ITAT Weekly Round Up

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 8th September 2024 to 14th September 2024. Co-operative Societies Offering Credit to its Members Eligible for Deductions u/s 80P(2)(a)(i): ITAT Hunnur Souhard Credit Sahakari vs ITO CITATION: 2024 TAXSCAN (ITAT) 1044 The Bangalore Bench of Income Tax Appellate Tribunal ( ITAT ) ruled that co-operative societies providing credit to their members are eligible for deductions under Section 80P(2)(a)(i) of the Income Tax Act,1961. The two-member bench comprising Yogesh Kumar U. S (Judicial Member) and Waseem Ahmed (Accountant Member) partly allowed the appeal and remitted the issues to the CIT(A)/NFAC for a fresh review, ensuring that the assessee had a full opportunity to present their case. ITAT Sets aside CIT(E) order, Citing Insufficient Hearing Opportunity in Section 80G (5) Application Rejection Manav Seva Mandir vs Commissioner of Income Tax (Exemption) CITATION: 2024 TAXSCAN (ITAT) 1045 The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) set aside the Commissioner of Income Tax (Exemption) order, noting that the assessee had not been given a fair opportunity to be heard before the rejection of the application under Section 80G (5) of the Income Tax Act, 1961, as principles of natural justice require such an opportunity. The CIT (E)’s order was set aside and the case was returned to CIT (E) for reconsideration in accordance with the principles of natural justice. Inadequate Inquiry into Rs. 9.30 Crore Property Investment: ITAT Upholds PCIT’s Revision Order Navin Kalidas Patel vs The Pr.CIT-3 CITATION: 2024 TAXSCAN (ITAT) 1046 The Income Tax Appellate Tribunal ( ITAT ) of Ahmedabad in a recent case, upheld a revision order passed by the Principal Commissioner of Income Tax ( PCIT ) under Section 263 of Income Tax Act 1961, observing that the said order was passed justifiably as the Assessing Officer (A) failed to sufficiently scrutinize a large property investment made by the assessee. In result, the tribunal inferred that the AO’s failure to make adequate inquiries, particularly concerning the large investment compared to the assessee’s income, justified the PCIT’s decision to exercise jurisdiction under Section 263 of the income tax statute to order a fresh assessment. Thus, the appeal was dismissed, with directions given for a detailed investigation by the AO to verify the source of funds and the genuineness of the loan transactions. PCIT Adds Rs.1.67 Crore Doubtful Debts to Book Profit u/s 115JB: ITAT Reverses Recognizing Actual Write-Off M/s. Featherlite Office Systems Pvt. Ltd vs The Deputy Commissioner of Income Tax CITATION: 2024 TAXSCAN (ITAT) 1047 The Bangalore Bench of Income Tax Appellate Tribunal ( ITAT ) reverses Principal Commissioner of Income Tax addition of Rs. 1,67,51,026 from doubtful debts to book profit under section 115JB of the Income Tax Act,1961. The ITAT acknowledged the amount as an actual write-off, not just a provision for doubtful debts. The Tribunal held that the reduction of Rs. 1,67,51,026 from trade receivables amounted to an actual write-off and not a mere provision for doubtful debts. Thus, the tribunal directed the assessing officer to complete the assessment in light of the observation of this order. The assessee’s appeal was allowed. Penalty u/s 270A cannot be Imposed if Assessed and Processed Income are Same: ITAT Quashes Penalty on S. 43B Disallowances Income Tax Officer vs Om Minerals CITATION: 2024 TAXSCAN (ITAT) 1048 The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) ruled that the penalty under Section 270A of Income Tax Act,1961 cannot be imposed when the assessed income matches the income determined in the return processed. Thus, it quashed the penalty on disallowances made under Section 43B. The two-member bench comprising Sudhir Kumar (Judicial Member) and Dr. B. R. R. Kumar(Accountant Member) partly allowed the appeal in favor of the assessee, confirming the genuine nature of the payments and addressing the penalty issue based on the absence of intentional misreporting. Cash Seized from Partner’s Premises Cannot Be Adjusted Against Partnership Firm’s Tax Liability: ITAT Anand Sweets & Savouries vs The Dy. Commissioner of Income Tax CITATION: 2024 TAXSCAN (ITAT) 1049 The Bangalore Bench of Income Tax Appellate Tribunal ( ITAT ) ruled that cash seized from a partner’s premises cannot be automatically deemed adjustable against the partnership firm’s tax liability. The two member bench comprising Keshav Dubey(Judicial Member) and Waseem Ahmed (Accountant Member) set aside the CIT(A)’s order and directed the AO to allow the adjustment of Rs.9,30,000 against the firm’s tax dues. The appeal was allowed in favor of the assessee. AO Adds SBN Deposits by NBFC as Unexplained Cash Credit u/s 68 During Demonetization: ITAT Directs AO to Reassess and Apply CBDT Guidelines Chetana Financial Services Private Limited vs The Assistant Commissioner of Income Tax CITATION: 2024 TAXSCAN (ITAT) 1050 The Bangalore Bench of the Income Tax Appellate Tribunal ( ITAT ) directed the Assessing Officer ( AO ) to reassess the case involving the addition of Specified Bank Notes ( SBN ) deposits as unexplained cash credit under section 68 of the Income Tax