ITAT Weekly Round-Up

3 Jun 2023 4:36 PM IST

This weekly round-up analytically summarises the key stories related to the Income Tax Appellate Tribunal (ITAT) reported at Taxscan.in during the previous week from May 27 to June 3, 2023. Addition of loan Amount as Outstanding Balance without Proper Evidence and Documents: ITAT directs AO to Re-adjudicate TSP Engineers Pvt. Ltd vs ITO CITATION: 2023 TAXSCAN (ITAT) 1152 The New...

Read the full article.

This weekly round-up analytically summarises the key stories related to the Income Tax Appellate Tribunal (ITAT) reported at Taxscan.in during the previous week from May 27 to June 3, 2023.

Addition of loan Amount as Outstanding Balance without Proper Evidence and Documents: ITAT directs AO to Re-adjudicate TSP Engineers Pvt. Ltd vs ITO CITATION: 2023 TAXSCAN (ITAT) 1152

The New Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has directed the Assessing Officer to re-adjudicate the case regarding the addition of a loan amount as an outstanding balance.

The tribunal Bench of Judicial Member Astha Chandra and Accountant Member Anil Chadurvedi observed that before the CIT(A), the assessee did not submit any explanation and the stand taken by the Assessing Officer remained uncontroverted. In the absence of any supporting evidence and documents filed by the assessee in support of the impugned outstanding balance of Rs. 14,47,140/-, the CIT(A) confirmed the impugned addition. The two-member Bench further added that the assessee must have an opportunity to present his case before the Assessing Officer. The explanation of the assessee could not come on record. Additionally, it was noted that the assessee had filed certain fresh documents before the Tribunal which the CIT (A)/Assessing Officer had not perused. Therefore, deem it fit to remit this issue also to the file of the Assessing Officer to decide it afresh after allowing reasonable opportunity to the assessee to present his case on the point. In result, the appeal of the assessee was allowed for statistical purposes.

Preparation of fake Documents and Upload of ITR by CA without Consent of Assessee: Hyderabad ITAT remands the matter to AO Venkata Ramana Anupa vs Income Tax Officer CITATION: 2023 TAXSCAN (ITAT) 1153

The Hyderabad Bench of the Income Tax Appellate Tribunal (ITAT) has recently remanded the file for a fresh decision to the file of the Assessing Officer to decide in accordance with the outcome of the criminal case pending against the partners in the matter where the Income Tax Return (ITR) of the assessee was filed without his consent by a Chartered Accountant in connivance with the partners of the Assessee.

The single-member bench of Judicial Member K Narasimha Chary also noted that “The finding by the Board of Discipline of ICAI is to the effect that the said Chartered Accountant, with the connivance of the partners of the assessee, prepared fake documents to support the ITR which was uploaded without the knowledge of the assessee. It prima facie creates any doubt as to whether there is any income in the hands of the assessee for this year or not?” It was also observed that “ICAI is a professional body competent to deal with the complaints against the Chartered Accountants, and the proceedings of the Disciplinary Board thereof carry their own credibility and cannot be simply brushed aside. Due regard has to be given to the findings of such a professional Body. The said findings lend any amount of support to the contention of the assessee.” In the pendency of the criminal proceedings closely related to the matter of the assessee, the tribunal bench allowed the appeal of the assessee for statistical purposes.

ITAT disallows Deduction under Section 80P Due to Late Submission of Return The Parabada Co-op. Milk Producers Society Limited vs The Income Tax Officer CITATION: 2023 TAXSCAN (ITAT) 1154

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has recently disallowed deduction under Section 80P due to late submission of return.

The Single Bench of Judicial Member Suchitra Kamble observed that the assessee should have filed the return within the extended period of due date but the assessee failed to do so. The Assessing Officer thereby issued intimation under Section 143(1) of the Income Tax Act and has categorically disallowed the deduction under Section 80P of the Income Tax Act on the ground of belated returns. It was noted that, “The assessee filed return belatedly and Section 80AC(ii) of the Act is inapplicable in present case. The CIT (A) was right in denying the claim of assessee that of deduction under Section 80P of the Income Tax Act.” In result, the appeal filed by the assessee was dismissed.

No Penalty u/s 271D if Reasonable Cause shown by Assessee: ITAT Narendrakumar Chunilal Soni vs The Joint Commissioner of Income Tax CITATION: 2023 TAXSCAN (ITAT) 1155

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) recently ruled that a penalty under Section 271D of the Income Tax Act, 1961 cannot be levied if a reasonable cause is shown by the assessee.

The two-member Bench consisting of Judicial Member T.R. Senthil Kumar, and Accountant Member Annapurna Gupta observed that ‘’a careful reading of Section 273B encompasses that certain penalties “shall” not be imposed in cases where “reasonable cause” is successfully pleaded. The bench further added that the Jurisdictional High Court in the case of Maa Khodiyar Construction (cited supra) held that no penalty is leviable under Section 271D for cash loans exceeding Rs. 20,000/- from agriculturists living in remote areas when transactions were not doubted.” As a result, the Bench cancelled the penalty and the appeal filed by the Assessee was allowed.

Unexplained Money u/s 69A Received Back through Banking Channel as sale Consideration of Shares: ITAT Upholds Addition u/s 115BBE Rahul Gupta vs Assistant Commissioner of Income Tax CITATION: 2023 TAXSCAN (ITAT) 1156

The Income Tax Appellate Tribunal (ITAT), Raipur Bench, has recently, in an appeal filed before it, on finding that unexplained money under section 69A was received back through banking channel as sale consideration of shares, upheld the addition made under Section 115BBE of the Income Tax Act.

ITAT Coram of Ravish Sood, the Judicial Member thus held: “In terms of my observations, I concur with the view taken by the lower authorities and uphold the addition of Rs.5.40 lac made by the A.O, on the ground that the same was the undisclosed fund of the assessee that was routed back in the garb of the aforesaid transaction of purchase/sale of shares. Thus, the Grounds of appeal raised by the assessee being devoid and bereft of any merit, are dismissed in terms of my aforesaid observations.”

Price paid by Sugar Cooperatives for Purchase of Sugar Cane Higher than FRP Allowable under Recent Amendment u/s 155(19): ITAT Shree Someshwar SSK Ltd vs DCIT CITATION: 2023 TAXSCAN (ITAT) 1157

The Pune Bench of Income Tax Appellate Tribunal (ITAT) has held that price paid by sugar cooperatives for the purchase of sugar cane higher than the fair and remunerative price (FRP) would be allowable as per the recent amendment in clause (19) of Section 155 of the Income Tax Act.

The two-member Bench of Satbeer Singh Godara, (Judicial Member) and Dipak P. Ripote, (Accountant Member) allowed the appeal filed by the assessee directing the AO to refer to the legislative developments as per law.

Penalty u/s 271(1)(c) not Leviable When no Inaccurate Particulars of Income are Furnished by the Assessee: ITAT Khanpur Vibhag Madhyamik Shala Karmchari Dhiran & Grahak Anand. Sahakari Mandali Limited vs A.C.I.T CITATION: 2023 TAXSCAN (ITAT) 1158

The Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench, has recently, in an appeal filed before it, held that penalty under Section 271(1)(c) of the Income Tax Act is not leviable when no inaccurate particulars of income were furnished by the assessee.

