Pattina vs ITO - 2022 TAXSCAN (ITAT) 802

The Section 80A (5) cannot be invoked for denying deduction under Section 80P even if Income Tax Return was not filed, so was held by the Income Tax Appellate Tribunal (ITAT), Bangalore.

M/s.Puttur City Hospital Pvt.Ltd. vs The Income Tax Officer - 2022 TAXSCAN (ITAT) 801

The Income Tax Appellate Tribunal (ITAT), Bangalore held that, the report of the District Valuation Officer (DVO) was illegal on the ground that rejection of books of account is a precondition for making reference to DVO.

Ketan Brothers Diamondz Exports vs Asstt. Commissioner of Income Tax - 2022 TAXSCAN (ITAT) 803

Income Tax Appellate Tribunal (ITAT), Mumbai deleted the disallowance made by Assessing Officer (AO) on alleged delay in payment towards employee’s contribution to Provident Fund under Section 36(1) (va).

K. Uttamlal And Company vs Asstt. Commissioner of Income Tax - 2022 TAXSCAN (ITAT) 800

The Income Tax Appellate Tribunal (ITAT), Mumbai directed fresh adjudication on the disallowance of foreign exchange loss in respect of the buyer’s credit payable by the assessee.

Asstt. Commissioner of Income Tax vs Maharashtra State Electricity Transmission Company Ltd - 2022 TAXSCAN (ITAT) 795

The Income Tax Appellate Tribunal (ITAT), Mumbai held that payment of Tax Consultation Fee after passing of Order by Income Tax Department cannot be treated as Prior Period Expenses.

Krishnapandian Balaji, Vs The DCIT,- 2022 TAXSCAN (ITAT) 818

The Income Tax Appellate Tribunal (ITAT), Chennai bench has deleted an addition under section 68 of the Income Tax Act, 1961 against a Proprietor towards cash deposit during demonetization period by considering the fact that the same was kept as cash in hand in his business capacity.

ACIT vs M/s. Modern Papers - 2022 TAXSCAN (ITAT) 812

The Income Tax Appellate Tribunal, Delhi, has held that excise duty subsidy/ excise rollback is a capital receipt, not taxable. The Tribunal observed that the excise duty subsidy and interest subsidies that were given in pursuant to the new industrial policy were held to be capital receipts

Smt. Sabhapathi Padmasree vs Income Tax Officer - 2022 TAXSCAN (ITAT) 814

Receiving advances for purpose of availing credit facilities, cannot be considered as gratuitous payments under Section 2(22)(e) of the Income Tax Act, so was held by the Income Tax appellate Tribunal (ITAT), Visakhapatnam. Considering the fact that the assessee had given her personal property as collateral security to the bank for the purpose of availing credit facilities by the company, in turn the company has given certain advances, therefore, the same cannot be considered as gratuitous payments which are coming within the meaning of loans and advances as defined U/s. 2(22)(e) of the Act.”

M/s. Mahadevan HUF vs The Income Tax Officer - 2022 TAXSCAN (ITAT) 817

The Chennai Income Tax Appellate Tribunal (ITAT) presided by Mr. Mahavir Singh, Vice President and Mr. Manoj Kumar Aggarwal, Accountant Member has held that property purchased by coparceners of Hindu Undivided Family (HUF) in their individual capacity is assessable under section 64(2)(b) and upholds revision.

SDS Ramcides Crop Science Pvt. Ltd. vs Deputy Commissioner of Income Tax - 2022 TAXSCAN (ITAT) 813

The Income Tax Appellate Tribunal (ITAT) allows half depreciation as an asset was put to use for a claim of 100% depreciation on the temporary structure of the office. Mahavir Singh, Vice President, and Manoj Kumar Aggarwal, Accountant Member held that” The assessee is entitled to this claim of Rs. 63,10,205/- at 100% depreciation but only half of the depreciation because the asset was put to use only with effect from 25.03.2014. Hence, we allow the claim of the assessee, and accordingly, the appeal of the assessee is allowed.”

