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 30th September 2024 to 4th October 2024.
In a recent ruling, the Cochin Bench of the Income Tax Appellate Tribunal ( ITAT ) directed the Assessing Officer ( AO ) to delete the addition due to disallowance which was made without recording satisfaction regarding the assesseeās books of account. The assessee in this case is Condis India Healthcare Pvt. Ltd., Trivandrum, Kerala. During the assessment proceedings for the financial years 2013-14 to 2015-16, the AO noted that the company had declared dividend income of Rs. 2.88 crore as tax-exempt under Section 10(34) of the Income Tax Act,1961.
The ITAT observed that while Section 14A of the Income Tax Act allows for the disallowance of expenses related to tax-exempt income, the AO had acted mechanically, without considering the companyās overall income from consultancy services and other expenses. As a result, the ITAT directed the AO to delete the disallowance for all three assessment years. The ITAT bench comprising Soundararajan K (Judicial Member) and Waseem Ahmed (Accountant Member) allowed the appeal filed by the assessee.
The bench comprising Mr. Vikram Singh Yadav and Mr.Aakash Deep Jain, allowed the appeal of the assessee for statistical purposes.
The Chandigarh bench of the Income Tax Appellate Tribunal ( ITAT ) remanded the revision order for the re-examination of qualification as venture capital as there was no finding by the Commissioner of Income Tax (Appeals) [CIT(A)] against the claim of the assessee under Section 56(2)(viib) of the Income Tax Act, 1961.
The bench was of the opinion that the assessee must qualify as a venture capital undertaking and that relevant documentation was presented for the first time to the CIT(A), not to the AO, during set-aside proceedings. Since there is no finding from either the AO or CIT(A) on this, the ITAT bench remanded the matter to the AO for verification of the assesseeās claim under section 56(2)(viib), ensuring due process.
The ITAT bench, comprising Mr. Vikram Singh Yadav and Mr.Aakash Deep Jain, allowed the appeal of the assessee for statistical purposes.
The Chennai Bench of Income Tax Appellate Tribunal ( ITAT ) ruled that interest earned from savings accounts in a Co-operative bank cannot be treated as income or dividends from investments.
The two-member bench comprising Viswanethra Ravi (Judicial Member) and Jagadish (Accountant Member) noted that the deduction under section 80P(2)(d) applies to income from interest or dividends received by a co-operative society from its investments in other co-operative societies.
The tribunal noted that the interest earned from the FDs was considered an investment, it emphasized that interest earned from a savings bank account maintained in a co-operative bank cannot be treated as income or dividend from investment.
The Chandigarh bench of the Income Tax Appellate Tribunal ( ITAT ) sets aside the ex-parte order due to the assesseeās illness and husbandās demise and grants a final hearing regarding the addition of Rs. 29.5 lakh as undisclosed income. In this case, the assessee, Bachan Kaur, had filed the appeal before the ITAT under Section 253 of the Income Tax Act, 1961, against the impugned order passed by the Commissioner of Income Tax (Appeals) [CIT(A)].
The ITAT bench, while going through the facts of the present case, observed that the assessee was unwell and her husband was no more. Due to this, she was unable to pursue any proceedings before lower authorities diligently. The ITAT bench, comprisng of Mr. Vikram Singh Yadhav and Mr. Paresh M. Joshi, allowed the appeal of the assessee for statistical purposes.
The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) quashed reassessment proceedings because the approval was wrongly obtained from the Principal Commissioner of Income Tax ( PCIT ) instead of the Principal Chief Commissioner of Income Tax ( PCCIT ) or Director General of Income Tax ( DGIT ). The ITAT ruled that reassessment cannot proceed after three years without approval from the higher-level authorities.
The two-member bench comprising Prashant Maharishi ( Accountant Member ) and Sandeep Singh Karhail ( Judicial Member ) observed that the reassessment proceedings were initiated in contravention of the law, as the reassessment notice was not approved by the correct authority.
