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 16 to July 22, 2022
Technichem Organics Pvt. Ltd. vs Income Tax Officer – 2022 TAXSCAN (ITAT) 999
The Income Tax Appellate Tribunal (ITAT), Ahmedabad bench has held that the waiver of principal loan amount in cash cannot be treated as business perquisite under section 28(iv) of the Income Tax Act, 1961. A bench comprising Shri P.M. Jagtap, Vice President and Ms. Suchitra Kamble, Judicial Member observed that relied on the case of Mahindra & Mahindra and held that the decision is applicable in the present case as in the said case it was categorically held that when the assessee had not claimed deduction under Section 36(1)(iii) of the Act for interest on loan and loan was taken for acquiring capital asset then the waiver was on account of liability other than trading liability and thus provisions of Section 41(1) does not apply in such cases.
M/s.Panyam Cements & Mineral Industries Ltd vs Asst.Commissioner of Income Tax– 2022 TAXSCAN (ITAT) 1000
The Income Tax Appellate Tribunal ( ITAT ) Hyderabad bench has held that the claim of Income tax dues can’t be more excessive than the resolution plan approved by NCLT. Shri Rama Kanta panda, AM and Shri Laliet Kumar, Judicial Member held that “the Revenue is bound by the resolution plan as accepted by the NCLT and not entitled to anything more than what is provided therein.”
ACIT vs M/s. Cairn UK Holding Ltd – 2022 TAXSCAN (ITAT) 998
The Delhi Bench of Income Tax Appellate Tribunal (ITAT), has held that Long Term Capital Gain (LTCG) arises from the transfer of the share of a closely held company and is chargeable to tax at the rate of 10%. The Coram of Mr. Saktijit Dey, Judicial Member, and Dr. B.R.R. Kumar, Accountant Member has held that “we find, the Hon’ble Delhi High Court after analyzing the provisions of section 48 and 112(1) of the Act has concluded that the assessee is entitled to avail the beneficial tax rate under section 112(1) of the Act. Thus, in view of the aforesaid binding precedent of the Hon’ble Jurisdictional High Court, we do not find any infirmity in the decision of learned Commissioner (Appeals)”.
Ravindra Champalal Khinvasara vs DCIT – 2022 TAXSCAN (ITAT) 988
Income Tax Appellate Tribunal (ITAT), Pune held that examination of nature of work and income necessary for granting deduction for housing projects u/s801B (10). The assessee, Ravindra Champalal Khinvasara is a developer and promoter in real estate. During the course of assessment proceedings, the Assessing Officer (AO) observed that the assessee claimed deduction u/s.80IB (10), inter alia, on receipts from ‘extra work’ done amounting to Rs.2,99,910/-. The assessee was asked to furnish the details of such extra work, which he could not. In the absence of such details, the AO rejected the claim of deduction on it. The CIT(A), too, upheld the disallowance pro tanto. Aggrieved thereby, the assessee has come up in appeal before the Tribunal.
Microsoft Regional Sales Pte. Ltd. vs ACIT – 2022 TAXSCAN (ITAT) 982
The Income Tax Appellate Tribunal (ITAT), Delhi bench has partly allowed an appeal of the Microsoft Regional Sales Pte. Ltd relating to a TDS Credit Claim worth Rs. 392 Crores. Addressing the other issue on subscription to cloud services, the Tribunal observed that “The very same issue regarding the cloud service in the case of MOL Corporation for the AY 2012-13 came up for consideration before the Co-ordinate Bench of the Tribunal. The Co-ordinate Bench, by following the ratio laid down in the case of M/s. Salesforce.com Singapore Pte. Vs. Dy. D.I.T. Circled-2(2) ITA No. 4915/Del/2016 [A.Y 2010-11] and also the decision of Mumbai Tribunal in the case of DDIT Vs. Savvis Communication Corporation [2016] 69 Taxman.com 106 (Mumbai- Trib.) and the Chennai Tribunal decision in the case of ACIT Vs/. Vishwak Solutions Pvt. Ltd. ITA No. 1935 & 1936/MDS/2010 dated 30/01/2015, held that the authorities fallen in error in considering the subscription received towards cloud serviced to be royalty income.”
Mahesh K. Bhutiya Vs Income Tax Officer – 2022 TAXSCAN (ITAT) 980
In a significant ruling, the Rajkot bench of the Income Tax Appellate Tribunal (ITAT) has held that as a relief to small taxpayers, maintaining books u/s 44 AD of the Income Tax Act,1961 is not required for small businesses and deleted the addition. It was evident that small businessmen were not required to maintain books of accounts as per Section 44AD of the Act and were difficult for the assessee to produce bills to substantiate his turnover in cash that too after a lapse of six years. The Tribunal held that the entire deposits of Rs. 18,66,000/- in cash in the bank can be safely attributed to the business receipts of the assessee only.
