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 December 10 to December 16,2022
The ITAT of Delhi bench has held that the TDS credit cannot be denied to the assesseeon ground of technical or typographical errors.A bench of Shri Saktijit Dey, Judicial Member and Dr. B.R.R. Kumar, Accountant Memberafter perusing Form 26AS statement submitted, observed that the amount of Rs.1,78,692/-, being the TDS deducted by Employees Provident Fund organization is reflected in From 26AS. Similarly, TDS amounting to Rs.1,70,009/- deducted by the employer M/s. Yaskawa India Pvt. Ltd. is also reflected in Form 26AS with TAN number.
The Delhi bench of ITAT recently held that the payment received from freight /logistic support service could not be treated as Royalty Under Section 9(1)(Vii) of Income Tax, Act 1961 a and Article 12 of the Double Taxation Avoidance Agreement.
After considering the contentions of the both parties the division bench of the ITAT compraising G.S.Pannu, President & Saktijit Dey, Judicial Member observed that the issue between the assessee and the revenue starting from assessment year 2010-11.
The Hyderabad Bench of the ITAT has held that Loss of investment written off as bad debt and same can’t claim as a business loss and upheld order of CIT(A) against Ceramin India Private Limited.A Coram of ITAT bench consisting of Shri Rama Kanta Panda, Accountant Member and Shri Laliet Kumar, Judicial Member held that when the assessee is not entitled to claim the same as bad debt, the assessee cannot claim the same as business loss as per his sweet will. The law is well settled on this aspect and business loss, if any, can be claimed by the assessee in the year of incurring of the expenditure and not as per his sweet will.
The New Delhi Bench of the ITAT, allowed income tax addition to Luthra and Luthra LLP on the ground that Bonus paid to partners attracts Section 40(b)(v) of Income Tax Act, 1961.The Bench comprising N K Billaiya, Accountant Member and Kul Bharat, Judicial Member relied on the decision of the Co-ordinate Tribunal wherein it was held that “Total allowance of the remuneration to partners has to be judged in the light of the provisions contained section 40(b) of the Income Tax Act. The AO is directed to verify whether the overall remuneration including bonus is within the permissible limit of the relevant provisions of section 40 (b) of the Income Tax Act and if found so the same should be allowed.”
The ITAT of Mumbai bench has held that the exemption to Trusts under section 11 of the Income Tax Act, 1961 cannot be denied merely due to the delay in furnishing of the audit report in form 10B.Concluding the order in favour of the assessee, the ITAT held that “In view of what has been discussed above, I am of the considered view that the order passed by the Ld. CIT(A) is not sustainable in the eyes of law, hence set aside. The AO is directed to grant the deduction claimed by the assessee trust under section 11 of the Act, by considering audit report in form 10B after due verification. Resultantly, appeal filed by the assessee is allowed.”
The ITAT of Ahmedabad Bench held that No claim of expenses can be made when amount represents net income of firm.A Bench consisting of P.M. Jagtap, Vice President and Siddhartha Nautiyal, Judicial Member observed that “The CIT(Appeals) has correctly observed that from the statement recorded of the Partner of the firm, it cannot be inferred that the said amount of Rs 11 crores represents net incomeof the assessee firm, and therefore, the assessee is not eligible to claim any expenses against the same.”
The Tribunal also noted that once the position is admitted that the assessee has offered the undisclosed sum of Rupees 11 crores in the return of income, and during the course of detailed assessment, the assessing Officer has not doubted the genuineness of expenses claimed in the return of income, then such expenses should be allowed against the undisclosed income of Rupees 11 crores offered by the assessee in the return of income.
In a recent ruling by the Ahmedabad Bench of the ITAT, the Judicial Member Suchitra Kamble and Accountant Member Waseem Ahmed held that, rejection of application for condonation of delay on the sole ground of not following prescribed technical grounds amounts to grave violation of the natural justice principles and remanded the matter back to the Commissioner of Income Tax (Appeals) [CIT(A)] for proper adjudication on merit.
It was observed that “there is a delay of 607 days in filing the present appeal before us. The assessee has filed an affidavit of the partner of the assessee thereby stating that due to certain difficulties which was elaborately explained in the affidavit the assessee could not file the appeal before us” and the application for condonation of the delay was allowed.
