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 October 15 to October 21, 2022

M/s.Subex Technologies Limited vs The Joint Commissioner of Income-tax - 2022 TAXSCAN (ITAT) 1410

The Income Tax Appellate Tribunal (ITAT), Bangalore held assessee, M/s Subex Technologies Limited not eligible for TDS on the ground that the consideration received was not income deemed to accrue in India. A Division Bench of the Tribunal consisting of George George K, Judicial Memberand Padmavathy S, Accountant Member observed that “Hence, the assessee is not liable to deduct tax at source for the reason that consideration received by the STI from the assessee could not have been regarded as income deemed to accrue or arise in India as per the law then existing. We hold that the assessee is not liable to deduct tax at source at the relevant point of time.”

Vikas Narayan Baddi 2 vs ACIT - 2022 TAXSCAN (ITAT) 1411

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT)has held that capital gain exemption cannot be denied on the ground of Delay in the registration of new property for reasons beyond the control. A Coram of Smt Annapurna Gupta, AM and Smt. Suchitra Kamble, JM observed that the delay in registration of the new property was for reasons beyond his control and the denial of exemption u/s 54 F in the present case is for a mere technical default in not getting the new property registered in his name within the stipulated period of two years, as specified under section 54F of the Act, the consequent delay being a minor delay of 5 months that too for reasons beyond the control of the assessee.

Vishnunarayan R. Modani vs CIT(A) - 2022 TAXSCAN (ITAT) 1412

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT)has held that addition under section 69 of the Income Tax Act,1961 towards unexplained investment is not permissible in the absence of corroborative evidence. It was observed that the assessee has purchased and sold shares within a short period of ten days in A.Y. 2008-09 and two days in A.Y. 2009-10. The assessee has furnished a copy of the bank statement and it has shown no movement of funds from the assessee to M/s. Alliance Intermediaries& Network Pvt. Limited.

Swiss Park Vanijya India Pvt. Ltd Vs ADIT - 2022 TAXSCAN (ITAT) 1417

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) comprising Mahavir Singh and Manoj Kumar Aggarwal held that, the assessee was eligible to claim the deduction u/s 80-IA in favour of assessee, M/s. Swiss Park Vanijya India Pvt. Ltd. and directed the Centralised Processing Center (CPC), Bangalore to grant this deduction. The Tribunal observed that, the assessee has made claim u/s 80-IA in the original return of income as well as in the revised return of income filed subsequently. The only reason to deny the deduction is the fact that the assessee did not upload Form No.10CCB along with original return of income and the same was filed along with revised return of income.

Subex Technologies Limited vs Joint Commissioner of Income-tax -  2022 TAXSCAN (ITAT) 1418

The Income Tax Appellate Tribunal (ITAT), Bangalore held assessee, M/s Subex Technologies Limited not eligible for TDS on the ground that the consideration received was not income deemed to accrue in India. A Division Bench of the Tribunal consisting of George George K, Judicial Member and Padmavathy S, Accountant Member observed that “Hence, the assessee is not liable to deduct tax at source for the reason that consideration received by the STI from the assessee could not have been regarded as income deemed to accrue or arise in India as per the law then existing. We hold that the assessee is not liable to deduct tax at source at the relevant point of time.”

Sanjay Dayal vs ITO -  2022 TAXSCAN (ITAT) 1420

The Income Tax Appellate Tribunal (ITAT), Pune Bench remitted the matter back to the file as the addition was made on discrepancy between gross receipts shown in return of income and amount deducted as TDS or TCS. The Bench consisting of Inturi Rama Rao, Accountant Member and SS Viswanethra Ravi, Judicial Member held that “The issue in appeal before the CIT(A), NFCA, Delhi is with regard to the addition on account of discrepancy between the gross receipts shown in the return of income and Form No.26AS. However, from perusal of the order passed by the CIT(A), NFCA, Delhi, we find that he had considered altogether a different issue which does not form part of the subject-matter of appeal. Therefore, we remit the issue to the file of the CIT(A), NFAC, Delhi with direction to decide the issue in appeal in accordance with law.”

