ITAT Must Recall Its Order U/s 254 To Correct Manifest Error Apparent On Record: Delhi High Court

While condoning the delay of 86 days by Revenue in filing the appeal, the Delhi High Court dismisses Revenue's appeal filed against the Tribunal's order in miscellaneous application filed by assessee to review its earlier order u/s. 254(2) of the Income tax Act.The Division Bench comprising Justice Yashwant Varma and Justice Purushaindra Kumar Kaurav observed that “the ITAT had clearly rendered incompatible and inconsistent findings. In fact, we are constrained to observe that paras 12 and 21...

Interest Paid On Borrowed Funds For Investment In Shares Is Hit By Sec 14A If Dividend Received On Shares Was Not Part Of Total Income: Bombay HC

The Bombay High Court recently held that the interest paid on borrowed funds in respect of investment in shares of two companies was hit by Section 14A of the Act inasmuch as the dividend received on such shares did not form part of the total incomeThe Division Bench comprising Justice K.R. Shriram and Justice Dr. Neela Gokhale observed that “the fact remains that the dividend income from the two companies is not taxable and in that scenario the expenditure incurred on interest paid on funds...

Harshad Mehta Scam: AO Can't Assess Additions Again If Deleted By CIT(A) In First Round Of Proceedings; Bombay High Court

The Bombay High Court in the Harshad Mehta Scam case, while upholding the ITAT's ruling, held that the Assessing Officer could not have assessed additions again since the CIT (A) had deleted the same in the first round of proceedings and the concerned matters have attained finality. The bench of Justice K. R. Shriram and Justice Dr. Neela Gokhale has observed that various types of additions aggregating to the amount were made by the Assessing Officer in the original assessment proceedings, and...

Himachal Pradesh High Court Declares Water Cess Levied By State Government On Hydropower Generation As Unconstitutional

The Himachal Pradesh High Court has declared the levy of water cess by the state government on hydropower generation unconstitutional.The bench of Justice Tarlok Singh Chauhan and Justice Satyen Vaidya has observed that even the Statement of Objects and Reasons as well as the preamble of the Himachal Pradesh Water Cess on Hydropower Generation Act, 2023, do not lend any guidance to the delegate. The preamble of the Act merely states that it is an act to levy water cess on hydropower generation...

Explanation 3 To Sec 147 Can't Be Resorted To Make Addition On Any Other Issue Which Is Not Included In Reasons For Reopening: New Delhi ITAT

On finding that no addition is made based on the reasons to believe recorded by the AO for reopening the assessment, the New Delhi ITAT quashed the order passed by the AO u/s 147 of the Income tax Act, 1961The Bench of the ITAT comprising of Anubhav Sharma (Judicial Member) and Shamim Yahya (Accountant Member) observed while referring to the decision of Jurisdictional High Court in the case of Commissioner of Income Tax vs. Monarch Educational Society [2016] 387 ITR 416 that, “If no addition is...

Any Order Passed By Referring To Sec 144(C)(1) Should Be Construed Only As Draft Assessment Order: Madras High Court

While dismissing assessee's petition, the Madras High Court held that the impugned assessment order passed by the respondent/ AO is only a draft assessment order in which case, the petitioner/ assessee should approach the appropriate forum and address their grievance in terms of Section 144 (C) of the Income Tax Act.The Single bench of Justice Krishnan Ramasamy observed that “Though the word “draft assessment” is missing, the provision under Section 144 (C) of the Income Tax Act is very much...

No Addition Can Be Made U/s 69 If Difference In Stock Found During Survey And As Recorded In Books Stands Reconciled: New Delhi ITAT

Finding that no defects were pointed out and the books of accounts have been accepted, the New Delhi ITAT ruled that the assessee having given the explanation which was plausible explanation which stands verified in inquiry by the Assessing Officer, the same cannot be rejected arbitrarily by indulging into surmises.The Bench of Dr. B.R.R Kumar (Accountant Member) and Yogesh Kumar US (Judicial Member) observed that “when the difference in physical stock found during survey and as recorded in the...

Filing Of Return U/s 139(1) Within Due Date Is Mandatory For Claiming Deduction U/s 80IB: Ahmedabad ITAT

Emphasizing that the condition of filing the return of income within the due date is mandatory in nature for claiming deduction u/s 80IB(10) of the Income tax Act, the Ahmedabad ITAT confirmed the disallowance made by the AO under the said provision.Referring to the decision of Apex Court in Wipro Ltd. vs. Pr. CIT (2022) 142 taxmann.com 562 (SC), the Bench of Suchitra Kamble (Judicial Member) and Waseem Ahmed (Accountant Member) reiterated that “for claiming the benefit u/s. 80IB(10) of the...

Once Unsecured Loan Stands Repaid Along With Interest, Then Such Loan Transaction Can't Be Treated As Non-Genuine: Mumbai ITAT

The Mumbai ITAT pointed out that the AO and the CIT(A) has applied the concept of human probabilities to hold the scrip as penny stock without bringing on record as to how the assessee is involved in any of the scrupulous activities or directly linked to one of the persons who has involved in manipulation/rigging of share prices, entry operator or exit provider.The ITAT therefore held that there is no material with the tax authorities to substantiate their findings that the impugned transaction...

Genuineness & Veracity Of Party Can't Be Doubted To Make Addition U/s 69 Merely Because Rent Was Received In Cash: Delhi ITAT

While deleting the addition on account of unexplained investment, the New Delhi ITAT clarified that genuineness and veracity of the party cannot be doubted merely because the cold storage rent was received in cash, when the assessee is only a custodian of the goods received by it for storing in its storage.The Bench of Challa Nagendra Prasad (Judicial Member) and Dr. BRR Kumar (Accountant Member) observed that “the material impounded in the course of survey on 01.11.2017 also contains copies of...

Investments Yielding Tax Exempt Income Can Only Be Considered For Computing Disallowance Under Rule 8D(2)(iii): Kolkata ITAT

Abiding by the principle of judicial hierarchy and binding precedent, the Kolkata ITAT directed the AO to consider only the investments yielding tax exempt income for computation of disallowance under Rule 8D(2)(iii) of the Income Tax Rules 1962.The Bench of the ITAT comprising of Sanjay Garg (Judicial Member) and Girish Agrawal (Accountant Member) observed while referring to the decision of Coordinate Bench of Guwahati in the case of ACIT vs. Williamson Financial Services Ltd. while...

Capital Gains On Silver Articles Wrongly Estimated By I-T Authorities: Chennai ITAT Deletes Addition & Penalty Levied U/s 271(1)(C)

On finding that lower authorities had erred in computing the estimated gain on silver articles, the Chennai ITAT deleted the addition made by CIT(A) and levy of penalty u/s 271(1)(c) of the Income Tax Act, 1961.The Bench of the ITAT comprising V. Durga Rao (Judicial Member) and Manoj Kumar Aggarwal (Accountant Member) observed that, “the shortage of 693.85 grams in gold jewellery is well covered by the stated purchase of 1950 grams of gold jewellery by the assessee. This being the case, the...