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 October 1 to October 7, 2022
The Jt.CITS.K. RangeHimatnagar vs Shree Ganesh Construction -2022 TAXSCAN (ITAT) 1338
The Income Tax Appellate Tribunal “A” Bench, Ahmedabad, has recently, in an appeal filed before it, held that the assessee is entitled to 80G deduction with regard to the contributions or donations made to certain relief funds and charitable institutions, such as Chief Minister KanyaKelvani Nidhi.
Financial Software and Systems Private Limited vs Deputy Commissioner of Income Tax– 2022 TAXSCAN (ITAT) 1350
ATM machines are eligible for depreciation at 60% as applicable to computer software, the Chennai Bench of the Income Tax Appellate Tribunal (ITAT) directed to compute WDV at the same rate. It was observed that if the Assessing Officer considered 60% of depreciation and worked out WDV then the depreciation worked out by the Assessing Officer will be higher than or equal to the depreciation claimed by the assessee.
M/s. Owens Corning India Pvt. Ltd vs ACIT – 2022 TAXSCAN (ITAT) 1355
The Income Tax Appellate Tribunal (ITAT), Mumbai Bench disallowed depreciation claim as there was Lapse of 15 years to produce supporting documents before Assessing Officer (AO). The CIT(A) observed in his order that this issue is relating to original disallowance pertaining to A.Y. 2006-07. In that assessment year Assessing Officer disallowed depreciation as the assessee failed to produce the invoices with respect to additions made to the fixed assets. Aggrieved assessee preferred appeal before Appellate Authorities and the issue travelled upto the ITAT and ITAT remitted back the issue to the file of AO. The set aside the claim of assessee.
Shri Dilip Manichand Nahar vs Income Tax Officer– 2022 TAXSCAN (ITAT) 1353
The Income Tax Appellate Tribunal (ITAT), Pune Bench refused to condone the delay of 807 days as there was a delay on the ground due to the late filing of an appeal on advice from a consultant. A Single Bench consisting of S S Viswanethra Ravi, Judicial Member observed that “I find that except the reason of advice of Consultant, there was no valid reason given by the assessee which really prevented in filing the appeal in time before this Tribunal. Further, on perusal of the additional notarized affidavit dated 03-08-2022, I note that the assessee reiterated the same explanation which was stated in the earlier notarized affidavit as discussed above. I note that in the second notarized affidavit also the assessee did not show any sufficient cause to condone the delay of 807 days except repeating the same that the appeal was not filed on the basis of the advice of his Consultant.”
Pamstar Exports vs ACIT – 2022 TAXSCAN (ITAT) 1357
In an assessee friendly judgment, the Income Tax Appellate Tribunal (ITAT), Mumbai bench restored the matter to the file of Commissioner of Income Tax (CIT) for fresh adjudication on the ground that the assessee has preferred manual filing of appeal due to lack of awareness regarding E- filing procedures. The Bench consisting of Amit Shukla, Judicial Member and Prashant Maharshi, Accountant Member held that “Admittedly, the scheme of physical filing of appeal was replaced by electronic /online w.e.f. 01.03.2016 vide rule 45 of the Income Tax Rules. Since there was some difficulty in e-filing, CBDT has taken due cognizance of such difficulty and extended the time limit vide its circular. Thus, CIT(A) should have accepted the appeal and decided the appeal on merits when already multiple hearing have taken place. Accordingly, the appeal of the assessee is remanded back to the file of CIT(A) to decide the issue afresh on merits after giving sufficient opportunity of hearing to the assessee.”