Reliance Motor Company Pvt. Ltd vs ACIT - 2022 TAXSCAN (ITAT) 811

The Income Tax Appellate Tribunal (ITAT), Chennai held that amount advanced for business transactions cannot be treated as Deemed Dividend. Mahavir Singh, Vice President, and Manoj Kumar Aggarwal, Accountant Member held that “If the amounts advanced are for business transactions between the parties, such payment would not fall within the deeming dividend under Section 2(22)(e) of the Act.”

Narendra Chandubhai Rafaliya vs The ITO - 2022 TAXSCAN (ITAT) 815

The Ahmedabad Bench of Income Tax Appellate Tribunal has held that provision of sec. 68 cannot be invoked where assessee filed return of income under section 44AD on presumptive basis. The Tribunal by relying the decision of Mumbai ITAT has observed that where assessee was not maintaining any account books, bank statement could not be construed to be a book of account maintained by assessee; merely on basis of information that assessee made a ‘cash deposit’ in her saving bank account, no addition could be made as unexplained cash credit u/s 68.

Mahesh Arvind Tilve vs Principal Commissioner of Income Tax - 2022 TAXSCAN (ITAT) 726

The Mumbai Bench of Income Tax Appellate Tribunal has held that Assessing Officer properly verified documents adduced by assessee and set asides revision proceedings u/s 263. The Tribunal has observed that the assessment was reopened specifically to verify the cash transactions and cash payment made by the appellant to the builder as on money and appellant explained the source of cash even though drawings are less but still appellant has sufficient cash to make on money payment.

Shri Anil Kumar Khetawat vs ACIT - 2022 TAXSCAN (ITAT) 657

Income Tax Appellate Tribunal (ITAT), Kolkata bench consisting of Rajpal Yadav, Vice President and Manish Borad, Accountant Member held that Income Tax Officer (ITO)having no jurisdiction over assessee cannot issue notice u/s. 143(2). The Tribunal observed “We note that the ACIT by assuming the jurisdiction after the time prescribed for issuance of notice u/s. 143(2) of the Act notice became qoarum non judice after the limitation prescribed by the statute was crossed by him.

M/s. Steril-Gene Life Sciences Pvt. Ltd vs The DCIT - 2022 TAXSCAN (ITAT) 809

Loss arising out of foreign currency term loan as a capital loss, Chennai bench of Income Tax Appellate Tribunal (ITAT) allowed depreciation on the cost of assets including forex. It was observed that the foreign currency term loan sanctioned by the bank was by way of conversion of existing rupee term loan and that the FCTL was at a concessional rate as compared to the rupee term loan leading to lower interest being debited in the profit & loss account.

M/s.Vestas Technology R&DChennai Private Ltd vs Commissioner of GST & CE - 2022 TAXSCAN (CESTAT) 333

The Income Tax Appellate Tribunal (ITAT), Chennai bench have held that the limitation period on CENVAT refund claim can only calculate based on dates of realisation of export proceeds and filing of refund and ordered to submit the relevant documents for that. It was observed that the appellant failed to produce documents to prove that the claims filed by the appellants and the Tribunal were unable to verify the claim that the respective refund applications have been filed within one year of realization of the export proceeds in the relevant quarter.

M/s. Shubh Arya Steel Pvt. Ltd vs ACIT - 2022 TAXSCAN (ITAT) 797

Disallowance under Section 40A (3) of the Income Tax Act cannot be made in intimation under Section 143(1) of the Income Tax Act, so was held by the Income Tax Appellate Tribunal (ITAT), Mumbai. The Bench consisting of M. Balaganesh, Accountant Member and Rahul Chaudhary, Judicial Member observed that “In our considered opinion, as stated earlier, this would not fall within the ambit of a prima facie or arithmetical error u/s.143(1) warranting prima facie adjustment thereon.