ITAT coram of Suchitra Kamble, the Judicial Member, thus held: “The decision of Hon’ble Supreme Court in the case of CIT vs. Reliance Petroproducts, is apt in the present case as the assessee is under bonafide belief that interest income earned on bank deposits is also coming under the purview of claim for deduction under Section 80P of the Act. Thus, the penalty under Section 271(1)(c) of the Act fails on the count of furnishing inaccurate particulars of income. Therefore, the penalty does not survive.”

Interest Income from FD is Eligible for Deduction u/s 10AA: ITAT Jardine Lloyd Thompson Private Limited vs Assistant Commissioner of Income tax CITATION: 2023 TAXSCAN (ITAT) 1159

The Income Tax Appellate Tribunal (ITAT), Mumbai Bench, has recently in an appeal filed before it, held that interest income from FD is eligible for deduction under Section 10AA of the Income Tax Act, 1961.

Mumbai ITAT Coram of Amit Shukla, the Judicial Member and Padmavathy S, the Accountant Member thus held: “In the assessee’s case, we notice that the assessee has placed the surplus funds in FDs and has earned interest from the same. The facts of the assessee’s case being identical to the case of Hewlett Packard Global Soft Ltd, respectfully following the above full bench decision of the Hon’ble Karnataka High Court, we hold that the interest income earned by the assessee is eligible for deduction under section 10AA. Accordingly, we delete the disallowance made by the Assessing Officer in this regard.”

No Penalty can be Imposed u/s 271(1) when Income Surrendered by Assessee During Survey is Shown in a Regular Income Tax Return Filed within the Prescribed Time: ITAT The DCIT vs NBM Iron & Steel, Trading Pvt. Ltd. CITATION: 2023 TAXSCAN (ITAT) 1160

The Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench, has recently, in an appeal filed before it, held that no penalty under section 271 (1) can be imposed when income surrendered by the assessee during the survey is shown in the regular income tax return filed within the prescribed time.

ITAT coram of Annapurna Gupta, the Accountant Member and Shri T.R. Senthil Kumar, the Judicial Member, thus held: “The Hon’ble Delhi High Court in the case of CIT vs. SAS had held that where income surrendered by the assessee during survey had been shown by it in its regular income tax return filed within the prescribed time, the penalty could be imposed. Thus, the CIT(A) has followed the above decisions and deleted the penalty on the declared income of Rs. 1,80,00,000/-. However, the CIT(A) had confirmed the levy of penalty on the balance disputed income of Rs. 4,08,097/-. Thus, we do not find any infirmity in the order passed by the CIT(A), which partly deleted the penalty levied under Section. 271(1)(c) of the Act. Thus, the grounds raised by the Revenue is devoid of merits and the same is dismissed.”

Stamp Duty Valued as Full Value of Consideration u/s 50C(1): ITAT directs Re-Computation of Capital Gains Padmakar Matondkar vs Commissioner of Income-tax CITATION: 2023 TAXSCAN (ITAT) 1161

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has directed the re-computation of capital gain as the stamp duty was valued as full value of the consideration by invoking the provisions under Section 50C(1) of the Income Tax Act, 1961.

The Bench observed that, sale consideration for transfer of the capital assets, being the suit property, could have been decided by the parties to the dispute. The two-member Bench of Maharishi, (Accountant Member) and Rahul Chaudhary, (Judicial Member) allowed the appeal filed by the assessee directing re-computation of the capital gain after making reference to the valuation officer and considering the report of valuation officer as per law.

Notice Issued Within Limitation Period Specified u/s 149(1)(c): ITAT Upholds Reassessment Govindbhai Laljibhai Kakadia vs Commissioner of Income-tax CITATION: 2023 TAXSCAN (ITAT) 1162

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has upheld the reassessment order as the notice was issued within the limitation period specified under Section 149(1)(c) of the Income Tax Act.

The Bench dismissed the appeal filed by the assessee holding that the Assessing Officer was entitled to reopen an assessment for the Assessment Year 2006-07 as the jurisdictional requirements specified under Section 147 of the Income Tax Act were satisfied and the notice, dated 12/03/2014 – pursuant to which Assessment Order dated 25/03/2015 was passed, has been issued under Section 148 of the Income Tax Act within the limitation period specified under Section 149(1) of the Income Tax Act.

No Explanation as to Source of Credit Card Payment: ITAT upholds Addition u/s 69C of Income Tax Act Pavuluri Sylendra vs Income Tax Officer CITATION: 2023 TAXSCAN (ITAT) 1163

The Hyderabad Bench of the Income Tax Appellate Tribunal (ITAT) has upheld the addition under Section 69C of the Income Tax Act, 1961 as explanation as to source of credit card payment was not furnished by the assessee.
The Bench observed that the assessee had taken a plea before the Commissioner of Income Tax Appeals (CIT(A)) that he had received a sum of Rs. 2.5 lakhs by way of cash gifts from his father, from out of the pension savings but the assessee failed to substantiate the same with reference to the ITR, bank statement etc., of his father. The assessee had also failed to appear and to dispute the correctness of the additions made by the AO and confirmed by the learned CIT(A) before the tribunal. Thus, the Single Bench of K. Narasimha Chary, (Judicial Member) dismissed the appeal filed by the assessee

Non-Consideration of Valuation and Jantri Value for Determining Nature of Sold Land: ITAT remands matter to CIT(A) Patel Ambalal Haridas vs Income Tax Officer CITATION: 2023 TAXSCAN (ITAT) 1164

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) recently remanded the matter to CIT(A) due to non-consideration of valuation and Jantri value for determining the nature of sold land.

The Single Bench of Judicial Member Suchitra Kamble observed that the Jantri value determined by the Government of Gujarat was Rs. 300 per sq. yard for agricultural land. However, the valuer and CIT(A) mistakenly applied the Jantri value meant for non-agricultural land. The valuation report and the Jantri rate were not properly verified, the Tribunal observed. Thus, it was held that the case should be sent back to CIT(A) to consider these factors and provide the assessee an opportunity to be heard. In result, the appeal of the assessee is partly allowed for statistical purpose.

Assessment Order without Issuing proper Notice: ITAT quashes Assessment Order and Addition Ballu Singh vs ITO CITATION: 2023 TAXSCAN (ITAT) 1165

The New Delhi Bench of the Income Tax Appellate Tribunal (ITAT) quashed the assessment order and addition of income due to the invalid notice issued by assessing officer.

A single member bench comprising of Sri. Kul Bharat (Judicial) held that the based on various decisions of High courts and Supreme Courts, the issuance of notice under Section 148 of the Income Tax Act was bad in law and without jurisdiction, and that the impugned assessment has been framed in violation of natural justice. The tribunal bench also deleted the addition of unexplained income passed by assessing officer due to non-justification while making the addition. The Tribunal allowed both the Appeals filed by the Assessee.

