Tax
Section 148A(d) Order Passed Without Section 151 Sanction Is Illegal: Bombay High Court
The Bombay High Court has held that if an order is passed under Section 148A(d) of the Income Tax Act in the absence of an appropriate sanction in terms of the provisions of Section 151 of the Income Tax Act, the order and the consequent notice under Section 148 would be required to be declared illegal.The bench of Justice G. S. Kulkarni and Justice Somasekhar Sundaresan has observed that...
Investment Allowance Available On Exchange Rate Fluctuation: Bombay High Court
The Bombay High Court has held that investment allowance is available on exchange rate fluctuations.The bench of Justice G. S. Kulkarni and Justice Somasekhar Sundaresan has relied on the decision of the Supreme Court in the case of Commissioner of Income-Tax vs. Ambika Mills Ltd., in which it was held that investment allowance, consequent to exchange rate fluctuation, would be...
Obsolete Inventory Prepared In Accordance With Accounting Standards And Audited By Independent Auditor, Can Be Written Off: Delhi ITAT
Referring to the decision in case of Gillette India Ltd. Vs. ACIT (66 Taxman.com 221), 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. The Bench of Yogesh Kumar U.S (Judicial Member) and Pradip Kumar Kedia (Accountant Member) reiterated...
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
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. The ITAT added that the effective borrowing cost, including the guarantee fee, was lower than the bank's...
Cash Sales Can't Take Place Before Commencement Of Business: Delhi ITAT Deletes Addition U/s 69A On Receipts From Such Sale
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. Hence, the ITAT deleted the addition made u/s 69A on account of cash sales during demonetization. As per Sec 69A of Income tax Act, where in...
Indexation Benefit Shall Be Given To Taxpayer Based On Cost Of Acquisition Of Property Sold By Him: Delhi ITAT
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. The Bench of Saktijit Dey (Vice-President) and M. Balaganesh (Accountant Member) observed that “as on the date of the conveyance deed, the value of the property is...
AO Can't Make Additions Solely Based On Retracted Statement Of Third-Parties If Assessee Has Claimed Opposite: Chennai ITAT
Referring to the decision of Madars High Court in case of P.V. Kalyanasundaram (155 Taxman 454), the Chennai ITAT held that once the assessee had denied payments made by it, then he cannot be expected to prove the negative. Going further, the Bench held that the AO cannot make additions solely based on retracted statement of third-parties, if assessee had claimed otherwise. The...
Block Period Of Six AYs For Purpose Of Sec 153C Has To Be Reckoned From Date Of Receipt Of Documents By AO: Delhi ITAT
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. Section 153C of Income tax Act empowers the Assessing Officer of the person searched to handover the money, gold, jewellery, or other relevant articles/things or books of account or documents belonging to the other...
Statutory Authority Must Not Grant Approval U/s 153D Mechanically: Delhi ITAT Criticizes On Unjust Exercise Of Discretion By AO
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. The...
Payments Made To Overseas Company For Services Utilized Abroad, Does Not Warrant Tax Deduction At Source U/s 195: Delhi ITAT
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. As per Section 195 of the Income Tax Act, TDS must be deducted at the time of credit or payment on certain payments made to non-residents, and it applies...
Refund Can't Be Denied On Ground That It Earlier Period: CESTAT
The Ahmedabad Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that the refund cannot be denied on the ground that the refund pertains to an earlier period.The bench of Ramesh Nair (Judicial Member) and C. L. Mahar (Technical Member) has observed that Rule 5, by which the refund is given in respect of the credit taken, will be applicable even to refunds relating...
JAO Cease To Have Jurisdiction To Issue Reassessment Notice Outside Faceless Assessment: Bombay High Court
The Bombay High Court has held that the Jurisdictional Assessing Officer (JAO) would cease to have jurisdiction to issue any notice under Section 148A(b) and to take further actions under Section 148A(d) and Section 148 of the Act, outside the faceless assessment.The bench of Justice G. S. Kulkarni and Justice Somasekhar Sundaresan has observed that the JAO did not have the authority to issue...