ACIT vs HSBC Software Development (India) Pvt.Ltd. -  2022 TAXSCAN (ITAT) 1419

The Income Tax Appellate Tribunal (ITAT), Pune Bench granted deduction u/s 10B of The Income Tax Act, 1961 on registration with Software Technology Park of India(STPI) as 100% Export Orient Unit (EOU) thereby granting Relief to HSBC Software Development (India) Pvt. Ltd. A bench consisting of Inturi Rama Rao, Accountant Member and SS Viswanethra Ravi, Judicial Member held that “We are of the considered opinion that the assessee is entitled for deduction u/s 10B of the Act, on registration with STPI as 100% EOU.”

Prolific Research Pvt. Ltd. vs DCIT - 2022 TAXSCAN (ITAT) 1423

The Ahmedabad Bench of the Income Tax Appellate Tribunal(ITAT) comprising Annapurna Gupta and T R Senthil Kumar has held that payment of consideration in regard to bandwidth/telecom services by way of  International Private Leased Circuit (IPLC) is taxable as “royalty”. The bench comprising Annapurna Gupta, Accountant Member and T R Senthil Kumar observed that, “In fact the assessee’s reliance in its Grounds of Appeal of Jurisdictional High Court judgment in the case of Nova Technocast Pvt. Ltd. (304 CTR 670) is a judgment considering Explanation 2 of Section 9(1)(iv) and is not applicable to the facts of the present case.” and held that, the findings of the lower authorities do not require any interference.

KARNATAKA GRAMEENA BANK KPS vs Assistants Commissioner of Income Tax - 2022 TAXSCAN (ITAT) 1424

The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) has held that late fees under section 234E of the Income Tax Act,1961 for the delay in filing of TDS return are not leviable before 01.06.2015. The Supreme Court held that any ambiguity in a taxing statute should ensure the benefit of the subject/assessee. On the contrary, any ambiguity in the exemption clause must be conferred in favour of revenue and such exemption should be allowed to be availed only to those subjects / assesses who demonstrate that a case for exemption squarely falls within the parameters enumerated in the notification and they satisfy all the conditions precedent for availing exemption.

M/s Association of Mutual Funds in India vs Deputy Commissioner of Income Tax - 2022 TAXSCAN (ITAT) 1427

The Income Tax Appellate Tribunal (ITAT), Mumbai Bench held that activities of society for benefit of investors and potential investors forming part of general public, eligible for deduction under Section 11 of the Income Tax Act, 1961. The Assessing Officer observed that where industry or trade association claims to be, both, charitable institution and mutual organization, their claim to be charitable organizations would be governed by the provisions contained in First Proviso to Section 2(15) of the Act as regards their dealings with non-members are concerned. However, the Assessing Officer denied exemption under Section 11 read with Section 2(15) of the Act and brought to tax gross receipts from non-members without allowing any deduction for expenditure incurred. The CIT(A) also dismissed the appeal and hence the assessee is in appeal before the Tribunal.

M/s. ETA Star Infopark vs Principal Commissioner of Income Tax -  2022 TAXSCAN (ITAT) 1429

The Income Tax Appellate Tribunal (ITAT), Bangalore confirmed revision order under Section 263 of the Income Tax Act, 1961 and held that income from Joint Development Agreement (JDA) is business income. The Bench consisting of Chandra Poojari, Accountant Member and Beena Pillai, Judicial Member held that “There was proper examination of the issue disputed by PCIT by AO at the stage of assessment and the PCIT cannot find fault with the action of the AO in accepting the claim of assessee that income arose out of the JDA to be treated as business income instead of Long term capital gain offered by assessee.”

The Dy. Commissioner-of Income Tax vs M/s.Univercell Telecommunications India- Pvt. Ltd - 2022 TAXSCAN (ITAT) 1437

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) has held that addition of long term capital gains are not valid if capital gains on transfer of goodwill is zero after consideration of costs incurred for transfer. The Assessing Officer(AO) had observed the transfer of shares of Mr. S.Satish Babu, within a period of five years from the date of transfer of proprietary concern and thus, invoked Sec.47A of the Income Tax Act and assessed difference between assets and liabilities of company as long term capital gains and added back to the total income of the assessee. Assessee, aggrieved by the action of the AO, seeked for redressal of grievance before the CIT(A).

