This weekly round-up analytically summarizes the key stories related to the Income Tax AppellateTribunal ( ITAT ) reported at Taxscan.in during the previous week 1st September 2024 to 7th September 2024.
In a recent judgment, the Raipur bench of the Income Tax Appellate Tribunal ( ITAT ) ruled that a registered gift deed for immovable property cannot be treated as unexplained cash credit under Section 68 of the Income Tax Act, 1961.
The tribunal, comprising Judicial Member Ravish Sood and Accountant Member Arun Khodpia, reviewed the rival submissions and evidence on record. They observed that the assessee had received the property as a gift from his father on 30.11.2016, with the fair market value determined at ₹80, 33,600. The property had traversed through various hands before being gifted to the assessee.
The tribunal upheld the CIT(A)’s decision to delete the addition, concluding that the AO’s anticipatory assumptions regarding future tax benefits from the recorded value in the books were misplaced. The tribunal found no merit in the revenue’s arguments based on hypothetical future events. Consequently, the appeal filed by the revenue was dismissed.
The two-member bench of the Income Tax Appellate Tribunal (ITAT) in Bangalore remanded the case to the Assessing Officer (AO) for fresh consideration, highlighting that both the AO and the Commissioner of Income Tax (Appeals) [CIT (A)] had failed to consider Central Board of Direct Taxes (CBDT) guidelines on cash deposits during the demonetization period, and noting that the issue had not been thoroughly examined in accordance with the CBDT’s instructions for investigating such deposits.
The ITAT remitted the issue back to the AO for a fresh examination of the cash deposits during the demonetization period, in accordance with CBDT instructions. The assessee was directed to submit the necessary documents to substantiate his case, and the revenue authorities were instructed to ensure a fair hearing. The assessee was also urged to cooperate with the proceedings for the early disposal of the case. Consequently, the appeal by the assessee was allowed for statistical purposes.
The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) has ruled that a taxpayer registered as a co-operative society under the Karnataka Souharda Sahakari Act is eligible for deduction under Section 80P of the Income Tax Act, 1961.
The Tribunal, comprising Judicial Member Keshav Dubey and Accountant Member Laxmi Prasad Sahu, noted that the assessee had filed a return declaring nil income and claimed a deduction under Section 80P on the entire income. The AO had disallowed this deduction, despite a favorable jurisdictional High Court judgment in a similar case, Sri Matha Vividoddesha Pathina Souharda Sahakari Niyamitha vs. UOI . The CIT (Appeals) had decided the case ex parte due to the assessee’s non-prosecution.
The Tribunal remitted the issue to the CIT (Appeals) for fresh consideration, directing the assessee to update their contact details and submit the necessary documents. The Tribunal emphasized that the assessee must cooperate with the proceedings, warning that failure to do so would result in no further leniency. Consequently, the appeal was allowed for statistical purposes.
In a recent ruling, the Bangalore bench of the Income Tax Appellate Tribunal (ITAT) has remanded the case to the Commissioner of Income Tax (Appeal) (CIT (A) for fresh adjudication, noting that the CIT (A) issued a notice to the assessee for the first time after a gap of almost four years. This delay can be attributed to the Covid-19 pandemic, which reasonably explained the delay.
In the interest of justice and fairness, the two-member bench of the tribunal, comprising Yogesh Kumar U.S (Judicial Member) and Waseem Ahmed (Accountant Member), decided to grant the assessee one additional opportunity to present their case before the CIT-A with supporting materials. The bench also instructed the assessee to cooperate fully during the proceedings and not seek adjournments without valid reasons. Consequently, the ITAT remanded the issue to the CIT-A for fresh adjudication in accordance with legal provisions. The appeal was thus allowed for statistical purposes.
In a recent ruling, The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) has allowed a 69-day delay in the filing of an appeal due to a reasonable cause and has directed the Commissioner of Income Tax (Appeal) (CIT (A)) to reassess the case.
A two-member bench of the Income Tax Appellate Tribunal (ITAT), comprising Judicial Member Prakash Chand Yadav and Accountant Member Waseem Ahmed, held that the delay should be excluded when calculating the deadline for filing the appeal. The bench found that there was sufficient and reasonable cause preventing the assessee from filing the appeal within the statutory time limit. As a result, the ITAT decided that the delay should be condoned.
