The Income Tax Appellate Tribunal (ITAT), Jodhpur Bench, has recently, in an appeal filed before it, held that belated return cannot be submitted after the expiry of one year from the end of the Assessment Year (AY). Thus, allowing the assessee’s appeal, the Jodhpur ITAT held that “Hence, in this view of the matter, order passed by the AO under Section 154 is not in accordance with law and we do not concur with the findings of the ld. CIT(A). Thus, the appeal of the assessee is allowed.”
The Income Tax Appellate Tribunal (ITAT), Jodhpur Bench, has recently, in an appeal filed before it, while directing the AO to delete the penalty-imposed under Section 271(1) (C), held that additions cannot be made on estimation basis. Thus, allowing the assessee’s appeal, the Jodhpur ITAT held that considering the binding precedent as relied by the Ld. Counsel for the assessee, direct the AO to delete the penalty-imposed under Section 271(1)(c) of the Act to the assessee. Grounds raised by the assessee are hence, allowed. In the result, the appeal filed by the assessee is allowed.”
The Income Tax Appellate Tribunal (ITAT), Jaipur Bench, has recently, in an appeal filed before it, held that once penalty is levied for non-maintenance of book of accounts, no further default is to be imposed for not getting the same audited under Section 44AB of the Income Tax Act. “The penalty under Section. 271B can be levied when the assessee maintains the books and not get them audited but once it has been held and not disputed that the assessee has not maintained the books, how the penalty for not getting the books audited be levied. Finally, the Jaipur ITAT held that “Therefore, the penalty levied under Section 271B is not justified and thus vacated. In the result, appeal of the assessee is allowed.”
The Income Tax Appellate Tribunal (ITAT), Delhi Bench, has recently, in an appeal filed before it, held the penalty proceedings-initiated under Section 271(1)(c) of the Income Tax Act, 1961 as non- sustainable, when notices issued by the A.O turned to be bad in law, being vague. “The decisions relied upon by the ld. DR are misplaced and the decision of the Hon’ble Jurisdictional High Court is directly on the point.”, relying upon various precedents of the Delhi High court in this regard, the ITAT added.
The Income Tax Appellate Tribunal (ITAT), Pune Bench, has recently, in an appeal filed before it, while upholding the disallowance, held that payment to minors and unregistered firms by co-operative banks is violative of S. 194A. Thus, dismissing the assessee’s claims while partly allowing the appeal, the Pune ITAT held: “In the facts and circumstances, we are of the opinion that the AO has rightly invoked provisions of section 40(a)(ia) of the Act and disallowed interest paid to minor and unregistered firm hence, the said addition is confirmed. Accordingly, ground no.4 and 5 are dismissed.”
The Income Tax Appellate Tribunal (ITAT), Visakhapatnam Bench, has recently, in an appeal filed before it, held that export incentives such as duty drawback and MEIS, are assessable as ‘profits or gains from business or profession’. Thus, dismissing the Revenue’s appeal, the Visakhapatnam ITAT held: “Respectfully following the above precedents, we hold that the export incentives such as Duty Drawback and MEIS is an income assessable under the head ‘profits or gains from business or profession’ as per clause (iiib) and (iiid) to section 28 of the Act. In view of the above, the grounds raised by the Revenue are dismissed.”
The Income Tax Appellate Tribunal (ITAT), Hyderabad Bench, has recently, in an appeal filed before it, held that deduction u/s 54F is not allowable, if the assessee has more than a residential house at the time of claiming the deduction. Finally, allowing the Revenue’s appeal, the Hyderabad ITAT held that “As the case may be, without giving any finding on the above said facts, in the interests of justice, the case is required to be remanded back to the file of Assessing Officer with a direction to examine afresh having regard to the SRO Certificate, GST and Municipal Tax Receipts and to record a categorical finding as to for what purposes the facts were approved by municipal authorities.”
