Top Stories Income Tax Annual Digest 2024: ITAT Cases [Part 10] A Round-Up of all the ITAT Rulings in 2024 By Manu Sharma – On January 9, 2025 3:13 pm – 23 mins read This annual round-up analytically summarizes all the Income Tax related Orders of the Income Tax Appellate Tribunal (ITAT) Benches of India reported at Taxscan.in during 2024. Failure to File SFT within Stipulated Date given in Notice u/s 285 BA of Income Tax Act: ITAT confirms Penalty u/s 271FA The Waghodia Urban Co. Op. Bank Limited vs The Director of Income Tax CITATION:   2024 TAXSCAN (ITAT) 715 The Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) confirmed the penalty under Section 271FA for failure to file the Statement of Financial Transactions ( SFT ) within the stipulated date given in the notice under Section 285BA of the Income Tax Act.

Further the single member bench of the tribunal comprising Suchithra Kamble  ( Judicial member) noted that the factual aspect in the present case clearly set out that the assessee despite giving one month period has failed to file the SFT return within the stipulated date given in notice under Section 285BA(5) of the Income Tax Act. Taxpayer is Co-Owner of Bank Account, No Concealment of Income: ITAT deletes penalty u/s 271(1) (c) of Income Tax Act Suchit Arvindbhai Patel vs The Income Tax Officer CITATION:   2024 TAXSCAN (ITAT) 716 The Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) deleted the penalty under Section 271(1)(c) of the Income Tax Act, 1961 observing that there is no concealment of income  particulars. The taxpayer who is the co-owner of the bank account whose deposits have been added was also not taken into account either by the Assessing Officer ( AO ) or by the Commissioner of Income Tax (Appeals) [CIT (A)].

The two member bench of the tribunal comprising Anupama Gupta (Accountant member) and Suchithra Kamble (Judicial member) concluded that the assessee was the third co-owner of the Bank Account whose deposits have been added was also not taken into account either by the Assessing Officer or by the CIT (A). Thus, this amounts to non-application of mind by invoking Section 271(1)(c) of the Income Tax Act which was  a penalty. Therefore, in the present assessee’s case, the penalty does not sustain. Appeal of the assessee was allowed. No Order can be Passed in Name of Non-Existent Entity: ITAT quashes Income Tax Assessment Order M/s. Patil Construction vs Deputy Commissioner of Income Tax CITATION:   2024 TAXSCAN (ITAT) 717 The Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) quashed the Income Tax Assessment Order, stating that no order can be passed in the name of a non-existent entity.

The two member bench of the tribunal comprising Gagan Goyal ( Accountant member ) and Amit Shukla ( Judicial member ) noted that amalgamating company was  not in existence and had been amalgamated much prior to the commencement of the proceedings, then no order can be passed in the name of nonexistent entity even if the assessee had participated in the proceedings or not? If intimation has been given, it is the duty of the AO not only to issue notices in the case of amalgamate company to pass the order in the name of the existing entity in which erstwhile company has been amalgamated. Accordingly, the entire assessment order was bad in law because order in the case of a non-existing entity cannot be sustained at all Money Introduced from JDS Industries not Deemed Taxpayer’s Own Income: ITAT deletes Addition of 4.45 Core u/s 69 M/s.Global Ship Trade P.Ltd. vs ITO CITATION:   2024 TAXSCAN (ITAT) 718 The Ahmedabad bench of Income Tax Appellate Tribunal ( ITAT ) has deleted the addition of Rs. 4.45 crore under Section 69, of Income Tax Act, 1961 ruling that money introduced from JDS Industries is not deemed the taxpayer’s own income.

The two member bench of the tribunal comprising Siddhartha Nautiyal ( Judicial member ) and  Annapurna Gupta ( Accountant member) failed to understand, how the funds received by the assessee from JDS can be treated as its own funds when the money trail unraveled by the Department itself clearly revealed the ultimate beneficiary to be VMS Industries. There can be no other conclusion drawn from the facts before the department but that of VMS Industries being the ultimate beneficiary of the transactions, and the assessee only being intermediary in the entire process. The AO of VMS Industries and the AO “SCMPL” have also admitted to this fact. Even the AO of VMS Industries agreed with the same while taxing the entire share capital received in it, in its hands.

