ITAT Half Yearly Digest: January To June 2024 - PART II

Failure To Produce Share Certificate Is No Basis To Doubt Share Purchase Transaction: Mumbai ITAT Refers Art 265 Of ConstitutionCase Title: Shantaben Fathechand Mehta verses Income-tax Officer Referring to Article 265 of the Constitution of India, the Mumbai ITAT remanded the case to the file of AO with direction to verify factual aspects, pertaining to the purchase of the shares in consideration and re-compute the liability accordingly.Trading Income From Sale Of Scrips Can't Be Conferred As...

ITAT Half Yearly Digest: January To June 2024 - PART I

S. 54F Exemption Not Available On Property Predominantly Being Used For Religious Purposes: ITATCase Title: Asstt. CIT Versus Iqbal Ali KhanThe Hyderabad Bench of Income Tax Appellate Tribunal (ITAT) has held that exemption under Section 54F of the Income Tax Act is not available on property predominantly being used for religious purposes.ITAT Deletes Addition Of Unexplained Investment In Stock Valuation DifferenceCase Title: Ethiraj Hotel Mart Versus DCITThe Chennai Bench of Income Tax...

Non-Filing Of GST By Supplier Can't Be The Reason For Reopening Assessment After 4 Years: ITAT

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that no reopening can be done after the expiry of four years from the end of the relevant assessment year unless any income chargeable to tax has escaped assessment for the reasons of the failure on the part of the assessee to disclose truly and wholly all material facts necessary for the assessment. The bench of Amit Shukla (Judicial Member) and Gagan Goyal (Accountant Member) has observed that the assessment was already...

No Material To Prove Cheque Paid For Donation Has Been Ploughed Back By Way Of Cash: ITAT

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has allowed deduction to the assessee as there was no material to prove that the check paid for donation has been ploughed back by way of cash.The bench of Sunil Kumar Singh (Judicial Member) and B.R. Baskaran (Accountant Member) has observed that the AO has not brought any material to disprove the evidence furnished by the assessee with regard to the donations it has made to the institutions. There is also no proof to show that the check...

Income Tax Addition Can't Be Made On Cash Deposits During Demonetization Period: Delhi ITAT

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the department is precluded from making any addition under Section 68 of the Income Act in respect of the cash deposits made into bank accounts during the demonetization period.The bench of Challa Nagendra Prasad (Judicial Member) and Avdhesh Kumar Mishra (Accountant Member) has observed that there cannot be any addition under Section 69A of the Income Tax Act in respect of cash deposits made by the assessee into its bank...

Licence Fees Received Towards Live Transmissions Of Cricket Matches Held In Australia, Not Taxable In India As Royalty: Delhi ITAT

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the licence fees received by the assessee towards live transmissions of cricket matches held in Australia are not taxable in India as royalty.The bench of G.S. Pannu (Vice President) and Anubhav Sharma (Judicial Member) have observed that Balkrishna Industries Limited (BAL) as sponsor did not have any exclusive rights in the use of the logo of the assessee or the event of Big Bash League. The logo was to be used in restricted...

Section 80P(2)(d) Deduction Allowable To Co-operative Society On Interest Earned From Co-operative Bank: Delhi ITAT

The Delhi bench of Income Tax Appellate Tribunal (ITAT) has held that the deduction under Section 80P(2)(d) of the Income Tax Act is allowable to the co-operative society on interest earned from co-operative banks.The bench of Kul Bharat (Judicial Member) has observed that the assessee is a Co-operative society and it has earned interest and dividend income by making deposits with the Delhi State Co-operative Bank Ltd. which is registered under Co-operative Societies Act and the Division Bench...

ITAT Cases Monthly Round Up: June 2024

Salary Reimbursements Of Seconded Employees Is Not Taxable As Fees For Technical Services: ITATCase Title: IBM Canada Limited Versus DCITThe Bangalore Bench of Income Tax Appellate Tribunal (ITAT) has held that salary reimbursements of seconded employees are not taxable as fees for technical services.ITAT Quashes Assessment Order Against Bret Lee As Reassessment Notice Not Served Within Limitation PeriodCase Title: M/s. Valeo Friction Materials India Ltd. Versus Commissioner of CustomsThe...

Net Profit Shall Be Estimated @2.75% Of Total Turnover In Case Its Rate Is Highest In First Year Of Operation: Cuttack ITAT

Finding that the assessee has shown highest rate of net profit in its first year of business, the Cuttack ITAT directed for estimation of net profit @2.75% on the total turnover of the assessee after reduction of the airport rent cost, sheet cost and truck rent cost as there is no possibility of assessee earning any income out of the said expenses. The Bench of Manish Aggarwal (Accountant Member) and George Mathan (Judicial Member) observed that “the assessee has shown the highest...

Rejection Of Belated Objections By DRP Does Not Extend Limitation Of Passing Final Assessment U/s 144(4): Delhi ITAT

The New Delhi ITAT held that once the DRP has chosen to reject the objections of assessee on the ground of delay, its resultant effect is confirmation of merits of draft order passed by the AO. However, the ITAT clarified that such rejection by DRP on ground of delay in no way extends the limitation of passing the final assessment order u/s 144(4) of the Act. The ITAT held so while finding that though the DRP has rejected the objections, but did not issue any directions for the...

Reasonable Cause Excludes Operation Of Sec 271D: Bangalore ITAT Deletes Penalty

The Bangalore ITAT held that that Revenue Department cannot adopt the tactics of pick and choose while assessing the citizens of India, as it would be violative of Article 14 of the Constitution. Hence the ITAT deleted the penalty levied by AO u/s 271D on assessee for receiving excessive cash in contravention of taxation statute, upon sale of property. Section 271D of the Income Tax Act lays down the penalty to be imposed on a taxpayer for accepting or taking any loans,...

Payment By Indian Entity To Its AE Abroad Is Not 'FTS' If Technical Skill Is Not Made Available By AE: Bangalore ITAT

The Bangalore ITAT held that payment made by Assessee (Indian entity) to its foreign AE (Parent entity) for obtaining administrative services will not be taxable as FTS/FIS in India in terms of Indo USA DTAA, in absence of 'make available' clause in the agreement between both the parties. Article 12(4) of India USA DTAA states that 'fees for included services' means payments of any kind to any person in consideration for the rendering of any technical or consultancy services (including...