ITAT Weekly Round-Up

This weekly summary analyses the major Income Tax Appellate Tribunal (ITAT) stories that have been published at Taxscan.in. during the previous week from July 7 to July 14, 2023.

ITAT upholds Deletion of Addition u/s 69A of Income Tax Act by CIT(A) on Ground of Genuine Disclosure of Transactions in ROI The Income Tax Office vs Ms.KavithaSiddareddy 2023 TAXSCAN (ITAT) 1579

The Chennai bench of the Income Tax Appellate Tribunal (ITAT) upheld the deletion of addition made under section 69A of the Income Tax Act,1961 by the Commissioner of Income Tax (Appeals) on the ground of genuine disclosure of the transactions filed in the Return of Income (ROI).

The two-member bench comprises Mahavir Singh ( Vice President) and Manjunatha. G ( Accountant) upheld the deletion of addition by the Commissioner of Income Tax (Appeals) while dismissing the appeal filed by the revenue. 

Violation of Procedural Norms does not Extinguish Substantial Right of Claiming Credit of FTC u/s 90 of Income Tax Act: ITAT Vikash Daga vs ACIT  2023 TAXSCAN (ITAT) 1580

The New Delhi bench of the Income Tax Appellate Tribunal (ITAT) held that the violation of procedural norms does not extinguish the substantial right of claiming the credit of Foreign Tax Credit (FTC) under section 90 of the Income Tax Act,1961. 

The two-member bench comprising Saktijit Dey (Judicial ) and N. K. Billaiya (Accountant) directed the assessing officer to allow the credit of foreign tax credit (FTC) while allowing the appeal filed by the assessee. 

Payment made to a Non-resident doesn’t amount to Deduction in Tax u/s 195 of Income Tax Act: ITAT dismisses Appeal Deputy Commissioner of Income Tax vs M/s.Trusted Aerospace Engineering Pvt.Ltd  2023 TAXSCAN (ITAT) 1591

The Chennai bench of the Income Tax Appellate Tribunal (ITAT) held that the payment made to the non-resident doesn’t amount to deduction in tax under Section 195 of the Income Tax Act, 1961.

The two-bench member comprising of V. Durga Rao (Judicial member) and Manish Borad (Accountant member) hold that the Commissioner of Income Tax (Appeal) was justified in deleting the disallowance made by the Assessing Officer under Section 40(a)(ia) of the Income Tax Act.

No addition can be made on Cash Deposited to Bank Account from Husband’s Savings for pay of Bank Loan: ITAT Ramesh Rani Chatwal vs ITO  2023 TAXSCAN (ITAT) 1590

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) held that addition could not be made on cash deposited to the bank account from husband’s savings for payment of bank loan.

The tribunal after reviewing the facts observed that without proper verification of the facts AO made additions towards the deposits. Thus, the lower authorities were not justified in making the entire amount deposited in the bank as an unexplained income. Hence, a single bench of tribunal Kul Bharat Judicial Member deleted the addition made by the assessing officer and allowed the appeal filed by the assessee.

Pre-Operative Expenses of Developing Business Activities shall not be disallowed: ITAT Grant Relief to Honda Access Honda Access India Pvt. Ltd. vs DCIT  2023 TAXSCAN (ITAT) 1587

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) while granting relief to Honda Access held that pre -operative expenses of developing business activities should not be disallowed.

A bench consisting of two members, N.K.Billaiya, (Accountant Member) Dr. S. Anubhav Sharma (Judicial Member) observed that Tax Authorities below erred in concluding that assessee’s business was not ‘set up’ during previous year, to deny the claim of loss or to categorize certain expenses as pre-operative expenses.

Amount given by Co-Purchaser for Services towards Arranging Sale is Income: ITAT confirms Income Tax Addition Gnanasambantham Shanmuganathan vs The Asst. Commissioner of Income Tax 2023 TAXSCAN (ITAT) 1588

The Chennai bench of the Income Tax Appellate Tribunal (ITAT) held that the amount given by the co-purchaser for service towards arranging sales is income.

The two-bench member consisting of Manjunatha G (Accountant member) and Manomohan Das (Judicial member) held that the Commissioner of Income Tax (Appeal) has correctly decided the matter. Nataraj Ganesh, the payer of the amount claimed that the amount of Rs. 70,00,000/- was paid to the assessee as the cost of the property. The claim of Nataraj Ganesh cannot be ignored as he was the payer of the money. Thus, the appeal was decided against the assessee.

Power of Attorney should be verified in Sale of an Inherent Property: ITAT sets aside the Assessment Order Murugesan Shanthi vs The Income Tax Officr   2023 TAXSCAN (CESTAT) 734

The Chennai bench of the Income Tax Appellate Tribunal (ITAT) held that the power of attorney should be verified in the sale of an inherent property.

The two-bench members comprising of Manjunatha. G (Accountant member) and Manomohan Das (Judicial member) held that the PCIT has rightly observed that the assessment order as framed by the assessing officer is erroneous and prejudicial to the interest of Revenue. Therefore, the order of the PCIT was confirmed which he had set aside the assessment order and directed the assessing officer to frame the assessment after making necessary enquiry and verification in accordance with the law in respect of the issues discussed by the PCIT in the exercise of powers under section 263 of the Income Tax Act.

Cash Deposited in Bank Accounts during Demonetization Period reflected in Books of Account of Company: ITAT deletes Addition DCIT vs Bawa Jewellers Pvt. Ltd.  2023 TAXSCAN (ITAT) 1586

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT), while deleting the addition made by the Assessing officer (AO), determined that the cash deposited in bank accounts during the demonetization period was reflected in the books of account of the company.

After determining the facts and submissions made by both parties the bench consisting of two members, Narendra Kumar Billaiya (Accountant Member) Challa Nagendra Prasad (Judicial Member) observed that the assessee was maintaining complete stock tally, the sales were recorded in the regular books of accounts and the amount was deposited in the bank account out of the sale proceeds. Thus, the bench dismissed the appeal filed by the revenue.

Disallowance made u/s 40(a)(ia) of Income Tax Act on ground of Non Disclosure of Payment of Transportation Charges in Income Tax Return: ITAT Directs Re-adjudication Cargo Handling Corporation vs ITO  2023 TAXSCAN (ITAT) 1578

The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) directed the assessing officer to re-adjudicate the disallowance made under section 40(a)(a) of the Income Tax Act,1961 on the ground of nondisclosure of payment of transportation charges in income tax returns. 

The two-member panel comprising Manish Borad (Accountant) and Sonjoy Sarma (Judicial) held that the assessee was entitled to get relief from the disallowance made by the assessing officer while allowing the appeal filed by the assessee. 

ITAT Upholds Addition made u/s.115BBC of Income Tax Act as Anonymous Donations due to Defects in Maintaining record by Public Trust Society Asstt. Commissioner of Income Tax vs M/s. Everest Education Society 2023 TAXSCAN (ITAT) 1592

The Pune Bench of the Income Tax Appellate Tribunal (ITAT) upheld the addition made under section 115BBC of the Income Tax Act, 1961 as Anonymous donations due to defects in maintaining record by the public trust society.

