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 July 1 to July 8, 2022
The Hyderabad bench of the Income Tax Appellate Tribunal (ITAT) has held that the depreciation allowable on goodwill acquired under a slump sale agreement under section 32 of the Income Tax Act, 1961.The Tribunal bench comprising Shri Rama Kanta Panda, Accountant Member and Shri K. Narasimha Chary, Judicial Member agreed with the assessee’s contention that by acquiring the aforesaid business rights along with the tangible assets, the assessee got an up and running business and the specified intangible assets acquired under slump sale agreement are in the nature of “any other business or commercial rights of a similar nature” on which depreciation is allowable.
The Bangalore Bench, of the Income Tax Appellate Tribunal, held that set-off of income under ‘house property’ against loss is not allowable to a closed business.Chandra Poojari, accountant member and Smt. Beena Pillai, judicial member observed that the assessee failed to establish by way of any documents that these expenses were incurred for business. The Coram didn’t find any infirmity in the view taken by the CIT(A) and upheld the same.
The Kolkata Bench, of the Income Tax Appellate Tribunal, held that excise duty exemption is a capital receipt which neither chargeable to Income Tax nor categorised under book profit.The Tribunal observed that the excise duty exemption has been admittedly the capital receipt and the alleged capital receipt cannot be categorised as part of the book profit. It was observed that the excise duty exemption is a capital receipt which was not chargeable to tax under the normal provisions of the Income Tax Act and not to be included as part of the book profit for computing the minimum alternative tax as per the provisions of section 115JB of the Act.
The Income Tax Appellate Tribunal (ITAT) Ahmedabad Bench has held that mere disallowance of the claim under section 54F will not attract a penalty u/s 271(1)(c).The Tribunal observed that CIT(A) has rightly deleted the levy of penalty noting that the assesseehad furnished all particulars relating to the claim of exemption by way of investment in residential properties and that the claim was made under the bonafide belief that all investment would be made within the period specified but could not be done so for reasons beyond his control as the construction was not completed in time.
In a significant ruling of Banglore International Airport, the Bangalore Bench, of the Income Tax Appellate Tribunal, held that depreciation is not allowable for expenditure availed on professional or legal services which don’t create any commercial right. Shri N V Vasudevan, vice president and Ms Padmavathy S, accountant member upheld the disallowance of depreciation on intangible assets and remit back the issue of the nature of software expense to the AO to verify the facts afresh after considering the breakup of the software expenses submitted as additional evidence. The appeal of the assessee was partly allowed.
The Visakhapatnam bench of the Income Tax Appellate Tribunal (ITAT) has held that the addition of unaccounted sales is not sustained in the absence of cogent material.The Tribunal observed that if the assessee did not adhere to the surrender made during the survey, the AO had to bring on record cogent material or other evidence to support the additions rather.
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has held that the income tax appeal is not maintainable once Insolvency Resolution proceedings are initiated against a Corporate Debtor under the Insolvency and Bankruptcy Code (IBC).
The Income Tax Appellate Tribunal (ITAT), New Delhi hold that the assessee is eligible for registration under Section 12AA by ruling that skill development is akin to providing education.The Tribunal observed that “Since, imparting skill development is akin to providing education we hereby hold that the assessee is eligible for registration u/s 12AA of the Act.
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that penalty u/s 271(1)(c) is not applicable when income is computed on an estimated basis.Mr. G. S. Pannu, President,and Shri Challa Nagendra Prasad, Judicial Member have held that “the Assessing Officer has only estimated the net profit by rejecting books of accounts and estimation of net profit at a higher percentage than the declared percentage by the assesseeand, therefore, it cannot conclusively prove of any concealment of income or furnishing of inaccurate particulars of such income. Thus, respectfully following the above-said decisions, we delete the penalty levied under Section 271(1)(c) of the Act”.
In a major relief to Morgan Stanley Advantage Services Pvt. Ltd, a division bench of the Mumbai bench of the Income Tax Appellate Tribunal (ITAT) comprising Shri Kuldip Singh, Judicial Member and Shri Gagan Goyal, Accountant Member has held that the discount on issue of ESOP is allowable as deduction while computing Business Income under the provisions of the Income Tax Act, 1961.