M/s. Essel Finance VKC Forex Ltd vs DCIT – 2022 TAXSCAN (ITAT) 1002
The Income Tax Appellate Tribunal ( ITAT ) Chennai Bench deleted the addition of “Deemed Dividend” in the absence of proof to establish payment to a shareholder or person who has a beneficiary interest in the company. The assessee advanced sum of Rs.7.50 Crores to an entity namely M/s. Arun Priya Services Ltdon lease.The AO held that the assessee was liable for TDS on the said payment u/s 194 and therefore, made a disallowance of Rs.169.50 Lacs to the income of the assessee. The sum has been treated by AO as deemed dividend u/s 2(22)(e) of the Act on the ground that one of the directors of the assessee company held a substantial interest in that entity.
Jigneshbhai Kishorbhai Bhajiyawala (HUF) vs I.T.O – 2022 TAXSCAN (ITAT) 990
The Income Tax Appellate Tribunal (ITAT), Surat Bench has upheld the denial of capital gain exemption under section 54 by holding that an unregistered document has no evidentiary value. The Tribunal has held that “we find that there is no other corroborative evidence to substantiate the claim of the assessee that she acquired or holding possession of the property since 14/02/2007, therefore, we uphold the orders of lower authorities in treating the capital gain as short-term capital gain in place of long-term capital gain as claimed by the assessee”.
Aadarh Developers vs A.C.I.T – 2022 TAXSCAN (ITAT) 979
The Rajkot bench of the Income Tax Appellate Tribunal ( ITAT ) has held that a change in the method of treating income would lead to double taxation if the sales consideration amount was taxed once. The Tribunal observed that the CIT failed to look into the income which has already been taxed in the earlier years and in the absence of such direction it would lead to the double addition in the hands of the assessee. Further observed that the assessee has been following the method of accounting for recognizing the income consistently which has been accepted by the revenue and the revenue cannot interfere to change the method adopted by the assessee when the income of the assessee has already been taxed in the later years.
Diamond Beverages Private Limited vs Pr. CIT – 2022 TAXSCAN (ITAT) 1001
The Income Tax Appellate Tribunal (ITAT), Kolkata Bench has held that Principal Commissioner of Income Tax (PCIT) fails to record the reason for revision and quashes order u/s 263. The Coram of Mr. Rajpal Yadav, Vice President,and Mr. Rajesh Kumar, Accountant Member has observed that the Pr. CIT has not recorded any finding that the recipients were not enjoying registration u/s 80G of the Act, neither this fact was verified by him. His reasoning is from the angle that there is a distinction between the expenditure claimed under CSR expenditure and donation made u/s 80G of the Act. Hence the Tribunal held that “we are of the view that the impugned order is not sustainable and hence the same is quashed”.
Sudhi Jain vs ITO – 2022 TAXSCAN (ITAT) 997
Income Tax Appellate Tribunal (ITAT), Cuttack deleted penalty as assessee duly complied with notices issued under Section 142(1)(i). The AO observed that the 271F proceedings which were initiated on the assessee for PAN number AIGPJ6846F and not on against the PAN ACXPJ2118B, assessee again requested to keep the proceedings under section 271F in abeyance till the disposal of appeal on verification it was observe by the AO that the assessee has not filed appeal under the PAN number AIGPJ6846F on which the penalty proceedings were initiated accordingly penalty under section 271F for Rs. 5000 was imposed by order dated 22/02/2020. Aggrieved with action of AO, assessee filed an appeal with the CIT(A). The CIT(A) in his order u/s 250 of the ACT dismissed the appeal as invalid and not maintainable in law.
Arunkumar Purshotamlal Khanna vs PCIT – 2022 TAXSCAN (ITAT) 1003
The Income Tax Appellate Tribunal (ITAT), Pune Bench has held that amendment to section 54F (1) applicable from 1.4.2015 onwards and grants capital gain deduction for the purchase of multiple residential units. The Coram of Mr. S. S. Godara, Judicial Member, and Dr. Dipak P. Ripote, Accountant Member observed that the appellant purchased the twin residential units in the year 2014 itself whereas the clinching amendment to section 54F (1) is applicable with prospective effect from 1.4.2015 only. Hence, “a residential house” for section 54F (1) deduction can indeed cover multiple units in the same or different towers or residential blocks; as the case may be.
