ITAT Cases Monthly Round Up: May 2024
Mariya Paliwala
1 Jun 2024 6:00 PM IST
Bonafide Mistake Committed By Assessee While Applying For Registration In Form 10AB Instead Of Form 10A, Merits To Be Condoned: Hyderabad ITATCase Title: Mandava Foundation verses Income Tax OfficerOn finding that it is proper to condone the mistake committed by the assessee while applying for registration in Form 10AB instead of Form 10A of the Income Tax Act, the Hyderabad ITAT directed...
Case Title: Mandava Foundation verses Income Tax Officer
On finding that it is proper to condone the mistake committed by the assessee while applying for registration in Form 10AB instead of Form 10A of the Income Tax Act, the Hyderabad ITAT directed the CIT(E) to hear and dispose of the request of the assessee by allowing it to apply under Form 10A.
Case Title: Maruti Enterprise verses ADIT
The Rajkot ITAT held that the claim of the assessee cannot be denied as it was not reported in the tax audit report, especially in the circumstances where other evidence is available on record suggesting the deduction in pursuance to the provisions of section 43B on payment basis is available.
Case Title: Phillip Koshy verses DCIT
While allowing deduction u/s 54 of the Income tax Act, the New Delhi ITAT explained that under the light of section 54, exemption of capital gain from being charged to income tax as income of the previous year is attracted when another residential house has been purchased within one year before or two years after the date of transfer or has been constructed within three years after the date of transfer of the residential house.
No Adhoc Disallowance Is Permitted Without Rejecting Books Of Account: Mumbai ITAT
Case Title: ACIT verses Merchant Agri Global Private Limited
On finding that the AO had audited and still not rejected the books of account, the Mumbai ITAT held that the ad hoc disallowance made by the AO was not justified and needed to be deleted.
Case Title: Our Lady of Hope Church verses CIT (Exemption)
While allowing the appeal challenging the cancellation of provisional registration of the applicant trust u/s 12AB of the Income Tax Act, the Pune ITAT set aside the order of CIT(E) and remanded the matter back to specifically examine the genuineness of the charitable activities performed by the trust as per his satisfaction.
Case Title: Murtuza Abdul Gaffar Khan verses National Faceless Appeal Centre
While deleting the addition made u/s 68 of the Income Tax Act, the Mumbai ITAT held that in the absence of any dispute and discrepancy in the sales, the addition should be restricted to the extent of gross profit at the same rate of the genuine purchases.
Case Title: Lalita Troy Caeiro verses ITO
On finding that the reopening of the assessment is beyond the time limit provided under the proviso to Section 147 of the Income Tax Act, the Mumbai ITAT quashed the order of disallowance passed by the AO for disallowing the interest paid for acquisition of the property from computation of short-term capital gain.
Case Title: Smt. Kusum Mittal verses DCIT
While rejecting the appeal challenging the validity of notice issued u/s 153A, the New Delhi ITATheld that section 292CC of the Income Tax Act empowers an officer to presume that the books of account or other document found during search u/s 132 or survey u/s 133A belongs to a person upon whom search or survey has been done.
Case Title: Kundal Raghubir Bhandari verses ITO (Intl. Tax)
Finding that the AO has completely relied on the statement of third party without giving opportunity to the assessee to prove its point of view, which is against natural justice, the Mumbai ITAT held that such assessment order to be bad in law which was made purely on the basis of assumption and unverified statement of the third party.
Case Title: M/s. KSJ Infrastructure Pvt. Ltd. Verses DCIT
The Chennai ITAT held that since the notice issued by AO for subject assessment year falls beyond the stipulated six assessment years and four relevant assessment years, considering the satisfaction note, the notice issued by AO u/s 153C of Income tax Act for initiation of proceeding against assessee and consequent assessment order passed u/s.143(3) r/w/s 153C is barred by limitation, void ab initio and liable to be quashed.
Case Title: Kishore Bhagwandas Ramnani verses ITO
Since the AO did not consider that assessee has incurred expenses as per the terms & conditions of the agreement, theMumbai ITAT directed the AO to allow the claim of the assessee to treat Form No. 35A as filed after verification of the copy of agreement and copy of bank statement filed by the assessee.
Case Title: Konathala Nooku Naidu verses ITO
Finding that the assessee has properly explained the source of cash deposit, the Visakhapatnam ITAT directed the AO to delete the addition made u/s 69A of the Income Tax Act.
Case Title: Kanjula Rajagopal Reddy Firm verses ITO
On finding that there is no short fall of TDS and the assessee is eligible to get credit of the entire amount, theVisakhapatnam ITAT directed the AO to grant credit of the entire amount deducted as tax at source u/s. 194Q of the Income Tax Act.
