INCOME TAX
Additions Cannot Be Made To Assessee's Income On Basis Of Document Declared By The CESTAT As 'Dumb Document': Ahmedabad ITAT
The Ahmedabad Bench of ITAT has ruled that additions cannot be made to assessee's taxable income under the Income Tax Act, 1961 on the basis of documents that are declared as 'dumb documents' by the CESTAT in the service tax proceedings before it. The Bench, consisting of members Madhumita Roy (Judicial Member) and Waseem Ahmed (Accountant Member), held that though the proceedings under the Income Tax Act and Service Tax are distinct and independent to each other, but the factual...
No Deemed Registration Even If Registration Application U/Sec 12AA Income Tax Act Is Not Decided Within Six Months: Supreme Court
The Supreme Court has observed that there shall not be any deemed registration even if in a case where the registration application under Section 12AA of the Income Tax Act, 1961, is not decided within six months.The bench comprising Justices MR Shah and BV Nagarathna was considering a Special Leave Petition challenging a judgment of Allahabad High Court in which the issue raised was whether on non-deciding the application for registration under Section 12AA (2) of the Income Tax Act within a...
Subscription Fee Towards Cloud Services Not Taxable As Royalty: Delhi ITAT
The Delhi Bench of ITAT, consisting of members Anubhav Sharma (Judicial Member) and R.K. Panda (Accountant Member), has ruled that subscription fee received towards Cloud Services is not taxable as royalty. The Microsoft Corporation, USA is the ultimate parent entity of the Assessee MOL Corporation which is incorporated in the United States of America. Due to certain License Agreements entered into between the associated enterprises, the Assessee MOL Corporation was considered the...
Income Tax Act - Loss Suffered Due To Exchange Fluctuation While Repaying Loan Can Be Regarded As Revenue Expenditure : Supreme Court
Allowing the appeal filed by Wipro Finance Ltd., the Supreme Court observed that the loss suffered owing to exchange fluctuation can be regarded as revenue expenditure and thus an allowable deduction.The bench comprising Justices allowed the appeal against High Court judgment which had reversed the above view taken by Income Tax Appellate Tribunal. Wipro entered into a loan agreement with one Commonwealth Development Corporation for borrowing amount to carry on its...
Routine Business Support Services Are Not Taxable As Fees For Technical Services: Delhi ITAT
The Delhi Bench of ITAT, consisting of members Astha Chandra (Judicial Member) and N.K. Billaiya (Accountant Member), has ruled that routine business support services are not taxable as fees for technical services (FTS) since they do not make any technology or skill available to the recipient of the services. The Bench held that when a tax rate is prescribed under the Double Taxation Avoidance Agreement (DTAA), education cess and surcharge cannot be levied. The appellant/assessee...
Mere Ignorance Of Law With Respect To Compulsory Audit Under Section 44AB Is Not A Reasonable Cause For Deleting Penalty: ITAT Hyderabad
The Hyderabad Bench of ITAT, consisting of members S.S. Godara (Judicial Member) and A. Mohan Alankamony (Accountant Member), has ruled that mere ignorance of law with respect to the provisions of Section 44AB of the Income Tax Act for compulsory audit of accounts, cannot be said to be a reasonable cause under Section 273B for deleting the penalty imposed on the Assessee for failure to audit accounts. The Assessee Mohd Zaheeruddin was involved in trading of shares and derivatives. In the...
No TDS Required To Be Deducted On Enhanced Compensation Awarded By Court Under Land Acquisition Act: Delhi ITAT
The Delhi Bench of ITAT, consisting of members Astha Chandra (Judicial Member) and N.K. Billaiya (Accountant Member), has ruled that interest received by land owners on enhanced compensation awarded to them by the Court under Section 28 of the Land Acquisition Act, 1894 is not in the nature of 'income from other sources' under the Income Tax Act, 1961, therefore, no TDS is required to be deducted with respect to it. The Assistant Commissioner of Income Tax (ACIT) conducted TDS ...
Corpus Donations Received By A Trust For A Specific Purpose Are Not Taxable, Even If The Trust Is Not Registered: ITAT Mumbai
The Mumbai Bench of ITAT, consisting of members Sandeep Singh Karhail (Judicial Member) and Gagan Goyal (Accountant Member), has ruled that the corpus donations received by a Trust for a specific purpose are not taxable, even if the Trust is not registered under Section 12 A of the Income Tax Act, since they are in the nature of a capital receipt. The Assessee Versova Kokni Sunni Jamat Trust filed its income tax return for the relevant assessment year. The Assessing Officer (AO)...
Additions By AO On The Basis Of Suo-Moto Disclosure Before The Settlement Commission, Not Permissible If The Settlement Was Aborted: ITAT Mumbai
The Mumbai Bench of ITAT, consisting of members Kuldip Singh (Judicial Member) and Prashant Maharishi (Accountant Member), has ruled that the Assessing Officer cannot make any addition to assessee's income on the basis of the suo-moto disclosure made by the assessee before the Income Tax Settlement Commission, if the settlement got aborted due to non-fulfilment of conditions by the assessee under the Income Tax Act, 1961. The Assessee Sawarmal Hisaria was into the business of trading of...
Source Of Demonetized Notes Collected By Co-Operative Society Explained, ITAT Quashes Addition Made Under Section 68 Of Income Tax Act
The Bangalore Bench of ITAT has ruled that there is no rationale in the action of the Assessing Officer of making additions to assessee's income under Section 68 of the Income Tax Act on the ground that the assessee has violated RBI notifications. The Single Member Bench of B.R. Baskaran (Accountant Member) held that the Assessee Co-operative Society had explained the nature and source of the demonetized notes deposited by it in its bank account and all the transactions had been...
Non-Disclosure Of A Foreign Asset In ITR Is Not A Valid Reason For Imposition Of Penalty If source Of Investment Is Well Explained: Mumbai ITAT
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) headed by Pramod Kumar (Vice President) and Rahul Chaudhary (Judicial Member) has ruled that mere non-disclosure of a foreign asset in the income tax return, by itself, is not a valid reason for a penalty under the Black Money Act, if the source of investment is well explained by the assessee.The Assessing Officer challenged the correctness of the order passed by the Commissioner (Appeals) in the matter of penalty under ...
No Liability To Deduct TDS On Payments Made By Lenskart To Facebook Ireland: ITAT Delhi
The Delhi Bench of ITAT, consisting of members N. K. Choudhry (Judicial Member) and Anil Chaturvedi (Accountant Member), has upheld the order passed by the CIT (A) deleting additions of over Rupees 67 Lakhs made to Lenskart's taxable income for non-deduction of TDS on marketing expenses paid by it to Facebook Ireland Inc. The Bench noted that the CIT (A) had concluded that that there was no liability to deduct tax on payments made for advertising services to Facebook Ireland Inc. ...