Lake View Hospitality vs Dy. Commissioner of Income Tax – 2022 TAXSCAN (ITAT) 984
The Income Tax Appellate Tribunal ( ITAT ) Mumbai bench held that the relief u/s 43B of the Income Tax Act can be availed if the VAT liability was paid before the due date of filing the return. Shri Om Prakash Kant, Accountant Member and Shri Sandeep Singh Karhail, judicial member remanded the issue and directed to grant relief to the assessee under section 43B of the Act, if upon verification found that the VAT liability was paid by the assessee before the due date of filing return under section 139(1) of the Act.
Senapati Satija vs ACIT– 2022 TAXSCAN (ITAT) 973
The Delhi bench of the Income Tax Appellate Tribunal (ITAT), while deleting a penalty order, has held that non-compliance with S.44AB of the Income Tax Act, 1961 can be excusable if it was committed without dishonest intention. The Tribunal observed that the assessee committed default the first time for non-complying with the provisions of section 44AB because the case of the assessee crossed the threshold limits as prescribed under the provisions of section 44AB of the Act first time only.
Subhag Projects Private Ltd vs ITO – 2022 TAXSCAN (ITAT) 981
The Cuttack bench of the Income Tax Appellate Tribunal (ITAT) has imposed a cost of Rs. 5,000 on the assessee for non-compliance of the notice received through the Income Tax Business Application (ITBA). A perusal of the order of the ld. CIT(A) shows that four opportunities have been granted to the assessee by issuing notices through ITBA System via e-Mail. It was submitted by the ld. AR that notices have been received but the assessee was unable to correspond with its counsel. This being so, we are of the opinion that the assessee should be granted another opportunity of being heard before the ld. CIT(A). This is however, subject to the levy of cost of Rs.5000/- (Rupees Five Thousand Only) payable under the head “Others” by the assessee before the AO and challan of the same be submitted to the ld.CIT(A). Thus, the issues in the appeal of the assessee are restored to the file of CIT(A) for readjudication after granting adequate opportunity of the assessee.
Trustline Securities Pvt. Ltd. vs DCIT – 2022 TAXSCAN (ITAT) 987
Income Tax Appellate Tribunal (ITAT), New Delhi deleted addition against share broker as pledging of shares of clients with banks for obtaining bank finance and for depositing margin money not violation of regulation of SEBI. The assessee furnished explanation vide letter dated 07.11.2016 that the pledge value of shares with Citi Bank as on 31.03.2014 (Rs. 11,70,78,543/-) included assessee’s ownshares as well as excess shares of clients. The overdraft facility is provided by the bank on the basis of total value of shares pledged with them.The explanation was not acceptable to the Ld. AO. He observed that the shares of clients cannot be pledged for obtaining loans and that confirmation from clients has not been submitted. He, therefore, added the value of difference in shares between book value and pledge value as income of the assessee reducing therefrom value of assessee’s own shares which worked out to Rs. 24,86,72,622/- as income from other sources
Mr.Naresh Chand vs Income Tax Officer – 2022 TAXSCAN (ITAT) 965
The Income Tax Appellate Tribunal (ITAT), Delhi Bench presided by Mr. Anil Chaturvedi, Accountant Member,and Shri N.K. Choudhry, Judicial Member has held that deduction u/s 54 EC is applicable within six calendar months from the date of transfer of property and not within 180 days. The Tribunal observed that under the provision the investment can be made as a whole or in part of the capital gains. As per section 54EC of the Act, the period of investment starts from the date of transfer and not from the date of receipt of consideration.By relying on the decision of Coordinate Benches of the Mumbai Tribunal in the case of Neela S. Karyakarte vs. ITO ‘six months’ means ‘six calendar months’ and not 180 days.
M/s Elphinstone Paper Box Manufacturing Co vs Jurisdictional Income-tax Officer – 2022 TAXSCAN (ITAT) 959
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that exception to the Central Board of Direct Taxes (CBDT) circular specifying monetary limit for filing appeals not applicable to cases relating to information received from the investigation wing of the department. Mr. Om Prakash Kant (Accountant Member) and Mr. Sandeep Singh Karhail (Judicial Member) have observed that the Investigation Wing of the Income Tax Department based on the information from the Sales Tax Authorities conducted a search/survey on M/s Bigwin Paper Distributor Private Limited’ and ‘M/s Arun Paper and Iron Traders. During the action, it was found that they were engaged in providing entries of bogus sales to the assessee, and thereafter the Investigation Wing sent the information to the AO of the assessee that the assessee was engaged in receipt of bogus purchase bills.
