ITAT Deletes Addition On Security Deposits From Distributors/Retailers Against Coca Cola Bottles

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has deleted the addition against Hindustan Coca-Cola Beverages on the Security Deposits made by distributors and retailers against Coca-Cola bottles.The bench of Anubhav Sharma (Judicial Member) and N.K. Billaiya, (Accountant Member) has relied on the decision of the Supreme Court in the case of Sugauli Sugar Works [P] Ltd., in which it was held that the onus is on the revenue to bring on record tangible evidence to show that liability...

No specific ICDS, ITAT Disallows Deduction On Marketing & Sales Expenses To Real Estate Developer

The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) has disallowed the deduction of marketing and sales expenses accumulated in work-in-progress as per accounting standards and revenue recognition policy.The bench of Rajpal Yadav (Vice President) and Girish Agrawal (Accountant Member) has observed that no specific Income Computation and Disclosure Standards (ICDS) have been notified for real estate developers; revenue and cost recognition are governed by the applicable accounting...

ITAT Upholds Addition On Account Of Unexplained Cash Deposit Made During Demonetisation

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT), while rejecting the plea of the assessee for cash received in marriage, upheld the addition on account of an unexplained cash deposit made during demonetisation.The bench of Mahavir Singh (Vice President) and Manoj Kumar Aggarwal (Accountant Member) has observed that there is no direct evidence available from the assessee to substantiate his claim, but going through the customary system in Indian society, no economic transaction can...

Tax Cases Weekly Round-Up: 16 July To 22 July, 2023

Supreme Court Income Tax Act | Completed/Unabated Assessments Cannot Be Reopened by AO If No Incriminating Material Is Found During Search: Supreme Court Case Title: Principal Commissioner of Income Tax vs King Buildcon Pvt. Ltd. Citation : 2023 LiveLaw (SC) 532 The Supreme Court has reiterated that in view of the judgment of the Supreme court in Principal Commissioner of Income Tax vs. Abhisar Buildwell Pvt. Ltd.,2023 LiveLaw (SC) 346, an Assessing Officer (AO) cannot...

Passing Of Project Specific Architectural Drawings And Design With Measurement Doesn’t Amount To ‘Make Available’ Technical Knowledge: ITAT

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that the mere passing of project-specific architectural drawings and designs with measurements did not amount to making available technical knowledge, know-how, or processes.The bench noted that G.S. Pannu (President) and Astha Chandra (Judicial Member) observed that the assessee has not transferred any technical expertise, skill, or knowledge along with the drawings and designs of the particular building.The appellant/assessee...

Plastic Waste Management Falls Under Preservation Of Environment: ITAT Allows Income Tax Exemption

The Chandigarh Bench of the Income Tax Appellate Tribunal (ITAT) has allowed the Income Tax exemption for the Punjab Plastic Waste Management Society and observed that plastic waste management falls under the preservation of the environment.The bench of A.D. Jain (Vice President) And Vikram Singh Yadav (Accountant Member) has quashed the order of the Commissioner of Income Tax (Exemptions) against the Punjab Plastic Waste Management Society, by which the Society’s application under Section 12A...

ITAT Upholds Interest On 'Outstanding Interest Receivable' Against Parle Biscuits

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has upheld the levy of interest on 'outstanding interest receivable' against Parle Biscuits.The bench of Kuldip Singh (Judicial Member) and Padmavathy S. (Accountant Member) has observed that in a transfer pricing transaction, what needs to be looked into is whether, in an uncontrolled similar transaction, the third party would charge such interest or not. The interest on a loan is compensation received towards the utilisation of...

Tax Cases Weekly Round-Up: 9 July To 15 July, 2023

Supreme Court Revenue Dept Can't Recover Refunded Cess Amount Because Refund Was Based On A Judgment Which Was Later Overruled : Supreme Court Case Title: Commissioner of CGST and Central Excise (J and K) vs M/s Saraswati Agro Chemicals Pvt. Ltd. Citation : 2023 LiveLaw (SC) 522 The Supreme Court has upheld the decision of the Jammu and Kashmir and Ladakh (J&K&L) High Court where the court had held that the assessee was not liable to return the Education Cess...

Capital Gain Exemption Allowable On Construction Of Residential House Completed Within 3 Years: ITAT

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT), has held that the claim of capital gain exemption under Section 54 of the Income Tax Act, 1961 on construction of residential house completed within 3 years is allowed and removed the penalty levied under Section 271(1)(c) of the Income Tax Act. The assessee, Hemant Shridhar Phatak, in its return of income claimed exemption of Rs.45,46,285/- u/s. 54 of the Act on long term capital gains from sale of a residential house. The...

ITAT Disallows Interest Paid On Loan Taken For Paying Compensation To Family Members Pursuant To Arbitral Award On Family Settlement

The Panaji Bench of the Income Tax Appellate Tribunal (ITAT) has disallowed the interest paid on a loan that was taken for paying compensation to the assessee’s family members pursuant to an arbitral award on family settlement.The bench of R.S. Syal (Vice President) and Partha Sarathi Chaudhury (Judicial Member) has observed that the expenses incurred by the assessee for paying interest on the loan taken are not related either to the cost of acquisition, the cost of improvement, or the cost of...

Bank Guarantee Rates Cannot Be Considered For Benchmarking Corporate Guarantee Fee: ITAT

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that bank guarantee rates cannot be considered for benchmarking corporate guarantee fees.The bench of Kavitha Rajagopal (Judicial Magistrate) and Prashant Maharishi (Accountant Member) has remanded the file back to the assessing officer with a direction to the assessee to show the benchmarking of corporate guarantee fees by either adopting an interest-saving approach, comparable corporate guarantee fee rates, the cost of...

Business Model Explains Mismatch Between Form 26AS And Actual Income: ITAT

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has deleted the addition on the grounds that the business model explains the mismatch between Form 26AS and actual income.The bench of Sandeep Singh Karhail (Judicial Member) and Prashant Maharishi (Accountant Member) has observed that the income of the assessee is not the rental income but the income earned in the business of acquiring and dealing in unguaranteed residuary interest in assets rented to the customers. Thus, the income...