ITAT Weekly Round-Up

This Round-Up analytically summarises the key stories related to the Income Tax Appellate Tribunal (ITAT) reported at Taxscan.in during July 15 to 14, 2023.

Interest Received u/s 28 of Land Acquisition Act on Enhanced Compensation is not Taxable being Part of Compensation: ITAT deletes Income Tax Addition Nitin Kumar vs ITO CITATION:   2023 TAXSCAN (ITAT) 1680

The Delhi Bench of Income Tax Appellate Tribunal held that the interest received by the assessee under Section 28 of the Land Acquisition Act, 1894 on enhanced compensation is part and parcel of the compensation, if the agricultural land of the assessee has been acquired under compulsory acquisition and, thus, the same is exempt income under Section 10(37) of the Income Tax Act, 1961.

The Bench comprising of Chandra Mohan Garg, Judicial Member observed that the authorities below have treated interest received by the assessee on enhanced compensation under Section 28 of the Land Acquisition Act as ‘Income from other sources’ and denied exemption under Section 10(37) of the Income Tax Act.

The Tribunal categorically held that the interest received by the assessee under Section 28 of the Land Acquisition Act on enhanced compensation is part and parcel of the compensation if the agricultural land of the assessee has been acquired under compulsory acquisition. Thus, the same is an exempted income under Section 10(37) of the Income Tax Act. Hence, directed the AO to delete the addition.

Due date for Payment of PF/ESI on Public Holiday shall not result in Disallowance: ITAT sets aside Order of CIT(A) M/s.Sri Jayajothi & Co. Pvt. Ltd vs The Income Tax Officer CITATION:   2023 TAXSCAN (ITAT) 1691

The Chennai bench of the Income Tax Appellate Tribunal (ITAT) held that the due date for payment of Provident Fund (PF)/Employee State Insurance (ESI) on a public holiday shall not result in disallowances.

The two-bench member of V. Durga Rao (Judicial member) and Arun Khodpia (Accountant member) held that since the deposit of contribution received from the employees was covered by the provisions of the General Clauses Act. Therefore, the same shall be treated as payment within the due date, thus no disallowance on this count was called for. The order of the Commissioner of Income Tax (Appeal) has been set aside

ITAT upholds addition of Cash Deposits in Bank Accounts due to failure to explain Sources Indra Sharma vs ITO CITATION:   2023 TAXSCAN (ITAT) 1661

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) upheld the addition made on account of cash deposited in the bank account due to failure to explain the source.

After reviewing the facts and submissions, the two member bench of the tribunal comprising Dr. B. R. R. Kumar (Accountant Member) and Yogesh Kumar U.S (Judicial Member) upheld the addition made by the Assessing officer due to failure to explain the source cash deposited in the bank. Thus, the bench dismissed the appeal filed by the assessee.

Non- maintenance of books of account implies no audit of account done: ITAT deletes penalty for u/s 271B Sh. Taranjeet Singh Alagh vs The Income Tax Officer CITATION:   2023 TAXSCAN (ITAT) 1655

The Delhi bench of Income Tax Appellate Tribunal (ITAT) held that, if the assessee was not guilty of non-maintaining of books of accounts, the presumption would be that he shall not required to maintain the books of accounts and directed the Assessing authority to delete the penalty.

The Bench comprising of Kul Bharat Judicial Member and M. Balaganesh, Accountant Member observed that the penalty was initiated under Section 271A of Income Tax Act for non-maintenance of books of accounts as well as under Section 271A of Income Tax Act for not complying with the provisions of Section 44AB of the Income Tax Act regarding the auditing of the account.

The Tribunal further observed that if the assessee was not guilty of non maintaining of books of accounts, the presumption would be that he shall not required to maintain the books of accounts.

Thus, the Bench held that imposing penalty for non auditing of books of accounts is not justified. Therefore, directed the AO to delete the penalty.

ITAT Upholds Levy of Penalty u/s 271(1)(c) of Income Tax Act on ground of Furnishing Inaccurate Particulars of Income  Vimal Oil & Foods Ltd. vs DCIT CITATION:   2023 TAXSCAN (ITAT) 1658

The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) upheld the imposition of penalty under section 271(1)(c ) of the Income Tax Act,1961 on the ground of furnishing the inaccurate particulars of income by the assessee. The bench observed that the assessee had not been able to substantiate the business rationale of the traveling expense and the assessee only gave a general explanation, which was rejected by the assessing officer. 

The two-member panel comprising Annapurna Gupta (Accountant) and Siddhartha Nautiyal (Judicial) held that the Commissioner of Income Tax (Appeals) decided the case on merit and as per the law. Thus the levy of penalty was liable to be sustained while dismissing the appeal filed by the assessee. 

No Addition can be Made if AO Failed to Discharge Secondary Onus of Disproving Documentary Evidences Filed by Assessee : ITAT Deletes Income Tax Addition Manhar Yarns Pvt. Ltd vs ITO CITATION:   2023 TAXSCAN (ITAT) 1656

The Delhi bench of Income Tax Appellate Tribunal (ITAT) held that the Assessing Officer (AO),  has failed to discharge the secondary onus of demolishing/disproving the genuineness of the documentary evidences filed by the Assessee and thus addition made under Section 68 of the Income Tax Act,1961 which was sustained by the Commissioner of Income Tax (Appeals) CIT(A) was deleted.
The Bench comprising of Dr.B.R.R Kumar, Accountant Member and Yogesh Kumar U.S., Judicial Member observed that the assessee had provided all the details to discharge the onus to prove the identity, creditworthiness and genuineness of the investors, the onus will shift to Income Tax Authorities to disprove the documents furnished by the assessee.

The Tribunal further stated that CIT(A) has not made any further investigation on the claim made by the assessee or the document produced by the assessee. Thus, the addition cannot be sustained merely based on the inferences without gathering tangible evidence and the AO has failed to discharge the secondary onus of demolishing/disproving the genuineness of the documentary evidences filed by the Assessee.

No Income Tax Addition without Examination of Documents Furnished by Assessee, on Ground of No Response to Notice Issued by AO: ITAT M/s. Vachitra Builders Pvt. Ltd. vs Income Tax Officer CITATION:   2023 TAXSCAN (ITAT)

The Delhi bench of the Income Tax Appellate Tribunal (ITAT) held that the assessee has proved the genuineness, identity and creditworthiness of the creditors and the Assessing Officer(AO) is directed to delete the addition made under Section 68 of the Income Tax Act, 1961

The Bench comprising of G.S Pannu, President and Challa Nagendra Prasad, Judicial Member observed that the AO did not make any efforts to analyse the transactions and after having PAN number of the two parties he did not examine the same from the returns of these two companies. And also held that the assessee has proved the genuineness, identity and creditworthiness of the creditors and the Assessing Officer is directed to delete the addition made under Section 68 of the Income Tax Act.

