This weekly round-up analytically summarizes the key stories related to the Income Tax Appellate Tribunal (ITAT) reported at Taxscan.in during the previous week from November 19 to November 25, 2022
Shri Pavan Kandkur vs Principle Commissioner ofIncome Tax – 2022 TAXSCAN (ITAT) 1706
The Bengaluru Bench of the ITAT held that Revision proceedings cannot be initiated when assessee has opted to settle dispute under DTVSV scheme.
A Bench consisting of N.V. Vasudevan, Vice President and Padmavathy S, Accountant Member observed that “In the given casethe PCIT has initiated the revision proceedings u/s.263 of the Income Tax Act on the same issue for which the assessee has already opted for DTVSV. It is also noticed the assessee has filed the necessary forms under the DTVSV scheme which have been accepted. “In our considered view the decision of the Madras High Court is clearly applicable to the assessee’s case. Accordingly, we hold that the PCIT is not justified in initiating the impugned proceedings under Section 263 of the Income Tax Act when the assessee has opted to settle the dispute under DTVSV scheme” the Tribunal ruled.
ACIT vs M/s. Lifecell International Private Limited – 2022 TAXSCAN (ITAT) 1711
The ITAT of Chennai Bench recently in an application filed before it held that the Appeal prior to declaration under Direct Tax Vivad Se Vishwas Act shall revive on failure to settle income tax dues. Rejected application filed by the Revenue and held that , “as per section 4(6) of DTVSVS Act, 2020, the law is very clear, in as much as in case the declarant violates any of the conditions, then all the proceedings and claims which were withdrawn u/s. 4 and all the consequences under the Income-tax Act, 1961 against declarant shall be deemed to have been revived. In the present case, the declarant has violated the conditions of payment of tax as determined by the designated authority in Form no. 3. Therefore, appeal filed by the assessee is deemed to have been revived”
Ecstasy Buildcon Pvt. Ltd vs DCIT – 2022 TAXSCAN (ITAT) 1708
The ITAT deleted income tax addition as there was absence to take note of judicial pronouncements in District Valuation Officer (DVO) Report. A Bench consisting of Anil Chaturvedi, Accountant Member and Kul Bharat, Judicial Member observed that “We hold that the action of AO for making addition partly on the basis of a report by DVO who has failed to take note of the judicial pronouncements, adopted CPWD rate for the purpose of estimation of cost of construction cannot be sustained. We, therefore, direct the AO to delete the impugned addition.”
Dy. Commissioner of- Income Tax vs Smt. A. Gandhimathi – 2022 TAXSCAN (ITAT) 1709
The Chennai Bench of the ITAT held that proceedings under Section 153C of the Income Tax Act, 1961 cannot be initiated in absence of incriminating material found during search. A Bench consisting of held that “Therefore, in our considered view, in absence of any incriminating material found during the course of search of other person, the AO cannot initiate proceedings u/s.153C of the Income Tax Act, and complete assessment, when a simultaneous survey u/s.133A of the Income Tax Act, was carried out on very same day in the case of the assessee.
Deputy Commissioner of Income Tax vs Swiss Finance Corporation (Mauritius) – 2022 TAXSCAN (ITAT) 1707
The Mumbai Bench of the ITAT held that Non-resident FII can claim benefit of Article13(4) of DTAA for entire current year Short or Long-Term Capital Gains. Dismissing the appeal A Bench consisting of Om Prakash Kant, Accountant Member and Rahul Chaudhary, Judicial Member relied on the judgment in Goldman Sachs Investments (Mauritius) Ltd and wherein it was observed that “The Assessee was entitled to claim benefit of Article 13(4) of DTAA in respect of the entire current year Short/Long Term Capital Gains. The Tribunal also permitted carry forward of the Brought Forward Short/Long Term Capital Gains to the subsequent assessment years holding that the Short/Long Term Capital Loss permitted to be carried forward in a previous assessment could not be reviewed in the assessment proceedings of a subsequent assessment year.”
Gurgaon Gramin Bank vs ACIT – 2022 TAXSCAN (ITAT) 1226
The ITAT of New Delhi deleted addition made by Assessing Officer (AO) on the ground of disallowance of expenditure of interest in year of actual payment in merchandise system of accounting.
