Amount Equivalent To Capital Gains Utilised For Acquisition Of New House: ITAT Allows Capital Gain Exemption

The Delhi Bench of the Income Tax Appellate Tribunal has allowed the capital gain exemption under section 54 of the Income Tax Act on the grounds that the amount equivalent to the capital gains has been used for the acquisition of a new house.The two-member bench of Yogesh Kumar US (Judicial Member) and Dr. B. R. R. Kumar (Accountant Member) has observed that the agreement for sale was signed on August 8, 2014, and the payments had been completed by October 8, 2014.The assessee/appellant...

Land Received In Lieu Of Business Loan Foregone, Is A Business Asset Not A Capital Asset: ITAT

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) has ruled that the land received by the assessee in the normal course of its finance business, in lieu of a business loan foregone, would assume the character of a business asset and not a capital asset, irrespective of its treatment in the assessee's books of accounts. The bench of Mahavir Singh (Vice President) and Manoj Kumar Aggarwal (Accountant Member) held that since the assignment of debt in favour of another entity in...

Tax Cases Weekly Round-Up: 11 December to 17 December 2022

Supreme Court Income Tax Dept. Can't Initiate Reassessment Proceedings During The Pendency Of The Rectification Proceedings: Supreme Court Case Title: S.M. Overseas (P) Ltd. Versus CIT The Supreme Court has held that the income tax department cannot initiate the reassessment proceedings during the pendency of the rectification proceedings. The division bench of Justice M.R. Shah and Justice C.T. Ravikumar has observed that the Punjab and Haryana High Court has committed a ...

AO Can't Pass Rectification Order to Disallow Set-off Of Loss By Invoking Section 79 of Income Tax Act, On Change In Assessee's Shareholding: ITAT

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has ruled that Section 154 of the Income Tax Act, 1961 can only be exercised by the Assessing Officer for rectification of mistake which is apparent on the face of record. The Bench of Pramod Kumar (Vice President) and Aby T. Varkey (Judicial Member) held that the issue whether Section 79 of the Income Tax Act was applicable in the case of the assessee where there was a change in its shareholding, was a debatable issue which involved...

Employees' Contribution To PF Cannot Be Disallowed Merely On The Basis Of Auditor's Statement: ITAT

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has deleted the addition made by the Centralised Processing Centre (CPC) towards employees' contributions to the Provident Fund (PF) based on the tax auditor's statement reporting the delay in employee contribution remittances.The two-member bench of Aby T. Varkey (Judicial Member) and M. Balaganesh (Accountant Member) has observed that the action of the CPC Bangalore in disallowing the employees' contribution to the provident fund...

Matter Which Is Not The Subject Matter Of Limited Scrutiny Cannot Be Raised In Revisionary Proceedings: ITAT

The Chandigarh Bench of the Income Tax Appellate Tribunal (ITAT) has held that matters that were not subject to limited scrutiny cannot be raised in revisionary proceedings.The two-member bench of Diva Singh (Judicial Member) and Vikram Singh Yadav (Accountant Member) has observed that the matter relating to wages and labor expenses, which was not subject to limited scrutiny, cannot be raised in revisionary proceedings under Section 263 of the Income Tax Act for the first time.The...

ITAT Deletes Addition On Account Of Cash Deposited In The Bank Accounts During Demonetisation Period

The Raipur Bench of the Income Tax Appellate Tribunal (ITAT) has deleted the addition on account of cash deposited in bank accounts during the demonetization period.The bench of Ravish Sood (a judicial member) has observed that the AO, by not rejecting the books of account, has clearly accepted that the cash deposited in the bank accounts by the assessee firm during the year under consideration was not from its disclosed sources.The appellant/assessee firm, which operates a cold storage...

Interest Income Earned By Co-Operative Society From Investments Made With Co-Operative Banks Is Eligible For Section 80P Deduction: ITAT

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has allowed the deduction under section 80P(2)(d) of the Income Tax Act in respect of interest earned by cooperative societies from investments made with cooperative banks.The two-member bench of Aby T. Varkey (Judicial Member) and Amarjit Singh (Accountant Member) has relied on the decision of the Karnataka high court in the case of PCIT VS Totagar's Cooperative Sales Society, in which it was held that the interest income derived by...

ITAT Allows Section 80G Deduction To The Trust Which Is Not Substantially Religious

The Pune Bench of the Income Tax Appellate Tribunal (ITAT) has allowed the deduction under Section 80G of the Income Tax Act to the trust, which is not substantially religious.The two-member bench headed by R.S. Syal (Vice President) and Partha Sarthi Chaudhury (Judicial Member) has observed that if a trust or institution incurs expenses for religious purposes, which are inclusive and only a small part of the income, and if the substantial work done by the trust is charitable in nature and...

Tata Industries Entitled To Set-Off Business Loss Against Dividend Received From Its Foreign Subsidiary: ITAT

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has ruled that investments made by an assessee company to exercise control over other investee companies constitutes a business activity. The bench of Rahul Chaudhary (Judicial Member) and M. Balaganesh (Accountant Member) held that though the dividend income is taxable under the head 'income from other sources' in view of the specific provision contained in Section 56(2)(i) of the Income Tax Act, 1961, however, since the ...

Hospital Charging Commercial Rates Not Entitled For Registration As Charitable Organisation: ITAT

The Hyderabad bench of the Income Tax Appellate Tribunal (ITAT) has held that the assessee hospital is charging on the basis of commercial rates from the patients and is not entitled to registration as a charitable organization under Section 12A of the Income Tax Act.The two-member bench of Laliet Kumar (Judicial Member) and R.K. Panda (Accountant Member) has observed that the assessee is charging on the basis of commercial rates from the patients, either outdoor or indoor, and the assessee has...

Advance Given For Hospital Project, Later Abandoned, Allowable As Revenue expenditure: ITAT

The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) has held that the advance was given for setting up a hospital project, and since the project was abandoned and the advance given could not be recovered, the sum is allowable as a revenue expenditure.The two-member bench of Sonjoy Sarma (Judicial Member) and Manish Borad (Accountant Member) has observed that the advance was given for setting up a hospital project that was abandoned as a business loss under Section 28(1) of the Income...