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 August 20 to August 26, 2022

Tulsi Das vs ITO -2022 TAXSCAN (ITAT) 1192

The Income Tax Appellate Tribunal (ITAT), New Delhi set aside the dismissal of the appeal stating noncompliance under Section 249(4)(b) on the ground of misconception of facts.Saktijit Dey, Judicial Member observed that “It is apparent, the Commissioner (Appeals) has proceeded on the basis that for the assessment year under dispute, the assessee had not filed any return of income. Whereas, the material placed before me clearly indicates that for the assessment year under dispute, the assessee filed his return of income on 02.02.2010, declaring an income of Rs.1,90,040.

Kirtida Rameshchandra Chandarana vs CIT- 2022 TAXSCAN (ITAT) 1231

The Income Tax Appellate Tribunal (ITAT), Mumbai bench has held that the denial of the TDS on ground of mismatch in Form 26AS and 16A is clear violation of the charters issued by the Central Board of Direct Taxes (CBDT). A division bench of the Tribunal comprising Shri Aby T Varkey, Judicial Member and Shri Gagan Goyal, Accountant Member observed that “the documents which has been processed and issued by the department itself on which assessee relied, how there can be a case of mistake apparent from record. May be there is a mismatch in the data pertaining to assessee and data pertaining to the deductor (processed and maintained by department), CPC Bangalore and jurisdictional ITO can’t proceed u/s 154 against the assessee.”

Shri Dashrathlal K.Patel vs ITO -2022 TAXSCAN (ITAT) 1184

The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) has held that the claim of set-off of business losses against speculative income is allowable.Smt Annapurna Gupta, Accountant Member and Smt. Suchitra Kamble, Judicial Member viewed that the loan can be said to be genuine and deleted the addition made under section 68 of Rs.18,000. The appeal of the assessee was allowed.

Kavitaben Chintanbhai vs Income-tax - 2022 TAXSCAN (ITAT) 1240

The Income Tax Appellate Tribunal (ITAT) Ahmedabad has held that when the deposit on the bank with the demonetized currency during the demonetization period was proved with the bank statement the addition under section 69A of the Income Tax Act is not sustainable.Ms Annapurna Gupta, Accountant Member and Shri T.R. Senthil Kumar, Judicial Member observed that the source of withdrawal of the money was demonstrated and their deposit of money on various occasions was established by the assessee through her bank account. The Tribunal while allowing the appeal filed by the assessee deleted the impugned addition made by the Assessing Officer of Rs. 12,75,000/- u/s. 69A of the Act.

M/s. Sirpur Paper Mills Ltd vs DCIT - 2022 TAXSCAN (ITAT) 1239

The Income Tax Appellate Tribunal (ITAT), Hyderabad held that claims not part of the resolution plan stands extinguished on approval of the resolution plan by Adjudicating Authority.Rama Kanta Panda, Accountant Member and K Narasimha Chary, Judicial Member observed that “In the circumstances, we are of the considered opinion that the parties are bound by the resolution plan as approved by the competent adjudicating authority and nothing needs to be done.”

Gandhi Ram vs Principal Commissioner of Income Tax- 2022 TAXSCAN (ITAT) 1235

The Income Tax Appellate Tribunal (ITAT), Chandigarh bench has held that no deeming provision can be invoked when the source of the income was explained with the corroborative evidence and set aside the Revisional order by PCIT.The Tribunal found that the Assessing officer has duly taken cognizance of the statement of the assessee recorded during the survey, the surrender letter and the return of income, and after examination thereof and due application of mind has not drawn any adverse inference and income has been rightly assessed under the head “business income”.

Gaus Mohammad vs Income Tax Officer - 2022 TAXSCAN (ITAT) 1238

The Income Tax Appellate Tribunal (ITAT), Allahabad ordered a fresh enquiry as there was no proper enquiry by the Assessing Officer (AO) on the genuineness of the Will in question.Vijay Pal Rao, Judicial Member held that “It is clear that the Assessing Officer, as well as the CIT(A), doubted the genuineness of the Will in question without conducting any enquiry or examination of the genuineness. To ascertain the genuineness of the Will, the Assessing Officer was required to verify the genuineness of the signatures of the father either from the undisputed record bearing his signature or otherwise by examination of the attesting witnesses or any other relevant material. Hence, in the facts and circumstances of the case, the matter is set aside to the record of the Assessing Officer to re-adjudicate the same after conducting a proper enquiry regarding the genuineness of the Will.”

A. Nagarajan vs ITO -2022 TAXSCAN (ITAT) 1237

The Income Tax Appellate Tribunal (ITAT), Chennai held that Farmhouse is part of agricultural land and eligible for deduction under Section 10(37) of the Income Tax Act, 1961.The bench consisting of Mahavir Singh, Vice President and Manoj Kumar Aggarwal, Accountant Member held that “It is undisputed fact that the land under consideration is agricultural land and it has RCC structure for which the assessee has separately been compensated. Nevertheless, this structure, in our considered opinion, was integral to the land which was used for agricultural purposes and could not be separated from the land and therefore, qualifies to be agricultural income.”

