Additional Evidence On Foreign Remittances Must Be Examined If It Goes To Root Of Matter: ITAT Ahmedabad

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has held that in reassessment proceedings involving unexplained foreign remittances, additional evidence relating to a taxpayer's overseas residency status and foreign business activities must be examined where it goes to the root of the controversy. Vice President Dr. B.R.R. Kumar and Judicial Member Siddhartha Nautiyal set aside the assessment in Mr. Jitendra Motilal Chawla's case and restored the matter to the Dispute Resolution...

ITAT Ahmedabad Holds Form 26AS Mismatch Alone Insufficient For Addition, Restores ₹42.34 Lakh Issue

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) on 17 June held that a mismatch between revenue reflected in Form 26AS and a taxpayer's books of account does not, by itself, justify an addition, and that such discrepancies require a proper reconciliation exercise before any addition can be sustained. Vice-President Dr. B.R.R. Kumar and Judicial Member Rahul Chaudhary allowed the appeal filed by Checkmate Services Pvt Ltd for statistical purposes and remanded the Rs. 42.34 lakh...

Mere Client Code Modification Not Enough To Invoke S.68 On Entire Transaction Value: ITAT Ahmedabad

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has held that the Department cannot treat the entire value of commodity transactions routed through alleged client code modifications as unexplained cash credits under Section 68 of the Income Tax Act, 1961, in the absence of material showing that the taxpayer benefited from accommodation entries. Vice President Dr. B.R.R. Kumar and Judicial Member Siddhartha Nautiyal upheld relief granted to Dharmdeep Commodities Pvt. Ltd. and...

TPO Cannot Ignore Documentary Proof Of Services And Fix ALP At Nil: ITAT Ahmedabad

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT), on 6 June, held that once a taxpayer demonstrates actual receipt of management services through documentary evidence, the Transfer Pricing Officer (TPO) cannot disregard the transaction and fix the Arm's Length Price (ALP) at nil based merely on assumptions of commercial necessity. Vice President Dr. B.R.R. Kumar and Judicial Member Siddhartha Nautiyal dismissed the Revenue's appeal against Schaeffler India Ltd. and upheld...

Revenue Cannot Sit In The Armchair Of Businessmen: ITAT Delhi Deletes ₹17.8 Lakh Addition

Tax authorities cannot sit in the armchair of businessmen and decide how businesses should be run merely because operations have ceased, the Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held. The tribunal deleted an addition of nearly ₹18 lakh that the Income Tax Department had treated as unexplained cash credits after a company received funds from its directors, their relatives, and a company under the same management. Accountant Member Ramit Kochar, sitting as a single-member...

ITAT Ahmedabad Holds Suspicion Cannot Replace Evidence, Strikes Down ₹38 Lakh & ₹10.5 Lakh Additions

On 18 June, the Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) held that additions cannot be sustained merely on suspicion when a taxpayer furnishes complete documentary evidence. Vice President Dr. B.R.R. Kumar and Judicial Member Suchitra Kamble deleted additions of Rs. 38 lakh and Rs. 10.5 lakh made by the Income Tax Department against Shreenathji Extrusion. The Bench held: “There is no cash outflow of Rs. 10,50,000/- from the assessee to M/s. Balkrishana Metal, much less an...

ITAT Kolkata Remands Capital Gains Assessments Over Mandatory DVO Reference Under Section 50C(2)

On 18 June, the Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) remanded a capital gains assessment after holding that an Assessing Officer is duty bound to refer a property valuation dispute to the Departmental Valuation Officer (DVO) when a taxpayer seeks such reference under Section 50C(2) of the Income Tax Act, 1961. Judicial Member Yogesh Kumar U.S. and Accountant Member Rakesh Mishra was hearing an appeal filed by Tapan Das against an order upholding an addition of Rs. 63.52...

Foreign Company Entitled To Concessional Tax Rate Without Separate Central Govt. Approval: ITAT Mumbai

On 19 June, the Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) held that a foreign company cannot be denied the benefit of a lower tax rate merely because no separate approval was obtained from the Central Government, where the transaction itself was permitted under the automatic route prescribed by the RBI. Judicial Member Beena Pillai and Accountant Member Arun Khodpia allowed the appeal filed by Gemological Institute International, Inc., noting that a taxpayer cannot be expected to...

Dividend From Cooperative Societies Remains Deductible Despite Erroneous Claim: ITAT New Delhi

On 19 June, the New Delhi Bench of the Income Tax Appellate Tribunal (ITAT) held that a bona fide claim made under an incorrect provision does not disentitle a taxpayer from claiming a deduction otherwise available in law, and that dividend income received from a co-operative society remains eligible for deduction even if it cites the wrong exemption provision. Vice President Mahavir Singh and Accountant Member Manish Agarwal dismissed the Revenue's appeal and allowed the cross-objection filed...

OYO Share Premium From FOCC Investment Not Taxable Under S.56(2)(viib) Income Tax Act: ITAT Delhi

The New Delhi Bench of the Income Tax Appellate Tribunal (ITAT) on 4 June held that Section 56(2)(viib) of the Income Tax Act cannot be invoked to tax share premium received through a Foreign Owned and Controlled Company (FOCC) where the investment complies with India's foreign investment regulations, as such transactions cannot be treated as routing unaccounted money. Accountant Member S. Rifaur Rahman and Judicial Member Vimal Kumar allowed the appeal filed by OYO Hotels and Homes Private...

ITAT Ahmedabad Deletes ₹2.25 Crore Addition On Land Deal Registered In 2019, Notes 2009 Agreement

The Ahmedabad bench of the Income Tax Appellate Tribunal has deleted a tax addition of about ₹2.25 crore made against a Vadodara taxpayer in a land transaction. The tribunal held that the assessing officer and the Dispute Resolution Panel were not justified in confirming the addition after documents showed that payments had been made before the property's registration. The bench of Vice President Dr. B.R.R. Kumar and Judicial Member Suchitra Kamble allowed the taxpayer's appeal. "Though the...

ITAT Ahmedabad Deletes ₹26.08 Lakh Addition Based Solely On Investigation Wing Information

The Ahmedabad Bench of the Income Tax Appellate tribunal has upheld the deletion of a ₹26.08 lakh addition made against a taxpayer. The tribunal held that an addition cannot be sustained solely on information received from the Investigation Wing without independent enquiry or corroborative evidence linking the taxpayer to the alleged transactions. A bench of Vice-President Dr. B.R.R. Kumar and Judicial Member Suchitra R. Kamble dismissed the Revenue's appeal. It affirmed the order of the...