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has allowed deduction under Section 37(1) of the Income Tax Act 1961 holding that the interest paid on delayed Tax Deducted at Source (TDS) payment was compensatory in nature. According to Section 37, any expenditure that was planned or spent entirely and solely for the purposes of the company or profession (as opposed to capital expenditures or the assessee’s personal expenses) should be allowed in determining the income that must be paid under the “profits and gains of business or profession.”
The Kolkata Bench of Income Tax Appellate Tribunal (ITAT) has held that addition could not be based on SMS or WhatsApp messages without corroborative evidence. The Division Bench of Rajesh Kumar, (Accountant Member) and Sonjoy Sarma, (Judicial Member) allowed the appeal referring to the decision in ACIT vs. Machukonda Shyam holding that addition could not be sustained as it was based on the SMS or WhatsApp messages without any corroborative evidence.
The Mumbai bench of Income Tax Appellate Tribunal (ITAT) held that litigation expenses incurred by Assessee Company for recovery of money from the debtors could not be disallowed. Chetan M Kacha, Counsel for the revenue submitted that no TDS have been deducted on such payment of professional fees and therefore the same should be disallowed under Section 40(a)(ia) Income Tax Act, 1961. The bench observed that “Payments have been made by the assessee for the filling of various suits for recovery of money from the debtors like Fancy Impacts, Marble Gems, Asugems Sugey Gems which are still pending, and the suits were filed in 2012. Thus, these legal expenses could not be disallowed as they have been incurred during carrying on the business.”
An appeal was filed by the assessee, Harcharan Dass Gupta, against the order dated 28.03.2022 relating to Assessment Year 2017-18. Mansi Jain, on behalf of the assessee submitted that the AO had erred in making addition on account of interest paid on late TDS under Section 37 of the Income Tax Act 1961. The Division Bench of Shamim Yahya, (Accountant Member) and C.M. Garg, (Judicial Member) allowed the appeal and deleted the addition observing that, “We are of the considered view that the interest paid by the assessee u/s 201(1A) r.w.s. 206C (7) of the Act cannot be held as penal in nature and, thus, incurred out of commercial expediency and, therefore, is allowable u/s 37 of the Act.”
The Jaipur bench of Income Tax Appellate Tribunal (ITAT) while quashing the addition made by the assessing officer based on information by the Director of Revenue Intelligence (DRI), held that Officers of DRI are not proper officers for the purpose of Section 28 of Customs Act, 1962. Considering the submissions and orders made by the CESTAT and CIT(A), the division bench of the tribunal observed that“CIT(A) respectfully followed the order of the CESTAT and deleted the addition made by the AO and we also concur with the findings of the CIT(A) which has merit”.
The Income Tax Appellate Tribunal (ITAT), Jodhpur Bench, has recently in an appeal filed before it, held that addition under Section 68 and taxing under Section 115BBE cannot be invoked, when the assessee is not required to maintain the books of accounts. “As regards the invoking the provisions of Section 115BBE of the Act, we fail to find any merit in the action of the AO since in the instant case we have held that provision of Section 68 cannot be invoked as the assessee was not required to maintain the books of account. Since Section 115BBE comes into operation only in case of income referred in Section 68/69/69A/69B/69C and 69D of the Act which is not applicable on the issues raised in the instant case, therefore, there is no justification for invoking the provisions of Section 115BE of the Act”, the Coram of Khul Bharat, the Judicial Member and Manish Borad, the Accountant Member further observed.
The Jaipur bench of Income Tax Appellate Tribunal (ITAT), recently by observing the decision of Supreme Court, held that courts should not go strictly by the rulebook to deny justice to deserving litigants as it would lead to miscarriage of justice. Further, the bench of Sandeep Gosain, (Judicial member) and Rathod Kalesh Jayantbhai, (Accountant member) observed that the assessee had filed the appeal manually but simultaneously not electronically.