NLU not conducting ‘Business’, exists solely for Legal Educational Purposes: ITAT quashes Penalty for Failure to Audit National Law University vs Additional/Joint/Deputy/ Assistant Commissioner of income Tax CITATION: 2023 TAXSCAN (ITAT) 1167

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has recently quashed the penalty demanded failure to audit the National Law University (NLU) under Section 271B of the Income Tax Act, 1961.

The tribunal bench of Accountant Member Anil Chaturvedi and Judicial Member Anubhav Sharma observed that “It can be appreciated that the assessee university has been established by the Act of Legislative Assembly of the National Territory of Delhi, and Subsection (3) of Section 3 of the University Act, provides for the establishment of University and that “The University shall be engaged in teaching and research in law and in allied disciplines.”. The preamble of the University Act makes it very apparent that the purpose of the establishment of a Law University is the establishment of a national-level institution of excellence in the field of legal education and research in the NCT of Delhi.’ It was also noted by the two-member tribunal that, “The object of the university as specified in section 4 of the University Act, the powers and function of the University defined u/s 5 grossly indicate that the University is not engaged in any ‘business’ as understood for the purpose of the Act. It is existing solely for educational purposes. It is not established for the purpose of profit.“ It was thus held that “Tax Authorities below have fallen in grave error on facts and law while invoking the penalty provisions”, allowing the appeal of the assessee-National Law University.

ITAT Orders Reassessment after Assessee Inadvertently Files ITR in Wrong Form Young Mens Welfare Society vs ADIT (CPC) CITATION: 2023 TAXSCAN (ITAT) 1168

The Chennai bench of the Income Tax Appellate Tribunal (ITAT) ordered reassessment in this case where the assessee inadvertently filed the return in the wrong form.

The Bench consisting of Judicial Member, Sanjay Garg and Account Member, Dr. Manish Borad set aside the impugned orders of the lower authorities and restore the matter to the file of Assessing Officer with a direction to examine the contentions raised by the assessee and tax the assessee at the rates as applicable to the assessee considering the revised return filed by the assessee. Both the appeals filed by the assessee against the separate orders dated 19.09.2022 of the National Faceless Appeal got allowed and opened for re-assessment, as a result.

ITAT dismisses Interest Charged by AO on Reply to Notice u/s 148 Filed within 30 Days Mrs. Ruchita Jindal vs DCIT CITATION: 2023 TAXSCAN (ITAT) 1169

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) recently dismissed the interest charged by the Assessing Officer on reply to notice under Section 148 of Income Tax Act filed within 30 days.

The Single Bench consisting of an Accountant Member Amarjit Singh observed that the assessing officer erred in charging interest under Section 234A of Rs.2,895/- on the reason that assessee has filed the return of income in response to notice under Section 148 of the Income Tax Act within 30 days from the date of notice is restored to the file of the Assessing Officer for deciding the same as per law after verification of the claim made by the assessee. Therefore, this ground of appeal of the assessee was allowed for statistical purposes. The Bench further observed that the assessee made part of the payment of Rs. 51 lac vide cheque no. 620130 drawn from the corporation bank claiming as date of allotment. The payment plan was also referred to a page no. 6 of the document comprising 26 pages placed in the paper book. The Departmental Valuation Officer as per annexure 1(A) of the valuation report had also determined the valuation of the flat as on 01.11.2013 at Rs.7,05,66,565/- on the date of allotment. After considering the provisions of Section 56(2) (vii)(b) of the Income Tax Act. The single-member tribunal Bench directed the assessing officer to restrict the addition to the extent of Rs.5,66,565/- after taking into consideration the value determined on the date of allotment by the District Valuation Officer as on 01.11.2013. In result, the appeal filed by assessee was partly allowed.

No addition on Gross Receipts reflected in Form 26AS inclusive of Service Tax: ITAT Mediserv House vs Income Tax Officer CITATION: 2023 TAXSCAN (ITAT) 1170

The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) has recently held that no addition could be made in gross receipts reflected in Form 26AS inclusive of service tax.

It was observed by the tribunal that “Addition made by the AO is on account of difference between the figure of gross receipts reported by the assessee which is including the service tax component whereas the figure reported in Form 26AS is inclusive of the service tax component which has been adequately reconciled by the assessee”. Thus, the two member bench of the Rajpal Yadav, (Vice President) and Girish Agrawal, (Accountant Member) allowed the appeal filed by the assessee and deleted the addition made by the Assessing Officer.

Subsidy received from Government of India to encourage the Deployment of Biomass Co-Generation system in Industries is Capital Receipt : ITAT M/s. Manali Petrochemical Ltd. vs The Deputy Commissioner of Income-tax (LTU-Appeals)-1 CITATION: 2023 TAXSCAN (ITAT) 1171

The Chennai bench of Income Tax Appellate Tribunal (ITAT) has recently held that subsidy received from the Government of India to encourage the development of biomass co-operation system in industries is capital receipt.

The two member bench of V. Durga Rao, (Judicial Member) and Manjunatha. G (Accountant Member) held that the Subsidy received by the assessee from Government of India through Tamil Nadu Energy Development Agency, is capital subsidy given by the Government to enable the assessee to set up new power plants in line with a program on biomass cogeneration system in industry.

AO can initiate proceedings either u/s 143(2) or 147 of IT Act before completion of Assessment of Deemed Income Escapement: ITAT Sahara India Power Corporation Limited vs ACIT CITATION: 2023 TAXSCAN (ITAT) 1172

The Delhi bench of Income Tax Appellate Tribunal (ITAT) has recently held that assessing officers could initiate proceedings either under Sections 143(2) or 147 of Income Tax Act, 1961 before completion of assessment in case of deemed income escapement.

It was observed by the tribunal that The AO rightly recorded the reason that reopening of assessment so as to bring the escaped income into tax. The notice issued by AO under section 147 r.w.s. 148 of the Income Tax Act is not time barred on the reason that the AO has not initiated the proceedings by issue of notice under Section 143(2) of the Income Tax Act. Therefore, the two member bench of the Dr. B.R.R. Kumar, (Accountant Member) and Yogesh Kumar Us, (Judicial Member) allowed the appeal filed by the revenue.

Interest Income from Investment in Cooperative Banks by Cooperative Societies Eligible for Deduction u/s 80P(2)(d): ITAT M/s. Premium Tower Cooperative Housing Society Ltd vs Commissioner of Income Tax CITATION: 2023 TAXSCAN (ITAT) 1173

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that the interest income received by cooperative societies from investment made in the cooperative banks are eligible for deduction under Section 80P(2)(d) of the Income Tax Act.

The Bench further observed that, if there was any interest income which was earned on deposits or investment made with cooperative societies, the same would fall in the category activity or the business, but still would be eligible for deduction under the specific provision of Section 80P(2)(d) of the Income Tax Act.