Thus there appears to be clear unanimity between the AO’s of all the three entities that the money brought into assessee and SCMPL was  only as intermediary, with M/s VMS being the ultimate beneficiary of the same. Assessment/Reassessment in a Search-Related Case Cannot Be Passed Without Proper Approval by Competent Authority: ITAT MDLR Airline vs DCIT CITATION:   2024 TAXSCAN (ITAT) 719 In a significant case, the Income Tax Appellate Tribunal ( ITAT ) of the New Delhi bench held that assessment or reassessment in a search-related case cannot be passed without proper approval of the competent authority  and quashed the same. It was observed that the approval granted under section 153D of the Income Tax Act clearly indicates that the Approving Authority has neither examined the assessment records nor the seized materials. The two-member Bench comprising of Saktijit Dey (Vice President) and Naveen Chandra (Accountant Member) observed that the approval granted under Section 153D of the Act clearly indicated that the Approving Authority has neither examined the assessment records nor the seized materials. Claim u/s 80M of Income Tax Act Allowable when Deduction of Amount was Equal to Dividend Distributed within Due Date: ITAT Purnasons Pvt. Ltd vs ITO CITATION:   2024 TAXSCAN (ITAT) 720 The Kolkata bench of the Income Tax Appellate Tribunal ( ITAT ) held that claim under Section 80M of Income Tax Act, 1961 is allowable when deduction of amount was equal to dividend distributed within due date.

The two member Bench of the ITAT comprising of Pradip Kumar Choubey (Judicial Member) and Dr. Manish Borad (Accountant Member) found that in the year in which the dividend was received, 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. Further observed that the dividend was paid to the shareholders of the assessee before due date under section  139(1) via cheques. The ITAT allowed the assessee’s appeal. Treating Cash Deposit During Demonetization as unexplained cash without rejecting Books of account is Invalid: ITAT Pilani Industrial vs ACIT CITATION:   2024 TAXSCAN (ITAT) 721 In a recent case, the New Delhi of the Income Tax Appellate Tribunal ( ITAT ) held that treating the cash deposit as unexplained cash without rejecting the books of account is invalid.

The two member Bench comprising of Vimal Kumar (Judicial Member) and S Rifaur Rahman (Accountant Member) observed that when entries in books of account in regard to cash balances were held to be genuine, there was no escape from conclusion that assessee had offered reasonable explanation as to source of all high denomination notes which it encashed and it was not open to ITAT to accept genuineness of those books and accept assessee’s explanation in part and reject same in regard to balance sum. Date of Acquisition of New Property must be Date of Possession: ITAT allows Deduction under Income Tax Act Sunil Amritlal Shah vs The Income Tax Officer CITATION:   2024 TAXSCAN (ITAT) 722 The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) has held that the date of possession of new property is to be considered as the date of acquisition while considering the deduction under Section 54 of the Income Tax Act,1961 on the purchase of new property. The tribunal held the assessee eligible for Income Tax deduction.

The two-member bench of Raj Kumar Chauhan (Judicial Member) and Prashant Maharishi (Accountant Member) has observed that the date of possession of the new property should be considered as the date of acquisition of the property. By agreeing to purchase, the assessee has acquired the right to purchase the property and did not purchase it as it was under construction. No Price Paid for Acquiring Bonus Shares: ITAT dismisses Valuation of Bonus Shares u/s 55(2)(aa)B of Income Tax Act M/s. Zash Traders vs ACIT CITATION:   2024 TAXSCAN (ITAT) 723 The Bangalore bench of the Income Tax Appellate Tribunal ( ITAT )dismissed the valuation of bonus shares under Section 55(2)(aa)B of the Income Tax Act, 1961 as the taxpayer admitted to not paying any price for acquiring them.

The bench observed that the provision of sub-clause (i) of clause (b) in section 55(2)(b) of the Income Tax Act is in respect of financial assets, where a purchase price has been paid by an assessee for acquiring such financial asset. Whereas, in present facts, the assessee has admittedly not paid any price for acquiring the bonus shares. Under such circumstances, the specific provision relating to acquisition of financial assets under Section 55(2)(aa)B(iiia) of the Income Tax Act, without any cost would be applicable. Taxpayer fails to Construct Residential House within Prescribed Time: ITAT disallows Section 54 Deduction under Income Tax Act DCIT vs Sandeep Hooda CITATION:   2024 TAXSCAN (ITAT) 724 In a recent ruling, the Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) disallowed the claim of deduction under Section 54 of the Income Tax Act,1961, because the taxpayer failed to construct a residential house within the prescribed time. The two member bench of the tribunal comprising Sakti Dey ( Vice President ) and M. Balaganesh ( Accountant member ) had no hesitation to hold that the assessee had not constructed the residential house within the prescribed time and in fact had not constructed a residential house at all on or before 25.09.2017 which could be construed as a residential house, habitable for its dwelling. Accordingly, deduction under Section 54 of the Income Tax Act had been rightly denied by the AO in the instant case.