The case has been remanded to the CIT-A for fresh adjudication in accordance with the law, taking into account the condoned delay. Consequently, the appeal filed by the assessee has been allowed for statistical purposes.
The New Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) allowed foreign tax credit despite the delay in filing Form No. 67 and ruled that Rule 128(9) under Income Tax Rule, 1962 is a directory and cannot be considered mandatory.
The income tax appellate tribunal observed that the amendment effective from 1 April 2022, which allows filing Form No. 67 by the end of the assessment year, further supports the non-mandatory nature of the earlier rule. Thus, the tribunal directed the assessing officer to grant the Foreign Tax Credit after verifying the facts. The assessee’s appeal was allowed.
The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) has imposed a ₹1000 fine for non-appearance during assessment proceedings before both the Assessing Officer and the Commissioner of Income Tax (Appeals) (CIT(A)), which is to be paid to the Prime Minister’s Relief Fund, with proof of payment required to be submitted to the Assessing Officer for verification.
Considering the facts and circumstances, the two-member bench of the tribunal, comprising Waseem Ahmed (Accountant Member) and Yogesh Kumar U.S (Judicial Member), deemed it appropriate to remit the issue back to the AO for fresh consideration. Additionally, due to the assessee’s failure to appear before both the AO and CIT(A), the ITAT decided to impose a cost of Rs. 1,000/- on the assessee. This amount is to be paid to the Prime Minister’s Relief Fund, and proof of payment must be submitted to the AO for verification. The appeal was partly allowed for statistical purposes.
In a recent case, The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) ordered detailed verification of “KYC” ( Know Your Customer) of the members of the assessee-cooperative society in relation to the assessee’s acceptance of Specified Bank Notes (SBNs) as deposits after the demonetization announcement on November 8, 2016
In result, the tribunal allowed the Revenue’s appeal for statistical purposes, remitting the matter back to the AO for further verification and ordered the AO to make a fresh decision based on the additional evidence provided by the assessee.
The Income Tax Appellate Tribunal ( ITAT ) Delhi recently dealt with an Income Tax case involving unexplained credits of Rs. 11.06 crore, where the appellant challenged an addition made by the Assessing Officer ( AO ) under Section 68 of the Income Tax Act.
Upon hearing both parties, the ITAT noted that the CIT(A) should not have dismissed the appeal solely on the grounds of non-prosecution. Considering the situation of the appellant during the Covid-19 period and the interest of justice, the tribunal bench of Judicial Member Sudhir Pareek and Accountant Member Shamim Yahya remanded the matter back to the AO.
The AO has been directed to reassess the case on its merits, ensuring that the appellant is given a fair opportunity to present his case.
The Bangalore bench of the Income Tax Appellate Tribunal ( ITAT ) upheld the First Appellate Authority’s decision by confirming a 50% disallowance of motor car and bike expenses due to the assessee’s failure to provide complete details and a log book, despite an already applied 20% disallowance for personal use, while also granting relief of 50% of the addition made and crediting the suo motu disallowance of ₹38,958/-.
The ITAT, comprising Keshav Dubey and Laxmi Prasad Sahu (Accountant Member), noted that the assessee had not provided complete details for motor car expenses and that personal use could not be denied given the 20% disallowance already made. The AR failed to produce a log book. Consequently, the ITAT confirmed a 50% disallowance of the FAA’s decision on motor car and motorbike expenses, granting relief of 50% of the addition made on these accounts. Additionally, credit was to be given for the suo motu disallowance of ₹38,958/-.
The ITAT rejected the argument that the tax audit’s lack of errors absolved the assessee from providing evidence during the assessment. The assessee’s failure to substantiate claims was noted, and other arguments were also rejected. The appeal was thus partly allowed.
The Bangalore Bench of the Income Tax Appellate Tribunal ( ITAT ) has directed the Assessing Officer (AO) to reassess the fixed deposit interest claims of Tungabhadra Credit Co-operative Society, emphasizing that the exclusion under Section 80P(2)(d) must be considered alongside Section 57 of the Income Tax Act, 1961.
The two-member bench, comprising Beena Pillai ( Judicial Member ) and Waseem Ahmed ( Accountant Member ), upheld the grounds in all three appeals.
The Pune Bench of Income Tax Appellate Tribunal ( ITAT ) reversed the addition made solely based on the survey statement under Section 133A of the Income Tax Act, 1961 without any corroborative evidence to prove the presence of any errors or omissions.