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has held that the deliberate delay in filing an appeal and depositing of appeal fee under the wrong head would show the irresponsible and noncooperative attitude of the assessee and therefore, the appeal shall be dismissed.Shri Anil Chaturvedi, Accountant Member and Shri N.K. Choudhry, Judicial Member observed that the mere filing of appeal is not sufficient until and unless, it is effectively pursued and prosecuted.
Income Tax Appellate Authority (ITAT), Hyderabad restores matter to Commissioner of Income Tax (CIT) as ex-parte order was passed without properly serving the hearing notice.R K Panda, Accountant Member observed that “It is the submission of the learned Counsel for the assessee that the CIT has passed an ex-parte order and in the interest of justice, the assessee should be given one more opportunity to substantiate the cash so found. Considering the totality of the facts of the case and in the interest of justice, I deem it proper to restore the issue to the file of the learned CIT (A) with a direction to grant one last more opportunity to the assessee to substantiate her case and decide the issue as per fact and law.”
Income Tax Appellate Tribunal (ITAT), Chennai sets aside addition as genuineness of transaction was proved by assessee as loan amount was received through proper banking channel and confirmation letter also filed.The bench consisting of V Durga Rao, Judicial Member and G Manjunatha Accountant Member held that “The genuineness of transaction is also proved, because loans have been transferred through bank account and creditworthiness of parties are not in doubt, because M/s.Aashana Enterprises has explained known source of income Therefore, we are of the considered view that the assessee has discharged her onus of proving creditworthiness by filing necessary details, including confirmation from parties.”
The Income Tax Appellate Tribunal (ITAT) Delhi Bench has held that warranty expenses claimed under a provisional basis are not an unascertained liability and set-asides order disallowing provisional warranty expenses.The Tribunal by relying on the decision of the Supreme Court in the case of Rotork Controls India P. Ltd. observed that the amount incurred may vary nominally in comparison to the amount of provision made. Based on the materiality concept, the amount of provision made, can’t be termed as unascertained liability, as the percentage for which provision is being made had been derived based on the technical study, the experience of the company, and the industrial standards. Also matching warranty costs as against the goods being sold is the most appropriate way of accounting because it fulfills the accrual concept as well as the matching concept.
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that speculative transaction through a broker without the purchase of share and deletes addition on purchase of shares and commission expenditure.The Tribunal observed that the speculation loss incurred cannot claim set-off of the same with future speculation income. Even if the speculation loss incurred by the assessee is treated as non-genuine, the same would be of no consequence so far as the determination of tax liability of the assessee in the instant case as well as in the subsequent years is concerned.
The Delhi Bench of Income Tax Appellate Tribunal has held that addition on additional grounds are not permissible if Assessing Officer does not make an addition on the primary ground for reopening the assessment.The Coram of Mr. Challa Nagendra Prasad, Judicial Member by relying on the decision of Delhi High Court in Ranbaxy Laboratories Limited Vs. CIT has held that “I hold that the reassessment order passed by the Assessing Officer under Section 143(3) read with Section 147 of the Act is bad in law and the same is quashed on this ground”.
The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that extended limitation claimed by the department is not valid in the absence of suppression of fact by the duty payer.The Tribunal viewed that the range superintendent has verified the manufacturing activity physically and thereafter given the report that the product which is manufactured by the appellant was eligible for exemption under notification No. 06/2006-CE and the appellant filed ER- 1 return. Further observed that once an assessee claimed exemption notification which was in the knowledge of the department, the department has to verify whether the goods on which exemption was claimed can be covered under the notification or otherwise.
The Chennai Bench of Income Tax Appellate Tribunal (ITAT) has held that expenditure claimed towards write-off investment in capital loss cannot be allowed as deduction u/s.37(1).The Tribunal observed that investment made by the assessee in another company is on capital account and further, when loss incurred on account of diminishing in value of the said investment is capital in nature and thus, same cannot be claimed as deduction u/s.37(1) of the Act.