CMA CGM SA vs The Asstt.Commissioner of Income Tax - 2022 TAXSCAN (ITAT) 1431

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that no TDS in India on freight charges received from the transportation of cargo through Feeder vessels is covered under the India–France Tax Treaty. It was observed that IHC forms part of the income from the operation of Ships in international traffic and is covered by Article -9 of India-France DTAA.  Shri C.T. Mathews representing the Department vehemently defended the assessment order and the directions of the DRP.

M/s. Koninklijke Philips N.V vs Deputy Commissioner of Income Tax (IT) - 2022 TAXSCAN (ITAT) 1426

No TDS on Interest on Income Tax Refund under section 244A of the Income Tax Act,1961 is a ‘debt claim’ payable by revenue as per Article 12(3)(a) of India Italy DTAA the Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) has held as above. A Coram of Shri SonjoySarma, Judicial Member and Shri Girish Agrawal, Accountant Member observed that under the India-Italy Treaty, the definition of interest under Article 12(4) includes “debt claim of every kind” which is akin to the India-Netherlands DTAA and interest on the income tax refund u/s. 244A is covered within the definition of interest under the India-Italy DTAA.

M/s. Cathay Pacific airways Limited vs Assistant Commissioner of Income Tax - 2022 TAXSCAN (ITAT) 1433

The Income Tax Appellate Tribunal (ITAT), Kolkata Bench held that Service tax component not includible in Gross receipts for computing deemed taxable income under Section 44BBA of the Income Tax Act, 1961. The Bench consisting of Sonjoy Sarma, Judicial Member and Girish Agrawal, Accountant Member held that “Considering the facts on record, provisions of section 44BBA of the Act, the decision of High Court of Delhi in Mitchell Drilling International Pvt Ltd as well as the position clarified by CBDT in its two circulars cited, we do not find any reason to interfere with the finding and decision given by the CIT(A) and accordingly, dismiss the ground taken by the revenue on the issue under consideration.”

Euro Diamonds Pvt. Ltd vs ITO -  2022 TAXSCAN (ITAT) 1430

The Income Tax Appellate Tribunal (ITAT), Mumbai Bench consisting of B.R. Baskaran, Accountant Member and Pavan Kumar Gadale, Judicial Member set aside addition on bogus purchases on the absence of material evidence. The Division Bench of the Tribunal held that “It is pertinent to note that the AO has not brought any material on record to show that the assessee could have purchased the goods from persons other than M/s Mayur Exports in support of the bills received from M/s Mayur Exports. In the absence of materials in support of this presumption, the same cannot be accepted.

 Shri Pramod A. Thakur vs ITO -  2022 TAXSCAN (ITAT) 1407

The Pune Bench of the Income Tax Appellate Tribunal (ITAT) has held that immovable property received without consideration by the assessee, as per family settlement memorandum is taxable under section 56(2)(vii)(b)(i) of the Income Tax Act,1961. It was observed that the developer was not a party in the family settlement memorandum and the assessee has failed to show the clinching material inter alia indicating any arrangement between his father and developer wherein the former had parted with the land for getting developed area in lieu of consideration; which was passed on to him as a gift from the father.

Adidas India Marketing Pvt. Ltd vs ACIT - 2022 TAXSCAN (ITAT) 1436

The Income Tax Appellate Tribunal ( ITAT ), New Delhi, has recently, in an appeal preferred before it, held that, AMP expenses incurred for own benefit will not amount to international transaction. “It is not in dispute that in Assessee’s own case for the Assessment Year 2006-07, 2011-12 and 2012-13, the very same issue involved in the present appeal has been dealt by the  Coordinate Bench of the Tribunal  and decided in favour of the assessee by dismissing the Appeal of the Revenue in ITA No. 953/Del/2016 & (A.Y 2011-12) and ITA No. 729/Del/2019 (AY 2012-13) vide order dated 31/07/2019, wherein it was held that the main purpose of incurring of  huge AMP expenses  being largely benefiting the  assessee in India, with only an incidental benefit arising to foreign AE, unless Ld.TPO can establish direct benefit accruing to foreign AE, it is very difficult to accept existence of an international transaction.”, the Bench added.