The Mumbai Bench of the ITAT of Judicial Member Kuldip Singh, quashed the reopening of assessment by the Assessing Officer (AO) due to the absence of valid reasons and tangible materials and deleted the additions made.It was also observed that, “The AO has also not made any comparison with the assessee’s own productions in the earlier years to arrive at the logical conclusion. Even in earlier years for A.Y. 2002-03, 2003-04 and 2005-06 the Ld. CIT(A) himself quashed the reopening which was made on the basis of information received from Maharashtra State Electricity Board that the assessee is involved in theft of electricity.”
The Mumbai Bench of the ITAT has held that the reasons recorded for reopening the assessment are to be read as they were recorded by the Assessing Officer and the same cannot be supplemented.A Coram of Shri S Rifaur Rahman, accountant member and Shri Sandeep Singh Karhail, judicial member set aside the reassessment proceedings under section 147 of the Act and the impugned order passed by the CIT(A), inter-alia, upholding the order passed under section 143(3) r.w.s. 147 of the Act. The appeal by the assessee got allowed.
The ITAT, Mumbai held that the business profits earned by the RGA International Reinsurance Company on account of the reinsurance business have no tax implications in India.Counsel for assesses P J Pardiwalla, along with Jasmin Amalsadvala and Anish Thakkar observed that assessee does not have any place of business operations in India and that the assessee did not have any premises at its disposal. RGA India is a separate legal entity having its own personnel It was also explained that the services rendered by the RGA India and the assessee company are distinct in nature while the former renders support services, the later provides reinsurance services.
The Mumbai Bench of ITAT has denied the claim for deduction as the income tax return was filed after the due date mentioned under Section 80AC of the Income Tax Act 1961.The tribunal of Vikas Aswathi, upheld the decision of Commissioner of Income Tax Appeals (CIT(A)) and dismissed the appeal of the assessee observed that the substituted section of 80AC of the Income Tax Act after amendment clearly showed that the Section 80 p of the of the Income Tax Act had all restriction upon the impugned year and impugned section and the Tribunal also denied the deduction.
The Mumbai Bench of the ITAT, presided over by Judicial Member Vikas Awasthy, decided that the cooperative society is entitled to claim a deduction for said interest on deposits deposited with cooperative banks under Section 80P(2)(d).the bench took into consideration the Co-ordinate Bench’s decision in the case of Kaliandas Udyog Bhavan Premises Co-op Society Ltd. vs. ITO, which mentioned‘that interest income derived by a co-operative society from investments with a co-operative bank, would be entitled for deduction under Section 80P(2)(d) of the Act.’
In this case of appeal, the Mumbai Bench of the ITAT, presided over by Judicial Member S.S. Viswanethra Ravi and the Accountant Member Dr. Dipak P. Ripote decided that the assessee to be eligible for deduction under Section 54B of Income Tax Act, 1961 only for that part of the land used for agricultural purposes.The Appellate tribunal observed that, “to avail the deduction under section 54B of the Act, the assessee has to show that the land was used for agricultural purpose in the immediate two preceding years. In this case only land at Survey No.33, Hissa No.7C was used for cultivation in the two preceding years. Other three lands were not used for cultivation. Therefore, assessee will be eligible for deduction under section 54B only with respect to land cultivated.”
The ITAT of Delhi bench has held that TDS credit shall be given to the deductee for the assessment year for which such income is assessable under the Income Tax Act, 1961.A bench of Dr. B. R. R. Kumar, Accountant Member and Sh. Yogesh Kumar U.S., Judicial Member observed that there cannot be taxation for the same amount in the year under consideration i.e. Assessment Year 2013-14, which amounts to double taxation. Deleting the addition, the Tribunal also found that regarding the TDS credit, “the assessee offered the subject income for taxation in Assessment 2016-17 & 2017-18. As per Section 199 of the I.T Act, credit for tax deduction at source shall be given to the deductee for the assessment year for which such income is assessable. Therefore, with the above observations the Ground No. 2 deserves to be partly allowed and the assessee is entitled to get the TDS Credit as per Section 199 of the Income Tax Act. Order accordingly.”
The Ahmedabad Bench of the ITAT confirmed penalty as there was showing less Long Term Capital Gain (LTCG) by making false claim under Section 54EC without making investment.A Bench comprising Pramod M Jagtap, Vice President and Madhumita Roy, Judicial Member observed that “We do not find any iota of doubt in holding that the appellant is consciously and continuously mis-represented the facts and furnished inaccurate particulars of her income by making computation for this claim under Section 54EC of the Income Tax Act and 54F of the Income Tax Act. We therefore confirm the order passed by authorities below in imposing impugned penalty under Section 271(1)(c) of the Income Tax Act.”