Charging of Fees for conducting Matches or Tournament in  Rifle Shooting is not Commercial Activity : ITAT grants relief to Haryana Rifle Association Haryana Rifle Association C/o Ashok Mittal vs CIT(E) CITATION:   2023 TAXSCAN (ITAT) 1660

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) granting relief to Haryana Rifle Association ruled that charging of fees for conducting matches or tournaments in rifle shooting is not commercial activity.

The two member bench of the tribunal comprising  N. K. Billaiya (Accountant Member) and C.N. Prasad (Judicial Member) held that the association is not running on profit motive and, therefore, is very much eligible for registration under Section 12AA Income Tax Act.

Management Support Services provided to various Hotels in India are not FTS as per Article 12(4) of India-Singapore DTAA: ITAT deletes Addition Inter Continental Hotels Group [Asia Pacific] PTE Ltd vs The .Dy. C.I.T. CITATION:   2023 TAXSCAN (ITAT) 1662

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) held that management support services provided to various hotels in India are not Fee for Technical Service as per Article 12(4) of India -Singapore Double Taxation Avoidance Agreement (DTAA). Therefore, the bench deleted the addition.

The two-member bench of the tribunal comprising  N.K. Billaiya (Accountant Member) and Challa Nagendra Prasad (Judicial Member) directed the assessing officer to delete the addition.

Revision Order u/s 263 of Income Tax Act Against a Deceased Person is Not Valid : ITAT Hiraben Babubhai Patel vs Principal Commissioner of Income Tax CITATION:   2023 TAXSCAN (ITAT) 1663

The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) held that the revision order under section 263 of the Income Tax Act,1961 against a deceased person was invalid.

The bench observed that a notice issued /order passed in the name of a dead person was not a valid notice/order.  The two-member bench comprising Annapurna Gupta (Accountant) and Siddhartha Nautiyal (Judicial) quashed the revision order passed by the Commissioner under section 263 of the Income Tax Act while allowing the appeal filed by the assessee. 

Addition Made Purely on Estimation Basis , No Penalty shall be Leviable u/s 271(1)(c) of Income Tax Act : ITAT Deletes Penalty Fancy Diamonds India Pvt. Ltd. vs DCIT CITATION:   2023 TAXSCAN (ITAT) 1665

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) held that the penalty levied under Section 271(1)(c) of the Income Tax Act,1961 is liable to be cancelled in the instant cases since the additions have been made on estimated basis.

The ITAT Bench comprising of B.R. Baskaran, Accountant Member and Rahul Chaudhary, Judicial Member observed that during assessment proceedings, the addition was made on estimation at 12.5%. In first appeal, the addition was restricted to 3% and on further appeal to the Tribunal by the Revenue, the addition was enhanced to 6%. The entire addition right from assessment stage to the Tribunal was merely on estimations.

Thus, the Bench held that the penalty levied under Section 271(1)(c) of the Income Tax Act is liable to be cancelled in the instant cases since the additions have been made on estimated basis.

Payment Made for Employees Contribution after Due Date cannot be Allowed as Deduction : ITAT Directs to Restrict Disallowance Rishabh Metals and Chemicals Private Limited vs DCIT CITATION:   2023 TAXSCAN (ITAT) 1666

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) held that if the payment has been made with respect employees’ contribution after the due date of the Income Tax Act, 1961, the same has to be disallowed and cannot be allowed as deduction and therefore, adjustment has rightly been made and the Assessing Officer (AO) is directed to restrict the disallowance to the extent of employee contribution.

he bench comprising of Aby T. Varkey, Judicial Member and S. Rifaur Rahman, Accountant Member observed that it is undisputed fact that payment of PF & ESI amounting to ₹ 4,00,168/- was not made within the due date prescribed under the PF & ESI Act, but payment has been made much before the due date of filing the return of income.

Further, the Tribunal relied on the decision of Supreme court in Checkmate Services Private Limited vs. CIT, where it was held that “if the payment has been made with respect employees contribution after the due date of the respective acts, the same has to be disallowed and cannot be allowed as deduction and therefore, adjustment has rightly been made”.

Turnover of a Company Alone Cannot be Considered as Source of Loan Advanced to Assessee, Secondary Onus Needs to be Proved: ITAT Deletes Income Tax Addition M/s. Sasi Enterprises vs DCIT CITATION:   2023 TAXSCAN (ITAT) 1667

The Chennai Bench of Income Tax Appellate Tribunal (ITAT) held that the turnover alone could not be considered as source of loan as advanced to the assessee, thus directed the Assessing Officer (AO) to delete the impugned addition.
The bench comprising of V. Durga Rao, Judicial Member and Manoj Kumar Aggarwal, Accountant Member, observed that the assessee had discharged its primary onus of fulfilling the three ingredients of Section 68 of the Income Tax Act. The lender, in sworn statement, admitted the fact of granting of loan and thus, the assessee stood discharged. The onus was now on revenue.

Thus the Tribunal held that the turnover alone could not be considered as source of loan as advanced to the assessee and hence directed the  AO to delete the impugned addition of Rs.16.47 Lakhs.

No Disallowance u/s. 40(a)(ia) of Income Tax Act can be Made for Short Deduction of Tax: ITAT DCIT vs M/s. Shiv Build India CITATION:   2023 TAXSCAN (ITAT) 1659

The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) held that no disallowance was made under section 40(a)(ia) of the Income Tax Act,1961 for short deductions of tax by the assessee.

The bench observed that the assessing officer made disallowance under section 40(a)(ia) of the Income Tax Act on the ground that the assessee company had made short deductions of tax and thus was in violation of section 197(1) of the Income Tax Act.

The two-member bench comprising Annapurna Gupta (Accountant) and Siddhartha Nautiyal (Judicial) upheld the decision of the Commissioner while dismissing the appeal filed by the revenue.

Revisionary Powers u/s 263 of Income Tax Act not prevails if AO Conducts Inquiry and Verification during Assessment: ITAT quashes Revision Order Ashok Khimraj Jain vs Pr. Commissioner of Income Tax-1 CITATION:   2023 TAXSCAN (ITAT) 1668

The Pune Bench of Income Tax Appellate Tribunal has quashed the revisionary order passed by the Principal Commissioner of Income Tax (PCIT) under Section 263 of the Income Tax Act, 1961.

