This yearly digest analyzes all the ITAT stories published in the year 2023 at taxscan.in
The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) deleted the addition made by the assessing officer without understanding the whole contractual obligations made by the parties. The two-member bench comprising Rajpal Yadav(Vice-President) and Girish Agrawal, (Accountant) held that the higher amount was to be considered as clawback payment, then a higher amount was to be allowed as a deduction not character of income. It was also held that the addition made by the AO is liable to be deleted while allowing the appeal filed by the assessee.
The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) held that depreciation should be allowed for the computing income available for accumulation under section 11(6) of the Income Tax Act, 1961.
The two-member bench comprising Rajpal Yadav (Vice-President) and Girish Agrawal (Accountant) held that the depreciation should be allowed for computing the income available for accumulation and no further submissions were adduced to rebut the assessing officer’s findings of fact and or position of law while allowing the appeal filed by the assessee.
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) directed re-adjudication for the rejection of a claim of expenditure incurred for club members on the ground of non-business expenses.
A single-member bench comprising Aby T. Varkey (judicial) held that the assessee company functions through the director/shareholders and even though converted to a Limited liability partnership, still functions through the key persons and the entrance fees paid by the assessee for becoming a member of the Cricket Club of India would inure benefits for the business of the assessee. It was also directed to the assessing officer to re-adjudicate the matter and to delete the addition made by him while allowing the appeal filed by the assessee.
The Mumbai bench of Income Tax Appellate Tribunal (ITAT) has recently while providing relief to Sabre Travel Network (India) deleted additions made on account of foreign exchange loss incurred from marketing services.
The two member Bench of the ITAT Vikas Awasthy, (Judicial Member) and Gagan Goyal, (Accountant Member) allowed the appeal filed by the assessee and observed that the same issue was already closed by the tribunal in assessee own case in the assessment year 2009-10. Nitesh Joshi & Ruben Menezes ,who appeared for the assessee and Vinod Tanwan who appeared for the revenue.
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has deleted the disallowance as the tax auditor had committed an error in reporting the date of payment of Provident Fund (PF) collected from the employees.
The two-member Bench of B.R. Baskaran (Accountant Member) and Kavitha Rajagopal (Judicial Member) observed that the assessee had furnished a revised certificate issued by the tax auditor mentioning correct dates of payment. The assessee had also furnished copies of challans for the payment of provident fund and also relevant copy of bank statements in support of the claim of actual date of payment mentioned. The ITAT bench set aside the impugned order passed and deleted the addition made under section 36(1)(va) of the Income Tax Act.
The Income Tax Appellate Tribunal (ITAT), Ahmedabad bench has held that the disallowance of expenditure under Section 40(a)(ia) of the Income Tax Act, 1961 for the non-deduction of Tax Deducted at Source (TDS) shall be restricted to 30% of the expenditure considering the curative nature of Amendment to the Finance Act.
The two-member bench consisting of Shri Waseem Ahmed (Accountant Member) and Shri T.R. Senthil Kumar (Judicial Member) held that disallowance of expenses under section 40(a)(ia) on account of non-deduction of TDS should be restricted to 30% of the expenses and not 100%, considering the curative nature of the amendment made by Finance Act.
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that the penalty under Section 271B of the Income Tax Act 1961 would not be applicable when reasonable cause for failure to comply with provisions has been explained.
The two-member Bench of Prashant Maharishi, (Accountant Member) and Kavitha Rajagopal, (Judicial Member) observed that Section 271B of the Income Tax Act was very much covered by Section 273B of the Income Tax Act where if the assessee was able to substantiate that there was a reasonable cause for the failure to comply with the provision, then the penalty should not be imposed in such cases.
The Surat bench of the Income Tax Appellate Tribunal (ITAT) has quashed the revision order passed under section 263 of the Income Tax Act, 1961 without providing sufficient time for file material evidence and documents. The two-member bench of Pawan Singh, (Judicial Member) and Dr. A. L. Saini, (Accountant Member) Considering the above facts held that the assessee has not been given sufficient opportunity of being heard and could not plead his case successfully before the Principle Commissioner of Income Tax, hence it is a violation of the principle of natural justice.
The Pune bench of the Income Tax Appellate Tribunal ( ITAT) directed re-adjudication for the disallowance made under rule 8D(iii) of the Income Tax Rules, 1962 without giving Weightage to the credit balance of Investments.
The bench observed that being the uncontroverted factual position and for the reason the payer of the appellant to remand the matter back for correct computation of disallowance under section 8D(iii) of the Income Tax Rules in all the fairness deserves to be approved. The two-member bench comprising S. S. Godara(Judicial) and G. D. Padmahshali (Accountant) directed the matter back to the assessing officer for re-adjudication to addition while allowing the appeal filed by the assessee.
