Salaries Paid By Foreign Bank's Head Office To Expatriates Working For Indian Branch Not Head Office Expenses: ITAT Mumbai

Salary paid by the head office of a foreign bank to expatriate employees working exclusively for its Indian operations cannot be treated as head office expenditure merely because the payment was initially made outside India, the Mumbai Income Tax Appellate Tribunal (ITAT) has held. A bench of Judicial Member Beena Pillai and Accountant Member Arun Khodpia dismissed the Revenue's appeal. It upheld the Commissioner (Appeals)' order allowing Standard Chartered Bank's claim for deduction of...

Carbon Credit Sale Receipts Are Capital Gains, Not Taxable Before AY 2017-18 : ITAT New Delhi

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) on 13 July held that receipts from the sale of carbon credits are capital receipts and are not taxable for Assessment Years 2012-13 and 2013-14. Judicial Member Satbeer Singh Godara and Accountant Member Manish Agarwal dismissed the Revenue's appeals and partly allowed the appeals filed by Jindal Saw Ltd. (formerly known as Saw Pipes Ltd.). The Bench observed: “We conclude in this factual backdrop that the assessee's impugned...

Standard Asset Provision Write-Back Can't Be Taxed Twice If Already Accounted For: Mumbai ITAT Remands Issue

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has remanded to the Assessing Officer (AO) the issue of taxability of a ₹3.14 crore write-back of general provision for standard assets, observing that if the assessee had already accounted for the amount in its profit and loss account and neutralised its effect while computing taxable income, it could not be brought to tax again. A bench of Judicial Member Beena Pillai and Accountant Member Arun Khodpia partly allowed the appeal...

Charitable Status Cannot Be Denied Merely Because Activities Benefit Specific Industry: ITAT New Delhi

The New Delhi Bench of the Income Tax Appellate Tribunal (ITAT) on 10 July held that an institution does not lose its charitable character merely because its activities benefit a specific industry, and set aside the Commissioner (Exemptions)'s order rejecting registration of the National Lubricating Grease Institute India Chapter under Sections 12AA/12AB of the Income Tax Act. A Bench comprising Accountant Member S. Rifaur Rahman and Judicial Member Vimal Kumar held: “Only because of...

Late Corrigendum To Final Assessment Order Cannot Cure Failure To Follow DRP Directions: ITAT Delhi

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has quashed an assessment order passed against an Indian subsidiary of a foreign technology company. The tribunal held that the Assessing Officer could not rectify the failure to give effect to the Dispute Resolution Panel's (DRP) directions by issuing a corrigendum after the statutory time limit had expired. A bench of Judicial Member Raj Kumar Chauhan and Accountant Member S. Rifaur Rahman observed that the final assessment order,...

ITAT Chennai Upholds Deletion Of Unexplained Money Addition Against Forex Commission Agent

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) has upheld the deletion of an addition of ₹3.44 crore made against an individual who worked as a commission agent for foreign exchange companies. It held that cash withdrawn from the agent's own bank account for disbursal to customers could not be treated as unexplained money under Section 69A of the Income Tax Act, which addresses unexplained assets. The case involved an individual who acted as an authorised sub-agent for...

ITAT Delhi Quashes Reassessment After AO Failed To Decide Objections Before Proceeding

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has recently quashed a reassessment against Meramandali Finvest Ltd., holding that the Assessing Officer was required to dispose of the assessee's objections to the reopening by passing a separate speaking order before proceeding with the reassessment. A bench of Judicial Member Satbeer Singh Godara and Accountant Member Naveen Chandra observed: "It is now settled law by a series of judicial precedents that the failure of the...

ITAT Ahmedabad Upholds Rejection Of Tax Deduction Claim On ₹12 Lakh Donation To Political Party

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has upheld the denial of a tax deduction claimed by a salaried taxpayer on a ₹12 lakh donation made to a political party, holding that he failed to establish that the contribution was genuine and eligible for deduction. A division bench of Vice-President Dr. B.R.R. Kumar and Judicial Member Rahul Chaudhary observed, "the assessee has failed to establish that the impugned contribution represented a genuine donation eligible for...

AO Cannot Grant Fresh Opportunity To Extend Reassessment Notice Deadline: ITAT Ahmedabad

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) on 7 July held that a reassessment notice issued after the expiry of the prescribed “surviving period” under the Income Tax Act, 1961 is barred by limitation. Vice President Dr. B.R.R. Kumar and Judicial Member Rahul Chaudhary allowed the appeal filed by Scarlet Tradelink Private Limited against the order of the National Faceless Appeal Centre for Assessment Year 2016-17 and quashed the reassessment proceedings. The Bench observed:...

Non-Recourse Sale Of Future Rent Receivables Not Borrowing Or Interest For TDS Purposes: ITAT Chennai

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) on 6 July held that discounting charges arising from the assignment of future rent receivables on a non-recourse basis cannot be treated as interest under the Income-tax Act, 1961, and therefore do not attract tax deduction at source (TDS) under Section 194A (which requires deduction of tax on interest other than interest on securities). A Single Member Bench comprising Judicial Member R. Muralidhar allowed seven appeals filed by OPC...

Section 263 Assessment Cannot Survive After Original Order Is Quashed As Time Barred: ITAT Kolkata

On 8 July, the Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) held that a fresh assessment order passed pursuant to revision proceedings cannot survive once the original assessment has been quashed as time barred. It becomes “invalid and void ab initio” since the original assessment no longer exists in law. Judicial Member Pradip Kumar Choubey and Accountant Member Rajesh Kumar allowed the cross objection filed by Dozco India Private Limited and dismissed the Revenue's appeal as...

ITAT Delhi Deletes ₹13.97 Crore TP Adjustment Against Coca-Cola India Over Delayed Receivables

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has recently held that Coca Cola India Inc.'s Indian branch cannot be subjected to a transfer pricing adjustment over delayed recovery of receivables from its Associated Enterprises (AEs) where it had no borrowings and its working capital requirements were entirely funded by its US head office. A bench of Judicial Member Vimal Kumar and Accountant Member S. Rifaur Rahman partly allowed the Revenue's appeal only on the issue of interest...