The tribunal relied on the decision from the case of Siemens Financial Services (P.) Ltd. v/s DCIT, where similar issues regarding the approval authority were raised, and the reassessment proceedings were found invalid.
The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) ruled that the Principal Commissioner of Income Taxās (PCIT) action under Section 263 was invalid as it constituted an impermissible second opinion for the Assessment Year(AY) 2018-19.
The bench concluded that the Assessing Officer had properly verified the issue and that the PCITās claim for disallowance under Section 36(1)(iii) was unfounded, as all interest expenses were directly related to the companyās business. The two member bench comprising Suchitra Kamble(Judicial Member) and Narendra Prasad Sinha(Accountant Member) allowed the appeal filed by the assessee.
The Chennai Bench of Income Tax Appellate Tribunal (ITAT) directed the assessing officer (AO) to limit the disallowance under Section 14A to 0.5% of exempt income earned by the assessee based on Rule 8D(2)(iii) of the Income Tax Rules, 1962.
The two members comprising Aby T. Varkey (Judicial Member) and Jagadish (Accountant Member) noted that the assessee had consistently claimed in earlier years that borrowed funds were used for investments yielding exempt dividend income.
The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) quashed the assessment order under Section 153 of the Income Tax Act due to the delayed digital sign of the National Faceless Assessment Centre ( NFAC ) beyond the statutory deadline. Bennett Coleman & Co. Ltd. (Appellant) challenged the validity of the assessment order claiming that it was signed after the limitation period prescribed under Section 153 of the Income Tax Act, making it invalid.
The two-member bench comprising Narendra Kumar Billaiya (Accountant Member) and Rahul Chaudhary (Judicial Member) observed that the digital signature on the assessment order, signed by Visesh Prakash, was dated October 1, 2021, and the accompanying tax computation sheet was also signed on the same date.Since the assessment order was not digitally signed by the statutory deadline of September 30, 2021, it was considered incomplete.
In the recent ruling, the Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) directed Commissioner of Income Tax (Exemption) [CIT(E)] to consider a fresh application for registration under Section 80G(5) of the Income Tax Act, 1961, after the appeal filed by Aadthakkar Parivar Devasthan Trust was withdrawn.
The two member bench comprising T.R. Senthil Kumar (Judicial Member) and Makarand V.Mahadeokar(Accountant Member) recorded the statements of both parties and dismissed the appeal filed by the assessee as withdrawn, directing the CIT(E) to consider the fresh application for registration under Section 80G(5) of the Act.
In a recent ruling, the Cochin bench of the Income Tax Appellate Tribunal ( ITAT ) dismissed the duplicate income tax appeal filed by the Revenue against Geojit Financial Services Ltd as it was infructuous. The assessee in this case is Geojit Financial Services Ltd. In this case, the backdrop of the case arose when the Revenue filed an appeal against the ruling of the National Faceless Appeal Centre, Delhi Commissioner of Income Tax (Appeals) [CIT(A)] dated 15.03.2023 for the Assessment Year ( AY ) 2018-19.
The Cochin ITAT bench, composed of Soundararajan K ( Judicial Member ) and Waseem Ahmed ( Accountant Member ), dismissed the appeal filed by the Revenue as it considered it infructuous.
The Chennai Bench of Income Tax Appellate Tribunal (ITAT) directed the assessing officer (AO) to limit the disallowance under Section 14A to 0.5% of exempt income earned by the assessee based on Rule 8D(2)(iii) of the Income Tax Rules, 1962.
The two members comprising Aby T. Varkey (Judicial Member) and Jagadish (Accountant Member) noted that the assessee had consistently claimed in earlier years that borrowed funds were used for investments yielding exempt dividend income. The tribunal agreed with the AO in rejecting the assesseeās claim that no interest expenditure was incurred to earn the exempt income. However, the tribunal noted procedural lapses in the computation made under Rule 8D(2)(ii).
The Chennai bench of Income Tax Appellate Tribunal ( ITAT ) ruled that no addition was required under Section 56(2)(viib) of the Income Tax, 1961 if the difference between the issue price and Fair Market Value ( FMV ) was below the 10% tolerance limit under Rule 11UA of the Income Tax Rules, 1962.
