Income Tax Act - Carrier of Goods Not An ‘Owner’; Bitumen Not A ‘Valuable Article’ Under S. 69A : Supreme Court

The Supreme Court has ruled that bitumen cannot be treated as a ‘valuable article’ under Section 69A of the Income Tax Act, 1961. The bench comprising Justices K.M. Joseph and Hrishikesh Roy made the observation while dealing with an appeal filed against the decision of the Patna High Court, who had upheld the additions made by the Assessing Officer (AO) towards the bitumen lifted by the assessee as a carriage contractor, which was allegedly not delivered by it to the consignee- the Road...

AO Can’t Make Addition On The Basis Of Statement Without Corroborating It With Any Other Material: ITAT

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that an AO cannot make additions merely on the basis of a statement without corroborating it with any other material.The bench of Pavan Kumar Gadale (Judicial Member) and B.R. Baskaran (Accountant Member) has observed that the AO has assessed entire cash receipts as income of the assessee without examining the nature of entries and whether those receipts can be considered revenue receipts accessible to tax.The...

ITAT Imposes Cost On Assessee For Being Delinquent And Lethargic In Pursuing The case Before The Authorities

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has imposed a fine of Rs. 2000 for being delinquent and lethargic in pursuing the matter before the tax authorities."Since the assessee has not appeared before any of the tax authorities below, in the interest of justice, we are of the view that the assessee may be provided with an opportunity to present his case properly before the Ld. CIT (A). Since the assessee was delinquent and lethargic in pursuing his matter before the tax...

ITAT Deletes Income Tax Addition Towards ESOP

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has deleted the income tax addition towards ESOP.The bench of Amit Shukla (Judicial Member) and Padmavathy S. (Accountant Member) has observed that ESOP expenses are capital in nature.The appellant/assessee company is engaged in the manufacturing of branded FMCG products, namely foods and beverages and home and personal care (HPC) products.The assessing officer, during the course of the assessment, noticed that the assessee had debited...

Agricultural Operations Cannot Be Dubbed As ‘Commercial Activity’ Merely For Commercially Selling Hybrid Seeds And Open Pollinated Seed Varieties: ITAT

The Hyderabad Bench of the Income Tax Appellate Tribunal (ITAT) has held that when agricultural activity is conducted and seeds are produced, merely because the seeds were sold commercially, the basic agricultural operations also cannot be dubbed "commercial activities" and not ‘agricultural activities’.The bench of K. Narasimha Chary (Judicial Member) and Rama Kanta Panda (Accountant Member) have observed that hybrid and open-pollinated seeds are products of agricultural activity.The...

Tax Cases Weekly Round-Up: 07 May to 13 May, 2023

Supreme Court Prickly Heat Powder Is Not A ‘Medicine’ For The Purpose Of Sales Tax In Kerala & Tamil Nadu: Supreme Court Case Title: Heinz India Limited v The State of Kerala Citation: 2023 LiveLaw (SC) 411 The Supreme Court Bench has held that prickly heat powders fall under the category of ‘medicated talcum powder’ and not ‘medicine’ for the purpose of sales tax under Kerala General Sales Tax Act, 1963 (“KGST Act”). Whereas, under the Tamil Nadu General Sales Tax...

There Cannot Be Any Addition Of The Regular Items Which Were Disclosed By The Assessee In The Regular Books Of Accounts: ITAT

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has held that there cannot be any addition of the regular items that were disclosed by the assessee in the regular books of accounts.The bench of Madhumita Roy (Judicial Member) and Waseem Ahmed (Accountant Member) has observed that the completed assessment cannot be disturbed in the absence of any incriminating material or documents, whereas the assessment or reassessment can be made with respect to abated assessment years. The...

Any Adjustment Against Bad And Doubtful Debts Amounts To Actual Writing Off The Bad Debts: ITAT Deletes Addition

The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) has deleted the addition and held that any adjustment for bad and doubtful debts amounts to actual writing off the bad debts.The bench of T.R. Senthil Kumar (Judicial Member) and Waseem Ahmed (Accountant Member) has observed that the assessee cannot be denied the benefit for the bad debts merely on the reasoning that such bad debts were not claimed in the profit and loss account but adjusted against the provision for bad debts.The...

Payment Of Compensation To CSA Under Termination Agreement Is Not Taxable Under India-South Africa DTAA, BCCI Not Liable To Deduct TDS: ITAT

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has held that payment of compensation to Cricket South Africa (CSA) under the Termination Agreement is not taxable under the provisions of the India-South Africa DTAA.The bench of G.S. Pannu (President) and Sandeep Singh Karhail (Judicial Member) has observed that since the payment is not chargeable to tax in India in the hands of CSA, there is no obligation on the assessee to deduct tax at source under Section 195.The...

Department Can Bring Expenditure Incurred In Earlier Years To Be Taxed In Subsequent Years On Grounds Of Bogus Expenditure: ITAT

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has observed that the department can bring expenditures incurred in earlier years to be taxed in subsequent years on grounds of bogus expenditure.The bench of B. R. R. Kumar (Accountant Member) has observed that the department can bring the expenditure incurred in the earlier years to be taxed in the subsequent years if it is proved that the expenditure incurred was bogus, and the revenue can deem the liabilities ceased as time went by,...

​​AO Without Rejection Of Books Of Accounts Estimated The Income Based On Profit Margin Method: ITAT Deletes Addition

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT), while upholding the addition, has held that A.O. without rejection of books of accounts under Section 145 but estimated the income based on the Profit Margin Method.The Bench of T.R. Senthil Kumar (Judicial Member) and Waseem Ahmed (Accountant Member), while dismissing the grounds of the department, has observed that the additions made by the Assessing Officer do not survive taking into account the Tribunal decision in the...

Section 14A Disallowance Cannot Be More Than Exempted Income: ITAT

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that section 14A disallowance cannot be more than exempted income.The bench of G.S. Pannu (President) and Sandeep Singh Karhail (Judicial Member) has directed the AO to restrict the disallowance made under section 14A of the Income Tax Act to the extent of exempt income earned by the assessee.Section 14A is a disallowance provision. This section provides that while computing the total income of any assessee, no deduction will be...