Addition of LTCG by invoking S. 50(c) of Income Tax Act without retrospective effect is invalid : ITAT directs Re-adjudication Shri Prakash Sadashiv Sonawane vs The Income Tax Officer CITATION:2023 TAXSCAN (ITAT) 1174

The Pune Bench of Income Tax Appellate Tribunal (ITAT) held that the addition of long term capital gain by invoking section 50(c) of the Income Tax Act 1961 which does not carry retrospective effect is invalid.

The two member bench comprising of Satbeer Singh Godaraj ( judicial) And Dr. Dipak P. Ripote (Accountant) held that there is no concrete finding either in re-assessment or in the National Faceless Appeal Centre (NFAC) order as to whether the assessee had received whole or part of the consideration by way of the specified modes or not so as to attract sec.50C(1) first and second proviso of the Income Tax Act 1961 inserted by the Finance Act 2016 as they do not carry retrospective effect. The tribunal restore the matter back to the assessing officer for re-adjudication while allowing the appeal.

Interest Income from Fixed Deposit is eligible for Deduction u/s 80IA: ITAT Viramgam Mahesana Project Ltd. vs ACIT CITATION: 2023 TAXSCAN (ITAT) 1175

The New Delhi Bench of Income Tax Appellate Tribunal (ITAT) held that the interest income earned on fixed deposit by bank and all other interest income was eligible for deduction under Section 80IA of the Income Tax Act, 1961.

The two member bench comprising of Anubhav Sharma(Judicial) And Shamim Yahya (Accountant) held that the tax Authorities had fallen in error in denying the benefit of Section 80IA of Income Tax Act, 1961 to the assessee/appellant while allowing the appeal.

Expenditure Claimed on account of Forward Premium relating to Forward Contracts in respect of Foreign Currency Loans are Capital Expenditure: ITAT The ACIT vs Tamilnadu Newsprint and Papers Ltd CITATION: 2023 TAXSCAN (ITAT) 1176

The Chennai bench of the Income Tax Appellate Tribunal (ITAT) has recently held that expenditure claimed on account of forward premium relating to forward contracts in respect of foreign currency loans are capital expenditure.

It was observed by the tribunal that “provisions of section 43A of the Income Tax Act specifically provides that the amount of increase or decrease in the liability due to fluctuation in exchange rate should be adjusted against the actual cost of the capital expenditure or the cost of acquisition of capital asset.” Further relying upon the decision of CIT vs. Elgi Rubber Products Ltd, the tribunal bench held that having regard to the provisions of Section 43A of the Income Tax Act, the additional amount paid to the ICICI due to fluctuation in exchange rate was capital in nature and not revenue. Finally the two member bench of Mahavir Singh, (Vice President) and Manjunatha.G, (Accountant Member) dismissed the appeal filed by the assessee.

Employees of Ajmer Vidhyut Vitran Nigam are not State or Central Government Employees: ITAT denies Exemption u/s 10(10AA) of IT Act Shri Devendra Kumar Gupta vs The CIT (Appeals) CITATION: 2023 TAXSCAN (ITAT) 1177

The Jaipur Bench of Income Tax Appellate Tribunal (ITAT) has denied exemption under Section 10(10AA) of the Income Tax Act, 1961 as the employee of Ajmer Vidhyut Vitran Nigam could not be regarded as a state or central government employee.

The two-member Bench of Sandeep Gosain (Judicial Member) noticed that the assessee had merely claimed that he was working as State Government Employee whereas the pension and other emoluments had been issued by Ajmer Vidhyut Vitran Nigam Ltd. The said Ajmer Vidyut Vitran Nigam Ltd. was appearing as a Public Sector Undertaking on the official website of the Comptroller & Auditor General in cag.gov.in and also under Rajasthan PSU’s on the website indianpsu.com and other publicly available documents. The Bench dismissed the appeal filed by the assessee.

Expenses Recorded in Cash Book Subsequent to Survey not Bogus: ITAT Shri Mehul Prakash Mehta vs DCIT CITATION: 2023 TAXSCAN (ITAT) 1178

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that the expenses recorded in cash books subsequent to survey operations were not bogus.

The two-member Bench of Amit Shukla (Judicial Member) and Padmavathy S. (Accountant Member) noted that the assessee was doing regular business throughout the year and there could not be a situation where no expenses were incurred from the first of the financial year till the date of search. The Bench allowed appeal holding that the expenses booked by the assessee upto the date of survey could not be treated as bogus only for the reason that the same were accounted in the books of account subsequent to the date of search.

Ramamirtham Mangaladhevi vs ITO CITATION: 2023 TAXSCAN (ITAT) 1179

The Chennai bench of the Income Tax Appellate Tribunal (ITAT) has recently while quashing the reopening assessment under Section 148 of the Income Tax Act, 1961 held that there is no failure on the part of the assessee to disclose material facts during scrutiny assessment under Section 143(3) of the Income Tax Act, 1961.

Payment of Education cess cannot be considered as an expenditure u/s 37 and 40(a)(ii) of Income Tax Act : ITAT Maral Overseas Ltd vs DCIT CITATION: 2023 TAXSCAN (ITAT) 1180

The New Delhi bench of Income Tax Appellate Tribunal (ITAT) held that the payment of educational cess should not be allowed as an expenditure under section 37 and 40(a)(ii) of Income Tax Act 1961.

The two member bench comprising of Shri Yogesh Kumar U.S (Judicial) and Shri Anil Chaturvedi (Accountant) held that the education cess paid by the Assessee would not be allowed as an expenditure under Section 37 read with Section 40(a) (ii) of the Income Tax Act 1961 while dismissing the appeal.

Rejection of Maintenance Claim u/s 40(a)(ia) of Income Tax Act without Proper Verification: ITAT quashes Order M/s. Mall Hotel Ltd vs Dy. CIT CITATION: 2023 TAXSCAN (ITAT) 1181

The New Delhi bench of Income Tax Appellate Tribunal(ITAT) held that the claim of maintenance for building under Section 40(a)(ia) of Income Tax Act, 1961 rejected without proper verification of challan and papers by Commissioner.

The two member bench comprising of Shri Yogesh Kumar U.S (Judicial Member) and Shri Anil Chaturvedi (Accountant Member) held that the Commisioner had committed an error in making proportionate disallowance of building repairs treating the same against the rental income. It was thus held that the maintenance claim should be allowed made by the assessing officer and deleted the order passed by the Commissioner while allowing the appeal.

Credit Entries Appearing in Current & Savings Accounts are Gross Receipts from Business Transactions, 8% Profit Rate Applicable: ITAT Smt. Gunaseelan Janaki Radha vs Income Tax Officer CITATION: 2023 TAXSCAN (ITAT) 1182

The Chennai bench of the Income Tax Appellate Tribunal (ITAT) has recently held that credit entries appearing in current and saving accounts are gross receipts from business transactions hence 8% profit rate should be applied.

It was observed by the bench that the assessee could not submit any documentary evidence that the profit rate is lower than 8% as computed by the AO. The assessee has not maintained any books of accounts nor any bills and vouchers. The two-member bench of Mahavir Singh, (Vice President) And Manjunath. G, (Accountant Member) dismissed the appeal filed by the assessee. S. Sridhar, advocate appeared for the assessee. AR.V. Sreenivasan, an advocate appeared for the revenue.