M/s.Dell International ServicesIndia Private Limited vs The Joint Commissioner ofIncome Tax – 2022 TAXSCAN (ITAT) 1349
The Income Tax Appellate Tribunal (ITAT), Bangalore Bench granted relief to M/s. Dell International Services India Private Limited and held that amount received towards warranty is refundable even on cancellation of warranty agreement. The Division Bench relied on the judgments in Schneider Electric IT Business India Pvt. Ltd. v. JCIT, LTU in order to arrive at the conclusion. The Bench consisting of George George K, Judicial Member and Padmavathy S, Accountant Member held that “In the light of the decision of the coordinate bench of the Tribunal and considering the facts of the case as discussed above, we are of the view that claim of the assessee deserves to be accepted and the addition made by the AO as confirmed by the DRP is hereby deleted. This ground accordingly is allowed in favour of the assessee.”
Shri Sudhakar vs Deputy Commissioner of Income Tax – 2022 TAXSCAN (ITAT) 1347
The Income Tax Appellate Tribunal ‘B’ Bench, Chennai, has while allowing an appeal filed by the Revenue, held that capital gain exemption u/s 54F is allowable only if the property in question is found to be of commercial nature. The aforesaid observation was made by the tribunal when an appeal was filed by the Revenue against the order of the Commissioner of Income Tax (Appeals) 14, Chennai, on 23.01.2020, with regard to the assessment year 2015-16.
Shri Manish Raichand Shah vs Asst. Commissioner of Income-tax – 2022 TAXSCAN (ITAT) 1348
The Income Tax Appellate Tribunal Ahmedabad “C” Bench has recently, while allowing an appeal filed by the Revenue, held that deletion of disallowance under section 40(a) is not valid in the absence of a verification on the inclusion of amount in the income of the asssessee. The aforesaid observation was made by the Tribunal when an appeal was filed before it by the Revenue, opposing the order dated 22.01.2019 passed by the Commissioner of Income Tax (Appeals)-3, Ahmedabad, as against the Assessment order passed under section 154 of the Income Tax Act, 1961 relating to the Assessment Year (A.Y) 2009-10.
Uma Industries vs Income Tax Officer – 2022 TAXSCAN (ITAT) 1351
The Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench sustained disallowances of bad debt written off for Rupees Twenty Lakhs as there was No information available with respect to subsequent recovery of bad debts. The Bench consisting of Suchitra Kamble, Judicial Member and Waseem Ahmed, Accountant Member held that “If the assessee was to avail the benefit of the provisions of law by using the colourable device, the same cannot be allowed to the assessee. In the given facts of the case, admittedly the assessee has closed down the business and there was no information available on record what treatment has been given by the assessee with respect to the subsequent recovery of the baddebts, if any. In the absence of any contrary information available on record, we do not find any defect in the order of the CIT-A.”
M/s.Nike India Private Limited vs Deputy Commissioner of Income-tax– 2022 TAXSCAN (ITAT) 1336
The Income Tax Appellate Tribunal Bangalore Benches “C”, has recently in an appeal filed by Nike, held that disallowance on purchase of trade samples is to be safeguarded against double taxation. The aforesaid observation was made by the Tribunal when the assessee, a wholesale distributor of Nike brand products in India filed the return of income for the assessment year 2016-2017, declaring total loss of Rs.164,42,63,191.
Shri Gopinathan vs The Income Tax Officer – 2022 TAXSCAN (ITAT) 1354
Section 194C (6) & (7) are independent of each other and cannot be read together to attract disallowance u/s 40(a)(ia), the Chennai Bench of the Income Tax Appellate Tribunal (ITAT) quashed the rectification order. It was observed that since the assessee could not produce vouchers for the expenses by satisfying that the section 194C(7) of the Act is not applicable for the reason that section 194C(6) and section 194C(7) of the Act are independent of each other and cannot be read together since the assessee has furnished PAN of the transporter as required under section 194C(6) of the Act.
