ITAT Cases Monthly Round Up: June 2024

Update: 2024-07-01 03:00 GMT
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Salary Reimbursements Of Seconded Employees Is Not Taxable As Fees For Technical Services: ITATCase Title: IBM Canada Limited Versus DCITThe Bangalore Bench of Income Tax Appellate Tribunal (ITAT) has held that salary reimbursements of seconded employees are not taxable as fees for technical services.ITAT Quashes Assessment Order Against Bret Lee As Reassessment Notice Not Served...

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Salary Reimbursements Of Seconded Employees Is Not Taxable As Fees For Technical Services: ITAT

Case Title: IBM Canada Limited Versus DCIT

The Bangalore Bench of Income Tax Appellate Tribunal (ITAT) has held that salary reimbursements of seconded employees are not taxable as fees for technical services.

ITAT Quashes Assessment Order Against Bret Lee As Reassessment Notice Not Served Within Limitation Period

Case Title: M/s. Valeo Friction Materials India Ltd. Versus Commissioner of Customs

The Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that the royalty is not included in the transaction value of the imported raw materials to demand any differential customs duty.

No Disallowance Under Section 14A Of Income Tax Act Is Warranted In Respect Of Investments Not Yielding Tax Free Income: ITAT

Case Title: DCIT Versus Paranjapee Schemes Construction Ltd.

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that disallowance has to be worked out on the basis of investment which yielded dividend during the year and not by factoring in the total amount of investment.

Computation Of 6 Assessment Years For Search Assessments U/S 153C Starts From Date Of Receiving Seized Documents: ITAT

Case Title: M/s Esha Securities Pvt Ltd Versus Dy. CIT

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the computation of six assessment years for search assessments under Section 153C of the Income Tax Act starts from the date of receiving seized documents.

Cash Deposits Made From Assessee's Parents Accumulated Savings And Income From Agricultural Activities; ITAT Deletes Addition

Case Title: Vivek Prahladbhai Patel Versus ITO

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) has deleted the addition made by the department as the cash deposits made from the assessee's parents accumulated savings and income from agricultural activities.

Section 80G Deduction Allowable On CSR Expenditure: ITAT

Case Title: M/s. Alubound Dacs India Private Limited Versus Dy. CIT

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that the deduction under Section 80G of the Income Tax Act is allowable on the expenditure in respect of corporate social responsibility (CSR).

Non-Compete Fee To Be Treated As “Revenue Receipt” From 01.04.2003: ITAT

Case Title: ACIT-2(2)(1) Versus Lyka Labs Ltd.

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that the non-competitive fee received by the assessee is treated as 'revenue receipt' in the hands of the assessee but only post-amendment, i.e., w.e.f. 01.04.2003.

Shed Of 500 Mtr. On Agricultural Land Can't Be Considered As Residential House, Section 54F Exemption Not Allowable: ITAT

Case Title: ACIT Versus Himanshu Garg

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has denied the exemption under Section 54F of the Income Tax Act on the 500-meter shed made on agricultural land that cannot be considered a residential house.

Income From Reselling Of Subscription Based Product Is Royalty: ITAT

Case Title: Gartner Ireland Ltd. Versus DCIT

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that the income from the reselling of subscription-based products is royalty.

Income Tax Deduction Allowable On Expenditure Incurred On Warranty Claim: ITAT

Case Title: Grey Orange India Pvt. Ltd. Versus ACIT

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the income tax deduction is allowable on expenditures incurred on warranty claims.

RPM Is Most Appropriate Method To Benchmark Transaction Of Purchase Of Solar Goods: ITAT

Case Title: D Light Energy P. Ltd. Versus Assessing Officer

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the Resale Price Method (RPM) is the most appropriate method to benchmark the transaction of the purchase of solar goods.

ITAT Kolkotha Allows Exemption Registration To Income Tax Bar Association, Sets Aside CIT Order

Case Title: Income Tax Bar Association Calcutta Versus Commissioner of Income Tax (Exemption)

The Calcutta Bench of Income Tax Appellate Tribunal (ITAT) has allowed the exemption registration to the income tax bar association as the registration application was not time-barred.

