Seized Documents Lack Information About Receipt Of Money: Mumbai ITAT Deletes Addition

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has deleted the income tax addition of Rs. 1.61 crores on the grounds that the seized documents lack information as to date and mode of receipt of “on money.”.The bench of Anikesh Banerjee (Judicial Member) and B.R. Baskaran (Accountant Member) has observed that the entries made in the document fall short of certain material facts, viz., date and mode of receipt of “on money," who had paid the money, to whom the money was paid, date of...

Income Tax Disallowance Based On Presumptions Of Earning Dividend Income In Future Is Not Sustainable: Mumbai ITAT

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that income tax disallowance based on presumptions of earning dividend income in the future is not sustainable.The bench of Raj Kumar Chauhan (Judicial Member) and Padmavathy S (Accountant Member) has observed that the AO has proceeded for disallowance made on the basis of presumptions that the investment was made from borrowed funds bearing interest expenditure, which may earn dividend income in the future, and the...

Purchasing Of Agricultural Land Is Outside Definition Of Capital Asset; Delhi ITAT Deletes Addition

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the assessee has purchased agricultural land, which is outside the definition of a capital asset; therefore, the deeming provision under Section 56(2)(x) of the Income Tax Act cannot be invoked.The bench of Sudhir Pareek (Judicial Member) and S.Rifaur Rahman (Accountant Member) has observed that the assessee purchased agricultural land and paid a sum of Rs. 20,00,000 as purchase consideration. The assessee also filed the...

Submission Of Form-67 Is Not Mandatory For Availing Foreign Tax Credit: Delhi ITAT

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that submission of Form-67 is not mandatory for availing foreign tax credit (FTC).The bench of Sudhir Pareek (Judicial Member) and S. Rifaur Rahman (Accountant Member) has observed that filing Form-67 is a procedural or directory requirement and is not a mandatory requirement. Therefore, a violation of procedural norms does not extinguish the substantive right to claim credit from the FTC. A resident taxpayer who has credit for the...

Income Tax Addition On Unaccounted Sales And Purchases Can't Be Solely Based On Loose Slips: ITAT Bangalore

The Banglore Bench of Income Tax Appellate Tribunal (ITAT) has deleted the income tax addition of Rs. 1.36 crore on alleged unaccounted sales and purchases that were solely based on loose slips.The bench of Keshav Dubey (Judicial Member) and Chandra Poojari (Accountant Member) has observed that the onus lies upon the Department to collect cogent evidence to corroborate the notings on the loose sheets. The additions cannot be made merely on the basis of notings on the loose sheet papers, which...

ITAT Cases Weekly Round-Up: 09 To 15 June 2024

Income From Reselling Of Subscription Based Product Is Royalty: ITATCase Title: Gartner Ireland Ltd. Versus DCITThe Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that the income from the reselling of subscription-based products is royalty.Income Tax Deduction Allowable On Expenditure Incurred On Warranty Claim: ITATCase Title: Grey Orange India Pvt. Ltd. Versus ACITThe Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the income tax deduction is allowable on...

Assessments Concluded U/s 153A Without Mandatory Approval U/s 153D Would Be Void: Delhi ITAT

The Delhi ITAT allowed the Assessee's appeal challenging assessments completed u/s 153A r/w Section 143(3) as void, in absence of mandatory approval u/s 153D. Section 153D of the Income Tax Act, mandates that no order of assessment or reassessment shall be passed by an AO below the rank of Joint Commissioner without the prior approval of the Joint Commissioner or a higher-ranking officer. The Division Bench comprising G.S. Pannu (Vice President) and Anubhav Sharma (Judicial...

Absence Of 'FTS' In Treaty Is No Basis To Tax Technical Services Rendered To AE, In Absence Of Its PE In India: Delhi ITAT

The Delhi ITAT ruled that though income received by a non-resident entity towards services provided to Indian associate enterprises (AE) are in nature of 'fees for technical service' (FTS), but same cannot be taxed in India simply in absence of FTS clause under respect treaty provisions. The Division Bench comprising G.S. Pannu (Vice-President) and Anubhav Sharma (Judicial Member) also clarified that the services provided to AE are in nature of business activity covered under Article...

ITAT Calcutta Allows Exemption Registration To Income Tax Bar Association, Sets Aside CIT Order

The Calcutta Bench of Income Tax Appellate Tribunal (ITAT) has allowed the exemption registration to the income tax bar association as the registration application was not time-barred.The bench of Rajpal Yadav (Vice President) and Sanjay Awasthi (Accountant Member) has observed that the procedure adopted by the CIT (Exemption) was incorrect to grant a provisional certificate to the assessee at the first stage and then to deny the regular certificate under Section 80G(5)(iii) of the Income Tax...

RPM Is Most Appropriate Method To Benchmark Transaction Of Purchase Of Solar Goods: ITAT

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the Resale Price Method (RPM) is the most appropriate method to benchmark the transaction of the purchase of solar goods.The bench of Vikas Awasthy (Judicial Member) and Pradip Kumar Kedia (Accountant Member) has observed that where there is no value addition made before reselling the product, RPM is the most appropriate method. Except for suspicion, the revenue has not been placed on record, and there is no documentary...

Income Tax Deduction Allowable On Expenditure Incurred On Warranty Claim: ITAT

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the income tax deduction is allowable on expenditures incurred on warranty claims.The bench of Kul Bharat (Judicial Member) and M. Balaganesh (Accountant Member) has relied on the decision of the Supreme Court in the case of Rotork Controls India (P) Ltd., in which it was held that if the facts establish or show that defects existed in some of the items manufactured and sold, then the provision made for warranty in respect of...

Income From Reselling Of Subscription Based Product Is Royalty: ITAT

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that the income from the reselling of subscription-based products is royalty.The bench of Kavitha Rajagopal (Judicial Member) and Om Prakash Kant (Accountant Member) has observed that the assessee has sold not only the digital product but also all copyrights therein, which squarely falls under the definition of 'royalty' both under Article 12 of the Double Taxation Avoidance Treaty (DTAA) between India and Ireland and provisions...