Act, 1961. This decision was made because the AO failed to properly apply the CBDT guidelines in evaluating the deposits made during the demonetization period. The tribunal further referred to the Banglore tribunal ruling in the case of Bhoopalam Marketing Services P. Ltd. Vs ACIT (2022) where the issue was remanded back to the AO for fresh examination due to not performing the instruction prescribed in the CBDT guidelines regarding the cash deposits. Therefore, the tribunal in the present case remands the matter back to the assessing officer for fresh adjudication. The appeal of the assessee was allowed for statistical purposes. Delay of 331 Days in Filing Appeal: ITAT Orders CIT (E) to Process Trust’s Fresh Form 10 AB application for Section 80 (G)(5) Manas Yog Seva Trust vs Commissioner of Income Tax CITATION: 2024 TAXSCAN (ITAT) 1051 The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) has directed the Commissioner of Income Tax (Exemption) to process the trust’s new Form 10AB application, extending the deadline for filing Form 10AB for approval under Section 80G(5) of the Income Tax Act, 1961, until June 30, 2024, despite a delay of 331 days in filing the appeal. The two-member bench of the Tribunal, consisting of Narendra Prasad Sinha (Accountant Member) and T.R. Senthi Kumar (Judicial Member), observed the submissions made. Consequently, the Tribunal dismissed the present appeal and directed the CIT (E) to process the application filed on April 30, 2024, in Form 10AB in accordance with the law. The appeal filed by the Assessee was dismissed, with the direction for the CIT (E) to address the fresh application as per legal provisions. ITAT Dismisses Appeal, Directs CIT (E) to Resolve Fresh Form 10 AB Application for Section 80 G (5) Trust Registration Navgujarat Foundation vs Commissioner of Income Tax CITATION: 2024 TAXSCAN (ITAT) 1052 In a recent, judgment, The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) has dismissed the appeal and directed the Commissioner of Income Tax ( Exemption ) CIT (E) to address the new Form 10 AB application for the Section 80G(5) of the Income Tax Act, 1961, trust registration. The two-member bench of the Tribunal, consisting of Accountant Member Malaren Vasant Mahadeokar and Judicial Member T.R. Senthil Kumar, recorded the submissions made by the assessee-Trust. Subsequently, the Tribunal dismissed the appeal, directing the Commissioner of Income Tax (Exemption) to consider the fresh application filed by the assessee in Form 10AB on April 25, 2024, for final registration under Section 80G(5) of the Income Tax Act, in accordance with the law. With these observations, the appeal was dismissed. No Addition u/s 68 in Partnership Firm’s Hands if Credit is in Partner’s Capital Account: ITAT Income Tax Officer vs Samvatt Properties LLP CITATION: 2024 TAXSCAN (ITAT) 1053 The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) ruled that no addition is permissible under Section 68 of the Income Tax Act, 1961, in the hands of the partnership firm but can only be examined in the hands of the individual partners. The bench, comprising Makarand Vasant Mhadeokar (Accountant Member) and T.R. Senthil Kumar (Judicial Member), considered the materials on record and the CIT (A)’s decision, which included the relevant judgment from the Jurisdictional High Court. The Tribunal agreed with the CIT (A) that issues regarding the creditworthiness of partners should be examined in their individual cases rather than in the hands of the partnership firm. This perspective was supported by the Supreme Court’s dismissal of the revenue’s SLP. The Tribunal found no merit in the revenue’s grounds of appeal and, therefore, upheld the CIT (A)’s decision. The appeal filed by the Revenue was accordingly dismissed. ITAT Rejects Allegation of Fabricated LTCG, Validates Sale Price of Unquoted Shares The Income Tax Officer vs Shri Bipin Babubhai Panchal CITATION: 2024 TAXSCAN (ITAT) 1054 In a recent case, Ahmedabad “A” bench of the Income Tax Appellate Tribunal (ITAT) rejected allegations of fabrication regarding the Long Term Capital Gain (LTCG) earned by the assessee from the sale of shares of a Private Limited Company under liquidation and validated the sale price of the said unquoted shares, which was higher than the actual price of the shares. After hearing both parties and reviewing the material on record, the division bench of Ms Suchitra Kamble and Mr Naredra Prasad Sinha noted that the AO had made direct inquiries with the Cambatta Group, the purchaser of the shares, under Section 133(6) of the Income Tax Statute, and their response supported the sale price of ₹2,85,770 per share. The bench agreed with the CIT(A) that the sale price reflected the intrinsic value of the land and the strategic advantage gained by the purchaser, who sought full control over the company. Thus, the ITAT ruled in favor of the assessee, upholding the deletion of the LTCG addition. Consequently, the appeal of the Revenue was dismissed. No Nexus Between Borrowed Funds and Tax-Exempt Investments: ITAT quashes s.14A Disallowance under Income Tax The Deputy Commissioner of Income Tax vs Gujarat State Fertilizers & Chemicals Ltd CITATION: 2024 TAXSCAN (ITAT) 1055 