This yearly digest analyzes all the ITAT stories published in the year 2023 at taxscan.in
The Chennai bench of the Income Tax Appellate Tribunal (ITAT) recently held that the remuneration paid to consultant doctors is not salary, hence Tax Deduction at Source (TDS) is not applicable.
Accordingly, the tribunal of Mahavir Singh, Vice President, and Manjunatha. G, Accountant Member deleted additions made towards short deduction of TDS under Section 201(1) and interest thereon under Section 201(1A) of the Act in respect of payment made to consultant doctors.
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) while quashing the assessment passed under Section 153A of the Income Tax Act 1961 observed that approval granted under Section 153D of the Income Tax Act, 1961 was without verifying assessment records.
After perusal of the records the two-member bench of Shamim Yahya, (Accountant Member) and Astha Chandra, (Judicial Member) allowed the appeal filed by the assessee and observed approval given under Section 153D has been granted in a mechanical manner and without application of mind and thus it is invalid and bad in law and consequently vitiated the assessment order for want of valid approval under Section 153D of the Income Tax Act.
The Chennai bench of Income Tax Appellate Tribunal (ITAT) has recently held that appeal could not be dismissed on ground of assessee filing against Vivad se viswas. Therefore, the bench set aside the order passed by the lower authority. The two-member bench of Durga Rao, (Judicial Member) and Manoj Kumar Aggarwal, (Accountant Member) set aside the order of the CIT(A) allowing the appeal filed by the assessee.
The Income Tax Appellate Tribunal (ITAT), Delhi Bench, has recently, in an appeal filed before it, held that coercion shouldn’t be there to admit undisclosed income, and also that admissions should be backed by credible evidence. In the result, the appeal of the Revenue is dismissed.
The Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench, has recently in an appeal filed before it, held that unsecured loan taken at higher rate for commercial expediency is admissible under section 57(iii).
Thus, the Ahmedabad ITAT finally held: “Considering the facts of the case and our observations made in the preceding paragraphs, we are hereby allowing the appeal of the assessee. In the result, the appeal of the assessee is allowed.”
The Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench, has recently, in an appeal filed before it, while upholding the revision order under Section 263, held that failure of AO to examine purchase of land by the assessee, as per Section 56(2)(vii)(b), is prejudicial to the Revenue’s interest.
Thus, the Ahmedabad ITAT finally held: “In view of the above, we hold that there is no infirmity in the order of the Ld. PCIT passed under Section 263 of the Act and the appeal of the assessee is liable to be dismissed. In effect, the appeal of the assessee is dismissed.”
The Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench, has recently in an appeal filed before it, on finding that the legal prerequisite for reopening beyond 4 years under section 147 was not fulfilled, set aside the reassessment orders.
Thus, the Ahmedabad ITAT finally held: “In view of the above, it is clear that prerequisite laid down in law for reopening of the case beyond four years is not found to be fulfilled in the present case. The reopening by the AO therefore, we hold, in both the cases is without jurisdiction; the assessment orders, therefore, passed as a consequence are invalid and directed to be set aside. In the result, appeals of the Revenue are dismissed and Cross objections of the assessee are allowed in above terms.”
The Chennai bench of Income Tax Appellate Tribunal (ITAT) has recently held that cash received from sister-in-law deposited in bank accounts during the demonetization period is not a gift. Hence, the bench upheld the addition made by the assessing officer.
Therefore, the bench of Mahavir Singh, Vice President and Manjunatha. G, Accountant Member sustained additions made towards cash deposits made during the demonetization period.
The Chennai Bench of the Income Tax Appellate Tribunal (ITAT), treated the source for cash deposits found in bank accounts as unexplained money on unsubstantiated evidence.
The Tribunal concluded by observing that “We are of the considered view that the claim of the assessee that source for cash deposits found in three bank accounts is out of amount received from debtors of partnership firm is unsubstantiated and thus, we reject argument of the assessee.”
The Delhi bench of Income Tax Appellate Tribunal (ITAT) has recently held that no addition could be made under Section 69B of Income Tax Act on account of jewellery shown in wealth tax return.