ITAT considered opinion, was thoroughly misplaced. With these observations, the grounds raised by the revenue are allowed. Accordingly, appeal of the revenue was allowed. JCIT issues Penalty Order under Income Tax Act beyond Limitation, Deemed Invalid: ITAT deletes Penalty ITO vs Turner General Entertainment Networks India Pvt. Ltd CITATION:   2024 TAXSCAN (ITAT) 725 The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) deleted the penalty, noting that the Joint Commissioner of Income Tax ( JCIT ) ought to have passed the order on or before 31.03.2015, and since the penalty order was passed on 25.02.2016, it was barred by limitation, deemed invalid. Further the two member bench of the tribunal comprising Saktijit Dey ( Vice President) and M. Balaganesh ( Accountant member) found that If a 6 months period is constructed from this date, then the JCIT (TDS) ought to have passed the order on or before 31.03.2015 and since the penalty order was passed on 25.02.2016, it would be barred by limitation.

Further found that this dispute has been directly addressed by the Jurisdictional High Court in the case of PCIT vs. JKD Capital & Finlease Ltd. wherein the limitation period mentioned in provisions of Section 275(1) (c) of the Income Tax Act was subject matter of interpretation in the context of levy of penalty under Section 271E of the Income Tax Act. ITAT allows Claim of Deduction u/s 80P (2) (a) (i) in respect of Interest Earned from Credit Facilities extended to members including Nominal / Associate Members M/s. Sullia Taluk vs The Income-tax Officer CITATION:   2024 TAXSCAN (ITAT) 726 The Bangalore bench of the Income Tax Appellate Tribunal ( ITAT ) allowed the claim of deduction under Section 80P (2)(a)(i) 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.

Accordingly, appeal of the assessee was allowed. Approval Granted u/s 153 D clearly indicates Approving Authority neither Examined Assessment Records nor Seized Materials: ITAT quashes Assessment Order MDLR Airline (P) Ltd vs DCIT CITATION:   2024 TAXSCAN (ITAT) 727 The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) quashed the assessment order, stating that the approval granted under Section 153D clearly indicates the approving authority neither examined the assessment records nor the seized materials. The two member bench of the tribunal comprising Naveen Chandra (Accountant member) and Saktijit Dey (Vice President) quashed the assessment orders while deciding the legal grounds raised by the assessee, the ground raised on merits have become purely academic, hence do not require adjudication. Accordingly, the assessee’s appeals were allowed. Unawareness of Proceedings as Accountant entrusted with GST Compliance on Maternity Leave: Delhi HC directs Re-Adjudication of SCN M/S JIG BROTHERS vs SALES TAX OFFICER CLASS II/AVATO CITATION:   2024 TAXSCAN (ITAT) 728 The Delhi High Court directed the re-adjudication of the show cause notice (SCN) as the petitioner was unaware of the proceedings due to the leave of absence of the accountant entrusted with GST compliance on maternity leave. A Division Bench of Justices Sanjeev Sachdeva and Ravinder Dudeja observed that “Keeping in view the peculiar facts of the present case and since the only reason for passing the impugned order is that petitioner had not filed any reply/explanation, one opportunity needs to be granted to the petitioner to respond to the Show Cause Notice. The matter is liable to be remitted to the Proper Officer for re-adjudication. Accordingly, the impugned order dated 17.04.2024 is set aside.

Disallowance u/s 14A of Income Tax Act not available in respect of Investments not yielding Tax-Free Income: ITAT DCIT vs Paranjapee Schemes Construction Ltd CITATION:   2024 TAXSCAN (ITAT) 729 The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) has held that disallowance under section 14 A of the Income Tax Act, 1961 is not available in respect of investments not yielding tax-free income. The two-member bench of Amit Shukla (Judicial Member) and Renu Jauhri (Accountant Member) has observed that no disallowance under section 14A of the Income Tax Act is warranted in respect of investments not yielding tax-free income for the appellant. Cash Deposits made From Parent’s Accumulated Savings and Income from Agricultural Activities: ITAT Deletes Income Tax Addition u/s 69A Vivek Prahladbhai Patel vs The Income Tax Officer CITATION:   2024 TAXSCAN (ITAT) 730 The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) has deleted the Income tax addition of unexplained money.