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has directed for fresh adjudication as the Commissioner of Income Tax Appeals (CIT(A)) failed to admit additional evidence as stipulated under rule 46A of Income Tax Rules 1962. The Division Bench of Shamim Yahya, (Accountant Member) and Astha Chandra, (Judicial Member) allowed the appeal observing that, it was necessary to look into the submissions of the assessee made before the CIT(A) in the light of the material / document (additional evidence) placed before the CIT(A) which he had not considered in his appellate order. The Bench directed to afford reasonable opportunity of being heard to the assessee and fresh assessment proceedings.
The Kolkata Bench of Income Tax Appellate Tribunal (ITAT) has deleted the additional holding that accumulated profits should be arrived after allowing depreciation as per Income Tax Act, 1961 and not as per companies Act. The Division Bench of Rajesh Kumar, (Accountant Member) and Sonjoy Sarma, (Judicial Member) allowed the appeal observing that, “We observe that in case the depreciation as per Income Tax Act is taken into account then the accumulated profits of the assessee would be working out to be in negative meaning thereby that
there are no accumulated profits for the purpose of Section 2(22)(e) of the Income Tax Act. In the aforesaid decisions it has been held that the accumulated profits have to be arrived at after allowing depreciation as per the Act and not as per Companies Act.”
The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) recently held that death of assessee shall not abate assessment proceedings as per Rule 26 of the Income Tax Rules, 1962. Assessee Ishwarbhai Madhavlal Patel is a Kartha of a Hindu Undivided Family. He filed an appeal against the order of the Commissioner of Income Tax passed under Section 250(6) of the Income Tax Act, 1961 for the Assessment Year 2014. According to the bench of Annapurna Gupta, (Accountant Member) held that ”assessee is no longer interested in pursuing the appeal and in the absence of any corrective action taken, the appeal stands abated” therefore the appeal filed by the assessee was as abated and non-maintainable.
The Income Tax Appellate Tribunal (ITAT), Delhi Bench, has recently, while deleting an addition made under Section 40(a)(ia) of the Income Tax Act, held that accrual of payment and actual act of making payment must both exist for TDS to be made. Thus, the ITAT finally held that “Before us, Revenue has not placed on record any contrary binding decision in its support. In such a situation, we relying on the aforesaid decision of Hon’ble Delhi High Court in the case of Tej Quebecor Printing Ltd. (supra) are of the view that AO was not justified in making addition u/s 40(a)(ia) of the Act. We, therefore, direct its deletion. Thus, the ground of assessee is allowed. In the result, appeal of the assessee is allowed.”
The Income Tax Appellate Tribunal (ITAT), Mumbai Bench, has recently, in an appeal filed before it, on finding that the order passed by the A.O. did not satisfy the twin conditions of “erroneous and prejudicial to the interest, set aside the Pr. CIT’s order. The assessee had filed the return of income for the A.Y 2017-18 on 10.03.2018, disclosing a total income of Rs.Nil and the return of income was processed under Section 143(1) of the Act. And subsequently, the case of the assessee was selected for scrutiny through CASS for complete scrutunity, which includes (i)Large investment in immovable property (ii) depreciation claimed (iii) deduction and deposit of TDS (iv) High Loans and Advances and income from House Property.
The Income Tax Appellate Tribunal (ITAT), Chandigarh Bench, has recently, in an appeal filed before it, quashed the disallowance of claim under Section 143(1)(a) for belated filing of ITR, on the ground of lack of enabling provision in the Income Tax Act. Thus, the ITAT finally held “For the above discussion, finding merit in the
grievance raised by the Assessee, the same is accepted. The order under appeal is accordingly reversed. Consequently, the disallowance of Rs. 4,11,664 is cancelled. In the result, the appeal is allowed.”
The Income Tax Appellate Tribunal, (Delhi Bench), has recently, in an appeal filed before it, held that no income addition can be made in respect of addition under the Black Money Act. “We have carefully perused the orders of the authorities below. Without going into the merits of the case, we are of the considered view that once additions have been made under the Black Money Act the same addition cannot be made under the IT Act on the same set of facts, therefore, the deletion of the addition by the CIT(A) does not call for any interference.” ruled ITAT.