The bench consisting of S S Viswanethtra Ravi (Judicial Member) and G. D. Padmahshali (Accounting Member) allowed the appellant’s appeal and quashed the PCIT’s revisionary order.

Proceeds received on Sale of Carbon Credit is a Capital Receipt and not Business Income: ITAT deletes addition on Income by AO The Godavari Sugar Mills Pvt. Ltd vs Assistant Commissioner of Income Tax CITATION:   2023 TAXSCAN (ITAT) 1671

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) held that the proceeds received on the sale of carbon credit is a capital receipts and not business income.

The two-member bench comprising of Amit Shukla (Judicial member) and Prashant Maharishi (Accountant member) directed the assessing officer to verify the amount of carbon credit received by the assessee during the year. It was also directed to consider it as a capital receipt and compute the income of the assessee accordingly.

Penalty proceeding u/s 271A of Income Tax Act can’t be initiated on Proper maintenance of Books of Account: ITAT Suresh Sharma VS ITO CITATION:   2023 TAXSCAN (ITAT) 1669

The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) held that penalty proceeding under Section 271A of the Income Tax Act, 1961 cannot be initiated on proper maintenance of books of accounts.

The two-bench member comprising of Chandra Poojari (Accountant member) and Beena Pillai (Judicial member) held that the filing of an audit report is possible only after auditing of books of accounts. Thus, it means that the assessee has maintained the books of accounts. In the present case, the penalty has been levied for non-maintenance of books of accounts under Section 271A of the Income Tax Act.

Depreciation Allowable only on Fixed Assets not used for Commercial Purpose: ITAT The Dy. Commissioner of Income-tax vs Ahmedabad Urban Development Authority (AUDA) CITATION:   2023 TAXSCAN (ITAT) 1670

The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) held that depreciation is allowable only on fixed assets not used for commercial purpose.

The two- member comprising of Waseem Ahmed (Accountant member) and Senthil Kumar (Judicial member) held that the assessee is entitled to claim the depreciation as ‘plant and machinery’ as the assessee in promoting public objects which are activities in the nature of trade, commerce or business but without commercial motive. And the application of income shall precede accumulation by directing Assessing Officer to allow accumulation under Section 11(1)(a) of the Income Tax Act, from income remaining after deducting the amount applied for the objects of the assessee trust.

AO has Power to Reopen Case if there is any ‘Tangible Material ‘ Concluding Escape of Income from Assessment: ITAT V.K. Sasikala vs DCIT CITATION:   2023 TAXSCAN (ITAT) 1673

The Chennai Bench of Income Tax Appellate Tribunal (ITAT) held that in the absence of any new tangible material, the case could not be reopened on mere change of opinion,the reassessment proceedings were nothing but the review exercise undertaken by  Assessing Officer (AO) which is impermissible. Therefore,the reassessment proceedings are bad in law and hence, quashed.

The Bench comprising of V. Durga Rao, Judicial Member and Manoj Kumar Aggarwal, Accountant Member observed that in the absence of any new tangible material, the case could not be reopened on mere change of opinion. It was also stated that the AO has power to reopen the case of the assessee provided there is ‘tangible material’ to come to conclusion that there is escapement of income from the assessment.

The Tribunal held that the reassessment proceedings were nothing but the review exercise undertaken by AO which is impermissible. Therefore,the reassessment proceedings are bad in law and hence, liable to be quashed.

Penalty Can’t be Sustained on Fact that Notice Issued doesn’t Disclose Specific Charge: ITAT deletes Penalty Imposed u/s 271(1)(c) of Income Tax Act Meena Singhal vs ITO CITATION:   2023 TAXSCAN (ITAT) 1694

The Delhi bench of the Income Tax Appellate Tribunal (ITAT) held that the penalty cannot be sustained on the fact that the notice issued doesn’t disclose a specific charge, the penalty imposed under Section 271(1)(c) of the Income Tax Act, 1961.

The Two-member bench comprising of Kul Bharat (Judicial member) and B.R.R Kumar (Accountant member) held that the facts are not under dispute regarding the notice being defective. Therefore, the impugned penalty imposed under Section 271(1)(c) of the Income Tax Act by the Assessing Officer was deleted.

Commission Earned from Provision of Accommodation Entry shall be Added to Total Income of Assessee: ITAT Secunderabad Healthcare Ltd. vs Dy. Commissioner of Income Tax Central Circle–2(2) CITATION:   2023 TAXSCAN (ITAT) 1672

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) held that the commission earned from the provision of accommodation entry shall be added to the total income of the assessee.

The two-member bench comprising of Amarjit Singh (Accountant member) and Sandeep Singh Karhail (Judicial member) held that the assessee was found to be involved in the process of providing accommodation entries at the behest of Shirish C Shah. Therefore, the Assessing Officer was directed to consider 1% of the total sales declared during the year as net commission in the hands of the assessee for providing accommodation entry.

Profit from Bogus Purchases can be added to Taxable Income: ITAT DCIT vs Parth Developers CITATION:   2023 TAXSCAN (ITAT) 1674

The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) held that the profit from bogus purchases can be added to taxable income.

The two-member bench comprising of Waseem Ahmed (Accountant member) and T.R. Senthil Kumar (Judicial member) confirmed the addition to the extent of 10% on account of the alleged bogus purchase. Thus, the appeal filed by the Revenue and Cross Objection filed by the Assessee was dismissed.

ITAT Deletes addition made on account of loss from Derivative Trading adjusted with Business Income Kippy Engineering Private Limited vs DCIT CITATION:   2023 TAXSCAN (ITAT) 1677

The Income Tax Appellate Tribunal (ITAT), Kolkata Bench deletd the addition made on account of loss from derivative trading adjusted with business Income.

After reviewing the facts and submissions, the two-member bench of the tribunal comprising Pradip Kumar Kedia (Accountant Member) and Challa Nagendra (Judicial Member) relied upon the Supreme Court case of Snow Ten Investment Ltd. vs PCIT  observed that “ the insertion of clause (d) to the provision of section 43(5) of the Income Tax Act, the transaction in respect of trading in derivative as prescribed in clause (d) inserted in provision of section 43(5) would not be a speculative transaction”

Therefore, the views taken by the lower authorities are not in accordance with law. Thus the bench allowed the appeal of the assessee.