ACIT vs Genus Electrotech Limited-2022 TAXSCAN (ITAT) 1236

The sale tax incentive subsidy and excise duty incentive are capital receipt and not chargeable to tax, was ruled by the Delhi bench of the Income Tax Appellate Tribunal (ITAT).Shri Shamim Yahya, accountant member and Shri Yogesh Kumar US, judicial member viewed that the subsidy nowhere linked to cost of acquisition of the assets and no need to make any deduction from the depreciation claimed. The Tribunal set aside the Revenue’s appeal and allowed the assessee’s appeal.

Ghaus Memorial Sahkari Awas Samiti Ltd vs ACIT - 2022 TAXSCAN (ITAT) 1232

The Income Tax Appellate Tribunal, Allahabad bench has held that the addition under section 68 of the Income Tax Act,1961 will sustain when the assessee failed to prove the genuineness of cash credit.The Tribunal observed that the assessee has not submitted any evidences/explanation to discharge its onus u/s 68 of the 1961 Act.

Bai Navajbai Tata Zoroastrian Girls School vs Commissioner of Income Tax- 2022 TAXSCAN (ITAT) 1153

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) held that the Income Tax Authorities cannot impose conditions beyond the scheme of law while granting registration to charitable institutions and trusts under Section 12A of the Income Tax Act, 1961.The Tribunal observed that the conditions concerning the conduct of the trust and the circumstances in which the registration granted to the appellant can be cancelled as these are regulated by the specific provisions of law. Further observed that if the scheme of the law does not visualize these conditions being part of the scheme of the registration being granted to the applicant trust, then the Commissioner cannot supplement the law.  The appeal was allowed.

Deloitte Haskins & Sells vs Assistant Commissioner of Income Tax- 2022 TAXSCAN (ITAT) 1233

In a significant ruling, the Delhi bench of the Income Tax Appellate Tribunal (ITAT) granted relief by allowing the deduction from income claimed for the payment made to a retired partner as it amounts to a diversion of income at source by overriding title.Shri Saktijit Sey, judicial member and Shri Anadee Nath Misshra, accountant member observed in the case that payment to the partner would amount to diversion of income at source by overriding title.

Vimalchand Manikchand Jain vs I.T.O. - 2022 TAXSCAN (ITAT) 1177

In the absence of documents to substantiate the TDS deduction by the principal before the payment of sale, the Surat bench of the Income Tax Appellate Tribunal (ITAT) has extended the disallowance to 6%.Shri Pawan Singh, judicial member and Dr Arjun Lal Saini, accountant memberviewed that the disallowance restricted by CIT(A) was on the little lower side, to avoid the possibility of Revenue leakage, the Coram modified the order of CIT(A) by restricting the addition of impugned/bogus purchasesto the extent of 6%.

Gwalior Bypass Project Ltd. vs ACIT - 2022 TAXSCAN (ITAT) 1170

The Income Tax Appellate Tribunal (ITAT), Delhi bench has held that the grant to operate a project under the government is a license and is eligible for depreciation of the intangible asset.The Tribunal observed that the benefit in terms of the circular can be granted ifthe assessee claims in terms of it. Further observed thatto operate the project/project facility and collect toll charges is a license or akin to a license, hence, being an intangible asset is eligible for depreciation under section 32(1)(ii) of the Act.

Deccan Chronicle Holdings Limited vs Asst. Commissioner of Income Tax - 2022 TAXSCAN (ITAT) 1143

In the case of Deccan Chronicle Holdings Limited, the Hyderabad bench of the Income Tax Appellate Tribunal(ITAT) has held that statutory dues and claims stand frozen after approval of the resolution plan by Insolvency and Bankruptcy Code (IBC), 2016.Shri Rama Kanta panda, AM & Shri K Narasimha Chary, JMobserved that the appeals cannot be proceeded with during the continuance of the proceedings under the Insolvency and Bankruptcy Code. The Tribunal granted leave to seek the restoration of the appeals if necessitated by the orders in the Corporate Insolvency Resolution Proceedings and the appeals of the assessee and the revenue got dismissed.

Shri Mukesh Rasiklal Shah vs ITO- 2022 TAXSCAN (ITAT) 1135

While considering a bunch of appeals the Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) has held that share trading through Benami can’t be claimed as a business loss by the assessee and upheld the denial of the above-said claim by the CIT(A).Smt. Annapurna Gupta, accountant member and Smt. Suchitra Kamble, judicial member upheld the order of the CIT(A) that the business of share trading transactions carried on in the proprietorship concern was not that of the assessee, but Benami and denial of the claim of business loss to the tune of Rs.4,13,11,931/- was upheld.  The appeal of the assessee got dismissed.