Om Prakash Agarwal vs Principal Commissioner of Income Tax – 2022 TAXSCAN (ITAT) 1276
The Income Tax Appellate Tribunal (ITAT), Jaipur bench has held that revisional jurisdiction under Section 263 of the Income Tax Act, 1961 cannot be invoked to correct each and every type of mistake or error committed by the Assessing Officer. The department observed that in the year under reference cash of Rs. 1,47,45,000/- has been deposited in the two bank accounts of the assessee. The Pr. CIT, exercising her revisionary powers under section 263, issued a SCN dated 16.02.2022 for clarifying the assessee as to why the assessment should not be held erroneous in so far as it is prejudicial to the interest of Revenue. Assessee submitted a detail reply to the SCN on 28.02.2022, which did not find favour with the Pr. CIT and an order under section 263 of the Act was passed on 26.03.2022.
Gold Finch Jewellery Ltd. vs Dy. Commissioner of Income Tax – 2022 TAXSCAN (ITAT) 1346ss
The Income Tax Appellate Tribunal (ITAT) Ahmedabad bench held that addition under section 68 of the Income Tax Act,1961 on the assessee company is not sustainable when the onus was discharged with sufficient evidence. It was observed that the assessee company has discharged its onus by providing a share application form, Bank details, PAN Numbers, return of income and audited balance sheet and other relevant details but lower authorities failed to appreciate the submitted by the assessee.
Deputy Commissioner of IncomeTax vs M/s N. M. Agrofood Products Pvt. Ltd. -2022 TAXSCAN (ITAT) 1359
The Income Tax Appellate Tribunal (ITAT), Jaipur Bench held that no fresh addition can be made for assessment already completed after proper enquiry on absence of incriminating material. The Bench consisting of Dr S Seetha Lakshmi, Judicial Member and Rathod Kamlesh Jayantbhai, Accountant Member observed that “As the CIT(A) has after considering the details arguments of both the parties clearly taken a view that there is no incrementing material, no addition can be made for the assessment which are already completed after making the proper enquiries by the AO, and those assessment cannot be allowed to again reframed merely based on the search and that too without any fresh evidence. Merely the surveys conducted parties are not available after 8 years it is not the fault of the assessee and without any fresh material unearthed during search no fresh addition can be made on the issue which are already settled.
” Smt. Kalyani Seetharaman vs ACIT– 2022 TAXSCAN (ITAT) 1191
The Chennai bench of the Income Tax Appellate Tribunal (ITAT) has held that revisional order under section 263 can’t be simply on assumption. The PCIT observed that the AO failed to invoke section 50C of the Act and has allowed the market value and indexation in respect of sold property as claimed by the assessee without proper verification.
Ferrero India Pvt. Ltd vs Dy. C.I.T – 2022 TAXSCAN (ITAT) 1284
Relief to Ferrero India Pvt Limited was granted by the Income Tax Appellate Tribunal (ITAT), Pune as on absence of international transaction determination of ALP (Arm Length Price) not necessary.The CIT(A) held that 90.42% of the AMP expenditure does not constitute of international transaction. The entire T.P adjustment of Rs. 9,82,82,571/- was also deleted. It is in this background that the assessee had filed Cross Objection submitting that in its case there is no question of international transaction at all since prima facie the revenue was unable to discharge its onus of establishing international transaction in respect of the assessee. Rather, there was no machinery nor any specific agreement through which the revenue could establish that there was an international transaction.
M/s. Angalakshmi Spinning Mill vs The Income Tax Officer – 2022 TAXSCAN (ITAT) 1360
The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) has held that replacement of spare parts includes in regular repairs and maintenance shall be treated as revenue expenditure. It was observed that in the case of Super Spinning Mills Ltd the court considered the replacement of machinery as revenue in nature by holding that the basic test is to find out whether expenditure is incurred to preserve and maintain already existing assets and said expenditure must not be incurred to bring any new asset into existence to obtain a new advantage.
Bhartiya City Developers Pvt. Ltd vs Addl. CIT – 2022 TAXSCAN (ITAT) 1125
The Income Tax Appellate Tribunal (ITAT), Delhi Bench has held that disallowance of expenditure on an estimated or notional basis does not attract penalty provision under section 271. The Tribunal further observed that the claim of expenditure towards exempt income made, at best, be taken as an erroneous claim by the assessee. Such a claim, although, may not be maintainable for quantum proceedings, however, would not invite penalty in the absence of falsity per se.