The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) quashed invocation of section 14 of the Income Tax Act 1961 (ITA) noting that it was not applicable in the assessee’s case as no nexus between borrowed fund and tax-exempt investments could be found, which is a prerequisite for attracting this particular section. The Tribunal dismissed the Revenue’s appeal regarding the interest disallowance and deemed the Assessee’s cross-objections to be infructuous. The Tribunal also instructed the AO to carefully reconsider the Assessee’s claims regarding administrative expenses and to ensure that dissatisfaction is properly recorded before any future disallowances are made. S.263 of Income Tax Act Not to be invoked without Justifiable Reasons: ITAT Kaivan Jitendrakumar Shah HUF vs Commissioner of Income Tax CITATION: 2024 TAXSCAN (ITAT) 1056 The Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) recently held that Section 263 of the Income Tax Act 1961 is not to be invoked without justifiable reasons for the same. It was noted that the distinction between a “lack of inquiry” and “inadequate inquiry” must be considered. In this case, the tribunal concluded that the AO had conducted a proper inquiry and that there was no “lack of inquiry” that would justify invoking Section 263 of the tax legislature. In light of these facts, the tribunal ruled that the PCIT’s order was untenable in law, and set aside the same. 80P Deduction cannot be claimed beyond due date of ITR Filing u/s 139(1): ITAT Dared Seva Sahkari Mandali Ltd vs Assessment Unit CITATION: 2024 TAXSCAN (ITAT) 1057 The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) ruled that the deduction under section 80P cannot be claimed in Income Tax Return (ITR) filing beyond the due date specified under section 139(1) of the Income Tax Act. The tribunal highlighted that the amendment of section 80AC which mandates deduction under section 80P could be claimed only if the income tax return was filed within the due date under section 139(1) from 1st April 2018. The tribunal referenced similar rulings, such as the Nileshwar Rangekallu Chethu Vyavasaya Thozhilali Sahakarana Sangham case, supporting the revenue’s stance on the amended Section 80AC. Thus, the tribunal dismissed the appeal of the assessee. Income Tax Notices Sent via Email against Assessee’s Request: ITAT Sets aside CIT(A)’s Ex Parte Order Luv Procon Private Limited vs ITO CITATION: 2024 TAXSCAN (ITAT) 1058 The Ahmedabad “B” bench of Income Tax Appellate Tribunal ( ITAT ) in a recent case set aside an ex parte order passed against the appellant, noting that the notices were sent to the appellant through email, opposed to their request for physical notices. The tribunal decided that the matter should be remanded to the CIT(A) for fresh adjudication. The tribunal thus set aside the order of the CIT(A) and directed a fresh hearing on the merits of the case, ensuring that the assessee received a fair opportunity to be heard. AO Fails to Apply CBDT Instructions regarding Cash Deposits During Demonetization: ITAT Remands for Re-Examination Gowdara Mahalingappa vs The Assistant Commissioner of Income Tax Officer CITATION: 2024 TAXSCAN (ITAT) 1059 The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) remanded the matter for re-examination due to the assessing officer’s failure to apply CBDT’s (Central Board of direct taxes) instructions on cash deposits during the demonetization period. The two-member bench comprising Laxmi Prasad Sahu (Accountant Member) and Keshav Dubey (Judicial Member) heard both sides’ arguments. The tribunal observed that CBDT had issued instructions for examining the cases regarding the cash deposits during the demonetization period. The tribunal directed the AO to verify the cash deposits during the demonetization period following the CBDT’s instructions. Therefore, the appeal of the assessee was allowed. AO Erred by Not Examining Delayed Payment of Employer’s PF/ESIC Contributions During Scrutiny: ITAT Upheld PCIT’s Invocation of S.263 Parry Engineering & Electronics Ltd. vs Principal Commissioner of Income Tax CITATION: 2024 TAXSCAN (ITAT) 1060 The Bangalore Bench of the Income Tax Appellate Tribunal ( ITAT ) upheld the Principal Commissioner of Income Tax’s invocation of Section 263 of the Income Tax Act, 1961, concerning the assessing officer’s failure to scrutinize the employer’s delayed payment of PF/ESIC contributions during the comprehensive review. The two-member bench comprising Suchitra Kamble (Judicial Member) and Makarand V. Mahadeokar (Accountant Member) observed that the assessing officer in the assessment order mentioned that the case was selected for complete scrutiny. Regarding delayed payments to PF/ESIC, the tribunal agreed with the PCIT contention that under complete scrutiny, the AO was required to examine the issue, and the failure to do so rendered the assessment order erroneous and prejudicial to revenue Therefore, the tribunal upheld the PCIT’s invocation of Section 263 regarding the delayed payment of PF/ESIC contributions, as the AO’s omission constituted an error. The appeal of the assessee was dismissed. CIT(A) Erroneous in dismissing Appeal for Non-Compliance w/o Addressing Merits: ITAT Shreenath Developers