General CO.OP Bank Ltd vs JCIT- 2022 TAXSCAN (ITAT) 1245

The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) has held that Interest received by the bank post liquidation can’t taxed if diverted at source as per the provision of the Deposit, Insurance and Credit Guarantee Corporation of India (DICGCI) Act. Ms Annapurna Gupta, Accountant Member and Shri T.R. Senthil Kumar, Judicial Member viewed that the entire income of the assessee including interest income and share dividend income are diverted at the source and the bank under liquidation has no discretion or authority to apply such funds. Such income was not taxable in the hands of the assessee.  The appeals filed by the Revenue are dismissed.

Poorvanchal Vikas Foundation vs The Income Tax Officer - 2022 TAXSCAN (ITAT) 1243

The single-member bench of the Income Tax Appellate Tribunal (ITAT), Varanasi held that the state can’t take undue benefit and allowed for rectification of typographical errors that occurred in the return filed by the assessee.It was observed that if the assessee has brought tothe notice of the Assessing Officer the typographical or technical mistake in the return of income, then the Assessing Officer was expected to verify the correctness of the total income of the assessee.

Shri Kalyan Co-op Credit Society Ltd vs Income Tax Officer -2022 TAXSCAN (ITAT) 1246

The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) comprising Shri P M Jagtap, vice president and Ms Suchitra Kamble, the judicial member has held that interest in FDR can be treated as income from other sources under section 56 if the claim of 80P got rejected.It was observed that if the claim of 80P has been rejected, income from FDRs is treated as income from other sources under Section 56 of the Act.  The expenses related to the interest income earned by the assessee have to be allowed as it was permissible under the Statute of law.

Rakesh Global Steel P. Ltd vs ACIT -2022 TAXSCAN (ITAT) 1217

Income Tax Appellate Tribunal (ITAT), New Delhi held that mere none production of stock register cannot be ground to reject declared trading results.The bench consisting of Dr BRR Kumar, Accountant Member and Yogesh Kumar US, Judicial Member observed that “In our view, mere none production of stock register particularly when the quantitative details of opening stock, purchase, sales and closing stock is available cannot be ground to reject the declared trading results and the submission is supported by judgments. The CIT(A) has considered all the above factual aspects and came to a just conclusion in deleting the additions made by the A.O.”

N Core Cables vs Assistant Commissioner of Income-tax - 2022 TAXSCAN (ITAT) 1244

The Surat bench of the Income Tax Appellate Tribunal (ITAT) has held that the income tax deduction under section 80 IB of the Income Tax Act,1961 is allowable even if the goods were not manufactured by own plant and machinery.Shripawan Singh, JM &Dr A L Saini, AM observed that the assessee applied their own technology, standard process, own raw material, own quality control/check, and the goods are manufactured as per the specification given by customers. Based on these facts the assessee was entitled to get a deduction under section 80-IB of the Act and allowed the appeal filed by the assessee.   

Shri Suresh Prasad vs ITO -2022 TAXSCAN (ITAT) 1250

The Income Tax Appellate Tribunal (ITAT), Patna Bench has held that no Income tax on compensation is received for compulsory acquisition of land by the government.The Coram of Mr. Manish Borad, Accountant Member & Shri Sonjay Sarma, Judicial Member has observed that the assessee received compensation for compulsory acquisition of commercial land during the F.Y. 2014-15 which was exempted under section 96 of the RFCTLARR Act, as clarified by the CBDT Circular No. 36/2016 dated 25/10/2016. Therefore, after considering the totality of the fact as the division bench dismissed the revenue appeal and held that the CIT(A) was justified by not confirming the action of the A.O.

Monnet Ispat & Energy Ltd. - 2022 TAXSCAN (ITAT) 1256

Income Tax Appellate Tribunal (ITAT), New Delhi bench consisting of NK Billaiya, Accountant Member and Yogesh Kumar US, Judicial Member held that liabilities payable to Central or State Government in any period or prior to acquisition will be written off in full in terms of resolution plan as approved by National Company Law Tribunal (NCLT).

Shri Surjeet Singh vs The Pr. CIT- 2022 TAXSCAN (ITAT) 1255

Revisionary powers cannot be exercised arbitrarily, so was held by the Income Tax Appellate Tribunal (ITAT), Chandigarh.The bench consisting of Diva Singh, Judicial Member and Vikram Singh Yadav, Accountant Member observed that “On a consideration of the facts and circumstances of the present case, we find that the Revisionary Powers exercised by the PCIT cannot be upheld. On going through the Paper Book filed considering the issues enquired into by the AO and replied to by the assessee, we find that when read along with the reply on behalf of the assessee before the PCIT, we find that the appeal of the assessee has to be allowed. The Revisionary Powers cannot be exercised arbitrarily. The twin conditions necessary for exercising the powers in the facts of the present case are found to be missing.”

NTPC Limited vs Addl. CIT - 2022 TAXSCAN (ITAT) 1253

Income Tax Appellate Tribunal (ITAT), New Delhi ruled that Electricity has all necessary trappings of “articles” hence addition liable to be deleted.In the present appeal the Tribunal held that “Since, the matter stands covered by the order of the Tribunal in the assessee’s own case, keeping in view the absence of any change in the factual position, the addition made in the instant year is liable to be deleted.”

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