The ITAT observed that there was no corroborative evidence that supported the presence of any errors or omissions in the assessee’s records. Thus, the tribunal reversed the addition made by the assessing officer. The assessee’s appeal was allowed.
The Delhi bench of Income Tax Appellate Tribunal ( ITAT ) stated that torn papers alone were not sufficient to prove the same papers represent the unreported sales in the books of accounts. The tribunal ordered the Assessing Officer to conduct a fresh adjudication.
The two member bench comprising Saktijit Dey(Vice President) and M.Balaganesh(Accountant Member) allowed the appeal, remanding it for a fresh review.
The Delhi bench of Income Tax Appellate Tribunal ( ITAT ) upheld the Commissioner Of Income Tax (Appeals) [CIT(A)]’s decision to delete an addition of Rs. 2,37,77,550 related to share capital, confirming that the genuineness of transactions and investor creditworthiness were adequately proven.
The two member bench comprising Saktijit Dey ( Vice President ) and M.Balaganesh ( Accountant Member ) dismissed the revenue appeal holding that the CIT(A) was justified in deleting the addition made on account of share capital and share premium.
The Pune Bench of Income Tax Appellate Tribunal ( ITAT ) remanded the matter to the Commissioner Of Income Tax (Appeals) due to non-adjudication and failure to state the point of determination under Section 250(6) of the Income Tax Act, 1961.
The two-member bench comprising G.D. Padmahshali (Accountant Member) and Vinay Bhamore (Judicial Member) observed that the CIT(A) erred in not adjudicating the legal grounds related to Section 153C jurisdiction. The Tribunal noted that the CIT(A) passed the order without recording his independent findings.
The Tribunal emphasized the principle laid down by the Supreme Court in the case of Chandra Kishore Jha vs Mahavir Prasad which held that the statutory requirements must be followed strictly. Due to the non-adjudication of legal grounds raised and failure to state the point of determination, the tribunal set aside the impugned order and remanded the matter to the file of the Commissioner of Income Tax (Appeals). The appeal of the assessee was allowed.
The Delhi bench of Income Tax Appellate Tribunal ( ITAT ) upheld the Commissioner Of Income Tax (Appeals) [CIT(A)]’s deletion of a Rs.1,36,08,090 addition, finding that the survey team had incorrectly used standard weights instead of accurate measurements. The tribunal confirmed that the revenue did not challenge the CIT(A)’s findings supported by excise records.
The tribunal found that the CIT(A) correctly addressed the discrepancies in the AO’s weight determination, which followed the survey team’s erroneous method. The assessee’s weight-based valuation, consistent with ISI standards and accepted in subsequent assessments, was confirmed by excise records showing that goods were sold and stock maintained by weight. The two member bench comprising Saktijit Dey(Vice President) and M.Balaganesh (Accountant Member) dismissed the revenue appeal, noting no issues with the CIT(A)’s order, as the revenue did not contest the factual findings supported by excise records in RG23A.
The Delhi Bench of the Income Tax Appellate Tribunal ( ITAT ) has upheld the decision of the Commissioner of Income Tax (Appeals) [CIT(A)] to delete the addition related to the TDS portion of interest expenditure on a loan, citing the revenue’s failure to provide counter-evidence.
The ITAT Bench, comprising Accountant Member Naveen Chandra and Judicial Member Vikas Awasthy, noted that the Revenue had failed to present any evidence contradicting the CIT(A)’s findings. Consequently, they found no fault in the CIT(A)’s decision and upheld it. As a result, the Revenue’s appeal was dismissed.
The Delhi bench of Income Tax Appellate Tribunal ( ITAT ) has restored the matter of income tax addition of Rs. 3.7 crores on payment of ESI/ PF due to auditor’s misreporting.
After considering the arguments, the bench of Ramit Kochar (Accountant member) and Siddhartha Nautiyal (Judicial member) agreed that the case warranted a re-examination and restored the matter to the CIT(A) for de novo consideration. The CIT(A) was instructed to re-assess the disallowance, taking into account the detailed submissions and evidence provided by the assessee.
The New Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) deleted the addition made by the assessing officer under section 69A of the Income Tax Act, 1961. The decision followed as the AO accepted the purchase and sale documents and no evidence to prove otherwise.
The tribunal noted that the assessee had disclosed the income in the income tax return filing and the AO had accepted the same. The tribunal found no reason to interfere as the Commissioner of Income Tax (Appeals) rightly deleted the addition made by the assessing officer. Thus, the appeal of the revenue was dismissed.