Smt. Swati Jignesh Jain vs ITO - 2022 TAXSCAN (ITAT) 794

Penalty u/s 271(1)(b) for non-appearance was deleted by the Mumbai bench of Income Tax Appellate Tribunal (ITAT) on completion of scrutiny assessment by the Assessing Officer after condoned the absence of the assessee. Shri M Balaganesh, AM & Shri Rahul Chaudhary, JM held that no penalty u/s.271(1)(b) of the Act could be levied when an assessment has been completed u/s.143(3) of the Act, wherein the AO condoned the absence of the assessee and the assessments were ultimately completed u/s.143(3) of the Act.

Shri Harpreet Singh Grover vs ITO - 2022 TAXSCAN (ITAT) 666

The Amritsar bench of Income Tax Appellate Tribunal (ITAT) consisting of Dr M L Meena, AM and Shri Anikesh Banerjee, JM has held that addition u/s 69 of the Income Tax Act 1961 can’t make without considering corroborative evidence and set aside the order of addition and directed to de novo adjudication. The Tribunal observed that the assessment was done u/s 144 of the Act and directed to give a reasonable opportunity to the assessee for further consideration and submission of the documents.

M/s. India Pistons Ltd. vs DCIT - 2022 TAXSCAN (ITAT) 810

The Income Tax Appellate Tribunal (ITAT), Chennai bench has held that the short payment of invoices can be treated as business loss even if the claim is not substantiated with specific invoices. It was sufficient to show that there was shortfall in receipt of amount against the invoices.

Chalet Hotels Limited vs Dy. Commissioner of Income Tax - 2022 TAXSCAN (ITAT) 785

The appeal is filed by the assessee before the Income Tax Appellate Tribunal (ITAT), Mumbai against order passed by the Commissioner of Income-Tax (CIT) for assessment year 2016-17. ITAT held that short term capital cannot be carried forward as it has not been claimed through a return filed under section 139(3).

Smt. Rani vs Income Tax Officer - 2022 TAXSCAN (ITAT) 679

The Amritsar Bench of Income Tax Appellate Tribunal has held that CIT (A) require to examine documentary evidences filed by assessee before merely confirming finding of Assessing Officer. The Tribunal further observed that the quantum of is required to be taken into consideration while computing cash at hand of a women assessee.

Karandikar Enterprises vs Assistant - 2022 TAXSCAN (ITAT) 830

The Income Tax Appellate Tribunal (ITAT), Pune held that Entertainment subsidy falls under capital receipt. The appeal has been filed by the Revenue against the order of the Commissioner of Income Tax (CIT) for the Assessment Year 2013-14. The Tribunal bench comprising of S.S. Godara, Judicial Member, and Dr. Dipak P. Ripote, Accountant Member observed that “the CIT has followed the decision of Hon’ble Bombay High Court in the case of Chaphalkar Brothers.

Shri Madhav Kumar Swarup vs ACIT - 2022 TAXSCAN (ITAT) 833

The Income Tax Appellate Tribunal (ITAT), New Delhi held that mentioning PAN does not attribute transaction or credit to an assessee. There is no discussion of any evidence in the impugned orders or otherwise on record to show also if the said credit card was otherwise applied, obtained, and used by the assessee only. Only due to mention of PAN, the credit or transaction cannot be attributed to any assessee.”

Smt. Tripta Rani vs The Assistant. Commissioner of Income Tax - 2022 TAXSCAN (ITAT) 835 ADD TO BOOKMARKS

The Income Tax Appellate Tribunal ( ITAT ), Chandigarh Bench has held that the addition of unexplained income u/s 69 is not sustainable in the presence of the duly audited regular books. Shri N K Saini, vice president and Shri Sudhanshu Srivastava, judicial member observed that the AO had no sound reason to reject the contention of the assessee about the source of cash deposits made in the bank account of M/s Syna Creations especially when the deposits have been routed through the regular books of account of the assessee. The Tribunal set aside the order of CIT(A) in the absence of incriminating material which would point out towards the assessee introduced her unaccounted cash into the books of account.