It was found that the cash deposit was made from the assessee’s parent’s accumulated savings and income from agricultural activities. The two member bench of Suchitra Kamble (Judicial Member) and Makarand V. Mahadeokar (Accountant Member) has observed that the AO did not conduct any independent verification or inquiry into the claims made in the affidavits. The AO has simply dismissed the affidavits without assigning any cogent reasons. The CIT (A), too, has upheld the AO’s order without addressing the merits of the affidavits or the explanation provided by the assessee. Foreign Exchange Fluctuations have direct Nexus over Export Sales, would be Eligible for Deduction u/s 10A of Income Tax Act: ITAT M/s Genpact India Private vs DCIT CITATION:   2024 TAXSCAN (ITAT) 731 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.

The bench found that the assessee had furnished complete details of income from foreign exchange/forward contract gains before the AO vide letter dated 27.02.2015, which is enclosed in pages 154 to 160 of the paper book. The assessee had explained that it had entered into forward contracts with certain banks during the year for hedging its foreign exchange risks on the receivables of export sales. ITAT directs Remands Matter to AO to Analyse Payment of Guarantee Commission is an Admissible Deduction u/s 37(1) of Income Tax Act M/s. The Karnataka State vs The Income Tax Officer CITATION:   2024 TAXSCAN (ITAT) 732 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. Non-Compete Fee to be treated as Revenue Receipt from Post-Amendment to S.28 of Finance Act: ITAT ACIT-2(2)(1) vs Lyka Labs Ltd CITATION:   2024 TAXSCAN (ITAT) 733 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. Deduction u/s 80G of Income Tax Act Allowable on CSR Expenditure: ITAT M/s. Alubound Dacs India Private vs Dy. CIT CITATION:   2024 TAXSCAN (ITAT) 734 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. ITAT allows Deduction u/s 80 IA(4)(iii) of Income Tax Act on Interest Income derived from Industrial Parks/SEZ Candor Gurgaon One Realty vs ACIT CITATION:   2024 TAXSCAN (ITAT) 735 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.

Taxpayer Provides Adequate and Credible Evidence on Identity, Creditworthiness and Genuineness of Share Subscription Transactions:  ITAT deletes addition u/s 68 DCIT vs CDS Infra Projects Limited CITATION:   2024 TAXSCAN (ITAT) 736 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. Taxpayer earns Interest/Dividend Income out of Investments with Co-Operative Society, Entitles to 80P Deduction of Income Tax Act: ITAT Kotekar Vyavasaya Seva Sahakara Sangha Niyamitha vs ACIT CITATION:   2024 TAXSCAN (ITAT) 737 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. Cash Source Seized by CBI from Corporate Office Sufficiently Explained: ITAT deletes Income Tax Addition of Rs. 89 lakhs u/s 69 DCIT vs Eldeco Infrastructure & Properties Ltd. CITATION:   2024 TAXSCAN (ITAT) 738 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. Encashment of Leave Salary would be a Profit in Lieu of Salary, Not Taxable under Voluntary Separation Programme: ITAT deletes Income Tax Addition Income Tax Officer vs Sh. Avirook Sen CITATION:   2024 TAXSCAN (ITAT) 739 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. CBDT Extends Time Limit for Form 10AB filing to 30.06.2024: ITAT sets aside CIT (E) order Canceling Trust Registration u/s 12 AB The Earth Trust vs CIT (Exemptions) CITATION:   2024 TAXSCAN (ITAT) 740 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. ITAT allows Deduction Claim in respect of Interest Earned from Credit Facilities Extended to Members including/ Nominal Associate Members M/s. Chokkadi Vyavasaya Seva Sahakari Bank Niyamitha vs The Income Tax Officer CITATION:   2024 TAXSCAN (ITAT) 741 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. AO fails to verify Genuineness of Credible Information before issuing Notice: ITAT quashes Notice u/s 148 of Income Tax Act M/s. R.S. Darshan Singh Motor Car Finance vs ITO CITATION:   2024 TAXSCAN (ITAT) 742 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. Creditworthiness of Shares Subscribers and Genuineness of Transactions proved by Supported Documents: ITAT deletes Income Tax Addition u/s 68 Wellman Logistics Pvt. Ltd vs ACIT(OSD) CITATION:   2024 TAXSCAN (ITAT) 743 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. Taxpayer dies and no Legal Heirs is substituted within a Reasonable Time: ITAT dismisses Appeal Shri Binod Kumar Singh vs ACIT CITATION:   2024 TAXSCAN (ITAT) 744 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. Interest Income is Assessable as Business Income: ITAT directs AO to Assess Interest Income under Head Income from Business Kamlakant Chhotalal Exporters vs ACIT CITATION:   2024 TAXSCAN (ITAT) 745 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’.

