The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) has held that payments received by the assessee towards interconnectivity utility charges from Indian customers or end users cannot be considered royalties to be brought to tax in India.

Taxing Unsold Flats In Real Estate Business Applicable From AY 2018-19; ITAT Deletes Notional Rent Addition For AY 2014-15

Case Title: Mack Star Marketing Private Limited Versus National Faceless Appeal Centre

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT), while deleting the notional rent addition for AY 2014–15, held that taxing unsold flats in real estate business is applicable from AY 2018–19.

Penalty Order On Ground Of Misreporting Of Income Not Justified When SCN And Assessment Order Alleged Under-Reporting: ITAT

Case Title: Mohd. Sarwar Versus The Income Tax Officer

The Hyderabad Bench of Income Tax Appellate Tribunal (ITAT) has held that the penalty order on the ground of misreporting of income was not justified when show cause notice and the assessment order alleged under-reporting.

Assessee Has Incurred Expenses For Transfer As Per Scheme Of Arrangement Approved By NCLT; Mumbai ITAT Directs To Allow Stamp Duty & Registration Charges

On finding that when the assessee has incurred the amount in question to complete the transfer as per the scheme of arrangement approved by the NCLT, without which the transfer could not have been effected, the Mumbai ITAT held that the CIT(A) has rightly and validly decided the issue in favour of the assessee and directed the AO to allow the stamp duty and registration charges after due verification.

Assessee Has Not Benefited From Round-Tripping Of Share Transactions; Mumbai ITAT Deletes Addition U/s 68

Case Title: Lalwani Estates & Realtors Pvt Ltd. Verses Income Tax Officer

On finding that the assessee has issued share application money and subsequently allotted shares which shows that the transactions are genuine and there is no material brought on record by tax authorities that the assessee has benefited from round-tripping, the Mumbai ITAT deleted the addition made u/s 68 of the Income Tax Act, 1961.

Time Barred Appeal Is Not Maintainable In Absence Of Sufficient Cause For Condonation: Vishakhapatnam ITAT

Case Title: Mahesh Gurram verses Income Tax Officer

On finding that the assessee had neither substantiated his case before the Tribunal or before the CIT(A), theVisakhapatnam ITAT rejected the condonation and dismissed the appeal filed by the assessee in-limine.

Payment Of Excessive Or Unreasonable Salary Is Sine Qua Non For Invoking Provision Of Sec 40A(2)(B): Ahmedabad ITAT

Case Title: M S Hostel verses Deputy Commissioner of Income Tax

On finding that none of the orders passed by I-T Authorities doubted the services so rendered by the administrative head nor alleged to have been paid salary excessive or unreasonable which is sine qua non in invoking the provision of Section 40A(2)(b) of the Income Tax Act, the Ahmedabad ITATallowed the deduction u/s 40A(2)(b).

Mere Disallowance Of Expenditure Or Enhancement Of Returned Income Does Not Ipso Facto Call For Penalty U/s 271(1)(C): Delhi ITAT

Case Title: Dion Global Solutions Limited verses ACIT

While holding that mere disallowance of expenditure or enhancement of returned income does not ipso facto call for the imposition of penalty u/s 271(1)(c) of Income Tax Act, the Delhi ITAT deleted the said penalty.

Bonafide Mistake Committed By Assessee While Applying For Registration In Form 10AB Instead Of Form 10A, Merits To Be Condoned: Hyderabad ITAT

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.

Deduction U/s 43B Shall Be Allowed If Assessee Has Claimed Such Deduction On Payment Basis: Rajkot ITAT

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.

Section 54F Does Not Envisage That Sale Consideration Obtained From Original Capital Asset Is Mandatorily Utilized For Meeting Cost Of New Asset: Delhi ITAT

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

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.

Pune ITAT Grants Additional Opportunity To 'Lady Of Hope Church' To Establish Genuineness Of Its Charitable Activity

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.

Addition U/s 68 Should Be Restricted To Extent Of Gross Profit At Same Rate Of Genuine Purchases If Sales Are Not Disputed: Mumbai ITAT

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.

AO Can't Reopen Assessment Beyond Period Of Four Years When There Was Full Disclosure By Assessee: Mumbai ITAT

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.

ITO Can Presume That Books Of A/C Found During Search U/s 132/ Survey U/s 133A Belongs To Person Upon Whom Said Action Is Initiated: Delhi ITAT

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.

Assessment Made Purely Based On Assumption & Unverified Statement Of Third Party, Is Bad In Law: Mumbai ITAT

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.

Time Barred Notice Issued U/s 153C And Consequent Assessment Order Passed U/s 143(3) R/w/s 153C Is Void Ab Initio: Chennai ITAT

Assessee Is Eligible For Credit Of TCS Paid U/S 194Q If There Is No Shortfall In Payment Of TDS: Vishakhapatnam ITAT

On finding that there is no short fall of TDS and the assessee is eligible to get credit of the entire amount, the Visakhapatnam ITAT directed the AO to grant credit of the entire amount deducted as tax at source u/s. 194Q of the Income Tax Act.

Issuance Of Letters Of Comfort/Support Will Construe As International Transaction U/s 92B: Mumbai ITAT

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.

No ALP Adjustment Is Permitted On Notional Amount Of Royalty Paid By Overseas Subsidiary, Reiterates Mumbai ITAT

The Mumbai ITAT confirmed the CIT(A)'s action in deleting the addition made on account of waiver of royalty received from two subsidiaries.

Notional Interest Income Credited To P/L A/C As Per Accounting Standard Requirement Is Not Liable For Tax Under Real Income Principle: Mumbai ITAT

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.

Database Capturing Market Volatility Shall Be Considered For Making ALP Adjustment Qua Bullion Purchase: Mumbai ITAT

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.

Volume Discount & Geography Adjustments Shall Be Considered While Determining TP Adjustment: Ahmedabad ITAT

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

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.

Typographical Error In Mentioning Incorrect Amount Of Expenses In Form 3CD Doesn't Permit AO For Any Addition To Assessee's Income: Chennai ITAT

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.

If Employees' Contributions Are Not Paid Within Due Dates Specified Under PF Act, Then Employer Is Not Entitled To Deduction U/s 36(1)(Va): Bangalore ITAT

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.

AO Can Make Addition Of Unexplained Cash Credit U/s 68 Only In Previous Year In Which Such Cash Credit Was Made And Assessee Fails To Explain Same: Mumbai ITAT

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.

Income Tax Act Doesn't Mandate That Specific Money Deposited In Capital Gain Account Scheme Shall Be Utilized Towards New Investment: Chennai ITAT

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.

CIT(A) Shall Not Delete Disallowance Merely By Accepting Taxpayer's Contentions Without Dealing With Findings Of AO: Ahmedabad ITAT

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.

Merely Making Entries In Books Is Not Sufficient To Discharge Initial Burden Of Proof Regarding Claim Of Cost Of Improvement Of Asset: Chandigarh ITAT

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.

Mumbai ITAT Confirms Gross Profit Margin @ 12.5% On Alleged Bogus Purchase Since Sales Are Not Disputed: Mumbai ITAT