200% Penalty Can’t Be Levied Unless Dept. Specifies Misreporting: ITAT

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that a 200% penalty can’t be levied unless the department specifies misreporting.The bench of Aby T. Varkey (Judicial Member) and Om Prakash Kant (Accountant Member) has observed that AO failed to bring the addition or disallowance he made in quantum assessment under the ken of (a) to (f) of Section 270A (9) of the Act, and the penalty levied for misreporting at the rate of 200% cannot be sustained because it is trite law that...

Benefits Of India- Mauritius DTAA Available To Collective Investment Vehicles: ITAT

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that the benefits of the Double Taxation Avoidance Agreement (DTAA) are available to collective investment vehicles.The bench of Saktijit Dey (Judicial Member) and Dr. B. R. R. Kumar (Accountant Member) has observed that the TRC is statutorily the only evidence required to be eligible for the benefit under the DTAA, and the respondent’s attempt to question and to hide behind the Tax Residency Certificate (TRC) is wholly...

Provisions Of Section 44BB Not Applicable In Absence Of PE: ITAT

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that the provisions of Section 44BB of the Income Tax Act are not applicable in the absence of a permanent establishment (PE).The bench of Kul Bharat (Judicial Member) and Shamim Yahya (Accountant Member) has observed that the burden of proving the existence of PE lies on the department, which has not been discharged. There is no finding of PE; hence, Section 44BB will not apply.The appellant/assessee is a company incorporated...

Deemed Dividend Cannot Be Taxed In The Hands Of Non-Shareholders: ITAT

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has held that deemed dividends cannot be taxed in the hands of non-shareholders.The bench of Annapurna Gupta (Accountant Member) has observed that the deeming fiction envisaged in Section 2(22)(e) of the Income Tax Act is only with respect to dividends, and its scope, therefore, cannot be enlarged to extend to shareholders also. The deemed dividend could not be taxed in the hands of non-shareholders.The additions in respect of...

Income Derived From Sale Of Agricultural Land Is Not A Capital Asset: ITAT

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that income derived from the sale of agricultural land is not a capital asset.The bench of Saktijit Dey (Judicial Member) and M. Balaganesh (Accountant Member) has observed that income tax is not payable on the income derived from the sale of agricultural land.A search and seizure operation was conducted in the case of the assessee. Following the search and seizure operation, proceedings under Section 153A of the Income Tax Act...

ITAT Deletes Disallowance On Setting Off Legal Expenses Against Interest Income For Contesting Arbitral Award

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has deleted that disallowance setting off legal and other expenses against interest income for contesting an arbitral award.The bench of G.S. Pannu (President) and Saktijit Dey (Judicial Member) has observed that the arbitral award was passed in July 2020, which is under challenge before the Delhi High Court. Even after the conclusion of the Common Wealth Games in 2010, the assessee did not wind up its PE in India as the PE was required...

AO Can’t Sit On The Armchair Of Businessman Assessee To Replace His Business Strategy By His Own Whims And Fancies: ITAT

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that the Assessing Officer cannot sit on the armchair of a businessman assessee to replace his business strategy with his own whims and fancies.The bench observed that Chandra Mohan Garg (Judicial Member) and Pradip Kumar Kedia (Accountant Member) have observed that the Assessing Officer only noted an abnormal fall in the GP rate of jewelry without pointing out any defects or discrepancies in the audited books of accounts of...

Trust Created For Managing The Statutory Obligations Of Employees Of The Parent Trust: ITAT Grants Section 12AA Registration

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that any trust that has been created for the purpose of managing the statutory obligations of employees of the parent trust would certainly fall within the ambit of advancement of general public utility and, hence, be considered a charitable activity as defined under Section 2(15) of the Income Tax Act.The bench of C.M. Garg (Judicial Member) and M. Balaganesh (Accountant Member) has granted the registration under Section 12AA...

Gift From Family Members Do Not Require Any Special Occasion: ITAT Deletes Addition

The Indore Bench of the Income Tax Appellate Tribunal (ITAT) has deleted that addition and held that gifts from family members do not require any special occasion.The bench of Vijay Pal Rao (Judicial Member) and B.M. Biyani (Accountant Member) has observed that all sources explained by the assessee were genuine except the gift of Rs. 1,00,000 claimed to have been received from the grandmother.The assessee/appellant filed his return of income, declaring a total income of Rs. 1,49,900/- earned...

E-Filing Of “Audit Report” Beyond The Date, Violative Of CBDT Circular: ITAT Denies Section 11 Exemption to Trust

The Raipur Bench of the Income Tax Appellate Tribunal (ITAT) refused to grant the exemption under Section 11 of the Income Tax Act on the grounds that the trust e-filed the "audit report" in Form 10B beyond the date.The bench of Ravish Sood (a judicial member) has observed that the assessee trust had e-filed or uploaded the "audit report" in Form 10B as of June 21, 2019, which was much beyond the date specified under Section 139. Therefore, its case would clearly fall beyond the scope and gamut...

Relationship Between Consultant Doctor And The Hospital Can't Be seen As Employer Employee : ITAT Deletes Addition

The Chennai Bench of Income Tax Appellate Tribunal (ITAT) has deleted the addition made towards short deduction of TDS and held that the relationship between a Professional Doctor consultant and the Hospital cannot be treated as an Employer-Employee relationship unless there exist specific Rules and Provisions in the contract of appointment between the consultant and Hospital.The bench of Mahavir Singh (Vice President) and Manjunatha. G, (Accountant Member) has observed that there was no error...

NLU-Delhi Is Not Engaged In Business: ITAT Quashes Income Tax Penalty

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has quashed the penalty under Section 271B of the Income Tax Act on the grounds that the NLU-Delhi is not engaged in "business" and exists solely for educational purposes.The bench of Anubhav Sharma (Judicial Member) and Anil Chaturvedi (Accountant Member) has observed that to justify invoking the mandate of Section 44AB, it was necessary to see if the assessee university can be said to be engaged in business as defined under Section...