The Income Tax Appellate Tribunal (ITAT), Hyderabad Bench, has recently, in an appeal filed before it, held that interest income from loan extended against mortgage of properties would not constitute Rental Income. Thus, dismissing the assessee’s claim, the ITAT held that “We find the learned CIT (A) while upholding the addition has also given a finding that since the assessee has already offered the rental income under the head income from house property as per remand report, the addition should be limited to the disallowance u/s 24(b) of the Act only which in our opinion is just and proper and needs no interference”.
The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT), while allowing the appeal filed by the assessee, recently held that all cash deposits in the savings account could not be considered as income of assessee. The tribunal observed that the assessee was not required to file return of income was not taken into account and therefore, there was no application of mind while recording the reasons for reopening.
The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) has held that addition for unexplained expenditure could not be made on mere extrapolation and presumption. The assessee, Assam Kerala Roadways Pvt. Ltd. was engaged in the business of transportation of goods. AO observed from the details filed by the assessee that the assessee has claimed a sum as vehicle operating and maintenance expenses under the head other expenses. The Division Bench of Rajesh Kumar, (Accountant Member) and Sonjoy Sarma, (Judicial Member) allowed the appeal and observed that, all the vehicles as test checked by the AO were duly registered as goods carriers on the web portal of VAHAN, Ministry of Road Transport & highways and in couple of cases the data were not available due to non-digitization of data.
The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) recently held that no addition can be made on compensation received from the government on account of acquisition of land under Acquisition of Land Act, 1894. The tribunal, after analyzing the contention confirmed that, the assessee deposited the amount which was he received from the Government as compensation on account of acquisition of land under Land Acquisition Act. Annapurna Gupta, (Accountant Member) allowed the appeal of the assessee and restored the issue back to the file of the AO for considering of the issue afresh after providing due opportunity of hearing to the assessee in accordance with law.
The Pune bench of the Income Tax Appellate Tribunal (ITAT) has held that the ex-gratia payment received by the employee on voluntary retirement cannot be taxed as “Profit in lieu of Salary” under section 17(3)(iii) of the Income Tax Act, 1961. Deleting the addition, the ITAT held that “without establishing the letter as non-genuine or without examining the sanctity of the payment made, simply invoking the provisions of the Act for making addition is not appropriate for a quasi-judicial authority.
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that repair work inextricably connected with prosecting, extraction or production of mineral oil are taxable under Section 44B of the Income Tax Act, 1961. “In case of ONGC Vs. CIT, the Hon’ble Supreme Court, while interpreting the provisions contained under section 44BB of the Act in the context of scope of work covered under the contract, has considered the entire gamut of work executed under the contract, including repair, training of personnel etc. and held that the pith and substance of each of the contracts is inextricably connected with prospecting, extraction or production of mineral oil. Thus, applying the ratio laid down in the aforesaid decision”, the bench further observed.
Distribution Fee to AE of Google India cannot be Treated as “Royalty/FTS”: ITAT deletes Orders against Google India
The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) has held that the distribution fee paid by the tech-giant Google India to its Associate EnterQuashing the additions and the penalty orders for the year 2008-09, a Two-Member Tribunal comprising Shri George George K. (Judicial Member) and Ms. Padmavathy S (Accountant Member) has observed that “the issue of taxing the distribution fees by treating the same as Royalty / FTS has already settled in favour of the assessee by the coordinate bench in assessee’s own case from the perspective of applicability of provisions of section 201 and accordingly there cannot be any disallowance u/s.40(a)(i) on this count.”