A bench consisting of two members, G. D. Padmashali (Accountant Member) S. S. Godara (Judicial Member) observed that assessee society failed to maintain the identity of the person indicating full name and full address. Therefore, all cash donation transactions are sham.

Re-calculation of Refund Receivable to Claim Interest on Refunds: ITAT Condones Delay of 98 Days Kapilaben Kanjibhai Patel Oral Specific Deferred Family Trust vs Income Tax Officer  2023 TAXSCAN (ITAT) 1585

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) restored the matter to the file of the Assessing Officer (AO) for proper verification and calculation of refund receivables to grant interest to the assessee under Section 244A of the Income Tax Act, 1961.

The Tribunal remanded back the matter to the file of the AO for proper verification and calculation which was placed by the assessee before the Revenue authorities in consonance with Section 244A of the Income tax Act. Thus, the assessee was given an opportunity of hearing by following the principles of natural justice.

Incriminating Books of Account is Not Necessary to Initiate Search Proceeding u/s 153C of Income Tax Act: ITAT Bharat Ginning & Pressing Factory Behind Rai vs ITO  2023 TAXSCAN (ITAT) 1584

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) held that for initiating proceeding under Section 153C of the Income Tax Act, 1961, it is not necessary that these books of account should be incriminating.

The Tribunal stated that no satisfaction note of the AO, the searched person is required regarding documents relating to the assessee found during the course of search on some other persons for a valid assumption of jurisdiction to frame assessment under Section 153C of the Income Tax Act. The ITAT further held that for initiating proceedings under Section 153C of the Income Tax Act it is not necessary that these books of accounts should be incriminating and accordingly rejected this plea of the assessee.

Relief to Wipro: ITAT Quashes Order of AO Disallowing Interest Expenditure and Orders Re-computation of Deduction u/s 10AA of Income Tax Act M/s. Wipro Limited vs The Assistant Commissioner of Income-tax  2023 TAXSCAN (ITAT) 1593

The Bangalore Bench of Income Tax Appellate Tribunal (ITAT) directed the Assessing Officer (AO) to delete the disallowance under Section 115BBD of the Income Tax Act, 1961 and to recompute the deduction allowable to the assessee under Section 10AA of the Income Tax Act.

The Bench comprising of Beena Pillai, Judicial Member and Laxmi Prasad Sahu, Accountant Member set aside the order passed by AO on this issue and direct him to compute deduction under Section 10AA of the Income Tax Act. Further, the A.O. was not justified in invoking the provisions of Section115BBD of the Income Tax Act for making the impugned disallowance, accordingly directed the AO to delete the disallowance under Section 115BBD of the Income Tax Act.

Lease Rent and Packaging Charges derived under  Lease Agreements for rendering Manufacturing Services to IMFL is Business Income :ITAT DCIT vs M/s. Hyderabad Distilleries and Wineries Pvt. Ltd  2023 TAXSCAN (ITAT) 1594

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) ruled that lease rent and packaging charges derived under lease agreements for rendering manufacturing services to Indian Made Foreign Liquor (IMFL) is business Income .

the two member bench of tribunal comprising Anil Chaturvedi (Accountant Member) and Anubhav Sharma (Judicial Member) dismissed the appeal filed by the revenue and observed that the same issues are covered in favour of assessee 

Disallowance u/a 40A (3) is not applicable when Payment was by Account Payee Cheque or Account Payee DD: ITAT Smt.A. Thripurasundari vs The DCIT 2023 TAXSCAN (ITAT) 1595

The Chennai bench of the Income Tax Appellate Tribunal (ITAT) held that disallowances under Section 40A (3) of the Income Tax Act, 1961 are not applicable when payment was by account payee cheque or account payee demand draft.

The two-bench member consisting of Mahavir Singh (Vice-president) and Manjunatha G (Accountant member) quashed the assessment order and reverse the order of the Commissioner of Income Tax (Appeal) and the Assessing Officer in favour of the assessee.

No addition can be made on Immovable Property purchased out of Gifts received from Relatives: ITAT directs Re-adjudication Karamveer Singh vs ITO  2023 TAXSCAN (ITAT) 1597

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) ruled that no addition could be made on immovable property purchased out of gifts received from relatives. Therefore, the bench directs re-adjudication.

A single-member bench of tribunal comprising Kul Bharat (Judicial Member) set aside the assessment order and restored the assessment to the file of the AO to frame the assessment afresh after verifying the claim of the assessee.

No addition can be made on account of Fabrication Charges paid to Small Time Workers: ITAT ACIT vs Mrs. Neena HArdeep Singh  2023 TAXSCAN (ITAT) 1596

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) ruled that no addition could be made on account of fabrication charges paid to small time workers.

The two member bench of the tribunal comprising Shamim Yahya (Accountant Member) and Anubhav Sharma (Judicial Member) dismissed the appeal filed by the revenue and confirmed the deletion of addition upon the fabrication charges paid to small time workers .

AO can’t Travel beyond his Jurisdiction inorder to Invoke the Provision of Section 40A(3) of the Income Tax Act: ITAT quashes Order of AO Vishnu Srinivasa Rao Kakarla vs Income Tax Officer  2023 TAXSCAN (ITAT) 1601

The Visakhapatnam bench of the Income Tax Appellate Tribunal (ITAT) held that the Assessing Officer cannot travel beyond his jurisdiction in order to invoke the provision of section 40A(3) of the Income Tax Act, 1961.

The two-bench member comprising of Duvvuru Reddy (Judicial member) and S Balakrishnan (Accountant member) held that the assessing officer has travelled beyond his jurisdiction in disallowing the cash withdrawals being payments made to various fishermen by invoking the provisions of section 40A(3) of the Income Tax Act is not valid in law. Therefore, the order passed by the assessing officer was quashed and the appeal of the assessee is allowed.

Provisions of Section 44AB not Applicable to Income which are Treated as Income from Other Sources: ITAT Sree Krishna Educational Society vs Income Tax Officer  2023 TAXSCAN (ITAT) 1602

The Visakhapatnam bench of the Income Tax Appellate Tribunal (ITAT) held that the provision of Section 44AB of the Income Tax Act, 1961 is not applicable to income which is treated as income from other sources.

The two-bench member consisting of Duvvuru RL Reddy (Judicial member) and S Balakrishnan (Accountant member) held that since the income had been treated as income from other sources and not as income from profit & gains of business or profession, the provisions of Section 44AB of the Income Tax Act are not applicable. Therefore, there was no hesitation to delete the penalty of Rs. 1,42,260/- levied by the Assessing Officer. Thus, the appeal of the assessee is allowed.

