Appeal By Assessee Prior To Declaration Under VSVS Act, Shall Revive On Failure To Pay the Tax Determined: ITAT

The Chennai bench of the Income Tax Appellate Tribunal (ITAT) has ruled that if the assessee violates the conditions prescribed under the Direct Tax Vivad Se Vishwas Act, 2020 (DTVSVS Act) by not paying the tax determined by the designated authority, the appeal filed by it prior to filing a declaration under the DTVSVS Act, disputing the tax liability raised against it, shall revive under Section 4(6) of the DTVSVS Act. The bench of V. Durga Rao (Judicial Member) and G. Manjunatha...

Source of cash deposits can't be discarded if shown On Cashbook Entries: ITAT

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that a cash flow statement based on the entries made in the cash book reveals the source of cash deposited in the bank account and cannot be discarded by the authorities below.The two-member bench of Kul Bharat (Judicial Member) and N.K. Billaiya (Accountant Member) has directed the Assessing Officer to delete the addition of Rs. 7,65,000.The assessee/appellant preferred the appeal against the order framed by the National...

Interest Earned On FDs Kept As Security For PG Is Taxable As Business Income: ITAT

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that the interest income earned on fixed deposits kept as security for performance guarantees is taxable as business income and can be set off against project expenses.The single bench of Saktijit Dey (Judicial Member) has directed the Assessing Officer to refund the TDS amount to the assessees.The assesses/appellants are resident corporate entities and are wholly owned subsidiaries of National Commodities Management Services...

Sec.194H Income Tax Act Attracted For 'Supplementary Commission' Earned By Travel Agents ; Airlines Liable To Deduct TDS : Supreme Court

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 Kant and MM Sundresh upheld the Delhi High Court judgment and overruled the Bombay High Court judgment in CIT v. Qatar Airways [2009 SCC OnLine Bom 2179] that had held otherwise.Section 194HSection 194H of the IT Act was introduced by the Finance...

ITAT Allows Deduction To SBI On Total Outstanding Advances At The End Of Each Month Considering The Opening Balances

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has allowed the deduction to the State Bank of India (SBI) on the total outstanding advances at the end of each month, considering the opening balances.The three-member bench of Pramod Kumar (Vice President), Aby T. Varkey (Judicial Member), and Sandeep Singh Karhail (Judicial Member) has relied on the decisions of the Calcutta High Court in PCIT vs. Uttarbanga Kshetriya Gramin Bank and the Madras High Court in CIT vs. M/s City Union...

Tax Cases Weekly Round-Up: 6 November to 12 November 2022

Delhi High CourtExpenses Towards Advertisement, Brokerage And Commission, Incurred By A Real Estate Developer; Deductible As Revenue Expenditure: Delhi High Court Case Title: Commissioner of Income Tax versus Somnath Buildtech Pvt. Ltd. Citation: 2022 LiveLaw (Del) 1048 The Delhi High Court has ruled that advertisement expenses, Software Developing Charges, and expenses towards brokerage and commission, incurred by a real estate developer, are in the nature of general ...

Reliance Industrial Holdings and Biomatrix Not Associated Enterprises, No income Escaped : ITAT

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that Reliance Industrial Holdings and Biomatrix were associated enterprises, and, therefore, it could not be said that any income on account of Arm's Length Pricing (ALP) has escaped assessment.The two-member bench headed by Pramod Kumar (Vice President) and Sandeep S. Karhail (Judicial Member) has quashed the reassessment proceedings and observed that the AO's recorded reasons for reopening the assessment were unsustainable...

Liability To Deduct TDS Under Section 201 of Income Tax Act Is A Vicarious Liability, Which Ends With Discharge Of Principal Liability Of Recipient Of Income: ITAT

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has ruled that the liability to deduct tax at source (TDS) under Section 201 read with Section 195 of the Income Tax Act, 1961, is a vicarious liability of the payer of an income and thus, the liability to deduct TDS ceases to exist when the primary liability of the recipient of income is already discharged. The Bench of Pramod Kumar (Vice President) and Amit Shukla (Judicial Member) held that the provisions of Section 201 of...

Assessee Proved Creditworthiness Of Loan Transactions: ITAT Deletes Addition

The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) has deleted the addition as the assessee proved the creditworthiness of loan transactions.The two-member bench of Sanjay Garg (Judicial Member) and Rajesh Kumar (Accountant Member) has observed that where all the evidence were filed by the assessee proving the identity and creditworthiness of the loan transactions, the fact that summons issued were returned unserved or no one complied with them is of little significance to prove the...

Software Development Expenses For Rendering Services To Clients Is Revenue Expense: ITAT

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that the software development expenses for rendering services to clients are revenue expenses.The two-member bench of Vikas Awasthy (Judicial Member) and Gagan Goyal (Accountant Member) has observed that the expenditure has been incurred in the regular course of business of the assessee and for earning revenue and profits, hence the expenditure is on the revenue account.The assessee/appellant is in the business of process...

Payment Made To Non-Resident Marketing Partners for Sale Services is FTS: ITAT

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) has held that payment made by the assessee to non-resident marketing partners for providing pre and post-sale services related to software solutions is in the nature of fees for technical services (FTS).The two-member bench of V. Durga Rao (Judicial Member) and G. Manjunatha (Accountant Member) has observed that since the assessee has failed to deduct TDS when payments are made to non-residents, the CIT(A) has rightly disallowed...

ITAT Restricts Addition To Estimated Profit Of 30% Of Cash Deposits Made During Demonetisation Period

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) has directed the AO to estimate a 30% net profit on total cash deposits made during the demonetization period and deleted the balance additions made under Section 69A of the Income Tax Act.The two-member bench of V. Durga Rao (Judicial Member) and G. Manjunatha (Accountant Member) observed that neither the assessee proved its arguments for the cash deposits nor the AO reached the conclusion that the explanation offered by the assessee...