ITAT Deletes Additions Against Unsuspecting Investor In A 'Penny Stock' To Make Quick Profit

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that the assessee was an unsuspecting investor who transacted in a 'penny stock' with a view to earning a quick profit, and since his involvement in any dubious transaction relating to price rigging or connection with exit providers could not be shown, the transaction could not be treated as a 'pre-arranged' one even if there were no underlying fundamentals in or financial performance by the company whose shares were sold.The...

ITAT Deletes S. 68 Addition Towards Cash Receipts Subsequently Converted Into Sale Of Jewellery

The Chennai Bench of Income Tax Appellate Tribunal (ITAT) has deleted the addition under Section 68 of the Income Tax Act towards cash receipts, which were subsequently converted into the sale of jewellery.The bench of Mahavir Singh (Vice President) and Manjunatha. G (Accountant Member) has observed that there cannot be any reason for uniform sales on all days, months, or years. There may be various reasons for an increase or decrease in sales that depend on various factors, including festival...

Sponsorship Amount Made By IOCL To Global Cricket Corporation Is Not Royalty: ITAT

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that the sponsorship amount made by Indian Oil Corporation Limited (IOCL) to Global Cricket Corporation (GCC) is not royalty.The bench of Vikas Awasthy (Judicial Member) and Gagan Goyal (Accountant Member) has observed that since the payments made to GCC and Nimbus Sports International are not taxable in India, there is no need to deduct tax at source under Section 195 on such payments. Consequently, no disallowance can be made...

Non-Mentioning Of DIN On Body Of Assessment Order Is Non-Est: ITAT

The Chandigarh Bench of Income Tax Appellate Tribunal (ITAT) has held that the non-mentioning of the Director Identification Number (DIN) on the body of the assessment order is non-est.The bench of Aakash Deep Jain (Vice President) and Vikram Singh Yadav (Accountant Member) has observed that there is no mention of DIN in the body of the assessment order, and even there is no mention of any exception so carved for non-mentioning DIN in the body of the order, thus not in conformity with Paragraphs...

Tax Cases Weekly Round-Up: 17 To 23 December, 2023

Delhi High Court High-End KPO Services Provider Can't Be Compared With ITeS, Which Is BPO Services Provider: Delhi High Court Case Title: PCIT Versus Future First Info. Services Pvt. Ltd. Citation: 2023 LiveLaw (Del) 1301 The Delhi High Court has held that the high-end knowledge process outsourcing (KPO) services provider cannot be compared with the information technology-enabled services (ITeS), which fall under the category of BPO services provider. No Upward...

ITAT Deletes Addition On Availing Accommodation Entries In Shape Of LTCG As It Was Not Recorded In Books Of Accounts

The Indore Bench of Income Tax Appellate Tribunal (ITAT) has deleted the addition of availing accommodation entries in the shape of Long Term Capital Gain (LTCG) as it was not recorded in the books of accounts.The bench of Vijay Pal Rao (Judicial Member) and B.M. Biyani (Accountant Member) has observed that once the assessee has denied the alleged transaction and it is also not found recorded in the books of accounts, including the Demat account of the assessee maintained by the banks, then the...

Without Pointing Out Any Specific Defect In Audited Books Of Accounts AO Can't And Should Not Make Any Estimated Addition: ITAT

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that without pointing out any specific defect in the audited books of accounts, the AO cannot and should not make any estimated addition.The bench of Kul Bharat (Judicial Member) and N. K. Billaiya (Accountant Member) has observed that the expenses claimed by the assessee were also test-checked, and while making the addition, the AO says that the books of account vouchers were not produced. The logical question arises: if the books...

Tax Cases Weekly Round-Up: 10 To 16 December, 2023

Delhi High Court No Incriminating Material Was Found During Search: Delhi High Court Quashes S. 153A Proceedings Case Title: PCIT Versus Oxygen Business Park Pvt. Ltd. The Delhi High Court has held that the assessment for the assessment year 2011–12 was finalized on January 20, 2012, and no notice under Section 143(2) of the Income Tax Act was issued. As such, no assessment was pending on the date of the search action, i.e., October 29, 2013. SCN Lacked Time Or Date For...

Section 54 Deduction Can't Be Disallowed Merely For Not Depositing LTCG In Capital Gain Account Scheme: ITAT

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that deduction under Section 54 of the Income Tax Act cannot be disallowed merely for not depositing long-term capital gain (LTCG) that was not deposited in the capital gain account scheme.The bench of Saktijit Dey (Vice President) and M. Balaganesh (Accountant Member) has adopted a hyper-technical approach while dealing with the issue. When the basic conditions of Section 54(1) have been satisfied, the assessee remains entitled to...

Addition For Deemed Dividend Made Can Be Done In Hands Of Shareholder Only: ITAT

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that addition for a deemed dividend made under Section 2(22)(e) of the Income Act can be done in the hands of the shareholder only.The bench of Yogesh Kumar (Judicial Member) and Shamim Yahya (Accountant Member) has observed that the assessee is not a registered shareholder in the loan-given company, so the addition to the touchstone is not sustainable.The Assessing Officer made an addition under Section 68 for an unsecured loan...

ITAT Deletes Penalty For Default In Not Deducting TDS On Foreign Remittances

The Jaipur Bench of Income Tax Appellate Tribunal (ITAT) has deleted the penalty levied for default in not deducting TDS on foreign remittances.The bench of Sandeep Gosain (Judicial Member) and Rathod Kamlesh Jayantbhai (Accountant Member) has observed that the assessee has deliberately not avoided TDS and there is no contumacious conduct on the part of the assessee.The ITO has passed an order under Section 143(3) of the Income Tax Act, 1961. During scrutiny proceedings, it was found that in the...

ITAT Directs Reconsideration Of Form No.10AB For S. 80G Registration By Giving Proper Opportunity Of Being Heard To Assessee Trust

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) has directed the department to reconsider Form No.10AB for final registration under section 80G of the Income Tax Act by giving the proper opportunity of being heard to the assessee trust.The bench of T.R. Senthil Kumar (Judicial Member) and Waseem Ahmed, (Accountant Member) have observed that the time is extended up till 30-09-2023, whereas the assessee filed a belated application on 28-02-2023. The circular also clarified that even in...