The Surat bench of the Income Tax Appellate Tribunal (ITAT) held that the books of Account were not liable to be audited when the turnover of the business is less than the threshold limit under section 44AB of the Income Tax Act.
A single-member bench comprising Pawan Singh (Judicial) observed that the penalty proceedings initiated under Section 271B of the Income Tax Act by taking a view that the turnover of the assessee on delivery bases share transaction and intra-day transaction was more than the threshold limit for attracting audit under Section 44AB of the Income Tax Act.
It was also held that turnover of the assessee for capital gain, the short-term or long-term shall not form part of the turnover and was not required to get the books of account audited and the penalty imposed under section 271B of the Income Tax Act was not as per law and are liable to be deleted while allowing the appeal filed by the assessee.
The Amritsar bench of Income Tax Appellate Tribunal (ITAT) has recently upheld that assessment passed under section 153A /144 of Income Tax Act based on special audit conduct under Section 142(2A) Income Tax Act, 1961. The two member bench of the Dr. M. L. Meena, (Accountant Member) and Anikesh Banerjee (Judicial Member) dismissed the appeal filed by the assessee.
The Raipur bench of the Income Tax Appellate Tribunal (ITAT) directed re-adjudication to the assessing officer for making the addition to Income that was already declared in Income Disclosure Scheme,2016.
A single-member bench comprising Ravish Sood(Judicial) held that the assessee had declared part of the bogus purchases/gross profit of his regular business transactions in the IDS and the same could not have been once again subjected to tax by the Assessing officer and directed re-adjudication to the assessing officer while allowing the appeal filed by the assessee.
The Delhi bench of Income Tax Appellate Tribunal (ITAT) has recently held that direct expenses incurred for the purchase of construction material should not be disallowed under Section 40A (3) of Income Tax Act, 1961.The two member bench of B. R. R. Kumar, (Accountant Member) Sh. Yogesh Kumar US, (Judicial Member) confirmed the decision of the Commissioner of Income Tax (Appeals).
The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) deleted an addition made by the assessing office under section 69 of the Income Tax Act,1961 on the ground of unexplained investment in a bank account.
The two-member bench comprising Rajpal Yadav (Vice-President) and Rajesh Kumar (Accountant Member) held that the assessee had not made any unexplained investment in the bank account and whatever deposits were made are either out of the past savings or from the loans taken from relatives and the addition made by the assessing officer was against the law and are liable to be deleted while allowing the appeal filed by the assessee.
The Pune bench of the Income Tax Appellate Tribunal ( ITAT) directed re-adjudication for the disallowance made under section 40(a)(a) of the Income Tax Act,1961 on the ground of violation of non-deduction of tax under section 194H of the Income Tax Act.
The two-member bench comprising Inturi Rama Rao(Accountant) and S.S. Viswanethra Ravi (Judicial) held that the order passed by the assessing officer without the application of mind and directed the assessing officer to re-adjudicate for allowing the claim of depreciation while allowing the appeal filed by the assessee.
The Income Tax Appellate Tribunal (ITAT), Ahmedabad bench has held that the absence of a formal loan agreement or repayment schedule does not justify treating the unsecured loan as unexplained cash credit under Section 68 of the Income Tax Act, 1961.
The two-member bench consisting of Shri Waseem Ahmed (Accountant Member) and Shri T.R. Senthil Kumar (Judicial Member) held that the absence of a formal loan agreement or repayment schedule should not be the basis for treating the unsecured loan as unexplained cash credit. The bench directed the AO to delete the addition made based on the loan from Sri Salim Hamid Menon. As a result, the appeal of the assessee is partly allowed.
The Pune bench of the Income Tax Appellate Tribunal ( ITAT) upheld the imposition of penalty by the assessing officer under section 271B of the Income Tax Act,1961 due to non-audit of books of account.
The two-member bench comprising Satbeer Singh Godara(Judicial) and Dr. Dipak P. Ripote (Accountant) held that the income of the assessee exceeds the prescribed threshold limit of Rs.1 crore mandatory for maintaining the books of account under section 44AB of the Income Tax Act and liable to be audited under section 44AB of the Income Tax Act while dismissing the appeal filed by the assessee.
The Pune bench of the Income Tax Appellate Tribunal ( ITAT) held that the Interest income earned by the cooperative society on deposits of surplus funds by the scheduled banks is eligible for the deduction under section 80P(2)(ai) and Section 80P(2)(d) of the Income Tax Act,1961.
The two-member bench comprising S. S. Godar( Judicial) and Inturi Rama Rao (Accountant) directed the assessing officer to re-adjudicate the matter to allow deduction under section 80P(2)(a)(i) and 80P(2)(d) of the Income Tax Act in respect of interest income earned from cooperative bank/scheduled bank while allowing the appeal filed by the assessee.