Case Title: Asian Paints Ltd Versus Asstt. Commissioner of Income Tax
The Mumbai ITAT recently ruled on selection of comparable and transfer pricing adjustment on account of non-recovery of charges for providing letter of comfort/support and royalty in case of company engaged in manufacturing paints and enamels.
Case Title: Asian Paints Ltd Versus Asstt. Commissioner of Income Tax
The Mumbai ITAT confirmed the CIT(A)'s action in deleting the addition made on account of waiver of royalty received from two subsidiaries.
Case Title: ACIT verses Kesar Terminals and Infrastructure Ltd.
While referring to the decision of Chennai Bench of Tribunal in the case of M/s. Shriram Properties Limited (ITA No. 431/Chny/2022), the Mumbai ITAT held that the notional interest income credited by the assessee to the profit and loss account as per the requirement of Indian Accounting Standard has not actually accrued to the assessee and hence the same is not liable for taxation under Real Income principle.
Case Title: Bank of Nova Scotia verses DCIT
The Mumbai ITAT rules on TP-adjustments w.r.t administrative support services in relation to interbank indemnities, provision of IT-enabled services, and purchase of precious metals in case of company carrying out banking activities.
Case Title: Atul Limited verses DCIT
The Ahmedabad ITAT remitted the issue of granting business volume discount adjustment and geographical difference adjustment for determination of ALP in case of company engaged in the business of manufacturing chemicals like dyes, agro chemicals, bulk drugs, commodity chemicals and intermediates.
Ahmedabad ITAT Explains Difference Between Letter Of Credit From Corporate Guarantee
Case Title: Axis Bank Limited verses ACIT
While upholding ALP adjustment on LOC in case of Axis Bank, the Ahmedabad ITAT rules on difference between letter of comfort (LOC) and guarantee commission.
Case Title: Shri. Palanisamy Senthil kumar verses ITO
The Chennai ITAT explained that a typographical error in mentioning incorrect amount of expenses in Form 3CD does not call for any addition by the Assessing Officer to assessee's income.
Case Title: Shri. Trimbak Konher Patil verses ITO
The Bangalore ITAT reiterated that the distinction between an employer's contribution which is its primary liability under law, in terms of Section 36(1)(iv), and its liability to deposit amounts received by it or deducted by it is crucial.
Case Title: Shri Vijay Suresh Dave verses DCIT
The Mumbai ITAT clarified that as per the provisions of Section 68 of the Income tax Act, the Assessing Officer is required to make addition of unexplained cash credit only in the previous year in which such cash credit has been made and the assessee is not in a position to offer satisfactory explanation relating thereto.
Case Title: DCIT verses Shri Subramaniam Thanu
The Chennai ITAT clarified that the Assessing Officer has to record his satisfaction before initiating penalty under section 271D of the Income tax Act in respect of violation of the provisions of section 269SS of the Act.
Case Title: Shri Girishbhai Vadilal Shah verses DCIT
The Ahmedabad ITAT held that in the absence of the Assessing Officer pointing out as to how despite the assessee's explanation, there was no nexus between the interest-bearing funds and their utilization for making advances for earning interest income, no disallowance u/s 57(iii) of the Income tax Act was tenable.
Case Title: Shri Ramasubramaniam Sridhar Paul verses ITO
The Chennai ITAT held that there is no requirement that specific money as deposited in capital gain account scheme should be utilized towards new investment, and the assessee may make investment from other funds as available with him and the same would not jeopardize the claim of the assessee.
Case Title: ITO verses Shri Piyushbhai Bhailalbhai Hirpara
Finding that the CIT(A) has deleted the disallowance merely by accepting the contentions of the assessee before it without dealing with the finding of the AO, the Ahmedabad ITAT directed the CIT(A) to consider the arguments of both the sides before him, i.e. the AO and the assessee, and thereafter adjudicate the issue in accordance with law.
Case Title: Shri Charanjit Singh verses ACIT
Finding that except for filing copies of so-called invoices of the contractor through whom the work was done, which were also deficient in several respects, no other evidence was filed by the assessee, the Chandigarh ITAT held that the assessee had failed to discharge the initial burden of proof rested on him to substantiate his claim of having incurred expenditure on improvement of the property.
Case Title: DCIT verses Shri Nilesh Shantilal Tank
Finding that the Settlement Commission has not discarded the evidentiary value of the statement of witness (Rajesh Doshi) who has admitted to the modus operandi of availing bogus purchase bill from the assessee, the Mumbai ITATconfirmed the addition made by I-T Authorities on the gross profit margin @ 12.5% on the alleged bogus purchase by assessee.
