INCOME TAX
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. ...
Limitation For Revisionary Jurisdiction Runs From The Date Of Assessment Order And Not Reassessment, If Subject Matter Was Not Covered In Reassessment: ITAT Kolkata
The Kolkata Bench of ITAT, consisting of members Rajpal Yadav (Vice President) and Rajesh Kumar (Accountant Member), has ruled that the period of limitation for exercising revisionary jurisdiction under Section 263 of Income Tax Act, 1961 runs from the date of assessment order and not the reassessment order, if the revisionary jurisdiction is sought to be exercised with respect to an issue which was not the subject matter of reassessment proceedings. The Assessee Alkem Laboratories...
AO's Jurisdiction Doesn't Change On Mere Surrendering Section 12A Registration: ITAT Upholds Income Tax Reassessment Order Against Young Indian
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) consisting of Amit Shukla (Judicial Member) and Anil Chaturvedi (Accountant Member) has upheld the income tax reassessment order against Young Indian on the grounds that the jurisdiction of AO does not change on mere surrendering registration under Section 12A of the Income Tax Act. The appellant, Young Indian (YI), was incorporated and registered as a company on November 23, 2010, when a licence was granted under section 25 of...
Assessment Order Without Reasons, Not Erroneous Or Prejudicial To The Interest Of The Revenue: ITAT Quashes Revenue's Revision Order
The Mumbai Bench of ITAT has ruled that action of the Assessing Officer in accepting the explanation submitted by the Assessee in the course of scrutiny assessment proceedings cannot be faulted merely because the Assessing Officer did not write specific reasons for accepting the explanation. The Bench, consisting of members Pramod Kumar (Vice President) and Kuldip Singh (Judicial Member), held that non-mentioning of reasons does not render the assessment order passed by the Assessing...
Foreign Tax Credit Cannot Be Denied For Delay In Filing Form 67: Bangalore ITAT
The Bangalore Bench of ITAT has ruled that Foreign Tax Credit cannot be denied to the assessee for delay in filing Form 67. The Bench, consisting of members Beena Pillai (Judicial Member) and Chandra Poojari (Accountant Member) has ruled that Rule 128 of the Income Tax Rules which requires the assessee to submit Form 67 before filing the income tax return for claiming Foreign Tax Credit (FTC) is directory in nature and not mandatory, thus FTC cannot be denied for delay in filing Form...