While deleting an addition under section 69A of the Income Tax Act, 1961, the Income Tax Appellate Tribunal (ITAT), Delhi bench has held that the re-deposit of cash after the declaration of the demonetization for the purpose of the renovation of house and marriage of son is normal conduct of a man ordinary prudent which cannot be doubted unless revenue authorities bring on record positive or adverse material to establish that the amount withdrawn by the assessee from his bank account was utilized or deposited somewhere else.
The Income Tax Appellate Tribunal (ITAT), Kolkata bench has held that the discount paid to dealers by the distributor in the nature of turnover discount is not subject to TDS u/s 194H of Income Tax Act, 1961. Sonjoy Sarma (Judicial Member), while upholding the CIT(A) order, held that “the ld. CIT(A) rightly observed that the payment of incentive are made to the various parties by the assessee leading to transfer of ownership in the goods (with complete risk and rewards) the assessee in such a situation did not have any right or control over the goods sold to the retailers, as the retailers held the goods on their own behalf and not on behalf of the assessee and therefore they did not act as an agents of the assessee as such no TDS is deductible u/s 194H of the Act as it is not applicable in the case of assessee.
In a major relief to M/s Petroleum India International (PII), the Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has held that TDS provisions under section 195 of the Income Tax Act is not applicable on the reimbursement of reimbursed expenses to employees deputed outside India. ITAT Members Shri Prashant Maharishi, Accountant Member and Shri Kuldip Singh, Judicial Member observed that “member employer company deducts tax at source under section 192 of the Act from the Indian salary of such employee as they continue to get their salary from his employer member companies.
Builder Liable to Pay Income Tax on Rental Income on Notional Basis of Municipal Ratable Value on Vacant Unsold Flats
The Income Tax Appellate Tribunal (ITAT), Mumbai bench has directed the income tax department to compute income tax on the rental income on the basis of municipal ratable value for computing the notional rent towards the vacant unsold flats kept by the assessee, Builder. The ITAT bench of Shri Amit Shukla, Judicial Member and Shri S. Rifaur Rahman, Accountant Member held that the assessee had unsold closing stock which was kept vacant during the current Assessment Year. The Assessing Officer has estimated the notional income by relying on the decision of the CIT v. Ansal Housing Finance and Leasing Company Limited by adopting the rent based on property tax.
The Income Tax Appellate Tribunal (ITAT), Delhi bench has quashed an ex-parte order and directed re-adjudication as the assessee did not get an opportunity to represent his case due to non-receipt of notices uploaded on the Income Tax portal.
Shri Saktijit Dey (Judicial Member) observed that “Drawing my attention to the impugned order of learned Commissioner (Appeals), learned counsel for the assessee submitted that proper opportunity of hearing was not granted to the assessee in hearing of the appeal.
The Income Tax Appellate Tribunal (ITAT), Mumbai bench, has deleted an addition under section 69A of the Income Tax Act, 1961 in respect of cash deposit during demonetization period holding that the deposit was made out of tuition fee received from the students. While deleting the addition, Shri Amarjit Singh, Accountant Member held that “the CIT(A) ought to have consider the material on record for adjudicating the issue contested in the appeal on merit. Section 250(6) contemplates that the first appellate authority would
determine point in dispute and therefore, record reason on such point in support of his conclusion. Therefore, I restore this case to the file of the ld. CIT(A) for adjudicating on merit after affording opportunityto the assesse. The assesse is also directed to make due compliance before the ld. CIT(A) without any failure. Therefore, the appeal of the assessee is allowed for statistical purposes.”
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has recently held that no assessment should be framed on the basis of Base Note if the assessee signed a Consent Waiver Form. Therefore, the bench set aside the order of lower authority. The tribunal of Prashant Maharishi (Accountant Member) and Kuldip Singh (Judicial Member) allowed the appeal by considering the following observations; “when “consent waiver form” has already been signed by the assessee way back on 30.07.2013 the AO is required to get all the original documents pertaining to the bank account in question maintained by the assessee with HSBC Bank, Geneva and then framed the assessment afresh.”
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