Failure to Issue Notice for Reassessment shall not be Curable u/s 292B of Income Tax Act: ITAT Quashes Reassessment Order Sohanbir Singh vs The Assessing Officer CITATION:   2023 TAXSCAN (ITAT) 1684

The Income Tax Appellate Tribunal (ITAT) Delhi Bench while quashing the reassessment order passed by the Assessing officer held that failure to issue notice for reassessment should not be curable  under Section 292BB of Income Tax Act, 1961

After reviewing the facts and submission the single  member bench of the tribunal Chandra Mohan Garg (Judicial Member) held that without valid jurisdiction AO passed the reassessment order.

ITAT upholds addition made on account of Unverifiable Unsecured loan due to failure to Prove Creditworthiness of Lenders Kirat Hotels Pvt. Ltd. vs ITO CITATION:   2023 TAXSCAN (ITAT) 1683

The Income Tax Appellate Tribunal (ITAT) Delhi Bench upheld the addition made on account of unverifiable unsecured loan due to failure to prove creditworthiness of lenders.

After reviewing the facts and submission the two-member bench of the tribunal comprising Shamim Yahya (Accountant Member) and Yogesh Kumar U.S, (Judicial Member) held that “assessee has not proved the capacity, identity and creditworthiness of the lenders and also failed to provide any document to prove the genuineness of the transaction which ultimately resulted in making addition by the A.O. and confirmation of the addition by the CIT(A)”. Therefore, the bench dismissed the appeal of the assessee.

Delay in Filing Audit Report due to Dispute Between Director of Company is Mere Technical Breach and not Malafide Intention: ITAT Deletes Penalty u/s 271 B of Income Tax Act Encore ConstructionConsortium Pvt. Ltd vs The Income Tax Officer CITATION:   2023 TAXSCAN (ITAT) 1685

The Chennai Bench of Income Tax Appellate Tribunal (ITAT) held that the Tax Audit Report was made available to Assessing Officer before completion of assessment proceedings.

The Departmental Representative P. Sajit Kumar, contended that the reason stated for delay in preparation of submission of Audit Report by the assessee is not tenable and reasonable, hence it is a clear cut case of failure on the part of the assessee to get audit under Section 44AB of the Income Tax Act, completed within the prescribed time limit.

The Bench comprising of Durga Rao, Judicial Member and Arun Khodpia, Accountant Member relied on the case of Puducherry Tourism Development Corporation Ltd. v. ITO where it was observed that for the audit report under Section 44AB of the Income Tax Act were furnished during the course of assessment proceedings under Section 143(3) of the Income Tax Act, which was also considered by the Assessing Officer before concluding the assessment. Thus for venial technical breach without any mala fide intention, penalty cannot be levied under Section 271B of the Income Tax Act. Hence, the Tribunal set aside the order of CIT (A).

Providing Uniforms, Books and Transport Services to Students Not main Objects of Trust; Commercial in Nature: ITAT Disallows Income Tax Exemption M/s. Sri Palaniappa Charitable vs The Income Tax Officer CITATION:   2023 TAXSCAN (ITAT) 1687

The Chennai Bench of Income Tax Appellate Tribunal (ITAT) held that providing uniforms, books or transport services to the students by the assessee trust are not its main objects and these been commercial in nature and disallowed the exemption under Section 11 of the Income Tax Act,1961.

A Single Judge bench comprising of Mahavir Singh, Vice President relied on the decision of CIT(A) and followed Supreme court’s judgement in the case of New Noble Educational Society vs. CIT, where it was stated that, “providing uniforms, books or transport services to the students by the assessee trust are not its main objects and these been commercial in nature.” Hence, the Tribunal confirmed the action of AO in disallowing the exemption on trust property under Section 11 of Income Tax Act.

Defect in Issue of Notice: ITAT quashes Scrutiny Assessment Proceedings Initiated by ACIT Jigna Chetan Mehta vs Assistant Commissioner of Income Tax CITATION:   2023 TAXSCAN (ITAT) 1686

The Income Tax Appellate Tribunal (ITAT) of Kolkata Bench has quashed scrutiny assessment proceedings initiated by the Assistant Commissioner of Income Tax (ACIT) initiated due to a defect in the issue of notice.

The tribunal observed that the assessee returned income was less than Rs. 20 lakhs and the jurisdiction were lying with the ITOs but the notice under Section 143(2) of the Income Tax Act has been issued by ACIT.

After reviewing the facts and submission, the two-member bench of the tribunal comprising Girish Agrawal, (Accountant Member) and Sanjay Garg (Judicial Member) observed that ACIT, had no valid jurisdiction over the assessee on the date of issuing notice under Section 143(2) of the  Income Tax Act. Therefore, quashed the scrutiny proceedings as defect in issuance of notice.

AO Cannot Make Adjustments when Assessee Extended Credit Period to Non-AE  Without Charging Interest on Delayed Payment: ITAT grants Relief to Tech Mahindra DCIT vs M/s. Tech Mahindra Ltd CITATION:   2023 TAXSCAN (ITAT) 1688

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) held that the AO(Assessing Officer) /TPO(Transfer Pricing Officer)  is not required to make the adjustment on notional basis when the assessee Extended Credit Period to Non-AE (Associated Enterprise) without charging interest on delayed payment

The bench comprising of Amit Shukla, Judicial Member and Amarjit Singh, Accountant Member observed that the assessee has extended credit period to its non-associated enterprises without charging any interest on delayed payment. Hence, the ground of appeal of the assessee was allowed that in such circumstances the AO/TPO is not required to make the adjustment on notional basis.

Mere Determination of Income based on Surmise and Conjecture is Grossly Illegal: ITAT DCIT vs Shri Vinod Kumar Bajaj CITATION: 2023 TAXSCAN (ITAT) 1690

The Delhi bench of the Income Tax Appellate Tribunal (ITAT) held that mere determination of the income based on surmise and conjecture is grossly illegal.

The Two-bench member comprising of Kul Bharat (Judicial member) and M. Balaganesh (Accountant member) held that the determination of income based on surmise and conjecture is grossly illegal and incorrect on the part of the Assessing Officer. Thus, the appeal of the revenue was dismissed.

Loan Advanced to Non-Relative Partner of Company without Securing Interest in Absence of Registered Documents: ITAT directs Re-Adjudication Apostle Trading Consultants Private Limited vs DCIT CITATION:   2023 TAXSCAN (ITAT) 1700

The Income Tax Appellate Tribunal (ITAT) Delhi Bench while directing re-adjudication in cases related to loan advanced to Non-relative partners of the company without securing interest in absence of registered documents.
After reviewing the facts and submissions, the two-member bench of the tribunal comprising Anil Chaturvedi (Accountant Member) and N.K. Choudhry (Judicial Member) directed the Assessing Officer to inquire about the surrounding circumstances qua transactions entered into by the Assessee with FDPL, and the profile and work done by FDPL, by directing the Assessee to produce FDPL or summoning FDPL directly.