In a ruling in favour of Orissa Minning Corporation the Cuttack Bench, of the Income Tax Appellate Tribunal ( ITAT ), held that benefits were not derived from compulsory afforestation done on land not owned by the assessee and upheld the deletion of addition made on NPV.The court observed that the assessee was engaged in mining activities and it was a pre-condition that the assessee had to restore the land to its original form and the assessee derives no enduring benefit as the land was not owned by him.
Considering the fact that the car was used by the owner of the Company for both business and personal purposes, the Pune bench of the Income Tax Appellate Tribunal (ITAT) has restricted the depreciation claim to 15% under section 32 of the Income Tax Act, 1961.After hearing arguments from both sides, Shri R.S. Syal, Vice President observed that “it is indisputable that the assessee could not lead any evidence to demonstrate that the user of the car was restricted only to business purposes and did not percolate for personal use. Even the auditor has also mentioned that the personal element in vehicle expenses could not be ignored. This shows that the car was partly used for business and partly for personal purpose. In such circumstances, disallowance of some percentage of the expenses in connection with the running of car is warranted. Keeping into consideration the peculiarity of the facts and circumstances of case under consideration, I am of the considered opinion that the ends of justice would meet adequately if the disallowance is restricted to 15% of such expenses and allowance instead of 30% as sustained in the first appeal. I order accordingly.”
The Income Tax Appellate Tribunal (ITAT), Surat bench comprising Shri Pawan Singh, JM &Dr.A.L.Saini, AM has allowed a claim of TDS credit to the assessee by observing that the same cannot be rejected if the deduction is already done by the employer/deductor and the income tax department can recover the same from them any time.Allowing the appeal, citing the High Court decision, the Tribunal observed that “Therefore, respectfully following the judgment of Hon`ble High Court of Gujarat in the case of Kartik VijaysinhSonavane (supra), we direct the Assessing Officer to verify the claim of the assessee and allow credit of TDS in accordance with law.”
The Kolkata Bench, of the Income Tax Appellate Tribunal (ITAT), has held that the sale of agricultural land does not amount to capital gain for the purpose of allowing exemption under section 10(1) of the Income Tax Act, 1961.The Tribunal observed that if the cultivation of land continued till the date of sale of the land, then the land should have been treated as agricultural land and exempt from the capital gain in view of section 2(14) of the Act.
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that 100% deduction under section 80IC is allowable when an industry underwent a substantial expansion after the expiry of 5 years of its incorporation.The Tribunal has held that “keeping in view, the latest judgment of the Hon’ble Supreme Court allowing 100% deduction u/s 80IC on substantial expansion of the unit, the appeals of the assessee are hereby allowed”.
The Income Tax Appellate Tribunal (ITAT), Visakhapatnam bench has deleted an addition under section 69A of the Income Tax Act, 1961 by holding the deposit of banned notes received by the assessee from cash sales during demonetization period is legally valid.A bench of Shri DuvvuruRl Reddy, Judicial Member & Shri S Balakrishnan, Accountant Member has relied on the judicial pronouncement in the case of Principal Commissioner of Income Tax vs. Agson Global (P) Ltd, and held that the cash sales made by the assessee deposited in the bank account are in accordance with law and hence the addition made by the AO is deleted.
The Vishkhapatanam bench of the Income Tax Appellate Tribunal (ITAT) has held that a mere arrangement between a husband and wife without real money exchange cannot be doubted as an unexplained investment under section 69 of the Income Tax Act, 1961.Deleting the addition, the Tribunal held that “We also find merit in the argument of the Ld. AR that the transactions are between the husband and wife and there was no actual consideration passed on between the husband and wife. The consideration mentioned in the sale deed was only for the purpose of stamp duty determination and hence it cannot be treated as a consideration received by the husband of the assessee nor paid by the assessee. Considering the peculiarity in the nature of transaction in the instant case, we find merit in the Ld. AR’s argument that no real consideration has been transferred by the assessee for the purchase of land. In view of the disclosure made by the assessee while filing the return of income as required U/s 148 of the Act, we are of the considered opinion that section 69 of the Act cannot be invoked as it applies only to the investments which are not recorded in the books of accounts. Considering the peculiar facts and circumstances in the instant case, actual transfer of money was not done by the assessee to her husband and since the registration was done only to save the property without real consideration, we are of the considered view that the order of the ld. CIT(A) deserves to be quashed and we allow the appeal of the assessee.”