The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) has exempted gold donation of religious trust towards corpus funds under Section 11(1)(d) of the Income Tax Act 1961.
A Single Bench of Suchitra Kamble, (Judicial Member) allowed the appeal filed by the assessee holding that the ledger account of corpus fund Gold and the Annual Accounts and Audit Report was harping that the donation in Gold and actually for corpus donation. The Gold corpus fund was already accepted in the previous and the subsequent year by the Revenue and only in this year the same had been disputed.
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that a suit or proceedings could not be continued against a corporate debtor until the conclusion of proceedings taken place under Insolvency and Bankruptcy Code 2016 (IBC).
The two-member Bench of Amarjit Singh, (Accountant Member) and Sandeep Singh Karhail, (Judicial Member) held that asper the provision of Section 14 of the Insolvency and Bankruptcy Code till the conclusion of proceedings under IBC 2016 no suit or proceedings could be continued against the corporate debtor. The ITAT bench referred to similar issues and identical facts in ACIT Vs. M/s Wizcraft International Entertainment Pvt. Ltd. dismissed the present appeal filed by the assessee in terms of the provisions of Section 14 of the Insolvency and Bankruptcy code with liberty to the assessee that as soon as the moratorium period was over the assessee may prefer the appeal afresh or recall the present appeal.
The Amritsar bench of the Income Tax Appellate Tribunal (ITAT) has recently held that high sea sales of imported goods are not considered as speculative transactions under Section 43(5) of the Income Tax Act, 1961. Thus the bench upheld the interest income from fixed deposits and other investments as business income.
The Tribunal observed that the entire transaction is going through by proper delivery of the goods during purchase and the assessee had provided documents for evidence of delivery of goods related to high sea sale and confirmed the interest income treated as business income. Therefore the two-member bench of Dr. M. L. Meena, (Accountant Member) and Anikesh Banerjee, (Judicial Member) allowed the appeal filed by the assessee.
The Indore Bench of Income Tax Appellate Tribunal (ITAT) has held that the order passed under Section 147 read with Section 143(3) of the Income Tax Act 1961 under reassessment proceedings initiated before the search and seizure procedure was void ab initio.
The Bench held that once the reassessment proceedings initiated vide notice under Section 148 of the Income Tax Act dated 22.03.2013 stood abated by virtue of search and seizure action under Section 132(1) of the Income Tax Act carried out on 16.05.2013 then the reassessment order dated 19.02.2014 passed by the AO under Section 147 read with Section 143(3) of the Income Tax Act was illegal and void ab initio and liable to be quashed. The two-member Bench of Vijay Pal Rao, (Judicial Member) and B.M. Biyani, (Accountant Member) allowed the appeal and quashed the impugned order.
The Bangalore bench of Income Tax Appellate Tribunal (ITAT) has recently held that co-operative societies should be liable to furnish Annual Information Report (AIR) only after amendment under Rule 114E of the Income Tax Rule. Thus the bench deletes the penalty.
The two member bench of George George K, (Judicial Member) and Laxmi Prasad Sahu, (Accountant Member) observed that the original provisions of Rule 114E of Income tax Rules did not include “cooperative bank” and it was inserted only in the amended provisions of Rule 114E, which came into effect from 1.4.2016 Therefore the bench confirmed that Rule 114E of the Income Tax Rules was substituted to include co-operative banks with effect from 01.04.2015 and allowed the appeal filed by the assessee.
The Jaipur bench of the Income Tax Appellate Tribunal (ITAT) held that no addition can be made under section 153A of the Income Tax Act, 1961 in the absence of seizure of any incriminating materials during search and seizure proceedings.
The two-member bench comprising Dr. S. Seethalakshmi (Judicial) and Rathod Kamleh Jayantbhai (Accountant) held that in the absence of any incriminating material found or seized during search and seizure proceedings, the additions made by the assessing officer during reassessment under section 153A of the Income Tax Act are without jurisdiction and liable to be deleted while allowing the cross objections filed by the assessee.
The New Delhi bench of the Income Tax Appellate Tribunal ( ITAT) allowed the claim of Business loss in which the assessing officer (AO) failed to appreciate the nature of the business activity of the INX News.
The two-member bench comprising N.K.Billaiya(Accountant) and Anubhav Sharma(Judicial) held that the Commissioner had rightly appreciated the facts in the light of the submissions of the assessee and the remand report once statutory permission was received from the competent authority of the business operations of the assessee company required the creation of content and resources for broadcasting the news.
The New Delhi bench of the Income Tax Appellate Tribunal ( ITAT) directed re-adjudication for the rectification order passed under section 154 of the Income Tax Act, 1961 without proper verification.
