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 November 15 to November 20, 2021.
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) while disallowing the Income Tax Exemption on bogus Long Term Capital Gains (LTCG) held that the onus to prove the genuineness of trading of shares leading to LTCG gain lies on the assessee. The Coram of Judicial Member, Kuldip Singh, and Accountant Member, Prashant Maharishi ruled that a genuine transaction needs to be proved to be genuine by the person who substantially asserts the same and not by the Revenue as contended by the assessee because once the assessee has been called upon to prove the genuineness of the trading of the shares leading to LTCG gain, the onus lies upon him which he fails to discharge.
The Delhi bench of the Income Tax Appellate Tribunal (ITAT), Delhi bench has held that loan on interest received from the sister concern to fulfill the enhanced requirement of working capital for export orders does not attract the provisions of deemed dividend under section 2(22)(e) of the Income Tax Act, 1961.
The bench comprising Judicial Member Mr. Amit Shukla and Accountant Member B R R Kumar relied on the decision of the Supreme Court in the case of Rameshwarlal Sanwarmal Vs. CIT and a few High Court judgments wherein the Courts granted relief to the taxpayers.
The Income Tax Appellate Tribunal (ITAT), Bangalore bench has held that the interest paid on bank loan cannot be liable to Tax Deduction at Source (TDS) and therefore, the disallowance under section 40(a)(ia) of the Income Tax Act, 1961.
While allowing the plea of the assessee, Accountant Member B R Bhaskaran and Judicial Member Beena Pillai held that the interest paid on bank loans is not liable to TDS deduction and hence disallowance u/s 40(a)(ia) is not called for.
The Pune bench of the Income Tax Appellate Tribunal (ITAT) has held that the commission expenditure claimed by the assessee cannot be disallowed for the mere reason that the assessee could not furnish the confirmation letters from the recipients. While holding in favor of the assessee, Judicial Member Mr. Partha Sarathi Chaudhury and Accountant Member Mr. Inturi Rama Rao observed that the issue in the present appeal relates to the allowance of commission expenditure of Rs.42,53,300/-.
The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) has directed the income tax department to reconsider the claim of non-recoverable advances to employees and vendors as a business loss under section 37(1) r.w.s. 28 of the Income Tax Act, 1961.
While disposing of the second appeal filed by the assessee-Company, Judicial Member Mr. George George K and Accountant Member B R Bhaskaran held that the claim made by the assessee is not towards bad debt u/s 36(1)(vii) of the I.T.Act, but under the provisions of section 28 of the I.TAct as business or trade loss.
The Income Tax Appellate Tribunal (ITAT), Bangalore bench, while allowing an appeal filed by Dr. Chandrashekar Foundation, held that if the cost of assets acquired out of loan funds have already been allowed as application of income, then the repayment of the loan should not be allowed as application. While quashing the order of the first appellate authority, ITAT Vice President N V Vasudevan and Accountant Member Mr. B R Bhaskaran modified the direction of the CIT (Exemptions) and directed the A.O. to examine the claim afresh.
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