Investment Expenditure In Subsidiary Was Incurred For Business Expediency: Delhi ITAT Deletes Addition U/s 37 Of I-T Act

On finding sufficient evidence for establishing that expenditure was incurred for business expediency, the Delhi ITAT deleted the addition made by AO u/s 36(1)(iii) and u/s 37 of the Income Tax Act, 1961.The Bench comprising Anubhav Sharma (Judicial Member) and Narendra Kumar Billaiya (Accountant Member) observed that, “no merit in the argument of the ld. DR that unless some revenue is shown from the project, the assessee cannot justify the loan and the interest expenditure was rightly...

Voluntary Disallowance Of Expense U/s 40(A)(ia) Is No Basis To Treat Taxpayer As 'Assessee In Default' U/s 201(1): Delhi ITAT

On finding that voluntary disallowance of expense u/s 40(a)(ia) of the Income Tax Act is not a ground to treat the assessee as 'assessee in default' u/s 201(1), the Delhi ITAT deleted the addition of chargeable interest u/s 201(1A) as well as the treatment of 'assessee in default' u/s 201(1).The Bench comprising Anubhav Sharma (Judicial Member) and M. Balaganesh (Accountant Member) observed that, “Merely because the assessee had voluntarily disallowed the expenses u/s 40(a)(ia) of the Act in the...

Charging Nominal Sum For Functioning Educational Institution Not Commercial Activity: Indore ITAT Directs For Registration U/s 12AB

While allowing the Assessee's appeal for registration u/s 12AB, the Indore ITAT held that mere charging a nominal amount for smooth functioning of educational institution and trust cannot called to be a part of commercial activity, and therefore, directed the CIT(E) to grant registration u/s 12AB of Income Tax Act, 1961.The Bench comprising Vijay Pal Rao (Judicial Member) and B.M. Biyani (Accountant Member) observed that “the entire thrust of the CIT(E) is regarding services provided by the...

'On-Money' No Basis To Make Addition On Sale Of House Property Sans Absence Of Reference To DVO U/s 55A: Ahmedabad ITAT

On finding that the AO has failed to refer the case to District Valuation Officer u/s 55A of Income Tax Act 1961, the Ahmedabad ITAT deleted the addition made by AO on account of on-money received by the assessee on the sale of duplex pent house.The Bench comprising T.R. Senthil Kumar (Judicial Member) and Annapurna Gupta (Accountant Member) observed that “the AO has merely relied upon the report given by his Inspector and determined the fair market value of the flats and pent houses, which is...

Taxpayer Deserves Opportunity To Furnish Additional Evidence If Critical To Issue, Before Completing Assessment U/s 144: Chandigarh ITAT

On finding lack of opportunities provided to Assessee and in interest of substantial justice, the Chandigarh ITAT remanded the matter to the file of CIT(A) to examine the matter of exemption u/s 10(23C) of the Income tax Act, 1961 afresh.The Bench comprising of Sanjay Garg (Judicial Member) and Vikram Singh Yadav (Accountant Member) observed that, “the additional evidence so submitted is critical and germane for deciding the matter under consideration and given that the assessment has been...

Discrepancy In Stock Sufficient Enough For Addition U/s 69B: Rajkot ITAT Confirms Estimation Of Gross Profit

On finding that the AO has rightly estimated the gross profit after finding discrepancy in stock, the Rajkot ITAT confirmed the addition made u/s 69B of Income tax Act, 1961.The Bench comprising Suchitra Kamble (Judicial Member) and Waseem Ahmed (Accountant Member) observed that, “The Assessing Officer has rightly estimated the gross profit by applying fair and reasonable ratio of gross profit at 8% instead of 6.25%. There is no need to interfere with the finding of the Assessing Officer as well...

No Addition Is Permitted U/s 69 I-T Act Once Source Of Investment Stands Proved: Mumbai ITAT

On finding that none of requirements of section 69 regarding source of investment stands fulfilled, the Mumbai ITAT upheld the order of CIT(A) deleting the addition made by AO under said provision.The Bench comprising C.V. Bhadang (President) and B.R. Baskaran (Accountant Member) observed that, “the said section envisages a situation where the assessee has (i) made an investment (ii) which is not recorded in the books of account or (iii) the assessee offers no explanation about the nature/source...

Sec 50C(1) Is Anti-Avoidance Provision To Prevent Evasion Of Tax By Showing Lesser Consideration, Reiterates Mumbai ITAT

While setting aside the order passed by CIT(A) and emphasizing on the safe harbour limit, the Mumbai ITAT held that the assessee is entitled to the benefit of Section 50C of Income Tax Act, 1961.The Bench comprising CV Bhadang (President) and BR Baskaran (Accountant Member) observed that, “the CBDT had acknowledged that there can be genuine cases, where there would be a variance between the “stamp duty value” and the “actual consideration received” in respect of similar properties depending upon...

Meagre Control Over Companies Transacting In Penny Stock Is No Basis To Question Source Of Source Of Income: Delhi ITAT

On not finding any substance in the conclusion of AO that the source of source of income is tainted, the Delhi ITAT confirms the deletion of addition made u/s 68 of Income Tax Act.The Bench comprising Anubhav Sharma (Judicial Member) and Narendra Kumar Billaiya (Accountant Member) observed that, “merely because of some sort of control of Gupta family into companies transacting in the alleged penny stock cannot be basis to question the source of source in the hands of the assessee company without...

Genuineness Of Company Is Not Dependent On Magnitude Of Profit: Kolkata ITAT Upholds Disallowance Of LTCG

The Kolkata ITAT confirmed the CIT(A)'s order upholding disallowance of claim of long-term capital gain exemption u/s 10(38) of Income tax Act, 1961 by stating that genuineness of the company is not dependent on the magnitude of profit.The Member of the ITAT comprising Rajpal Yadav (Vice-President) and Girish Agrawal (Accountant Member) observed that “The assessee might have made investment when the shares of the company were already managed to a particular level and he sold his investment very...

Interest Income Earned From Co-Operative/ Scheduled Bank Eligible For Deduction U/s 80P(2): Pune ITAT

Relying on decisions of Supreme Court and High Court, the Pune ITAT directed the AO to allow the deduction u/s 80P(2)(a)(i) and 80P(2)(d) of Income Tax Act, 1961 in respect of interest income earned from co-operative bank/scheduled bank.The Member of the ITAT comprising Inturi Rama Rao (Accountant Member) observed that, “the interest income earned by cooperative society on deposits made out of surplus funds with cooperative banks as well as schedule bank qualifies for deduction both under the...

Capital Gains Tax Can Be Computed Separately Even In Case Of Consolidated Sale Of Land And Building, Confirms Rajkot ITAT

The Rajkot ITAT held that Assessing Officer has not erred in computing separate capital gains tax in respect of sale of land (being Long Term Capital Gains) and sale of building / super structure (being Short Term Capital Gains), even if the assessee had made a consolidated sale of both land and building, as part of the same agreement.The Member of the ITAT comprising Siddhartha Nautiyal (Judicial Member) and Waseem Ahmed (Accountant Member) observed that, “the Assessing Officer has not erred in...