ACIT vs Padmshree Dr. D.Y. Patil University – 2022 TAXSCAN (ITAT) 1118
The Income Tax Appellate Tribunal (ITAT), Mumbai bench has held that no incriminating material was unearthed during search and confirms deletion of addition made u/s 153A. The Tribunal observed that in the absence of any complaint or inquiry merely because a copy of fee receipt was found during search which [fee receipt] include the item of development fees, cannot be a ground to form an opinion that the same was compulsorily extracted from the students. The same cannot be termed as incriminating material against the assessee. The Coram of Mr. Aby T. Varkey, JM, and Mr. Gagan Goyal, AM by relying on the decision of the Bombay High Court decision in case of CIT Vs. Continental Warehousing Ltd. has dismissed the revenue appeal.
EIT Services India Pvt. Ltd vs Deputy Commissioner of Income-tax – 2022 TAXSCAN (ITAT) 1366
The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) held that a discount on Employee Stock Option Plan (ESOP) amounts to expense and deduction under section 37 of the Income Tax Act,1961 is allowable. The Tribunal observed that the assessee’s plea for inclusion of certain companies can be granted as those companies were primarily engaged in Software development services and not in the sale of products.
M/s. Trinity Infraventures Limited vs Asst. Commissioner of Income Tax – 2022 TAXSCAN (ITAT) 1372
The Hyderabad Bench of the Income Tax Appellate Tribunal (ITAT) held that the interest paid on delayed TDS payment is allowable as a deduction. It was observed that the interest paid on delayed payments of TDS under section 37of the Act is like compensation and not penal and is allowable as a deduction. The Tribunal held in favour of the assessee and directed the Assessing Officer to delete the disallowance made on account of interest on TDS. The appeal of the assessee was allowed. Shri P. Murali Mohan Rao appeared on behalf of the assessee and Ms R. Helen Ruby Jesindha appeared on behalf of the revenue.
ACIT vs Indian Drugs & Pharmaceuticals Limited -2022 TAXSCAN (ITAT) 1368
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) held that penalty under section 271 (1) (c) of the Income Tax Act,1961 cannot be imposed for unsustainable claims. It was observed that the penalty order reveals that the impugned penalty has been imposed by the AO for the solitary reason that the assessee made claim for deduction of expenses which were not allowable. The assessee furnished an explanation for claiming a higher deduction of expenses in the revised computation.
Atlantic Bio Medical Pvt. Ltd. vs DCIT – 2022 TAXSCAN (ITAT) 1371
The Income Tax Appellate Tribunal (ITAT), Mumbai Bench condoned delay of 314 days on the ground that the assessee filed late appeal on belief that Form 10CCB was to be filed manually. A Division Bench consisting of Kuldip Singh, Judicial Member and Om Prakash Kant, Accountant Member observed that “Bare perusal of the submissions made by the assessee by way of affidavit seeking condonation of delay shows that the assessee had undisputedly filed the return of income electronically but under bonafide belief that the Form 10CCB was to be filed manually with the AO as and when required thus failed to file the same electronically along with the return of income. No doubt ignorance of law is no excuse but keeping in view the fact that it was first year of filing the return of income along with Form 10CCB electronically and due to human error and under bonafide belief assessee has failed to file the same electronically which was well within their notice.”
The Asstt. C.I.T. vs Mercedes-Benz India Pvt. Ltd – 2022 TAXSCAN (ITAT) 1376
The Pune bench of the Income Tax Appellate Tribunal ( ITAT ) has recently while dismissing an appeal filed before it by the Revenue Department, held that royalty expenditure is revenue in nature and not capital expenditure, and hence that the same should be taxable accordingly. “The ground of the appeal being the disallowance of homologation expenditure as to whether it is capital expenditure or revenue expenditure, we find that this issue has also been considered by the Tribunal in assessee’s own case in ITA No. 495/PUN/2017, wherein it was held by the Tribunal that Homologation expenses are revenue expenditure, based on the Hon’ble Supreme Court’s decision in Empire Jute Co. Ltd. Vs. CIT (1980) 124 ITR 1 (SC).”