Claim of Deduction u/s 54F Rejected by AO without Obtaining any Evidence for Proof of Construction done: ITAT Directs Re-adjudication Mr.K.S.Anbuselvan vs The Income Tax Officer 2023 TAXSCAN (ITAT) 1582

The Chennai bench of the Income Tax Appellate Tribunal (ITAT) directed the assessing officer to re-adjudicate the rejection of the claim of deduction under section 54F of the Income Tax Act,1961 without obtaining any evidence for proof of construction done by the assessee.

The two-member bench comprises Manjunatha. G (Accountant) and Manomohan (Judicial) directed the assessing officer to re-adjudicate the claim of deduction filed under section 54F of the Income Tax Act while allowing the appeal filed by the assessee. 

Re-adjudication of Income Tax Addition as Unexplained Money: ITAT Restores Delayed Application Rameshbhai Nagjibhai Patel vs Asstt. Commissioner of Income Tax  2023 TAXSCAN (ITAT) 1581

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) restored the matter to the file of the Commissioner of Income Tax (Appeals) [CIT (A)] for proper adjudication on the addition of Rs.29,74,617 under Section 69A of the Income Tax Act,1961 as unexplained, after taking cognizance of the evidences filed by the assessee.

The Single member Bench comprising of Ms. Suchitra Kamble, Judicial Member, condoned the delay of 98 days as non-representation before both the authorities appears to be genuine and further it remanded back the matter to the file of the CIT(A) for proper adjudication of the issues contested by the assessee after taking cognizance of the evidences filed by the assessee before the CIT(A). Thus, the assessee was given opportunity of hearing by following the principles of natural justice and the appeal was allowed.

Contributions received for Charitable Purpose can’t be treated as Income u/s 2(24) (iia) of Income Tax Act: ITAT allows Appeal Kakatiya Sangham vs Income Tax Officer  2023 TAXSCAN (ITAT) 1603

The Visakhapatnam bench of the Income Tax Appellate Tribunal (ITAT) held that the contributions received for any charitable purposes cannot be treated as income under Section 2(24) (iia) of the Income Tax Act, 1961.

A Single-bench member consisting of Duvvuru RL Reddy held that contributions received for charitable purposes cannot be treated as income under Section 2(24)(iia) of the Income Tax Act and hence, the provision of Section 2(15) of the Income Tax Act does not apply to the instant case. Therefore, the appeal filed by the assessee is allowed.

Error In Sale of Share Transaction made by Broker of Assessee: ITAT Deletes Addition on Client Code Modification Ketan M. Chalishazar HUF vs Income Tax Officer  2023 TAXSCAN (ITAT) 1604

The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) held that error in the sale of share transaction made by the broker of the assessee hence deleted the addition on client code modification.

A Single-bench member consisting of Suchitra Kamble (Judicial member) observed that the Assessing Officer in the assessment order has not given the specification of KETAN M. CHALISHAZAR (HUF) and KETAN M. CHALISHAZAR (INDIVIDUAL) in respect of the number of trades in which client code modification has been made by the broker M/s. Affluence Shares & Stock Pvt. Ltd.

ITAT deletes disallowance of deduction claimed on account of payment of guarantee commission to Associate Enterprise Lease Plan India P. Ltd Vs Income-tax Officer 2023 TAXSCAN (ITAT) 1605

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has  deleted the disallowance of deduction claimed on account of payment of guarantee commission to associate enterprise.

The two member bench of the tribunal comprising N.K. Billaiya (Accountant Member) and Saktijit Dey (Judicial Member) the bench concluded that issue was already covered in favour of assessee. Thus, the bench deletes disallowance deduction claimed under Section  40(a)(i) of the Income Tax  Act on account of payment of guarantee commission to Associate Enterprise.

Assessee shall not be Penalized for the Action of the Tax Consultant in claiming an Excessive Refund in Return of Income: ITAT Mr. Veereshayya Angadi vs ITO  2023 TAXSCAN (ITAT) 1608

The Bangalore bench of the Income tax Appellate Tribunal (ITAT) held that the assessee shall not be penalized for the actions of the tax consultant in claiming an excessive refund in return of income.

The two-bench member comprising of Chandra Poojari (Accountant member) and Beena Pillai (Judicial member) remitted the entire issue in dispute in both the appeals to the file of NFAC (First Appellate Authority) for reconsideration and to decide whether the assessee is bonafide in claiming an excessive refund in its return of income and decide accordingly.

Mere Estimate of Cost by DVO doesn’t Constitute Material to Concealment: ITAT deletes Penalty imposed on Account of Difference of Valuation Sri Ginjala Atchiraju vs Income Tax Officer  2023 TAXSCAN (ITAT) 1611

The Visakhapatnam bench of the Income Tax Appellate Tribunal (ITAT) held that a mere estimate of cost by the Departmental Valuation Officer (DVO) doesn’t constitute material to concealment and hence deleted penalty imposed on account of difference of valuation.

The two-bench member comprising of Duvvuru RL Reddy (Judicial member) and S Balakrishnan (Accountant member) by referring to the case of CIT vs. Apsara Talkies deleted the proportionate penalty levied on account of the difference in the valuation by the DVO. Thus, the appeal of the assessee is partly allowed.

No addition can be made on Expenses incurred for  Purchases of liquor from Licensed Suppliers :ITAT Shakti Singh Gulia vs ITO  2023 TAXSCAN (ITAT) 1612

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) ruled that no addition could be made on expenses incurred for purchase of liquor from liquor from licensed suppliers .

The two member bench of the tribunal comprising Pradip Kumar Kedia (Accountant Member) and Chandra Mohan Garg (Judicial Member) observed that the cash transactions, in any case, have been subjected to TCS collections and are thus duly made chargeable to tax in the hands of the recipient. Further, no enquiries have been made on behalf of the Revenue to dislodge the bona fides of the cash purchases.  Also, the suppliers and recipients of cash are identified parties.

ITAT dismiss Ex Parte order passed without consider Savings of housewife Deposit in Joint Account Leela Devi Jai vs Income-tax Officer 2023 TAXSCAN (ITAT) 1613

The Jaipur  Bench of the Income Tax Appellate Tribunal (ITAT) recently dismissed an ex parte order passed without considering the savings of the housewife deposited in a joint account.

The two member bench of the tribunal comprising Rathod Kamlesh Jayantbhai, (Accountant Member) and Dr. S. Seethalakshmi, ( Judicial Member) remand the issue to the file of Assessing officer and direct to provide opportunity to assessee. 

No Order shall be passed without affording Reasonable Opportunity of being heard to Assessee: ITAT set aside Order of CIT(A) Shri Shankar Namdeo Kashid vs Dy. Commissioner of Income Tax  2023 TAXSCAN (ITAT) 1610

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) held that no order shall be passed without affording reasonable opportunity of being heard to the assessee and hence set aside the order of the Commissioner of Income Tax (Appeal) [CIT(A)].

