Appellate Officer Cannot Ignore Assessing Officer's Findings Without Contrary Material: ITAT Ahmedabad

The Income Tax Appellate Tribunal (ITAT) at Ahmedabad has held that findings recorded by an Assessing Officer in a remand report cannot be disregarded by the Commissioner (Appeals) without any material to the contrary. The court observed that where the Assessing Officer, after verification, accepted that a taxpayer's land had been used for agricultural purposes and that the conditions for claiming exemption were met, those findings could not be ignored without contrary evidence. A bench of...

Cash Loan Given In Breach Of Income Tax Act Can Still Be Recovered: Madras High Court

The Madras High Court at Madurai has held that a cash loan advanced in breach of the Income Tax Act does not become illegal merely for that reason, and the lender can still seek recovery of the money. A bench of Justice G.R. Swaminathan and Justice R. Poornima was dealing with a case in which P. Palanikumar claimed to have lent ₹25 lakh in cash instead of through an instrument as contemplated under Section 269SS of the Income Tax Act. The bench held that while the Income Tax Department was...

ITAT Delhi Quashes Proceedings Against Indeed Fincap Over Common, Vague Satisfaction Note

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has quashed assessment proceedings initiated against Indeed Fincap Pvt. Ltd. after finding that the tax department relied on a common satisfaction note covering multiple assessment years without identifying assessment year-specific incriminating material. A coram of Judicial Member Vimal Kumar and Accountant Member S. Rifaur Rahman dismissed the Revenue's appeal against an order of the Commissioner of Income Tax (Appeals), which had...

ITAT Mumbai Upholds Relief To Chillies and Garlic After AO Treated Consignment Sales As Agent's Own Turnover

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has upheld the deletion of an addition made on alleged undisclosed sales in the case of Chilles & Garlic Commission Co. after finding that the Assessing Officer had wrongly treated consignment sales handled by the commission agent as the taxpayer's own turnover.A bench of Judicial Member Amit Shukla and Accountant Member Arun Khodpia observed that the Assessing Officer had proceeded on a misconceived understanding of the taxpayer's...

Interest Received By American Express India Branch From Head Office, Overseas Branches Not Taxable: ITAT Mumbai

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that interest received by the Indian branch of American Express Bank from its Head Office and overseas branches is not taxable in India. The Tribunal found that the transactions were between different parts of the same entity and therefore attracted the principle that a person cannot make a profit from oneself. A bench of Vice President Saktijit Dey and Accountant Member Prabhash Shankar was hearing cross-appeals relating...

Reassessment Without Section 143(2) Notice Lacks Jurisdiction, Cannot Be Sustained: ITAT Kolkata

On 16 June, the Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) held that reassessment proceedings initiated without issuance of the mandatory notice under Section 143(2) of the Income Tax Act are void ab initio, as the requirement goes to the root of jurisdiction and cannot be treated as a curable procedural lapse. Accountant Member Rajesh Kumar and Judicial Member Pradip Kumar Choubey set aside the reassessment against Star Tradecom Private Limited and quashed the consequential...

Tax Reassessment Beyond 4 Years Invalid Without Failure To Disclose Material Facts: Bombay High Court

On 16 June, the Bombay High Court held that the Income Tax Department cannot reopen an assessment after four years when the taxpayer has already disclosed all material facts fully and truly and allowed a writ petition filed by Chennai Container Terminal Private Limited.A Division Bench of Justices B.P. Colabawalla and Firdosh P. Pooniwalla set aside the notice issued under Section 148 of the Income Tax Act, the order rejecting objections, and the consequential show cause notice and draft...

Supreme Court Refuses To Entertain Plea For Creamy Layer In Income-Tax Exemption For Scheduled Tribes In North-East States

The Supreme Court on Tuesday declined to entertain a plea seeking the introduction of a "creamy layer" mechanism for the income-tax exemption granted to Scheduled Tribes residing in specified areas and States under the Income Tax Act, 2025.The petitioner sought a direction to restrict the benefit to economically weaker tribals and exclude affluent beneficiaries. A bench of CJI Surya Kant and Justice V. Mohana allowed petitioner Ashwini Upadhyay to withdraw the petition with the ...

Cash Held By Chartered Accountant For Client Tax Payments Not Unexplained Income: ITAT Chennai

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) on 11 June held that a practising Chartered Accountant does not incur liability under Section 69A of the Income Tax Act merely because clients deposit cash into his bank account for payment of statutory dues, where the evidence shows he used the funds to remit taxes on their behalf. Judicial Member Aby T. Varkey and Accountant Member Padmavathy S allowed the appeal filed by Bose Saravanan and directed the Assessing Officer to delete...

Revenue Must Disclose Tally Data, Forensic Report Before Making Additions: ITAT Kolkata

On 16 June, the Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) held that the Revenue cannot rely on tally data and a forensic analysis report without confronting a taxpayer with those materials, as doing so constitutes a “grave violation of natural justice”. Accountant Member Rajesh Kumar and Judicial Member Pradip Kumar Choubey partly allowed Kailash Kumar Patwari's appeals for statistical purposes, dismissed the Revenue's appeals, and remanded the matter to the Assessing Officer....

Excess Royalty Refunded To Indian Subsidiary Under APA Cannot Be Taxed As Income Of GIA US: Bombay High Court

The Bombay High Court has upheld relief granted to Gemological Institute of America Inc. (GIA US) in a dispute over royalty payments received from its Indian subsidiary. The court ruled that royalty amounts bona fide refunded pursuant to a CBDT-approved Advance Pricing Agreement (APA) could not be brought to tax in the hands of the US entity because the amounts did not ultimately belong to it. A Division Bench of Justice B.P. Colabawalla and Justice Firdosh P. Pooniwalla dismissed a batch of...

Gujarat HC Quashes Reassessment, Holds No Escaped Income Exists Where MAT Liability Is Unchanged

The Gujarat High Court has quashed reassessment proceedings initiated against Pandesara Infrastructure Limited for Assessment Year 2020-21. The court found that the proposed recomputation of depreciation would not result in any income chargeable to tax escaping assessment. It also noted that the company's liability under the Minimum Alternate Tax (MAT) regime would remain unchanged. A Division Bench of Justice A.S. Supehia and Justice Vaibhavi D. Nanavati allowed the writ petition challenging...