'Cannot Wear Cap of A Businessman': ITAT Delhi Deletes ₹53.30 Lakh Disallowance Against Zeta

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has granted relief of Rs. 53.30 lakh to Zeta Buildtech Pvt. Ltd., a distributor of liquor and beverages, by deleting disallowances on payments to independent service providers and holding that the Revenue cannot question the commercial wisdom of such expenditure. For Assessment Year 2020–21, Zeta had declared total income of ₹98.48 lakh.The Assessing Officer had disallowed Rs. 31.80 lakh paid to S.P. Jindal Financial Services Limited...

ITAT Chennai Deletes Penalty for Under-Reporting Of Income After Finding 99% Tax Covered by TDS

The Chennai Bench of the Income Tax Appellate Tribunal has recently deleted a Rs. 2.57 lakh penalty imposed under Section 270A of the Income Tax Act (penalty for under-reporting of income) on an individual salaried taxpayer. The tribunal noted that TDS (tax deducted at source) on the assessee's salary had almost covered 99% of the total tax demand and held that, “When tax liability is covered by TDS, there is no manafide intention on the part of the assessee to conceal any particulars of...

ITAT Delhi Quashes Revision Order Against Studds, Flags Lack of Clear Findings

The Delhi Bench of the Income Tax Appellate Tribunal has recently set aside a revision order passed against Studds Accessories Limited for Assessment Year 2020–21, holding that the Principal Commissioner failed to show how the assessment was “erroneous as well as pre-judicial to the interest of the revenue.” Studds Accessories Limited is a popular two-wheeler helmert manufacturer. Allowing the appeal, the Bench of Judicial Member Raj Kumar Chauhan and Accountant Member S. Rifaur Rahman said...

ITAT Mumbai Upholds Fresh Examination of Ambuja Cements' AY 2019–20 Assessment For Lack Of Inquiry

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has dismissed Ambuja Cements Limited's appeal against a revision order that had set aside its completed tax assessment for fresh verification, holding that the original assessment was passed “without due examination and verification.” The company had challenged the Principal Commissioner of Income Tax's order under Section 263 revising and setting aside its Assessment Year 2019–20 assessment on the ground that the Assessing Officer...

ITAT Delhi Quashes Tax Revision Against Senior Advocate Mukul Rohatgi For AY 2020–21

The Delhi Bench of the Income Tax Appellate Tribunal on Monday quashed a revision order passed against Senior Advocate Mukul Rohatgi for Assessment Year 2020–21, holding that the Income Tax Department lacked material to exercise its revision powers for an assessment of Rs.133.46 crore. Section 263 allows a senior tax officer to revise a completed assessment if it is found to be erroneous and prejudicial to the interests of the Revenue. In Rohatgi's case, the Tribunal held that these...

Reopening Of Assessment Invalid If AO Fails To Show Reason To Believe: ITAT Chennai

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) on 2 February quashed the reopening of assessment against a SEBI-registered stock broker, holding that the Assessing Officer failed to satisfy the “reason to believe” requirement under Section 147 of the Income Tax Act, 1961. Judicial Member Abhy T. Varkey and Accountant Member S.R. Raghunatha observed that the recorded reasons were “extremely scanty and vague.” They further held: “According to us, the reasons recorded should be...

ITAT Chennai Cancels Rs 1.5 Lakh Penalty For Delayed Audit Filing, Cites Reasonable Cause

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) on 2 February deleted a penalty of Rs. 1,50,000 imposed on a jewelry export company for delayed filing of its audit report under Section 44AB of the Income-tax Act, 1961. A Bench of Judicial Member Abhy T. Varkey and Accountant Member S.R. Raghunatha, observed that penalty provisions could not to be mechanically invoked and that the assessee was prevented by “reasonable cause.” They held: “Penalty provisions being quasi-criminal...

ITAT Chennai Rules Cash Deposits Can Be Set Off Against Earlier Advances, Deletes ₹20 Lakh Addition

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) on 2 February deleted an addition of Rs. 20 lakh on a taxpayer out of the total Rs. 39.95 lakh made towards unexplained cash deposits and bank credits, observing that earlier bank deposits or cash advances can be set off against the said deposits.The matter was heard by Judicial Member Manu Kumar Giri and Accountant Member S.R. Raghunatha. The Bench noted that cash deposits of Rs. 20,00,000 in UCO Bank, made by Dhanabalan Selvamuthu...

Organising Ramkatha, Bhagwat Katha Not 'Wholly Religious', 80G Approval Cannot Be Denied To Charitable Trust: ITAT Ahmedabad

The Income Tax Appellate Tribunal at Ahmedabad has recently held that a charitable trust cannot be denied approval under Section 80G of the Income Tax Act merely because one of its objects provides for organising Ramkatha, Bhagwat Katha, and similar programmes for raising funds. A coram of Judicial Member Sanjay Garg and Accountant Member Narendra Prasad Sinha observed that object of the trust “cannot be said to be wholly or substantially religious in nature,” and that organising Ramkatha and...

ITAT Mumbai Sets Aside ₹1.14 Crore Transfer Pricing Adjustment For Lack Of Proper FAR Analysis

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) on 6 January set aside a transfer pricing adjustment of Rs. 1.14 crore against Corporate Worldwide Stay LLP, after finding that the revenue authorities had proceeded on assumptions about the firm's functions and risks without a proper FAR analysis.The bench, comprising Judicial Member Anikesh Banerjee and Accountant Member Vikram Singh Yadav remitted to the assessing officer and transfer pricing officer for fresh adjudication.The...

ITAT Delhi Denies DTAA Capital Gains Benefit To Hareon Solar Singapore, Says Entity Set Up For Treaty Benefit

The Income Tax Appellate Tribunal at New Delhi has denied capital gains tax exemption to Hareon Solar Singapore Pvt. Ltd. under the India–Singapore Double Taxation Avoidance Agreement, holding that the company was set up solely for claiming the tax benefit. The tribunal comprising Judicial Member Raj Kumar Chauhan and Accountant Member Ramit Kochar held, “Thus, we hold that the assessee company was created for the principal purposes of taking a tax advantage under the India-Singapore DTAA,...

ITAT Amritsar Directs Fresh Verification Of Rs. 1.03 Crore Deposits By Jewellery Company During Demonetisation

The Amritsar Bench of the Income Tax Appellate Tribunal (ITAT) last month remanded a demonetisation-related reassessment case to the Assessing Officer for fresh verification of purchase bills, sale bills, and receipt vouchers that were not examined at the assessment stage. A Bench comprising Manoj Kumar Aggarwal, Accountant Member, and Udayan Dasgupta, Judicial Member was hearing an appeal by Chand Jewellers, a partnership firm engaged in gold jewellery business against the confirmation of an...