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 1st July 2024 to 6th July 2024.
The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) has allowed the deduction under Section 80P(2)(d) of the Income Tax Act, 1961 to the Grand Paradi Co-op Housing Society and held that cooperative banks are cooperative societies that are doing banking business.
The single member bench of Prashant Maharishi (Accountant Member) has observed that, as per Section 2(10) of the Maharashtra Cooperative Societies Act, “co-operative bank” means a cooperative society that is doing the business of banking as defined in Section 5(1)(b) of the Banking Companies Act, 1949, and includes any society that is functioning or is to function as an agricultural and rural development bank. While allowing the appeal, the Tribunal held that the assessee is entitled to the deduction under Section 80P(2)(d) of the Income Tax Act with respect to the amount of interest income earned from cooperative banks.
The Bangalore Income Tax Appellate Tribunal ( ITAT ) held that payment made by Assessee ( Indian entity ) to its foreign AE ( Parent entity ) for obtaining administrative services would not be taxable as Fees for Technical/ Included Services ( FTS/FIS )in India in terms of Indo USA DTAA, in the absence of ‘make available’ clause in the agreement between both the parties.
The two-member Bench of Chandra Poojari (Accountant Member) and Prakash Chandra Yadav (Judicial Member) observed that “if there is any conflict among the provisions of DTAA and Income Tax Act 1961, then provisions of treaty would override the domestic law provisions”. The Bench also referred to the CBDT Circular No.333 dated 02.04.1982 reported in 137 ITR 1, to state that the provisions of DTAA will override the domestic law provisions.
The Kolkata Income Tax Appellate Tribunal ( ITAT ) has held that delayed deposit of amount collected towards employees’ contribution to Provident Fund ( PF ) renders claim of deduction under section 36(1)(va) of the Income Tax Act, 1961 ineligible.
The two member Bench of Sanjay Garg ( Judicial Member ) and Sanjay Awasthi ( Accountant Member ) reiterated that deduction under section 36(1)(va) in respect of delayed deposit of amount collected towards employees’ contribution to PF cannot be claimed even though deposited within the due date of filing of return even when read with Section 43B.
The Bench held that deduction under section 36(1)(va) in respect of delayed deposit of amount collected towards employees’ contribution to PF cannot be claimed even though deposited within the due date of filing of return even when read with Section 43B of the Income Tax Act.
In a significant case, the Kolkata Income Tax Appellate Tribunal ( ITAT ) held that failure to serve hearing notice under Income Tax Act, 1961 invalidates ex-parte order. The ITAT directed the assessee to furnish its correct address before the competent authority.
The two member Bench of Sanjay Garg (Judicial Member) and Sanjay Awasthi (Accountant Member) observed that “the assessee has further changed its address and the assessee is required to duly brought to the knowledge of the Assessing Officer/CIT(A) regarding the change in address”. The Bench found from a perusal of the Form No.36 that the assessee has changed its address later on, and this is why the hearing notices could not be served upon the assessee during the appellate proceedings. Because of the change of address of the assessee, the notices issued by the AO during the course of assessment proceedings were returned with mark ‘not found’.
In a matter related to Income Tax deduction, the Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) has held that the deduction under Section 80P(2)(d) of the Income Tax Act, is allowable to the co-operative society on interest earned from co-operative banks.
The two member bench of Kul Bharat ( Judicial Member ) has held that Co-operative Bank is primarily a Co-operative Society. Therefore, for section 80P(2)(d) of the Income Tax Act, the assessee would be entitled for deduction under section 80P(2)(d) of the Income Tax legislation. While allowing the appeal, the tribunal held that the assessee would be eligible for income tax deduction under Section 80P(2)(d)
The Bangalore Income Tax Appellate Tribunal ( ITAT ) held that once the department has accepted the capital gain offered by the seller upon transfer of its business, then said transaction cannot be doubted in the hands of the purchaser.
The Bench disregarded the opinion of the Income Tax Assessing Officer that there was no intangible asset transferred to the assessee by the seller company, since the excess amount offered by the recipient company as short-term capital gain was accepted by the Revenue itself. The Appellate Tribunal of Income Tax allowed assessee’s appeal and concluded that Income Tax Authorities are not correct in disallowing the claim of assessee on depreciation
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) deleted the addition of Rs.16.4 lakhs after the taxpayer provided a proper explanation and documentary evidence for their agricultural income
The two member bench of the tribunal comprising S. Rifafur Rahman (Accountant member) and Yogesh Kumar U.S (Judicial member) found merit in the Grounds of appeal of the assessee, accordingly, the additions made by the A.O. which was confirmed by the CIT (A) was hereby deleted and the Grounds of Appeal of the assessee were allowed.
The two member bench of the Income Tax Appellate Tribunal ( ITAT ) Delhi, dismissed the taxpayer’s appeal after they claimed assessment under section 44AD without maintaining day-to-day regular books of account.
The bench observed that no substantial evidence was produced to justify the transactions. The manner in which CIT (A) has discussed the receipt and payment by assessee and lack of certainty to whom the payments were actually returned. The non-corroboration of claim of working as land aggregator with specific transactions taken up or abandoned on behalf of said builder M/s Krrish Buildtech, only justifies the conclusion of CIT (A) and same cannot be said to be based on mere suspicion
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) deleted the addition of Rs. 9.31 crore citing the non-applicability of Section 56(2)(vii) to non-residents.
The CIT(A) failed to consider the assessee’s pleas regarding the Rs.2.15 crores and Rs.9.31 crores additions, therefore, the coram of G.S Pannu ( Vice President) and Anubhav Sharma ( Judicial member) remanding this ground back to the CIT(A) for reconsideration in light of the appellant’s arguments, and granting the appellant a fresh opportunity for a hearing. The appeal of assessee was accordingly allowed
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) ruled that the cash deposit made in the bank account was thoroughly and properly explained, resulting in the deletion of an addition of Rs. 7.43 crore.”
The two-member bench of the tribunal, comprising Amit Shukla (Judicial member) and M. Balaganesh (Accountant member), observed that the assessee had duly explained that the phone numbers provided were complete. The first two digits were given in the previous column, and the remaining eight digits in the next column, thereby ensuring completeness of both mobile and landline numbers. Additionally, the assessee had conducted enquiries on a few borrowers on a test-check basis and found them to be genuine, having also verified their PANs. These details were placed on record before the lower authorities. Therefore, the observations made by the learned AO in the assessment order in this regard are completely devoid of merit.
The Bangalore of the Income Tax Appellate Tribunal ( ITAT ) deleted the penalty under section 271 D of the Income Tax Act, 1961 as it proved reasonable cause to treat the assessee as bonafide. The words ‘reasonable cause’ would mean a cause which prevents a reasonable man of ordinary prudence acting under normal circumstances, without negligence or inaction or want of bona fides, from doing the act of which he, called on to act reasonably, knows or ought to know.
The two-member Bench of Chandra Poojari (Accountant Member) and Prakash Chandra Yadav (Judicial Member) observed that “there was reasonable cause and explanation of the assessee would be treated as bonafide, hence in this case, no penalty is leviable as section 273B. Section 273B categorically excludes the operations of section 271D”. (Part 10) The Bench found that the assessee filed his return on Aug 07, 2017. The Department after a month processed and issued a penalty notice after almost four years of the processing return. The Bench opined that the penalty was not initiated by the Revenue in a reasonable time as the Departmental Representative had failed to point out anything contrary to the facts of the case.