Application for Registration u/s 80G(5)(vi) of IT Act not allowable, if Trust constructs Building deriving Funds from Trust on Land Owned by Trustees: ITAT Mauli Multipurpose Organisation vs The CIT CITATION: 2023 TAXSCAN (ITAT) 1183

The Pune bench of Income Tax Appellate Tribunal (ITAT) has recently held that application for registration under Section 80G(5)(vi) of Income Tax Act, 1961 should not be allowable, if trust constructed building deriving funds from the trust on land owned by trustees.
It was observed by the tribunal that activity of construction of buildings as per the terms of the lease agreement is a direct benefit of the persons covered under Section 13(3) of the Income Tax Act which clearly violates the conditions mentioned under Section 80G(5)(vi) of the Income Tax Act. Further the lease agreement is not containing automatic renewal clause and the trustees can dispossess the assessee from the building constructed by the assessee from its funds. The assessee’s trust after deriving the benefit of donations and constructing buildings on the land belonging to the trustees is a tax free asset, will hand over the said tax free asset to the trustees at the end of lease period of 30 years. The Two member bench of S.S. Viswanethra Ravi, (Judicial Member) and G.D. Padmashali, (Accountant Member) upheld the order of CIT(Exemption), rejecting the application for grant of recognition under Section 80G(5)(vi) of the Income Tax Act.

Section 69A of IT Act not applicable if Assessee has plausible Explanation regarding Source of Jewellery Found during Search : ITAT deletes Addition Jayashri Shrikant Deshmukh vs ACIT CITATION: 2023 TAXSCAN (ITAT) 1184

The Pune bench of Income Tax Appellate Tribunal (ITAT) has recently while deleting the addition made by the Assessing Officer (AO) held that provision of Section 69A of the Income Tax Act should not be applied if assessee has brought plausible explanation regarding the source of jewelry found during search.

Tribunal while considering the appeal, observed that in terms of the CBDT Instruction dated 11.05.1994 the Assessing Officer treated 850 gms of gold jewellery as explained. As regards to the balance of jewellery of 107.48gms, the assessee had offered an explanation that this jewellery was acquired out of the agricultural income generated by the Bigger HUF on the lands held by it. This explanation cannot be termed as “not plausible explanation”. Therefore, if the Assessee brought plausible Explanation regarding Source of Jewelry Found during Search no addition can be made under Section 69A of the Income Tax Act. Hence, the two member bench of tribunal comprising Inturi Rama Rao (Accountant Member) and S. S. Viswanethra Ravi (Judicial Member) deleted the addition and allowed the appeal filed by the assesee.

ITAT deletes ex parte Addition u/s 68 of Income Tax Act made during COVID 19 Pandemic Sh. Abdul Hamid Khan vs ITO CITATION: 2023 TAXSCAN (ITAT) 1185

The Amritsar Bench of Income Tax Appellate Tribunal (ITAT) has deleted the ex parte addition imposed under Section 68 of the Income Tax Act, 1961 made during the Covid-19 Pandemic.

The two-member Bench of M. L. Meena (Accountant Member) and S.H. Anikesh Banerjee (Judicial Member) observed that the assessee’s appeal was in hearing during the pandemic of Covid. It is pertinent that the entire amount of cash was duly verified by the auditors of the assessee. Both the assessment and appeal were ex parte and assessee was also denied to explain the source of cash deposit in the bank account The Tribunal Bench allowed the appeal directing to give a reasonable opportunity to submit the documents in favour of the argument.

Interest-Free Funds advanced to Sister Concern for Purchase of Land are Revenue in Nature: ITAT RNS Infrastructure Limited vsThe Deputy Commissioner of Income Tax CITATION: 2023 TAXSCAN (ITAT) 1186

The Bangalore bench of Income Tax Appellate Tribunal (ITAT) has recently held that interest-free funds advanced to sister concern for purchase land are revenue in nature.

It was observed by the tribunal that the AO proportionately disallowed the interest by holding that the interest should be capitalized as per proviso to section 36(1)(iii) of the Income Tax Act, 1961 because the assets were not put to use during the impugned assessment year. Moreover, on going through the ledger account of Naveen Hotels in the books of the assessee company, it was noticed that the interest-free funds have been given on various dates on a piece-meal basis and the amount has also been received back from the sister concern on different dates, but no interest has been charged on the advances. The two-member bench of George George K., (Judicial Member) and Laxmi Prasad Sahu, (Accountant Member) allowed the appeal filed by the assessee.

Disallowance u/s 14A r.w.r 8D, cannot Exceed Quantum of Exempt Income Earned During Particular Assessment Year: ITAT Jubilant Securities Pvt. Ltd. vs DCIT CITATION: 2023 TAXSCAN (ITAT) 1187

The Delhi Bench of Income tax Appellate Tribunal (ITAT) has held that disallowance under Section 14A of the Income Tax Act 1961 read with rule 8D could not exceed the quantum of exempted income earned during the particular assessment year.

The two-member Bench of Saktijit Dey, (Judicial Member) And M Balaganesh, (Accountant Member) deleted the penalty holding that as per the ratio laid down in various judicial precedents, the disallowance under Section 14A read with Rule 8D, could not exceed the quantum of exempt income earned during a particular assessment year. The Bench allowed the appeal filed by the assessee holding that there was a valid reason available to the assessee for restricting the disallowance to the extent of exempt income earned. Merely because assessee accepted the disallowance made by the Assessing Officer, it could not automatically lead to the conclusion that the assessee had under reported its income.

Assessee cannot be Non-Filer or Undeclared of Tax in Return on Wrong Allotment of PANs: ITAT Directs Re-Adjudication Samreen Shafi Chattabal Channa Mohalla vs ITO CITATION: 2023 TAXSCAN (ITAT) 1188

The Amritsar Bench Income Tax Appellate Tribunal (ITAT) has directed re-adjudication as the assessee could not be treated as non-filter or undisclosed of tax in return on wrong allotment.

The two-member Bench of M. L. Meena, (Accountant Member) and S.H. Anikesh Banerjee, (Judicial Member) observed that the assessee was allotted two PAN and the assessee was regularly filing the return and declared the income in old PAN. The Bench allowed the appeal holding that the assessee had never concealed his income or turnover before the revenue authorities and assessee could not be set as a non-filer or undeclared of tax in the return because he had made a wrong allotment of two PANs.

Assessee Lawfully Bound to Prove Huge Long Term Capital Gain Claims to be Genuine: ITAT Denies Exemption u/s 10(38) Sangeeta Devi Jhunjhunwala vs ITO CITATION: 2023 TAXSCAN (ITAT) 1189

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has denied exemption under Section 10(38) of the Income Tax Act 1961 holding that the assessee is lawfully bound to prove huge long term capital gain which was claimed to be genuine.

The two-member Bench of B.R.R Kumar, (Accountant Member) and Astha Chandra, (Judicial Member) in the light of the judicial precedents set out treating the impugned transactions as sham and discarding the assessee’s explanation as not satisfactory. The Bench upheld the disallowance of exemption under section 10(38) of the Act on long term capital gain holding that the assessee had failed to discharge the onus cast upon her under Section 68 of the Income Tax Act.