The two-bench member comprising of Amarjit Singh (Accountant member) and Sandeep Singh Karhail (Judicial member) held that the Commissioner of Income Tax (Appeal) rejected the evidence without calling for any further information from the assessee. Thus, none of the authorities have properly examined the evidence so furnished by the assessee in respect of the claim of exemption of agricultural income.

Application for Permanent Registration Cannot be Rejected for Selecting Wrong Form while Filling Application: ITAT Restores Matter to CIT (E) Telangana State Chapter Indian Radiological & Imaging Association vs Income Tax Officer   2023 TAXSCAN (ITAT) 1615

The Hyderabad Bench of Income Tax Appellate Tribunal (ITAT) held that on account of the mistake committed by the assessee, while filing the application i.e.  error in submitting the correct application cannot be the reason to reject permanent registration under Section 80G(5) of the Income Tax Act, 1961.

The Bench comprising of Rama Kanta Panda (Accountant Member) and Laliet Kumar (Judicial Member) observed that though the assessee had committed a mistake in selecting the wrong section code 11 while making an application at the first instance, however, for such a mistake, the permanent registration cannot be denied.

Further it noted that the respondent is also duty bound to cross-verify the details, submitted by the assessee at the time of issuance of provisional certificate and should have issued a notice at that time by pointing out the wrong selection of section code by the assessee. Thus, the assessees as well as Revenue both are at fault.

No addition can be made on basis of credit entry not enter in books of account of assessee : ITAT Today Retail Network Pvt Ltd vs The ITO  2023 TAXSCAN (ITAT) 1607

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) ruled that no addition could be made on the basis of credit entry not entered in the book of account of the assessee .

The tribunal after considering the submission of the both parties observed that the only reason for making the addition is that Reebok India Co. Ltd has passed a credit entry in its books of account, which was not there in the books of the assessee Thus, when the assessee did not receive any goods, it did  not enter its books of account . Reebok India Co. Ltd, had debited the assessee, passed credit entry in their books of account thus there is no differences.

Business Service Charges paid to  Associate Concern for providing HR related Services  shall not be disallowed :ITAT ACIT vs Jones Lang Lasalle Building Operation Pvt. Ltd  2023 TAXSCAN (ITAT) 1606

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) held that business service charges paid to  associate concern for providing Human Resource (HR) related services  should not be disallowed.

The two member bench of the tribunal comprising N. K. Billaiya (Accountant Member) and Saktijit Dey ( Judicial Member) allowed the appeal of the assessee and held that business advisory services charges should not be disallowed .

Lack of Jurisdictional Competency of TPO in Making Upward Adjustment in TP: ITAT Deletes Income Tax Addition Yizumi Precision Machinery (India) Private Limited vs A.C.I.T 2023 TAXSCAN (ITAT) 1619

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) held that the addition made by the Assessing Officer (AO) Transfer pricing Officer (TPO) on account Transfer Pricing (TP) adjustment is without having valid jurisdiction therefore directed such income tax addition to be deleted.

The Bench comprising of Waseem Ahmed, Accountant Member and Siddhartha Nautiyal, Judicial Member, observed that the right course of action for the AO was to take the approval from the competent authority for expanding the scope of Limited Scrutiny to the regular assessment but he failed to do so. Further the Bench noted that, the DR has also not brought anything on record justifying that the “Limited Scrutiny” was converted by the Assessing Officer under normal/ regular scrutiny after obtaining necessary approval from the appropriate authority.

ITAT upholds Penalty levied  u/s 271 of Income Tax Act due to non Compliance of Notice Shri Ishoo Narang vs ACIT 2023 TAXSCAN (ITAT) 1620

The Income Tax Appellate Tribunal (ITAT) Hyderabad Bench upheld the penalty levied under section 271(1)(b) of Income Tax Act, 1961 due to non compliance of notice.

It was also observed that the assessee, despite several opportunities, had not filed any reply before the Assessing Officer. Thus once there is deliberate or willful default on the part of the assessee then the penalty should be imposed. Therefore, the two member bench of the tribunal comprising R.K. Panda,, (Accountant Member) and Laliet Kumar, ( Judicial Member) upheld the penalty imposed due to non compliance of notice.

Payment of Bonus made to Employees before due date of filing ROI u/s 139 (1) of Income Tax Act are sufficient for Compliance of Section 43B of Act: ITAT allows appeal Mala Anand vs DDIT 2023 TAXSCAN (ITAT) 1621

The Income Tax Appellate Tribunal (ITAT) Bangalore Bench held that payment of bonus made to employees before the due date of filing return of income under Section 139(1) of Income Tax Act, 1961 are sufficient for compliance of section 43B of Income Tax Act.

The two member bench of the tribunal comprising Dr. B.R.R.Kumar, (Accountant Member) and Kul Bharat, (Judicial Member) observed that  since the amount of bonus to employees has been paid before due date of filing of return of income under Section  139(1) of the Income-Tax Act and this is sufficient compliance of provisions of section 43B of the Income-Tax Act.

Discharge of Onus u/s 68 of Income Tax Act by Furnishing Identity and Creditworthiness of Parties: ITAT Deletes Income Tax Addition Yizumi Precision Machinery (India) Private Limited vs A.C.I.T  2023 TAXSCAN (ITAT) 1619

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT), held that the assessee has discharged the onus cast under Section 68 of the Income Tax Act, 1961 by Furnishing Identity and Creditworthiness of Parties and directed the Assessing Officer (AO) to delete the income tax addition.

The Tribunal held that the assessee has discharged the onus cast under Section 68 of the Income Tax Act with respect to receipt of share application money from Ramesh Vardhan. Therefore, we hereby direct the AO to delete the addition made by him.

Amount given for Admission is not Donation to Charitable Trust: ITAT Confirms Income Tax Addition Society for Computer Technology and Research vs ACIT 2023 TAXSCAN (ITAT) 1617

The Income Tax Appellate Tribunal (ITAT) Pune Bench, confirmed the income tax addition of 6 Lakhs given for the admission in college is not donation to charitable trust and thus is taxable.

The Bench comprising of R.S. Syal, Vice President, observed that it is clear from the letter of Ms. Suprabha D. Galakatu, who gave specifically complete narration of the circumstances of entering the college, that she did payed a sum of Rs.6.00 lakh to the assessee but that was in lieu of admission of her sister’s son, Mr. Soham Deshmukh and not as donation.

Penalty u/s 272A(1)(d)  Income Tax Act shall not levied if Reasonable Cause for Non-Compliance of Statutory Notices: ITAT Maqsood Ali vs ITO 2023 TAXSCAN (ITAT) 1622

The Income Tax Appellate Tribunal (ITAT) Delhi Bench ruled that penalty under Section 272(1)(d) of Income Tax Act, 1961 should not be levied if the assessee has reasonable cause for non-compliance of statutory notices.

The two member bench of the tribunal comprising Dr. B.R.R.Kumar, (Accountant Member) and Kul Bharat, (Judicial Member) determined that there was a reasonable cause for non-compliance of the statutory notices sent by the Department to the assessee. Therefore, the bench allowed the appeal.