The Mumbai bench of the ITAT has held that Interest on the loan of the leased portion of a building cannot be allowed as a work-in-progress when eligible for deduction under Section 24 of the Income Tax Act,1961.A Coram of Shri Om Prakash Kant (Accountant Member) and Ms Kavitha Rajagopal (Judicial Member) held that interest on the loan in respect of the leased portion of the building cannot be allowed as work-in-progress as same is eligible for deduction u/s 24 of the Act under the head ‘income from house property. Accordingly, we direct the Assessing Officer to verify if the same has been claimed separately u/s 24 in the computation of income filed by the assessee. The appeal of the Revenue is accordingly allowed for statistical purposes.
The Delhi Bench of the ITAT, held that Hedging transactions to safeguard loss arising out of fluctuation in foreign currency are not speculative in nature. A Coram comprising of Dr B R R Kumar, Accountant Member and Yogesh Kumar US, Judicial Member relied on the judgment in LGW Ltd. vs. ITO wherein the Tribunal held that “Where forward contract in question was purely hedging transactions entered into by assessee to safeguard against loss arising out of fluctuation in foreign currency, loss on such transactions could not be held as speculative transactions felling within ambit of section 43(5).”
In a recent ruling, Chennai Bench of the ITAT presided over by a Judicial Member V. Durga Rao and an Accountant Member G. Manjunatha decided that the interest paid on the belated payments of service tax is allowable for deduction under Section 37(1) of the Income Tax Act, 1961. Also directed the Assessing Officer (AO) to delete additions made towards disallowance of interest on service tax.The Appellate Tribunal observed that “interest paid on belated payments of service tax is not a penalty, which can be disallowed u/s. 37(1) of the Act. Therefore, we are of the considered view that the Ld. CIT(A) has erred in sustaining addition made by the AO towards interest paid on service tax.”
The ITAT of Mumbai held that Non- Residents are not required to disclose their assets situated outside India to the Income Tax Authorities.After both considering the contentions of both sides the bench consisting of Prashant Maharishi, Account Member and Sandeep Singh Karhail, Judicial Member dismissed the appeal filed by the revenue and held that “A Nonresident is chargeable to tax in India only income falls under Section 5(2) of the Income Tax Act. The present case assessee is a non-resident is not obliged to disclose his assets situated outside India in the return of income filed in India”.
The ITAT of New Delhi, has recently in an appeal filed before it by an assessee, held that the Commissioner Of Income Tax (CIT) cannot assume revisional jurisdiction under section 263 of the Income Tax Act to the extent of substituting his subjective view in the place of the judicious view of the Assessing Officer (A.O).“The decision of the Hon’ble Supreme Court in case of CIT vs. Max India Ltd 295 ITR 282, Malabar Industrial Co. Ltd. vs. CIT 243 ITR 83 are aptly applicable in the present case as the Hon’ble Apex Court wherein it is held that Section 263 has to be read in conjunction with the expression “erroneous” order passed by the Assessing Officer”, it added.
The ITAT of Pune Bench, constituted of the Vice President of ITAT, Pune alongside being an Accountant Member Ravinder Singh Syal, and a Judicial Member Partha Sarathy Chaudhury, has made a conspicuous decision in the case of Dana India Pvt. Ltd Company and rendered that the Foreign Exchange fluctuations in export or imports can be treated as an Operating Cost.The ITAT held that “in the case of the assessee that foreign exchange gain/loss which has arisen from exports/imports of the product/materials which are in the ordinary course of business of the assessee are included as operating cost.”
The ITAT of Pune bench consisting of Inturi Rama Rao, Accountant Member, and S S Viswanethra Ravi quashed the revision order of Principal Commissioner of Income Tax (PrCIT) as prima facie evidence for claiming exemption under Section 54B proved.The Tribunal observed that “The issue in the present appeal relates to the validity of the revision exercised by the Pr.CIT u/s 263 of the Act in respect of claim for deduction u/s 54B allowed by the Assessing Officer. There is no material on record indicating that the appellant had not satisfied the conditions laid down under the provisions of the Act for claiming exemption u/s 54B of the Act. Therefore, the assessment order cannot be branded as “erroneous” and “prejudicial to the interests of the revenue”. Thus, the Pr.CIT is not justified in exercising the power of revision u/s 263 of the Act and order passed u/s 263 by the ld. Pr.CIT is hereby set-aside.”
