INCOME TAX
Bogus Share Transaction: ITAT Denies Exemption Under Section 10(38) Of Income Tax Act
The Pune Bench of the Income Tax Appellate Tribunal has ruled that where the assessee fails to establish the genuineness of the transaction of sale and purchase of shares, and fails to rebut the findings of quasi-judicial bodies regarding the bogus transaction in shares, the said transaction is void ab initio. Thus, applying the principle of fraud, the ITAT held that the assessee was not eligible for exemption of capital gains under Section 10(38) of the Income Tax Act, 1961. The bench...
Department Is Not Allowed To Travel Beyond The Issues Involved In Limited Scrutiny Cases: ITAT
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that the department is not allowed to travel beyond the issues involved in limited scrutiny cases.The two-member bench of N.K. Choudhary (Judicial Member) and Pradip Kumar Kedia (Accountant Member) have observed that the assessee was selected for limited scrutiny, and the addition in hand does not emanate from the grounds on which the case of the assessee was picked up for limited scrutiny.The appellant/assessee filed its...
ITAT Deletes Addition On Cash Deposits Before Demonetisation
The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) has directed the Assessing Officer (AO) to delete the addition made on account of cash deposits made before demonetization.The bench of G. Manjunatha (an accountant member) has observed that as per Section 5 of the Specified Bank Notes (Cessation of Liabilities) Ordinance, 2016, from December 31, 2016, no person shall, knowingly or voluntarily, hold, transfer, or receive any Specified Bank Notes. There was no prohibition on dealing...
Section 45(4) Of Income Tax Act Applicable To Cases Of Subsisting Partners Of A Partnership Transferring The Assets In Favour Of A Retiring Partner: Supreme Court
A Supreme Court bench comprising Justices M.R. Shah and M.M. Sundresh held that Section 45(4) of the Income Tax Act was applicable to not only the cases of dissolution but also cases of subsisting partners of a partnership, transferring the assets in favour of a retiring partner.The respondent assessee, a partnership firm originally consisted of four partners (all brothers) engaging in the business of Dyeing and Printing, Processing, Manufacturing, and Trading in Clothing. Under the family...
Filing Of Form 10–IC Is Mandatory Condition To Claim The Benefit Of Reduced Corporate Tax Rate For The Domestic Companies: ITAT
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that in order to claim the benefit of a reduced corporate tax rate, domestic companies have to mandatorily file Form 10–IC.The two-member bench of Sandeep Singh Karhail (Judicial Member) and Om Prakash Kant (Accountant Member) has observed that the assessee did not file Form 10–IC before the due date of filing the return of income, which is a mandatory condition for claiming the option available under Section 115BAA of the...
Supreme Court Dismisses Department's SLP Against HC Decision Holding That Entrance Fees Received By Club From Its Member Is Capital Receipts
The Supreme Court bench of Chief Justice of India, Justice D.Y. Chandrachud, and Justice Hima Kohli has dismissed the special leave petition of the department challenging the decision of the Bombay High Court. The Bombay High Court has held that any sum paid by a member of a club to acquire the rights of a club is a capital receipt and not a revenue receipt.The assessee or respondent runs the race course in Bombay. During the assessment year 2009-10 and in the years prior, the assessee used to...
Income Tax Assessment made by a non-jurisdictional officer is void: Kolkata ITAT
The Kolkata Income Tax Appellate Tribunal (ITAT) has held that the income tax assessment made by a non-jurisdictional officer is null and void.The two-member bench of Sonjoy Sarma (Judicial Member) and Rajesh Kumar (Accountant Member) has observed that in the case of a non-corporate assessee in non-metro cities, the ITR filed up to Rs. 15 lacs has to be assessed by ITO. Therefore, the assessment was made in violation of Instruction No. 1 of 2011 by the CBDT.The return of income was filed,...
Tax Cases Weekly Round-Up: 13 November To 19 November 2022
Supreme CourtSec.194H Income Tax Act Attracted For 'Supplementary Commission' Earned By Travel Agents ; Airlines Liable To Deduct TDS : Supreme CourtCase Title: Singapore Airlines Ltd. vs C.I.T., Delhi Citation: 2022 LiveLaw (SC) 959 The Supreme Court held that Section 194H of the Income Tax Act is attracted in the case of Supplementary Commission amounts earned by the travel agent and therefore Airlines are liable to deduct TDS in this regard. The bench comprising Justices Surya...
VAT Not Fee/Charge; Cannot Be Disallowed As Deduction Under Section 40(a)(iib) of Income Tax Act: ITAT
The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) has ruled that payment of Value Added Tax (VAT) by Tamil Nadu State Marketing Corporation, a State Government undertaking, is not a fee or charge, or an appropriation made by the State Government, and thus, it cannot be disallowed as deduction under the provisions of Section 40(a)(iib) of the Income Tax Act, 1961. The bench of Mahavir Singh (Vice President) and Dr. Dipak P. Ripote (Accountant Member) held that since the...
ITAT Fastens Capital Gain Liability On Owner selling property through GPA Holder
The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) has fastened capital gain liability on owners executing General Power of Attorney (GPA) and selling property through GPA holders.The two-member bench headed by Mahavir Singh (Vice President) and G. Manjunatha (Accountant Member) has observed that the GPA has nowhere given possession to the GPA holder, and he has only executed the sale deed. As per the clear terms of the Power of Attorney (PoA), the principal has to receive monetary...
Unrealized sale proceeds have to be excluded from export turnover as well as total turnover: ITAT
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that unrealized sale proceeds have to be excluded from an export turnover as well as total turnover.The two-member bench headed by Mahavir Singh (Vice President) and G. Manjunatha (Accountant Member) has directed the AO to re-compute deduction by excluding unrealized sale proceeds from an export turnover as well as total turnover.The assessee appealed against the exclusion of unrealized sale proceeds of Rs. 24,32,35,200 from...
Employees' Contribution To PF And ESI Should Be Remitted Before The Due Date To Allow Income Tax Deduction: ITAT
The Banglore Bench of the Income Tax Appellate Tribunal (ITAT) has held that the employees' contribution to PF and ESI should be remitted before the due date for it to be allowable under Section 43B of the Income Tax Act.The two-member bench of George George K (Judicial Member) and Laxmi Prasad Sahu (Accountant Member) relied on the decision of the Supreme Court in the case of Checkmate Services (P.) Ltd. v. CIT, in which it was held that Section 43B(b) does not cover employees' contributions to...