Absence Of 'FTS' In Treaty Is No Basis To Tax Technical Services Rendered To AE, In Absence Of Its PE In India: Delhi ITAT

Case Title: Denso (Thailand) Co. Ltd Vs ACIT

The Delhi ITAT ruled that though income received by a non-resident entity towards services provided to Indian associate enterprises (AE) are in nature of 'fees for technical service' (FTS), but same cannot be taxed in India simply in absence of FTS clause under respect treaty provisions.

Assessments Concluded U/s 153A Without Mandatory Approval U/s 153D Would Be Void: Delhi ITAT

Case Title: Emaar MGF Land Limited Vs ACIT

The Delhi ITAT allowed the Assessee's appeal challenging assessments completed u/s 153A r/w Section 143(3) as void, in absence of mandatory approval u/s 153D.

Income Tax Addition On Unaccounted Sales And Purchases Can't Be Solely Based On Loose Slips: ITAT Bangalore

Case Title: ITO Versus M/s. Ramachandra Setty & Sons SRS Building

The Banglore Bench of Income Tax Appellate Tribunal (ITAT) has deleted the income tax addition of Rs. 1.36 crore on alleged unaccounted sales and purchases that were solely based on loose slips.

Submission Of Form-67 Is Not Mandatory For Availing Foreign Tax Credit: Delhi ITAT

Case Title: Suchi Agrawal Versus ITO

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that submission of Form-67 is not mandatory for availing foreign tax credit (FTC).

Purchasing Of Agricultural Land Is Outside Definition Of Capital Asset; Delhi ITAT Deletes Addition

Case Title: Mr. Ramnarayan Versus ITO

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the assessee has purchased agricultural land, which is outside the definition of a capital asset; therefore, the deeming provision under Section 56(2)(x) of the Income Tax Act cannot be invoked.

Income Tax Disallowance Based On Presumptions Of Earning Dividend Income In Future Is Not Sustainable: Mumbai ITAT

Case Title: Zodiac Ventures Ltd. Versus ITO

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that income tax disallowance based on presumptions of earning dividend income in the future is not sustainable.

Seized Documents Lack Information About Receipt Of Money: Mumbai ITAT Deletes Addition

Case Title: Yash Synthetics Private Limited Versus Assistant Commissioner of Income Tax

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has deleted the income tax addition of Rs. 1.61 crores on the grounds that the seized documents lack information as to date and mode of receipt of “on money.”

Revisionary Power Can't Be Invoked On Allegation Of Improper Inquiry By AO: Delhi ITAT

Case Title: Sh. Dharam Singh Versus PCIT

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the assessment order cannot be held to be erroneous and prejudicial to the interest of revenue merely on the allegation that the Assessing Officer has not made an inquiry and verification with regard to cash deposits as well as scrap sales.

Deeming Provisions Of Section 50C Can't Be Applied For Leasehold Rights: Delhi ITAT

Case Title: Shivdeep Tyagi Versus ITO

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that deeming provisions of Section 50C of the Income Tax Act cannot be applied for leasehold rights.

Orders Sent Through Email Went To Spam Folder; Cuttack ITAT Condones Delay Of 145 Days

Case Title: Tirupati Prasad Sahu Versus ITO

The Cuttack Bench of Income Tax Appellate Tribunal (ITAT) has condoned the delay of 145 days in filing an appeal by the assessee on the ground that the assessee mistakenly did not receive the orders sent through email, as many of these orders are going to spam folders.

Due Date For Filing Form 10AB Extended By CBDT; Bangalore ITAT Quashes Order Rejecting Section 80G Approval

Case Title: Carers World Wide Versus The Commissioner of Income Tax (Exemptions)

The Bangalore Bench of Income Tax Appellate Tribunal (ITAT) has quashed the order rejecting the approval under Section 80G of the Income Tax Act as the Central Board of Direct Taxes (CBDT) has extended the due date for filing Form 10A/10AB via press release dated April 25, 2024, to June 30, 2022.