The ITAT of New Delhi Bench held that Benefit of India UK Double Taxation Avoidance Agreement (DTAA) allowable to Limited Lability Partnership (LLP) on portion of Income from Indian Engagements.A Bench comprising Shamim Yahya, Accountant Member and Yogesh Kumar US, Judicial Member relied on the judgment in Linklaters LLP wherein it was observed that “The assessee is entitled to the benefit of Article 4. 1 of India-UK DTAA on the portion of its income from Indian engagements, which has been taxed in the UK in the hands of its UK tax resident partners.”
The Chennai bench of the ITAT has held that the benefit of the circular issued by the Central Board of Direct Taxes (CBDT) providing a ceiling on the holding of the amount of jewellery by “family members” can be extended to the jewellery held by a minor son and daughter.Holding in favour of the assessee, Shri Mahavir Singh, Vice President and Shri Manoj Kumar Aggarwal, AM observed that “It could be seen that Ld. AO has granted concession as per CBDT Instruction No.1916 dated 11.05.1994 but it failed to give applicable concession for minor son and daughter. If further quantities for minor son and daughter are considered, nothing would remain to be added since the quantity of jewellery fall within the permissible limits. Another fact to be noted is that the assessee has also discharged the onus of establishing the source of jewellery. Accordingly, the impugned additions have rightly been deleted by Ld. CIT(A).”
The ITAT of Ahmedabad Bench has held that Joint Commissioner sanctioned reopening notice under section 148 after the expiry of 4 years and quashes the assessment order being violative of section 151.The Coram of Mr. Waseem Ahmed, Accountant Member, and Mr. T.R. Senthil Kumar, Judicial Member observed, the sanctioning of the joint commissioner for the reopening proceedings, which is clearly against the provisions of Section 151 of the Act. Therefore, the entire reopening assessment itself is vitiated and against the provisions of Section 151 of the Act. The Tribunal quashed the entire assessment proceedings on the point of sanctioning authority u/s. 151 of the Act.
The Bangalore bench of the ITAT has held that the condition of proving “source of source of funds” under 68 of the Income Tax Act,1961 does not apply to non-residents.A Coram of Shri N V Vasudevan, Vice President and Shri Chandra Poojari, Accountant Member observed that section 68 does not apply to remittances made in India by non-residents. According to the said proviso, if an assessee company, in which the public is not substantially interested, receives money by way of share capital or share premium or any such amount by whatsoever name called, then the source of funds of the resident shareholder has to be established by the assessee to get out of the kind of the deeming provision u/s 68 of the Act.
The Delhi Bench of ITAT, presided over by a Judicial Member Chandra Mohan Garg and and an Accountant Member Pradeep Kumar Khedla upheld the decision of the Commissioner of Income Tax (Appeal) [CIT(A)] that the security premium reserve cannot be regarded as part of accumulated profits while deciding the case of Bhagwati Coal Movers (P) Ltd.The Appellate Tribunal upheld the decision of the CIT(A) and observed that the CIT(A) has restricted the addition to the extent of ‘General Reserve’ after excluding the ‘Security Premium Reserve’ which has been regarded to be outside the ambit of expression ‘accumulated profits’ under Section 2(22)(e) of the Income Tax Act and held that the security premium reserve cannot be regarded as a part of accumulated profits.
A Division Bench of the Income Tax Appellate Tribunal (ITAT), Mumbai Bench held that Income from shareholders’ account liable to be taxed as part of life insurance business, thereby granting relief to M/s. Tata AIA Life Insurance Company Ltd. Quashing the revision order, the Bench comprising Amit Shukla, Judicial Member and M Balaganesh, Accountant Member relied on the decision of the Jurisdictional High Court wherein it was held that “Income earned on shareholders’ amount has to be considered as arising out of Life Insurance Business. Moreover, in terms of Section 44 of the Act, such income has to be taxed in accordance with First Schedule
The Mumbai Bench of the Income Tax Appellate Tribunal ( ITAT ), held that Income from Design Charges are business income to compute deduction under Section 10A of the Income Tax Act, 1961.A Coram consisting of Prashant Maharshi, Accountant Member and Rahul Chaudhary, Judicial Member observed that “We hold that the Appellant has been able to establish that income by way of Design Charges are in the nature of business income as the same are in herently connected with the business of export of jewellery undertaken by Unit-II of the Appellant, and therefore, the same must be included in business income for the purpose of computing deduction under Section 10A of the Income Tax Act.”