The bench consisting of observed that “The expenditure has been incurred for the business and it is not the case of the A.O that, it is not allowable u/s 37 (1)of the Act. Since, the assessee has already paid more tax in Financial Year 2009-10, which is in the tax bracket of 30% and the claim is revenue neutral, i.e. that is there is no loss of Revenue. While deleting the addition made by the A.O, CIT(A) has also considered all the above facts.”
ITO-33(1)(1) vs Shri Kalpesh C. Shah – 2022 TAXSCAN (ITAT) 1716
The ITAT of Mumbai Bench, has recently, while deciding few appeals filed before it, held that no addition can sustain unless an opportunity of cross examination is given to the assesse when such an addition has been made by the department on account of third-party statement.
Hindi Sahitya Sammelan 12 vs Chief Commissioner of Income Tax – 2022 TAXSCAN (ITAT) 1712
The Allahabad bench of ITAT has held that the Hindi Sahitya Sammelan is eligible for Income tax exemption under section10 (23C) (vi) the Income Tax Act. Moreover the DRobserved that “Education for the purposes of section 2(15) of the 1961 Act, has a very specific meaning and is not used in a wide and extended sense. Education should normally be considered as a process, training and development of knowledge, mind and character of students in normal schooling. The aims, objects and the activities of the assessee society could not be held as education as it was not a process of training and development of the students in normal schooling.” After considering the contention of the both side the division bench of Tribunal compraising. Shri Vijay Pal Rao (Judicial Member) and Shri RamitKochar (Accountant Member) allowed the appeals filed by assessee for the assessment year(s) 2000-01 to 2003-04, 2006-07 and 2007-08 respectively.
Income Tax Officer vs Shri Rajeev Suresh Gehi – 2022 TAXSCAN (ITAT) 1713
The ITAT of Mumbai bench, while granting relief to a non-resident Indian (NRI) settled in UAE, has held that the assessee is eligible for the benefit under the Double Taxation Avoidance Agreement (DTAA) between India and UAE.
Granting relief to the assessee, the Tribunal noted that “As noted above in the present case, the assessee has also filed the Tax Domicile Certificate for the relevant Financial Year issued by the concerned authority in Ministry of Finance, UAE, in support of its claim. The learned D.R. could not show us in any reason to deviate from the aforesaid decision and no change in facts and law was alleged in the relevant assessment year. Thus, respectfully following aforesaid judicial precedent in assessee’s own case, we find no infirmity in the impugned order passed by the learned CIT(A). As a result, grounds raised by the Revenue are dismissed.”
ITO vs M/s. Sharan Svadha LLP – 2022 TAXSCAN (ITAT) 1714
The Delhi bench of the ITAT has held that the provisions of section 50C of the Income Tax Act, 1961 is applicable only to the seller of the property, not to the buyers.
A Two-Member-bench comprising Sh. Anil Chaturvedi, Accountant Member and Sh. Anubhav Sharma, Judicial Member observed that the relevant Section 50C cannot be invoked as the said section is applicable in the case of seller of the property only while the appellant is a buyer. “Section 56(2)(vii)(a) and Section 56(2)(vii)(b) of the Act are also not applicable in case of partnership firm or LLP and the assessee is a LLP. The Section 56(2)(x) which may be applicable in case of partnership firm or LLP was introduced with effect from A.Y. 2018-19 while the present case is with regard to A.Y. 2015-16. Thus, in the absence of any statutory presumption the Ld. AO was under obligation to establish by definite evidence that purchaser had made more payment then stated in sale deed. Circumstances of distress sale are on record and there was no attempt of ld. AO to discredit the same. The Ld CIT(A) has rightly taken all these aspects into consideration while allowing the relief of deletion and no interference is required,” the Tribunal said.
DCIT vs M/s Gopuram Developers – 2022 TAXSCAN (ITAT) 1715
The Mumbai Bench of the ITAT has held that the percentage completion method of Revenue recognition practised by Builder is acceptable as per Accounting Standards. It was observed that the Delhi High Court in the case of Ansal housing finance and leasing (supra) has held that stock is to be treated as house property of the assessee and therefore liable for deemed rental income or ALV and the same has to be computed under the head ‘income from house property’. Whereas, a contrary view has been taken by the High Court of Gujarat in the case of CIT Vs Neha Builders Private Limited (2006) 296 ITR 661 (Guj).