Shri Venkatesharaiyer Subramanian vs ACIT – 2022 TAXSCAN (ITAT) 1004
The Chennai bench of the Income Tax Appellate Tribunal (ITAT) has held that the capital gain exemption under section 54F of the Income Tax Act, 1961 is allowable to separate independent liveable residential units on a single piece of land. Allowing the exemption, the Tribunal held that “In our considered opinion, there is nothing in the statutory provisions which debar the assessee to make separate independent livable units on a single piece of land or obtain more than one electricity connection to claim the deduction. There is also not a condition that the property should be, at all times, used exclusively by the owner himself for his own residential purposes and the same could not be let out. As long as the property is one residential house, the fragmentation of the same into different livable units and to let them in part would not make the assessee ineligible to claim the deduction. Accordingly, the lower authorities, in our considered opinion, has misconstrued the statutory provisions. We would hold that the assessee is eligible to claim the deduction on investment of Rs.249.98 Lacs which shall proportionately stand reduced to Rs.244.30 Lacs as held by Ld. AO in para-14 of assessment order in view of the fact that full sale consideration was not invested in the new house.”
M/s. A.D. Hydro Power Ltd vs DCIT – 2022 TAXSCAN (ITAT) 1005
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) comprising Shri Challa Nagendra Prasad, Judicial Member and Shri Pradip Kumar Kedia, Accountant Member has held that the receipt from the sale of Carbon Credit is exempted under the normal provisions of the Income Tax Act, 1961 and shall not be included while computing book profit under section 115JB of the Income Tax Act, 1961. Holding in favour of the assessee, the Tribunal held that “It was further held that since the income/profits from the sale of Carbon Credits is essentially in the nature of capital receipts and it cannot be brought to tax under the provisions of minimum alternate tax under Section 115JB of the Act. While holding so the Tribunal followed the decision of the Jaipur Bench of the Tribunal in the case of Shree Cements Ltd. reported in 49 taxmann.com 274. We observe that the ld. CIT (Appeals) following the order of the co-ordinate bench of the Tribunal in the case of M/s. Malana Power Company Limited, which is the Holding company of the assessee decided the grounds in favour of the assessee holding that sale of Carbon Credits is capital receipt not exigible to tax under normal provisions of the Act and also while computing the book profits under Section 115JB of the Act, we see no infirmity in the order passed by the ld. CIT (Appeals).”
Roop Raj Hospitality (P) Ltd vs Income Tax Officer – 2022 TAXSCAN (ITAT) 962
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) ruled that reassessment proceeding cannot be challenged if the assessee suppressed material facts by not filing an Income Tax Return. It was observed that the assessee has accepted the addition sustained by Commissioner (Appeals). Further observed that the assessee despite having income from operations to the tune of Rs.29,85,471/-, as shown in the profit and loss account furnished before Commissioner (Appeals), did not file any return of income under section 139(1) of the Act. The Assessing Officer had to complete the assessment ex-parte, to the best of his judgment under section 144 of the Act due to the non-compliance of the assessee and the Assessing Officer had tangible material available with him to indicate that the assessee had earned income, but it was not offered to tax.
Sujan Azad Parikh vs DCIT – 2022 TAXSCAN (ITAT) 1006
While deleting an addition of capital gain on account of transfer of shares as family arrangement, the Income Tax Appellate Tribunal (ITAT), Mumbai bench has held that a partition or family arrangement cannot be treated as “transfer” for the purpose of the Income Tax Act, 1961. Allowing the plea of the assessee, the Tribunal held that“there is no doubt that there is a family arrangement and based the condition specified in the order passed by CLB, the shares were transferred to the company on the buyback terms. In the given case, the transferor is an individual whereas in the case relied by the CIT(A) in which the transferor is the legal entity. As held in the case of R Nagaraja Rao (supra), the Hon’ble Karnataka High Court observed that Partition or family settlement is not transfer. When there is no transfer there is no capital gain and consequently no tax on capital gain is liable to be paid.”
Tardevi Jyoti Kumar Bubna vs DCIT – 2022 TAXSCAN (ITAT) 1007
The Income Tax Appellate Tribunal (ITAT), Mumbai bench, while considering a grievance of the assessee regarding denial of TDS credit due to holding of two PAN cards, has directed the department to cancel one PAN card and allow the TDS credit as per the law. A division bench of the Tribunal comprising Shri Vikas Awasthy, Judicial Member & Shri M.Balaganesh, Accountant Member observed that“this matter requires factual verification by the ld. AO and one of the PAN of the assessee should be cancelled by the Income Tax department and credit for advance tax and TDS should be granted to the assessee as per law. Hence, we deem it fit to remand this issue to the file of the ld. AO for denovo adjudication. Accordingly, the grounds raised by the assessee are allowed for statistical purposes.”