Shri Sagar Uttam Murhe vs DCIT – 2022 TAXSCAN (ITAT) 1374
The Income Tax Appellate Tribunal ( ITAT ), Pune has recently while allowing an appeal filed before it, held that the assessment shall not exceed the scope of prescribed limited scrutiny, except as per the due process of law. The aforesaid observation was made by the Tribunal when a twin appeal was filed before it by an assessee, as against the CIT(A) 6, Pune’s separate orders; both dated 20.06.2018, passed in case Nos. PN/CIT(A)-6/DCIT Cir-8/10762/2016-17 and PN/CIT(A)-6/DCIT Cir-8/ 10075/2017-18, involving proceedings under Sections 143(3) and 271(1)(c) of the Income Tax Act, 1961, respectively.
Sanskruti Wines vs Pr.CIT – 2022 TAXSCAN (ITAT) 1373
The Income Tax Appellate Tribunal (ITAT) Pune, has, in a recent appeal filed before it, held that transfer fee paid in connection with the transfer of licence is capital expenditure and hence, that the same would be deductible from taxable income. “The case of the ld. Pr. CIT is that such transfer fees is capital expenditure and hence cannot be allowed as deduction. It is seen that the AO did not examine the license transfer fee during the course of assessment proceedings. The ld. AR also could not point out any case law on the point for allowing such deduction. This shows that the AO ought to have examined this aspect from the angle of deductibility, which he did not.”
Shilpa Vitthal Jadhav vs The Income Tax Officer – 2022 TAXSCAN (ITAT) 1377
The Income Tax Appellate Tribunal “SMC” Bench, Pune, has, while jointly considering two appeals filed on the same ground bydifferent assessees, held that sale consideration not accruing to the assessee in the year under consideration, but extending to many years cannot be computed as short – term capital gain. The aforesaid observation was made by the court whentwo appeals were filed by different assessees against the common order dated 31-01-2019, passed by the Commissioner of Income Tax (Appeals)-13, Pune [‘CIT(A)’], for the assessment year 2011-12,challenging the action of CIT(A) in confirming the addition of Rs.14,54,317/- on account of short-term capital gain.
Sh. Kanwal Mohan Singh Sehgal vs DCIT – 2022 TAXSCAN (ITAT) 1379
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) comprising N K Billaiya (Accountant Member) and Astha Chandra (Judicial Member), upholding an order of the CIT(A), held in favor of the Assessee that, the exemption under section 54 & 54 F of the Income Tax Act,1961 is allowable in respect of the amount invested in the construction of a residential house. It was also held in the impugned order that, if the property was purchased from borrowed funds, the amount of interest constitutes the actual cost to that property. To exclude the interest amount from the actual cost of the assets/property would lead to an anomalous result.
ACIT vs IQOR India Services Pvt. Ltd – 2022 TAXSCAN (ITAT) 1378
Ruling in favour of IQOR India Services Pvt. Ltd., the Delhi Bench of the Income Tax Appellate Tribunal (ITAT), held that, the income classified as business profits or Fees for Technical Services (FTS) are not taxable in India without a Permanent Establishment (PE) in India as per the India-Philippines DTAA and Section 195 of the Income Tax Act, 1960. The Tribunal comprising G S Pannu (President) and Saktijit Dey (Judicial Member) observed that the matter is settled in the favour of the assessee in several decisions of the co-ordinate benches, namely Jynga Game Networks India (P) Ltd. vs. ACIT, in which it was held as “As far as the case of the assessee that the payment in question is in the nature of ‘FTS’ and since the recipient of payment was a tax resident of Philippines and since there is no FTS clause in the said DTAA, the sum in question can be charged to tax only under Article 7 of DTAA as business profits and since Startpoint does not have a PE in India, even under Article 7, the sum in question cannot be brought to tax. We therefore hold that the sum in question cannot be taxed as FTS in India. Consequently, there was no obligation on the part of the assessee to deduct tax at source u/s 195 of the Act.”