M/s. Tristar Container Services (Asia) Private Limited vs ACIT - 2022 TAXSCAN (ITAT) 834

The Chennai bench of the Income Tax Appellate Tribunal (ITAT) has held that the principal component can be treated as revenue expenditure u/s 37 of the Income Tax Act 1961. It was viewed that whatever the nature of the lease, only the lessor is entitled to depreciation as per the decision in ICDS Limited Vs CIT (350 ITR 527). It was observed that under the provisions of the Act, depreciation is admissible under section 32 of the Act only to the ‘owner’ of the asset. Lease charges paid for the use of the asset, without acquiring any ownership rights in the same, are allowable as revenue expenditure under Section 37 of the Act.

M/s. R.R. Kapoor vs ITO - 2022 TAXSCAN (ITAT) 827

The Income Tax Appellate Tribunal ( ITAT ) has held that, Late action by new auditor is reasonable cause for non-imposition of penalty under Section 271B of the Income Tax Act.It was observed that section 271B is subject to section 273B, and the latter section emphasizes that if a “reasonable cause” is established for non-compliance of the requirements which led to imposition of penalty under certain sections, including 271B, then no penalty should be imposed.

Jitendra Rana vs Pr.CIT-1, Jabalpur - 2022 TAXSCAN (ITAT) 829

The Income Tax Appellate Tribunal (ITAT), Jabalpur held that, Lack of enquiry at right time, to prejudice interest of Revenue, invokes revisionary jurisdiction under Section 263 of the Income Tax Act.

Shri M.Y. Jahabar Sadique vs ITO - 2022 TAXSCAN (ITAT) 840

The Chennai bench of the Income Tax Appellate Tribunal (ITAT) has upheld addition against the assessee, a non-resident since he was unable to prove the genuineness of the cash gift received under section 69A of the Income Tax Act, 1961.

M/s Grand Mumtaz Resorts vs Income Tax Officer - 2022 TAXSCAN (ITAT) 844

Income Tax Appellate Tribunal (ITAT), Amritsar bench has held that expenses vouched and verified incompletely will invalidate the addition to the Income. It was observed by the Tribunal that there was no material suggesting that expenditure did not give enduring benefit to the assessee and such expenditure was a regular feature which was claimed earlier. It was observed that the expenses were not completely vouched and were not fully verifiable.

Sri Aditya Kumar Singhania vs JCIT - 2022 TAXSCAN (ITAT) 843

The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) has held that exemption u/s 10(2A) applies to a Legitimate share of profit earned based on LLP agreement. The Tribunal observed that the LLP was regularly assessed to tax and the assessee has only received the share of profit from the LLP at the agreed rate of 95% of the profits. It was observed that the assessee being an expert in the field of management and investments joined hands with the company having funds and together after forming the LLP, they are carrying on business activity regularly.

M/s Abdul Samad & Sons vs Income Tax Officer - 2022 TAXSCAN (ITAT) 841

The Amritsar bench of Income Tax Appellate Tribunal (ITAT) has held that disallowance of expense is not sustainable when the non-availability of expense vouchers happened due to a flood. Shri Kul Bharat, Judicial member observed that the assessee failed to substantiate the expenditure and the accounts of the assessee were duly audited. The Tribunal observed that the auditor had no adverse inference regard to the contention of the more particularly the contention of the assessee that the record was washed away due to flood.

Vision Foundation vs The DCIT - 2022 TAXSCAN (ITAT) 842 ADD TO BOOKMARKS

The Income Tax Appellate Tribunal (ITAT), Chennai bench comprising Shri Mahavir Singh, Vice President and Shri Manoj Kumar Aggarwal, Accountant Member has condoned the delay in filing of audit report after the income tax return due date because of virus attack in the system.

Mrs. Rupal Jain vs ACIT - 2022 TAXSCAN (ITAT) 836

The Income Tax Appellate Tribunal (ITAT), New Delhi held that addition u/s 68 of Income Tax Act 1961 will not sustain in the presence of evidence which proves the authenticity of the transaction. The Tribunal ordered to reverse the addition in the presence of evidence adduced by the assessee and allowed the assessee’s appeal.

