Issuance Of Letters Of Comfort/Support Will Construe As International Transaction U/s 92B: Mumbai ITAT

The Mumbai ITAT recently ruled on selection of comparable and transfer pricing adjustment on account of non-recovery of charges for providing letter of comfort/support and royalty in case of company engaged in manufacturing paints and enamels. Under the assessee's support services and intragroup services segment, the Bench excluded two companies, namely, Axis Integrated Systems Ltd, and Inmacs Management Services Ltd citing functional dissimilarity and unavailability of complete data...

Assessee Is Eligible For Credit Of TCS Paid U/S 194Q If There Is No Shortfall In Payment Of TDS: Vishakhapatnam ITAT

On finding that there is no short fall of TDS and the assessee is eligible to get credit of the entire amount, the Visakhapatnam ITAT directed the AO to grant credit of the entire amount deducted as tax at source u/s. 194Q of the Income Tax Act. The Bench of Duvvuru Rl Reddy (Judicial Member) observed while referring the CBDT Circular No. 452 that “kaccha arahtias are concerned, the turnover does not include the sales effected on behalf of the principals and only the gross commission...

No Addition Permitted U/s 69A Once Taxpayer Properly Explains Source Of Cash Deposit: Vishakhapatnam ITAT

Finding that the assessee has properly explained the source of cash deposit, the Visakhapatnam ITAT directed the AO to delete the addition made u/s 69A of the Income Tax Act. The Bench of Duvvuru Rl Reddy (Judicial Member) observed that “the assessee has mentioned about the receipts of sale consideration as per the sale of agreement in his books of accounts. As per the agreement of sale, the purchaser has paid the sale consideration of Rs. 30 lakhs to the assessee. But...

Correction In Form 35A Is No Basis To Treat Such Form As Filed Beyond Time Limit: Mumbai ITAT Allows Expenses Incurred In Earning Capital Gain

Since the AO did not consider that assessee has incurred expenses as per the terms & conditions of the agreement, the Mumbai ITAT directed the AO to allow the claim of the assessee to treat Form No. 35A as filed after verification of the copy of agreement and copy of bank statement filed by the assessee. The Bench of Amit Shukla (Judicial Member) and Amarjit Singh (Accountant Member) observed that “it is evident that assessee has made correction in the form 35A which cannot be...

Time Barred Notice Issued U/s 153C And Consequent Assessment Order Passed U/s 143(3) R/w/s 153C Is Void Ab Initio: Chennai ITAT

The Chennai ITAT held that since the notice issued by AO for subject assessment year falls beyond the stipulated six assessment years and four relevant assessment years, considering the satisfaction note, the notice issued by AO u/s 153C of Income tax Act for initiation of proceeding against assessee and consequent assessment order passed u/s.143(3) r/w/s 153C is barred by limitation, void ab initio and liable to be quashed. The Bench of Manjunatha. G (Accountant Member) and Manomohan...

Assessment Made Purely Based On Assumption & Unverified Statement Of Third Party, Is Bad In Law: Mumbai ITAT

Finding that the AO has completely relied on the statement of third party without giving opportunity to the assessee to prove its point of view, which is against natural justice, the Mumbai ITAT held that such assessment order to be bad in law which was made purely on the basis of assumption and unverified statement of the third party. The ITAT also held that the addition cannot be made without bringing proper material on record or bringing on record the proper joint statement from the...

ITO Can Presume That Books Of A/C Found During Search U/s 132/ Survey U/s 133A Belongs To Person Upon Whom Said Action Is Initiated: Delhi ITAT

While rejecting the appeal challenging the validity of notice issued u/s 153A, the New Delhi ITAT held that section 292CC of the Income Tax Act empowers an officer to presume that the books of account or other document found during search u/s 132 or survey u/s 133A belongs to a person upon whom search or survey has been done. The Bench of M. Balaganesh (Accountant Member) and Yogesh Kumar U.S. (Judicial Member) reiterated while referring the decision of Orrisa High Court in the case of...

AO Can't Reopen Assessment Beyond Period Of Four Years When There Was Full Disclosure By Assessee: Mumbai ITAT

On finding that the reopening of the assessment is beyond the time limit provided under the proviso to Section 147 of the Income Tax Act, the Mumbai ITAT quashed the order of disallowance passed by the AO for disallowing the interest paid for acquisition of the property from computation of short-term capital gain. The Bench of Amit Shukla (Judicial Member) and S Rifaur Rahman (Accountant Member) observed that “The permissible condition for reopening the assessment beyond the period of...

Ascertained Liability Can't Be Added Back As Per Clause (C) Of Explanation-1 To Sec 115JB(2): Mumbai ITAT

On finding that the liability of payment to Core SGF by the assessee is ascertained, the Mumbai ITAT held that it cannot be added back as per clause (c) of Explanation-1 to section 115JB(2) of the Income Tax Act. The Bench of the ITAT comprising of Aby T. Varkey (Judicial Member) and S Rifaur Rahman (Accountant Member) observed that “in assessee's own case for AY 2016-17 this Tribunal had allowed the claim made by assessee on account of contribution made to the Core SGF u/s 37(1) of...

Addition U/s 68 Should Be Restricted To Extent Of Gross Profit At Same Rate Of Genuine Purchases If Sales Are Not Disputed: Mumbai ITAT

While deleting the addition made u/s 68 of the Income Tax Act, the Mumbai ITAT held that in the absence of any dispute and discrepancy in the sales, the addition should be restricted to the extent of gross profit at the same rate of the genuine purchases. The Bench of the ITAT comprising of Rahul Chaudhary (Judicial Member) and Prashant Maharishi (Accountant Member) observed while referring the decision of the Bombay High Court in case of PCIT vs. Mohd. Haji Adam and Co. that “where ...

Pune ITAT Grants Additional Opportunity To 'Lady Of Hope Church' To Establish Genuineness Of Its Charitable Activity

While allowing the appeal challenging the cancellation of provisional registration of the applicant trust u/s 12AB of the Income Tax Act, the Pune ITAT set aside the order of CIT(E) and remanded the matter back to specifically examine the genuineness of the charitable activities performed by the trust as per his satisfaction. The ITAT directed the applicant to file all the relevant documents/evidence as and would be called for by the office of CIT(E). The Bench stated that this is the...

No Adhoc Disallowance Is Permitted Without Rejecting Books Of Account: Mumbai ITAT

On finding that the AO had audited and still not rejected the books of account, the Mumbai ITAT held that the ad hoc disallowance made by the AO was not justified and needed to be deleted. The Bench of the ITAT comprising of Kuldip Singh (Judicial Member) and S. Rifaur Rahman (Accountant Member) reiterated while considering the findings of the CIT(A) that “because the books of accounts of the assess were audited and the AO did not find any infirmity in them, and also because, had the...