Shri Jagdishbhai R. Patel vs ACIT Cent.Cir.1(2) – 2022 TAXSCAN (ITAT) 1008
The Income Tax Appellate Tribunal (ITAT), Ahmedabad bench has held that the cash seized during search cannot be adjusted against the self-assessed existing tax liability as per the provisions of section 132B of the Income Tax Act, 1961. While dismissing the appeal preferred by the assessee, Smt.Annapurna Gupta, Accountant Member and Shri Siddhartha Nautiyal, Judicial Member observed that the “penalty @ 30% was required to be levied as per the section on account of the above failure of the assessee. The Ld.CIT(A) rejected both the contentions of the assessee of treating belated return filed u/s 139(4) of the Act as being filed u/s 139(1) of the Act and treating cash seized to be treated as adjusted against taxes due thus tant amounting to taxes also being paid by the assessee on the undisclosed income by the specified date.
Siddhartha Academy of General & Technical Education vs Asst. Commissioner of Income Tax – 2022 TAXSCAN (ITAT) 816
If identity of donors is established U/s115BBC money received cannot be considered as anonymous donations so was held by the Income Tax Appellate Tribunal (ITAT), Visakhapatnam. Duvvuru RL Reddy, Judicial Member and S Balakrishnan, Accountant Member observed that “We are of the considered view that the assessee has established the identity of the donors as provided U/s. 115BBC of the Act and hence the donations received by the assessee cannot be categorized asanonymous donations and cannot be subjected to tax as per the provisions of section 115BBC of the Act. We therefore, find no infirmity in the order of the CIT and no interference is required.”
Shri Jangpal Singh Tanwar vs Pr. CIT-1 – 2022 TAXSCAN (ITAT) 885
The Chandigarh Bench Income Tax Appellate Tribunal (ITAT), has deleted the revision order passed u/s 263 based on presumption. The Coram of Smt. Diva Singh, Judicial Member,andMr. Vikram Singh Yadav, Accountant Member have observed that the entire Long Term Capital Gain from the sale of the property has been applied to the new property. Documents substantiating the claim are available on record and have not been upset, thus the revisionary power u/s 263 of the Act cannot be allowed to be exercised in a casual arbitrary manner.The presumption that the assessee’s wife and son had 1/3rd share each is an inference based on no facts. The PCIT has to point out the error in the order and that too such an error can be said to be prejudicial to the interests of the Revenue.
Sangitaben Chetankumar vs ITO – 2022 TAXSCAN (ITAT) 877
The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) has held that inadequate opportunity for hearing in appeal proceedings and remand matter back to Commissioner Income Tax (Appeal) for fresh adjudication. The Tribunal has held that “the CIT(Appeals) passed ex parte order confirming the additions made by the Assessing Officer. In our view, in the interests of justice, we are restoring the matter to the CIT(Appeals) for adjudication of the case on merits after giving opportunity of hearing to the assessee”.
M/s. Akash Infra Projects P. Ltd vs ITO– 2022 TAXSCAN (ITAT) 866
While considering a bunch of appeals filed by the assessee, the Ahmedabad bench of Income Tax Appellant Tribunal, comprising Ms Annapurna Gupta, Accountant Member and Shri Mahavir Prasad, Judicial Member has held that the business of infrastructure development comes under the definition of developer and allowed the deduction claimed u/s 80IA (4) of Income Tax Act,1961. It was observed that the tender documents clearly show that the assessee has to arrange their own finances, purchase their own plant & machinery and purchase all materials at their own cost, and deploy qualified personnel for construction and development of infra projects. The assessee claimed depreciation on plant and machinery as it has been used for the development of infrastructure facility projects.
Atharva Polymers Private Limited vs The Dy.Commissioner of Income Tax – 2022 TAXSCAN (ITAT) 1010
The Income Tax Appellate Tribunal (ITAT), Pune has ruled that, Subsidy is not to be reduced from the actual cost of fixed assets under Section 43(1) for purpose of calculation of depreciation. The Bench consisting of S S Godara, Judicial Member, and Dr. Dipak P Ripote, Accountant Member observed that Subsidy shall not be reduced from the actual cost of fixed assets u/s 43(1) for the purpose of calculation of depreciation, and the AO is directed to delete the addition of depreciation.”
ACIT vs M/s. Emcipi Electronics Pvt. Ltd – 2022 TAXSCAN (ITAT) 1009
The Income Tax Appellate Tribunal ( ITAT ) has held that, Expenditure resulting in income or substantial income not necessary for granting deduction for business purposes. The Bench consisting of B R R Kumar, Accountant Member and Yogesh Kumar U S, Judicial Member held that “The issue of quantum of income and allowableness of the expenses it has to be seen that, whether the expenditure incurred wholly and exclusively for the purpose of business or not. So long as the expenses are incurred for the purpose of business, in our opinion the same should be allowable as deduction and it is not necessary that the expenditure may result in income or there must be substantial income. The said view has been supported by the decision of Hon’ble Supreme Court in the case of CIT Vs. Malayalam Plantation Ltd. and CIT Vs. Rajinder Pd. Modi.”