The two-member bench comprising Aby T. Varkey ( Judicial Member ) and Jagadish ( Accountant Member ) observed that the AO had indeed called for details during the assessment proceedings including the valuation of shares as per Rule 11UA and examined the issue and found the difference between the issue price and FMV was 0.65% and well within the 10% tolerance limit. The tribunal noted that Rule 11UA allows a 10% margin between the issue price and FMV. Since the difference was only 0.65%, there was no addition required under Section 56(2)(viib) of the Income Tax Act, 1961.
The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) quashed the ā¹10 lakh reassessment, ruling it invalid due to an intraday profit of Rs.49,792 falling below the threshold for reopening under Section 147 of Income Tax Act,1961.
The bench observed that while the AO alleged the generation of bogus capital gains and losses, the profit was below the Rs. 100,000 threshold for reopening the assessment under Section 147 of the Act. Since the basis for reopening the assessment was found lacking, the Tribunal concluded that the reassessment made by the Assessing Officer was unsustainable and liable to be quashed.
The two member bench comprising T.R.Senthil Kumar(Judicial Member) and Annapurna Gupta(Accountant Member) allowed the appeal filed by the assessee.
The Raipur Bench of Income Tax Appellate Tribunal ( ITAT ) dismissed the appeal of the assessee, due to insufficient evidence supporting the claim of unexplained cash deposits.
The bench, following the principles laid down by the Supreme Court in Rattan Singh & Ors. and the Punjab & Haryana High Court in Paramjit Singh vs ITO, held that in the absence of evidence to challenge the registered sale deed, the contents of the document, including the sale consideration, cannot be disputed based on oral claims.
The two member bench comprising Ravish Sood ( Judicial Member ) and Arun Khodpia( Accountant Member ) dismissed the assesseeās appeal, finding it to lack merit.
Recently in a decision, the Income Tax Appellate Tribunal (ITAT) of Bangalore remanded a case back to the Commissioner of Income Tax (Appeals) [CIT(A)] for fresh consideration after finding that the CIT(A) had wrongly dismissed the appeal on technical grounds, specifically over allegations of non-payment of advance tax.
The bench of Mr Laxmi Prasad Sahu and Mr Keshav Dubey considered these arguments and observed that the CIT(A) had indeed erred in dismissing the appeal based solely on the alleged non-payment of advance tax.
In its ruling, the ITAT remanded the case back to the CIT(A) for fresh consideration, instructing the lower authority to examine the substantive issues and to give the taxpayer a reasonable opportunity to present additional evidence.
In a recent ruling, the Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) held that the assessee is entitled to raise additional claims in appeal that were not made when the returns were filed.
The ITAT held that the bank was entitled to raise the additional claim during the appeal, even though it was not included in the original return. The ITAT bench, comprising Mr. Makarand V. Mahadeokar and Mr. Siddhartha Nautiyal, dismissed the departmentās appeal and confirmed that the assesseeās additional claim for the deduction of Rs. 45 lakh is valid.
The Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) has held that Hardship Allowance received by assessee from Developer as ācompensation towards displacementā is not a ārevenue receiptā . The bench held that the hardship compensation is a ācapital receipt.
In light of the various other decisions of the co-ordinate bench , the two member bench of Ms. Kavitha Rajagopal, JM and Girish Agrawal, AM viewed that the hardship compensation is nothing but a ācapital receiptā which is towards the hardship caused to the assessee as the name suggests, due to the displacement which is inevitable during redevelopment of the property where the developer compensates the assessee.