Income Tax Appellate Tribunal (ITAT), Mumbai bench consisting of Kuldip Singh, Judicial Member and Gagan Goyal, Accountant Member held that Sale of Carbon Credit is Capital Receipt.The Tribunal observed “Following the order passed by Co-ordinate Bench of Tribunal in case of M/s Dawarkesh Sugar Industry Ltd. which is based upon the decision rendered by Andhra Pradesh High Court in case of My Home Power Ltd., we are of the considered view that sale of Renewable Energy Certificate (Carbon Credit) of income received by the assessee is a capital receipt and could not be business receipt or income nor it is directly linked with the business of the assessee nor any asset is generated in the course of business but it is generated due to environmental concern. So, the addition of Rs. 10,20,587/- by the AO from the sale of Carbon Credit and confirmed by the CIT(A) is not sustainable, hence, ordered to be deleted.”
The Income Tax Appellate Authority (ITAT), New Delhi deletes interest levied under Section 201(IA), when default under Section 201(1) not proved.The facts in brief are that a TDS survey u/s 133A of the Act was conducted on 29th March, 2017 at the educational premises of the appellant, Sharda Educational Trust and it was found that it had remitted abroad amounts under various heads but failed to deduct TDS. The Assessing Officer (AO) observed from the sum spent were under different heads which were taxable in India as per the provisions of the Act and relevant DTAA. The AO considered it to be a default u/s 201(1) of the Act and the liability for the payment of interest u/s 201(1A) of the Act. Giving opportunity of hearing the AO treated the assessee as assessee in default and also initiated penalty proceedings u/s 271C(1)(a) which were concluded by penalty order dated 19.09.2018. the same was sustained in appeal before the Commissioner of Income Tax (CIT).
The Income Tax Appellate Tribunal (ITAT), Visakhapatnam Bench has held that addition for undisclosed income under section 69A cannot be made merely on grounds of typographical errors.The Coram of Mr. Duvvuru RL Reddy, Judicial Member, and Mr. S Balakrishnan, Accountant Member has observed the peculiar circumstances of assessee’s business cash being received by the dealer in automobiles for making payments to various authorities such as registration charges, insurance, life tax, etc. The cash is collected from the customers as reimbursements and hence it does not form part of the revenue of the assessee. A mere typographical error of the account number of the bank account does not mean that the assessee has not disclosed proper information about the bank account details. The Tribunal has held that “we find no infirmity in the order of the CIT(A) and hence no interference is required”.
The Income Tax Appellate Tribunal (ITAT), Pune has ruled that, Consideration paid for the acquisition of shares does not come under revenue deduction.The bench consisting ofInturi Rama Rao, Accountant Member and S. S. Viswanethra Ravi, Judicial Member held that “The assessee company had also failed to satisfy the conditions precedent to claim as revenue expenditure, as the expenditure was incurred during the previous year relevant to the assessment year under consideration, therefore, the claim made by the assessee cannot beallowed as deduction.”
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has held that the provisions of Tax Deduction at Source (TDS) cannot be made applicable to fees for client referrals as the same would not amount to “Fee for Technical Services” (FTS) under the provisions of Income Tax Act, 1961.Sh. Shamim Yahya, Accountant Member and Sh. Anubhav Sharma, Judicial Member has observed that once the revenue admitted that they were consultancy charges paid for the introduction of client then that would fall in the definition of payments made to intermediary or liaison agents for channelizing, arranging or soliciting work order.
The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) has held that development fees directly taken to corpus account and invested in a fixed asset can be allowed as capital receipt.The Tribunal observed that the tuition fee was meant to incur revenue expenditure, the development fee is aimed at the requirement of equipment and acquisition of capital assets and further held that the Development Fee is to be treated as a corpus fund allowed to be taken as capital receipt.