The two member bench of the Income Tax Appellate Tribunal ( ITAT ) in Delhi has directed the Assessing Officer to remove the addition, as the lower authorities failed to counter the assessee’s explanation regarding the maturity and redemption of term deposits. The bank statements showed sufficient cash withdrawals to account for the deposits.
The bench, comprising Kul Bharat (Judicial Member), reviewed the material and orders of the lower authorities. It was noted that the lower authorities had not rebutted the assessee’s explanation regarding the term deposit maturity and its subsequent redemption. The bank statements showed sufficient cash withdrawals to account for the deposits.
The ITAT found that the authorities had not provided evidence suggesting the withdrawn cash was used for other purposes. As a result, the ITAT directed the AO to delete the impugned addition. The grounds raised by the assessee were thus allowed.
The Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) has restored the Commissioner of Income Tax (Appeals) (CIT(A)’s decision for re-adjudication, emphasizing that a prima-facie formation of a belief was required under Section 147/148 of the Income Tax Act ,1961, based on tangible material having live link/nexus that income escaped assessment.
The Tribunal upheld the reopening of the assessment. It was determined that the assessee had not denied the bank accounts or the cash deposits and had not provided adequate explanations for the same. Additional evidence submitted regarding peak cash credit was admitted for verification. The Tribunal ordered a remand of the case to the CIT (A) for re-adjudication on the merits of the additions, with a directive for proper hearing. The appeal was partly allowed for statistical purposes, with no comment on the merits of the issue.
The Bangalore bench of the Income Tax Appellate Tribunal ( ITAT ) in a recent case quashed a penalty levied under section 270 of the Income Tax Act 1961, noting that the assessee failed to file Income Tax Return due to bonafide misunderstanding.
In result, the tribunal set aside the CIT(A)’s order and directed the AO to delete the penalty of ₹8,16,895 levied under Section 270A of ITA.
Recently, the Bangalore bench of Income Tax Appellate Tribunal (ITAT) ordered the reevaluation of a Co-Operative Society’s income tax deduction eligibility under section 80P of the Income Tax Act 1961 (ITA), observing that the assessee society’s income from interest was not verified completely.
In light of the observations made, the Tribunal remitted the case back to the AO to reassess the eligibility of the interest income for deductions under Sections 80P(2)(a)(i) and 80P(2)(d) based on the findings and guidelines provided in the judgment. The appeal of the assessee was allowed for statistical purposes, providing the AO with clear instructions on how to proceed with the reassessment.
In a recent judgment, the Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) deleted the penalty under Section 270A of the Income Tax Act, 1961, citing that the income discrepancy was due to the auditor’s incorrect recording of the written down value ( WDV ) in the tax audit report, and observed that “to err is human,” asserting that a bona fide error should not serve as grounds for imposing a penalty.
They observed that the First Appellate Authority had thoroughly discussed the issue in the impugned order and had relied on the decision of the Jurisdictional High Court in the case of Prem Brothers Infrastructure LLP vs. NFAC to justify the deletion of the penalty. The bench concluded that “to err is human” and that a bona fide error should not be the basis for imposing a penalty. Given the specific facts of the case, the Tribunal affirmed the decision of the First Appellate Authority to delete the penalty, and the evenue’s grounds for appeal were dismissed.
In a recent judgment, the Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) upheld the order of the Commissioner of Income Tax (Appeals), asserting that simply making a claim that is not legally sustainable does not constitute furnishing inaccurate particulars of income by the assessee.
In conclusion, the two member bench of the tribunal comprising R.V Easwar ( President ) and P.M Jagtap ( Accountant member ) upheld the CIT(A)’s orders canceling the penalties imposed by the AO and dismissed the appeals filed by the Revenue. The tribunal’s decision reaffirmed the principle that penalties under Section 271(1)(c) should not be imposed in cases of genuine legal interpretation differences where no inaccurate particulars are furnished.
The New Delhi Bench of the Income Tax Appellate Tribunal (ITAT) remanded the matter concerning unexplained cash credits back to the Commissioner of Income Tax (Appeals). This decision was taken because the CIT(A) issued an ex-parte decision without considering the adjournment request filed by the assessee via email.