vs Income Tax Officer CITATION: 2024 TAXSCAN (ITAT) 1061 In a recent ruling, the Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) held that the Commissioner of Income Tax (Appeals) erred in dismissing an appeal for non-compliance without addressing its merits. The bench highlighted that according to Sections 250(4) and 250(6) of the tax legislature, it is the CIT(A)’s duty to dispose of an appeal by making a reasoned order, discussing the points of contention and rendering a decision on each point. The tribunal further stressed that the appeals cannot be dismissed solely for non-prosecution without evaluating the issues at hand. In light of these observations, the ITAT set aside the CIT(A)’s order and remanded the case for fresh adjudication, directing the CIT(A) to consider the merits of the case and to provide the Assessee with an opportunity to present its arguments.Thus, the appeal was allowed for statistical purposes. 80C Deduction cannot be denied Solely due to Incorrect Filing of ITR-5 Instead of ITR-2: ITAT Smt. Pashiben Prajapati Family Trust(DISC) vs The Income-tax Officer CITATION: 2024 TAXSCAN (ITAT) 1062 The Ahmedabad Bench of the Income Tax Appellate Tribunal ( ITAT ) has ruled that the deduction under Section 80C of Income Tax Act, 1961 cannot be denied solely due to incorrect filing in ITR Form-5 instead of ITR Form-2. The Tribunal observed that there was no justification to penalize the assessee for using an incorrect form as long as the correct income was brought to tax. Consequently, the Tribunal directed the Assessing Officer to grant the applicable benefits after verification. Therefore, the assessee’s appeal was partly allowed. AO passes Ex Parte Assessment Order without considering ITR Filed in response to S. 148: ITAT directs to pass Order afresh Govindbhai Hirabhai Bharvad vs Income Tax Officer CITATION: 2024 TAXSCAN (ITAT) 1063 The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) found that the Assessing Officer ( AO ) had passed an ex parte assessment order without considering the return filed by the assessee in response to the notice under Section 148 of the Income Tax Act, 1961. The two-member bench comprising T.R Senthil Kumar ( Judicial Member ) and Makarand Vasant Mahadeokar ( Accountant Member ) allowed the appeal filed by the assessee. Sale of Agricultural Land Does Not Attract Capital Gain Tax u/s 45 until Official Conversion of Land, Regardless of Purchaser’s Intended Use: ITAT The J.C.I.T vs Rajeshkumar Shantilal Sanghvi CITATION: 2024 TAXSCAN (ITAT) 1064 The Ahmedabad Bench of the Income Tax Appellate Tribunal ( ITAT ) ruled that the sale of agricultural land is exempt from capital gain tax under Section 45 of the Income Tax Act, 1961 until the land is officially converted for non-agricultural use. This ruling applies regardless of the purchaser’s intended use of the land at the time of sale. The tribunal clarified that agricultural land sold under the provisions of Section 63AA of the Gujarat Tenancy and Agricultural Lands Laws (Amendment) Act, 1997 remains agricultural until its use is officially converted, regardless of the purchaser’s intentions for future industrial use. Therefore, the tribunal upheld the decision of the CIT(A) order and dismissed the revenue’s appeal. PCIT’s Different Views on Unrelated Issues do not Justify Invoking S.263 in Limited Scrutiny: ITAT Hirenkumar Lavjibhai Kanani vs Principal Commissioner of Income Tax CITATION: 2024 TAXSCAN (ITAT) 1066 The Ahmedabad Bench of the Income Tax Appellate Tribunal ( ITAT ) ruled that the Principal Commissioner of Income Tax ( PCIT ) cannot invoke Section 263 of the Income Tax Act, 1961, simply because it holds differing views on issues that are unrelated to the original scope of limited scrutiny. The tribunal held that the PCIT’s invocation of jurisdiction under Section 263 was not justified because the order of the AO was neither erroneous nor prejudicial to the interests of the revenue concerning the issues for which the reassessment was originally initiated. Therefore, the tribunal set aside PCIT’s order and the appeal of the assessee was allowed. Discrepancy in Form 26AS and Books of Accounts Due to Typographical Error in Receipts: ITAT Sets aside CIT(A) Order Bankers Cardiology Pvt. Ltd vs Dy. Commissioner of Income Tax CITATION: 2024 TAXSCAN (ITAT) 1067 The two member bench of the Income Tax Appellate Tribunal ( ITAT ), Ahmedabad has set aside the Commissioner of Income Tax (Appeals) order, finding that the discrepancy between Form 26AS and the books of accounts was due to a typographical error in the receipts. The Tribunal, consisting of members T.R. Senthil Kumar and Makarand Mhadeokar (Accountant Member), acknowledged the potential merit of the additional evidence. Given its significance, the Tribunal decided to set aside the CIT (A)’s order and remand the case to the CIT(A) for fresh adjudication. The CIT (A) is instructed to review the additional evidence, provide a reasonable opportunity for the assessee to be heard, and then pass a revised order. Accordingly, the appeal was allowed for statistical purposes. AO Fails assuming 8% of Unsecured Loans from Non-Members as Net Profit: ITAT deletes addition Parkland Avenue Co. Op. Housing Society