ITAT Ahmedabad Holds Suspicion Cannot Replace Evidence, Strikes Down ₹38 Lakh & ₹10.5 Lakh Additions

On 18 June, the Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) held that additions cannot be sustained merely on suspicion when a taxpayer furnishes complete documentary evidence. Vice President Dr. B.R.R. Kumar and Judicial Member Suchitra Kamble deleted additions of Rs. 38 lakh and Rs. 10.5 lakh made by the Income Tax Department against Shreenathji Extrusion. The Bench held: “There is no cash outflow of Rs. 10,50,000/- from the assessee to M/s. Balkrishana Metal, much less an...

ITAT Kolkata Remands Capital Gains Assessments Over Mandatory DVO Reference Under Section 50C(2)

On 18 June, the Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) remanded a capital gains assessment after holding that an Assessing Officer is duty bound to refer a property valuation dispute to the Departmental Valuation Officer (DVO) when a taxpayer seeks such reference under Section 50C(2) of the Income Tax Act, 1961. Judicial Member Yogesh Kumar U.S. and Accountant Member Rakesh Mishra was hearing an appeal filed by Tapan Das against an order upholding an addition of Rs. 63.52...

Foreign Company Entitled To Concessional Tax Rate Without Separate Central Govt. Approval: ITAT Mumbai

On 19 June, the Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) held that a foreign company cannot be denied the benefit of a lower tax rate merely because no separate approval was obtained from the Central Government, where the transaction itself was permitted under the automatic route prescribed by the RBI. Judicial Member Beena Pillai and Accountant Member Arun Khodpia allowed the appeal filed by Gemological Institute International, Inc., noting that a taxpayer cannot be expected to...

Dividend From Cooperative Societies Remains Deductible Despite Erroneous Claim: ITAT New Delhi

On 19 June, the New Delhi Bench of the Income Tax Appellate Tribunal (ITAT) held that a bona fide claim made under an incorrect provision does not disentitle a taxpayer from claiming a deduction otherwise available in law, and that dividend income received from a co-operative society remains eligible for deduction even if it cites the wrong exemption provision. Vice President Mahavir Singh and Accountant Member Manish Agarwal dismissed the Revenue's appeal and allowed the cross-objection filed...

OYO Share Premium From FOCC Investment Not Taxable Under S.56(2)(viib) Income Tax Act: ITAT Delhi

The New Delhi Bench of the Income Tax Appellate Tribunal (ITAT) on 4 June held that Section 56(2)(viib) of the Income Tax Act cannot be invoked to tax share premium received through a Foreign Owned and Controlled Company (FOCC) where the investment complies with India's foreign investment regulations, as such transactions cannot be treated as routing unaccounted money. Accountant Member S. Rifaur Rahman and Judicial Member Vimal Kumar allowed the appeal filed by OYO Hotels and Homes Private...

ITAT Ahmedabad Deletes ₹2.25 Crore Addition On Land Deal Registered In 2019, Notes 2009 Agreement

The Ahmedabad bench of the Income Tax Appellate Tribunal has deleted a tax addition of about ₹2.25 crore made against a Vadodara taxpayer in a land transaction. The tribunal held that the assessing officer and the Dispute Resolution Panel were not justified in confirming the addition after documents showed that payments had been made before the property's registration. The bench of Vice President Dr. B.R.R. Kumar and Judicial Member Suchitra Kamble allowed the taxpayer's appeal. "Though the...

ITAT Ahmedabad Deletes ₹26.08 Lakh Addition Based Solely On Investigation Wing Information

The Ahmedabad Bench of the Income Tax Appellate tribunal has upheld the deletion of a ₹26.08 lakh addition made against a taxpayer. The tribunal held that an addition cannot be sustained solely on information received from the Investigation Wing without independent enquiry or corroborative evidence linking the taxpayer to the alleged transactions. A bench of Vice-President Dr. B.R.R. Kumar and Judicial Member Suchitra R. Kamble dismissed the Revenue's appeal. It affirmed the order of the...

Gujarat High Court Quashes Reassessment After Escaped Income Falls Below ₹50 Lakh

The Gujarat High Court has quashed reassessment proceedings against Touch Comm Tech Private Limited after finding that the alleged escaped income fell below ₹50 lakh, making the reopening time-barred. A division bench of Justice A.S. Supehia and Justice Vaibhavi D. Nanavati allowed the company's writ petition and set aside the order passed under Section 148A(d) along with the consequential reassessment notice. “Thus, it appears that in order to bring the assessment within the ambit of...

Survey-Based Reassessment Not Excluded From Settlement Under Vivad Se Vishwas Scheme: Gujarat High Court

The Gujarat High Court has recently held that reassessment proceedings based on survey material are not excluded from the Direct Tax Vivad Se Vishwas Scheme, 2024. The court observed that the revenue cannot import a restriction that does not appear in the statute. The Direct Tax Vivad Se Vishwas Scheme, 2024, was introduced by the Centre to reduce pending income-tax litigation by allowing eligible taxpayers to settle disputes and bring appeals to an end. A division bench of Justice A.S....

High-Value Bank Transactions Alone Cannot Justify Reassessment: Gujarat High Court

The Gujarat High Court recently held that high-value transactions reflected in bank accounts, without any material showing that income had escaped assessment, cannot by themselves justify reopening an assessment. The court consequently quashed reassessment proceedings initiated against O3 Developers Pvt. Ltd. A division bench of Justice A.S. Supehia and Justice Vaibhavi D. Nanavati set aside reassessment notices and consequential orders issued against the company for AY 2019-20 and AY 2021-22. ...

ITAT Delhi Upholds ₹18 Lakh Tax Deduction Claim On Ernst & Young's CSR Donations

Ernst & Young Services Private Limited has succeeded before the Delhi bench of the Income Tax Appellate Tribunal in a dispute over a tax deduction claimed on donations made as part of its Corporate Social Responsibility (CSR) spending. The tribunal dismissed the Income Tax Department's appeal and upheld the deduction. A bench of Judicial Member Yogesh Kumar U.S. and Accountant Member Manish Agarwal was considering the Department's challenge to relief granted to the company. The dispute...

Employee Secondment Payments To EY US Satisfy 'Make Available' Test, Taxable As FTS: Delhi High Court

The Delhi High Court on thursday held that payments made by Indian entities to a foreign company for the secondment of employees can be taxed as Fees for Technical Services (FTS) under the India-US Double Taxation Avoidance Agreement (DTAA) if the arrangement satisfies the "make available" test by transferring technical knowledge, skill, or experience to the Indian entity.A Division Bench of Justices V. Kameswar Rao and Vinod Kumar allowed appeals filed by the Revenue against Ernst & Young...