ITAT Cases Weekly Round-Up: 14 April To 20 April 2024

Actual Expenditure, Source Of Which Was Not Explained, Attracts Deeming Provisions Of Sec 69: Ahmedabad ITAT Case Title: Hyfun Frozen Foods Pvt. Ltd. Verses Income Tax Officer The Ahmedabad ITAT recently ruled that actual expenditure, the source of which has not been explained, attracted the deeming provisions provided u/s 69 of the Income tax Act. Extension Of Timeline For Filing Form No.10AB For Recognition U/s.12A Is Deemed Extension For Renewal Of Approval Under Clause (Iii)...

Primary Agricultural Credit Society Entitled To Benefit Section 80P(2)(i) For Providing Credit Facilities For Non-Agricultural Purposes To Its Members: ITAT

The Kolkata Bench of Income Tax Appellate Tribunal (ITAT) has held that Primary Agricultural Credit Society is entitled to benefit under Section 80P(2)(i) of the Income Tax Act for providing credit facilities for non-agricultural purposes to its members.The bench of Rajpal Yadav (Vice President) and Manish Borad (Accountant Member) has observed that the appellant society is eligible for deduction u/s 80P(2)(i) of the Act, but only to the extent of the income that has been earned from the...

Manual Cash Book Contains Entries Related To Cash Withdrawals, Income Tax Additions Not Sustainable: ITAT

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the manual cash book contained entries related to cash withdrawals and expenses of the company, which were duly recorded and reconciled with its books of account, as well as cash introduced, withdrawn, and expenses on behalf of the assessee.The bench of Anubhav Sharma (Judicial Member) and M. Balaganesh (Accountant Member) has observed that to offset the negative cash balance reflected in the manual cash book qua the...

Cash Sales Already Offered As Income Can't Be Taxed In Garb Of Inflation Sales To Cover Up Demonetization Currency: Delhi ITAT

The New Delhi ITAT recently clarified that the cash sales already been offered as income, cannot be taxed in the garb of inflation sales to cover up demonetization currency. The Bench of N.K. Billaiya (Accountant Member) and Astha Chandra (Judicial Member) observed that “Merely because there was a minor variation in the cash sales during the alleged period compared to previous year would not mean that the assessee has inflated its sales to cover up demonetized currency”. (Para 22) ...

Money Received As Security Deposit If Subsequently Refunded To Developer, Is Irrelevant For Determining Taxability U/s 56(2)(Vii)(A): Mumbai ITAT

While deleting the enhancement made u/s 56(2)(vii)(a) of the Income Tax Act, the Mumbai ITAT explained that as per the provisions of section 56(2)(vii)(a), any sum of money, the aggregate of which exceeds Rs.50,000, received by an individual without consideration is taxable as income from other sources, and thus, u/s 56(2)(vii)(a), the incidence of taxation is at the stage of receipt of money. The ITAT clarified that the fact that the money received as a security deposit was ...

Commission Expenses Can Be Allowed If Taxpayer Satisfies Rendering Of Services By Commission Agents And Income From Same Is Shown In Return: Mumbai ITAT

While deleting the addition made u/s 68 of the Income Tax Act, the Mumbai ITAT directed the assessee to file the details of the services rendered by the commission agents for availing the commission payment from the assessee. The ITAT clarified that if the assessee satisfies the AO about the services rendered by these commission agents and that they had shown their income as the commission paid by the assessee, then such commission expenses are to be allowed under law. The...

Action Can Be Initiated U/s 153C Based On Seizure Made During Course Of Search And Not Based On Material Impounded In Course Of Survey: Mumbai ITAT

While quashing the proceedings initiated u/s 153C of the Income Tax Act based on the material impounded in course of survey action, the Mumbai ITAT clarified that the material considered for initiating action u/s 153C in the case of assessee was not seized in the course of search action but was impounded in the course of the survey action, and hence assessment u/s 153C is not as per provisions of law. The Bench of the ITAT comprising of Sandeep Singh Karhail (Judicial Member)...

No Addition Permitted U/s 68 Once Taxpayer Establishes Genuineness & Creditworthiness Of Share Subscribers: Mumbai ITAT

The Mumbai ITAT upheld the order of CIT(A) in deleting the addition made by the AO u/s 68 of the Income Tax Act, since the assessee has successfully established the genuineness and creditworthiness of the share subscribers alleged for the bogus transactions. The Bench of the ITAT comprising of Aby T. Varkey (Judicial Member) and B R Baskaran (Accountant Member) observed that “merely because the lenders did not appear before the AO, cannot be the sole reason for drawing adverse view ...

No Deduction Can Be Claimed If Employees' Contribution Deducted From Employee's Salary was Not Paid To Respective PF & ESI A/c: Kolkata ITAT

Finding that the returns of the assessee have been processed in the Computer Processing Centre, the Kolkata ITAT ruled that if the Auditors have reported in the Audit Report that employees' contribution have been deducted by the assessee from the salaries of the employees but not deposited within due date provided under PF&ESI Act then no deduction can be claimed by assessee. The ITAT gave such ruling while referring to the law laid down by the Apex Court in the case of Checkmate ...

Income Of Co-Operative Society By Way Of Interest Derived From Investment With Any Other Cooperative Society, Is Allowable U/s 80P: Mumbai ITAT

Finding that assessee in the present case is not a cooperative bank, since the office of Central registrar of cooperative societies, New Delhi has issued a certificate of registration to the assessee registering it u/s 11 of Multistate Cooperative Societies Act, 2002, the Mumbai ITAT ruled that the income earned by a co-operative society by way of interest derived by from its investment with any other cooperative society, is deductible u/s 80P. The Bench of Amit Shukla (Judicial Member)...

Extension Of Timeline For Filing Form No.10AB For Recognition U/s.12A Is Deemed Extension For Renewal Of Approval Under Clause (Iii) Of First Proviso To Sec 80G: Chennai ITAT

The Chennai ITAT recently clarified that once the timeline prescribed for filing Form No.10AB for recognition u/s.12A has been extended, the same may be treated as extended for Form No.10AB for renewal of approval/recognition/registration under clause (iii) of the first proviso to section 80G of the Income Tax Act. The ITAT held so while agreeing with the contention of the assessee that the timeline prescribed under clause (iii) of the first proviso to section 80G(5) should be...

Actual Expenditure, Source Of Which Was Not Explained, Attracts Deeming Provisions Of Sec 69: Ahmedabad ITAT

The Ahmedabad ITAT recently ruled that actual expenditure, the source of which has not been explained, attracted the deeming provisions provided u/s 69 of the Income tax Act. The ITAT at the same time clarified that no addition can be made in the hands of the assessee merely on the reason that the assessee got the property transferred through registered sale without making the payment to the vendor. Referring to the decision of High Court of Delhi in the case of CIT versus...