ITAT dismisses Appeal as Defective due to Continuous Absence by assessee during Appellate Proceedings Geetu Kamra vs ITO  2023 TAXSCAN (ITAT) 1623

The Income Tax Appellate Tribunal (ITAT) Delhi bench dismissed appeal filed by assessee as defective due to continuous  absence by assessee during appellate proceedings.

The two member bench of the tribunal comprising Kul Bharat (Judicial Member) dismissed the appeal as defect due to continuous absence by assessee during appellate proceedings. Om Prakash, appeared for the revenue before the tribunal.

Income received from letting out of Property on a Commercial basis qualifies as Business Income: ITAT The DCIT vs Gulmohar Park Mall Pvt. Ltd  2023 TAXSCAN (ITAT) 1624

The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) held that the income received from letting out of the property on a commercial basis qualifies as business income.
The two-bench member comprising of Annapurna Gupta (Accountant member) and Siddhartha Nautiyal (Judicial member) are in view that the Commissioner of Income Tax (Appeal) has erred in facts and in law in holding that the income qualifies as business income of the assessee. Thus, the appeal of the Department is dismissed.

Internal CUP is the most appropriate method for Undertaking the Determination of Arm’s Length Price: ITAT Global Green Company Ltd vs DCIT 2023 TAXSCAN (ITAT) 1625

The Delhi bench of the Income Tax Appellate Tribunal (ITAT) held that the internal Comparable Uncontrolled Price Method (CPU) is the most appropriate method for undertaking the determination of the arm’s length price.

The two-bench member comprising of C.N. Prasad (Judicial member) and B.R.R Kumar (Accountant member) held that the internal CUP is the most appropriate method for undertaking the determination of Arm’s Length Price. Hence, it was directed that the economic analysis be conducted afresh by taking into consideration the like with the like and following the right foreign currency conversion. The Assessing Officer was directed to accord reasonable and accurate adjustments to Product characteristics, contractual terms, risk incurred, and geographical factors.

Interest Received Loan given from OD not Taxable: ITAT Deletes Addition NikhilSuryakant Shah vs ITO  2023 TAXSCAN (ITAT) 1626

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) held that interest received from a loan given from the overdraft is not taxable hence deleted the additions.

The two-bench member comprising of Pavan Kumar Gadale (Judicial member) and Rifaur Rahman (Accountant member) held that the action of the Assessing Officer in making an addition of deemed interest is not tenable and we set aside the order of the Commissioner of Income Tax (Appeal) and allow the ground of appeal in favour of the assessee. Therefore, the appeal filed by the assessee is partly allowed.

Disallowances can’t be made u/s 14A of Income Tax Act Earnings from Exempt Income: ITAT deleted the Addition made in Income The DCIT vs Archana Ajay Mittal  2023 TAXSCAN (ITAT) 1627

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) held that the disallowances cannot be made under Section 14A of the Income Tax Act, 1961 earnings from the exempt income hence deleted the additions made in income.

The two-bench member comprising of Pavan Kumar Gadale (Judicial member) and Rifaur Rahman (Accountant member) held that the Commissioner of Income Tax (Appeal) had relied on the facts, judicial decisions, and provisions of the Act in respect of disallowance under Section 14A r.w.r 8D of the Income Tax Act. Prima facie, the assessee has not earned any exempt income, and therefore the provisions of Section 14A r.w.s 8D of the Income Tax Act cannot be invoked.

Capital Gain Exemption Allowable on Construction of Residential House Completed Within 3 Years: ITAT Hemant Shridhar Phatak vs The Asst. Commissioner of Income Tax-35(1) 2023 TAXSCAN (ITAT) 1628

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT), held that the claim of capital gain exemption under Section 54 of the Income Tax Act, 1961 on construction of residential house completed within 3 years is allowed and the penalty levied under Section 271(1)(c) of the Income Tax Act was deleted.

The Bench comprising of Vikas Awasthy, Judicial Member and Amarjit Singh, Accountant Member held that the assessee is eligible to claim exemption under Section 54 of the Income Tax Act as the construction of residential house completed within three years from the relevant date. The Tribunal further observed that merely for the reason that the assessee had made claimed of exemption under Section 54 of the Income Tax Act which was not acceptable to the Assessing Officer, penalty under section 271(1)(c) of the Income Tax Act cannot be levied, thus deleted the penalty levied under Section 271(1)(c) of the Income Tax Act.

Benefit Allowed in Assessment shall not be withdrawn by exercising Power u/s 154 of Income Tax Act: ITAT Sanjay Kumar vs Income-tax Officer  2023 TAXSCAN (ITAT) 1629

The Income Tax Appellate Tribunal (ITAT) Delhi Bench held that benefit allowed assessment orders should not be withdrawn by exercising power under Section 154 of Income Tax Act, 1961.

The two member bench of the tribunal comprising Anil Chaturvedi (Accountant Member) and Anubhav Sharma (Judicial Member) held that benefits allowed in the assessment order should not be withdrawn by exercising power under Section 154 of Income Tax Act, 1961.

TDS reflected in form 26AS for assessment year  shall be allowed, if ROI and TDS are correctly filed: ITAT directs AO to verify claim BAE Systems Information & Electronic Systems Integration Inc vs The A.D.I.T. 2023 TAXSCAN (ITAT) 1664

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) ruled that Tax Deduction at Source in form 26AS for assessment year should  be allowed, if return of income and Tax Deduction at Source are correctly filed. Thus, the bench directed the assessing officer to verify the claim of assessee regarding TDS credits.

The two member bench of the tribunal comprising N.K. Billaiya (Accountant Member) and Challa Nagendra Prasad (Judicial Member) directed the Assessing Officer to verify the claim and allow credit of TDS if the income is shown in the year under consideration.

Activities of Import of Goods for Re-Export Falls Within Meaning of “Services” under SEZ Act: ITAT Allows Income Tax Deduction u/s 10AA The ACIT Bytescale vs Technologies Private Limited 2023 TAXSCAN (ITAT) 1630

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) held that the activities carried out by the assessee falls within the ambit of “services”, the expression used in Section 10AA of the Income Tax Act,1961 and the profits and gains derived from such services rendered from SEZ (Special Economic Zone ) would be eligible for deduction under Section 10AA of the Income Tax Act.

The Bench comprising of Vikas Awasthy, Judicial Member and Om Prakash Kant, Accountant Member observed that the activities carried out by the assessee falls within the ambit of “services”, the expression used in Section 10AA of the Income Tax Act and the profits and gains derived from such services rendered from SEZ would be eligible for deduction under Section 10AA of the Income Tax Act. Hence, the Tribunal found no infirmity in the impugned order, thus upheld the CIT (A) order and the appeal of Revenue is dismissed being devoid of any merit.