Shri Dinesh Babu Saxena vs Income Tax Officer - 2022 TAXSCAN (ITAT) 1435

The Income Tax Appellate Tribunal ( ITAT ), New Delhi, has recently, in an appeal filed before it, held that the CIT shall condone delay for want of material records regarding non service of notice and penalty order on time.

M/s. R.P. Polypacks Pvt. Limited vs Deputy Commissioner of Income Tax - 2022 TAXSCAN (ITAT) 1428

The Income Tax Appellate Tribunal (ITAT), Kolkata bench consisting of Rajpal Yadav, Vice-President and Rajesh Kumar, Accountant Member held that there was no appreciation of facts in true perspective and thereby set aside the revision order. The Bench observed that “The expenditure has been allowed to the assessee under section 43B on actual payment before the due date of filing of the return. The Commissioner has committed an error by not appreciating these facts in true perspective.”

M/s.Laxmi Bachat Sharafi Sahkari Mandali Ltd vs ITO - 2022 TAXSCAN (ITAT) 1425

Revisional Jurisdiction not valid in absence of error in assessment order, the Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has held claim of deduction u/s 80P(2)(a)(i) of the Income Tax Act,1961 allowable. A Coram of Smt. Annapurna Gupta, Accountant Member and Smt. Madhumita Roy, Judicial Member observed that the assessee’s claim was found allowable under section 80P(2)(d) of the Act, the allowance of deduction u/s 80P(2)(a)(i) of the Act by the AO cannot be said to be to the prejudice of the Revenue.

Shri Surinder Kumar Malhotra vs The ITO - 2022 TAXSCAN (ITAT) 1448

The Income Tax Appellate Tribunal (ITAT), Chandigarh Bench has recently held that It needs to be kept in mind that the Tax Authorities are acting as servants of the Government of India. Hence, are expected to be live and alert to the citizens for whom and on whose behalf, the functionaries of the State act. On the basis of the observation as has been made, the appeal of the assessee, a senior citizen was allowed, emphasising that “The obdurate attitude of ignoring the written pleadings on record are most unfortunate.” and the ITAT quashed the order of the CIT(A).

Sri P. Vijaya Kumar vs ITO Ward-2(2)(3) Bangalore - 2022 TAXSCAN (ITAT) 1449

The Income Tax Appellate Tribunal ( ITAT ), Bangalore, has recently, in an appeal filed before it, held that indexation benefit to be given on improvement expenses increased towards capital assets. “During the course of hearing, the ld.AR fairly accepted that the evidences provided by the assessee had not been appreciated by the revenue authorities and that the amount for Rs. 1,40,33,852/- for cost of improvements has not been given.”

M/s. Selva Ganesh Constructions Private Limited vs Income Tax Officer - 2022 TAXSCAN (ITAT) 1447

The Income Tax Appellate Tribunal ( ITAT ), Chennai, has recently, while deciding a group of appeals filed before it, held that disallowance shall not be made on the ground of non – deduction of TDS from salary when the same is disclosed in the employees ITR. “The learned Counsel for the assessee stated that once the recipients have disclosed the remunerations in their respective returns of income and discharged the payments and complies with the filing of the return of income having been completed, no disallowance can be made for the non-deduction of TDS by invoking the provisions of Section 40(a)(ia) of the Income Tax Act.”

M. Prabaharan vs Income Tax Officer - 2022 TAXSCAN (ITAT) 1451

The Income Tax Appellate Tribunal ( ITAT ) , Chennai, has recently, in an appeal filed before it by an assessee, held that penalty u/s 271 (1)( c ) should not be imposed upon the assessee for the duplication of assets happening due to mistakes at the chartered accountant’s office. “Before us, the Chartered Accountant Shri B. Jeevarathinam categorically admitted in writing that the duplication of assets has happened while calculating the depreciation as per Income Tax Act while computing the tax computation sheet by his staff. He admitted that while doing so, the staff has wrongly computed the deprecation value filed 15% block of assets with respect to the said assessment year and accordingly, excess depreciation claimed was made to the extent of Rs. 17,86,187.” “We noted that this mistake has occurred at the office of the Chartered Accountant and there is no intention of the assessee to evade the tax. Moreover, the assessee has already accepted assessment and paid taxes.”, the Bench added.