ITAT directs to Delete Disallowance of Expenditure incurred towards Exempt Income based on Book Profits M/s.Manali Petrochemical Ltd vs The Deputy Commissioner of Income-tax CITATION: 2023 TAXSCAN (ITAT) 1190

The Income Tax Appellate Tribunal, Chennai Bench, has recently, in an appeal filed before it, directed to delete the disallowance of expenditure incurred towards except income based on book profits.

Hearing the opposing contentions of both sides as submitted by Shri. R. Vijayaraghavan, the Advocate on behalf of the assessee, and by Shri. P. Sajit Kumar, the JCIT on behalf of the Revenue, the ITAT coram of V. Durga Rao, the Judicial Member and Manjunatha G, the Accountant Member thus, held: “We find that the issue of addition towards disallowance under Section. 14A r.w.r. 8D of the I.T. Rules, 1962, to book profit computed under Section. 115JB (2) of the Act, is covered in favour of the assessee by the decision of the ITAT Special Bench in the case of ACIT vs Vireet Investments Pvt Ltd, where it has been clearly held that the computation of clause (f) to Explanation (1) of section 115JB (2) of the Act, is to be made without resorting to the computation as contemplated under Section. 14A r.w.r. 8D of the I.T. Rules, 1962. Thus, by following the decision of ITAT Special Bench, we direct the Assessing Officer to delete additions made towards disallowance under Section. 14A r.w.r. 8D of the I.T. Rules, 1962 to book profit computed under Section. 115JB(2) of the Act.”

Use of Vehicles by Directors / Employees as per Terms and Conditions of Employment is not Personal use: ITAT sets aside Disallowance of Vehicle Expenses Incurred Pushpak Steel Industries Private Limited vs ACIT CITATION: 2023 TAXSCAN (ITAT) 1191

The Income Tax Appellate Tribunal (ITAT), Pune Bench, has recently, in an appeal filed before it, while setting aside the disallowance of vehicle expenses incurred, held that the use of vehicles by directors / employees as per the terms and conditions of employment, is not personal use.

Hearing the contentions of both sides as presented by Shri Sarvesh Khandelwal, on behalf of the assessee, and by Ms. Neha Deshpande, on behalf of the Revenue, the ITAT Panel of R.S Syal, the Vice- President, thus held: “I fail to see any rationale in disallowing the expenses incurred on cars as for personal use, when admittedly these have been provided to director-employees. A company is a separate legal entity distinct from its directors or employees. As such, there can be no question of treating the use of vehicles by the directors/employees as a personal use by the company. I, therefore, order for the deletion of disallowance of expenses incurred on vehicles.”

Penalty u/s 271(1)(c) not Leviable When no Inaccurate Particulars of Income are Furnished by the Assessee: ITAT The Khanpur Vibhag Madhyamik Shala Karmchari Dhiran & Grahak Sahakari Mandali Limited vs. A.C.I.T. CITATION: 2023 TAXSCAN (ITAT) 1192

Hearing the opposing contentions of both sides as submitted by Shri Jaimin Gandhi, the AR on behalf of the assessee, and by Shri R.R. Makwana, the Sr. DR on behalf of the Revenue, the ITAT coram of Suchitra Kamble, the Judicial Member, thus held: “The decision of Hon’ble Supreme Court in the case of CIT vs. Reliance Petroproducts, is apt in the present case as the assessee is under bonafide belief that interest income earned on bank deposits is also coming under the purview of claim for deduction under Section 80P of the Act. Thus, the penalty under Section 271(1)(c) of the Act fails on the count of furnishing inaccurate particulars of income. Therefore, the penalty does not survive.”

No Penalty can be Imposed u/s 271(1) when Income Surrendered by Assessee During Survey is Shown in Regular Income-Tax Return Filed within Prescribed Time: ITATThe DCIT vs NBM Iron & Steel, Trading Pvt. Ltd CITATION: 2023 TAXSCAN (ITAT) 1193

The Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench, has recently, in an appeal filed before it, held that no penalty under section 271 (1) can be imposed when income surrendered by the assessee during survey is shown in the regular income tax return filed within prescribed time.

Hearing the opposing contentions of both sides as submitted by Shri Sarju Mehta, the A.R. for the assessee, and by Shri Atul Pandy, the Sr.D.R. of the Revenue, the ITAT coram of Annapurna Gupta, the Accountant Member and Shri T.R. Senthil Kumar, the Judicial Member, thus held: “The Hon’ble Delhi High Court in the case of CIT vs. SAS, had held that where income surrendered by assessee during survey had been shown by it in its regular income-tax return filed within prescribed time, penalty could be imposed. Thus, the CIT(A) has followed the above decisions and deleted the penalty on the declared income of Rs. 1,80,00,000/-. However, the CIT(A) had confirmed the levy of penalty on the balance disputed income of Rs. 4,08,097/-. Thus, we do not find any infirmity in the order passed by the CIT(A), who partly deleted the penalty levied under Section. 271(1)(c) of the Act. Thus, the grounds raised by the Revenue is devoid of merits and the same is dismissed.”

Unexplained Money u/s 69A Received Back through Banking Channel as Sale Consideration of Shares: ITAT Upholds Addition u/s 115BBE Rahul Gupta (HUF) vs The Assistant Commissioner of Income Tax-3(1) CITATION: 2023 TAXSCAN (ITAT) 1194

Hearing the opposing contentions of both sides as submitted by Shri R.B Doshi, CA, on behalf of the assessee, and by Shri Piyush Tripathi, the Sr. DR, on behalf of the Revenue, the ITAT Coram of Ravish Sood, the Judicial Member thus held: “In terms of my observations, I concur with the view taken by the lower authorities and uphold the addition of Rs.5.40 lac made by the A.O, on the ground that the same was the undisclosed fund of the assessee that was routed back in the garb of the aforesaid transaction of purchase/sale of shares. Thus, the Grounds of appeal raised by the assessee being devoid and bereft of any merit, are dismissed in terms of my aforesaid observations.”

Interest Income from FD is Eligible for Deduction u/s 10AA: ITAT Jardine Lloyd Thompson Private Limited vs Assistant Commissioner of Incometax CITATION: 2023 TAXSCAN (ITAT) 1195

The Income Tax Appellate Tribunal (ITAT), Mumbai Bench, has recently in an appeal filed before it, held that interest income from FD is eligible for deduction under Section 10AA of the Income Tax Act, 1961.

Hearing the opposing contentions of both sides as submitted by Shri Nishant Thakkar and Jasmin Amalsadvala, on behalf of the assessee, and by Dr.Yogesh Kamat, the CIT DR along with Ashish Kumar, the Sr AR, on behalf of the Revenue, the Mumbai ITAT Coram of Amit Shukla, the Judicial Member and Padmavathy S, the Accountant Member thus held: “In assessee’s case, we notice that the assessee has placed the surplus funds in FDs and has earned interest from the same. The facts of assessee’s case being identical to the case of Hewlett Packard Global Soft Ltd, respectfully following the above full bench decision of the Hon’ble Karnataka High Court, we hold that the interest income earned by the assessee is eligible for deduction under section 10AA. Accordingly, we delete the disallowance made by the Assessing Officer in this regard.”