Limited vs Income Tax Officer CITATION: 2024 TAXSCAN (ITAT) 1068 The Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) deleted the addition of Rs. Rs. 5,98,24,000/- ruling that the Assessing Officer erred by assuming 8% of unsecured loans from non-members as net profit. The tribunal found the addition of 8% of the advance for taxation unjustified. The bench, consisting of Suchithra Kamble, reviewed the case and noted that the assessee, a Co-operative Housing Society, had received advances from non-members. This fact was not disputed by the Revenue. The Society was not in the business of plot development, and the valid details provided by the assessee were disregarded by both the Assessing Officer and the CIT (A). The tribunal found the addition of 8% of the advance for taxation unjustified. Furthermore, the repayment of these loans in the subsequent year was reflected in the records. Consequently, the tribunal concluded that the additions made by the Assessing Officer and the CIT (A) were not justified and allowed the assessee’s appeal. ITAT deletes Disallowance of Rs.26.25 Lakh u/s 36(1)(iii) based on Records of Sufficient Interest-Free Funds and Commercial Expediency Oriental Enterprise Pvt.Ltd vs The ACIT Circle CITATION: 2024 TAXSCAN (ITAT) 1069 The Ahmedabad Bench of the Income Tax Appellate Tribunal ( ITAT ) deleted the disallowance of Rs. 26.25 Lakh under Section 36(1)(iii) of Income Tax Act, 1961. This decision was made based on the assessee’s records submission of sufficient interest-free funds and commercial expediency. The tribunal observed that the assessee successfully demonstrated that sufficient interest-free funds were available and the loan was advanced for commercial expediency. Therefore, the tribunal overturned the CIT(A)’s decision and directed the deletion of the disallowance of ₹26.25 lakh under Section 36(1)(iii). To Read the full text of the Order CLICK HERE ITAT Rejects Assessee’s Appeal on PF and ESI Contributions due to Proper Intimation by CPC regarding delayed Payments GMW Private Limited vs The Deputy Commissioner of Income Tax CITATION: 2024 TAXSCAN (ITAT) 1070 The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) rejected the assessee’s appeal against the disallowance of Rs.22,69,973 for delayed PF and ESI payments, which was based on an intimation issued by the Central Processing Centre ( CPC ). The two member bench comprising Suchitra Kamble ( Judicial Member ) and Makarand Vasant Mahadeokar ( Accountant Member ) dismissed the appeal filed by the assessee. Reopening of Assessment and Work-in-Progress Disallowance Unjustified Due to Change of Opinion by AO: ITAT Gayatri Creatives vs The Assistant Commissioner of Income Tax CITATION: 2024 TAXSCAN (ITAT) 1071 The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) found that the reopening of the assessment and the disallowance of work-in-progress were unjustified due to a change of opinion by the Assessing Officer (AO). The two-member bench comprising Suchitra Kamble (Judicial Member) and Makarand Vasant Mahadeokar(Accountant Member) found that the CIT(A) had ignored the assessee’s objections to the reopening under Section 148, deemed the disallowance unjustified, and allowed the appeal. Additional interest u/s 244A(1A) of Income Tax Act Applies for delayed Refunds: ITAT Jethiben K. Patel vs Dy. Commissionerof Income Tax CITATION: 2024 TAXSCAN (ITAT) 1072 The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) ruled that additional interest under Section 244A(1A) of the Income Tax Act,1961 applies to delayed refunds, even if the original order was made before the introduction of the provision. The two-member bench comprising Suchitra Kamble(Judicial Member)and Makarand V.Mahadeokar(Accountant Member)directed the AO to re-compute the interest under Section 244A, first applying the refund to interest and then to tax. Additional interest under Section 244A(1A) for 01.06.2016 to 05.07.2017 was also to be granted. The appeal was partly allowed. Relief to IDBI: ITAT Rules Bank Entitled to Full Refund Interest u/s 244A of Income Tax Act Dy. Commissioner of Income Tax vs IDBI Bank Limited CITATION: 2024 TAXSCAN (ITAT) 1073 In a significant relief for IDBI Bank, the Income Tax Appellate Tribunal ( ITAT ) of Mumbai ruled that the bank is entitled to the full amount of interest on its tax refund under Section 244A of the Income Tax Act 1961. The Tribunal rejected the Revenue’s argument based on the Gujarat Fluoro Chemicals case, clarifying that the assessee was not seeking “interest on interest” but rather proper calculation of interest on the remaining refund amount. Consequently, the ITAT upheld the CIT(A)’s directive for the AO to recalculate the refund amount and granted interest accordingly, dismissing the Revenue’s appeals. Thus, the assessee was affirmed to be entitled to the full interest under Income Tax Section 244A of, and the Tribunal supported the methodology of adjusting refunds first towards interest and then towards tax. ITAT Orders Review of S.80I Income Tax Deduction Claim by Windmill Business amidst Conflicting Precedents Deputy Commissioner of Income Tax vs Shilp Gravures Limited CITATION: 2024 TAXSCAN (ITAT) 1074 The Income Tax Appellate Tribunal ( ITAT ) of