Shri Lakhwinder Singh Panag vs The ITO - 2022 TAXSCAN (ITAT) 1450

The Chandigarh Bench of the Income Tax Appellate Tribunal ( ITAT ) comprising Judicial Member Diva Singh held in favour of the assessee and set aside the order quashing the penalty imposed. Observing that, “the explanation offered cannot be outrightly discarded in the penalty proceedings, the urgent need to clear payments by an assessee functioning outside residential/commercial areas in the peculiar facts by itself, no doubt, may not have been a valid explanation as far as the quantum proceedings are concerned,” however, requirements of the penalty provisions under Section 271(1)(c) of the Income Tax Act, 1961 was considered and it was found by the single  bench that the explanation deserves to be allowed and held that the explanation was satisfactory on this set of facts.

M/s Crayons Advertising (P) Ltd vs Deputy Commissioner of Income Tax - 2022 TAXSCAN (ITAT) 1444

The Income Tax Appellate Tribunal (ITAT), Delhi bench has held that the processing fees for purchase of business assets shall be allowable as expenditure under the provisions of the Income Tax Act, 1961. Allowing the claim of the assesse, a bench of Shri Shamim Yahya (Accountant Member) and Shri Yogesh Kumar US (Judicial Member) observed that “The Ld. counsel for the assessee submitted that the revenue authorities have erred in disallowing the expenditure by holding that processing fee for purchase of capital asset is capital expenditure. In this regard, he relied upon the decision of Hon’ble Supreme Court in the case of India Cements Ltd. vs CIT (1966) 60 ITR 52(SC). We find that in the case of India Cements Ltd. (Supra), Hon’ble Apex Court has expounded that loan is neither an asset nor any business advantage and that nature of expenditure incurred in raising a loan is not dependent upon nature and purpose of loan. Accordingly, we set-aside the order of authorities below and decide the issue in favour of the assessee.”

M/s. Selva Ganesh Constructions Private Limited vs Income Tax Officer - 2022 TAXSCAN (ITAT) 1447

The Income Tax Appellate Tribunal ( ITAT ), Chennai, has recently, while deciding a group of appeals filed before it, held that depreciation is allowable on vehicle registered in the director’s name but used for the company’s own business. “The Assessee has now contended before us that the entire invoices and bills although are in the name of the Directors individually, the entire expenses, i.e. interest expenses, repair expenses and petrol expenses are borne by the Assessee Company, while on the other hand, the learned Senior Departmental Representative supported the orders of the lower authorities.”

Kamaldeep Kaur vs Income-tax Officer - 2022 TAXSCAN (ITAT) 1441

The Delhi bench of the Income tax Appellate Tribunal (ITAT), while allowing the appeal of the assesse, has directed the income tax department to re-verify the claim in connection with the receipt of loan and cash gift as the same is a tradition in the marriage of a female. Thee assesse contended that both the authorities failed to appreciate the fact that there is tradition in marriage of a female. She gets gift etc. and the assessee also had taken loan from various persons who have also confirmed the same, but the authorities below for the reasons best known to them have not considered the evidences. ShriKul Bharat (Judicial Member) observed that “the assessee had filed various evidences in the form of affidavit etc. The learned CIT(A) has brushed aside those evidences without even verifying the veracity of such affidavit. Merely stating that the affidavit was procured subsequent to marriage, in my considered view is not justified. The learned CIT(Appeals) ought to have verified the correctness of the claim of the assessee. I, therefore, set aside the impugned order and restore the assessment to the file of the Assessing officer to decide it afresh after considering the evidences placed by theassessee in the form of affidavit and frame the assessment afresh.”