Taxpayer discharges Burden to prove Identity, Creditworthiness and Genuineness of Loan Creditors: ITAT deletes Income Tax Addition of 1.17Cr u/s 68 Arjun Manoj Purohit vs ITO CITATION:   2024 TAXSCAN (ITAT) 746 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. ITAT confirms Rs. 1.45 Crore Income Tax Addition as Short-Term Capital Gain in Taxpayer’s Non-Agricultural Land Sale Dhan Bahadur Gagan Chand vs Commissioner of Incometax Appeals CITATION:   2024 TAXSCAN (ITAT) 747 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. Transferees Eligible to Claim TDS Credit Even if Certificates are in Name of Amalgamated/Demerged Company: ITAT Culver Max Entertainment Private vs Assistant Commissioner of Income Tax CITATION:   2024 TAXSCAN (ITAT) 748 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. Exemption u/s 54F of Income Tax Act not allowable for 500 sqm Shed on Agricultural Land: ITAT ACIT vs Sh. Himanshu Garg CITATION:   2024 TAXSCAN (ITAT) 749 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 evidence 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.” Interest / Dividend Income from Investment with Cooperative Society is Entitled to Deduction u/s 80 P (2)(d) of Income Tax Act: ITAT remits to AO for Fresh Consideration Tumkur City Credit Souharda Cooperative Society Limited vs ITO Ward CITATION:   2024 TAXSCAN (ITAT) 750 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. CIT(A) fails to provide Evidence of Notice Served: ITAT deletes Penalty u/s 271 (1) (b) of Income Tax Act Sumit Maheshwari vs ITO CITATION:   2024 TAXSCAN (ITAT) 751 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. Interest Income from Investment in KDCC Bank is not Eligible for Deduction u/s 80 P(2)(a)(i) of Income Tax Act: ITAT remits to AO for Fresh Consideration Sri Laxminarayana Suvarna Credit Co-operative Society vs The Income Tax Officer CITATION:   2024 TAXSCAN (ITAT) 752 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. Interest Income from SBI Investments not attributable to Business of Taxpayer, Not Eligible for Deduction u/s 80P (2)(a)(i) of Income Tax Act: ITAT Farmers Agriculture Credit Co-operative Society Ltd vs The Income Tax Officer CITATION:   2024 TAXSCAN (ITAT) 753 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. S.80G(5)(iv) Exemption allowable as Application Filed within CBDT’s Extended Deadline: ITAT rules in Favour of Income Tax Bar Association Income Tax Bar Association Calcutta vs Commissioner of Income Tax (Exemption) CITATION:   2024 TAXSCAN (ITAT) 754 The Calcutta Bench of Income Tax Appellate Tribunal ( ITAT ) has held that exemption under Section 80G (5)(iv) of the Income Tax Act, 1961 allowable as an application filed within the extended time limit prescribed by CBDT ( Central Board of Direct Taxes ) notification allowed the exemption registration to the income tax bar association as the registration application was not time-barred.