The Delhi Bench, of the Income Tax Appellate Tribunal (ITAT), comprises sh. Pradip Kumar Kedia, AM and sh. Anubhav Sharma, JM has held that treating software-related services as FTS in the absence of cogent material is not sustainableIt was observed that the assessee had sold certain software products to customers in India and has also provided software-related maintenance services. In case, it does not come within the ambit of royalty as defined under the Treaty, there is no need to go into the provisions of the Act. The Assessing Officer relied on judicial precedents and assumed that the assessee has sold the copyright. The AO failed to find out the sample agreement or any other material available on record demonstrates that the assessee has transferred/sold the use or right to use copyright and not copyrighted article.
The Income Tax Appellate Tribunal (ITAT), Ahmedabad bench has held that the provisions of TDS not applicable to recovery of late payment charges and Service Tax.A division bench of the ITAT consisting Dr. Arjun Lal Saini, Accountant Member and Ms. Madhumita Roy, Judicial Member observed that “the ld Counsel submitted that assessee had paid Rs.2,27,56,222/- to APSRTC and out of this, the TDS on payment of Rs.2,17,08,097/- was deducted and balance amount of Rs.10,48,125/- (Rs.2,27,56,222-Rs.2,17,08,097) was adjusted by APSRTC towards recovery of late payment charges, service tax etc. and therefore assessee did not deduct TDS on the same, being penal in nature. Apart from this, ld Counsel also submitted that payee has included the sum of Rs.10,48,125/- in its income and offered for tax. Since, the said amount pertains to late fee and service tax, therefore the provisions of TDS does not apply to the late fee and service tax, hence we delete the addition of Rs.10,48,125/-, made by the Assessing Officer.”
While upholding the deletion of addition made on the deemed dividend by the CIT(A) Delhi bench of Income Tax Appellate Tribunal held that deemed dividend u/s 2(22)(e) of Income Tax Act, 1961 is not applicable on the non-shareholder company.The AO observed that the gross profit of the assessee has significantly dropped for the year under consideration in comparison to the earlier Assessment Year. The gross profit for the current year was 15.24% and the net profit of 1.74%. The AO held that on deduction of income from other sources of Rs.14.46 Cr. the net profit would have been further steeped down.
In a significant ruling on the Interest on enhanced compensation for land acquisition, the Delhi bench of the Income Tax Appellate Tribunal has held that addition will not sustain even if TDS was deducted.It was observed that the interest u/s 28 was a part of the amount of compensation whereas interest u/s 34 is only for a delay in making payment after the compensation is determined. Interest u/s 28 is a part of the enhanced value of the land.
The Kolkata Bench, of the Income Tax Appellate Tribunal ( ITAT ), held that the addition of unexplained cash u/s 69 of the Income Tax Act, 1961 is not sustainable when the genuineness of transaction was proved.It was observed that the assessee had regularly maintained books of account including the cash and all relevant details. The assessee showed the source of cash deposit of Rs. 94,50,000/- which was the cash withdrawn of Rs. 1,02,75,000/- on various dates during the year itself which were before the announcement of the demonetization scheme on 08.11.2016. The Tribunal didn’t find any doubt about the genuineness of the transaction of cash deposit of Rs. 94,50,000/- in the bank account on 16.11.2016.
In a relief to taxpayers who are waiting for the refund of balance in the personal ledger account (PLA) after the introduction of GST, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad bench has held that the balance amount maintained in PLA is not in the nature of “excise duty” and therefore, the limitation under the provisions of section 11B of the Central Excise Act, 1944 is not applicable.Mr. Ramesh Nair (Judicial Member) has observed that “the Learned Commissioner (Appeals) rejected the refund claim on the ground that the limitation under 11B is applicable according to which the claimant should have filed the refund within the one year from date of payment. I find that in case of PLA balance, it is not deposited as a duty but it is deposited as advance towards the duty. The PLA Amount takes the color of excise duty only when it is utilized for payment of duty on clearance of excisable goods. The unspent balance of PLA is only advance not duty therefore, Section 11B is not applicable.”