Payment Made to Dealers for Sale of Fertilizers are in Nature of Rebates, No TDS: ITAT M/s. Greenstar Fertilizers Limited vs ACIT CITATION:   2023 TAXSCAN (ITAT) 1698

The Income Tax Appellate Tribunal (ITAT) Chennai Bench recently held that the payment made to dealers for sale of fertilizers are in the nature of rebates.Hence,no Tax Deduction at Source should be deducted from assessee.

After reviewing the facts and submissions, the two-member bench of the tribunal comprising Manoj Kumar Aggarwal (Accountant Member) and Mahavir Singh (Vice President) held that   there was no obligation on assessee to deduct TDS on rebates given on transaction of sale. Therefore, the bench allowed the appeal of the assessee.

Relief to Tripoto: ITAT directs Re-Adjudication on Income Tax Deduction Claim for Late Deposit of Employees’ Contributions to PF/ESI Tripoto Travel Private Limited vs ACIT CITATION:   2023 TAXSCAN (ITAT) 1701

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has allowed the appeal of Tripoto.com Pvt. Ltd. and directed the Assessing Officer (AO) to re-adjudicate the claim of deduction for the late deposit of employees’ contribution to the Provident Fund (PF) and Employees’ State Insurance (ESI).

The Two member Bench of Saktijit Dey (Vice-President) and Girish Agrawal (Accountant member) allowed the assessee’s appeal for statistical purposes and remitted the matter back to the AO for verification of the actual payment dates.

Delay in Filing Appeal due to Medical Treatment: ITAT Condones Delay of 259 Days Surendra Ramdhar Yadav vs Income Tax Officer CITATION: 2023 TAXSCAN (ITAT) 1692

The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) held that delay in filling appeal due to medical treatment and condones a delay of 259 days.8

The Single bench member comprising of Waseem Ahmed (Accountant member) held that on the perusal of the payment details by the assessee to the builder it was noted that only a payment of Rs. 24,000/- was made in the year under consideration and the balance payment was not made in the year in dispute.

Therefore, the tribunal found force in the argument advanced by the Authorized Representative for the assessee. The payment which has been made by the assessee in the other year, the same can be the subject matter of dispute in another year and not in the year under consideration. Thus, an addition of Rs. 24,000/- was confirmed representing the payment to the builder in the year under consideration. Hence, the ground of appeal of the assessee was partly allowed.

Expenditure Incurred on Foreign Currency on Telecommunications Charges and Technical Services Outside India, not Excluded from Export Turnover: ITAT Allows Income Tax Deduction to Tech Mahindra DCIT-2(3) vs M/s. Tech Mahindra Ltd. CITATION: 2023 TAXSCAN (ITAT) 1688

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) held that expenditure incurred on foreign currency on telecommunication charges and provision of technical services outside of India should not be excluded from export turnover for the purpose of computing under Section 10A of the Income Tax Act, 1961.

The Bench comprising of Amit Shukla, Judicial Member and Amarjit Singh, Accountant Member observed that expenses incurred in foreign currency on telecommunication charges and providing technical services outside India should be excluded from total turnover for the purpose of computation of deduction under Section 10A of the Income Tax Act held that the impugned expenditure has to be excluded from the total turnover.

Further, the Tribunal allowed the appeal of the assessee that expenditure incurred on foreign currency on telecommunication charges and provision of technical services outside of India should not be excluded from export turnover for the purpose of computing under Section 10A of the Income Tax Act, since this expenditure were not included in the export turnover of the assessee.

Non-Filling of Audit Report Within Due Date is Venial Technical Breach without Any Malafide Intention of Assessee: ITAT Deletes Penalty u/s 271B of Income Tax Act Vellakovil Primary Agricultural vs The Income Tax Officer CITATION:   2023 TAXSCAN (ITAT) 1689

The Chennai Bench of Income Tax Appellate Tribunal (ITAT) held that non-filing of audit report within the due date is a venial technical breach without any mala fide intention on the part of the assessee and for venial technical breach without any mala fide intention, penalty cannot be levied. Thus, deleted penalty under Section 271B of Income Tax Act, 1961.

The Bench comprising of V. Durga Rao, Judicial Member and Arun Khodpia, Accountant Member, observed that Tax Audit Report was made available to the Assessing Officer before completion of assessment proceedings, then for venial technical breach without any mala fide intention of the assessee, the penalty cannot be levied under Section 271B of the Income Tax Act.

Further, the tribunal relied on the case of Balaji Logistics v. ACIT where it was decided that, “non-filing of audit report within the due date is a venial technical breach without any mala fide intention on the part of the assessee and held that for venial technical breach without any mala fide intention, penalty cannot be levied” Hence, the penalty levied under Section 271B of the Income Tax Act was deleted for the assessment years 2013-14, 2014-15, 2015-16 and 2016-17.

Bonus received in respect of Employment shall be Taxable only in Contracting State and not in any Other State: ITAT allows Foreign Tax Credit Souvik Mukherjee vs Income Tax Officer CITATION:   2023 TAXSCAN (ITAT) 1692

The Delhi bench of the Income Tax Appellate Tribunal (ITAT) held that the bonus received in respect of employment shall be taxable only in the contracting state and not in any other state.

The Two-member bench comprising of Kul Bharat (Judicial member) and M. Balaganesh (Accountant member) held that during the period for which the bonus is received, the assessee was serving only in Singapore and not in India. Hence, the bonus received by the assessee, being a resident would be taxable for the year under consideration in India. However, in terms of Section 90 of the Income Tax Act, the entire taxes paid by the assessee in Singapore for the very same salary and bonus component would be eligible for the tax credit for the assessee.

The said determination of foreign tax credit by the Assessing Officer was rejected. The Assessing Officer was directed to allow the foreign tax credit in full in respect of tax paid in Singapore for the very same salary and bonus income. The ground raised by the assessee was allowed and the Assessing Officer was directed to give tax credit to the assessee accordingly. Thus, the appeal was allowed for statistical purposes.

ITAT Deletes Disallowance on Ocean Freight Charges Paid to Korean AE as Amount can be Taxable only in Contracting States Doosan Power Systems India Pvt. Ltd vs JCIT CITATION:   2023 TAXSCAN (ITAT) 171

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) has deleted the disallowance of ocean freight charges paid to Korean-associated enterprises (AE)since the amount can be taxable only in contracting states.