Therefore, considering the wealth tax return and books of assessee, the bench deleted the addition made by the assessing officer.
The Income Tax Appellate Tribunal (ITAT), Ahmedabad bench has held that brought forward losses can be adjusted against the income declared belatedly income tax return under section 139(3) of the Income Tax Act, 1961.
Concluding the order, the ITAT held that “It is also important to note that the assessee has filed the return of income belatedly for the year under consideration but there is no prohibition to adjust the brought forward losses against the income declared belatedly in the return of income under the provision of section 139(3) of the Act. At the time of hearing, the ld. DR has not brought anything on record contrary to the findings of the ld. CIT-A. In view of above, we do not find any infirmity in the order of the Ld.CIT(A). Hence, the ground of appeal of the Revenue is hereby dismissed.”
In a setback to the State Bank of India (SBI), the Income Tax Appellate Tribunal (ITAT), Mumbai bench has held that since the fee paid for core banking solution (CBS) was not proved as revenue in nature, the Assessment Order was “erroneous” and therefore, revisional jurisdiction under section 263 of the Income Tax Act, 1961 can be invoked.
Upholding the revision order, the ITAT held that “In the absence of examination of the claim made by the assessee the finding of Ld. PCIT that the order of the AO is erroneous and prejudicial to the interest of the revenue qua the expenditure claimed as CBS Fees is upheld. Therefore, we hold that exercise of the revisional jurisdiction u/s 263 of the Act by the Ld. PCIT is proper and valid. And therefore, we dismiss the appeal of the assessee.”
The Income Tax Appellate Tribunal (ITAT), Mumbai bench has held that the amount forfeited out of share capital would amount to “capital receipt” and therefore, the provisions of section 56(2)(ix) of the Income Tax Act, 1961 shall not be applicable.
Relying on an identical order in the case of M/s. R.S. Triveni Foods P. Ltd. Vs. Addl. CIT, the ITAT deleted the impugned order and held that “the amount of Rs.1,50,35,625/- forfeited by the assessee out share capital issued by it shall not fall within the scope of sec.56(2)(ix) of the Act. Further, the said amount shall constitute a Capital receipt in the hands of the assessee. Accordingly, the above said amount is not taxable in the hands of the assessee. Accordingly, we set aside the order passed by Ld CIT(A) on this issue and direct the AO to delete the addition of the above said amount made in the hands of the assessee.”
The Kolkata bench of Income Tax Appellate Tribunal (ITAT) has recently held that interest income from fixed deposits of co-operative society made during the course of business is eligible for deduction under Section 80P(2)(a)(i) of the Income Tax Act, 1961. Therefore, the two-member bench of Dr Manish Borad, (Accountant Member) and Sonjoy Sarma, (Judicial Member) allowed the appeal filed by the assessee.
The Delhi bench of Income Tax Appellate Tribunal (ITAT) held that no penalty should be imposed under Section 271(1)(c) of Income Tax Act, 1961 without issue of notice specifying charge.
The tribunal while considering the submission observed that when no specification of charge in the penalty notice leads to the same becoming void and penalty on that count is to be deleted. Therefore, the two-member bench of Shamim Yahya, (Accountant Member) and Astha Chandra, (Judicial Member) observed that the penalty notice issued by the authority was defective. Due to that, the bench allowed the appeal filed by the assessee.
The Kolkata bench of Income Tax Appellate Tribunal (ITAT) has recently held that interest income from fixed deposits of co-operative society made during the course of business is eligible for deduction under Section 80P(2)(a)(i) of Income Tax Act, 1961.
The tribunal, after verifying the contentions of the above observed that assessee is a society as per the West Bengal Cooperative Societies Act, 2006. The interest income from the Fixed Deposits, which was made by the assessee in the course of business and eligible for deduction under Section 80P(2)(a)(i) of the Income Tax Act. Therefore, the two-member bench of Dr. Manish Borad, (Accountant Member) and Sonjoy Sarma, (Judicial Member) allowed the appeal filed by the assessee.
The Income Tax Appellate Tribunal (ITAT), Bangalore bench in a matter of addition to unaccounted cash based on deposits during demonetisation directed the assessee to establish the genuineness of money.
