Additions Made Under Income Tax Act Have No Bearing Under Black Money Act: Mumbai ITAT

The Mumbai ITAT held that any addition made as undisclosed foreign income and asset under the Black Money Act (BMA), shall not be repeated under the Income Tax Act. However, since there is no corresponding provision under the Income tax Act, the ITAT clarified that additions made under the Income tax Act have no bearing under the BMA. Single Third Member Bench comprising Narendra Kumar Billaiya (Accountant Member) observed that the entire BMA revolves around taxing only...

Assessment Was Based Solely On Existence Of Cash Deposits Linked To Incorrect PAN: Ahmedabad ITAT Deletes Addition U/S 69A Of IT Act

The Ahmedabad ITAT held that since the assessee/ appellant was consistently filing her returns under the original PAN and had also paid penalties for holding two PANs without contesting, the appellants effort reflects compliance of the provisions of Income tax Act rather than an intent to conceal any income. The Bench of T.R. Senthil Kumar (Judicial Member) and Makarand V. Mahadeokar (Accountant Member) observed that “the AO could not verify the books of account, tax audit report, or...

Stock-In-Trade Sold During Relevant Year Should Only Be Considered For Purpose Of Computing Capital Gains: Hyderabad ITAT

The Hyderabad ITAT held that the capital gain arising on account of conversion of capital asset into stock-in-trade should be proportionately computed by considering the stock-in-trade sold by the assessee and not the entire extent of land converted by the assessee. The Tribunal held so, after finding that the assessee has sold part of the stock-in-trade for the current financial year and remaining stock-in-trade is still held as closing stock. Referring to Section 45(2) of Income...

TOLA Extends Income Tax Reasssment Timelimit; Notices Can Be Issued After 2021 Under Old Regime : Supreme Court

The Supreme Court on Thursday (October 3) set aside the judgments of the High Courts which held that the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions Act) (TOLA) 2021 will not extend the time limit for issuing notices for re-assessment under the Income Tax Act.A bench comprising Chief Justice of India DY Chandrachud, Justice JB Pardiwala and Manoj Misra delivered the judgment allowing a batch of 727 appeals filed by the Income Tax Department against the various orders...

Infrastructure Companies laying Roads On BOT Basis Are Not Owners, Can't Claim Depreciation On Toll Roads: Mumbai ITAT

Emphasizing that ownership is a sine qua non for availing depreciation, and roads/ bridges are public properties, the Mumbai ITAT held that an infrastructural development company which has laid down roads cannot claim depreciation over same. The Division Bench comprising Amarjit Singh (Accountant Member) and Sandeep Singh Karhail (Judicial Member) denied depreciation claim on toll road to a company engaged in the business of infrastructure development (assessee), who, in execution of...

'Technological Impediment Can't Be A Reason To Harass Assessee' : Supreme Court Asks Income Tax Dept, CBDT To Resolve Software Issues

Technological impediment cannot be a reason to harass an assessee, said the Supreme Court while asking the Income Tax Department to upgrade its software to ensure that mistakes do not occur in the future.The Court directed that the Central Board for Direct Taxes should also take necessary steps for rectifying the software.A bench comprising Justices PS Narasimha and Sandeep Mehta was hearing an appeal filed by an assessee questioning the imposition of surcharge on Rs. 1.57 Crores and demanding...

Foreign Entity Having Valid Tax Residency Certificate Is Eligible To DTAA Benefit On Long-Term Capital Gain From Sale Of Share Of Indian Entity: Delhi ITAT

While observing that the Assessee submitted a valid Tax Residency Certificate (TRC) which is certainly statutory evidence, the Delhi ITAT granted India-Singapore DTAA benefit under Article 13(4) on long term capital gains on sale of share of an Indian company. The Tribunal emphasized that the burden is on the Revenue Department to establish that the entity has been formed and operated in a manner that the only intention was to take DTAA benefit without there being actual intention of...

Reworking Value Of Investments Held In Subsidiary By Applying DCF Method Is Permitted, Once Correctness Of Valuation Stands Proved: Delhi ITAT

Referring to Explanation to Section 56(2)(viib), the Delhi ITAT held that the assessee is entitled to suitably modify the Net Asset Value (NAV) as long as the NAV is capable of being substituted by some proof or competent evidence. Further, finding that the assessee has produced the valuation report as well as the market valuation of Hotel Residence AG Switzerland in German currency, the Tribunal observed that the valuation of shares of subsidiary company to determine the FMV of the...

Unaccounted Money Brought In The Garb Of Unsecured Loan: Mumbai ITAT Confirms Addition U/s 68

Finding that loans were nothing but accommodation entries and the repayment is also nothing but return of accommodation entries, the Mumbai ITAT held that the money which has been brought in the garb of unsecured loan is nothing but the unaccounted money of the assessee, and deserves to be added u/s 68. Section 68 of Income Tax Act aims to ensure individuals and corporations transparently disclose their income by addressing unexplained cash credits in their books of accounts, placing...

AO Was Not Intimated About Removal Of Company's Name From ROC, Draft Assessment Can't Be Said To Have Passed In Name Of Non-existent Entity: Delhi ITAT

While finding that the AO/DRP was not informed about striking off the name of non-resident assessee from the ROC, the Delhi ITAT held that assessee cannot take a plea that draft assessment order was against the non-existing entity or the company whose name is struck off. Further, pointing that the objections of non-existence of company were filed only on the day on which the Registrar of Companies, Mauritius had removed the name of the company u/s 308 of the Mauritius Companies Act,...

Provision For Leave Encashment Not Debited To P&L A/c, Can't Be Added As Employer's Income: Ahmedabad ITAT

The Ahmedabad ITAT held that provision for leave encashment which was inherited by the assessee on account of restructuring exercise of the GEB, by virtue of which, huge number of employees had been onboarded by the assessee-company, cannot be added to assessee's income. The Division Bench of Annapurna Gupta (Accountant Member) and T.R. Senthil Kumar (Judicial Member) observed that no disallowance of leave encashment liability was warranted if the assessee had not debited any amount...

Agriculturalist Is Not Supposed To Maintain Books Of Account U/s 44AA For Claiming Exemption U/s 10(1): Delhi ITAT

While granting exemption on agricultural income u/s 10(1), the Delhi ITAT held that assessee being an agriculturalist, is not supposed to maintain books of account as per Sec 44AA. Section 44AA of Income tax Act deals with the maintenance of books of accounts by certain persons carrying on business or profession. Finding regularity and consistency of declared agricultural income over the years and subsequent assessment years, Single Bench of S. Rifaur Rahman (Accountant Member)...