The two-member bench comprising Saktijit Dey ( Judicial) and Dr. B. R. R. Kumar, (Accountant) held that the dismissal of the appeal by the Commissioner of Income Tax (Appeals) against the rectification order was not per the law. The bench also directed the matter for re-adjudication while allowing the appeal filed by the assessee.
The New Delhi bench of the Income Tax Appellate Tribunal ( ITAT) quashed the revision order passed without jurisdiction by the Commissioner of Income Tax (Appeals) under section 263 of the Income Tax Act, 1961.
The two-member bench comprising Shamim Yahya (Accountant) and Astha Chandra(Judicial) observed that the assessing officer had examined all the records, evidence, supporting documents, and books of account and passed the assessment order only after due diligence and after making the necessary examination and after application of mind. It was also held that the assumption of jurisdiction by the Commissioner under section 263 of the Income Tax Act was not under the law and is liable to be quashed while allowing the appeal filed by the assessee.
The Income Tax Appellate Tribunal (ITAT), Patna Bench has held that the differential amount received by way of the issue of shares for a Premium above the Fair Market Value (FMV) shall be taxable for a Closely-held Company under the head “Income from Other Sources” under Section 56(2)(viib) of the Income Tax Act, 1961 but the same is not taxable for the Investor.
The two-member bench consisting of Shri Sanjay Garg (Judicial Member) and Shri Girish Agrawal (Accountant Member) upheld the PCIT’s decision to set aside the assessment order of AO as being erroneous and prejudicial to the interest of revenue and ordered AO to afford the assessee a reasonable opportunity to be heard before passing the appropriate order. The bench also directed AO to make the enquiries as directed by PCIT regarding the correctness of the valuation report of the accountant, may call for an independent report from an expert to confront the assessee and thereafter to pass a speaking order per law.
While entertaining the appeal of the National Law University, Delhi (NLUD), the Delhi bench of Income tax Appellate Tribunal (ITAT) of quashed the penalty order passed under Section 271B of the Income Tax Act, 1961 by the Assessing Officer (AO) and Commissioner of Income Tax (Appeals)[CIT(A)].
The bench of Anil Chaturvedi (Accountant Member) and Anubhav Sharma (Judicial Member) observed that to justify invoking the mandate of Section 44AB of the Income Tax Act, it was necessary to see if the NLU can be said to be engaged in Business as defined under Section Section 2(13) of the Income Tax Act.
The ITAT bench observed that the AO had taken shelter of Proviso to section 44AB of the Income Tax Act and assumed as the NLU has not got the accounts audited for the purpose of Section 12A(1)(b) of the Income Tax Act and this was a violation of Section 44AB of the Income Tax Act. While allowing the appeal of the NLU, Delhi, the ITAT bench, the Income Tax Authorities have fallen in grave error on facts and law while invoking the penalty provisions.
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) recently directed readjudication due to the Assessing Officer (AO) wrongly raising a demand on dividend distribution tax, despite the submission of proof of payment.
The Bench consisting of Judicial Member Chandra Mohan Garg and Accountant Member Pradip Kumar Kedia restored the matter back to the file of the AO to provide one more opportunity to Assessee and for re-examination of the issue by the AO. The Assessing Officer should grant credit for taxes paid, in accordance with provisions of law, where the authority concerned was duly satisfied about appropriate recovery of tax and after taking due safeguards on any possible misuse of the e-challan purportedly bearing incorrect assessment year.
The Kolkata bench of the Income Tax Appellate Tribunal(ITAT) held that no reassessment proceedings were initiated under section 148 of the Income Tax Act,1961 without proper verification of recorded details of documents.
The two-member bench comprising of Sanjay Garg(Judicial) and Girish Agrawal(Accountant) held that the reassessment proceedings initiated under section 148 of the Income Tax Act were against the provision of law and the addition made by the assessing officer were without proper verification of recorded details of the documents while allowing the cross objection filed by the assessee.
The Amritsar bench of Income Tax Appellate Tribunal (ITAT) has recently held that registration under Section 12A(1)(ac)(iii) Income Tax Act, 1961 should not be denied if remuneration paid to trust’s full time workers is not contravening Section 13(1)(c) Income Tax Act.
Relying upon the decision of the Supreme Court in the case of CIT vs. Radhasoami Satsang and CIT vs. Smt. Kasturbai Walchand Trust ,the tribunal held that The assessee had not violated Section 13 of the Income Tax Act by paying off the remuneration to the trustee for his full-time work for the trust. Therefore the two member bench of M. L. Meena, (Accountant Member) and Anikesh Banerjee, (Judicial Member) allowed the appeal filed by the assessee.
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