Mansha Textile Pvt. Ltd vs ITO – 2022 TAXSCAN (ITAT) 1717
The Ahmedabad Bench of the ITAT has held that Rental income can’t be brought to tax when assessee not entered into any lease agreement with tenants. The ITAT observed that the assessee was never in receipt of the rental income since neither the assessee company had entered into a lease agreement with the tenants nor was the rental income ever received by the assessee company, accordingly the said rental income was not offered to tax by the assessee in its return of income.
Bashir Ahmed Abdurrahman Matte vs Pr. Commissioner of Income Tax – 2022 TAXSCAN (ITAT) 1592
The ITAT of Bangalore Bench, has recently, in an appeal filed before it, held that the Commissioner of Income Tax (CIT), shall exercise revisional power under section 263, only when A. O’s order is erroneous and prejudicial to the interest of the Revenue.
Allowing the assessee’s appeal, the Tribunal ruled that “Considering the totality of facts and circumstances of the case, we set aside the order passed by the ld.Pr.CIT for exercising his power u/s 263 of the Act. Hence, the order passed by the AO cannot be revised us/ 263 of the Act. Therefore, the order passed by the AO is neither erroneous nor prejudicial to the interest of revenue”.
Velankanni Constructions vs ACIT -2022 TAXSCAN (ITAT) 1438
The Chennai Bench of the ITAT has held in partial relief to the assessee that, it was erroneous to invoke Section 40A(3) of the Income Tax Act, 1961 and disallow deductions to impose a tax of 20% on voucher bills and purchases that the assessee failed to produce.It was observed by the ITAT bench consisting Mahavir Singh and Manoj Kumar Aggarwal that the AO invoked the provisions of Section 40A(3) on the presumption that the payments exceeding Rs. 20,000/- was made to a single party. However, it was found that the conclusion made was not supported by any material on record. It was suggested that a better course of action in this regard would be to disallow a portion of the said expenses for the want of supporting documents. Thus, the ITAT directed the Assessing Officer to estimate only an addition of 10% against blue metal jelly purchase as well as against 5 other items listed.
Petnet Radio Pharmaceutial Solutions P. Ltd vs ACIT – 2022 TAXSCAN (ITAT) 1720
The New Delhi Bench of the ITAT held that training expenses that does not result in new income is not capital expenditure. A Bench consisting of Yogesh Kumar US, Judicial Member and Dr. B. R. R. Kumar, Accountant Member observed that “Since the subject training expenses do not bring into existence any capital asset nor results in any new source of income but merely enable the Company to manage and conduct the production operations in a more efficient effective manner, thus, the said expenses are on account of revenue and cannot be treated as capital expenditure.
Unitech Wireless (Tamilnadu) Private Limited vs Deputy Commissioner of Income Tax – 2022 TAXSCAN (ITAT) 1719
The ITAT of New Delhi Bench consisting of Shamim Yahya, Accountant Member and Yogesh Kumar US, Judicial Member held that no TDS can be deducted on roaming charges under Section 194J of the Income Tax Act, 1961. The Division Bench of the Tribunal observed that “As regards non-deduction of TDS u/s 194J of the Income Tax Act, following the aforesaid precedent, we set-aside the order of the CIT(A) on this issue and hold that no TDS was to be required u/s 194J of the Income Tax Act.”
VE Commercial Vehicles Ltd vs DCIT – 2022 TAXSCAN (ITAT) 1718
The ITAT of New Delhi invalidated re opening of re assessment under Section 147 of the Income Tax Act, 1961 as there was Non specification on primary facts to be disclosed in the Show cause notice. The Bench consisting of Anubhav Sharma, Judicial Member and Dr B. R. R. Kumar, Accountant Member observed that “In the facts of the present case, the impugned notice under section 148 of the Income Tax Act issued after the expiry of period four years from the end of relevant assessment year, is beyond limitation in terms of the proviso to section 147 of the Income Tax Act, no case could be made with regard to failure on part of assessee to disclose fully and truly all material facts.”
Shri Pujala Mahesh Babu vs A.C.I.T. Central Circle-2(3) – 2022 TAXSCAN (ITAT) 1721
The Hyderabad Bench of the ITAT has held that the addition of unexplained investment of land is permissible in the absence of explanation by cash flow statement.
