Tax
Investments In Mutual Funds Not A Basis To Conclude Activities Of Trust Are Not Genuine: Pune ITAT Restores Registration U/S 12A
On finding that entire proceeding was based on the covenants of the trust deed but not on the actual activities carried out by the appellant trust, the Pune ITAT set aside the order passed by CIT(E) cancelling the registration granted u/s 12AB(4) of the Income Tax Act, 1961.The Bench comprising Partha Sarathi Chaudhury (Judicial Member) and Inturi Rama Rao (Accountant Member) observed that, “Mere fact that the trust deed contains a covenant that enables the settlor to utilize the premises for...
Interest Income Derived By Co-Operative Society From Its Investment With Any Other Co-Operative Society Is Allowable U/s 80P(2)(D): Mumbai ITAT
While directing the AO to allow deduction u/s 80P(2)(a) or 80P(2)(d) of the Income-tax Act, 1961 of interest income earned by the assessee from the co-operative bank, the Mumbai ITAT clarified that co-operatives bank is also a co-operative society.The Bench comprising Rahul Chaudhary (Judicial Member) and Prashant Maharishi (Accountant Member) observed that, “in respect of any income by way of interest or dividend derived by the co-operative society from its investment with any other...
Investments Which Yielded Exempt Income Can Only Be Considered For Purpose Of Disallowance U/s 14A R/w Rule 8D: Mumbai ITAT
Quoting the decision of cargo motors private limited versus deputy Commissioner of income tax (145 taxmann.com 641), the Mumbai ITAT reiterated that for purpose of making disallowance of expenses u/s 14A as per rule 8D, only those investments were to be considered which yielded exempt income during the year.The Bench comprising Rahul Chaudhary (Judicial Member) and Prashant Maharishi (Accountant Member) observed that, “the assessee has more interest free funds available with it in the form of...
Taxpayer Should Not Suffer For Non-Filing Of Material Evidences: Mumbai ITAT Admits Additional Evidence
While setting aside the order u/s 68 of the Income Tax Act, 1961 passed by CIT(A), the Mumbai ITAT restored the entire disputed issues to the AO along with the additional evidence to decide the case afresh on merits, so that the assessee should be provided adequate opportunity of hearing.The Bench comprising Pavan Kumar Gadale (Judicial Member) observed that, “the evidences play important role in decision making in the adjudicating proceedings. Therefore, considering the facts, circumstances and...
Investment Expenditure In Subsidiary Was Incurred For Business Expediency: Delhi ITAT Deletes Addition U/s 37 Of I-T Act
On finding sufficient evidence for establishing that expenditure was incurred for business expediency, the Delhi ITAT deleted the addition made by AO u/s 36(1)(iii) and u/s 37 of the Income Tax Act, 1961.The Bench comprising Anubhav Sharma (Judicial Member) and Narendra Kumar Billaiya (Accountant Member) observed that, “no merit in the argument of the ld. DR that unless some revenue is shown from the project, the assessee cannot justify the loan and the interest expenditure was rightly...
Voluntary Disallowance Of Expense U/s 40(A)(ia) Is No Basis To Treat Taxpayer As 'Assessee In Default' U/s 201(1): Delhi ITAT
On finding that voluntary disallowance of expense u/s 40(a)(ia) of the Income Tax Act is not a ground to treat the assessee as 'assessee in default' u/s 201(1), the Delhi ITAT deleted the addition of chargeable interest u/s 201(1A) as well as the treatment of 'assessee in default' u/s 201(1).The Bench comprising Anubhav Sharma (Judicial Member) and M. Balaganesh (Accountant Member) observed that, “Merely because the assessee had voluntarily disallowed the expenses u/s 40(a)(ia) of the Act in the...
Charging Nominal Sum For Functioning Educational Institution Not Commercial Activity: Indore ITAT Directs For Registration U/s 12AB
While allowing the Assessee's appeal for registration u/s 12AB, the Indore ITAT held that mere charging a nominal amount for smooth functioning of educational institution and trust cannot called to be a part of commercial activity, and therefore, directed the CIT(E) to grant registration u/s 12AB of Income Tax Act, 1961.The Bench comprising Vijay Pal Rao (Judicial Member) and B.M. Biyani (Accountant Member) observed that “the entire thrust of the CIT(E) is regarding services provided by the...
'On-Money' No Basis To Make Addition On Sale Of House Property Sans Absence Of Reference To DVO U/s 55A: Ahmedabad ITAT
On finding that the AO has failed to refer the case to District Valuation Officer u/s 55A of Income Tax Act 1961, the Ahmedabad ITAT deleted the addition made by AO on account of on-money received by the assessee on the sale of duplex pent house.The Bench comprising T.R. Senthil Kumar (Judicial Member) and Annapurna Gupta (Accountant Member) observed that “the AO has merely relied upon the report given by his Inspector and determined the fair market value of the flats and pent houses, which is...
Taxpayer Deserves Opportunity To Furnish Additional Evidence If Critical To Issue, Before Completing Assessment U/s 144: Chandigarh ITAT
On finding lack of opportunities provided to Assessee and in interest of substantial justice, the Chandigarh ITAT remanded the matter to the file of CIT(A) to examine the matter of exemption u/s 10(23C) of the Income tax Act, 1961 afresh.The Bench comprising of Sanjay Garg (Judicial Member) and Vikram Singh Yadav (Accountant Member) observed that, “the additional evidence so submitted is critical and germane for deciding the matter under consideration and given that the assessment has been...
Discrepancy In Stock Sufficient Enough For Addition U/s 69B: Rajkot ITAT Confirms Estimation Of Gross Profit
On finding that the AO has rightly estimated the gross profit after finding discrepancy in stock, the Rajkot ITAT confirmed the addition made u/s 69B of Income tax Act, 1961.The Bench comprising Suchitra Kamble (Judicial Member) and Waseem Ahmed (Accountant Member) observed that, “The Assessing Officer has rightly estimated the gross profit by applying fair and reasonable ratio of gross profit at 8% instead of 6.25%. There is no need to interfere with the finding of the Assessing Officer as well...
No Addition Is Permitted U/s 69 I-T Act Once Source Of Investment Stands Proved: Mumbai ITAT
On finding that none of requirements of section 69 regarding source of investment stands fulfilled, the Mumbai ITAT upheld the order of CIT(A) deleting the addition made by AO under said provision.The Bench comprising C.V. Bhadang (President) and B.R. Baskaran (Accountant Member) observed that, “the said section envisages a situation where the assessee has (i) made an investment (ii) which is not recorded in the books of account or (iii) the assessee offers no explanation about the nature/source...
Sec 50C(1) Is Anti-Avoidance Provision To Prevent Evasion Of Tax By Showing Lesser Consideration, Reiterates Mumbai ITAT
While setting aside the order passed by CIT(A) and emphasizing on the safe harbour limit, the Mumbai ITAT held that the assessee is entitled to the benefit of Section 50C of Income Tax Act, 1961.The Bench comprising CV Bhadang (President) and BR Baskaran (Accountant Member) observed that, “the CBDT had acknowledged that there can be genuine cases, where there would be a variance between the “stamp duty value” and the “actual consideration received” in respect of similar properties depending upon...