Tax
Once Reassessment Framed By AO Is Not Sustainable,Order U/s 263 Seeking To Revise Reassessment Is Not Acceptable: Delhi ITAT
While allowing the appeal of assessee in respect of the fact that whether the PCIT had validly assumed his revision jurisdiction u/s 263 of the Income Tax Act, 1961, both in law and on facts, the New Delhi ITAT held that the PCIT erred in assumption of jurisdiction u/s 263 of the Income Tax Act, 1961.The Bench of the ITAT comprising of Saktijit Dey (Vice President) and M. Balaganesh (Accountant Member) observed that, “Once, the reassessment order per se framed by the AO is not sustainable in the...
Once Safe Harbour Rule Of 5% Is Held As Applicable, No Addition Can Be Made By Invoking Sec 50C, Reiterates Kolkata ITAT
On finding that CIT(A) was justified in adopting the valuation given by the DVO and has rightly considered the safe harbour rule of 5% as per third proviso to section 50C of the Income Tax Act, 1961, the Kolkata ITAT upheld the CIT(A)'s decision to delete the addition made under the head of “Capital gains”.The Bench of the ITAT comprising of Sanjay Garg (Judicial Member) and Manish Borad (Accountant Member) reiterated while agreeing with the CIT(A)'s observation that, “once the safe harbour rule...
Retracted Statement Of Person Without Any Nexus With Taxpayer Can't Form Basis For Addition U/s 69A: Mumbai ITAT
The Mumbai ITAT deleted the addition made by AO u/s 69A of the Income Tax Act, 1961, on finding that retracted statement of the person representing the said firm, who otherwise neither named nor specified the role and also not connected the assessee specifically.The Bench of the ITAT comprising of Narender Kumar Choudhry (Judicial Member) and Padmavathy S. (Accountant Member) observed that, “we have failed to understand that how the name as mentioned in the said diary, as 'NENSIBHI ELLA' can be...
AO Is Required To Apply His Mind To Facts Of Case And Then Pass Reasoned Assessment: Ahmedabad ITAT Calls For Adjudication Afresh
On finding that the order of the AO is not a simple order giving effect to the order of the CIT passed u/s 263, the Ahmedabad ITAT restored the issue back to the AO to verify the facts of the case and thereafter pass an order in accordance with the directions of the CIT in his order passed u/s 263 of the Income Tax Act, 1961.The Bench of the ITAT comprising of T.R. Senthil Kumar (Judicial Member) and Annapurna Gupta (Accountant Member) observed that, “The AO was required to apply his mind to the...
Compensation Received Under Mutual Agreement For Non-Renewal Of Contract Can't Form Basis Of Addition U/s 28(Ii)(E): Delhi ITAT
While clarifying the difference between profession and business, the Delhi ITAT reiterated that compensation received under mutual agreement for non-renewal of contract cannot form basis of addition u/s 28(ii)(e) of the Income Tax Act, 1961The Bench of the ITAT comprising of Yogesh Kumar U.S (Judicial Member) and N.K. Billaiya (Accountant Member) reiterated while considering the decision of Supreme Court in the case of G.K. Choksi & Co. 295 ITR 376 that, “Though the phrase has been used in...
Taxpayer Is Entitled To Deduction On Capital Gains U/s 54 Once It Satisfies Conditions Prescribed By Said Provision: Mumbai ITAT
While overturning the findings of CIT(A) that the assessee does not satisfy the condition laid down u/s 54 of the Income tax Act, 1961 for claiming deduction, the Mumbai ITAT directed the AO to re-compute the capital gains, if any, after allowing deduction u/s 54 as claimed by the assessee.The Bench of the ITAT comprising of Rahul Chaudhary (Judicial Member) and Om Prakash Kant (Accountant Member) observed that, “the Revenue has not disputed that the facts that the occupation certificate in...
Tested Party Normally Should Be Least Complex Party To Controlled Transaction, Reiterates Calcutta High Court
The Calcutta High Court reiterated that the selection of the tested party is to further the object of the comparability analysis by making it less complex and requiring fewer adjustment.The Division Bench comprising Justice T.S Sivagnanam and Justice Supratim Bhattacharya observed that “the tested party normally should be the least complex party to the controlled transaction and there is no bar for selection of tested party either local or foreign party and neither the Act nor the guidelines on...
Customs Act | “Reason To Believe” For Confiscation Of Goods Must Be Based On Credible Material: Allahabad High Court
The Allahabad High Court has held that for natural products that are also grown inside India, presumption cannot arise that they have been smuggled. The Court held for assuming jurisdiction in such cases, the custom authorities must show that credible material exists to give rise to “reason to believe” to empower them to confiscate the goods under the Customs Act, 1962.“Curtailment of free trade has serious consequences. While the revenue authorities would be within their jurisdiction to...
Hyderabad ITAT Dismisses Assessee's MA Qua Interest On Receivables Since Invoice-Wise Details Were Not Filed Earlier
The Hyderabad ITAT dismissed the Miscellaneous Application filed by assessee for modifying Tribunal's order on TP adjustment qua interest on trade receivables for AY 2015-16.Referring to the decision of Supreme Court in the case of MCorp Global Pvt. Ltd. Vs. CIT [(2009) 309 ITR 434/178 Taxmann 347 (SC)], the Bench comprising R.K. Panda (Vice President) and Laliet Kumar (Accountant Member) observed that “it would appear from order of ITAT that the credit period of only 60 days from the invoice...
Benefit Test Must Be Considered For Determining ALP Adjustment Qua Notional Interest On Outstanding Receivables: Bangalore ITAT
Emphasizing on the necessity of credit period, the Bangalore ITAT remitted the matter of ALP adjustment made towards notional interest on outstanding receivables in case of assessee company engaged in software development and IT enabled services.Referring to the judgment of ITAT Delhi in ITA NO.1248/Del/2012, the Bench comprising Goerge Goerge K (Vice President) and Laxmi Prasad Sahu (Accountant Member) observed that “there has to be a proper inquiry by the TPO by analysing the statistics over a...
Once Working Capital Adjustments Is Factored In Pricing, No Separate Adjustment On Outstanding Receivables Is Required: Visakhapatnam ITAT
The Visakhapatnam ITAT directed the TPO to consider the impact of working capital adjustments of the assessee company and appropriate material differences with that of the comparable companies.The ITAT ruled on comparables selection, treatment of expenses as operating/non-operating, and notional interest on outstanding receivables in case of assessee company engaged in providing processing services in relation to manufacture of garments. The Bench comprising Duvvuru RL Reddy (Judicial Member)...
Upward Adjustments Of Income As Proposed By TPO Stands Withdrawn: Delhi High Court Applies Rule Of Consistency To Adopt TNMM
Finding that the matter has been resolved and Modicare Limited has been excluded from the list of comparable to determine the ALP, the Delhi High Court dismisses Revenue's appeal against ITAT's decision in case of assessee engaged in sale of a wide variety of skin care and cosmetic products.The Division Bench comprising Justice Yashwant Varma and Justice Purushaindra Kumar Kaurav observed that “it was brought to our attention that the matter has been resolved inter partes in terms of the...