Ahmedabad recently remanded a case involving a Section 80IA deduction claim by a company engaged in windmill power business amidst conflicting precedents in previous similar cases. The ITAT allowed the Revenue’s appeal for statistical purposes and directed the CIT(A) to reconsider the deduction claim after verifying the facts, particularly in relation to the newly installed windmills and their eligibility for deductions under Section 80IA of the tax statute. S. 115JB(2)(b) not Applicable to Union Bank Due to Non-Company Status under Companies Act, Despite Deeming Provision in Acquisition Act for Income Tax Purposes: ITAT Union Bank of India vs DCIT CITATION: 2024 TAXSCAN (ITAT) 1075 The Mumbai Special Bench of Income Tax Appellate Tribunal ( ITAT ) ruled that Section 115JB of the Income Tax Act, 1961 did not apply to Union Bank of India due to Non-Company Status under the Companies Act despite the deeming provision in the Acquisition Act for Income Tax Purposes. The Special Bench concluded that Section 115JB(2)(b) does not apply to the Union Bank of India, as the bank is not a company under the Companies Act, despite the deeming provision in the Acquisition Act for Income Tax purposes. Tribunal has no Power to Recall/Review its own Orders: ITAT dismisses MA Challenging Revisionary Order Samriddhi Petroproducts Private Limited vs Income Tax Officer CITATION: 2024 TAXSCAN (ITAT) 1076 The Hyderabad Bench of Income Tax Appellate Tribunal ( ITAT ) dismissed the Miscellaneous Application (M.A.) of the assessee challenging revisionary order stating Tribunal has no power to recall/review its own orders. In the present case, the tribunal referred to the previous order in ITA No. 211/Hyd/2023 and found no reason to interfere with the Miscellaneous Application (M.A.) filed by the assessee, as it would involve re-deciding the case on its merits, which falls outside the scope of Section 254(2). Therefore, the assessee’s Miscellaneous Application was dismissed. CIT(A) issues 5 Income Tax Notices within 40 days, Fails to Consider Facts filed in Form 35: ITAT directs Fresh Adjudication Prakruthi Mahila Credit Society vs The Income Tax Officer CITATION: 2024 TAXSCAN (ITAT) 1077 The Bangalore Bench of Income Tax Appellate Tribunal ( ITAT ) directed fresh adjudication after finding that the Commissioner of Income Tax (Appeals) had issued five notices within 40 days for assessment year (AY) 2017-18 without considering the facts filed in Form 35. The two-member bench comprising Prakash Chand Yadav ( Judicial Member ) and Waseem Ahmed ( Accountant Member ) allowed the appeal of the assessee and restored the issue to the AO for fresh adjudication. 19 Days of Delay in Filing Appeal Condoned due to Outdated Email Address: ITAT remits Matter to CIT(A) Geetha Gopalan vs The Dy. Commissioner of Income Tax CITATION: 2024 TAXSCAN (ITAT) 1078 The Bangalore Bench of Income Tax Appellate Tribunal ( ITAT ) condoned a delay of 19 days in filing an appeal due to notices being sent to an outdated email address.The delay occurred because the Commissioner of Income Tax (Appeals) sent notices to an old email ID, while the updated contact information was provided in Form 35. The two member bench comprising Prakash Chand Yadav (Judicial Member) and Waseem Ahmed ( Accountant Member ) allowed the appeal filed by the assessee. FAA issues 6 Income Tax Notices likely Delivered to Assessee’s Spam Folder: ITAT directs Fresh Adjudication Davis Jenny vs The Deputy Commissioner of Income Tax Officer CITATION: 2024 TAXSCAN (ITAT) 1079 The Bangalore Bench of Income Tax Appellate Tribunal ( ITAT ) directed fresh adjudication after finding that the First Appellate Authority ( FAA )’s six income tax notices were likely delivered to the assessee’s spam folder. The notices were not received by the assessee, leading to the dismissal of the appeal ex parte. The tribunal, considering the submissions and the assessee’s request, remitted the issue to the Commissioner of Income Tax ( Appeals ) for fresh consideration. The assessee was directed to update contact details, file necessary documents, and cooperate with the proceedings. It was noted that reasonable opportunity should be given, but further default would result in no concessions. The two-member bench comprising Beena Pillai ( Judicial Member ) and Laxmi Prasad Sahu ( Accountant Member ) allowed the appeal filed by the assessee. Failure to Disclose Loan, Repayment or Interest Paid to Creditor: ITAT upholds Addition of Rs. 1.30 crores Nyalkaran Builders LLP vs Income Tax Officer CITATION: 2024 TAXSCAN (ITAT) 1080 The Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) upheld the addition of ₹1, 30,45,000/- due to the assessee’s failure to disclose the loan of ₹7,25,000/- availed from Pravinbhai Nanjibhai Golaviya HUF, along with the details of repayment or interest to the creditor, and in the absence of such details, the addition on this account was sustained. Similarly, in the case of Shreeji Developers, the unexplained closing balance of ₹12, 50,000/- was also upheld. The bench criticized the CIT (A) for confirming the addition based solely on the creditworthiness of the creditors without considering the loan repayments made within the same assessment