INCOME TAX
Cash Deposit During Demonetization Can't Be Taxed As Unexplained U/S 69A If Source Is Explained: Ahmedabad ITAT
The Ahmedabad ITAT held that the AO as well as the CIT(A) was not right in making the addition of cash deposits amounting to Rs. 49,80,000/- in bank account during the demonetization period by invoking section 69A of the Income tax Act, as the assessee has fully explained the cash deposits and thus the same cannot be treated as unexplained money.The Bench of Suchitra Kamble (Judicial Member) observed that “the assessee has given all the details as to how the assessee has that much cash in hand...
Only Obvious & Patent Mistake Can Be Subjected To Rectification Proceedings U/s 154: Bangalore ITAT
The Bangalore ITAT held that the CIT(A) is not justified in confirming the order of the AO passed u/s 154 of the Income Tax Act, on finding that the issue raised in the appeal is not a mistake apparent on record.The Bench comprising of George George K (Vice President) and Chandra Poojari (Accountant Member) observed that, “the AO while issuing show cause notice for rectification had not mentioned that the assessee had violated the principles of mutuality by dealing with non-members. Therefore,...
Method Of Revenue Recognition Adopted By Taxpayer And ITO In Earlier & Later Years Cannot Be Disturbed Sans Any Modification: Ahmedabad ITAT
The Ahmedabad ITAT held that once a method of recognizing the revenue adopted by the assessee and accepted by the revenue in the earlier and later years, the same cannot be disturbed for the intervening year i.e. the year in dispute until and unless initial year is made subject to the modification.The Bench comprising Madhumita Roy (Judicial Member) and Waseem Ahmed (Accountant Member) observed that, “the PCIT himself has admitted the fact that the assessee was entitled for certain amount of TDS...
ITR Dues Claims Shall Stand Extinguished Upon Approval Of Resolution Plan If They Were Not Part Of RP, Reiterates Nagpur ITAT
Referring to the decision of Apex Court in the case of Ghanashyam Mishra And Sons vs. Edelweiss Asset Reconstruction (2021) 126 taxmann.com 132 (SC), the Nagpur ITAT found that all the claims are not part of the Resolution Plan and hence dismissed the appeal filed against the orders of National Faceless Appeal Centre.The Bench comprising S.S. Viswanethra Ravi (Judicial Member) and Inturi Rama Rao (Accountant Member) observed that, “once the proceedings have commenced by institution of...
Taxpayer Cannot Be Denied Benefit Of Sec 80IB If Audit Report & Form 3CB Was Not Uploaded Due To Technical Glitch In E-Filing: Mumbai ITAT
While remanding the matter for fresh disposal of assessee's claim u/s 80IB of Income Tax Act, 1961 in the wake of new admissible evidence, the Mumbai ITAT directed the AO to consider the audit report u/s 44AB along with Form 3CB.The Bench comprising Kuldip Singh (Judicial Member) and Gagan Goyal (Accountant Member) observed that, “Since the uploading of the audit report with form No.3CB and form No.10CCB could not be uploaded due to technical glitch as e-filing was newly introduced, the assessee...
Mumbai ITAT Upholds Exemption Granted On LTCG Upon Sale Of Equity Shares Of Indian Entity Holding Valid TRC
The Mumbai ITAT upheld the exemption of long-term capital gain granted to the Assessee, holding a valid Tax Residency Certificate (TRC), under Article 13 of India-Mauritius DTAA, on sale of equity shares of an Indian company, acquired prior to April 01, 2017.The Division Bench comprising Prashant Maharishi (Accountant Member) and Sandeep Singh Karhail (Judicial Member) observed that “the assessment order passed by the learned Assessing Officer granting benefit of Article 13 to the assessee on...
Reassessment Proceedings Initiated On Account Of Change Of Opinion Merits To Be Quashed: Mumbai ITAT
While confirming the CIT(A)'s order quashing the reassessment order, the Mumbai ITAT held that the reassessment proceedings were initiated on account of change of opinion formed on re-appraisal of the facts already on record and examined during the regular assessment proceedings.The Division Bench comprising B.R. Baskaran (Accountant Member) and Rahul Chaudhary (Judicial Member) observed that “the CIT(A) had noted that specific queries were raised by the Assessing Officer in relation to Foreign...
Management Fee On ECB Partakes Character Of 'Interest' U/s 2(28A), Hence Exempt Under Art.11 Of Indo Germany DTAA: Delhi ITAT
The Delhi ITAT ruled that management fee received by the non-resident taxpayer bank for extending ECB to an Indian entity is not taxable as fee for technical services (FTS) since it partakes the character of interest under Section 2(28A).Thus, the ITAT held that such management fee would be exempt under Article 11(3)(b) of India-Germany DTAA. The Division Bench comprising Saktijit Dey (Vice President) and Dr. B.R.R. Kumar (Accountant Member) observed that “even the management fee is of similar...
For Computing Presumptive Income U/s 44BB, Service Tax Collected For Rendering Services Does Not Form Part Of Gross Receipts: Kolkata ITAT
The Kolkata ITAT recently ruled that service tax is not an amount paid or received for the services rendered by it, when the assessee is only collecting the service tax for passing it on to the Government account.Referring to the decision of Delhi High Court in case of DCIT Vs. Mitchell Drilling International Pvt. Ltd, the Bench comprising Sonjoy Sarma (Judicial Member) and Girish Agrawal (Accountant Member) observed that, “for the purpose of computing the presumptive income of the assessee u/s....
Failure To Furnish Segmental Information U/s 92D By Diamond Trader Is No Basis To Levy Penalty U/s 271G: Mumbai ITAT
On finding that transfer pricing adjustment made in the Arm's Length Price to be erroneous, the Mumbai ITAT deleted the penalty u/s 271G of Income Tax Act, 1961 for non-furnishing of requisite information u/s 92D.The Bench comprising Amit Shukla (Judicial Member) and S. Rifaur Rahman (Accountant Member) observed that, “levy of penalty under section 271G of the Act is neither fair nor reasonable and it is not justified in the present facts of the case viz., the nature of diamond trade,...
Revisionary Authority Could Not Exercise Jurisdiction U/s 263 When Larger Issue Was Pending Before CIT(A): Chennai ITAT
The Chennai ITAT held that the impugned revision u/s 263 of the Income Tax Act, 1961, was bad-in-law and liable to be quashed, while pointing that when larger issue was pending before CIT(A), the revisionary authority could not exercise jurisdiction u/s 263.Referring to the decision of Madras High Court in the case of Smt. Renuka Philip vs. ITO (409 ITR 567), the Bench comprising V. Durga Rao (Judicial Member) and Manoj Kumar Aggarwal (Accountant Member) observed that, “for the purpose of...
Loans Given By Co-Operative Banks To Their Nominal Members Qualify For Deduction U/s 80P(2)(A)(I), Reiterates Bangalore ITAT
While considering the definition of 'member' under the Kerala Act, as per which loans given to nominal members would qualify for purpose of deduction u/s 80P(2)(a)(i) of the Income Tax Act, 1961, the Bangalore ITAT directed the AO to grant relief to the assessee by allowing the claim of deduction under said provision.Relying on the decision of Supreme Court in the case of Mavilayi Service Cooperative Bank Ltd. v. CIT (2021) 123 taxmann.com 161 (SC), the Bench comprising Beena Pillai (Judicial...