The bench of Mahavir Singh (Vice President) and Manoj Kumar Aggarwal (Accountant Member) has observed that “the assessee’s case is covered by Article 8 of DTAA of India-Korea and therefore the rentals of the ship are like profit from the operation of ship or aircraft in international traffic carried on by an enterprise of a contracting state.  The amount can be taxable only in the contracting state and not taxable in India.  Hence, the assessee is not liable to deduct TDS and therefore, no disallowance by invoking the provisions of section 40(a)(i) of the Act.”

No disallowance on claim of prior Period Expenses on Customs Duty paid due to unable to Perform Export: ITAT M/s. TANFAC Industries Ltd vs ACIT CITATION: 2023 TAXSCAN (ITAT) 1696

The Income Tax Appellate Tribunal (ITAT) Chennai Bench ruled that no disallowance on claim of prior period expenses on customs duty paid due to unable to perform Export

During the appeal proceedings, the tribunal observed that expenditure had crystallized only during the assessment year. Also, the incentive received in earlier years has been considered as income in earlier years. Thus, in this year, the assessee could not perform export obligation and accordingly, held liable to pay the said amount.

Therefore, the two member bench of the tribunal comprising Manoj Kumar Aggarwal (Accountant Member) and Mahavir Singh (Vice President) allowed deduction to assessee.

ITAT upholds enhanced addition relating to Advertising & Marketing Expense due to failure to substantiate Business Purpose M/s. HPL Additives Ltd vs The DCIT CITATION:   2023 TAXSCAN (ITAT) 1697

The Income Tax Appellate Tribunal (ITAT) Delhi Bench upheld the enhanced addition relating to advertising and marketing expenses due to failure to substantiate business purpose.

It was observed by the tribunal that the assessee did not furnish any detail or even in the name of Indian clients to whom the gifts, parties, lunches etc. were given. Moreover assessee has not produced supporting bills and vouchers before the authorities. Further, the credit card expenses incurred on account of advertisement and marketing the tribunal observed that information given by the assessee was vague and did not prove anything regarding the expense.

After reviewing the facts and submissions, the two member bench of the tribunal comprising M.Balaganesh (Accountant Member) and Chandra Mohan Garg (Judicial Member)  dismissed the appeal of assessee.

No Discharge of Onus to Substantiate Claim of Deduction under Income from Other Sources with Required Documents Evidence: ITAT Restores Matter to AO Smt.Ganigara Rekha Venugopal vs The Assistant Commissioner of Income-tax CITATION:   2022 TAXSCAN (ITAT) 1404

The Income Tax Appellate Tribunal (ITAT), Bangalore restores matter to the file of Assessing Officer (AO), on the ground that there was no discharge of onus to substantiate claim of deduction under income from other sources with required documents evidences.

A Division Bench consisting of Chandra Poojari, Accountant Member and, George George K, Judicial Member observed that “The assessee has to necessarily prove that shewas only in receipt of total saleable area of 41,947 sq.ft. in exchange of undeveloped land of 87,120 sq.ft. This exercise needs to be done by the assessee before the A.O. Accordingly, the entire issue is restored to the files of the A.O. The assessee shall also produce the necessary evidence to prove that a sum of Rs.3,41,133 are expenses attributable to the sale of developed sites. The assessee shall cooperate with the Revenue and shall not seek unnecessary adjournment in the matter. The A.O. shall afford a reasonable opportunity of hearing to the assessee before a decision is taken in the matter.”

Excess Stock and Excess Cash found during  Survey Proceedings are recorded in  Books of Account: ITAT Upholds surrendered income as Business Income Ashok K. Kriplani vs Dy. Commissioner of Income Tax CITATION:   2023 TAXSCAN (ITAT) 1702

The Income Tax Appellate Tribunal (ITAT) Pune Bench while upholding the business income which surrendered after the survey proceeding and observed that excess stock and excess cash found during survey proceedings are recorder in books of account.

After reviewing the facts and submission, the two member bench of the tribunal comprising Shamim Yahya (Accountant Member) and Yogesh Kumar U.S (Judicial Member) determined that assessee offered additional income under excess stock and excess cash during the course of survey and same were entered in the books of account as on the last day of financial year ending on 31-03-2018 and offered the said amounts to tax under the business income.

Income from Letting Out properties along with other Amenities are chargeable to Tax  under  head ‘’Income from Business” : ITAT deletes revision order M/s. Agrani Buildestate vs The Pr. CIT-1 CITATION:   2023 TAXSCAN (ITAT) 1703

The Income Tax Appellate Tribunal (ITAT) Jaipur Bench held that Income from letting out properties along with other amenities are chargeable to tax under the head of Income from business. Therefore, the bench deleted the revision order passed under Section 263 of the Income Tax Act, 1961.

It was observed by the tribunal that the assessee was selected for scrutiny for specific purpose for verification of refund claim and income from house property and, therefore, there cannot be any presumption of lack of enquiry .

After reviewing the facts and submission the two member bench of the tribunal comprising Rathod Kamlesh Jayantbhai (Accountant Member) and Sandeep Gosain, (Judicial Member) allowed the appeal filed by the assessee and dismissed the revision order passed by the Principal commissioner of Income Tax Act.

ITAT upholds disallowance made u/s 35(1)(ii) of Income Tax Act towards donation given to School of Human Genetics and Population M/s. H.K. Dutta & Co vs ACIT CITATION:   2023 TAXSCAN (ITAT) 1707

The Income Tax Appellate Tribunal (ITAT) Kolkata Bench upheld disallowance made under Section 35(1)(ii) of Income Tax Act, 1961 towards donation given to school of Human Genetics and Population.

During the appeallate proceedings, the tribunal found that the issues are already covered in against the assessee in case of Hiralal Bhandari vs. ITO.Therefore, the bench considering the decision of the above order of case dismissed the appeal.

After reviewing the order in case of Hiralal Bhandari vs. ITO, the two -member bench of the tribunal comprising Dr. Manish Borad (Accountant Member) and Sonjoy Sarma (Judicial Member) held that   donations given to the School of Human Genetics and Population as bogus.

Failure to Show Explanation on Cash Deposits Being Unaware of Notice Uploaded in e-Filing Portal on Counsel’s e-mail ID: ITAT Directs Readjudication Shri Puran Singh vs ITO CITATION:   2023 TAXSCAN (ITAT) 1705

The Chandigarh bench of the Income Tax Appellate Tribunal (ITAT) directed readjudication on the grounds of unawareness of notice uploaded in e-filing portal on Counsel’s e-mail ID and failure to show explanation on cash deposits in bank and post office.

