AO Can't Make Additions Solely Based On Retracted Statement Of Third-Parties If Assessee Has Claimed Opposite: Chennai ITAT

Referring to the decision of Madars High Court in case of P.V. Kalyanasundaram (155 Taxman 454), the Chennai ITAT held that once the assessee had denied payments made by it, then he cannot be expected to prove the negative. Going further, the Bench held that the AO cannot make additions solely based on retracted statement of third-parties, if assessee had claimed otherwise. The Bench of Aby T. Varkey (Judicial Member) and Manoj Kumar Aggarwal (Accountant Member) observed that “no...

Block Period Of Six AYs For Purpose Of Sec 153C Has To Be Reckoned From Date Of Receipt Of Documents By AO: Delhi ITAT

The New Delhi ITAT held that for purposes of assessment u/s 153C, the date of recording of satisfaction of AO will be deemed date for the possession of seized documents. Section 153C of Income tax Act empowers the Assessing Officer of the person searched to handover the money, gold, jewellery, or other relevant articles/things or books of account or documents belonging to the other person to the Assessing Officer of that other person and the Assessing Officer of that other person. ...

Statutory Authority Must Not Grant Approval U/s 153D Mechanically: Delhi ITAT Criticizes On Unjust Exercise Of Discretion By AO

While emphasizing that the obligation of granting approval acts as an inbuilt protection to the taxpayer against arbitrary or unjust exercise of discretion by the AO, the New Delhi ITAT held that approval granted u/s 153D should necessarily reflect due application of mind and if the same is subjected to judicial scrutiny, it should stand for itself and should be self-defending. The ITAT also clarified that whenever any statutory obligation is cast upon any statutory authority, such...

Payments Made To Overseas Company For Services Utilized Abroad, Does Not Warrant Tax Deduction At Source U/s 195: Delhi ITAT

The New Delhi ITAT held that when the taxpayer company has utilized the service of a company outside India and payment has also been made outside India, then taxpayer company would not be liable for deduction of tax at source u/s 195. As per Section 195 of the Income Tax Act, TDS must be deducted at the time of credit or payment on certain payments made to non-residents, and it applies to interest, royalty, fees for technical services, and other sums chargeable for tax in India. The...

Technical Error In Making Application For Final Approval Is No Basis To Deny Benefit Of Sec 80G: Kolkata ITAT

Referring to the decision in case of Anudip Foundation for Social Welfare vs. CIT(Exemption), Kolkata – ITA No. 1341/Kol/2023, the Kolkata ITAT held that assessee will not be deprived of the benefit of Sec 80G due to technical errors occurred in making application because of the confusion and misunderstanding on in properly interpreting the relevant provision. Section 80G of Income tax Act deduction is a facility available which allows taxpayers to claim deductions for various...

Assumption Of Jurisdiction Based On Wrong Facts Can't Form Basis For Initiating Reopening: Mumbai ITAT

The Mumbai ITAT there is no question of concealment of fact when the assessee had itself declared the income in its return which was assumed by the AO to be an escaped income. Hence, the ITAT clarified that assumption of jurisdiction based on wrong facts, cannot form basis for initiating reopening. The Division Bench of Anikesh Banerjee (Judicial Member) and Prashant Maharishi (Accountant Member) observed that “The revenue assumed that the assessee claimed exemption under section...

Loans Brought Forwarded Can't Form Basis For Addition In Current Year if Genuineness Is Established: Mumbai ITAT

Finding that the genuineness of loan transactions is not verified by the Income tax Authorities, the Mumbai ITAT held that no additions are permitted on account on unsecured loans by disregarding the confirmations & identity of loan creditors produced by assessee. The Divisional Bench of Anikesh Banerjee (Judicial Member) and Prashant Maharishi (Accountant Member) observed that “Related to other loans, which are taken during this year, the assessee submitted the confirmations, PAN,...

Cash Deposits During Demonetization Alone Is No Basis To Make Addition In Absence Of Glaring Error In Books: Mumbai ITAT

Finding that cash sales as part of the trading result offered for taxation by the assessee is not disputed, the Mumbai ITAT held that addition is permitted on account of cash deposit during demonetization on mere allegation that books of account are manipulated without its rejection. The Bench presided by Prashant Maharishi (Accountant Member) observed that “Mere cash deposit or cash sales, without pointing out any latent, patent and glaring defect in books of accounts, books of ...

'Reasons To Believe' For Reopening Must Based On Credible Information : Kolkata ITAT

While quashing the reopening proceedings, the Kolkata ITAT held that any allegation of escapement of income must be backed by information expressing 'reason to believe' and such belief requires to be based on some credible or relevant material. The ITAT clarified that mere borrowed satisfaction from Investigation Wing is no justified ground for initiating reopening, when no credible information is available with the AO regarding escapement of income. The Bench of Manish Borad...

Additions Can't Be Made In Cases Of Unabated Assessments Without Incriminating Material: Mumbai ITAT

The Mumbai ITAT held that no addition can be made by AO in respect of completed/unabated assessments, in absence of any incriminating material found during the course of search u/s 132 or requisition u/s 132A. Section 132A of Income tax Act empowers income tax authorities to carry out a search and seizure of books of accounts, documents, cash & jewellery. Referring to the decision rendered by the Supreme Court in the case of Abhisar Buildwell – [(2023) 149 taxmann.com 399...

Merely Because The Transactions Are Made Through Banking Channel Does Not Itself Prove The Creditworthiness

The Mumbai ITAT held that merely because the transactions are made through banking channel does not itself prove the creditworthiness of the lender and genuineness of the transaction. The Bench of Prashant Maharishi (Accountant Member) observed that “Subsequent repayment of the accommodation entry naturally does not show that the originally credit is genuine and provider of the credit is creditworthy of the same”. Facts of the case: The assessee, engaged in business of...

Final Assessment Passed Within Two Days Of Issuing Intimation, Violation Of 143(1) IT Act : Mumbai ITAT

The Mumbai ITAT held that the AO has no jurisdiction to make any adjustment in final assessment order passed u/s 143(3) before thirty days of receiving any response from the assessee on basis of intimation issued u/s 143(1). As per Section 143 of the Income tax Act, the response received from the assessee, if any, shall be considered before making any adjustment, and in a case where no response is received within thirty days of the issue of such intimation, such adjustments shall be...