ITAT Weekly Round-Up: 14 To 20 July 2024

Update: 2024-07-21 07:10 GMT
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Final Assessment Passed Within Two Days Of Issuing Intimation, Violation Of 143(1) IT Act : Mumbai ITATCase Title: Add More Real Estate Developers LLP verses The Asst. Director of Income-taxThe Mumbai ITAT held that the AO has no jurisdiction to make any adjustment in final assessment order passed u/s 143(3) before thirty days of receiving any response from the assessee on basis of...

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Final Assessment Passed Within Two Days Of Issuing Intimation, Violation Of 143(1) IT Act : Mumbai ITAT

Case Title: Add More Real Estate Developers LLP verses The Asst. Director of Income-tax

The Mumbai ITAT held that the AO has no jurisdiction to make any adjustment in final assessment order passed u/s 143(3) before thirty days of receiving any response from the assessee on basis of intimation issued u/s 143(1).

Merely Because The Transactions Are Made Through Banking Channel Does Not Itself Prove The Creditworthiness

Case Title: M/s Sankpal Developers vs Income Tax Officer

The Mumbai ITAT held that merely because the transactions are made through a banking channel does not itself prove the creditworthiness of the lender and genuineness of the transaction.

Additions Can't Be Made In Cases Of Unabated Assessments Without Incriminating Material: Mumbai ITAT

Case Title: Assistant Commissioner of Income Tax vs. Mansha Agencies Pvt. Ltd

The Mumbai ITAT held that no addition can be made by AO in respect of completed/unabated assessments, in absence of any incriminating material found during the course of search u/s 132 or requisition u/s 132A.

'Reasons To Believe' For Reopening Must Based On Credible Information : Kolkata ITAT

Case Title: Alosha Marketing Pvt. Ltd verses Assistant Commissioner of Income Tax

While quashing the reopening proceedings, the Kolkata ITAT held that any allegation of escapement of income must be backed by information expressing 'reason to believe' and such belief requires to be based on some credible or relevant material.

Cash Deposits During Demonetization Alone Is No Basis To Make Addition In Absence Of Glaring Error In Books: Mumbai ITAT

Case Title: Anil Champalal Jain verses ITO

Finding that cash sales as part of the trading result offered for taxation by the assessee is not disputed, the Mumbai ITAT held that addition is permitted on account of cash deposit during demonetization on mere allegation that books of account are manipulated without its rejection.

Loans Brought Forwarded Can't Form Basis For Addition In Current Year if Genuineness Is Established: Mumbai ITAT

Case Title: Arun Babulal Shah verses CIT Appeal NFAC

Finding that the genuineness of loan transactions is not verified by the Income tax Authorities, the Mumbai ITAT held that no additions are permitted on account on unsecured loans by disregarding the confirmations & identity of loan creditors produced by assessee.

Assumption Of Jurisdiction Based On Wrong Facts Can't Form Basis For Initiating Reopening: Mumbai ITAT

Case Title: Laxman Gore Shreshtha verses DCIT

The Mumbai ITAT there is no question of concealment of fact when the assessee had itself declared the income in its return which was assumed by the AO to be an escaped income.

Technical Error In Making Application For Final Approval Is No Basis To Deny Benefit Of Sec 80G: Kolkata ITAT

Case Title: North Eastern Social Research Centre verses CIT(Exemption)

Referring to the decision in case of Anudip Foundation for Social Welfare vs. CIT(Exemption), Kolkata – ITA No. 1341/Kol/2023, the Kolkata ITAT held that assessee will not be deprived of the benefit of Sec 80G due to technical errors occurred in making application because of the confusion and misunderstanding on in properly interpreting the relevant provision.

Payments Made To Overseas Company For Services Utilized Abroad, Does Not Warrant Tax Deduction At Source U/s 195: Delhi ITAT

Case Title: QAI India Ltd. verses DCIT

The New Delhi ITAT held that when the taxpayer company has utilized the service of a company outside India and payment has also been made outside India, then taxpayer company would not be liable for deduction of tax at source u/s 195.

Statutory Authority Must Not Grant Approval U/s 153D Mechanically: Delhi ITAT Criticizes On Unjust Exercise Of Discretion By AO

Case Title: Mysore Bhaskara Pankaja verses ACIT

While emphasizing that the obligation of granting approval acts as an inbuilt protection to the taxpayer against arbitrary or unjust exercise of discretion by the AO, the New Delhi ITAT held that approval granted u/s 153D should necessarily reflect due application of mind and if the same is subjected to judicial scrutiny, it should stand for itself and should be self-defending

Block Period Of Six AYs For Purpose Of Sec 153C Has To Be Reckoned From Date Of Receipt Of Documents By AO: Delhi ITAT

Case Title: Akansha Gupta verses ACIT

The New Delhi ITAT held that for purposes of assessment u/s 153C, the date of recording of satisfaction of AO will be deemed date for the possession of seized documents.

AO Can't Make Additions Solely Based On Retracted Statement Of Third-Parties If Assessee Has Claimed Opposite: Chennai ITAT

Case Title: Shri Rajagopal Saravanan verses ACIT

Referring to the decision of Madars High Court in case of P.V. Kalyanasundaram, the Chennai ITAT held that once the assessee had denied payments made by it, then he cannot be expected to prove the negative.

Indexation Benefit Shall Be Given To Taxpayer Based On Cost Of Acquisition Of Property Sold By Him: Delhi ITAT

Case Title: Shri Anurag Lakshman Pande verses DCIT

The New Delhi ITAT held that the assessee is entitled to avail the benefit of carry forward of long-term capital loss on sale of residential property against long term capital gain computed on sale of commercial property.

Cash Sales Can't Take Place Before Commencement Of Business: Delhi ITAT Deletes Addition U/s 69A On Receipts From Such Sale

Case Title: ITO verses Appliances Forever

The New Delhi ITAT held that a business man deposits consideration from sale of his products on respective dates of sales as per his needs and prudence, and therefore, the AO cannot tax the receipts and income embedded therein together.

No Arm's Length Addition Is Warranted On Account Of Corporate Guarantee If Guarantee Fee Is Lower Than Bank's Quoted Interest Rate: Ahmedabad ITAT

Case Title: Bosch Rexroth (India) Ltd. versus ITO

Finding that the TPO did not present compelling evidence to establish that the guarantee fee was unwarranted, the Ahmedabad ITAT held that benefits derived, as seen in lower interest rates and favorable operating margins, substantiate the transaction's arm's length nature.

Obsolete Inventory Prepared In Accordance With Accounting Standards And Audited By Independent Auditor, Can Be Written Off: Delhi ITAT

Case Title: Nihon Parkerizing (India) Pvt. Ltd verses DCIT

Referring to the decision in case of Gillette India Ltd. Vs. ACIT, the New Delhi ITAT held that once assessee had given details about inventory written off along with ledger codes, then assessee would be eligible for deduction on written-off obsolete inventory.

AO Must Pass Draft Assessment If He Proposes Variation In Returned Income: Chennai ITAT Explains Scope Of Sec 144C

Case Title: M/s Regen Renewable Energy Generation Global Limited verses ACIT

The Chennai ITAT held that the AO must pass a draft assessment order to the eligible assessee in case he proposes to make any variation in the income or loss returned which is prejudicial to the interest of such assessee.

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