It was observed by the ITAT that the addition was made being explained investment in lands at Indrakaran Village on the ground that the assessee was unable to explain the source of the above investments. It was evident that the land was purchased during the year itself and the onus was on the assessee to explain the source of such investment. Merely stating that the assessee has sufficient funds will not absolve the assessee from his responsibilities especially when no cash flow statement was filed to explain the availability of funds and the assessee is also not maintaining any books of account.
MUFG Bank Ltd vs ACIT – 2022 TAXSCAN (ITAT) 1724
The ITAT of New Delhi Bench held that salary paid by head office to expatriate employees working in Indian branches, allowable as deduction, thereby granting relief to M/s. MUFG Bank Ltd. A Bench consisting of G S Pannu, President and Saktijit Dey, Judicial Member observed that “Salary paid by the head office to expatriate employees working in Indian branches is allowable as deduction.”
Shakir Ahmad vs ITO – 2022 TAXSCAN (ITAT) 1722
The ITAT of New Delhi Bench allowed deduction of expenditure on goods carriages taken on hire. The appeal has been preferred by Shakir Ahmad, the assessee. After considering the detailed submissions from the part of the assessee and revenue, a Bench consisting of Kul Bharat, Judicial Member observed that “In the present case, the assessee has taken certain goods carriages on hire which is not owned by the assessee and the assessee claimed certain expenses related to such carriages which is disallowed by the lower authorities. The CIT(A) has not appreciated this aspect.”
Shri Pujala Mahesh Babu vs A.C.I.T. Central Circle – 2022 TAXSCAN (ITAT) 1725
The Mumbai Bench of the ITAT has held that the Income Tax Addition under section 68 of the Income Tax Act,1961 is not valid when the assessee does not maintain any books of account. The ITAT bench of Shri R.K. Panda, Accountant Member and Shri K. Narasimha Chary, Judicial Member observed that the assessee does not maintain any books of account, thereforethe addition of the same u/s 68 is not allowable. Further observed that when the assessee is undertaking certain transactions with one Shri T. Jangaiah and he was engaged in the business of real estate, he must have earned some income. Since the total amount of receipts including the cheque receipt is amounting to Rs.51,80,000/- the profit @ 10% of the addition of Rs.51,80,000/- as against Rs.51,80,000/- made by the Assessing Officer and sustained by the CIT (A) was upheld while partly allowing the appeal.
Bai Navajbai tata vs CIT – 2022 TAXSCAN (ITAT) 1726
The Mumbai Bench of the ITAT held that Commissioner of Income Tax (Exemptions) (CIT(E)) cannot impose conditions on his own while granting approval under Section 80G of the Income Tax Act, 1961. After hearing detailed submissions, a Bench consisting of Aby T Varkey, Judicial Member and Pramod Kumar, Vice President observed that “We hold that the CIT(E) did not enjoy the power to impose any conditions on his own while granting the approval u/s 80G of the Income Tax Act (other than what is stipulated in law).”
Bhavesh Ghanshyam Advani vs CIT – 2022 TAXSCAN (ITAT) 1723
The ITAT ruled that ITAT cannot hear appeal against order passed u/s119(2)(b) of the Income Tax Act, 1961. “We further observed against such type of orders i.e order passed under section 119(2)(b) of the Income Tax Act can be appealed directly to the Secretary, CBDT or can be challenged through Writ before the Jurisdictional High Court” the Tribunal noted.
ACIT vs Allscripts (India) Pvt. Ltd. – 2022 TAXSCAN (ITAT) 1728
The ITAT of Ahmadabad Bench recently in an appeal filed before it held that provision prescribing the time limit for Tax Deducted at Source ( TDS ) is not applicable to Non Residents. After considering the contention of the both side the division bench of Tribunal compraising Sri. Ms. Suchitra Kamble (Judicial Member) and Shri Waseem Ahmed, (Accountant Member) dismiss the Appeal file by the Revenue and held that “The payment made to the non-resident was at no point of time pointed out by the Revenue that the said is coming under the purview of TDS deduction. The amount paid to Allscripts USA is on actual cost basis without any element of markup and for the reimbursement of expenses incurred by way of using the network connectivity provided by the service provider and the amount is not chargeable to tax on any accounts.”
Shri Vishal Dilip Palani vs Income Tax Officer – 2022 TAXSCAN (ITAT) 1727
While deleting the Income Tax Addition, the ITAT of Ahmadabad bench has held that investment on gold would not come under Total income of assesse when it is proved with bills and vouchers.