Wrong Classification In ITR Can't Result Into Denial In Deduction: Chennai ITAT

Case Title: National Contracting Company Versus DCIT

The Chennai Bench of Income Tax Appellate Tribunal (ITAT) has held that the claim of the assessee cannot be denied for the reason that a deduction was mentioned in the wrong classification in the ITR, especially in the circumstances where all other evidence is available on record suggesting the deduction in pursuance of the provisions of Section 43B is available.

Co. Op. Banks Are Co. Op. Societies In Banking Business; Delhi ITAT Allows Section 80P(2)(d) Deduction

Case Title: Grand Paradi Co-op Housing Vs. Society Ltd. Versus The Income Tax Officer

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has allowed the deduction under Section 80P(2)(d) of the Income Tax Act to the Grand Paradi Co-op Housing Society and held that cooperative banks are cooperative societies that are doing banking business.

Exhibition By Gem And Jewellery Export Promotion Council, Not Trade And Commerce: Mumbai ITAT

Case Title: Dy. Commissioner of Income-Tax Versus The Gem And Jewellery Export Promotion Council

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that the exhibitions conducted by the assessee, the Gem and Jewellery Export Promotion Council, are not in the nature of trade and commerce.

Notice Sent On Incorrect Email Addresses Constitutes Improper Service: Ahmedabad ITAT

Case Title: LMP Motors Private Limited Versus ACIT

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) has held that the notices were sent to an incorrect email address, which led to the non-receipt of the notices by the assessee.

Non Service Of Hearing Notice Invalidates Ex-Parte Order: Kolkata ITAT

Case Title: M/s Littlestar Projects Pvt. Ltd vs. ITO

Finding that the hearing notices were not duly served by the CIT(A) or the AO and resultantly the assessment order was passed ex-parte, the Kolkata ITAT directed the assessee to furnish its correct address before the competent authority.

Employer Can't Claim Benefit Of Sec 36(1)(Va) If He Fails To Deposit Employees' Contribution To PF Within Due Date: Kolkata ITAT

Case Title: Supreme & Co. Pvt. Ltd vs. DCIT

The Kolkata ITAT held that delayed deposit of amount collected towards employees' contribution to PF renders claim of deduction u/s 36(1)(va) ineligible.

Purchaser Is Eligible To Claim Depreciation On Excess Amount Paid Over & Above Net Asset Value Of Seller's Business: Bangalore ITAT

Case Title: DN Solutions (India) Private Limited vs. ITO

The Bangalore ITAT held that once the Department has accepted the capital gain offered by the seller upon transfer of its business, then said transaction cannot be doubted in the hands of the purchaser.

Payment By Indian Entity To Its AE Abroad Is Not 'FTS' If Technical Skill Is Not Made Available By AE: Bangalore ITAT

Case Title: Herbalife International India vs. DCIT

The Bangalore ITAT held that payment made by Assessee (Indian entity) to its foreign AE (Parent entity) for obtaining administrative services will not be taxable as FTS/FIS in India in terms of Indo USA DTAA, in absence of 'make available' clause in the agreement between both the parties.

Rejection Of Belated Objections By DRP Does Not Extend Limitation Of Passing Final Assessment U/s 144(4): Delhi ITAT

Case Title: Ares Diversified vs. ACIT

The New Delhi ITAT held that once the DRP has chosen to reject the objections of assessee on the ground of delay, its resultant effect is confirmation of merits of draft order passed by the AO.

Net Profit Shall Be Estimated @2.75% Of Total Turnover In Case Its Rate Is Highest In First Year Of Operation: Cuttack ITAT

Case Title: Bankula Jaga Reddy vs. ITO

Finding that the assessee has shown highest rate of net profit in its first year of business, the Cuttack ITAT directed for estimation of net profit @2.75% on the total turnover of the assessee after reduction of the airport rent cost, sheet cost and truck rent cost as there is no possibility of assessee earning any income out of the said expenses.


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