The Tribunal remanded the issue to the AO to carry out the necessary verification of the cash deposited in the bank account of the assessee. Further held, that the AO shall verify all the details/evidence filed by the assessee based on the above direction and consider the claim by the law.
The Delhi bench of Income Tax Appellate Tribunal (ITAT) has recently held that the limitation period under section 263(2) of Income Tax Act, 1961 begins from the date of original assessment order not from reassessment order. Hence, the bench quashed the revision order passed by the PCIT.
The two-member bench of Chandra Mohan Garg, (Judicial Member) and B.R.R. Kumar, (Accountant Member) allowed the appeal filed by the assessee and observed that there is no irregularity in the assessment order passed by the assessing officer.
The Income Tax Appellate Tribunal (ITAT), Bangalore bench has held that bad debts are allowable as a deduction under section 36(1)(vii) of the Income Tax Act, 1961.
In light of the decisions, the Coram comprising Shri George George K., Judicial Member and Shri Laxmi Prasad Sahu, Accountant Member directed the AO to delete the addition made under Section 36(1)(vii) of the Income Tax Act, 1961 and allowed the appeal.
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that Tax Deducted at Source (TDS) would not be applicable to Uber India on payments made to the driver partners.
The Bench held that the assessee could not be treated as a “person responsible for paying‟ for the purpose of Section 194C read with Section 204 of the Income Tax Act, 1961 in respect of payment made to driver partners on behalf of the Uber BV for the transportation services. Accordingly, the coordinate bench held that the assessee could not be treated as an “assessee in default‟ under Section 201(1)/201 (1A) of the Income Tax Act.
The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT), confirmed the deletion of disallowance of excess claim of depreciation and noted that motor vehicles qualify as self-propelled vehicles.
The Tribunal of Waseem Ahmed, Accountant Member and Siddhartha Nautiyal, Judicial Member observed that “we are of the considered view that motor vehicles qualify as self-propelled vehicles and accordingly, we find no infirmity in the order of the CIT(Appeals), who has allowed relief to the assessee with respect to this issue.
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that the assessment under Section 153C of the Income Tax Act, 1961 would not be valid for the assessment year not covered within the period of 6 years.
The Bench allowed the appeal holding that the AO had no jurisdiction to make an assessment of assessee’s income for AY 2009-10 as the relevant assessment year AY 2009-10 was outside the scope of Section 153C of the Income Tax Act.
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has directed re-adjudication on finding the rejection of registration of a trust for non-compliance of notice and non-registration under Section 12AB of the Income Tax Act, 1961 without adhering to principle of natural justice.
The two-member Bench of OM Prakash Kant, (Accountant Member) and Kavitha Rajagopal, (Judicial Member) allowed the appeal and directed re-adjudication holding that the assessee had to be given one more opportunity to present the details sought for by the CIT(E) as on the principles of natural justice.
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has recently held that income earned and declared by the wife on sale of joint-owned property is not taxable at the hands of the husband.
The two-member bench of Amit Shukla, (Judicial Member) and S. Rifaur Rahman, (Accountant Member) viewed that income cannot be taxed in the hands of two persons. Hence, the bench allowed the appeal filed by the assessee.
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) recently deleted an addition made on undisclosed income and observed that notional interest cannot be taxed as income.
The assessments for the said years had become final prior to the date of search and there was no incriminating material found during the course of search to support and substantiate the said addition. Further added that there was also no error in CIT(A) holding that it is settled law that notional interest cannot be taxed as income.
The appeal of the assessee got allowed in result.
The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) recently quashed an ex-parte order due to the non-service of notice and granted the assessee the opportunity of hearing.
It was further observed that the notices were not served in the proper manner, and the assessing officer did not obtain the necessary approval before issuing them, indicating a lack of applied mind. The assessee should be given a proper opportunity to be heard and submit supporting documents. As a result, the appeal of the assessee was allowed for statistical purposes.