The Tribunal bench comprising of ShriI P.M. Jagtap (Vice president) and Ms. Madumita Roy (Judicial member) partly allowed the appeal filed by the assesse, finding that no addition can be made on account of gold ornaments because it was entered on books of accounts , even if the details and documents such as bills/vouchers are not produced by the assesse no addition can be made because no deduction was claimed on it.
DCIT vs M/s. P.R. Rolling Mills Pvt. Ltd – 2022 TAXSCAN (ITAT) 1729
The Jaipur Bench of the ITAT has held that weighted deduction under section 35(1)(ii) of the Income Tax Act,1961 is not allowable on Bogus Donations. The ITAT Bench consisting of Shri Sandeep Gosain, JM & Shri Rathod Kamlesh Jayantbhai, AM observed that the assessee has adopted the unfair means to take the benefit under the garb of Section 35(1)(ii) amounting to Rs.1.75 Crore. The appeal of the Department was allowed.
Rasilaben Yogeshbhai Patel vs I.T.O – 2022 TAXSCAN (ITAT) 1731
The Ahmedabad Bench of the ITAT has held that when exemption claimed on Long Term Capital Gain (LTCG) by a co-owner has been accepted, then Capital Gain Exemption u/s 54 of the Income Tax Act,1961 is allowable for the assessee. A Coram of Shri Waseem Ahmed, an accountant member held that “when the LTCG and exemption claimed by the co-owner has been accepted, then the assessee cannot be treated indifferently.”
Shri Kadir Ahmed vs The Income Tax Officer – 2022 TAXSCAN (ITAT) 1730
The Delhi Bench of the ITAT has held that reassessment u/s 147 of the Income Tax Act,1961 simply relied on the Non-PAN AIR information is not valid. A Single member bench of ITAT consisting of Shri Chandra Mohan Garg, a judicial member observed that the case of the assessee was reopened under section 147 of the Income Tax Act, 1961 by recording the reasons and after obtaining approval from the JCIT and the PCIT based on the information received by the A.O. from the Non-PAN AIR of the Department that the assessee deposited a sum of Rs.21,55,000/- in the saving bank account during the financial year 2009-10.
Mahindra & Mahindra Limited Vs Asst.Commissioner of Income-tax, – 2022 TAXSCAN (ITAT) 1732
In a recent, case of Mahindra, the Mumbai Bench of the ITAT has held that Provision for Warranty Calculated on Scientific Basis is allowable as a deduction. It was observed that the assessee has made the said provision for warranty based on the actual expenses incurred on settlement of warranty claims incurred for earlier years on specific models of vehicles/tractors, which has facilitated in determining the average rate of warranty expenditure incurred on each of such models.
Ajaipal Mangal & Co vs Asstt. Commissioner of Income Tax – 2022 TAXSCAN (ITAT) 1733
The ITAT of Mumbai Bench deleted addition on sub contract expenses as there was no proper verification of records by Assessing Officer (AO). A Bench consisting of Rifaur Rahman, Vice President and Sandeep Singh Karhail, Judicial Member observed that “Once the PAN of the parties to whom sub-contract amount has been paid was available with the AO, all the basic details as sought from the assessee could have been easily traceable from the data available with the Department. However, no such efforts by the AO are evident from record.
Gulermak vs Assistant Commissioner of Income – 2022 TAXSCAN (ITAT) 1734
The Mumbai Bench of the ITAT has held that deduction is allowable towards the delayed payment of the employee’s contribution to Provident Fund ( PF )and ESI before filing the Return of Income (ROI).The ITAT bench comprising of Pramod Kumar (Vice President), and Aby T. Varkey (Judicial Member) directed the Assessing Officer to delete the impugned disallowances, on account of, what is termed as, delayed payments of PF and ESI contributions. The appeals were allowed.
DCIT vs Tashi Air Pvt. Ltd – 2022 TAXSCAN (ITAT) 1736
The Kolkata Bench of the ITAT held that Profits from transport of air passengers to be taxed in contracting state as per Indo Bhutan Double Taxation Avoidance Agreement (DTAA). A Division Bench consisting of Sanjay Garg, Judicial Member and Dr Manish Borad, Accountant Member observed that “Since Article 8 of the Indo Bhutan DTAA is more beneficial to the assessee, therefore the profits derived by the assessee from the operation of ships or aircraft in international traffic are liable to be taxed in the contracting state in which its place of effective management of the enterprise is situated, which undisputedly is Bhutan.”