The two-member bench of Rajpal Yadav ( Vice President ) and Sanjay Awasthi ( Accountant Member ) has observed that the procedure adopted by the CIT ( Exemption ) was incorrect to grant a provisional certificate to the assessee at the first stage and then to deny the regular certificate under Section 80G(5)(iii) of the Income Tax Act. Section 80G of the Income Tax Act provides tax exemptions for donations made to specified charitable institutions and funds. Addition on Sale of Partner’s Property Sold before issuance of Notice u/s 148 of Income Tax Act: ITAT quashes Re-assessment Proceedings against Firm Chaudhary Stone Crusher vs ITO CITATION:   2024 TAXSCAN (ITAT) 755 The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) quashed the reassessment proceedings, noting that the firm used a partner’s property as its address, but the property had been sold before the issuance of the notice under Section 148 of the Income Tax Act, 1961. The two member bench of the tribunal comprising Amit Shukla ( Judicial member) and M. Balaganesh ( Accountant member) found that the assessee firm existed in the said address and was merely using the property owned by the partners as the address of the assessee firm and that since the properties were sold by the partners prior to the issuance of notice under Section  148 of the Income Tax Act, the assessee firm was not existent in that address and the notice under Section  148 of the Income Tax Act had to be returned undelivered by the postal authorities. Assessments concluded u/s 153A without Mandatory Approval is Invalid: ITAT M/s. Emaar MGF Land Limited vs ACIT CITATION:   2024 TAXSCAN (ITAT) 756 The Delhi bench of the Income Tax Appellate Tribunal( ITAT ) has held that assessments concluded under section  153A  of the Income Tax Act, 1961 without mandatory approval are invalid. The two-member Bench comprising G.S. Pannu (Vice President) and Anubhav Sharma (Judicial Member) observed that prior approval of competent authority under section 153D of the Act is mandatory and same is required to pass rigour of the law, to show that the approval was granted after due consideration of the assessment record and it was not a mechanical approval. CSR Expenses Eligible for Deduction u/s 80G of the Income Tax Act: ITAT restores Matter to CIT ( Appeals ) ABIS Export India Pvt. Ltd vs The Deputy/Assistant Commissioner of Income Tax CITATION:   2024 TAXSCAN (ITAT) 757 In a recent case, the Raipur Bench of the Income Tax Appellate Tribunal ( ITAT ) held that  “Corporate Social Responsibility” ( CSR )  expenses are eligible for deduction under section 80G of the Income Tax Act and restored the matter to the file of Commissioner of Income Tax ( Appeals ). The AO observed that as CSR was an application of income, therefore, the same could not be said to have been incurred wholly and exclusively to carry on business as envisaged in Section 37 of the Act. On appeal, the CIT (Appeals) upheld the disallowance of the assessee’s claim for deduction of CSR expenses under section  80G of the Act. Creditworthiness of Share Subscriber Companies Proven: ITAT deletes Addition of Unexplained Share Application Money under Income Tax Act M/s. Wisley Real Estate Pvt. Ltd vs Income Tax Officer CITATION:   2024 TAXSCAN (ITAT) 758

The Kolkata Bench of the Income Tax Appellate Tribunal ( ITAT ) deleted the addition of unexplained share application money under the Income Tax Act, 1961 as the creditworthiness of share subscriber companies was proven. The two-member bench found that all the share applicants have duly replied to the notices issued under Section 133(6) and the majority of them have appeared before the Assessing Officer for recording the statement under Section 131. It was evident that all share applicants are regularly assessed to tax and have also faced scrutiny proceedings and as per MCA Matter Data as of date, all alleged share applicants are active companies and the shares have been issued at the fair market value of the equity shares and that no excess share premium has been charged. Addition on Unaccounted Sales and Purchases under Income Tax Act Solely Based on Loose Slips is Invalid: ITAT ITO Ward-1 Hassan vs M/s. Ramachandra Setty & Sons CITATION:   2024 TAXSCAN (ITAT) 759 The Banglore Bench of Income Tax Appellate Tribunal ( ITAT ) has held that the addition on unaccounted sales and purchases under the income tax act solely based on loose slips is invalid and deleted the income tax addition on alleged unaccounted sales and purchases. The  two member bench of Keshav Dubey (Judicial Member) and Chandra Poojari (Accountant Member) has observed that the Department failed to collect cogent evidence to corroborate the notings on the loose sheets. Therefore the additions cannot be made merely based on notings on the loose sheet papers, which are “dumb documents” having no evidentiary value. Purchase of Agricultural Land not fall under Definition of Capital Asset: ITAT deletes Addition Mr. Ramnarayan vs Income Tax Officer CITATION:   2024 TAXSCAN (ITAT) 760 The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) has held that the assessee has purchased agricultural land, which is outside the definition of a capital asset; therefore, the deeming provision under Section 56(2)(x) of the Income Tax Act cannot be invoked. The two-member bench of Sudhir Pareek ( Judicial Member ) and S.Rifaur Rahman ( Accountant Member ) has observed that the assessee purchased agricultural land and paid a sum of Rs. 20,00,000 as purchase consideration. The assessee also filed the relevant information before the assessing officer.