Shri Arunkumaar Thakurprasad Oza vs ITO – 2022 TAXSCAN (ITAT) 1012
The Income Tax Appellate Tribunal (ITAT), Ahmedabad bench has held that the loan amount obtained by the assessee from his friends out of their labour work income cannot be dismissed by the income tax department as “unbelievable” as per the provisions of the Income Tax Act, 1961. A bench of Smt. Annapurna Gupta (Accountant Member) and Shri Mahavir Prasad (Judicial Member) observed that “the assessee had given complete list of his friends from whom loans were taken, and it is evident from the same that he had taken very small amount of loan ranging from Rs.3,000/- to Rs.15,000/- and all the details regarding his friends from whom loan had been taken by the assessee was given to the AO who had issued summons to them and in respect of which, two persons had confirmed having given loan to the assessee. Considering that loans were taken for the purpose of carrying out share trading transactions, which is an accepted fact and were of very small amounts and two persons have confirmed giving loan, we see no reason to treat the loans as unexplained.”
Ishwarsingh Ramchandra Jangid vs Income Tax Officer – 2022 TAXSCAN (ITAT) 1013
The Income Tax Appellate Tribunal (ITAT), Ahmedabad bench in view of the negligent, casual and non-compliant behaviour of the assessee, has refused to condone a delay of 789 days. A division bench of Shri P.M. Jagtap (Vice-President) and Shri Siddhartha Nautiyal (Judicial Member) observed that there was non-compliance on the part of the assessee to the notices issued by the Assessing Officer during the course of assessment proceedings as well as to the notices issued by the learned CIT(A) during the course of appellate proceedings resulting into passing of exparte orders by them.
Strategic Infosystems Pvt. Ltd vs DCIT – 2022 TAXSCAN (ITAT) 875
The Income Tax Appellate Tribunal ( ITAT ) Ahmedabad Bench has held that credit of Dividend Distribution Tax (DDT) paid denied on technical default and directs revenue to correct data uploaded in Online Tax Accounting System (OLTAS) database and grant credit of Dividend Distribution Tax (DDT). The Tribunal observed that the assessee has already approached the CPC thrice and also approached CIT(Appeals) for redressal of its grievance and there is no denying that the assessee has paid and deposited DDT within the due date.
Samir Kishor Parekh vs The ACIT – 2022 TAXSCAN (ITAT) 871
The Income Tax Appellate Tribunal (ITAT), Ahmedabad bench consisting of Waseem Ahmed, Accountant Member and Siddhartha Nautiyal, Judicial Member held that no addition can be made on estimated basis, without rejecting books of account of assessee. ITAT held that “The additions have been sustained by CIT on purely estimate basis, as is evident from the observations made by Ld. CIT(Appeals) while passing the appeal order. It is well-settled law that no addition could be made on estimated basis without rejecting books of account of assessee.”
Deputy Commissioner of Income Tax vs Marubeni Corporation – 2022 TAXSCAN (ITAT) 860
The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) has upheld a lower tax rate on interest income under Article 11(2) of the Indo-Japanese tax treaty since no connection between interest income and permanent establishment (PE). The Tribunal relied on its own decision in DCIT vs Marubeni Corporation, Japan. It was held that “we see no reasons to take any other view of the matter than the view so taken by the co-ordinate bench. Respectfully following the same, we approve the conclusions arrived at by the learned CIT(A) and decline to interfere in the matter”.
Sh. Srijal Gupta vs Income Tax Officer – 2022 TAXSCAN (ITAT) 1016
The Amritsar bench of the Income Tax Appellate Tribunal (ITAT) has held that the cash deposit of the Firm cannot be added to the personal income of the Partner without investigating the same from the hands of the Firm. After hearing arguments from both sides, a bench consisting of Dr. M. L. Meena (Accountant Member) and Sh. Anikesh Banerjee (Judicial Member) has observed that the reopening was made u/s. 148 related to purchase of property amount to Rs.9,53,750/-.
Koshambh Charitable Trust vs The ACIT – 2022 TAXSCAN (ITAT) 1014
The Ahmedabad bench of Income Tax Appellate Tribunal (ITAT) comprising Shri Waseem Ahmed, (Accountant Member) and Shri T.R. Senthil Kumar (Judicial Member) has observed that the National Faceless Appeal Centre (NFAC) has refused to condone delay without a detailed order and therefore, directed the department to re-adjudicate the appeal. The division bench, after persuing the arguments and documents, observed that “As it can be seen from the Income Tax portal relating to the Assessment Year 2016-17, the date of service of u/s. 143(1) is said to be Nil and also mode of service also Nil. Thus, having not been served with the 143(1) order, only when certified copy was obtained from the department on 08.01.2020 and thereafter the assessee filed the appeal on 05.02.2020. Thus, there is no delay on the part of the assessee in filing such appeal. However, NFAC without appreciating the above facts has simply dismissed on the ground no “sufficient cause” was made on behalf of the assessee.”