Mahindra & Mahindra Limited Vs Asst.Commissioner of Income-tax, – 2022 TAXSCAN (ITAT) 1732
In a significant ruling in favour of Mahindra, the Mumbai Bench of the ITAT has held that the ESOP price difference between the exercise price and the market price isan allowable deduction. The ITAT viewed that in the return of income, the assessee had claimed a deduction for the difference between the exercise price and the market price on the date of grant of the option.
M/s. Tamilnadu StateMarketing Corporation Ltd vs The ACIT – 2022 TAXSCAN (ITAT) 1738
The ITAT of Chennai Bench recently in an appeal held that Value Adedd Tax payment would not amount to Fee under section40 (a) (iib) of Income Tax Act 1961. After considering the contention of the both side the division bench of ITAT compraising Sri. Shri Mahavir Singh, Vice Presidentand Shri Dr. Dipak P. Ripote, (Accountant Member) held that “VAT payment would not attract the provisions of section 40(a) (iib) of the Act and hence, is allowable u/s.37 r.w.s.43B of the Act, as claimed by the assessee”.
Deputy Commissioner of Income Tax vs M/s. Nexus Software Ltd – 2022 TAXSCAN (ITAT) 1735
The Ahmedabad Bench of the ITAT has held that the Addition of Income based on the statement of the Director without verifying details of payments from Third parties is not permissible. The CIT(A) observed that the Assessing Officer failed to take any steps calling for the statement of the third parties who were paid the part consideration by the assessee and further deleted the addition on account of business income of Rs. 3,28,32,402/- as the same amount suffered to taxes as entry provider at 0.5% as commission income in the hands of the assessee.
M/s. Peninsula Land Ltd vs Addl. CIT – 7(1) – 2022 TAXSCAN (ITAT) 1739
The Mumbai bench of ITAT held to direct the Assessing Officer to restrict the depreciation on software expenses @60%. After considering the contetion of the both side the division bench of ITAT compraising Sri. Shri Vikas Awasthy (Judicial Member) and Shri S. Rifaur Rahman, (Accountant Member) allow the appeal filed by the assessee and direct the Assessing Officer to restrict the depreciation on software expenses @60%.
M/s Skyline Prashasti vs Deputy Commissioner of Income Tax – 2022 TAXSCAN (ITAT) 1737
The Mumbai bench of the ITAT has held that the interest received from fixed deposit receipt (FDR) is taxable not as income from the business but as other income in Income Tax Act 1961. Dismissing the appeal the bench of comprising of, Shri Amarjit Sing (Accountant Member), and Shri Sandeep Sing Karhail (Judicial member) observing that the interest received from FDR was taxable as other income referring to a case where the assessee himself was a party. The tribunal also dismissed the appeal filed by the revenue.
DCIT vs M/s Ganga Developers – 2022 TAXSCAN (ITAT) 1742
The Mumbai Bench of the ITAT ruled that Income from compensation of land acquisition under Section 96 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (RFCTLARR)Act, 2013 not taxable under the Income Tax Act, 1961. A Bench consisting of Prashant Maharshi, Accountant Member and Shripavan Kumar Gadale, Judicial Member observed that “Therefore the income arising in the form of compensation shall be governed by the provisions of Section 96 of the act. Accordingly the income is not chargeable to income tax.”
Pradeep Kumar Sonthalia vs Deputy Commissioner of Income Tax – 2022 TAXSCAN (ITAT) 1740
The Kolkata Bench of the ITAT allowed deduction under Section 54 and 54F of the Income Tax Act, 1961 on the ground that Utilization of capital gain within one year from taking possession of new flat. A Bench consisting of Rajpal Yadav, Vice-President (KZ) and Girish Agrawal, Accountant Member observed that “The assessee has utilized the capital gain arose within one year from taking possession of the new flat and, therefore, on the basis of the Circulars and the judgments referred by the CIT(Appeals), is entitled for the deduction. Accordingly, we allow the claim of the assessee and direct the ld. Assessing Officer to grant deduction under section 54 and 54F of the Income Tax Act.”
