INCOME TAX
Ahmedabad ITAT Quashes Reopening In Absence Of Tangible Material With AO To Form Reason To Believe Escaped Assessment
The Ahmedabad ITAT quashed reopening proceedings finding that there was no tangible material available with the AO to form a reason to believe that the income of assessee has escaped assessment.The Bench of Waseem Ahmed (Accountant Member) and Siddhartha Nautiyal (Judicial Member) observed that “simply that Shri Prakash bhai Ishwar bhai Changela and the assessee are maintaining the bank account in the Social Co-operative cannot be a ground to draw a conclusion that the assessee is engaged in the...
Taxpayer Failed To Duly Substantiate Question Of Identity & Source Of Fund: Kolkata ITAT Remits Matter For Re-adjudication
Finding that the issue in question has been agitated for the first time before the Bench and the same has been covered by a previous decision under homogenous facts, the Kolkata ITAT remitted back the matter to the file of AO for further adjudication de-novo both in legal as well as factual aspect of the assessee.Referring to the decision of Delhi High Court in the case of CIT vs. Insecticides (India) Ltd. [2013] 357 ITR 330 (Delhi), the Bench of Rajesh Kumar (Accountant Member) and Anikesh...
Additions Based On Altogether Different Issue On Which No Reasons Were Recorded, Dents Proceedings U/s 147 / 148: Mumbai ITAT
On finding that addition which is not based on the reasons for reopening is un-sustainable, the Mumbai ITAT deleted the addition made by AO u/s 69C of the Income Tax Act, 1961.The Bench of the ITAT comprising of Narender Kumar Choudhry (Judicial Member) and Padmavathy S. (Accountant Member) observed that, “the return of income was assessed under section 143(3) of the Act and the additions made by the Assessing Officer and affirmed by the Ld. Commissioner, in fact, are based on the different...
AO Must Follow Mandate Of Sec 50C If Values Adopted By Stamp Value Authorities Exceeds FMV Of Property: Mumbai ITAT
On finding that AO has not computed capital gains by adopting the stamp duty value, the Mumbai ITAT restored the matter back to the file of the AO to follow the mandate of provision u/s 50(C)(2) of the Income Tax Act, 1961, and decide the issue afresh after giving the assessee an adequate opportunity of hearing.The Bench of the ITAT comprising of Prashant Maharishi (Judicial Member) and Sandeep Singh Karhail (Accountant Member) observed that, “According to the provision under section 50(C)(2),...
Warranty Costs Are Not Part Of AMP Expenditure, Clarifies Bangalore ITAT
The Bangalore ITAT ruled on treatment of share-based compensation (SBC), depreciation & amortization as operating expense and inclusion of delivery charges & warranty expenses in AMP expenditure.The Bench comprising George George K (Vice President) and Laxmi Prasad Sahu (Accountant Member) observed that “these expenditure cannot be regarded as having been incurred for the purpose of development of brand since these are post sales activities and part of sales expenditure. It is also not a...
Foreign-AEs Being Least Complex Entities Can Be Accepted As Tested Party, Confirms Kolkata ITAT
The Kolkata ITAT accepted foreign AE as tested party, and deleted the ALP adjustments qua export of software services and receipt of account management charges in case of assessee, engaged in providing a wide range of IT solutions.The Bench comprising Rajpal Yadav (Vice President) and Girish Agrawal (Accountant Member) observed that “Co-ordinate bench, ITAT, Kolkata also considered the functions performed, asset employed and risk assumed i.e. FAR analysis of the assessee vis-à-vis the foreign...
Foreign AE Can Be Accepted As Tested Party: Mumbai ITAT Deletes ALP Adjustment Qua Export Of Formulations
While deciding on ALP adjustments qua export of goods to AEs and guarantee commission in case of a pharma company, engaged in manufacturing and marketing of formulations in India, the Mumbai ITAT accepted foreign AE as tested party.The Bench comprising B.R Baskaran (Accountant Member) and Rahul Chaudhary (Judicial Member) observed that “so far the assessee herein is concerned and qua the transfer pricing provisions, what is required to be seen is whether the price realized on export of products...
Inconsistency In Treatment Of Forex Loss Without Plausible Reason For Deviation, Justifies Revisionary Interference: Hyderabad ITAT
The Hyderabad ITAT upheld the CIT's revision order citing inconsistency in treatment of forex loss without plausible reason for deviation in case of Corteva Agriscience Services India Pvt. Ltd engaged in providing sourcing, finance including evaluation of prospective customers and various other services to group companies.The Bench comprising Rama Kanta Panda (Vice President) and K. Narasimha Chary (Judicial Member) observed that “non-considering of the consistent treatment given by the assessee...
Business Restructuring Amongst Foreign Group Entities To Eliminate Duplicate Corporate Procedure Is 'International Transaction' U/s 92B: Mumbai ITAT
The Mumbai ITAT ruled that as per Explanation to section 92B of the Income tax Act, the transaction of business restructuring shall be considered an international transaction, irrespective of the fact whether it has a bearing on the profit, income, losses, or assets of such enterprises.The ITAT also upheld the disallowance of interest on Compulsory Convertible Debentures (CCDs) and treatment of cash payment by assessee to its parent company, pursuant to scheme of amalgamation, as deemed loan....
Addition Made U/s 69C Based On Time Barred Assessment Is Not Sustainable: Kolkata ITAT
On finding that there is no evidence on the file either direct or indirect or even circumstantial to show that the order was passed by the AO on or before the last date of limitation for the same, the Kolkata ITAT held that the assessment order passed by the AO is time-barred and deleted the addition made u/s 69C of the Income Tax Act, 1961.The Bench of the ITAT comprising of Sanjay Garg (Judicial Member) and Rajesh Kumar (Accountant Member) observed that, “Even the impugned assessment order was...
Form No. 68 Could Not Be Uploaded Due To Error; Mumbai ITAT Directs AO To Redecide On Application For Immunity From Penalty U/s 270AA
On finding that no opportunity of hearing was provided to the assessee before rejecting its application for immunity from penalty, the Mumbai ITAT set-aside the whole issue back to the file of the AO to decide the issue of availability of immunity from imposition of penalty u/s 270AA of the Income Tax Act, 1961.The Mumbai ITAT also directed the assessee to provide the evidences of filing of form number 68, which could not be uploaded due to the error. The Bench of the ITAT comprising of Vikas...
Mumbai ITAT Allows Depreciation On 'Right To Collect Toll Tax' On Infrastructure Facilities
While following the decision of the co-ordinate benches in assessee's own case, the Mumbai ITAT directed the AO to grant depreciation on the right to collect toll tax on infrastructure facilities considering same as intangible asset entitled to depreciation at the rate of 25%.The ITAT also directed the AO to re-compute the deduction allowable to the assessee u/s 80IA (4) of the Income Tax Act, 1961, by replacing the amount of amortised value of deduction with allowable depreciation. The Bench of...