No Notice u/s 143(2) issued and Served within prescribed Time Limit: ITAT quashes Assessment Order passed u/s 143(3) of Income Tax Act Mohan Yadav vs ITO CITATION: 2023 TAXSCAN (ITAT) 1196

The Indore bench of Income Tax Appellate Tribunal (ITAT) has recently while quashing the assessment order passed under Section 143(3) of Income Tax Act 1961 observed that there is no notice issued and served under Section 143(2) within the prescribed time limit.

The two member bench of Chandra Mohan Garg, (Judicial Member) and Bhagirath Mal Biyani, (Accountant Member) observed that the revenue neither produced assessment records nor produced copy of notice under Section 143(2) of the Income Tax Act before the bench. Thus, the assessment order dated 29.12.2011 passed under Sections 154 and 143(3) of the Income Tax Act was held to be not valid or sustainable being passed by the AO without assuming valid jurisdiction by issuing notice under Section 143(2) of the Income Tax Act within prescribed time limit.

Absence of Seller before AO not Ground to Allege Unexplained Investment: ITAT Deletes Addition u/s 69B of Income Tax Act The ACIT (Central)-2 vs Shri Sanjeev Agrawal CITATION: 2023 TAXSCAN (ITAT) 1197

The Indore Bench of the Income Tax Appellate Tribunal (ITAT), deletes addition under Section 69B of the Income Tax Act and noted that the absence of seller before the Assessing Officer (AO) not a ground to allege unexplained investment.

The Two-Member Bench of the Tribunal comprising Chandra Mohan Garg, Judicial Member and Bhagirath Mal Biyani, Accountant Member observed that “Merely because the seller was not present in person before the Assessing Officer, the assessee cannot be alleged to have made any unexplained investment which could entitle the Assessing Officer to make addition under Section 69B of the Income Tax Act. Therefore, the CIT(A) was right in deleting the addition on this issue.”

ITAT Denies Exemption u/s 10(23C)(vi) of Income Tax Act on not Existing Solely for Purposes of Education The Indian Institute Of Banking & Finance vs Commissioner of Income Tax CITATION: 2023 TAXSCAN (ITAT) 1198

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT), denied income tax exemption under Section 10(23C)(vi) of the Income Tax Act on not existing solely for purposes of education.

The Two-Member Bench of the Tribunal comprising Om Prakash Kant, Accountant Member and Sandeep Singh Karhail, Judicial Member observed that “Since the assessee has been found to be not „existing’ solely for the purposes of education on the basis of the above findings, therefore, the other aspects raised in the impugned order become academic. Accordingly, the denial of exemption under section 10(23C)(vi) of the Income Tax Act is upheld.”

Satisfaction u/s 151 of Income Tax Act is not Empty Formality: ITAT quashes Income Tax Addition made in Mechanical and Stereotyped Manner The Asst. Commissioner of Income Tax vs M/s. ECI Engineering & Construction Co. Ltd. CITATION: 2023 TAXSCAN (ITAT) 1199

The Hyderabad Bench of the Income Tax Appellate Tribunal (ITAT), observed that the satisfaction under Section 151 of the Income Tax Act is not an empty formality and quashed income tax addition made in mechanical and stereotyped manner.

The Two-Member Bench of the Tribunal comprising R.K. Panda, Accountant Member and Laliet Kumar, Judicial Member observed that “The satisfaction as contemplated under Section 151 of the Income Tax Act is not an empty formality as the authorities have to apply their mind and record satisfaction. When the authorities were not oblivious to the date of proposal then it cannot be said that they have applied their mind or considered the proposal of the Assessing Officer in its right earnest.” “The satisfaction was recorded by authorities in a mechanical and stereotyped manner and therefore, the same is not a satisfaction in the eyes of law” the Bench concluded.

Provision of Section 269SS/269T of IT Act not applicable if AO found no Explanation Regarding Source of Cash Loans during Search Proceedings: ITAT deletes Penalty Shri Ravinder Shivhare vs ACIT CITATION: 2023 TAXSCAN (ITAT) 1200

The Indore bench of Income Tax Appellate Tribunal (ITAT) has recently held that provision of section 269SS/269T Income Tax Act 1961 should not be applicable if Assessing Officer (AO) not found explanation regarding source of cash loans during search proceedings. Thus the bench deleted the penalty imposed by the AO.
The two member bench of Chandra Mohan Garg, (Judicial Member) and B.M. Biyani, (Accountant Member) concluded that sections 269SS/269T of the Income Tax Act and consequently Sections 271D/271E of the Income Tax Act could not be applicable in the assessee’s case. Thus the bench allowed the appeal of the assessee.

Number of Cash Receipt received as per Cash Book are not Reflecting in Day Book: ITAT Upholds Addition Shri Sunil Kumar Ahuj vs Asstt. C. I. T CITATION: 2023 TAXSCAN (ITAT) 1201

The Hyderabad Indore bench of Income Tax Appellate Tribunal (ITAT) has recently upheld the addition made by the Assessing Officer (AO) held that the number of cash receipts received as per cash book are not reflecting in the day book.

It was observed by the tribunal that, AO in the instant case made addition of Rs. 2,44,14,000/- on the ground that there is deficiency in the cash book on various dates and the assessee did not offer the income from profit on sale of land The CIT(A) without considering the nature of the entries found in the cash book which were not recorded in the day book, deleted the addition which is not justified. Therefore the two member bench of R.K. Panda, (Accountant Member) and Laliet Kumar, (Judicial Member) observed that, there is a difference between the introduction of cash as “other income” whenever there is deficiency in the cash book and income from “profit on sale of land” not recorded in the books of accounts.

Claim of exemption u/s 10(38) of IT Act for LTCG from sale of equity shares before assessment proceedings is valid: ITAT Ridhi Bagaria vs ITO CITATION: 2023 TAXSCAN (ITAT) 1202

The Cuttack bench of Income Tax Appellate (ITAT) held that the claim of exemption under section 10(38) of Income Tax Act, 1961 for the long term capital gain from the sale of equity shares before the ending of assessment proceedings is valid.
The tribunal bench observed that the assessee had not introduced his own unaccounted money by way of bogus long term capital gain, as all the entries were part of the bank account and the assessee dematerialized the shares in the account. A single member bench comprising of Shri George Mathan (Judicial Member) held that the addition as made by the assessing officer and as confirmed by the Commissioner in respect of the claim of exemption under Section 10(38) of the Income Tax Act, 1961 in respect of sale of shares was deleted while allowing the appeal.