After hearing both the parties, the tribunal observedthat the assessee, due to his advanced age, and being unaware of the notices issued, which were not served on him, but were uploaded on the e-filing portal at the email ID of his earlier counsel who did not make due compliances. Thus, did not appear before the Assessing Officer to provide the explanation on the cash deposits. The two-member bench comprising of A.D. Jain and Vikram Singh Yadav remitted the matter back to the CIT(A) to decide the issue afresh in accordance with law.

ITAT deletes addition made u/s 69 of Income Tax Act on Account of Gold Loan obtained from Partner which recorded under Books of Account M/s. H.K. Dutta & Co vs ACIT CITATION:   2023 TAXSCAN (ITAT) 1707

The Income Tax Appellate Tribunal (ITAT) Kolkata Bench deleted the addition made under Section 69 of Income Tax Act, 1961 on account of gold loan obtained from partner which was recorded under books of account.
During the appeal proceedings, the tribunal observed that the assessee has given detailed explanation about the nature and source of the said gold loan. Also, assessee is maintaining the books of account on Historical Cost Concept Method (HCCM)

After reviewing the facts and submission the two-member bench of the tribunal comprising Dr. Manish Borad (Accountant Member) and Sonjoy Sarma, (Judicial Member) allowed the appeal filed by the assessee and deleted the addition made by the lower authorities.

AO Fails to Verify Additional Evidence in violation of Rule 46A of Income Tax Rules: ITAT directs Readjudication Deputy Commissioner of Income Tax vs M/s. Ansaldo Caldaie Boilers India Private Limited CITATION:  2023 TAXSCAN (ITAT) 1706

The Chennai bench of the Income Tax Appellate Tribunal (ITAT) directed readjudication on grounds of non verification of additional evidence by the assessing Officer (AO).

The two bench member comprising of Durga Rao and G. Manjunatha observed that the matter pending before the Indian Council of Arbitration had not attained its finality as the hearing of the case had been fixed as 31t January, 2023 and 1st February, 2023.

Thus the tribunal remitted the matter back to the file of the Assessing Officer to decide the issue afresh in accordance with law after considering the submissions made before the CIT(A).

Notices of Hearing not received on Grounds of Technical Glitches in ITBA Portal : ITAT Directs Fresh Adjudication Shri Paritosh Rungta vs Income Tax Officer CITATION:   2023 TAXSCAN (ITAT) 1704

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) directed fresh adjudication on the grounds of notices for hearing not received

The two-member bench comprising of Prashant Maharishi and Sandeep Singh Karhaildirected the assessee to furnish all the details in support of its claim before the CIT(A) within 90 days of the receipt of the order and thereafter notice of hearing be issued by the CIT(A).

Interest Income earned by Cooperative Bank on Investments made with other Cooperative Bank is eligible for Deduction u/s 80P(2)(a)(i) Income Tax Act: ITAT deletes Revision Order The Mahatma Sahakari Griha Rachana Sanstha Maryadit vs CIT CITATION:   2023 TAXSCAN (ITAT) 1708

The Income Tax Appellate Tribunal (ITAT) Pune Bench while deleting the revision order passed under Section 263 of Income Tax Act, 1961 held that interest income earned by cooperative bank on investments made with other cooperative bank is eligible for deduction under Section 80 (2)(a)(i) of Income Tax Act, 1961.
It was observed by the tribunal that interest income was earned from the cooperative banks, the cooperative bank is also a specie of cooperative society. Therefore, the interest income earned by the cooperative society from the cooperative banks qualifies for deduction under Section 80(P)(2)(d) of the Income Tax Act.
After reviewing the facts and submission the two-member bench of the tribunal comprising R.S. Syal (Vice-President) and Partha Sarathi Chaudhury (Judicial Member) relied upon the decision of the Karnataka High Court in the case of Tumkur Merchants Souharda Credit Cooperative Ltd. held that interest income earned on the investment of surplus money with banks is also eligible for exemption under Section 80P(2)(a)(i) of the Income Tax Act. Therefore, the bench allowed the appeal filed by the assessee and dismissed the revision order.

No Variation in Returned Income and Assessable Income: Penalty u/s 271(1)(c) of Income Tax Act Not Leviable, rules ITAT Meera Anirudha Mirgunde vs Income Tax Officer CITATION:   2023 TAXSCAN (ITAT) 1709

The Income Tax Appellate Tribunal (ITAT) Pune Bench ruled that no penalty shall be levied when no variation is found in returned income and assessable income.

It was observed by the tribunal that   the assessment order and no demand raised by the AO and no disallowance or addition made by the AO. Further, in the present case, there was no variation in the returned income declared by the assessee which was accepted by the AO in the reassessment proceedings.

After reviewing the facts and submissions, the two-member bench of the tribunal comprising R.S. Syal (Vice-President) andS.S. Viswanethra Ravi (Judicial Member) held that there was no concealment of income or furnishing of inaccurate particulars of income attracting the provisions under Section 271(1)(c) of the Income Tax Act as the assessee made complete disclosure in the return of income and further offered the same for taxation.

Inadvertent Error in statement during Hearing cannot be Reason for Levy of penalty u/s 272(1)(c) of Income Tax Act: ITAT quashes Penalty against Kotak Mahindra Bank Kotak Mahindra Bank Limited vs Addl.Director of Income-tax CITATION:   2023 TAXSCAN (ITAT) 1712

The Mumbai bench of Income Tax Appellate Tribunal (ITAT) quashed penalty on the grounds that an inadvertent error in statement made by the assessee during Hearing cannot be Reason for Levy of penalty under Section 272(1)(c) of Income Tax Act, 1961.

The two-member bench comprising of Vikas Awasthy and  S. held that there was a reasonable cause for the delay in providing the details by the assessee and since the assessee in the end had shared all the relevant details, levy of penalty under section 272A(1)(c) is not warranted. Accordingly, the penalty thus levied was deleted

Non-Response on Notice Issued By NFAC due to Lack of Familiarity with ITBA Portal: ITAT directs Readjudication Krishnan Sivaprasad vs ITO CITATION:   2023 TAXSCAN (ITAT) 1711

The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) has directed the National Faceless Appeal Centre (NFAC) to re-adjudicate the case of a taxpayer who did not respond to notices issued by the NFAC due to his lack of familiarity with the ITBA portal.