Raw Pressery Private Limited vs ACIT – 2022 TAXSCAN (ITAT) 1365
The Income Tax Appellate Tribunal (ITAT), Mumbai granted relief to Raw Pressery Private Limited thereby setting aside an addition of Rupees 115 Crores. The Bench consisting of observed that “It is noted that during the year, the company had received share premium of Rs.52,24,66,398/- from five shareholders, out of which four were existing shareholders who had infused capital in earlier years as well and the remaining one was a new shareholder but to her, the shares were issued in discharge of her consideration for the rendering of services. From the material on record, it is clearly discernible that the impugned addition of Rs.115,56,95,385/- comprises of the opening balance of share premium of Rs.63,32,28,987/-.”
Amrapali Eden Park Developers Pvt. Ltd vs DCIT – 2022 TAXSCAN (ITAT) 1367
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) upheld the disallowance of bogus purchases which have no implication in income accounted for work in progress. The AO observed that the assessee, Amrapali Eden Park Developers Pvt. Ltd transactions of purchase of building materials/steels alleged to be sourced from the parties remained unverified and treated as ‘bogus and unexplained expenditure.’ It was submitted by the revenue that the purchases from all four parties were rightly treated as ‘bogus’ and the CIT(A) was not justified in granting relief to the assessee.
Shri S. Manoharan vs DCIT – 2022 TAXSCAN (ITAT) 1370
Penalty u/s 271(1)(c) of the Income Tax Act,1961 is not sustainable in the absence of concealment or furnishing of inaccurate particulars of income, the Chennai bench of the Income Tax Appellate Tribunal (ITAT) has held as above. A Coram of Shri Manoj Kumar Aggarwal, AM and Shri Sonjoy Sarma, J M observed that there was no case of concealment or furnishing of inaccurate particulars of income that could be made out against the assessee and held that estimated additions do not call for levy of penalty.
M/s. Champion Dreams vs PCIT – 2022 TAXSCAN (ITAT) 1369
The Income Tax Appellate Tribunal (ITAT), ordered a fresh examination on the consideration that Entire expenses claimed as Compensation and Tenant Payment are not to be capitalized as WIP (Work In Progress). The Bench consisting of B.R. Baskaran, Accountant Member and Pavan Kumar Gadale, Judicial Member observed that “We have noticed that the PCIT was not fully correct in holding that the entire expenses claimed as Compensation and Tenant Payment should be capitalised as WIP. Accordingly, we modify the directions given by PCIT and accordingly direct the AO to examine the correctness of computation of “Closing value of WIP” declared by the assessee, as the assessee has already sold two flats out of four flats.”
The ACIT, Vs Rajeswari Kumar – 2022 TAXSCAN (ITAT) 1364
The Income Tax Appellate Tribunal ‘A’ Bench, Chennai, has recently , in an appeal filed before it, held that reopening of assessment is not to be made on mere change of an opinion. The aforesaid observation was made by the Tribunal when the Revenue had filed an appeal before it, against the order dated 05.09.2019., of the Commissioner of Income Tax (Appeals)-10, Chennai, in ITA No.88/CIT(A)-10/17-18
M/s. Mahalaxmi Realtors vs Dy. CIT-. 2022 TAXSCAN (ITAT) 1375
The Income Tax Appellate Tribunal ( ITAT ) Pune Bench, has recently, in an appeal preferred before it by the revenue, held that once the income is declared and the return is filed, later, the Assessing Officer (AO) is not justified in further imposing a penalty under section 271(1)(c) of the Income-tax Act, 1961. “We are of the considered view after hearing the submissions of the ld. D.R and perusing the material on record that once the income has been declared and filed in the return of income, the A.O is not justified further to impose penalty on such declared income since there is no loss occurred to the Revenue. The penalty u/s 271(1)(c) of the Act is leviable if the A.O is satisfied in the course of any proceedings under this Act that any person has concealed the particulars of his income or furnished inaccurate particulars of such income.