The Income Tax Appellate Tribunal (ITAT), Mumbai Bench deleted ALP (Arm Length Price) adjustment of Rupees 18 lakhs thereby granting relief to Ambuja Cement Limited.A Bench comprising Pramod Kumar (Vice President), and Sandeep S Karhail (Judicial Member) observed that “In any event, the total ALP adjustment is less than Rs 20 lakhs, and the relevant financial period is almost 20 years ago, it may not even be appropriate to even remit the matter for fresh consideration at the TPO stage. Keeping in all these factors, as also the entirety of the case, in mind, we deem it fit and proper to delete the impugned ALP adjustment of Rs 18 Lakhs. The assessee gets the relief accordingly.”
The Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) has held that trading loss incurred cannot be held bogus merely based on modus operandi unearthed from third party without cogent materials.A Coram comprising of Shri Waseem Ahmed, Accountant Member observed that without further corroboration based on cogent material, the revenue can’t justify his conclusion that the transaction is bogus, a sham and nothing other than a racket of accommodation entries.
The Income Tax Appellate Tribunal (ITAT), Kolkata Bench granted relief to Birla Corporation Limited and held that Claim of interest subsidy from State Government is capital receipt.A Coram consisting of Rajpal Yadav, Vice President and Dr. Manish Borad, Accountant Member observed that “Since the issues raised before us are squarely covered by the decision of this Tribunal in assessee’s own case for preceding assessment year i.e. AY 2010-11and Revenue being unable to controvert this fact by placing any other binding precedence in its favour, we fail to find any infirmity in the finding of the CIT(A).”
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT), held that Insurance Premium for paid for Keyman insurance policy of Life Insurance Corporation of India (LIC) and is allowable as expenses.A Coram consisting of Amit Shukla, Judicial Member and Prashant Maharshi, Accountant Member held that “Thus, there can be no doubt that it was a keyman insurance taken by the assessee company and therefore, the same could not have been disallowed on the reason given by the AO. Accordingly, the order of the CIT(A) is confirmed and the appeal of the revenue is dismissed.”
The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT), allowed deduction under Section 80IAof the Income Tax Act, 1961 for thermal power plants thereby granting relief to Birla Corporation.A Coram consisting of Rajpal Yadav, Vice President and Dr Manish Borad, Accountant Member concluded that “Since the issues raised before us are squarely covered by the decision of this Tribunal in assessee’s own case for preceding assessment year i.e. AY 2010-11 and Revenue being unable to controvert this fact by placing any other binding precedence in its favour, we fail to find any infirmity in the finding of the CIT(A).”
The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) confirmed addition on the ground that Long Term Capital Gain (LTCG) for sale of equity shares as bogus, not eligible to exemption under Section 10(38) of Income Tax Act, 1961. The appellants in the present appeals are Rajendra Kumar Gupta and Others. A Bench consisting of SonjoySarma, Judicial Member and Dr. Manish Borad, Accountant Member observed that “We, therefore, respectfully following the decision of this Tribunal dated 17.10.2022 as well as in the light of ratio laid down by the Jurisdictional High Court in the case of Swati Bajaj & Others find no infirmity in the orders of the CIT(Appeals) holding the alleged LTCG for sale of equity shares as bogus and not eligible to exemptions under section 10(38) of the Income Tax Act and also confirming the addition of commission expenditure incurred for arranging bogus LTCG and dismiss the appeals of the assesses.”
The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT), in its recent ruling held that the Assessing Officer (AO) and the Commissioner of Income Tax (Appeal) [CIT(A)] rightly imposed the Tax liability on the seller of the scrap under Section 206C of the Income Tax Act, 1961 and dismissed the appeal of the assessee.The Bench of Suchitra Kamble denied the tax exemption to the seller on trade of scrap and directed it to follow the order made by the AO and CIT(A) as no declaration was made by the buyer under Form 27C of the Income Tax Act that not to use the scrap for trade.