year. Consequently, the bench held that the additions related to Empire Realty, Shree Swaminarayan Industries, Prerna Realty, and Shreeji Developers should be deleted. However, the two member bench of the tribunal comprising Annapurna Gupta ( Accountant member) and T.R.Senthil Kumar ( Judicial member) upheld the addition concerning the loan from Pravinbhai Nanjibhai Golaviya-HUF due to the lack of evidence regarding repayment or interest details, as well as the remaining balance of Rs. 12,50,000/- from Shreeji Developers. Agricultural Land Sold to Non-Agriculturist Remains Agricultural and cannot be treated as Capital Assets: ITAT Income Tax Officer vs Urmila Bharatbhushan Agarwal CITATION: 2024 TAXSCAN (ITAT) 1081 In a recent ruling, the Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) has ruled that agricultural land sold to a non-agriculturist retains its status as agricultural land and cannot be classified as a capital asset. After careful consideration of the records and judicial precedents, the two member bench of the tribunal comprising Annapurna Gupta (Accountant member) and T.R.Senthil Kumar (Judicial member) determined that the Assessing Officer misinterpreted Section 63AA of the Land Revenue Code by classifying the sale as non-agricultural. According to the Gujarat High Court ruling in CIT vs. Rajshibhai Meramanbhai Odedra, land sold to a non-agriculturist does not lose its agricultural character. Thus, the Revenue’s appeal was dismissed, affirming that the sale of agricultural land could not be treated as capital assets. AO incorrectly invokes Section 69A and Charges Tax u/s 115 BBE of Income Tax Act: ITAT deletes addition Dipak Balubhai Patel vs Income Tax Officer CITATION: 2024 TAXSCAN (ITAT) 1082 The Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) has deleted the addition where the Assessing Officer had incorrectly invoked Section 69A, of the Income Tax Act, 1961, which applies only when unaccounted money is not recorded in the books of accounts, and erroneously applied Section 115BBE of the Income Tax Act, 1961, at a 60% rate. The bench concluded that the addition made under Section 69A and the tax imposed under Section 115BBE were incorrect. The cash deposits were properly recorded in the books of accounts, and the explanations provided were adequate. Therefore, the addition made by the Assessing Officer was ordered to be deleted, and the grounds raised by the assessee were allowed. ITAT deletes Rs. 14 Lakhs Addition made by AO due to Misreported Property Transaction Details Smt. Prameela Parameshwar Shettigar vs ITO CITATION: 2024 TAXSCAN (ITAT) 1083 The Bangalore Bench of Income Tax Appellate Tribunal ( ITAT ) deleted a Rs. 14 lakhs addition made by the Assessing Officer ( AO ) under section 69A of Income Tax Act,1961. The addition was based on incorrect information regarding a property transaction, where the AO mistakenly recorded the purchase price as Rs. 45 lakhs instead of the actual Rs. 31 lakhs. The two member bench comprising Yogesh Kumar U.S(Judicial Member) and Waseem Ahmed(Accountant Member) deleted the Rs. 14 lakhs addition made by the AO under section 69A and allowed the appeal filed by the assessee. Software Project Abandoned with No Enduring Benefit, Expenses treated as Revenue in Nature: ITAT Deletes Addition Global Tech India Private Limited vs Income Tax Officer CITATION: 2024 TAXSCAN (ITAT) 1084 The two member bench of the Income Tax Appellate Tribunal (ITAT), Ahmedabad ruled that expenses incurred on a software project, which was ultimately abandoned and provided no enduring benefit, should be treated as revenue in nature, thereby deleting the addition made by the tax authorities The Tribunal referenced judicial precedents where expenses on abandoned projects were treated as revenue in nature. Consequently, the Tribunal concluded that since the software project did not provide any enduring benefit to the assessee, the expenses should be allowed as revenue expenditures, and the additions made by the lower authorities were ordered to be deleted. AO Levied Penalty u/s 271AAB for Alleged Undisclosed Income during Search: ITAT deletes Penalty due to Lack of Clear Evidence DCIT vs Tanya Jaiswal CITATION: 2024 TAXSCAN (ITAT) 1085 The New Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) deleted the penalty levied under Section 271AAB of the Income Tax Act, 1961 for alleged undisclosed income during the search. The decision was made due to a lack of clear evidence to prove the allegation. The two-member bench comprising S.Rifaur Rahman (Accountant Member) and Sudhir Kumar, Judicial Member observed that there was no substantial evidence linking the additional income to incriminating materials found during the search. The tribunal emphasized that for imposing a penalty under Section 271AAB of the Income Tax Act, there must be a clear link between the additional income disclosed and the incriminating evidence found during the search, which was missing in this matter. Therefore, the tribunal upheld CIT(A)’s decision and dismissed the revenue’s appeal Hearing Notices Sent by CIT(A) via Email against Assessee’s Request in Form 35: ITAT remits Matter to CIT(A) Syed Ariff vs ITO Ward CITATION: 2024 TAXSCAN (ITAT) 1086 The Bangalore Bench