DCIT, Circle-7, Vs Lalitkumar K. Jain -2022 TAXSCAN (ITAT) 1362
Provisions of the Deemed dividend not applicable on the advancement of the loan in the ordinary course of business, the Pune Bench of the Income Tax Appellate Tribunal (ITAT) upheld the order pf CIT(A). A Coram of Shri Inturi Rama Rao, Accountant Member and Shri Partha Sarathi Chaudhury, Judicial Member observed that the order of CIT(A) is based on proper appreciation of facts and law and the appeal filed by the Revenue got dismissed.
Toshiba JSW Power Systems Vs Deputy Commissioner of Income Tax, – 2022 TAXSCAN (ITAT) 1363
The Income Tax Appellate Tribunal ‘B’ Bench, Chennai, has, while allowing the appeals of an assessee, held that reasonable opportunity of being heard shall be compulsorily observed in the adjudication process and that a want of compliance of the natural justice principles by the adjudicating authority is a serious defect. It is abundantly clear that the CIT(A) has disposed off appeals filed by the assessee on technical grounds without observing principle of natural justice by providing reasonable opportunity of hearing to the assessee to justify its case. Therefore, we are of the considered view that the appeals filed by the assessee need to go back to the file of the Ld. CIT(A) to decide the issues involved in these appeals on merits.
Mahamaya Exports Vs ACIT – 2022 TAXSCAN (ITAT) 1361
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that the addition to unexplained credit will sustain in the absence of evidence to prove enhanced amounts payable. A Coram of Shri Shamim Yahya, accountant member and Shri Challa Nagendra Prasad, Judicial Member observed that as per section 68, the onus was on the assessee to prove not only the source but also the nature of the credits. From the details submitted the Tribunal observed that the enhanced amounts payable for land do not have any credible basis and the nature of such enhanced credits remains unexplained.
M/s. Information Technology Park Ltd vs Income Tax Officer – 2022 TAXSCAN (ITAT) 1352
The Income Tax Appellate Tribunal (ITAT), Bangalore Bench held that addition made for premium on redemption of preference shares as deemed dividend not sustainable. The Bench consisting of N V Vasudevan, Vice President and Padmavathy S, Accountant Member observed that “We are of the considered view that the excess premium paid to APFI by the assessee on redemption of preference shares cannot be taxed under Section 2(22)(d) or 2(22)(d) and delete the addition made by the CIT.”
Pamstar Exports vs ACIT – 2022 TAXSCAN (ITAT) 1356
The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) has held that the department can’t advantageous of the ignorance of the assessee in securing relief and restored the issue to the file of AO. It was observed that the reason for the denial of the deduction is the fact that the assessee has filed a return of income under the wrong provisions. The assessee has filed a return of income u/s. 139(4A) which applied to a Trust which was registered u/s. 12AA of the Act. The assessee is not a registered trust but claims to be an educational trust eligible for deduction u/s 10(23C)(iiiad) of the Act.
M/s.Prabhat Agri Biotech Limited vs Deputy Commissioner of Income Tax – 2022 TAXSCAN (ITAT) 1092
Sales return cannot be treated as an asset and liability when subsequently taken into books of account, so was held by Income Tax Appellate Tribunal (ITAT) Hyderabad. The Coram consisting of Rama Kanta Panda, Accountant Member and K Narasimha Chary, Judicial Member held that “In view of the seasonal nature of the business and also the short shelf life of the seeds, it is imperative for the assessee to take into account the quantity of unsold seats at the end of the year and the need to revalidate their further utility and to take them into stock in the next season. In the circumstances it cannot be said that the provision for sales returns is unascertained or unreasonable. With this view of the matter, we uphold the findings of the CIT(A).”
