This weekly round-up analytically summarizes the key stories related to the Income Tax Appellate Tribunal ( ITAT ) reported at Taxscan.in during the previous week 9th June 2024 to 13th June 2024.
The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) ruled that foreign exchange fluctuations have a direct nexus over export sales and would be eligible for deduction under Section 10A of the Income Tax Act, 1961.
Further, the two member bench of the tribunal comprising Yogesh Kumar US (Judicial member) and M. Balaganesh (Accountant member) found that the Madras High Court in the case of Commissioner of Income Tax v. Pentasoft Technologies Ltd. had categorically held that gains arising out of foreign exchange fluctuations are having direct nexus over the export sales of the assessee and would be eligible for deduction under Section 10A of the Income Tax Act.
In a recent ruling the Bangalore bench of the Income Tax Appellate Tribunal ( ITAT ) directed the remand of the matter to the AO to analyze whether the payment of the guarantee commission is an admissible deduction under Section 37(1) of the Income Tax Act.
The two member bench of the tribunal comprising Chandra Poojari (Accountant member) and Beena Pillai (Judicial member) remanded this issue to the AO to carry out necessary verification, based on the agreement entered into by the assessee with the state Government and to analyze if the payment of guarantee Commission was an admissible deduction under section 37(1) of the Act. Accordingly, appeal of the assessee was partly allowed.
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.
The two-member bench of Kavitha Rajagopal (Judicial Member) and Om Prakash Kant (Accountant Member) has observed that the amendment to Section 28(va) of the Finance Act, 2002 is only w.e.f. 01.04.2003 relevant to A.Y. 2004-05 onwards and does not have a retrospective effect for taxing the non-compete fee received before the period.
The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) has held that the deduction under Section 80G of the Income Tax Act, 1961 is allowable on the expenditure in respect of corporate social responsibility ( CSR ).
The two-member bench of Kavitha Rajagopal (Judicial Member) and Om Prakash Kant (Accountant Member) has observed that the amendment brought about by the Finance Act, 2015, to Section 80G of the Act, which inserted the subclauses (iiihk) and (iiihl) to be the exception for qualifying a donation for claiming under Section 80G of the Income Tax Act, could also be an evidencing factor to substantiate that CSR expenditures that fall under the nature specified in Sections 30 to 36 of the Income Tax Act are allowable deductions under Section 80G.
The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) allowed a deduction under Section 80 IA(4)(iii) of the Income Tax Act in respect of interest income derived from industrial parks and Special Economic Zones ( SEZ ).
The two member bench of the tribunal comprising Amit Shukla (Judicial member) and M. Balaganesh (Accountant member) found that the Central Board of Direct Taxes (CBDT) had also come out with a Circular No. 16/2017 dated 25.4.2017 to this effect in the context of allowability of deduction under Section 80IA(4)(iii) of the Income Tax Act in respect of income derived from Industrial Parks / SEZ. Accordingly, appeal of the assessee was allowed.
The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) deleted the addition under Section 68 of Income Tax Act, 1961 after the taxpayer provided adequate and credible evidence on their identity, creditworthiness, and the genuineness of the share subscription transactions.
The two member bench of the tribunal comprising Sakti Jit Dey (Vice President) and M. Balaganesh (Accountant member) held that the appellant has duly discharged its onus under Section 68 to establish the identity of the creditor, creditworthiness of the source of fund and source of source of fund and also genuineness of the transaction in respect of share subscription money received by it. Therefore, the addition made under Section 68 was not sustainable. Hence, the same deserves to be deleted.
The Bangalore bench of the Income Tax Appellate Tribunal ( ITAT ) restored to the Assessing Officer the case where the taxpayer, earning interest and dividend income from investments with a co-operative society, was entitled to a deduction under Section 80P (2)(d) of the Income Tax Act, 1961.
The two member bench of the tribunal comprising Chandra Poojari (Accountant Member) and Beena Pillai (Judicial Member) directed the AO to verify whether interest / dividend was received by the assessee out of investments made with Cooperative Societies. If the assessee earns interest / dividend income out of investments with co-operative society, as observed by Supreme Court in the case of Kerala State Co-operative Agricultural and Rural Development Bank Ltd. the same was entitled to deduction under Section 80P (2)(d) of the Income Tax Act.
The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) deleted the addition of Rs. 89 lakhs under Section 69 of the Income Tax Act, 1961 after the source of cash seized by the Central Bureau of Investigation ( CBI ) from the corporate office was well explained.
