Draft Assessment Order Required Only For 'Eligible Assessees' Under Faceless Assessment: Kerala High Court

The Kerala High Court has held that tax authorities conducting faceless assessments are not required to issue a draft assessment order before finalising proceedings in the case of ordinary assessees. Justice Ziyad Rahman A.A., while dismissing writ petitions filed by a partnership firm engaged in the real estate business, observed that the requirement applies only to "eligible assessees" specifically defined under the Income Tax Act. "The requirement of issuing a draft assessment order before...

ITAT Ahmedabad Upholds Relief To Adani Total Gas, Says No Exempt Income No Section 14A Disallowance

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) on 22 June reiterated that no disallowance can be made under Section 14A of the Income Tax Act where the taxpayer has not earned any exempt income during the relevant assessment year. Vice President Dr. B.R.R. Kumar and Judicial Member Rahul Chaudhary dismissed the Revenue's appeal and upheld the deletion of a Rs. 2.38 crore disallowance made against Adani Total Gas Ltd. for Assessment Year 2020-21. The Bench held: "It is an...

ITAT Ahmedabad Condones 388-Day Delay In Appeal, Cites Poor Advice From Tax Consultant

The Income Tax Appellate Tribunal (ITAT) at Ahmedabad has recently condoned a 388-day delay in filing an appeal by an educational institution. The tribunal found that the delay was caused by inadequate legal advice from its previous tax consultant and a bona fide belief that no further compliance was required. A bench of Vice President Dr. B.R.R. Kumar and Judicial Member Rahul Chaudhary set aside orders of the Commissioner of Income Tax (Appeals) passed through the National Faceless Appeal...

ITAT Mumbai Deletes ₹61.22 Crore TP Addition, Says Pending HC Appeal Doesn't Affect Earlier Binding Order

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has deleted a transfer pricing adjustment of ₹61.22 crore. The tribunal held that a pending appeal before the Bombay High Court does not dilute the binding nature of an earlier coordinate bench decision unless it has been stayed or reversed by a superior judicial forum. A bench of Judicial Member Anikesh Banerjee and Accountant Member Om Prakash Kant and passed the order while allowing an appeal filed by LANXESS India Pvt. Ltd. ...

Property Investment Can't Be Taxed As Unexplained Income In Later Year If Paid Earlier: ITAT Ahmedabad

The Income Tax Appellate Tribunal (ITAT) in Ahmedabad has upheld the deletion of additions made against a taxpayer after finding that documentary evidence showed the disputed property investments were made in an earlier financial year and not during the assessment year under consideration. A bench of Vice President Dr. B.R.R. Kumar and Judicial Member Siddhartha Nautiyal dismissed the Income Tax Department's appeal against the relief granted by the Commissioner of Income Tax (Appeals). "It is...

Additional Evidence On Foreign Remittances Must Be Examined If It Goes To Root Of Matter: ITAT Ahmedabad

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has held that in reassessment proceedings involving unexplained foreign remittances, additional evidence relating to a taxpayer's overseas residency status and foreign business activities must be examined where it goes to the root of the controversy. Vice President Dr. B.R.R. Kumar and Judicial Member Siddhartha Nautiyal set aside the assessment in Mr. Jitendra Motilal Chawla's case and restored the matter to the Dispute Resolution...

ITAT Ahmedabad Holds Form 26AS Mismatch Alone Insufficient For Addition, Restores ₹42.34 Lakh Issue

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) on 17 June held that a mismatch between revenue reflected in Form 26AS and a taxpayer's books of account does not, by itself, justify an addition, and that such discrepancies require a proper reconciliation exercise before any addition can be sustained. Vice-President Dr. B.R.R. Kumar and Judicial Member Rahul Chaudhary allowed the appeal filed by Checkmate Services Pvt Ltd for statistical purposes and remanded the Rs. 42.34 lakh...

Mere Client Code Modification Not Enough To Invoke S.68 On Entire Transaction Value: ITAT Ahmedabad

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has held that the Department cannot treat the entire value of commodity transactions routed through alleged client code modifications as unexplained cash credits under Section 68 of the Income Tax Act, 1961, in the absence of material showing that the taxpayer benefited from accommodation entries. Vice President Dr. B.R.R. Kumar and Judicial Member Siddhartha Nautiyal upheld relief granted to Dharmdeep Commodities Pvt. Ltd. and...

TPO Cannot Ignore Documentary Proof Of Services And Fix ALP At Nil: ITAT Ahmedabad

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT), on 6 June, held that once a taxpayer demonstrates actual receipt of management services through documentary evidence, the Transfer Pricing Officer (TPO) cannot disregard the transaction and fix the Arm's Length Price (ALP) at nil based merely on assumptions of commercial necessity. Vice President Dr. B.R.R. Kumar and Judicial Member Siddhartha Nautiyal dismissed the Revenue's appeal against Schaeffler India Ltd. and upheld...

Reassessment Notice Not Invalid Merely Because Reply Period Extends Beyond Limitation: Delhi High Court

The Delhi High Court has held that a notice issued under Section 148A(b) of the Income Tax Act does not become invalid merely because the minimum seven-day period granted to an assessee for filing a reply extends beyond the limitation period prescribed for issuance of reassessment notices. A Division Bench of Justices Dinesh Mehta and Vinod Kumar observed that Parliament consciously provided for exclusion of the time granted to an assessee for filing a reply while computing limitation under...

Time Granted To Assessee For Reply Must Be Excluded While Computing Reassessment Limitation: Delhi High Court

The Delhi High Court has reiterated that while computing the limitation period for reassessment proceedings under the Income Tax Act, the time granted to an assessee to respond to a notice issued under Section 148A(b) must be excluded in terms of the fifth and sixth provisos to Section 149. Applying this principle, the Division Bench of Justices Dinesh Mehta and Vinod Kumar dismissed a writ petition challenging reassessment proceedings as time-barred, holding that the order passed under Section...

Revenue Cannot Sit In The Armchair Of Businessmen: ITAT Delhi Deletes ₹17.8 Lakh Addition

Tax authorities cannot sit in the armchair of businessmen and decide how businesses should be run merely because operations have ceased, the Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held. The tribunal deleted an addition of nearly ₹18 lakh that the Income Tax Department had treated as unexplained cash credits after a company received funds from its directors, their relatives, and a company under the same management. Accountant Member Ramit Kochar, sitting as a single-member...