The Income Tax Appellate Tribunal ( ITAT ) Ahmedabad Bench has held that proprietary concern is not required to obtain a separate Permanent Account Number (PAN) and upholds deletion of addition u/s 40(a)(ia).The Tribunal observed that M/s. S.S. Enterprises was a proprietary concern of M/s. Gunesh India Pvt. Ltd. and, therefore, the proprietary concern of M/s. Gunesh India Pvt. Ltd. is not required to obtain a separate PAN. The relevant documentary evidence to establish that M/s. S.S. Enterprises was a proprietary concern of M/s. Gunesh India Pvt. Ltd. was produced by the assessee. The Assessing Officer was not justified in treating the same as invalid and consequently to make the disallowance under Section 40(a)(ia) of the Act for the alleged failure of the assessee to deduct tax at source.
The Income Tax Appellate Tribunal (ITAT), Chennai bench, while following the Apex Court ruling in the case of Sarkar Builders, held that the deduction under section 80IB(10) of the Income Tax Act, 1961 is applicable to commercial establishments or shops.After hearing arguments from both sides, Shri Mahavir Singh, Vice President and Shri Manoj Kumar Aggarwal, Accountant Member has observed that “As the issue is squarely covered, we find that the Supreme Court has gone a step further while interpreting the provisions of section 80IB(10) of the Act, which made it clear that the housing project contemplates under this section includes commercial establishments or shops also. It was further clarified that by way of amendment in the form of Clause (d), an attempt is made to restrict the size of the said shops and/ or commercial establishments. Therefore, the Supreme Court, by necessary implication noted that the provision has to be read prospectively and not retrospectively. Accordingly, in view of the decision of the Supreme Court in the case of Sarkar Builders (supra), we allow the appeal of the assessee.”
The Pune Bench of Income Tax Appellate Tribunal ( ITAT ) has held that benefit of set-off of brought forward business losses cannot be allowed on the non-genuine demerger.The Tribunal observed that the CIT(A) had granted the benefit of set-off of brought forward business losses in a perfunctory manner without looking into the objects behind the enactment of provisions of section 72A and held that the order of CIT(A) was illegal and unreasonable. The appeal filed by the Revenue was partly allowed.
The Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench, has held that rural agricultural land acquired by Government for business activity u/s 2 (13) is eligible for Exemption.The Coram of Mr. P.M. Jagtap, Vice President, and Ms. Suchitra Kamble, Judicial Member has observed that the acquisition of agricultural land owned by the assessee was done by the Government and thus Section 10(37) of the Act is attracted. The evidence such as bills for the sale of agricultural production shows that the agricultural operations carried out through Bhagiya and the same were not disputed by the Revenue authorities.
The Rajkot bench of the Income Tax Appellate Tribunal (ITAT) consisting of Shri Waseem Ahmed (Accountant Member) and Shri Siddhartha Nautiyal (Judicial Member) has held that the cash loan accepted from the proprietary concern of the father of the assessee cannot attract the provisions of section 269SS.
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that branch and head office forms part of the same legal entity and can’t be taxed on interest paid by PE to General Enterprises.It was observed that by Finance Act 2001, an Explanation was inserted below Section 90, with retrospective effect. The Tribunal viewed that unless such a foreign company makes prescribed arrangements for declaration and payment within India, of the dividend payable out of its income in India, the levy of tax at a higher rate cannot be considered a less favourable levy of tax or more burdensome taxation vis-à-vis the domestic companies
The Mumbai bench of Income Tax Appellate Tribunal comprising Shri M Balaganesh, accountant member & Shri Kuldip Singh, judicial member has held that mere providing access to CRS would not constitute Royalty and TDS not sustainable.It was observed that as providing of access to CRS, Property Management Services and Other services can’t be held to be technical services or “ancillary and subsidiary” services under Article 12(5)(a) and the consideration received by the assessee for rendering the said services/facility could not be held as FTS.
The Income Tax Appellate Tribunal ( ITAT ) Rajkot Bench presided by Ms. Annapurna Gupta, Accountant Member And Shri TR Senthil Kumar, Judicial Member has held that the cash deposits out of business of Shroff cannot be treated as undisclosed income u/s 68.The Tribunal observed that the bank account of the assessee has been examined exhaustively at various levels and no merit has been found in the contention of the Revenue that it represented any undisclosed income of the assessee, noting the fact that the assessee was into business of Shroff and earned only commission on the monetary transactions carried out by it; the cash deposits representing money belonging to his customers.