The tribunal observed the submissions of the assessee that the NFAC did not consider the specific circumstances of the case, however, the NFAC may argue that its findings were justified. NFAC did not consider the taxpayer’s lack of response to the notices when making its findings. The Second appellate authority noted that the taxpayer had not received any training on how to use the ITBA portal and that they had not been given any clear instructions on how to respond to the notices.

The Two Member Bench of Beena Pillai (Judicial Member) and Chandra Poojari (Accountant Member) partially allowed the assessee’s appeal against the NFAC’s 2017-18 assessment year order, vacating the order and remitting the matter for fresh consideration. The ITAT held that the assessee’s lack of familiarity with the ITBA portal was a factor in their failure to comply with notices and directed the NFAC to give the assessee a fair hearing and consider the assessee’s arguments in detail.

AO Fails to Follow Procedures to Proceed Reassessment Proceedings under Income Tax Act; issued notices to different PAN Number: ITAT quashes notice u/s 148 ITO vs M/s BPO Finance and Investments Pvt. Ltd CITATION:   2023 TAXSCAN (ITAT) 1710

The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) has quashed the notice issued under Section 148 of the Income Tax Act, 1961 (the Act), by the Assessing Officer (AO) for failing to follow the procedures prescribed under the Income Tax Act.

The Bench of Rajesh Kumar (Accountant Member) and Sanjay Garg (Judicial Member) agreed with the assessee that the ITO Kolkata lacked the authority to issue the notice under Section 148 of the Income Tax Act and ruled that the ITO Kolkata had no basis to think that taxable income was evading assessment since the assessee’s jurisdiction had been shifted to Kolkata under Section 127 of the Income Tax Act.

The ITAT further determined that ITO Kolkata failed to issue a notice under Section 148 of the Act before making the assessment, which is required for assuming authority to frame an assessment under Section 147 of the Income Tax Act. Consiquently, the ITAT dismissed the revenue’s appeal and reversed the

TDS Mismatch in 26AS and Profit & Loss Account: ITAT Orders Reassessment on Lack of Substantiating Evidence Mohammed Meraj vs ACIT CITATION:   2023 TAXSCAN (ITAT) 1713

The Income Tax Appellate Tribunal of Kolkata Bench has issued a directive for the reassessment of a case where there was a discrepancy between the Tax Deducted at Source (TDS) reported in Form 26AS and the profit and loss account. This discrepancy arose due to insufficient supporting evidence.

The Two Member Bench Dr. Manish Borad (Accountant Member) and Sanjay Garg (Judicial Member) restored the issue to the file of the Assessing Officer for decision afresh with a direction that the Assessing Officer will give proper opportunity to the assessee to furnish the relevant documents to prove his contention and thereafter the Assessing Officer will examine and verify the documents and thereafter pass a speaking order accordingly.

Assessee Liable to Pay Late Filing Fee for Delay in Filing TDS Statement: ITAT Dismisses Appeal Yogender Kumar vs ITO CITATION:   2023 TAXSCAN (ITAT) 1714

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has dismissed an appeal by an assessee who was liable to pay a late filing fee for delay in filing a Tax Deduction at Source (TDS) statement.

The tribunal stated that “the assessee had the responsibility to deduct and deposit the TDS and also file the TDS statement within the stipulated time. The delay in filing the TDS statement was not deliberate, however, the assessee cannot escape from the liability to pay the late filing fee.”

The Two Member bench of Saktijit Dey (Vice- President) and Girish Agrawal (Accountant Member) held that the appeal filed by the assessee has been dismissed by the Income Tax Appellate Tribunal (ITAT). The bench upheld the decision of the Commissioner of Income-Tax (Appeals) [CIT(A)], confirming the imposition of a late filing fee of Rs. 1,59,200 on the assessee under Section 234E of the Income-tax Act.

Assessee Liable to Pay Late Filing Fee for Delay in Filing TDS Statement: ITAT Dismisses Appeal Yogender Kumar vs ITO CITATION:   2023 TAXSCAN (ITAT) 1714

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has dismissed an appeal by an assessee who was liable to pay a late filing fee for delay in filing a Tax Deduction at Source (TDS) statement.

The tribunal stated that “the assessee had the responsibility to deduct and deposit the TDS and also file the TDS statement within the stipulated time. The delay in filing the TDS statement was not deliberate, however, the assessee cannot escape from the liability to pay the late filing fee.”

The Two Member bench of Saktijit Dey (Vice- President) and Girish Agrawal (Accountant Member) held that the appeal filed by the assessee has been dismissed by the Income Tax Appellate Tribunal (ITAT). The bench upheld the decision of the Commissioner of Income-Tax (Appeals) [CIT(A)], confirming the imposition of a late filing fee of Rs. 1,59,200 on the assessee under Section 234E of the Income-tax Act.

Sale of Share was Substantiated with Documentary Evidence, Addition of Capital Gain As Unexplained Income is not Valid: Bombay HC upholds Order of ITAT Principal Commissioner of Income vs Indravadan Jain CITATION:   2023 TAXSCAN (HC) 1121

The Bombay High Court held that capital gain as unexplained income is not valid when the sale of shares was substantiated with documentary evidence and upheld the order of the Income Tax Appellate Tribunal(ITAT).

The Tribunal while dismissing the appeals filed by the Revenue also observed on facts that these shares were purchased by respondent on the floor of Stock Exchange and not from the said broker, deliveries were taken, contract notes were issued and shares were also sold on the floor of Stock Exchange. 

 A division bench comprising Justice K R Shriram & Justice Firdosh P Pooniwalla found no infirmity in the tribunal’s order and while dismissing the appeal of revenue, upheld the order of ITAT.

AO Fails to Follow Procedures in Issuing Notice u/s 148 of Income Tax Act: ITAT deletes Addition Simple Singh vs Income-tax Officer CITATION:   2023 TAXSCAN (ITAT) 1718

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has deleted an addition of Rs. 37,35,000/- made by the Assessing Officer (AO) under Section 69 of the Income Tax Act, 1961 on the ground of unexplained investment.
The Tribunal observed that the assessee had been a regular taxpayer for more than ten years and that her return income had always been accepted in the past which shows that there is no unexplained investments.

A Single Member of Kul Bharat (Judicial Member), held that the AO has failed to follow the procedures prescribed under Section 148 of the Act in issuing the notice for reopening the assessment. Specifically, the AO has not provided the assessee with a copy of the information on which the reopening of the assessment was based. As a result, we hold that the addition made by the AO is invalid and Appeal is allowed for statistical purposes.

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