ACIT, Circle-2(1) vs M/s BIP Developers Pvt. Ltd – 2022 TAXSCAN (ITAT) 1741
The Kolkata Bench of the ITAT held that Interest expenses under Section 36(1)(iii) of the Income Tax Act, 1961 not allowable for utilization of funds for investment in shares of subsidiary company. The assessee in the present appeal is M/s BIP Developers Pvt Ltd. A Bench consisting of Sanjay Garg, Judicial Member and Girish Agrawal, Accountant Member observed that “In view of the above discussion, the facts being identical in the earlier assessment year and the issue being covered by the aforesaid decision of the Coordinate Kolkata Bench of the Tribunal, we do not find any reason to interfere with the order of the CIT(A).”
Dr. Dharmista Mehta 22/5 vs ITO-34(1) (3) – 2022 TAXSCAN (ITAT) 1743
The Mumbai Bench of the ITAT allowed capital gain exemption claim under Section 54 of the Income Tax Act on purchase of new residential property upto date of filing of belated Income Tax Return. A Bench consisting of Aby T Varkey, Judicial Member and Gagan Goyal, Accountant Member held that “It can be safely be concluded that the assessee in the case before us is entitled to claim exemption under section 54 to the extent she had invested towards the purchase of new residential property under consideration upto the date of filing of belated return under section 139(4) of the Income Tax Act.”
Deputy Commissioner of Income-tax vs BHP (1981) Pvt. Ltd. – 2022 TAXSCAN (ITAT) 1744
The ITAT of Kolkata Bench remanded back matter to consider pending District Valuation Officer (DVO) Report to calculate income from sale of land.
A Bench consisting of Sanjay Garg, Judicial Member and Girish Agrawal, Accountant Member observed that “We find that in the present set of facts, it is proper to set aside the order of CIT(A) on the issue of income from sale transaction of land property and remit the matter back to the file of CIT(A) to call for and obtain the pending valuation report from the DVO for which he had directed the AO.”
Mrs. Umamaheswari vs Income Tax Officer – 2022 TAXSCAN (ITAT) 1747
The Chennai bench of the ITAT has held that since there was no legal prohibition in dealing with the demonetized notes till 31st December 2022, the cash deposit of such notes, being the sale consideration received from the property cannot be subject to addition under the Income Tax Act, 1961.
Noting that the assessee explained before the AO that she had received a sum of Rs.13 lakhs from Smt. Vedhavathy for sale of property on 09.11.2016, the Tribunal observed that “In fact, the AO accepted, the assessee has received consideration for sale of property from Smt. Vedhavathy and the purchaser has also filed a confirmation letter stating that she had paid consideration in cash. Therefore, once the AO is accepted the fact that the assessee has received consideration in cash, then the source for cash deposits during demonetization period should have been accepted out of sale consideration received for property.”
Smt. Porkodi vs Income Tax Officer – 2022 TAXSCAN (ITAT) 1746
The Chennai bench of the ITAT has deleted an addition under section 69A of the Income Tax Act, 1961 where the assessee received cash including the demonetized currencies as gift during marriage.
Noting that the claim of marriage gift from her brothers cannot be rejected, the Tribunal held that “it is also a customary in India that during marriages brothers will give some money to their sisters depending upon their social status and economic condition. Therefore, the claim of the assessee that she has received marriage gift from her brothers cannot be totally ruled out. Therefore, considering the facts and also custom prevailing in India, we are of the considered view that a reasonable amount of marriage gift claimed by the assessee, can be allowed. Therefore, we direct the AO to allow source for cash deposits out of marriage gift received from her brothers to the extent of Rs.2 lakhs and delete the addition made u/s.69A of the Income Tax Act, towards cash deposits to the extent of Rs.2 lakhs out of marriage gift received from her brother.”
Amiya Gopal Dutta vs DCIT, Circle-1(1) – 2022 TAXSCAN (ITAT) 1745
The ITAT of Kolkata bench quash the assessment order passed by the Assessing Officer on the ground of lack of jurisdiction. Assessment order passed by the PCIT on the ground of lack of jurisdiction and observed that “in the case of non-corporate assessee in non-metro cities, the ITR filed upto Rs. 15 lacs has to be assessed by ITO and therefore in the instant case the assessment is framed in violation of above instruction by the Board”.
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