Recently in a case, the Income Tax Appellate Tribunal ( ITAT ) quashed a demand order that arose from an assessment approved under Section 153D of the Income Tax Act 1961 (ITA), The assessee/ appellant, M/s Khoday Eshwarsa and Sons (now Khoday Eshwarsa and Sons Pvt. Ltd.), challenged the legitimacy of an income tax assessment conducted under Section 153A of ITA for the assessment year 2020-21. The assessment had been initiated following a search and seizure operation under Section 132 of the tax legislature, with the assessment ultimately being approved by the Additional Commissioner of Income Tax, as per the legal requirement under Section 153D of ITA
After reviewing the case, the bench of Mr Waseem Ahmed and Mr Sundararajan observed significant merit in the arguments presented by the assessee. It noted that the short time frame between the submission of the draft orders and the approval suggested a lack of proper scrutiny. The Tribunal observed that the process mandated by Section 153D of ITA, which exists to ensure that assessments, especially those involving high-stake search cases, are conducted with due diligence and oversight, had not been followed appropriately. The ITAT ruled that the approval was given in a āmechanical manner,ā without the necessary application of mind.
The Ahmedabad Bench of Income Tax Appellate Tribunal(ITAT) condones the delay in filing the appeal before the Commissioner of Income Tax (Appeals)[CIT(A)] due to the assesseeās ignorance of legal procedures and lack of follow-up in the assessment proceedings.
A single member bench Suchitra Kamble(Judicial Member) condoned the delay in filing the appeal, allowed the application for additional evidence, and remanded the matter to the CIT(A) for proper adjudication. It emphasized that the assessee should be given a fair hearing and warned that non-cooperation could lead the CIT(A) to decide based solely on the submitted additional evidence.
Recently, the Income Tax Appellate Tribunal (ITAT) of Mumbai quashed the disallowance of labor charges after determining the payments to be genuine, following a key contractorās retraction of an earlier admission of false payments. The decision came after a thorough examination of the evidence provided by the taxpayer, which refuted claims by the Income Tax Department that the labor expenses were fictitious and inflated.
During the appellate proceedings, the bench of Mr BR Baskaran and Mr Sunil Kumar Singh examined the documents submitted by the assessee, along with a visit report from the Provident Fund Department, which had conducted its own inspection and confirmed that the laborers were duly registered, and the statutory requirements were fulfilled.
In result, the ITAT confirmed the genuineness of the labor payments and quashed the disallowance for all the years under consideration.
In a recent ruling, the Income Tax Appellate Tribunal ( ITAT ) upheld the addition of ā¹3.13 crore as unexplained cash deposits in the bank accounts of an appellant, citing his failure to provide any justification or evidence regarding the source of the funds. The appellant had challenged the Income Tax Departmentās decision to treat the deposits as unexplained income under Section 69A of the Income Tax Act 1961 ( ITA )
The bench of Mr Sidhartha Nautiyal and Mr Makarand V Mahadeokar reviewed the facts of the case.The tribunal referred to several judicial precedents, affirming that the burden of proof lies with the taxpayer to substantiate the legitimacy of any unexplained credits in their bank accounts. Without any credible explanation or supporting evidence, the tribunal had no choice but to uphold the addition.
In a recent decision, the Income Tax Appellate Tribunal ( ITAT ) of Bangalore quashed an addition made under Section 40A(3) the Income Tax Act, 1961 ( ITA ) against a real estate development firm based in Mangaluru. The case revolved around the firmās alleged cash payments and unaccounted income based on rough notings found during a search and survey operation at their premises.
The bench of Mr Waseem Ahmed and Mr Soundararajan carefully examined the case, including the impounded documents, statements, and the firmās arguments. In its ruling, the Tribunal highlighted several key points. First, it observed that the documents relied upon by the AO were āloose sheetsā containing rough notations and calculations, which lacked corroboration through other independent evidence. The Tribunal emphasized that rough notings or projections cannot be the sole basis for making substantial additions to income unless backed by concrete, verifiable data.
In the recent ruling, the Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) dismissed the appeal for registration under section 12A after the assessee withdrew it following the filing of a fresh application.
