ITAT Weekly Round-Up: 18 To 24 August 2024

Income Tax Deduction Allowable To Interest Income 'Attributable' To Cottage Industry Business: ITATCase Title: Potheri Village Weaning Food Manufacturing Womens Development Industrial Coop Versus ITOThe Chennai bench of Income Tax Appellate Tribunal (ITAT) has held that the income tax deduction allowable to interest income 'attributable' to cottage industry business.Gift Received From Non-Resident Brother Is Exempt From Taxation In India : Mumbai ITATCase Title: Abul Wais Abdus Salam versus...

AO Made No Enquiries In Respect Of Large Investment Made By Assessee Without Any Cash: Ahmedabad ITAT Upholds Revision U/s 263

Finding that no enquiries were being carried out by AO in respect of the discrepancies which were very much evident out from the large investment made by assessee in property even when assessee has no such cash, the Ahmedabad ITAT held that the order of AO was rightly treated as erroneous and prejudicial to the interest of the revenue by the Pr. CIT.As per the Explanation 2 to section 263 of the Income tax Act, the order passed by the AO shall be deemed to be erroneous and pre-judicial to the...

Inadequate Enquiry By AO Would Not By Itself Give Occasion To CIT To Pass Order U/s 263 Merely Based On Difference Of Opinion: Ahmedabad ITAT

The Ahmedabad ITAT held that the PCIT cannot impose his own view in the proceedings u/s 263 by overriding the view taken by the AO, without bringing any new fact or anything adverse on record.Section 263 of the Income Tax Act is a provision that empowers the Commissioner of Income Tax to revise any order passed by an assessing officer if the Commissioner believes that the order is erroneous and prejudicial to the interests of the revenue.The ITAT held so after finding that the AO had taken a...

Reasons To Believe Of Income Escaping Assessment Must Have Nexus With Information Before AO Which Led To Formation Of Such Belief: Ahmedabad ITAT

The Ahmedabad ITAT held that at the stage of reopening, conclusive proof of income escaping assessment is not required rather a prima-facie formation of a belief that income of assessee has escaped assessment of the AO is required based on tangible material.The said reasons to believe that income have escaped assessment should have a live link or nexus with the information before the AO which led to the formation of belief that income has escaped assessment, added the Tribunal. Single Bench of...

Rehabilitation Allowance received On Account Of Re-Development Of Society Can't Be Treated As Income: Mumbai ITAT

Referring to the decision of the Bombay High Court in case of Sarfaraz S. Furniturewall [Writ Petion No. 4958 of 2024], the Mumbai ITAT held that rehabilitation allowance paid by the developer to its resident customer who had suffered hardship due to dispossession on account of re-development, cannot be treated as income in hands of recipient. Single Bench of Prashant Maharishi (Accountant Member) observed that “It is undisputed fact that assessee is also receiving the hardship...

Software Expenses Are 'Revenue In Nature' If Fixed Capital Did Not Undergo Any Change Consequent To Acquisition Of Licensed Software: Mumbai ITAT

Referring to the decision in case of DCIT v/s M/s First Advantage Private Limited [ITA No. 6659/Mum/2013], the Mumbai ITAT held that software license expenses incurred by assessee to carry out its routine operations in a more efficient manner, has to be treated as revenue expenditure. The ITAT held so after finding that the fixed capital of assessee did not undergo any change as a consequence of the acquisition of the licensed software. The Division Bench of Sandeep Singh Karhail ...

Gift Received From Non-Resident Brother Is Exempt From Taxation In India : Mumbai ITAT

Finding that Assessee has proved identity, creditworthiness and genuineness of the gift received as well as relationship with donor, the Mumbai ITAT held that gift from brother is not chargeable to tax in the hands of the assessee being relative of the donor. Single Bench of Prashant Maharishi (Accountant Member) observed that “the amount of Rs. 20,00,000/- received by the assessee clearly shows that above amount is not the income of the assessee. Despite above information being...

Claim Of Advertisement Expenditure By Hospital Violative Of Indian Medical Council Act 1956: ITAT

The Visakhapatnam Bench of Income Tax Appellate Tribunal (ITAT) has held that the claim of advertisement expenditure by hospitals is violative of the Indian Medical Council Act 1956 professional conduct, Etiquette and Ethics Regulations, 2002.The bench of Duvvuru Rl Reddy (Judicial Member) and S Balakrishnan (Accountant Member) has observed that Chapter 6 of the Indian Medical Council Act, 1956, professional conduct, etiquette, and ethics Regulations, 2002, prohibits even institutions and...

Income Tax Deduction Allowable To Interest Income 'Attributable' To Cottage Industry Business: ITAT

The Chennai bench of Income Tax Appellate Tribunal (ITAT) has held that the income tax deduction allowable to interest income 'attributable' to cottage industry business.The bench of S.S. Viswanethra Ravi (Judicial Member) and S. R. Raghunatha (Accountant Member) has observed that the assessee is a 'cottage industry' and the interest income earned by the assessee is in its regular course of its operations and does forms part of the revenue 'attributable' to the operations of the society as a...

ITAT Weekly Round-Up: 11 To 17 August 2024

ITAT Declines To Stay Cancellation Of Exemption Notification To Legal Initiative For Forest And Environment Trust (LIFE)Case Title: Legal Initiative For Forest And Environment (LIFE Trust) Versus PCITThe Delhi Bench of Income Tax Appellate Tribunal (ITAT) has dismissed the stay application filed by assessee-LIFE Trust against the withdrawal/cancellation of registration for exemption granted under section 12A/12AA/12AB from FY 2013-14 onwards. The registration was cancelled on account of...

Remittance Made To Foreign Subsidiary Companies Are Not Taxable In India: ITAT

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the remittance made by the assessee to the foreign subsidiary companies have been held to be not taxable in India in the hands of the recipient company, there would be no obligation for the payer i.e. assessee company to deduct tax at source under section 195 of the Income Tax Act. The bench of Saktijit Dey (Vice President) and M. Balaganesh (Accountant Member) has observed that the moment a remittance is made to a non...

Sale Consideration Invested In Purchase Of Property, With Prior Permission Of Charity Commissioner; ITAT Deletes Disallowance

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that no disallowance can be made as the sale consideration was invested in the purchase of property with the prior permission of the charity commissioner.The bench of Sandeep Singh Karhail (Judicial Member) and Narendra Kumar Billaiya (Accountant Member) has observed that whenever the properties are purchased, they are shown as applications of funds and claimed as capital expenditures in the computation of income. Similar...