The two member bench of the tribunal comprising Amit Shukla( Judicial member) and M. Balaganesh ( Accountant member) found that the source of cash amounting to Rs. 89.00.000/- seized by Central Beuro of Investigation from the corporate office of the appellant is well explained, the addition made on account of deemed income under Section 69 of Income Tax cannot be sustained.
The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) deleted the addition of Rs. 13 lakhs, ruling that the encashment of leave salary constitutes profit in lieu of salary and is not taxable under the Voluntary Separation Programme.
The two member bench of the tribunal comprising Astha Chandra (Judicial member) and G.S Pannu (Vice President) observed that as the payment of ex-gratia compensation was voluntary in nature without there being any obligation on the part of employer to pay further amount to assessee in terms of any service rule. It would not amount to compensation in terms of Section 17(3)(i) of the Income Tax Act.
The Chennai bench of the Income Tax Appellate Tribunal (ITAT) set aside the Commissioner of Income Tax ( Exemption) [CIT(E)] order canceling the trust’s registration under Section 12AB, following the Central Board of Direct Taxes’ ( CBDT ) extension of the time limit for filing Form 10AB to 30.06.2024.
The two member bench of the tribunal Manu Kumar Giri (Judicial member) and Manoj Kumar Agarwal (Accountant member) also takes note of recent Circular No.07/24 issued by CBDT on 25.04.2024 extending the time limit for all such applications to 30.06.2024. Therefore, there remain no grounds for rejection of application by raising the issue of timeline. Considering the facts and circumstances of the case, ITAT set aside the impugned order and directed CIT(E) to consider the application on merits without raising the issue of timeline. Accordingly, the appeal was allowed for statistical purposes.
The Bangalore bench of the Income Tax Appellate Tribunal ( ITAT ) allowed the claim of deduction in respect of interest earned from credit facilities extended to members, including nominal and associate members.
The two member bench of the tribunal comprising Waseem Ahemed ( Accountant member) and Beena Pillai ( Judicial member) allowed the claim of the assessee under Section 80P(2)(a)(i) of the Income Tax Act in respect of the interest earned by the assessee from credit facilities extended to members that includes nominal / associate members.
The Kolkata bench of the Income Tax Appellate Tribunal ( ITAT ) quashed the notice issued under Section 148 of the Income Tax Act, 1961 as the Assessing Officer failed to verify the genuineness of the credible information before issuing the notice.
The two member bench of the tribunal comprising Rajesh Kumar ( Accountant member ) and Pradip Kumar Choubey ( Judicial member ) were of the opinion that information as alleged to be received by the AO cannot be said to be credible information. Moreover, further find that in the preceding A/Y 2012-2013, reopening proceedings was initiated by the then AO against the assessee on the same issue, i.e the transaction of the assessee with the same entity, viz. M/s Brahma Tradelink Pvt. Ltd. and after being satisfied with the identity of the entity and the genuineness of the transaction, no addition was made.
The Kolkata bench of the Income Tax Appellate Tribunal ( ITAT ) deleted the addition under Section 68, of Income Tax Act, 1961 as the identity and creditworthiness of the share subscribers, along with the genuineness of the transactions, were proved by the supported documents
The two member bench of the tribunal comprising Manish Board (Accountant member) and Sonjoy Sarma (Judicial member) considered view that the assessee on the extent of the complete documentary evidence has successfully proved the identity, creditworthiness of the share subscribers and genuineness of the transaction coupled with the supported documents and thus, ITAT feel it necessary to delete the alleged addition under Section 68 of the Income Tax Act at Rs. 1, 26, 00,000/-. Therefore, all the effective grounds raised by the assessee in merit of the case are allowed. Accordingly, an appeal filed by the assessee was allowed. To Read the full text of the Order CLICK HERE
The Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) dismissed the appeal as the taxpayer died and no legal heirs were substituted within a reasonable time.
The two member bench of the tribunal comprising Prashanth Maharishi ( Accountant member) and Sandeep Singh Karahail ( Judicial member) considered view that the present appeal filed by the assessee is not maintainable in its current form as the assessee has already expired on 08/05/2019 and his legal heir has not been brought on record.
The Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) directed the Assessing officer to assess the interest income under the head “Income from Business,” confirming that interest income is assessable as business income.
A single member bench of the tribunal comprising B.R. Baskaran (Accountant member) noticed that the business of the assessee consisted of money lending activities also and the interest income has been earned by the assessee out of the money lending activities only. Hence, further do not find any reason for assessing the interest income under the head ‘income from other sources’.
The Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) deleted the addition of 1.17 crore under Section 68 of the Income Tax Act, 1961 as the taxpayer had discharged the burden to prove the identity, creditworthiness, and genuineness of the loan creditors.
The two- member bench of the tribunal comprising Rifafur Rahman (Accountant member) and Aby.T. Varkey (Judicial member) directed deletion of the addition made by the AO to the tune of Rs.1.17 crores. Accordingly, appeal of the assessee was allowed.
The Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) confirmed an Income tax addition of Rs. 1.45 crore as short-term capital gain from the taxpayer’s sale of non-agricultural land.
The two member bench of the tribunal comprising Narendra Kumar Billaiya (Accountant Member) and Sunil Kumar Singh (Judicial Member) does not find any error of fact or law in the impugned order passed by the CIT(A) in confirming the addition of Rs. 1,45,60,000/- as short-term capital gain, arising out of the transfer of non-agricultural land by the appellant assessee. The impugned order dated 02.08.2023 is accordingly confirmed. Accordingly, the appeal filed by the assessee was dismissed.
The Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) directed the AO to allow Tax Deducted at Source ( TDS ) credit to transferees, even if the certificates are in the name of the amalgamated or demerged company.
The bench viewed that the provision for outstanding expenses claimed by the assessee was an ascertained liability only. Accordingly, ITAT viewed that the DRP was not justified in confirming the disallowance made by the AO. Accordingly, the addition of 70% of expenses amounting to Rs.109, 46, 79,368/- made by the AO was liable to be deleted.
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) rejected a claim for exemption under Section 54F of the Income Tax Act, as the exemption from sale of capital assets were claimed in the guise of reinvestment in a non-residential property.
It was thus observed by the tribunal bench of Judicial Member Kul Bharat and Accountant Member Dr. B. R. R. Kumar that, “based on the evidences collected, collated, examined, verified and investigated by the revenue authorities, the covered area which is shed of 500 mtr. on the agricultural land cannot be considered as a residential house.”
The Bangalore bench of the Income Tax Appellate Tribunal ( ITAT ) has ruled that interest and dividend income from investments with a cooperative society are entitled to a deduction under Section 80P(2) (d) of the Income Tax Act, 1961 and has remitted the case to the AO for fresh consideration.
The two member bench of the tribunal comprising Keshav Dubey (Judicial member) and Chandra Poojari (Accountant Member) concluded that if the interest earned by assessee from the banks is considered under the head “Income from other sources,” relief to be granted to the assessee under Section 57 of the Income Tax Act in accordance with law. Accordingly, the issue is restored to the file of AO for de-novo consideration with the above observations. Accordingly, appeal of the assessee was partly allowed.
The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) found that the Commissioner of Income Tax (Appeals) [ CIT(A) ] failed to provide evidence of notice served and subsequently deleted the penalty under Section 271(1)(b) of the Income Tax Act, 1961.
The two member bench of the tribunal comprising Dr. B.R.R. Kumar (Accountant member) and C.N. Prasad (Judicial member) observed that there was no finding in the penalty order whether the notice dated 31.07.2019 issued under Section 142(1) of the Income Tax Act was either served on the assessee.
The Bangalore bench of the Income Tax Appellate Tribunal ( ITAT ) ruled that interest income from investment in Karnataka District Central Co-operative Bank ( KDCC Bank ) was not eligible for deduction under Section 80P(2)(a)(i) of the Income Tax Act, 1961 and remitted the case to the AO for fresh consideration.
The two member bench of the tribunal comprising Narendra Kumar Choudhari ( Judicial member) and Laxmi Prasad Sahu ( Accountant member ) observed that the assessee has received interest from KDCC Bank was a scheduled bank which is governed by the Banking Regulation Act of 1949 ,accordingly further hold that the assessee was not eligible for deduction under Section 80P(2)(d) on such interest income also.
The Bangalore bench of the Income Tax Appellate Tribunal ( ITAT ) ruled that interest income received on investments from State Bank of India ( SBI ) was not attributable to the business of the taxpayer and, therefore, was not eligible for deduction under section 80P(2)(a)(i) of the Income Tax Act, 1961.
Further, the two member bench of the tribunal comprising Narendar Kumar Choudhary (Judicial member) and Laxmi Prasad Sahu (Accountant member) further noted that the revenue authorities have treated the entire income as income from other sources. The entire interest income cannot be taxed if the assessee has incurred expenses towards earning of such income.
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