ITAT Bangalore Holds Expenditure Incurred By Flipkart Towards ESOP Is Eligible For Deduction Under S. 37 Of ITA

The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) has allowed the appeal of Flipkart India against disallowance of over Rs.15.5 Crore of expenses claimed by it under Section 37 of the Income Tax Act, 1961, towards Employee Stock Ownership Plan (ESOP). Flipkart had claimed that the ESOP cross charge payments made to its Singapore based Holding Company were mere reimbursements, and the same were eligible for deduction under Section 37. The ITAT relied upon the decision...

Tax Cases Weekly Round-Up: 12 March To 18 March, 2023

Supreme Court Non-Service Of Assessment Orders Inconsequential If Assesee Had Knowledge About Them Otherwise : Supreme Court Case Title: Commercial Tax Officer Versus Neeraja Pipes Pvt. Ltd. Citation: 2023 LiveLaw (SC) 199 Attachment orders issued by the revenue for tax arrears will not be vitiated merely because the assessment orders were not served on the assessee, if the assessee had otherwise got knowledge about the assessment orders, held by the Supreme Court recently. ...

Income Tax Disallowances Made On Ad Hoc Basis Without Specifying A Particular Mistake: ITAT

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has observed that disallowances have been done on an ad hoc basis without specifying a particular mistake.The two-member bench of Astha Chandra (Judicial Member) and Shamim Yahya (Accountant Member) has set aside the orders of the authorities below and decided the issue in favor of the assessee and observed that AO has not pointed out specific documents that were missing.The assessee/appellant challenged the ad hoc disallowance on the...

Employers Have To Deposit Employees' Contribution Towards EPF/ESI On Time To Avail Income Tax Deduction: ITAT

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that employers have to deposit employees' contributions towards EPF/ESI on time to avail of income tax deductions.The two-member bench of Narender Kumar Choudhry (Judicial Member) and Anil Chaturvedi (Accountant Member) has relied on the decision of the Supreme Court in the case of Checkmate Services Pvt. Ltd. vs Commissioner of Income Tax-I in which it was held that the non-obstante clause under Section 43B or anything...

Confusion In Relation To The Service Of Intimation Through Email: ITAT Condones Delay Of 9 Years

The Amritsar Bench of the Income Tax Appellate Tribunal (ITAT) ruled that there was significant ambiguity regarding the service of notice under Section 143(1) to the assessee via email.The two-member bench of Anikesh Banerjee (Judicial Member) and Dr. M. L. Meena (Accountant Member) has observed that there has been a delay of 9 years, which is a huge delay for adjudicating the appeal by the CIT(A). However, the assessee also provided a "reasonable cause" for the delay in filing the appeal.The...

Income Earned From Offshore Supply Of Escalators And Elevators Is Not Taxable In India: ITAT

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has observed that income earned by the assessee from the offshore supply of escalators and elevators is not taxable in India.The two-member bench of G.S. Pannu (President) and Sandeep Singh Karhail (Judicial Member) have observed that the property in goods passes on to the buyer at the port of shipment. Though the cost, insurance, freight, etc., are met by the seller, the property in the goods gets transferred to the buyer at the port...

Late Filing Of Return, Denial Of Section 80P Exemption Not Justified: ITAT

The Rajkot Bench of the Income Tax Appellate Tribunal (ITAT) has ruled that denying the exemption under Section 80P of the Income Tax Act solely on the basis of the assessee's late filing of a return is not justifiable.The two-member bench of Suchitra Kamble (Judicial Member) and Waseem Ahmed (Accountant Member) has relied on the decision of the Kerala High Court in the case of Chirakkal Service Co-operative Bank Limited vs. CIT, in which it was held that in cases where returns have been filed,...

No Disallowance Shall Be Made With Respect To Chargeable Sum Paid To A Foreign Company Without Deduction Of Tax: ITAT.

The Delhi Bench of Income Tax Appellate Tribunal has held that no disallowance shall be made to the assessee in regards to the chargeable sum paid by the assessee to a foreign company without deduction of tax. The division bench of N.K. Billaiya (Accountant Member) and Yogesh Kumar (Judicial Member) held that the second proviso to clause (i) of S. 40 of the Income Tax Act (IT) provides that in cases where applicable income has been declared by assessee and tax chargeable on it has been...

Tax Cases Weekly Round-Up: 5 March to 11 March 2023

Delhi High Court Issuance Of SCN in Customs Brokers Licensing Regulations, Contemplates Dispatch Of Notice And Not Its Receipt: Delhi High Court Case Title: Commissioner of Customs (Airport & General) vs M/s R.P. Cargo Handling Services The Delhi High Court has ruled that the expression ‘issuance of show cause notice’ in Regulation 20(1) of the Customs Brokers Licensing Regulations, 2013 (CBLR), merely contemplates the dispatch of the notice and not its receipt by the Customs...

The Amount Which Is Lower Of Unabsorbed Depreciation And Business Loss Will Be Set-Off Against Book Profits: ITAT

The Delhi Bench of Income Tax Appellate Tribunal has clarified the provisions of clause (iii) of Explanation-1 to Section 115JB (2) for computation of book profits for taxation. The Tribunal held that amount which is lower between unabsorbed depreciation and business loss deserves to be set off against the current Assessment Year (A.Y.) book profits in terms of the provisions of Income Tax Act. The two-member bench of Pradip Kumar Kedia (Accountant Member) And Yogesh Kumar Us...

An Order Is Not Prejudicial To The Interest Of Revenue U/S 263 If It Is Based On An Uncertain Issue Of Entitlement Of Treaty Benefit: ITAT

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that an order by assessing officer on whether a particular entity is entitled to a treaty benefit or not is a highly contentious issue and cannot be considered to be erroneous and prejudicial to the interest of revenue under section 263 of Income Tax Act, 1961. The two-member bench of Saktijit Dey (Judicial member) and Pradip Kumar Kedia (Accountant member) has held that due to various inconsistencies in the order of...

ITAT Upholds Income Tax Addition On Amount Received For Arbitration Settlement

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has upheld the income tax addition on the amount received for arbitration settlement from Indian Oil Infrastructure & Energy Services.The two-member bench of Kul Bharat (Judicial Member) and Narendra Kumar Billaiya (Accountant Member) has observed that the assessee was engaged in the project only through its PE in India. In view of the complete involvement of the PE, the settlement amount arising out of the MOU consequent upon...