The Income Tax Officer vs M/s.67th Annual Conference of CSI-2015 – 2022 TAXSCAN (ITAT) 1020
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has held that surplus generated from trust can’t be added to the income of assessee Association Of Person (AOP). The Tribunal consists of Shri Mahavir Singh, vice president and Shri G Manjunatha, accountant member while confirming the order of CIT(A) observed that the excess amount collected by assessee AOP for organizing a conference can be held as the amount in trust, not to be held as the income of the assessee and dismissed the appeal.
Vishwanath Ramchandra Panvelkar vs DCIT – 2022 TAXSCAN (ITAT) 1021
The addition of unexplained cash is not sustainable when the primary onus was discharged by sufficient evidence, the Mumbai bench of the Income Tax Appellate Tribunal(ITAT) set aside the order of addition under section 68 of the Income Tax Act. The assessee furnished various details on appeal before CIT(A) who remanded the matter to the AO. The AO held that the amount of Rs.2,11,99,999/- claimed to have been received from M/s Samarth Enterprises was unexplained cash credit and is taxable as a gift in the hands of the assessee under section 56(2) of the Act. The CIT(A) confirmed the addition made u/s 68 of the Act.
Triune Energy Pvt Ltd vs DCIT – 2022 TAXSCAN (ITAT) 1022
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) comprising Shri Ani Chaturvedi, Accountant Member and Shri Anubhav Sharma, Judicial Member held that the absence of specifying the limp, in the notice issued, invalidates the penalty. It was observed that the notice issued u/s 274 read with section 271 of the Act itself was ambiguous as it did not make it clear as to under which limb section of 271(1)(c) of the Act the notice was issued.
M/s. Sundaram Infotech Solutions Ltd vs ITO – 2022 TAXSCAN (ITAT) 1018
The Income Tax Appellate Tribunal ( ITAT ) held that 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 Income Tax Act,1961. The Tribunal observed that ownership of the leased assets remains with the lessor and the lease rentals paid by the assessee are allowable as revenue expenditure for the reasons stated in our adjudication as above.
Satya Prakash vs ITO – 2022 TAXSCAN (ITAT) 1019 – 2022 TAXSCAN (ITAT) 1019
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) comprising Shri Challa Nagendra Prasad, (Judicial Member) & Shri Pradip Kumar Kedia (Accountant Member) has imposed a cost of Rs. 2000 on the assessee for neglected the income tax notices. The bench observed that the assessee has failed to appear before the Assessing Officer in the assessment proceeding resulting in ex-parte additions on estimated basis towards cash deposits of Rs.17,12,090/-.The assessee has also failed to appear before the CIT(A).
M/s. Orchid Foundations Pvt. Ltd. vs ITO – 2022 TAXSCAN (ITAT) 1017
The Chennai bench of the Income Tax Appellate Tribunal (ITAT) has held that eviction charges paid are allowable as business expenditure. The Tribunal observed that the assessee was into the business of real estate development and such expenditure would fulfil the test laid down u/s 37(1) and the expenditure incurred for business purposes of the assessee was well proven by the documentary evidence in support of the claim.
M/s. TULIP INFRATECH PRIVATE LIMITED vs Addl. CIT – 2022 TAXSCAN (ITAT) 1019
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) held that penalty u/s 271C of the Income Tax Act,1961 based on mere assumption without supporting evidence is not sustainable hence it is invalid. The AO held that there is no time limit for initiation of penalty, and for the imposition of penalty u/s 271C, order u/s 201(1)/201(1A) is not necessary and imposed a penalty and on appeal, the CIT(A) dismissed the same.