of Income Tax Appellate Tribunal ( ITAT ) has remitted the matter to the Commissioner of Income Tax (Appeals) after finding that hearing notices were sent via email, contrary to the assessee’s request in Form 35. The two-member bench comprising Soundararajan K (Judicial Member) and Waseem Ahmed(Accountant Member) set aside the CIT(A)’s orders and remitted the matter for a fresh decision on merits, allowing the appeal filed by the assessee. Validity of Assessment Order Passed on Struck-off Company Challenged: ITAT Dismisses Appeal Due to Lack of locus standi Boopendradas (Vikash) Sungker vs DCIT CITATION: 2024 TAXSCAN (ITAT) 1087 The New Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) dismissed the appeal challenging the validity of the assessment order passed on a struck-off company. This decision was made due to the appeal lacked locus standi. The tribunal noted that the Former Director lacked the locus standi to file an appeal on behalf of the dissolved company. Therefore, the appeal of the assessee were not maintainable and was dismissed. ITAT Remits Matter to AO for Reassessment as CIT(A) Sent Notices to Incorrect Email ID Venkataraju Chandra Shekar vs ITO CITATION: 2024 TAXSCAN (ITAT) 1088 The Bangalore Bench of Income Tax Appellate Tribunal ( ITAT ) remitted the matter to the Assessing Officer ( AO ) for reassessment after finding that the Commissioner of Income Tax(Appeals) had sent notices to an incorrect email address. The two member bench comprising Soundararajan K ( Judicial Member ) and Laxmi Prasad Sahu (Accountant Member) set aside both the assessment and appeal orders, remitting the case to the AO for a fresh review and hearing, and partly allowed the appeal. S.69A Addition cannot be made solely on Claim that Assessee not a Specified Person to Accept Demonetized Currency: ITAT M/s. Vikas Co-operative Credit Society Niyamith Tilavalli vs ITO CITATION: 2024 TAXSCAN (ITAT) 1089 The Bangalore Bench of Income Tax Appellate Tribunal ( ITAT ) ruled that the addition under section 69A of Income Tax Act,1961 cannot be made solely on the claim that the assessee was not a specified person to accept demonetized currency. The single member bench of George George K ( Vice President ) allowed the appeal filed by the assessee. 140-Day Delay in Filing Appeal before CIT(A) due to wrong Tax Consultant Advice: ITAT condones Delay Shri Chowlor Matada Swamy vs The Dy. Commissioner of Income Tax CITATION: 2024 TAXSCAN (ITAT) 1090 The Bangalore Bench of Income Tax Appellate Tribunal ( ITAT ) condoned a 140-day delay in filing an appeal before the Commissioner of Income Tax (Appeals) due to the appellant’s mistaken belief, based on incorrect tax consultant advice. The two-member bench comprising Prakash Chand Yadav ( Judicial Member ) and Waseem Ahmed ( Accountant Member ) allowed the appeal filed by the assessee. Accumulation Income can be applied towards Acquisition of Fixed Assets u/s 11(6) of Income Tax: ITAT Gujarat Safety Council vs ITO CITATION: 2024 TAXSCAN (ITAT) 1091 The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) allowed the appeal of the assessee ruling that accumulated income can be applied towards the acquisition of fixed assets under Section 11(6) of the Income Tax Act,1961. The two member bench comprising T.R Senthil Kumar (Judicial Member) and Narendra Prasad Sinha (Accountant Member) allowed the appeal filed by the assessee. CIT(A) cannot dismiss Income Tax Appeal on Limitation Grounds after Condoning Delay: ITAT Kyalasanahalli Narayanappa Subramani vs ITO CITATION: 2024 TAXSCAN (ITAT) 1092 The Bangalore Bench of Income Tax Appellate Tribunal( ITAT ) ruled that the CIT(A) cannot dismiss an income tax appeal on limitation grounds after condoning the delay. The two member bench comprising Soundararajan K(Judicial Member) and Waseem Ahmed (Accountant Member) allowed the appeal filed by the assessee. 364 Days Delay in Filing Appeal Due to Pursuit of Alternative Remedy u/s 119 of Income Tax Act: ITAT Condones Delay M/s. Sarvadeivatha Education Trust vs The Income Tax Officer CITATION: 2024 TAXSCAN (ITAT) 1093. The Income Tax Appellate Tribunal ( ITAT ) of Banglore in a recent case condoned a 364-day delay in filing appeal, noting that the delay was caused as a result of the assessee pursuing an alternative remedy under section 119 of the Income Tax Act 1961 ( ITA ). Thus in the interest of justice, the ITAT remitted the case back to the Assessing Officer (AO) for reconsideration, directing the AO to verify the exemption claim and ensure fair opportunity for the trust to present its case. ITAT upholds Reopening of Income Tax Assessment: grants partial relief w.r.t. unexplained cash deposits Smt. Pozhaniappan Malliga vs ITO CITATION: 2024 TAXSCAN (ITAT) 1094 The Chennai bench of the Income Tax Appellate Tribunal ( ITAT ) partly allowed the appeal and upheld the reopening of income tax assessment as there was due application of mind. The bench, comprising Shri Aby T. Varkey and Shri Manoj Kumar Aggarwal, allowed partial relief by granting the benefit of cash withdrawals amounting to Rs. 7.20 lacs. Thus, the appeal was partly allowed. Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates

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