The Income Tax Appellate Tribunal (ITAT), Delhi Bench, has recently, in an appeal filed before it, held that reassessment cannot be based on incorrect facts. The aforesaid observation was made by the Delhi Income Tax Appellate Tribunal when an appeal was preferred before it by the Assessee, as against the order of the Commissioner of Income Tax (Appeals), Noida (CIT(A) arising from the assessment order passed by the Assessing Officer (AO) under Section 147/148 of the Income Tax Act, 1961, concerning the AY 2009-10.
“We thus set aside the action of the CIT(A) and quash the re-assessment proceedings giving rise to the present appeal. In the result, the appeal of the assessee is allowed”, the coram of Chandra Mohan Garg, the Judicial Member, along with Pradip Kumar Khedia, the Accountant Member, held.
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has quashed the Income Tax Scrutiny Assessment under section 143(3) due to the issuance of a manual assessment order without a Documentation Identification Number (DIN).The appeal filed by the assessee was allowed, and the appeal of the revenue was dismissed.
The Income Tax Appellate Tribunal (ITAT), Delhi Bench, has held that Section 69A addition under the Income Tax Act, 1961 cannot be based on surmises conjectures and hypothesis.
Thus, the Delhi ITAT coram of Astha Chandra, the Judicial Member and N.K Billaiya, the Accountant Member finally held: “Considering the totality of facts from all possible angles, we do not find any reason to interfere with the findings of the ld. CIT(A). In the result both the appeals of the Revenue are dismissed.”
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has recently held that the global operation fee received from GE T&D India Ltd (GETDIL) is a fee from technical services (FTS) under the provisions of the India-UK Double Taxation Avoidance Agreement (DTAA). Therefore, the bench granted relief to UK Grid Solution Limited.
The two-member bench of N.K. Billaiya, (Accountant Member) and Anubhav Sharma, (Judicial Member) held that “Tax authority below have fallen in error in taxing global operation fee of Rs.8,12,37,030 received from GETDIL as Fees from Technical Services under the provisions of the Act and the India-UK DTAA, without appreciating that provision of said services by the Appellant did not satisfy the ‘make available’ clause contained in Article 13(4)(c) of the India-UK DTAA”.
The Mumbai Bench of Income Tax Appellate tribunal (ITAT) has set aside the reassessment proceedings initiated after the expiry of 4 years as there was no failure to provide material facts.
“In the present case, from the facts, it was evident that assessment was completed in the case of the assessee under Section 143(3) of the Act. Further, notice under Section 148 of the Act was issued on 29/03/2019, beyond a period of 4 years from the end of the relevant assessment year on 2012-13. Therefore, it needs to be examined whether the conditions prescribed in 1st provision to section 147 of the Act are satisfied in the present case,” the Bench further observed.
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has quashed the addition under Section 153A of the Income Tax Act, 1961 towards bogus purchase and disallowance of salary as the income escaped for assessment was not represented in the form of an asset.
“What was assessed in this year under Section 153A of the Income Tax Act was the addition towards alleged bogus purchases and disallowance of salary/professional fee under Section 37 of the Income Tax Act. It was not shown that the income, if any, generated out of these two disallowances is represented in the form of asset”, the Income Tax Appellate Tribunal Bench further observed.
The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) deleted the penalty under Section 271B of the Income Tax Act 1961, imposed on assessee for bonafide belief of treating gross commission as turnover.
“During assessment proceedings, the assessing officer required the books of account to be provided and audited. The audit report was furnished on May15, 2019, prior to the completion of assessment (Assessment order under section 143(3) of the Income Tax Act was completed on 18.12.2019).Therefore, the assessing officer had the benefit of an audit report in completing the assessment” the Tribunal noted.
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) deleted the penalty under Section 271(1) (c) of the Income Tax Act on the assessee in the absence of concealment or inaccurate particulars of income.
The Tribunal deleted the penalty imposed under Section 271(1) (c) of the Income Tax Act in both the assessment years and both appeals were allowed.
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has quashed the addition made against a practicing doctor for cash deposit during the demonetisation period. “There has been only one cash deposit of Rs. 165,000/- on account of old currency notes (SBN) in a savings bank account. The assessee is a practicing doctor, ENT specialist, deriving income from medical practice. The assessee has also deposited cash in his Saving Bank account (non-SBN) which has been duly accepted by the AO during the same period,” the Bench further observed.
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