Case Title: Shri Krishna Murthy Vuppala verses ITO
Finding merits in the argument of assessee regarding substantiation of cash deposit during demonetization, the Hyderabad ITAT directed the AO to give one final opportunity to the assessee to substantiate with evidence to his satisfaction regarding the nature and source of the cash deposit of Rs.9,79,000/- during the demonetization period.
Case Title: Sengoda Gounder HUF verses DCIT
The Chennai ITAT held that assessee's claim on the fair market value cannot be termed as concealment of income, if such claim was based on the valuation report of an approved valuer.
Case Title: Satyam Print House verses Additional/Joint/Deputy/ Assistant Commissioner of Income Tax, Income Tax Officer, National Faceless Assessment Centre
Noting that neither the Assessing Officer nor the CIT(A) have taken into consideration the explanation offered by the Assessee during the assessment proceedings in relation to the difference in the sale consideration and the stamp duty valuation of immovable property, the Mumbai ITAT deleted the penalty levied u/s 270A of the Income tax Act for under-reporting of income.
Case Title: Satishbhai Kadvabhai Sarvaiya verses ITO
Finding that the assessee has explained the details of the earning of the amount which was rightly deposited during the demonetization period, the Rajkot ITAT held that the addition confirmed by the CIT(A) u/s 69A of the Income tax Act is not justified.
Case Title: Sanjeev Kumar Goyal verses ITO
The New Delhi ITAT held that Section 44AB of the Income tax Act casts an obligation upon the assessee to get accounts audited before the specified date and furnish by that date the report of such audit.
Case Title: Sanganeria Foundations For Health & Education verses CIT (Exemption)
While explaining Section 11(3) of the Income tax Act, the New Delhi ITAT held that any income referred to u/s 11(2) which is paid to any trust/ institution registered u/s 12AA or to any fund/ trust/ university/ educational institution/ hospital referred to u/s 10(23C)(v) shall be deemed to be the income of such person of the previous year in which it is so applied or ceases to be so accumulated or set apart or ceases to remain so invested or deposited or credited or paid, as the case may be, or of the previous year immediately following the expiry of the period aforesaid.
Case Title: Sharda Ferro Works Pvt. Ltd. verses DCIT
Referring to the decision of Bombay High court in the case of PCIT v. Paradise Inland Shipping Pvt Ltd. [2017] 84 taxmann.com 58 (Pan), the Kolkata ITAT deleted the addition made towards share capital and share premium u/s. 68 of the Income tax Act.
Case Title: Computer Modelling Group Ltd. Versus ACIT
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that since the assessee was a non-resident, the entire tax was to be deducted at source on payment made by the payer to it, and there was no question of advance tax payment by the assessee; accordingly, no interest under Section 234B could be levied upon the assessee.
Case Title: Shree Bipin Biharidas Charitable Foundation verses CIT (Exemption)
Referring to the decision of the Calcutta Bench in ITA No. 994/Kol/2023, the Ahmedabad ITATreiterated that the assessee, who has been granted provisional registration, is eligible to apply for final registration irrespective of the fact that the assessee had already commenced its activity even prior to the date of grant of provisional approval.
Case Title: Shree Jay Limbach Co. Op. Credit Society Ltd. verses ITO
Observing that the assessee was all along, from the beginning since it became aware of some intimation having been made u/s 143(1) of the Income tax Act, seeking rectification in the same, the Ahmedabad ITAT held that rejection of said rectification application as being time barred is not in conformity with law.
Case Title: Kankaria Maninagar Nagarik Sahakari Bank Ltd. Versus Deputy Commissioner of Income Tax
The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) has held that loss due to the sale of government securities by banks is a “business loss” and the income tax deduction is allowable under Section 37 of the Income Tax Act.
SBI Not Liable To Deduct TDS On Transactions Related To Assignment Of Loans By NBFC: ITAT
Case Title: State Bank of India Versus DCIT(TDS)
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that the State Bank of India (SBI) is not liable to deduct tax at source (TDS) on transactions related to the assignment of loans by non-banking financial companies (NBFC).
Case Title: DCIT Versus J. K. Techno soft Ltd.
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has deleted the income tax addition and held that mark-to-market losses, losses on forward contracts, and losses on forward premium accounts are not speculative in nature.
Case Title: Computer Modelling Group Ltd Vs ACIT
The Delhi ITAT held that receipts by a foreign entity from provision of software services to oil companies in India being in the nature of business profits are not taxable in India in the absence of its Permanent Establishment (PE) during the relevant AYs.
Case Title: Devki Nandan Maheshwari Vs ACIT
The Delhi ITAT deleted the addition made u/s 68 being unsecured loan obtained from a firm by the Assessee for further investment in a company on the ground that the identity, creditworthiness, and genuineness of the transaction stands proved.