National Bank for Agriculture & Rural Development vs DCIT -2022 TAXSCAN (ITAT) 1383
The Income Tax Appellate Tribunal (ITAT)“B” Bench, Mumbai, has, recently, in an appeal filed before it by the assessee, held that service charges accrued but not received, cannot be treated as the assessee’s income. “There is no dispute with regard to the fact that the assessee has been following consistent accounting policy to recognize income by way of Service charges on receipt basis. The assessee submitted that there was uncertainty in recovering service charges. There should not be any dispute that an income can be recognized under mercantile system of accounting also, only if there is certainty of its recovery. Considering the past consistent practice followed by the assessee, we are of the view that this addition is not justified. Accordingly, we set aside the order passed by Ld CIT(A) on this issue and direct the AO to delete this addition.”
Shri Amit Mangilal Jain vs ACIT –2022 TAXSCAN (ITAT) 1382
The Income Tax Appellate Tribunal “A” Bench, Mumbai, has while deciding upon two cross appeals filed by the assessee and revenue, held that reopening notice can be issued under section 147 in relation to search and seizure. “ We find that the CIT(A) has considered the facts, provisions of law and judicial decisions and observed that in the case of search in Bhoomi group, incriminating material were found, where the aassesee is one of the investors in the land and the same was not disclosed by the Assessee in the original return of income or during original assessment U/sec143(3) of the Act. We also find that the statement recorded above are linked with the assessee’s undisclosed income and that these facts were not disclosed in the return of income filed u/sec148 of the Act by the assessee”, the bench added.
Central News Agency Pvt. Ltd vs DCIT – 2022 TAXSCAN (ITAT) 1385
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT)held that penalty under section 271(1)(c) is not leviable on a bonafide mistake. A Coram of Shri Chandra Mohan Garg, JM and Shri Anadee Nath Misshra, AM noticed that the aforesaid amount of Rs.1,68,263/- was added based on ad hoc estimation of personal use of the car by the Directors of the company. It was observed that the assessee made a computational error in not disallowing 1/6th out of expenses on car amounting to aforesaid Rs.1,63,263/- being 1/6th out of motor car expenses.
Logix In fra Developers (P) Ltd vs ACIT – 2022 TAXSCAN (ITAT) 1386
Pre-operative expenses incurred for running the business and bringing revenue are revenue expenditures, the Delhi Bench of the Income Tax Appellate Tribunal (ITAT) deleted the disallowance of advertisement expenses and brokerage & Commission. The AO held that since the assessee has not started showing the revenue from operations, they will not be allowed to debit the expenditure. On appeal, the CIT(A) confirmed the action of the AO holding that the construction has not been started, the approvals were pending, the land has not been fully paid for and it becomes apparent that the project is an infantile stage.
M/s. Lady Tata Memorial Trust vs Commissioner of Income Tax – 2022 TAXSCAN (ITAT) 1380
The Income Tax Appellate Tribunal (ITAT), Mumbai held that Principal Commissioner of Income Tax (PCIT) not empowered to impose conditions to be complied by assessee, for granting registration under Section 12AB of the Income Tax Act,1961. The Bench consisting of Kuldip Singh, Judicial Member and Om Prakash Kant, Accountant Member relied on the judgment in Bai Hirabai Jamshetji Tata Navsari Charitable Institution vs. CIT(E) and observed that “When we examine the questions raised by the assessees’ according registration under section 12A by the PCIT subject to certain conditions in the light of the provisions contained in the scheme of the Income Tax Act, 1961, registration under section 12A cannot be subjected to any condition as there is an “inbuilt mechanism” to be complied with by the assessee after getting the registration under section 12AA of the Act. Furthermore, compliance of the conditions by the assessees’ is to be examined by the Assessing Officer (AO) during the assessment proceedings.”
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