The Income Tax Appellate Tribunal (ITAT), Chennai Bench has held that the cooperative society providing financial accommodation to members without Reserve Bank of India (RBI) license for banking business is eligible for exemption u/s 80P(2)(a)(I).The Tribunal by relying on the decision in Velankattuvalasu Primary Agricultural Cooperative Credit Society Ltd. v. ACIT obseved that the assessee being a Co-operative Society the primary object of which is to provide financial accommodation to its members, i.e. members as well as Associate members for agriculture purposes or for purpose connected with the agricultural activities. The provision of Section 80P(4) of the Act is to be read as a proviso, which specifically excludes cooperative banks which are co-operative societies engaged in the banking business, i.e. engaged in lending money to members of the public, which have a license in this behalf from the Reserve Bank of India. Clearly, therefore, the assessee’s case is out of the provisions of Section 80P(4) of the Act.
The Cochin bench of the Income Tax Appellate Tribunal (ITAT) comprising Shri George George K., Judicial Member and Shri Laxmi Prasad Sahu, Accountant Member has held that the circulars issued by the Central Board of Direct Taxes (CBDT) are binding on the income tax officials.Allowing the plea of the assessee, the Tribunal observed that “From the above circular it is clear that before 1st April 2017 the assessee was eligible to claim set off of loss against the income under Section 115BBE of the Act and the impugned case on hand relates to AY 2014-15. The Revenue officers are bound to follow the circular issued by the CBDT but here in this case the learned PCIT has exercised his jurisdiction in spite of the clear cut clarification of the CBDT in the circular cited above. Therefore, the learned PCIT’s order is not sustainable. Accordingly the order passed by the AO which is para materia with the circular issued by the CBDT is not erroneous and not prejudicial to the interest of Revenue.”
The Income Tax Appellate Tribunal (ITAT), Mumbai has granted relief to L’Oreal India Private Limited and held that expenses cannot be disallowed solely due to non-receipt of invoices.The Tribunal observed it is imperative for concern, following the mercantile system of accounting, to provide for all known expenses and losses as of the year-end, even if the relevant bills have not been received. The accrued liability is an ascertained liability, but the liability to pay it has not arisen. By belated receipt of bills, the payment only gets postponed, but not the liability that has already accrued to the assessee.
The Income Tax Appellate Tribunal (ITAT) Pune Bench has held that remuneration and share profits received from partnership firms are not eligible for deduction u/s 80IB.The Coram of Mr. Inturi Rama Rao, Accountant Member, and Mr. S. S. Viswanethra Ravi, Judicial Member has held that “we do not find any merit in the grounds of appeal filed by the appellant. Accordingly, the grounds of appeal raised by the appellant stand dismissed”.
The Income Tax Appellate Tribunal (ITAT), Ahmedabad bench has held that trademark registration expenses to sell products in foreign countries are allowable as business expenditure.The Coram of Ms. Suchitra Kamble, Judicial Member, and Mr. B.M. Biyani, Accountant Member has held that “we are satisfied that the expenditure of Rs. 7,96,041/- incurred by the assessee on registration of trade-mark is a revenue expenditure and therefore allowable as a deduction, yet we observe that a sum of Rs. 6,46,200/- does not relate to the year under consideration. Therefore, we uphold the disallowance to the extent of Rs. 6,46,200/-. Accordingly, this ground of revenue is partly allowed”.
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) comprising G.S. Pannu, President and Ms. Astha Chandra, Judicial Member has held that the CSR expenses incurred by the Company and the contribution towards CM’s Relief Fund shall be eligible for exemption under the provisions of the Income Tax Act,1961.The Tribunal held that “Identical issue has been considered by the Tribunal in its order in ITA Nos. 3685 & 3686/Del/2017 dated 16.09.2021 for AY 2012-13 and 2013-14 wherein the Tribunal recorded the finding that the impugned expenditure cannot be held to be capital and it is not in the nature of personal expenditure or for any violation of law.”
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that normal income tax slab rates apply to the estate of a deceased assessee.The Tribunal has held that “we direct the assessing officer to tax the income of the assessee as per normal slab rates and not at a maximum marginal rate”.
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