The assessee sought permission to withdraw the appeal as they had applied for fresh registration under section 12AB. Since the assessee considered the appeal unnecessary, permission was granted to withdraw by The two member bench comprising T.R.Senthil Kumar (Judicial Member) and Makarand V.Mahadeokar (Accountant Member)
In a recent ruling, the Income Tax Appellate Tribunal ( ITAT ) allowed the appeal filed by the co-operative society and held that it was entitled to deductions under Section 80P(2)(d) of the Income Tax Act, 1961, for deposits in co-operative banks In this case, the assessee, Sumel 6 Commercial Co-op. Service Society Limited, had filed its Income Tax Returns for the Assessment Year 2020-21 and declared the income at āNilā
The ITAT bench observed that the assessee has given the details of cooperative societies, which are listed under cooperative banks issued by the Ministry of Corporation, Government of India, and thus, the disallowance made by the AO under Section 80P(2)(d) of the Act is not justified. The ITAT bench, composed of Narendra Prasad Sinha and Suchitra Kamble, allowed the appeal in favor of the assessee.
The Ahmedabad Bench of the Income Tax Appellate Tribunal ( ITAT ) in a recent judgment reprimanded the wrongful exercise of powers by the Principal Commissioner of Income Tax (Appeals)-3, Ahmedabad ( PCIT ) under Section 263 of the Income Tax Act, 1961 while adjudging a valid Income Tax Assessment.
The two-member Bench of ITAT comprising T.R. Senthil Kumar, Judicial Member and Narendra Prasad Sinha, Accountant Member echoed the submissions made by the counsel for the Appellant and insisted that no income escapement can be alleged against the Assessee in light of Vaibhav Corporationās Form 26AS proving that 1% TDS was made by the purchaser against Vaibhav Corporation.
ITAT stated that PCIT erred in issuing the file back to the Assessing Officer for re-computation of the Assesseeās income u/s 263 instead of rectification u/s 154 of the Income Tax Act, 1961 despite having solid evidence that the Sale was not conducted by the Assessee, referring to the Property Sale Deed and clarification letter issued by Sub Registrar Vadodara-3. Concludingly, the Appeal filed by the Assessee was allowed by ITAT.
The Bangalore Bench of Income Tax Appellate Tribunal ( ITAT ) deleted Rs.9.84 Lakh addition made under Section 69A of the Income Tax Act, 1961 after verifying that the cash deposits were from Rs. 10 Lakhs which was withdrawn earlier by the assessee. Bharat Kumar Chetri, the assessee filed his income tax return declaring Rs. 4,24,800 as total income for the assessment year 2017-18. The assesseeās assessment was selected for limited scrutiny due to cash deposits and withdrawals.
The two-member bench comprising Laxmi Prasad Sahu (Accountant Member) and Prakash Chand Yadav (Judicial Member) noted that the assessee made three specific cash deposits Rs. 4,50,000 on August 26, 2016, Rs. 6,00,000 on October 1, 2016, and Rs. 15,800 on September 14, 2016.
The tribunal noted that the assesseeās withdrawal of Rs. 10 lakhs in August 2016 was verified through bank statements, and there was no legal bar on keeping cash on hand. It was also noted that there were no significant material investments made by the appellant, and he had no other sources of income apart from his salary
The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) recently opined that a Will executed even on a plain paper is admissible while adjudging an Appeal regarding an Assesseeās disputed income and the exemptions claimed thereunder.
The two-member Bench of ITAT, Chennai comprising Manoj Kumar Aggarwal, Accountant Member and Manu Kumar, Judicial Member observed that the unregistered will executed by the Assesseeās late father stated that the Assessee has been bequeathed a total amount of Rs.25 Lacs explaining the source of cash deposit.
The Chennai Bench of the Income Tax Appellate Tribunal ( ITAT ) in a recent judgment directed the Assessing Officer ( AO ) to treat Income of an Assessee as āAgricultural Incomeā in light of disclosure of sufficient documentary evidence proving the same.
The two-member Bench of ITAT, Chennai comprising Manoj Kumar Aggarwal, Accountant Member and Manu Kumar, Judicial Member observed that the Assessee has furnished sufficient documentary evidence including Chitta and Adangal to prove that certain agricultural activity had been conducted on the said land.
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