ITAT
ITAT Cases Weekly Round-Up: 17 To 23 March 2024
Deeming Provisions Of Sec 69B Can't Be Invoked Once Nexus Of Source Of Unrecorded Transactions With Assessee's Business Is Proved: Chandigarh ITAT Case Title: M/s A.P Knit Fab verses DCIT Finding that the difference in stock found out by I-T Authorities has no independent identity and is part & parcel of entire stock, the Chandigarh ITAT refused to treat such difference as undeclared business income and clarified that it cannot be said that there is an undisclosed asset ...
LTCG Tax Exemption Can't Be Denied Due To An Error Made By The Builder In Assigning Apartment: ITAT
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that tax benefits cannot be denied to taxpayers due to an error made by the builder in assigning the apartment.The bench of Rahul Chaudhary (Judicial Member) and Om Prakash Kant (Accountant Member) has observed that the appellant or taxpayer cannot be penalized for the mistake committed by the developer or seller by allotting a flat to the appellant and thereafter selling the same flat to Mr. C.N. Jha. Clearly, the...
Income Tax Exemptions Available To ST Individuals Can't Be Extended To Partnership Firm: ITAT
The Guwahati Bench of the Income Tax Appellate Tribunal (ITAT) has held that the exemption under Section 10(26) of the Income Tax Act has been specifically conferred on members of the Scheduled Tribe residing in the specified area. The exemption cannot be extended to another separate and distinct "person," that is, the partnership firm, though such a firm consists of the individual partners who, in their individual capacities, are entitled to such an exemption.The special bench of Rajpal Yadav...
CBDT Expands Scope Of Appeal Filing By Dept. Before ITAT, High Court And Supreme Court, Retains Monetary Limits
The Central Board of Direct Taxes (CBDT) has issued a circular under section 268A of the Income-tax Act, 1961 for filing of appeals by the Department before Income Tax Appellate Tribunal, High Courts and SLPs/appeals before Supreme Court as a measure for reducing litigation.The board has retained the monetary limits at Rs.50 lakhs, Rs.1 Crore and Rs.2 Crores for filing appeals before ITAT, High Court and Supreme Court respectively.The monetary limits with regard to filing appeal/SLP shall be...
ITAT Cases Weekly Round-Up: 10 To 16 March 2024
Interest Income Earned On Deposits Placed With Co-Operative Society Is Duly Eligible For Deduction U/s 80P(2)(D): Chandigarh ITAT Case Title: Balduhak Co-operative Agriculture Service Society verses ITO Finding that that the assessee is a Cooperative Society (and not a co-operative bank) which was engaged in providing short term credit facility to its members, the Chandigarh ITAT ruled that interest income has been earned on deposits placed with a co-operative society and duly...
Claim Seeking Application Of Income For Charitable Purpose U/s 11 & 12 Can't Be Denied To Trust On Mere Technicalities: Delhi ITAT
The New Delhi ITAT emphasized that the Revenue Authorities have to tax the right person in right manner and shall not disallow the eligible deductions on mere technicalities.The Bench of M. Balaganesh (Accountant Member) and Yogesh Kumar U.S (Judicial Member) observed that “the Revenue has rejected the plea of the Assessee based on mere technicalities and it is not the case of the Revenue that the Audit Report was not ready as on the date of filing of the return or Assessee is not eligible for...
Premium Charged On Issue Of Shares To Existing Shareholder Is Not Deemed Income U/s 56(2)(Viib) If No Income Accrues To Ultimate Beneficiary: Delhi ITAT
Recently, the Delhi ITAT reiterated that object of deeming an unjustified premium charged on issue of share as taxable income u/s 56(2)(viib) of the Income tax Act is wholly inapplicable for transactions between holding and its subsidiary company where no income can be said to accrue to the ultimate beneficiary, i.e., holding company. The Bench of Kul Bharat (Judicial Member) and Pradip Kumar Kedia (Accountant Member) observed that “the premium charged is supportable by the valuation...
Addition Towards Purchases Should Be Restricted To Embedded Profit Once AO Has Not Disputed Sales Declared By Assessee: Mumbai ITAT
Referring to the decision of Bombay High Court in the case of Principal CIT vs Mohammed Haji Adam & Co (Income Tax Appeal No.1004 of 2016 dated 11/02/2019), the Mumbai ITAT reiterated that the additions should be limited to the extent of the G.P. rate on purchases at the same rate of other genuine purchases.The Bench of Aby T Varkey (Judicial Member) and MS Padmavathy S (Accountant Member) observed that “the AO has neither disputed the sales declared by the assessee nor any discrepancy is...
CIT(A) Can't Simply Dismiss Any Appeal U/s 250 On Account Of Non-Prosecution, Without Discussing Merits Of Case: Ahmedabad ITAT
The Ahmedabad ITAT emphasized that as per Section 250 of the Income tax Act, it is incumbent on the CIT(A) to make necessary enquiry before passing the order and he is obliged to decide each of the points arising out of the appeal i.e. grounds on merits have to be discussed even in an ex-parte order.The Bench of Annapurna Gupta (Accountant Member) and Siddhartha Nautiyal (Judicial Member) observed that “In view of Section 250(4) and 250(6) of the Act, CIT(A) has no power to dismiss an appeal on...
AO Fails To Demonstrate Live Link Between Tangible Material & Reason To Believe Escaped Income: Delhi ITAT Quashes Reopening
On finding that the requirement of application of mind is missing in the instant case, the Delhi ITAT held that the reassessment made in the section 143(3) read with section 147 of the Income Tax Act, 1961, is bad in law and hence, the re-assessment order is quashed.The ITAT pointed that there is no independent application of mind by the AO to tangible materials and reasons and the AO failed to demonstrate live link between tangible material and formation of reason to believe that income had...
Taxpayer Possessing Tax Residency Certificate & Offering Taxes On Income In Other Contracting State, Deserves Treaty Benefit U/s 90: Kolkata ITAT
Finding that the Appellant/ Assessee has valid Tax Residency Certificate (TRC) for United Kingdom, the Kolkata ITAT reiterated that the salary income received by assessee for his work during stay at United Kingdom is exempt from tax on account of treaty benefit. The Bench of Dr. Manish Borad (Accountant Member) and Anikesh Banerjee (Judicial Member) observed that “the assessee possesses tax residency certificate of United Kingdom for a period from 06.04.2013 to 05.04.2014 and the...
Rule 11UA(2)(A) R/w Explanation (A) To Sec 56(2)(Viib) Does Not Require Valuation Report For Substantiation Under NAV Method: Delhi ITAT
Finding that the book value of assets and liabilities adopted for the purposes of NAV method of valuation is in consonance with last audited balance-sheet items, the Delhi ITAT clarified that the AO has misdirected himself on seeking valuation report which requirement do not emanate from the law codified in this regard. The Bench of Kul Bharat (Judicial Member) and Pradip Kumar Kedia (Accountant Member) observed that “The phraseology of clause (a) to sub-rule (2) of Rule 11UA read...