ITAT deletes late fee levied on Belatedly filed TDS before Amendment in Section 234 E of Income Tax Act M/s. Balram Corporate Services Pvt. Ltd vs The Income Tax Officer (TDS) 2023 TAXSCAN (ITAT) 1636

The Income Tax Appellate Tribunal (ITAT) Bangalore Bench deleted late fee levied on belatedly filed Tax Deduction (TDS) at Source before the amendment in section 234E of Income Tax Act, 1961.

The two member bench of the tribunal comprising Laxmi Prasad Sahu, (Accountant Member) and George George K, (Vice President) delete the late fee charges under section 234E of the Income Tax Act, for the Assessment Years 2013-14 to 2015-16.

Interest subsidy under TUFS treated as capital receipt, for overall growth and generation of employment: ITAT Te ACIT vs M/s Shahi Exports Pvt Ltd 2023 TAXSCAN (ITAT) 1651

The Delhi bench of Income Tax Appellate Tribunal (ITAT) observed that the purpose of granting subsidy under TUFS (Technology Up-gradation Fund Scheme) by the Ministry of Textiles, Government of India was for overall growth and generation of employment and held that interest reimbursement received by the assessee is a capital receipt.

The Tribunal relied on the decision of CIT Vs. Ponni Sugars & Chemicals Ltd which held that the purpose of granting subsidy under TUFS by the Ministry of Textiles, Government of India was for overall growth and generation of employment and, therefore, the ‘Purpose Test’ was laid. Considering the facts of the case in totality, the Bench did not find any reason to interfere with the findings of the CIT (A), thus appeal filed by assessee was dismissed.

ITAT restores matter to consider Source of Cash Deposited with Sale Proceeds of LPG Cylinder during Demonetization Anaveer vs The Income Tax Officer 2023 TAXSCAN (ITAT) 1631

The Bangalore Bench of Income Tax Appellate Tribunal (ITAT) held that in the interest of justice and equity an opportunity should be granted to the assessee to prove the source of cash deposits and the matter was restored to the Assessing Officer (AO) for denovo consideration. 

The Single Bench comprising of George George K, Vice President, observed that the assessee neither before the AO nor the CIT(A), has explained the source of cash deposited with the sale proceeds of LPG cylinders. Hence, in the interest of justice and equity, the Tribunal granted one more opportunity to the assessee to prove the source of cash deposits. Hence, the matter was restored to the AO for denovo consideration.

Claim of Deduction on Sale of Scrap and Stores in Respect of Export Turnover u/s 80HHC: ITAT Allows AppealThe ITO vs Madhusudhan Industries Madhusudhan House  2023 TAXSCAN (ITAT) 1633

The Income Tax Appellate Tribunal (ITAT) Ahmedabad Bench, allowed the claim for deduction under Section 80HHC of the Income Tax Act, 1961 on the sale of scrap and parts.

The Tribunal stated that it has gone through order of the CIT(A) and see no reason to interfere in the matter, the CIT (A) has recorded a finding of the fact that scrap and stores sold, arose from the business activity of the assessee-company. Considering the uncontroverted facts, the Bench held that the assessee is entitled to claim deduction under section 80HHC of the Income Tax Act and thus he grounds raised by the Revenue are accordingly dismissed.

Delayed Deposit of Employees Contribution to PF/ESIC is sufficient to make Income Tax Addition: ITAT rejects AppealGopi Mani Kuttan vs DCIT 2023 TAXSCAN (ITAT) 1632

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) held that the delayed deposit of employees contribution indicated in the Audit Report is sufficient to make income tax addition and to disallow employees contribution to Provident Fund (PF)/Employees’s state Insurance Corporation (ESIC) under Sections 36(i)(va) r.w.s. 43B of the Income Tax Act, 1961.

The Bench comprising of Chandra Mohan Garg, Judicial Member and Pradip Kumar Kedia, Accountant Member observed that the issue towards taxability of belated employees contribution to Provident Fund/ESIC is no longer res integra. Hence, the Tribunal held that, “We thus, do not see any warrant to any reason to interfere with the order of CIT(A)”

ITAT upholds disallowance made on Interest Expenses incurred for taking Loans for making Investment in Shares RRPR Holding Private Limited vs Deputy Commissioner of Income Tax 2023 TAXSCAN (ITAT) 1634

The Income Tax Appellate Tribunal (ITAT) Delhi Bench upheld the disallowance made on interest expenses incurred for taking loans for making investment in shares. The assessee RRPR Holding Private Limited is an Investment Holding Company set up to acquire and hold shares of NDTV Ltd and its Group Cos. The Original return filed by the assessee was subjected to scrutiny assessment by issuance of notice under Section 143(2) Income Tax Act, 1961.

The two-member bench of the tribunal comprising Pradip Kumar Kedia (Accountant Member) and Challa Nagendra (Judicial Member) upheld disallowance made by AO on Interest Expenses incurred for taking Loans for making Investment in Shares.

Not Every Deposit during Demonetization Period will under category of Unaccounted Cash: ITAT directs Re-Adjudication Shri Neralakere Marulasiddappa Dayananda vs The Income-tax Officer 2023 TAXSCAN (ITAT) 1635

The Income Tax Appellate Tribunal (ITAT) of Bangalore Bench held that the payment of bonus made to employees before the due date of filing a return of income under Section 139(1) of Income Tax Act are sufficient for compliance of Section 43B of Income Tax Act, 1961.

Two member benches of the tribunal comprising Chandra Poojari (Accountant Member) and Beena Pillai (Judicial Member) assessee are directed to establish all relevant details to substantiate its claim in line with the above applicable instructions as applicable to the present facts of the assessee.

Deduction u/s 80P of Income Tax Act shall not be allowed on Interest Income earned from Nationalized Banks: ITAT upholds CIT(A) Order Gujarat State Co-op Agriculture and Rural Development Bank Ltd vs ITO 2023 TAXSCAN (ITAT) 1637

The Income Tax Appellate Tribunal (ITAT) Ahmedabad Bench while upholding the order of Commissioner of Income Tax (Appeal) held that deduction under Section 80P of Income Tax Act, 1961 should not be allowed on interest earned from nationalized banks.

The tribunal after reviewing the facts and submissions of the both parties and relied upon the decision of Totgars Cooperative Sales Society Ltd. Vs. ITO and State Bank of India (SBI) Vs. CIT the Two member bench of Annapurna Gupta (Accountant Member) and Madhumita Roy (Judicial Member ) dismissed the appeal filed by the assessee. Vijay Kumar Jaiswal, counsel appeared for the revenue. No one appeared for the assessee during the proceedings .

No cash Paid for taking Reversal of Entry as Commission through Proper Banking Channel: ITAT quashes Revision Order M/s. C.M.Buildcon Pvt. Ltd vs CIT 2023 TAXSCAN (ITAT) 1639

The Income Tax Appellate Tribunal (ITAT) Delhi Bench held that no cash paid for taking reversal of entry as commission through proper banking channel by assessee. Hence, held that the revision order passed under Section 263 of Income Tax Act 1961 has quashed.