The two-member bench comprising Kul Bharat (Judicial Member) and Avdhesh Kumar Mishra (Accountant Member) heard both side’s arguments. The tribunal observed that the CIT(A) had not decided the matter on merits. Therefore, the tribunal decided to give the assessee a reasonable opportunity to present the matter before the CIT(A).
The tribunal remanded the matter back to CIT(A) for de-novo consideration. The tribunal directed the assessee to ensure compliance during the proceedings before the CIT(A). Thus, the assessee’s appeal was allowed for statistical purposes.
The Ahmedabad Bench of the Income Tax Appellate Tribunal ( ITAT ) condoned a 129-day delay in filing the appeal due to the Commissioner of Income Tax (Exemptions) CIT(E) failure to serve email notices caused by a technical glitch in the office. The tribunal remanded the rejection of registration under section 80G(5) of the Income Tax Act, 1961 matter back to CIT(E) for fresh adjudication.
The two-member bench comprising T.R. Senthil Kumar (Judicial Member) and Makarand V. Mahadeokar (Accountant Member) carefully heard both sides’ arguments and observed the fact that the delay happened because of the lack of communication and there was no ill motive. The tribunal observed that the email confirmation from the CIT(E) office shows that the assessee was not properly served with the notice order via email which caused the delay in the process.
Thus, the tribunal condoned the delay and remanded the matter back to CIT(E) for fresh adjudication. The appeal of the assessee was allowed for statistical purposes.
The New Delhi Bench of the Income Tax Appellate Tribunal ( ITAT ) remanded the Assessing Officer ( AO ) addition under Section 68 of the Income Tax Act, 1961 matter, which was based on a mismatched photograph in the loan creditors’ voter ID and bank statement photos. The matter was remanded to provide the assessee an opportunity to present proper evidence before the AO.
Upon reviewing the two orders, the tribunal decided to restore the file to the assessing officer to provide the assessee an adequate opportunity to be heard and then decide the matter on merits. Therefore, the appeal of the assessee was allowed for statistical purposes.
Alagappa Muthiah (HUF), the appellant assessee, co-owned 6 acres 23.2 guntas of land in Hebbal Village. On 10/02/2011, he entered into a Development Agreement, resulting in the development of his property into commercial and residential units, including the entire commercial unit and 6 apartments.
The two-member bench comprising Soundararajan K(Judicial Member) and Chandra Poojari (Accountant Member) allowed the appeal of the assessee ruling that capital gains from the 10.02.2011 agreement should be taxed in AY 2018-19, reflecting the year of property development and completion.
The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) ruled that the Transfer Pricing Officer ( TPO ) erred in setting the Arm’s Length Price ( ALP ) for Intra Group Services at NIL for the assessee and directed the TPO to reconsider the ALP by evaluating all the evidence afresh.
The two-member bench comprising Yogesh Kumar U.S (Judicial Member) and S. Rifaur Rahman (Accountant Member), ruled that the TPO erred by setting the ALP at NIL despite evidence of services rendered and remanded the case for a fresh ALP determination, instructing the TPO to reassess all evidence provided.
The two member bench of the Income Tax Appellate Tribunal ( ITAT ) in Ahmedabad, denied the exemption under Section 10(38) of the Income Tax Act, 1961, for long-term capital gains ( LTCG ) on share sales, citing the alleged conversion of unaccounted money.
Further the bench comprising Makarand V. Mahadeokar ( Accountant member ) and Siddartha Nautical ( Judicial member ) observed that the CIT (A) did not err in confirming the addition related to bogus claims. For Gujarat Meditech Ltd., the AO noted that only a few entities traded shares, and the CIT (A) upheld the treatment of these shares as bogus. Thus, the loss of Rs.7, 89,230 was added to the assessee’s income. The appeal was consequently dismissed.
The Ahmedabad “A” bench of the Income Tax Appellate Tribunal ( ITAT ) in a recent case held that additions under section 68 of the Income Tax Act 1961 ( ITA ) are not to be attracted upon violation of RBI notifications, if the source and nature of the cash deposits are adequately explained.
The tribunal noted that the society had adequately demonstrated the nature and source of the deposits as business collections from its members and had ceased accepting old currency notes following the RBI’s clarifications. Therefore, the tribunal upheld the CIT(A)’s decision to delete the addition under Section 68 of ITA.
The Revenue’s appeal was thus dismissed, affirming the CIT(A)’s order to exclude the disputed amount from the society’s income.
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