Case Title: Conferencecall Services India Pvt. Ltd Vs Dy. Commissioner of Income Tax
The Chennai ITAT recently held that the final assessment order dated Nov 21, 2017 passed after expiry of one month from the end of the month in which the DRP directions were received by the Revenue is barred by limitation and hence, “passed wholly without jurisdiction and therefore, null in the eyes of law”.
Date Of Possession Of New Property To Be Considered As Date Of Acquisition; ITAT Allows Deduction
Case Title: Sunil Amritlal Shah Versus The Income Tax Officer(IT)
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that the date of possession of new property to be considered as date of acquisition and the assessee is entitled to deduction under Section 54 of the Income Tax Act on the purchase of new property.
Receipts From CRM Services Not Taxable In India As Royalty Or FTS: ITAT
Case Title: Salesforce.com Singapore Pte Ltd. Versus ACIT
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that receipts from Customer Relationship Management (CRM) services are not taxable in India as royalty or Fee for Technical Services (FTS).
CSR Expenditure Is Mandatory, Does Not Justify Disallowance Of Section 80G Deduction: ITAT
Case Title: Interglobe Technology Quotient Private Limited Versus ACIT
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that expenditures under corporate social responsibility (CSR) are mandatory and does not justify disallowance of these expenditures under Section 80G of the Income Tax Act if other conditions of Section 80G are fulfilled.
Case Title: BNP Paribas Vs Assistant Commissioner of Income Tax (IT)
Referring to the provision of Article 12 and 7 of the India-France DTAA which demonstrate that interest payment made by the permanent establishment to the head office are not taxable in the hands of the head office, the Mumbai ITAT held that interest received by the overseas head office (HO) from its Permanent Establishment (PE) is not taxable under beneficial provision of DTAA.
Case Title: Pr. CIT vs. Mahagun Realtors (P.) Ltd.
The Mumbai ITAT held that the rectification order passed in the name of a non-existent entity, despite informing Revenue regarding its merger, is non-est in the eyes of law.
Case Title: ACIT Vs Lx Pantos India Private Limited
The New Delhi ITAT held that no tax is deductible at source u/s 195 on payments made to overseas logistics company for rendition of logistics services, as such services cannot be treated as fees for technical services (FTS) as defined in Explanation 2 to Section 9(1)(vii).
Case Title: Mullanpur Garibdas Co-operative Multipurpose Society Vs The PCIT
The Chandigarh ITAT quashed the revision order u/s 263 holding that application of mind is discernible from examination of the record and that “the power under Section 263 of the Act was exercised on the basis of a mere difference in opinion with the AO, rendering such exercise of revisionary power to be invalid”.
Case Title: ITO verses Mangalvani Commercial Pvt. Ltd.
Noticing that against the alleged credits in the form of share capital & share premium, an equal amount of investment in equity of other entity has been made, the Kolkata ITAT confirmed the addition made u/s 68 of the Income Tax Act.
Case Title: Dream Valley Barter Pvt. Ltd verses ITO
On finding that the CIT(A) has failed to point out any defect and discrepancy in the evidence and details furnished by the assessee but simply upheld the order of the AO in a mechanical manner, theKolkata ITAT held that once the assessee has proved the identity and creditworthiness of the share subscribers, the burden shifts upon the AO to examine the evidence and made independent inquiries.
Case Title: Ambience Private Limited verses ITO
On finding that the assessee has a valid reason to consider the payments on account of 'transactional charges' to be not covered by section 194J(1)(ba) of the Income Tax Act, the New Delhi ITAT ordered to delete the penalty order passed by the CIT(A) u/s 271C.
Case Title: Majhaulia Sugar Industries Pvt. Ltd verses ITO
Finding that the AO has nowhere examined the order of the Pollution Control Board asking the assessee to make the payment, the Kolkata ITAT held that every payment made by the assessee to the Board for violation of environmental norms would not be penal, and hence, deleted the addition made by AO.
Case Title: Purnasons Pvt. Ltd verses ITO
While referring to the provisions of section 80M of the Income Tax Act, that the assessee company would be allowed a deduction of an amount equal to and not exceeding the amount of dividend “distributed” on or before the due date, the Kolkata ITAT held that assessee is rightly within law to claim deduction u/s 80M.
Case Title: Pilani Industrial Corporation Limited verses ACIT
On finding that Department had acted without any evidence to make disallowance u/s 69 r.w.s 115BBE of the Income Tax Act, the New Delhi ITAT held that treating the cash deposit as unexplained cash without rejecting the books of account, is legally not permissible.