According to the affidavit filed by the M/s Cardio Technovention , AO proved the  fact that  cash was not received by M/s Cardio Technovention. Hence, It was not self serving affidavit of the assessee but of concerned party from whom allegedly the assessee had benefited. The two member bench of the tribunal comprising Pradip Kumar Kedia (Accountant Member) and Challa Nagendra (Judicial Member) allowed the appeal filed by the assessee  and quashed the revision order.

Income Tax on sum received from Mother-in-Law by way Settlement of case in Court: ITAT directs Fresh Adjudication on ground of failing to make enquiry of correctness of claim Pawanveer Singh vs ITO 2023 TAXSCAN (ITAT) 1638

The Delhi Bench of Income Tax Appellate Tribunal (ITAT)  directed fresh adjudication on grounds of failing to make enquiry on the correctness of claim of sum received from mother -in-law by way of settlement of case in court.

The bench restore the assessment to the file of AO for making assessment afresh and directed  the AO to verify the correctness of the claim of the assessee that the sum of INR 12,00,000/- was received from his mother-in-law and frame the assessment after providing adequate opportunity to the assessee. 

Mismatch between contract receipts reflected in Form 26AS and Income Tax Return: ITAT directs Re-adjudication Sandhya Agarwal vs Assistant Commissioner of Income Tax  2023 TAXSCAN (ITAT) 1675

The Income Tax Appellate Tribunal (ITAT) of Kolkata Bench directed readjudication due to mismatch found between contract receipts reflected in form 26AS and Income Tax Return.

The two-member bench of the tribunal comprising Girish Agrawal (Accountant Member) and Sanjay Garg (Judicial Member) observed that confirmation letter from Birla Corporation Ltd. along with ledger account from their books of account which demonstrates the reversal of the contract receipts as claimed by the assessee has not been considered by the authorities below. Thus, the bench took this additional evidence on record and remitted the matter back to the file of AO for verification of these documents in respect of difference in contract receipts reflected in Form 26AS and that reported in the income-tax return.

No penalty shall be levied on profit rate of 8% estimated upon Gross Receipts as per provision of S. 44AD of Income Tax Act: ITAT M/s N.B. Builders & Promoters (P) Ltd vs Dy. CIT  2023 TAXSCAN (ITAT) 1642

The Income Tax Appellate Tribunal (ITAT) Chandigarh Bench ruled that no penalty should be levied on profit rate of 8% estimated upon gross receipts as per provision of Section 44AD of Income Tax Act, 1961.

The assessee case is not  covered by the said explanation especially  where the assessee has pleaded that it has filed its return under Section 153A Income Tax Act and disclosed  the income and paid taxes voluntarily though after the date of search. After reviewing the facts and submission, the two member bench of the tribunal comprising Vikram Singh Yadav (Accountant Member) and Aakash Deep Jain (Vice President) allowed the appeal filed by the assessee and and remand the matter to file of CIT(A).

ITAT Upholds Deletion of Addition made by CIT(A) on ground of Non Consideration of Previous Decision of Assessment The DCIT vs Kaira District Co-op. Milk Producers Union Limited  2023 TAXSCAN (ITAT) 1643

The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) upheld the deletion of the addition made by the Commissioner of Income Tax (Appeals) on the ground of non consideration of the previous decision of assessment. 

The bench observed that there was no change in the grant received by the assessee for the present assessment year and the present appeals issue was already decided in the previous assessment.  The two-member panel comprising Waseem Ahmed (Accountant) and T.R. Senthil Kumar (Judicial) upheld the deletion of the addition made by the commissioner while dismissing the appeal filed by the revenue.

ITAT upholds Allowance of Deduction u/s 10AA of Income Tax Act on ground of Proper e-filing of Form 56F DCIT vs Croygas Equipments Pvt. Ltd. 2023 TAXSCAN (ITAT) 1644

The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) upheld the allowance of deduction by the Commissioner of Income Tax (Appeals) under section 10AA of the Income Tax Act,1961 on the ground of proper electronic-filing of form 56F by the assessee. 

The two-member panel comprising Annapurna Gupta (Accountant) and Siddhartha Nautiyal (Judicial) held the Commissioner had correctly allowed the appeal of the assessee in the instant set of facts and no interference was called for in the order while dismissing the appeal filed by the assessee. 

Mere Non-production of Evidence by the Creditor of Assessee doesn’t result in Addition of Income: ITAT allows Appeal M/s Sudarshan Nirman Co vs ITO 2023 TAXSCAN (ITAT) 1646

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) held that mere non-production of evidence by the creditor of the assessee doesn’t result in the addition of income.

The two-bench member comprising of Amit Shukla (Judicial member) and Prashant Maharishi (Accountant member) directed the Assessing Officer to delete the addition of Rs.11,81,755/-. With respect to the balance sum of Rs.1,38,580/-, the assessing officer has made the addition of sums to be paid to the two carpenters. Naturally, the nature of payment and the quantum is so small that non-receipt of confirmation from them under Section 133 (6) of the Income Tax Act cannot result in addition. It was further shown that these expenses are not debited to the Profit and Loss account but are added to the fixed assets on which depreciation is claimed and allowed.

Deposit Made as a Reserve Amount for Business During Demonetization Period not amount to Unexplained Income: ITAT Deletes Addition Neeladri Sekhar Dey vs ITO 2023 TAXSCAN (ITAT) 1647

The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) held that deposits made as a reserve amount for the business during the demonetization period do not amount to unexplained income.

The two-bench member comprising of Sonjoy Sarma (Judicial member) and Girish Agrawal (Accountant member) that the approach taken by the Assessing Officer while making the addition of Rs. 24,07,000/- in the hands of the assessee by assuming that deposits made during the demonetization period are unexplained money was not correct.

Amount paid for Resale of Computer Software through EULAs agreements doesn’t amount to Deduction in TDS u/s 195 of Income Tax Act: ITAT Igroup Infotech India Pvt Ltd vs The A.C.I.T  2023 TAXSCAN (ITAT) 1648

The Delhi bench of the Income Tax Appellate Tribunal (ITAT) held that amount paid for resale of computer software through End User License Agreement doesn’t amount to deduction in Tax under Section 195 of the Income Tax Act, 1961.

The two-bench member comprising of Saktijit Dey (Judicial member) and N.K Billaiya (Accountant member) followed the decision of the Supreme Court and the Assessing Officer was directed to delete the impugned addition. Thus, the appeal of the assessee was allowed.

No Additions can be made u/s 68 of Income Tax Act when the Identities of lenders are Proved and loans are Repaid: ITAT Poddar Realtors vs Income Tax Officer 2023 TAXSCAN (ITAT) 1645

The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) held that no additions can be made under Section 68 of the Income Tax Act, 1961 when the identities of the lenders are proved and loans are repaired.