Sh. Avtar Singh vs Income Tax Officer - 2022 TAXSCAN (ITAT) 837

The Income Tax Appellate Tribunal (ITAT), Amritsar bench has held that reopening of assessment u/s 147 of Income Tax Act 1961 would invalidate in the presence of evidence for verification of cash deposit. The Tribunal restored the issue related to the balance addition amounting to Rs.15,89,700/- to the Assessing Officer for decision after verifying the evidence filed by the assessee.

The Deputy Commissioner of Income Tax vs Mr. Keezhayur Sowrirajan Sreenivasan - 2022 TAXSCAN (ITAT) 825

The Chennai bench of the Income Tax Appellate Tribunal ( ITAT ) presided by Mr. I G. Manjunatha, Accountant Member, and Mr. Anikesh Banerjee, Judicial Member has held that compensation received for relinquishment of right in a property is assessable under ‘income from capital gains’ and eligible for deduction u/s 54F.

Sanjay Sadashiv Navale vs DCIT - 2022 TAXSCAN (ITAT) 698

The Income Tax Appellate Tribunal (ITAT), Pune bench presided by S.S.Godara, Judicial Member held that prima facie belief that there is the escape of income is sufficient proof to initiate reassessment proceedings under section 147/148 of the Income Tax Act, 1961.

Karma Lakelands Pvt. Ltd vs DCIT - 2022 TAXSCAN (ITAT) 845

The Income Tax Appellate Tribunal (ITAT), Delhi bench has held that Conversion of stock in trade based on a development agreement without consideration does not accrue income. Sh. N K Billaiya, AM and Sh.Yogesh Kumar U S, JM observed that the assessee has not transferred his right to Unitech and no income accrues to the assessee. The Tribunal upholds the order of the CIT(A) and dismissed the appeal filed by the revenue.

DCIT vs M/s.Gea Process Engineering (India) Pvt. Ltd - 2022 TAXSCAN (ITAT) 846

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has held that consideration paid in excess than market value of net tangible assets is treated as goodwill. Shri Baskaran B R, accountant member and Shri Kuldip Singh, judicial member viewed that the assessee has acquired the food and pharma division of L&T by virtue of the agreement dated by paying excess consideration of net asset value, the excess was reflected as goodwill in the books of accounts of the assessee under the head “intangibles.

Marubeni Corporation, Japan vs Deputy Commissioner of Income Tax - 2022 TAXSCAN (ITAT) 847

In a ruling, in favour of Marubeni Corporation India Pvt. Ltd, the Mumbai bench of Income Tax Appellant Tribunal has held that Interest income earned by the enterprise in other jurisdictions is taxable if it is attributable to the permanent establishment. It was observed that unless the profit earned by an enterprise in the other jurisdiction is directly or indirectly attributable to that permanent establishment in the source jurisdiction, it cannot be taxed even under article 7.

Roshan Lal Verma vs DCIT - 2022 TAXSCAN (ITAT) 850

The Income Tax Appellate Tribunal (ITAT), Chennai bench has held that the defect of a belated jurisdictional notice is not curable under section 292B of the Income Tax Act, 1961. A bench of Shri Pradip Kumar Kedia, Accountant Member & Shri Narender Kumar Choudhry, Judicial Member found that the validity of impugned assessment order resulting in present appeal is under challenge on the grounds of notice issued under Section 143(2) purportedly barred by limitation.

Dilip B. Desai vs ACIT - 2022 TAXSCAN (ITAT) 851

The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) has held that the TDS credit cannot be denied to the assessee due to mentioning of wrong/new PAN by the deductors. The Tribunal comprising of Sri Manish Borad, Accountant Member & Sri Sonjoy Sarma, Judicial Member observed and directed the AO to examine the facts and veracity of the claim of credit of TDS at Rs. 13,88,073/- and if the assessee is able to demonstrate that the gross amount on which the tax has been deducted at source has been reflected in the regular books of account and audited financial statement of the individual assesee as a revenue then the credit of the TDS amounting to Rs. 13,88,073/- should be granted to the assessee.

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