Shri Rajkumar Tiwari vs Income Tax Officer – 2022 TAXSCAN (ITAT) 1015
The Income Tax Appellate Tribunal (ITAT), Ahmedabad bench has imposed a cost of Rs. 5000 on the assessee considering the negligent and causal approach during the assessment proceedings under the Income Tax Act, 1961. Allowing this argument, the bench held that “We are inclined to accept this contention of the learned DR. We accordingly impose a cost of Rs.5000/- [Rs. Five Thousand Only] on the assessee and subject to the payment of the said cost to the Prime Minister’s Relief Fund, we restore the matter to the file of the Assessing Officer for deciding the same afresh on merit in accordance with law after giving proper and sufficient opportunity of being heard to the assessee.” 2022 TAXSCAN (ITAT) 1011
M/s. Daeseung Autoparts India Pvt.Ltd vs The Assistant Commissioner of Income Tax – 2022 TAXSCAN (ITAT) 1011
Income Tax Appellate Tribunal (ITAT), Chennai bench consisting of V Dura Rao, Judicial Member and G Manjunatha, Accountant Member dismissed the appeal filed by M/s. Daeseung Autoparts India Pvt. Ltd on the claim for additional depreciation on capitalized portion of forex loss for plant and machinery. The Tribunal observed that “Arguments of the assessee is misplaced, because as per provisions of section 32(1) (iia) of the Act, the assessee is entitled for additional depreciation only in the year of acquisition and installation of new plant & machinery, but not for subsequent financial years. Although, provisions of section 43A of the Act allows capitalization of forex loss incurred on acquisition of plant & machinery outside India to cost of assets, but said additional cost can only be eligible for normal depreciation as per provisions of section 32(1) of the Act, but not for additional depreciation as contemplated under section 32(1) (iia) of the Act. Hence, dismiss appeal filed by the assessee.”
Smt. Sunita Goyal vs The Pr. CIT – 2022 TAXSCAN (ITAT) 993
The Chandigarh Bench of Income Tax Appellate Tribunal(ITAT) has held that mere suspicions of Principal Commissioners of Income Tax (PCIT) cannot be the basis for initiation proceedings under section 263 and quashes revisional order. The Tribunal observed that the suspicions of the PCIT cannot be the basis for setting aside a validly passed assessment order. Law requires the PCIT to meet the twin conditions of pointing to the error in the order passed and that too such an error which can be termed to be prejudicial to the interests of the Revenue.
Tangar Exports LLP vs ACIT – 2022 TAXSCAN (ITAT) 1024
The Chennai bench of the Income Tax Appellate Tribunal (ITAT), has held that debatable issues cannot be adjusted on mere intimation u/s 143 and allows deduction u/s.80JJAA. The Coram of V. Durga Rao, Judicial Member,and Mr. G. Manjunatha, Accountant Member observed that the issue is highly debatable which can be resolved by deliberation, including verification of necessary documents and the Assessing Officer cannot make adjustments towards deduction u/s.80JJAA of the Act, while processing return u/s.143(1) of the Income Tax Act, 1961.
Dharmapuri District Central Co-operative Bank Ltd vs ACIT – 2022 TAXSCAN (ITAT) 1023
The Income Tax Appellate Tribunal (ITAT), Chennai has held that rural advances consolidated and shown in Head office accounts are eligible for deduction as Bad and Doubtful Debts u/s 36(1)(viia). The Authority observed that the assessee does not make any such advances at the Head Office level and all such transactions were affected at the branch level only. It was only for management control, that the primary agricultural cooperative societies advanced functioning at the village level were consolidated and shown as Head office accounts in the financial statements.
M/s.Dhanalakshmi Mills Ltd vs The Deputy Commissioner of Income Tax – 2022 TAXSCAN (ITAT) 1028
The Chennai bench of the Income Tax Appellate Tribunal (ITAT), held that if AO failed to rightly compute capital gain on the sale of the land then the revisional jurisdiction of PCIT will sustain and uphold the revisional order. The Tribunal observed that the AO has failed to apply his mind in light of the facts of the case to relevant provisions of section 50C of the Act while completing the assessment and the PCIT has rightly exercised jurisdiction u/s.263 of the Act.
Macro tech Developers Ltd. vs DCIT – 2022 TAXSCAN (ITAT) 1036
The Income Tax Appellate Tribunal (ITAT), Mumbai Bench held that accepting loans through journal entries with reasonable cause will not attract penalty u/s 271D of the Income Tax Act,1961. Shri Aby T Varkey, JM and Shri Gagan Goyal, AM viewed that there was reasonable cause for assessee netting off/assigning off the debt against liabilities through journal entries u/s 269SS/269T of the Act and held that “thought the appellant has violated the provisions of section 269SS of the Act in respect of journal entries, it has shown reasonable cause and therefore, the penalty under section 271D is not leviable.”
Ahmed World Travels Tours & Cargo Pvt. Ltd. vs The Assistant Commissioner of Income Tax – 2022 TAXSCAN (ITAT) 1034
The cash paid by the forex dealers for the purchase of foreign currency can be exempt as per 6 DD(1) of the Income Tax Act,1961, the Chennai bench of the Income Tax Appellate Tribunal (ITAT) held as above. The Assessing Officer observed that the assessee has paid cash for hotel expenses, whereas the assessee claims that it has paid cash for the purchase of foreign currency and expenditure has been incurred in foreign currency by its customers.
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