The two-bench member comprising of Manish Borad (Accountant member) and Sonjoy Sarma (Judicial member) held that the given facts and circumstances of the case, are of the considered view since the assessee has successfully discharged its onus of proving the identity of the loan creditor, which in the instant case duly registered with Ministry of Corporate Affairs, having PAN and had filed return of income as well.

Disallowance u/s 14A of Income Tax Act should not Exceed Exempt Income of Assessment Year: ITAT Upholds Deletion of Disallowance DCIT vs Jaypee Infra Ventures 2023 TAXSCAN (ITAT) 1650

The Delhi bench of Income Tax Appellate Tribunal (ITAT) held that the disallowance should not exceed the exempt income of that year and upheld the decision of Commissioner of Income Tax (Appeals) [CIT(A)] of deletion of the disallowance made by invoking the provision of Section 14A of the Income Tax Act,1961.

The Bench comprising of Kul Bharat, Judicial Member and M. Balaganesh, Accountant Member relied on the decision of Supreme court in PCIT vs Caraf Builders & Constructions (P.) Ltd that, “he disallowance should not exceed the exempt income of that year”, and on the observation of High court in Pr. CIT v. Bharti Overseas (P.) Ltd. Thus, the Tribunal do not see any infirmity in the direction of CIT(A) therefore upheld the deletion of disallowance of Rs.9,68,85,199 made under Section 14A of the Income Tax Act.

Income from a Partnership Firm having Separate Identity from Partner can’t be added together u/s 69A of Income Tax Act: ITAT deletes Addition Oinidri Chakraborty vs Income Tax Officer 2023 TAXSCAN (ITAT) 1652

The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) held that the income from the partnership firm having a separate identity from the partner cannot be added together under Section 69A of the Income Tax Act, 1961.

The two-bench member comprising of Manish Borad (Accountant member) and Sonjoy Sarma (Judicial member) held that the addition of Rs. 4,19,56,697/- made by the Assessing Officer under Section 69A of the Income Tax Act in relation to the cash deposited in Boral Union Cooperative Bank was unjustified as the same did not relate to her but belonged to her partnership firm M/s Champahati CS Shop in which both the bank accounts and the cash deposits from cash sales had been duly accounted in the regular books of accounts. Therefore, directed the Assessing Officer to delete the same.

Income Earned by Co-operative Society is eligible for Deduction u/s 80P(2)(a)(i) of Income Tax Act: ITAT Katwa-Kalna Co-Operative Agriculture And Rural Development Bank Ltd. vs ITO 2023 TAXSCAN (ITAT) 1653

The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) held that the income earned by the co-operative society is eligible for deduction under Section 80P(2)(a)(i) of the Income Tax Act, 1961.

The two-bench member comprising of Manish Borad (Accountant member) and Sonjoy Sarma (Judicial member) held that the alleged interest income earned by the assessee is a business income and the assessing officer erred in treating it as income from other sources. Therefore, the assessee is eligible for claiming deduction under Section 80P(2)(a)(i) of the Income Tax Act. The order of the Commissioner of Income Tax (Appeal) was set aside and deleted the disallowance of deduction under Section 80P(2)(a)(i) of the Income Tax Act.

Income surrendered during Search and Seizure cannot be treated as ‘Undisclosed’: ITAT deletes Penalty u/s 271AAB of Income Tax Act Shri Paras Mal Jain vs The DCIT  2023 TAXSCAN (ITAT) 1649

The Jaipur bench of the Income Tax Appellate Tribunal (ITAT) held that income surrendered during search and seizure cannot be treated as an undisclosed, deleted penalty under Section 271AAB of the Income Tax Act, 1961.

The two-bench member comprising of Sandeep Gosain (Judicial member) and Rathod Kamlesh Jayantbhai (Accountant member) held that the income surrendered is not an undisclosed income as specified in Explanation (c) of Section 271AAB of the Income Tax Act. Thus, the appeal of the assessee was allowed.  

Bank Statement Needs to be Obtained Before Issuing Notice for Reassessment u/s 148: ITAT Deletes Income Tax Addition Manveer Singh vs Income Tax Officer 2023 TAXSCAN (ITAT) 1654

The Delhi bench of Income Tax Appellate Tribunal (ITAT) held that the revenue authorities are expected at least to obtain the bank statement before issue of notice under Section 148 of the Income Tax Act, 1961 and completion of the assessment proceedings under Section 144 of the Income Tax Act, since the revenue could not bring anything on record with regard to the alleged deposits (bank statement) the addition made by the AO was deleted.

The Tribunal held that Since, the revenue could not bring anything on record with regard to the alleged deposits (bank statement) the tenets of “Best judge assessment” are grossly flouted. Thus, the addition made by the AO was hereby deleted.

AO fails to Communicate reason to Hold Income Under-reported: ITAT quashes 200% Penalty Kishor Digambar Pati vs Income Tax Officer  2023 TAXSCAN (ITAT) 1679

The Pune bench of the Income Tax Appellate Tribunal (ITAT) held that Assessing officer’s failure in proper communication of specific circumstance to the assessee resulted in violation of the Principles of natural justice.

Relying on the judgment of CIT Vs Samson Pericherry, PCIT Vs Goa Dorado and ‚PCIT Vs New Era Sova Mine, the two bench members comprsing of S. S. Godara&G. D. Padmashalioverturned the order of NFAC and quashed the penalties imposed.

Incorrect Claim of Deduction or Expenses Made in ITR does not Amount to Concealment of Income or Furnishing Inaccurate Particulars: ITAT sets aside NFAC Order Kongnoli Sarva Seva Society Ltd. vs Income Tax Officer  2023 TAXSCAN (ITAT) 1682

The Pune Bench of Income Tax Appellate Tribunal (ITAT) held that rejection of incorrect claim of deduction or expense made in the ITR, do not ispo facto tantamount to concealment of income or furnishing of inaccurate particulars, and set-aside the impugned order of NFAC(National Faceless Appellate Centre).

The two Judge Bench comprising of Partha Sarathi Chaudhury, Judicial Member and G. D. Padmahshali, Accountant Member, set-aside the impugned order of NFAC observing that rejection of incorrect claim of deduction or expense made in the ITR, do not ispofacto tantamount to concealment of income or furnishing of inaccurate particulars. To Read the full text of the Order CLICK HERE

No addition shall be made on Loan Advanced to Directors and Sister Concern of company from Interest Free Fund: ITAT Deputy Commissioner of Income Tax vs M/s. Parinee Housing Private Limited  2023 TAXSCAN (ITAT) 1681

The Income Tax Appellate Tribunal (ITAT) Mumbai Bench held that no addition should be made on loan advanced to directors and sister concern of the company from interest free Fund.

After reviewing the facts and submissions, the two-member bench of the tribunal comprising OM Prakash Kant (Accountant Member) and Vikas Awasthy (Judicial Member) after examining the Balance Sheet of assessee company observed that assessee has sufficient interest free funds for advancing loans to related parties.

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