M/s. Manmohan Textiles Limited vs National Faceless Appeal Centre - 2022 TAXSCAN (ITAT) 1442

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT)has held to treat dividend income as exempt income u/s.10(34) of the Income Tax Act,1961 and held as no tax. A Coram of Shri M Balaganesh, Accountant Member & Smt Kavitha Rajagopal, Judicial Member observed that the dividend has been received by the assessee during the F.Y.2019-20 relevant to A.Y.2020-21 and there was no need for taxing the said dividend income during the year under consideration. The Tribunal directed the AO to treat the dividend income as exempt u/s.10(34) of the Act and an appeal of the assessee was allowed.

Deepak Budhani vs Income Tax Officer - 2022 TAXSCAN (ITAT) 1405

The Income Tax Appellate Tribunal (ITAT), Chandigarh condoned delay of approximately 887 days as the case was of an illiterate person not aware that certain amount received under VRS was exempt. The appeal has been preferred by the assessee against the order passed u/s 250 of the Income Tax Act, 1961 by the National Faceless Appeal Centre, Delhi [NFAC] for assessment year 2017-18. A Single Bench consisting of Sudhanshu Srivastava, Judicial Member held that “I deem it expedient that in the interest of substantial justice, the delay be condoned. I, accordingly, direct the NFAC to condone the delay of 2 years, 5 months and 17 days and adjudicate on assessee’s appeal on merits in accordance with law preferably within a period of one year from the date of receipt of this order after giving due opportunity to the assessee to present his case.”

M/s Oscar Investment Ltd vs Dy. C.I.T - 2022 TAXSCAN (ITAT) 1439

The Income Tax Appellate Tribunal (ITAT), New Delhi held that deduction of foreign exchange loss suffered is duly allowable as loss incurred during year. The Bench consisting of N K Billaiya, Accountant Member and Kul Bharat, Judicial Member confirmed the findings of CIT(A) and observed that “In view of above, factual and legal position the deduction on account of foreign exchange loss suffered by the appellant during the year is duly allowable as loss incurred during the year. Therefore, AO is directed to allow the said Foreign Exchange Loss under reference.

Shri Shivaji Bhimaji Gaikwad vs The Income Tax Officer - 2022 TAXSCAN (ITAT) 1422

The Income Tax Appellate Tribunal (ITAT), Pune Bench held that disallowance u/s. 40A(3) of the Income Tax Act, 1961 without appreciating business expediency in payment towards genuine transaction. A Single Bench consisting of SS Viswanethra Ravi, Judicial Member held that “The contention of the assessee from the day one is that the sellers demanded the assessee to pay in cash which is part and parcel of total sale consideration. Further, there is no dispute with regard to identification of the sellers as well as their confirmations in respect of payment in cash from the assessee. It is also not disputed that the said cash payment is part and parcel of total sale consideration which is reflected in the purchase deed. Further, the sellers also admitted the payment of cash before the registering authority under due process.”

Toyota Tsusho India P. Ltd. vs Joint / Deputy Commissioner of Income Tax - 2022 TAXSCAN (ITAT) 1459

The Income Tax Appellate Tribunal (ITAT), Bangalore Bench, has recently, in an appeal filed before it by Toyota Tsusho India P. Ltd., while deleting the disallowance under section 14A, held that if the assessee has not earned any exempt income during the year under consideration no disallowance is warranted as per the provisions of section14A of the Income Tax Act ,1962.We further notice that the AO has made the disallowance on the basis that the investment could potentially earn income which substantiates the contention of the assessee that in the year under consideration the assessee has not earned any exempt income.”, the bench observed.

Jain Peripherals P. Ltd vs DCIT - 2022 TAXSCAN (ITAT) 1458

The Income Tax Appellate Tribunal (ITAT), Delhi Bench, has, recently in an appeal filed before it, held that income tax penalty shall not be imposed for disallowance of bonafide claim. “The said documents go to show that almost all the relevant details, may not be in the form of documents specifically qua expenditures incurred, otherwise available before the Assessing Officer for consideration.”