Reopening of Assessment Proceedings u/s 147 of Income Tax Act after 4 years is Invalid: ITAT Arun Kumar Aggarwal vs Income Tax Officer CITATION: 2023 TAXSCAN (ITAT) 1203

The New Delhi bench of the Income Tax Appellate Tribunal (ITAT) held that the reopening of assessment proceedings under Section 147 of the Income Tax Act 1961 beyond the period of 4 years was not valid.
The two-member bench comprising Shri Yogesh Kumar U.S (Judicial Member) and Shri Anil Chaturvedi (Accountant Member) held that the present appeal relied on various judicial pronouncements to support the contention that the reassessment proceedings initiated beyond four years from the end of the relevant assessment year were not valid in terms of proviso to Section 147 of the Income Tax Act while allowing the appeal.

No Addition of LTCG can be made u/s 69A on Account of Alleged Unexplained Investment in Jewellery: ITAT Ballabh Prasad Aggarwal vs ACIT CITATION: 2023 TAXSCAN (ITAT) 1204

The New Delhi bench of Income Tax Appellate Tribunal(ITAT) held that addition of long term capital gain can be made by the assessing officer under Section 69A of Income Tax Act, 1961 on account of investment in jewellery is not valid.
The bench observed that the most important details was the addition made on account of Long Term Capital Gains on the purported, notional, fictitious sale of jewellery and that there were loose diamonds as per the Wealth Tax Return and the jewellery seized which had been treated as unexplained investments, but the jewellery seized was intra polated in the jewellery found and no addition can be made on this account. The two member bench comprising of Shri. Yogesh Kumar US (Judicial Member) And Dr. B. R. R. Kumar (Accountant Member) held that the addition made under Section 69A of the Income Tax Act, 1961 was not valid and no addition can be made on this account while allowing the appeal.

Penalty Imposed u/s 271(1)(c) of IT Act for Commission Payment without Proper Hearing: ITAT directs Re-adjudication Shri Yogendra Khandelwal vs ACIT CITATION: 2023 TAXSCAN (ITAT) 1205

The Jaipur bench of Income Tax Appellate Tribunal (ITAT) directed the matter back to the assessing officer for re-adjudication for penalty imposed under Section 271(1)(c) of the Income Tax Act 1961for the payment of commission without proper hearing of the parties.
The Bench noted that the Commissioner had passed an ex-parte order without providing adequate opportunity of being heard to the parties. It was also observed that the assessee should be provided one more opportunity to contest his case before the assessing officer as the assessee could not advance his arguments as to the penalty imposed under Section 271(1)(c) of the Income Tax Act, 1961. The two member bench comprising of Shri Sandeep Gosain (Judicial Member) And Shri Rathod Kamlesh Jayantbhai (Accountant Member) held that the matter was restored to assessing officer to decide it afresh while allowing the appeal.

Physical Cash found during Survey is Residual Amount of Cash Withdrawn from Firm against Imprest Account for Expenses: ITAT deletes Addition DCIT vs Shri Sudhir Kumar Agarwal CITATION: 2023 TAXSCAN (ITAT) 1206

The Indore bench of Income Tax Appellate Tribunal (ITAT) has recently held that physical cash found during survey is residual amount of cash withdrawn from firm against imprest account for expences.

The two-member bench of Chandra Mohan Garg, (Judicial Member) and Bhagirath Mal Biyani, (Accountant Member) dismissed the appeal filed by the revenue and deleted the addition made by the AO. Sumeet Neema counsel appeared for the assessee .P.K. Mishra, counsel appeared for revenue.

Lack of Jurisdiction u/s 153C owing to Absence of Incriminating Materials: ITAT dismisses Revenue’s Appeal ACIT vs Cogent Realtors Pvt. Ltd CITATION: 2023 TAXSCAN (ITAT) 1207

The Income Tax Appellate Tribunal (ITAT), Delhi Bench, has recently, in an appeal filed before it, dismissed the revenue’s appeal, on finding that there is lack of jurisdiction under Section 153C of the Income Tax Act owing to the absence of incriminating materials.
Hearing the opposing contentions of both sides as presented by Shri Gautam Jain, the Advocate on behalf of the asssessee, and by Shri T. James Singson, the CIT-DR, on behalf of the Revenue, the ITAT coram of Chandra Mohan Garg, the Judicial Member, and Pradip Kumar Khedia, the Accountant Member, thus held: “Having regard to the view expressed in AY 2012-13 by the Coordinate Bench, there is hardly any merit in the disallowance carried out by the Assessing Officer as held by CIT(A). Besides, we find merit in the findings rendered by the CIT(A) for lack of jurisdiction under Section 153C owing to absence of any incriminating material. We thus no perceptible reason to interfere with the order of the CIT(A). In the result, the appeal of the Revenue is dismissed”.

Deduction u/s 36(1) (va) Allowable Only if Employees’ Share in Relevant Funds Are Deposited before due Date Stipulated in Respective Acts: ITAT ATC Precision Component Pvt. Ltd vs DCIT CITATION: 2023 TAXSCAN (ITAT) 1208

The Income Tax Appellate Tribunal (ITAT), Delhi Bench, has recently, in an appeal filed before it, held that deduction under Section 36(1) (va) is allowable only if employees’ share in relevant funds are deposited before due date stipulated in the respective Acts.

Hearing the contentions of the D.R and perusing the materials available on record, the ITAT Panel of Anubhav Sharma, the Judicial Member and Anil Chaturvedi, the Accountant Member, thus held: “We are of the view that the ratio of the decisions of Hon’ble Apex Court is applicable to the present facts. We therefore, following the decision of Hon’ble Apex Court in the case of Checkmate Services Pvt. Ltd., find no reason to interfere with the order of lower authorities and thus the grounds of assessee are dismissed.”

Interest Receipt under TUFS Scheme is Capital in Nature, needs to be Excluded While Working out Book Profits u/s 115JB: ITAT BSL Ltd vs DCIT CITATION: 2023 TAXSCAN (ITAT) 1209

The Income Tax Appellate Tribunal (ITAT), Delhi Bench, has recently, in an appeal filed before it, held that interest receipt under TUFS scheme is capital in nature, needs to be excluded while working out book profits under Section 115JB.

Hearing the opposing contentions of both sides, as presented by Shri Satyajeet Goel, the Advocate on behalf of the assessee, and by Shri Kanv Bali, the Sr. DR on behalf of the Revdenue, the ITAT Panel of Yogesh Kumar US, the Judicial Member, and Anil Chaturvedi, the Accountant Member, thus held: “Following the decision of the coordinate bench in the case of Indogulf Cropsciences Ltd., we hold that since the interest receipt under TUFS Scheme is capital in nature, it needs to be excluded while working out the book profits under Section 115JB of the Act. We direct accordingly. Thus, the ground of the assessee is allowed.”

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

Devanand T R

DEVANAND T R is an Advocate and IPR Attorney. He’s a graduate in Law and a postgraduate in Commerce. His professional focus lies in Accounts, Taxation and Intellectual Property Rights, especially GST and Trademarks. He’s interested in legal research and passionate about legal journalism.

Chartered AccountantsIncome Tax Appellate TribunalITATITAT Weekly Round-Upsection 143(1) of the Income Tax Act

Related Stories

Get news delivered to your in-box. Subscribe to our newsletter.