In a recent ruling, the Bangalore Bench of the Income Tax Appellate Tribunal ( ITAT ), which is chaired by Judicial Member George George K. and Accountant Member Laxmi Prasad Sahu, instructed the Assessing Officer to re-adjudicated the case in which the Interest from Investment earned by the Co-operative Society from the Co-operative Bank is at issue.The Appellate Tribunal remarked that the Assessee had not argued before the PCIT that it was entitled to a deduction for expenses incurred in generating interest income under Section 57 of the Income Tax Act. However, the bench chose to entertain the argument.
The Hyderabad bench of the Income Tax Appellate Tribunal (ITAT) has held that expenditure incurred for construction of a new facility and subsequently abandoned at work-in-progress stage is allowable as Revenue Expenditure.It was observed that in the case of Chemplast Sanmar Ltd (supra) the court held that” where the assessee company set up a new project which was subsequently abandoned, since the new project was managed from common funds, control over all business units was in hands of the assessee and there was the unity of control, it could not be said that pre-operative expenditure incurred by the assessee was on a new line of business, thus, same was to be allowed as revenue expenditure.”
The Chennai Bench of the Income Tax Appellate Tribunal ( ITAT ) has recently allowed an additional income tax concession on the Gold acquired by the assessee, Lakshmanan Indirani by way of customary practices and tradition.The Tribunal Bench of Judicial Member V Durga Rao and Accountant Member Manoj Kumar Aggarwal observed that “concession of 400 grams has been allowed against the assessee’s daughter as against 500 grams prescribed in the circular. Further, no concession has been granted for jewellery acquired by the assessee out of customs/ traditions.”
The Income Tax Appellate Tribunal ( ITAT ), Bangalore Bench held that Additional income offered as part of business income, entitled to deduction under Section 40(b)(v) of the Income Tax Act, 1961.A Coram consisting of George George K, Judicial Member and Padmavathy S, Accountant Member held that “The additional income offered as part of the business income, the assessee would be entitled to deduction as per the provisions of section 40(b)(v) of the Income Tax Act.”
A Division Bench of the Income Tax Appellate Tribunal (ITAT), Kolkata Bench held that the Subsidy or incentive received are capital receipts, should be excluded from book profit under Section 115JB of the Income Tax Act, 1961. The assessee in the present appeal is Birla Corporation Limited.The Bench comprising Rajpal Yadav, Vice President and Dr Manish Borad, Accountant Member observed that “Since the issue stands squarely covered by the Jurisdictional High Court in the case of Ankit Metal and Power Limited, we fail to find any infirmity in the finding of the CIT(A) holding that the subsidy/incentive received by the assessee which have been held to be capital receipts are to be excluded from the book profit u/s 115JB of the Act.”
In a recent ruling, the Delhi Bench of the Income Tax Appellate Tribunal (ITAT) chaired by N.K. Balliya, Accountant Member and Kul Bharat, Judicial Member directed the Assessing Officer (AO) to delete the additions made under Section 69A of Income Tax Act, 1961 for the cash deposit of demonetized currency as the advance tax was paid under the Pradhan Mantri Garib Kalyan Yojana (PMGKY) Scheme, 2016. The Appellate Tribunal observed that the Assessee had presented a legitimate declaration in accordance with the PMGKY Scheme, 2016, and had duly paid penalties and taxes together with the required amount. Added, no stretch of imagination provisions of section 69A of the Income Tax Act can be applied on the mentioned facts.
The Income Tax Appellate Tribunal (ITAT), Mumbai Bench quashed re assessment proceedings on the ground by stating that Reasons for reopening assessment should be examined on standalone basis.A Division Bench consisting of Pramod Kumar (Vice President) and Sandeep S Karhail(Judicial Member) observed that “It is well settled in law that reasons, as recorded for reopening the reassessment, are to be examined on a standalone basis. Nothing can be added to the reasons so recorded, nor anything can be deleted from the reasons so recorded. We hold that the reasons for reopening the assessment were unsustainable in law. The impugned reassessment proceedings must stand quashed for this short reason alone.”
In as significant case of Zydus Healthcare, the Kolkata bench of the Income Tax Appellate Tribunal (ITAT) has held that AO is bound to refer to TPO for computation of domestic specified transactions.A Coram comprising of Shri Rajpal Yadav, Vice-President (KZ) & Shri Rajesh Kumar, Accountant Member observed that the third condition contemplated in the Instruction which mandates the search and survey is missing in the case of the assessee. Therefore, the case of the assessee does not fall under any of the conditions of the Instructions.
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