Shashank Shekhar Singh vs The Deputy Commissioner ofIncome Tax - 2022 TAXSCAN (ITAT) 1454

The Income Tax Appellate Tribunal ( ITAT ) Ahmedabad Bench, has recently, in an appeal filed before it held that ill – health and transfer to new place constitutes ‘reasonable cause’ for delay in filing appeal. “Considering the ill health of the assessee and transfer of his residence to New Delhi, we find that the assessee is sufficiently prevented from not furnishing the above documents to the Assessing Officer. Therefore, to meet the ends of justice, we deem fit it to set aside the case to the file of the Assessing Officer and give one more opportunity to the assessee to explain its case with these additional evidences as last opportunity by imposing a cost of Rs. 10,000/”.

Sirur Developers Pvt. Ltd. vs JCIT - 2022 TAXSCAN (ITAT) 1455

The Income Tax Appellate Tribunal (ITAT), New Delhi bench deleted penalty imposed under Section 271C of the Income Tax Act 1961 and held that there is no No TDS on payment of External Development Charges (EDC) to HUDA. The Bench consisting of Challa Nagendra Prasad, Judicial Member and B R R Kumar, Accountant Member held that “Facts being identical, respectfully following the decision of the Tribunal in the case of TDI Infrastructure Ltd. Vs. Addl. CIT we delete the penalty levied under section 271C of the Act.”

Sadhanakari Khaja vs ITO - 2022 TAXSCAN (ITAT) 1453

The Hyderabad Bench of the Income Tax Appellate Tribunal (ITAT) has held that addition on unexplained deposits deleted without valid documents is not allowable. Merely because certain persons have stated that the deposits appearing in the bank account of the assessee belong to them and confirmed the same through affidavits, but the same is merely self-serving documents which cannot be relied upon especially when the assessee himself was a licensed holder of retail sale of IMFL and this fact has not been verified by the CIT(A), observed Shri Rama Kanta Panda, Accountant Member and Shri K. Narasimha Chary, Judicial Member.

Nitan Chhatwal vs DCIT - 2022 TAXSCAN (ITAT) 1443

The addition of capital gain under section 68 as unexplained cash credit without incriminating material is not permissible, the Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held as above. The AO held that the capital gains declared by the assessee are bogus in nature and accordingly assessed them u/s 68 of the Act as unexplained cash credit based on the report of the investigation wing of the income tax department, which alleged that the prices of certain shares termed as “penny stocks” have been rigged to gain the advantage of capital gain/capital loss.

R V Deshpande HUF vs Principal Commissioner of Income Tax - 2022 TAXSCAN (ITAT) 1456

The Income Tax Appellate Tribunal (ITAT) Bangalore Bench, has recently, in an appeal filed before it upheld the revisional order on the ground of LTCG exemption on STT payment without verification. “In view of the above discussion the order of the PCIT u/s. 263 is modified to the extent that order u/s.143(3) is set aside with regard to allowing the claim of exemption of long term capital gains based on payment of STT. It is ordered accordingly.”

Mankind Pharma Ltd. vs DCIT - 2022 TAXSCAN (ITAT) 1461

The Income Tax Appellate Tribunal(ITAT) at Delhi has recently observed in a major denial of relief against assessee, Mankind Pharma Ltd. that, freebies given to doctors are illegal and does not fall under the head “Business Promotion Expenses”, disallowing a claim of Rs.1,06,78,600/-. The tribunal, placing reliance on the said case, observed that, “acceptance of freebies by medical practitioners was punishable as per Circular issued by Medical Council of India under MCI Regulations, 2022, gifting of such freebies to medical practitioners would also be prohibited by law and therefore expenditure incurred in distribution of freebies would not be allowed as deduction in view of Explanation – 1 to Section 37(1) of the Income Tax Act” and concurred with the order of the Commissioner of Income Tax (Appeals).

Vodafone Idea Ltd. vs Dy. Commissioner of Income Tax-3(2) - 2022 TAXSCAN (ITAT) 1445

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has recently held that no Tax Deducted at Source (TDS) liability arises from discount on prepaid sim cards and recharge vouchers, granting a major relief to Vodafone Idea Ltd.(formerly Idea Cellular Ltd.). It was observed by the bench that the matter had already been settled in favour of the assessee, by the Rajasthan High Court. The High Court relied on the nature of relationship between the assessee and distributors, which was followed in this matter by the Tribunal.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates.