Top Stories ITAT Weekly Round Up 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 23rd November 2024 to 29th November 2024. By Sneha Sukumaran Mullakkal – On December 1, 2024 3:03 pm – 25 mins read Undisclosed Foreign Credit Card Expenses: ITAT sustains Income Tax Additions towards Lalit Modi [Read Order] Lalit Kumar Modi vs DCIT CITATION:   2024 TAXSCAN (ITAT) 1428 The Income Tax Appellate Tribunal ( ITAT ), Delhi, recently confirmed income tax additions made by an Assessing Officer on prominent business personality Lalit Kumar Modi, alleging undisclosed foreign credit card expenses. Since the Assessee had been unable to adduce any supporting explanation when called for, it indicates that he had utilized the funds through the credit cards for his personal use and that none of the actual owners had brought on record any proof or documents to claim ownership over the same.

In light of the observations, the ITAT aligned with the decision of the CIT(A), upholding the additions made by the AO. S.13 attracts during Assessment, Not at Grant of Registration: ITAT restores matter to Grant Final Registration u/s 12AB [Read Order] Umrala Taluka Sardar Patel Prajapati Samaj Trust vs The CIT CITATION:   2024 TAXSCAN (ITAT) 1421 In a recent ruling, the Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) restored income tax matters to grant Final Registration under Section 12AB of the Income Tax Act, 1961 and held that S.13 of the Act is attracted during assessment and not at the grant of registration. The ITAT, comprising Annapurna Gupta ( Accountant Member ) and T. R Senthil Kumar ( Judicial Member ) allowed the appeal filed by the trust, restored the file back to the CIT ( E ), and directed to grant final registration under 12AB of the Income Tax Act, after giving due opportunity of hearing to the assessee.  Disallowance u/s 37 of Income Tax Act: ITAT Allows Opportunity to Prove Genuineness of Payment [Read Order] Surya Homes vs Income Tax Officer CITATION:   2024 TAXSCAN (ITAT) 1431 In a recent case, the Income Tax Appellate Tribunal, Bangalore ( ITAT ) has directed the Commissioner of Income-tax (Appeals), CIT(A)  to restore and review the Income Tax Appeal filed by the assessee to examine the payment of Rs. 40 lakhs, which the Assessing Officer disallowed under section 37 due to the assessee’s failure to provide adequate documentation. Recognizing the importance of justice, the tribunal decided to remit the matter back to the CIT(A) for fresh consideration. It directed the CIT(A) to re-evaluate the assessee’s case and address the appeal on its merits after ensuring due process. As a result, the tribunal allowed the appeal for statistical purposes ITAT Remands Case to AO for Re-Examination Due to Assessee’s Pregnancy-Related Delay in Document Submission [Read Order] Smt. Alka Jain Aurangabad Suti -II Jangipur vs Asst. Commissioner of Income Tax Circle-42 CITATION:   2024 TAXSCAN (ITAT) 1429 The Kolkata Bench of Income Tax Appellate Tribunal(ITAT) remanded the case to the Assessing Officer (AO) for re-examination due to the assessee’s pregnancy-related delay in submitting important documents. The tribunal remanded the matter to the AO to reconsider the issue with the new documents and to provide the assessee an opportunity to present her case. Ultimately,the appeal filed by the assessee was allowed for statistical purposes. ITAT upholds CIT(A) Decision, Dismisses Revenue’s Appeal Over Alleged Bogus Transactions [Read Order] The ITO vs Kapilkumar Amarchand Agrawal CITATION:   2024 TAXSCAN (ITAT) 1427 The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) upheld the Commissioner of Income Tax (CIT) Appeals’ decision to delete the addition under Income tax act made by the Assessing Officer (AO)  due to lack of corroborative evidence. Since it was clear that the assessee has not entered into transaction with entities namely RS Enterprise and Suruchi Trading as alleged by the revenue, the Bench declined to interfere with the order of the CIT(A). Hence, the appeal filed by the Revenue was dismissed and the cross-objection  filed by the assessee is dismissed as there’s no practical effect. ITAT Dismisses Taxpayer’s Appeal as Withdrawn After Opting for Vivad Se Vishwas Scheme, 2024 [Read Order] M/s.Fulcrum Venture India vs The Assistant Commissioner of Income Tax CITATION:   2024 TAXSCAN (ITAT) 1433 The Chennai Bench of Income Tax Appellate Tribunal (ITAT) dismissed the appeal by allowing the choice for opting under the Direct Tax Vivad Se Vishwas Scheme, 2024, with the liberty to reinstate the appeal if the application is not accepted. The Appellant was represented by Sonali Khatod & the Respondent was represented by Swapna Nanu Ambatt. Hence, the appeal filed by the assessee was dismissed as withdrawn. ITAT Rejects Revenue’s Rs. 39.52 Lakh Overstatement of purchase claim, upholds CIT(A) Ruling due to GST Period Difference [Read Order] Income Tax Officer vs Aman Enterprise CITATION:   2024 TAXSCAN (ITAT) 1432 The Ahmedabad Bench of Income Tax Appellate Tribunal( ITAT ) rejected the Revenue’s claim of Rs. 39.52 lakh overstatement of purchases, upholding the Commissioner of Income Tax(Appeals)[CIT(A)] ruling due to the discrepancy between the Goods and Service Tax( GST ) return period of 9 months and the 12-month period covered in the assessee’s books of accounts. However, the AO overlooked that the GST return covered only 9 months, while the books of accounts were for 12 months. The CIT(A) rightly granted relief after reviewing the assessee’s explanation and confirming that there was no disparity between the books and the creditor details. As the CIT(A) correctly evaluated the facts, the tribunal dismissed the revenue’s ground. In short,the appeal filed by the revenue was dismissed. ITAT deletes Incorrect Interest Charges due to Erroneous Due Date for Filing Return [Read Order] Abha Bansal vs ACIT CITATION:   2024 TAXSCAN (ITAT) 1430 The Delhi Bench of Income Tax Appellate Tribunal(ITAT) allowed the appeal of the assessee, directing the deletion of incorrect interest charges under section 234A of Income Tax Act,1961 due to an erroneous due date for filing the income tax return. Based on the precedent set in Pankaj Bansal, the tribunal ordered the deletion of interest charged under section 234A and accepted the assessee’s grounds. Ultimately, the appeal filed by the assessee was allowed. Invalid Assessment Order automatically Invalidates Revisional Order: ITAT [Read Order] M/s. Nvidia Graphics Pvt. Ltd vs ACIT CITATION:   2024 TAXSCAN (ITAT) 1419 The Bangalore Bench of the Income Tax Appellate Tribunal ( ITAT ) has ruled, in case of Nvidia, based on a key principle of taxation laws – when an assessment order is found to be  legally invalid, any subsequent revisional orders based on it automatically become invalid as well. This decision is a reminder of the importance of adhering to the procedural safeguards laid down in the Income Tax Act. It also highlights that if an initial order is flawed, any subsequent actions or orders based on it will not hold legal ground. Compliance with S. 249(4)(b) of Income Tax is Mandatory: ITAT Rules Non-Payment of Advance Tax Bars Taxpayer’s Right to Appeal [Read Order] Deputy Commissioner of Income Tax vs Shri Nagin A. Vaghela CITATION:   2024 TAXSCAN (ITAT) 1436 The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) ruled that compliance with Section 249(4)(b) of the Income Tax Act is mandatory and failure to pay advance tax/self-assessment tax bars a taxpayer’s right to appeal. The tribunal referenced tribunal rulings in Khushmanlal Hiralal (Ahmedabad Bench) and Bharatkumar Sekhsaria (Mumbai Bench) which underscored that the provision of Section 249(4) of the Income Tax Act is mandatory and not merely procedural, indicating that tax due must be paid to maintain the right to appeal. Therefore, the tribunal dismissed the appeal of the assessee due to repeated failure to file returns or pay taxes. ITAT deletes Disallowance of Trading Loss on Alleged Penny Stock Shares Due to Insufficient Evidence of Price Manipulation [Read Order] Shri Sagar Jhaveri vs Dy. CIT CITATION:   2024 TAXSCAN (ITAT) 1437 The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) deleted the disallowance of trading losses claimed by the assessee on alleged penny stock shares, citing insufficient evidence of price manipulation. Therefore, the tribunal partially allowed the assessee’s appeal by validating the reopening and rejecting the price manipulation claim. Consequently, some of the disallowances were dismissed, and specific additions were struck down due to a lack of conclusive evidence. To Read the full text of the Order CLICK HERE ITAT Remands Case to AO for Fresh Adjudication, allowing Assessee to Present Additional Evidence [Read Order] Alleppy Chits and Profits Private Limited vs ITO CITATION:   2024 TAXSCAN (ITAT) 1423 The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) remanded the case to the Assessing Officer ( AO ) for fresh adjudication, allowing the assessee to present additional evidence that was not available during the original proceedings. The tribunal, therefore, quashed the CIT(A)’s order and remanded the matter to the AO for fresh adjudication. It directed the AO to consider the additional evidence, along with any further evidence the assessee might produce, and to pass a reasoned order after granting the assessee an opportunity to present its case. The ITAT also clarified that, in the event of non-cooperation by the assessee, the AO would be at liberty to decide the matter in accordance with the law. Ultimately,the appeal filed by the assessee was allowed for statistical purposes. 10% Estimated Depreciation Claim on Property Registration Charges & Stamp Duty: ITAT remands for de novo Income Tax Assessment [Read Order] Housing & Urban Development Corporation Ltd vs Addl CIT CITATION:   2024 TAXSCAN (ITAT) 1425 The Delhi Bench of the Income Tax Appellate Tribunal ( ITAT ) recently remitted an Income Tax Appeal filed by Housing and Urban Development Corporation ( HUDCO ) claiming an estimated cost of 10% depreciation on the incurrence of stamp duty and registration charges. The ITAT observed that the matter was not settled and remitted the same for de novo verification. The Bench observed that the High Court had remitted the matter back to the file of the Assessing Officer for de novo verification in the Assessee’s Income Tax Appeal pertaining to A.Y. 2003-04. In respect of the precedential nature of the Delhi High Court, the ITAT Bench restored the issue to the file of the Assessing Officer for verification. ITAT dismisses Revenue Appeal on Ground of CBDT Circular on Low Tax Effect [Read Order] The Income Tax Officer Ward vs Nanalayja Power Company Ltd CITATION:   2024 TAXSCAN (ITAT) 1435 The Ahmedabad Bench of the Income Tax Appellate Tribunal ( ITAT ) dismissed the appeal filed by the Revenue as the case is non-maintainable at the court of law, as mandated by CBDT Circular on low tax effect. Based on submissions made by the Departmental Representative of Revenue and confirmation from the AO, the division bench consisting of Ms Suchitra Kamble( Judicial Member) and Mr Makarand V. Mahadeokar( Accountant Member) pronounced the appeal to be dismissed in the light of non-maintainability. ITAT upholds CIT(A) decision, Rejects Revenue’s Claim of Rs.8.77 Crore Income Understatement, Confirms Booking Advances, Not Consultancy Fees [Read Order] Income Tax Officer vs Aman Enterprise CITATION:   2024 TAXSCAN (ITAT) 1432 The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) upheld the decision of the Commissioner of Income Tax(Appeals)[CIT(A)], rejecting the Revenue’s claim of Rs. 8.77 Crore income understatement. It confirmed that the amount in question represented booking advances for flat sales, not income from consultancy services. The GST was reported correctly, but this did not make the amount taxable under the Income Tax Act. The AO’s treatment of the amount as income was incorrect. As the Revenue did not challenge the CIT(A)’s findings, the order was upheld, and the Revenue’s ground was dismissed. Ultimately,the appeal filed by the revenue was dismissed. Prior Period Expenses Integrable to Current Income Tax Assessment if Unclaimed: ITAT Remands HUDCO Matter [Read Order] Housing & Urban Development Corporation Ltd vs Addl CIT CITATION:   2024 TAXSCAN (ITAT) 1425 The Delhi Bench of the Income Tax Appellate Tribunal ( ITAT ) recently remanded an Income Tax Appeal filed by Housing and Urban Development Corporation ( HUDCO ), while maintaining that prior period expenses may be integrated into the income tax assessment for the current Assessment Year if they had not been claimed as deductions during the prior year under consideration. The two-member Bench of the Income Tax Appellate Tribunal, Delhi comprising Yogesh Kumar U.S., Judicial Member and M. Balaganesh, Accountant Member attested to the submissions of HUDCO, affirming that “once it is proved that the said expenditure is not claimed as deduction in earlier years, then the same would be squarely allowable as deduction during the year under consideration”, allowing the claim of the Assessee. ITAT caps S.14A Disallowance at 1% of Dividend Income for Period prior to Rule 8D, Income Tax Rules [Read Order] Housing & Urban Development Corporation Ltd vs Addl CIT CITATION:   2024 TAXSCAN (ITAT) 1425 The Delhi Bench of the Income Tax Appellate Tribunal ( ITAT ) recently directed an Assessing Officer ( AO ) to disallow 1% of dividend income as expenditure under Section 14A of the Income Tax Act, 1961 for the period prior to the onset of Rule 8D of the Income Tax Rules, 1962. In light of the precedential nature of the Delhi High Court decision, ITAT directed the AO to disallow 1% of the dividend income as expenditure under Section 14A of the Income Tax Act, 1961. ITAT overturns ₹1.2 Crore Income Tax Additions from Penny Stock Sale, vitiates Presumption of ‘Human Probabilities’ [Read Order] Jyoti Gupta vs ACIT CITATION:   2024 TAXSCAN (ITAT) 1434 The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) recently deleted additions of Rs. 1.2 crore made by an Assessing Officer (AO) on the basis of alleged ‘human probabilities’ that the disputed income had not been gained from the sale of shares, but was a method of facilitating tax evasion. The Bench referred the decision of the Bombay High Court in Pr. CIT v. Ziauddin A Siddique (2017) where the High Court upheld the decision of the Tax Tribunals while vitiating the Revenue’s claim of alleged tax evasion on the basis of mere probability, observing that the Assessee had conducted all concerned financial transactions through official channels and adduced documentation verifying the same. Vitiating the Revenue’s claim on the basis of the Principle of Human Probabilities, ITAT allowed the Appeals by the Assessee. Hearing Opportunity not Provided by CIT(A) while Not Condoning Delay: ITAT restores Appeal for Fresh Adjudication [Read Order] Shreenath Corporation vs The ITO CITATION:   2024 TAXSCAN (ITAT) 1438 In a recent ruling, the Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) restored the file in which penalty was imposed on the assessee for fresh adjudication due to procedural lapses and lack of hearing opportunity to the assessee. Due to the pending of the quantum proceedings before the CIT(A), the bench restored the issue back to the file of the CIT(A) and was of the opinion that it would be appropriate to decide the penalty appeal only after the quantum proceeding is decided and to consider condonation of delay only after giving proper opportunity of hearing to the assessee. The ITAT, comprising Siddhartha Nautiyal ( Judicial Member ) and Annapurna Gupta ( Accountant Member ) allowed the appeal filed by the assessee for statistical purposes. ITAT declares Reopening u/s 147 Invalid due to Lack of Fresh Tangible Material [Read Order] The Deputy Commissioner of Income Tax vs M/s. Cadila Pharmaceuticals Limited CITATION:   2024 TAXSCAN (ITAT) 1442 The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) declared the reopening of the assessment under Section 147 of the Income Tax Act,1961,invalid due to the lack of fresh tangible material. The two member bench comprising Suchitra Kamble ( Judicial Member ) and Makarand Vasant Mahadeokar ( Accountant Member ) concluded that in the present case, the issues were already examined during the original assessment under Section 143(3), and no new material was brought forward to justify reopening. The assessee had provided separate accounts and evidence during the original proceedings, which were duly verified. Thus, the reopening was declared invalid and void in law. Ultimately,the appeal filed by the assessee was allowed. NFAC Validates AO’s Action without Examining Taxpayer’s Submissions: ITAT remands for fresh Consideration [Read Order] Shri Sunil Jayantilal Sachdev vs Income Tax Officer CITATION:   2024 TAXSCAN (ITAT) 1441 In a recent ruling, the Hyderabad bench of the Income Tax Appellate Tribunal ( ITAT ) remands the income tax matter for denovo consideration as the National Faceless Assessment Centre ( NFAC )  confirmed the action of the Assessing Officer ( AO ) without adverting to submissions made by the assessee. The ITAT bench, comprising Mr. Inturi Rama Rao ( Accountant Member ) remanded the file back to the AO for proper verification of the evidence filed by the assessee before the CIT (A) after providing a reasonable opportunity for the assessee to explain his case. ITAT upholds CIT(A) Order, Dismissing Revenue’s Challenge on Unexplained Loan Repayment of Rs. 1.04 Crore, based on Bank Statement Evidence [Read Order] Income Tax Officer vs Aman Enterprise CITATION:   2024 TAXSCAN (ITAT) 1432 The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) upheld the Commissioner of Income Tax (Appeals) [CIT(A)] order, dismissing the Revenue’s challenge on the unexplained loan repayment of Rs. 1.04 Crore, based on bank statement evidence confirming the repayment transactions. The Revenue did not challenge this finding. Since the Revenue did not provide any evidence to dispute the CIT(A)’s conclusion, the bench found no reason to interfere with his order. The Revenue’s ground was dismissed. In short, the appeal filed by the revenue was dismissed. ITAT quashes Assessment Order for Time-Barred Reopening and Incorrect Ownership Assumption [Read Order] Pradip Chandra Roy vs ITO CITATION:   2024 TAXSCAN (ITAT) 1391 The Kolkata Bench of Income Tax Appellate Tribunal ( ITAT ) quashed the assessment order against the assessee, citing a time-barred reopening of assessment and an incorrect assumption of property ownership. Based on these findings, the tribunal concluded that the notice was issued incorrectly and that all subsequent actions were invalid, setting aside the orders. Ultimately,the appeal filed by the assessee was allowed. ITAT Condones 186-Day Delay and Remands Case to AO for Fresh Examination Due to Ex-Parte Assessment and Inadequate Representation [Read Order] Umang Webtech Private Limited vs Income Tax Officer CITATION:   2024 TAXSCAN (ITAT) 1447 The Kolkata Bench of Income Tax Appellate Tribunal ( ITAT ) condoned a 186-day delay in filing the appeal and remanded the case to the Assessing Officer (AO) for fresh examination due to an ex-parte assessment and failure by the assessee to adequately represent its case. In the interest of justice, the tribunal remanded the case to the AO for a fresh examination. The assessee was directed to provide the necessary supporting documents, and the AO was instructed to give proper notice before passing any order. Ultimately,the appeal filed by the assessee was allowed for statistical purposes. ITAT Remands Case for Reassessment of Rs. 9.74 Lakh Unexplained Cash Deposits, allows Assessee to Submit Evidence [Read Order] Manju Devi Chandak vs ITO CITATION:   2024 TAXSCAN (ITAT) 1446 The Kolkata Bench of Income Tax Appellate Tribunal ( ITAT ) remanded the case for reassessment regarding Rs. 9.74 lakh in unexplained cash deposits made during the demonetization period,allowing the assessee to submit supporting evidence for the deposits. Based on the facts and documents presented, the tribunal decided that the assessee should be allowed to submit the required documents to the AO, set aside the AO’s order, restored the case for a fresh hearing, and directed the AO to review the documents and issue a new order. In short,the appeal filed by the assessee was allowed for statistical purposes. ITAT Quashes Reassessment Due to Non-Issuance of Mandatory S.143(2) Notice [Read Order] Anand Sawroop vs The ITO CITATION:   2024 TAXSCAN (ITAT) 1439 The Chandigarh Bench of Income Tax Appellate Tribunal ( ITAT ) quashed the reassessment proceedings against the assessee, on the grounds of non-issuance of the mandatory notice under Section 143(2) of the Income Tax Act,1961. The tribunal agreed that section 292BB did not apply, as it only addresses issues of notice service, not its absence. Since the notice under section 143(2) was not issued, the tribunal found the assessment proceedings invalid. The assessment order under section 144 r.w.s. 147 was set aside, and the assessee’s appeal on this ground was allowed. As the reassessment proceedings were quashed, the other grounds of appeal were left open. The appeal was partly allowed. Interest Income from FDRs with other Cooporative Banks eligible for deduction u/s 80P (2)(d): ITAT [Read Order] The Kamran Vikas Co op. Credit Society Ltd. vs ITO CITATION:   2024 TAXSCAN (ITAT) 1450 In a recent ruling, the Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) held that interest income derived from FDRs with other cooperative banks is eligible for deduction under Section 80 P (2)(d) of the Income Tax Act, 1961, and deleted the disallowance of Rs. 24.5 lakhs. It was observed by the bench that the deduction under Section 80P(2)(d) of the Income Tax Act is available with respect to interest derived by a cooperative society from its investment with any other cooperative society. The bench held that the cooperative banks are essentially cooperative societies. Trust’s Appeal Partly Allowed: ITAT Remits Matter to CIT(E) for Fresh Consideration of Registration Application [Read Order] Amritam Prasadam Foundation vs CIT CITATION:   2024 TAXSCAN (ITAT) 1449 The Jaipur Bench of the Income Tax Appellate Tribunal ( ITAT ) recently set aside the rejection order of the Commissioner of Income Tax (Exemption) and remanded the matter for fresh consideration of the applicant trust’s registration .Along with a cost of Rs. 4,000 imposed on the trust. The appeal was disposed of for statistical purposes, and the matter was remitted to the CIT(E) for decision afresh after providing a reasonable opportunity to the applicant-appellant to comply with the directions. Additionally, the applicant-appellant trust was burdened with costs of Rs.4,000/- to be deposited in Prime Minister’s National Relief Fund. ITAT Remands Case to AO for Reconsideration of Tax Exemption Claim u/s 10(26AAA) for Sikkimese Assessee [Read Order] Usha Dhamala vs ITO CITATION:   2024 TAXSCAN (ITAT) 1440 The Kolkata Bench of Income Tax Appellate Tribunal( ITAT ) remanded the case of the Sikkimese assessee to the Assessing Officer ( AO ) for reconsideration of her tax exemption claim under Section 10(26AAA) of the Income Tax Act,1961. The two member bench comprising Sonjoy Sarma ( Judicial Member ) and Sanjay Awasthi ( Accountant Member ) agreed with the AR’s argument and remanded the case to the AO for a fresh examination and directed the AO to reconsider the exemption claim under section 10(26AAA) and allow the assessee to submit supporting evidence. The assessee was also instructed to provide all necessary documents without delay. Ultimately, the appeal filed by the assessee  was allowed for statistical purposes. ITAT directs CIT(A) to Consider Reasons for Delay in Filing Appeal after Dismissing it over 208-Day Delay [Read Order] Shri Balappa Hanamantappa Nandeppanavar vs The Income Tax Officer CITATION:   2024 TAXSCAN (ITAT) 1444 The Bangalore Bench of Income Tax Appellate Tribunal (ITAT)  directed the Commissioner of Income Tax (Appeals) [CIT(A)] to consider the reasons for the delay in filing an appeal after it was dismissed due to a 208-day delay. The tribunal held that the assessee should have been given an opportunity to explain the delay. The CIT(A) failed to provide this opportunity, which was essential for proper consideration. The tribunal stressed that substantial justice should outweigh technicalities and directed the assessee to submit a petition explaining the delay, for which the CIT(A) should give due consideration. In short, the appeal filed by the assessee was allowed for statistical purposes. Assessment not Prejudicial to Revenue if AO Follows Jurisdictional HC’s Ruling: ITAT [Read Order] Lakhotia Diagnostic Service Pvt. Ltd vs PCIT CITATION:   2024 TAXSCAN (ITAT) 1456 The Kolkata Bench of Income Tax Appellate Tribunal ( ITAT ) ruled that an assessment cannot be deemed prejudicial to the revenue if the Assessing Officer ( AO ) has followed the Jurisdictional High Court’s decision prevailing at the time of assessment. Based on this, the tribunal concluded that the case was covered by the Calcutta High Court’s decision and allowed the appeals, setting aside the order under Section 263 of the Act. In short,the appeal filed by the assessee was allowed. S.68 Applicable When Credit Received in Relevant Year, not for Earlier Years: ITAT [Read Order] ACIT vs Pujita Merchandise Pvt. Ltd CITATION:   2024 TAXSCAN (ITAT) 1457 The Kolkata Bench of Income Tax Appellate Tribunal ( ITAT ) ruled that section 68 of the Income Tax Act,1961 applies only to credits received in the relevant year and not to those from earlier years. The CIT(A) had concluded that the assessee had met its burden of proof and no addition could be made under section 68 for the current year. The tribunal upheld the CIT(A)’s order and dismissed the appeal. In short,the appeal filed by the revenue was dismissed. ITAT Deletes Rs. 4.82 Crore Addition as Unexplained Cash Credit, Citing Payments Linked to Genuine Sales Transactions [Read Order] M/s Goldman Stocks & Share Brokers Pvt. Ltd. vs ITO CITATION:   2024 TAXSCAN (ITAT) 1458 The Kolkata Bench of Income Tax Appellate Tribunal ( ITAT ) deleted the addition of Rs. 4.82 crore made as unexplained cash credit in the case of the assessee, citing payments linked to genuine sales transactions. The AO had treated two payments, Rs. 1,08,90,000/- and Rs. 3,73,50,000/-, as unexplained. These payments were received through State Bank for sales bills. The tribunal found that the payments were wrongly treated as unexplained and decided to set aside the CIT(A)’s order, directing the AO to delete the addition. Ultimately, the appeal filed by the assessee was allowed. Valid Reason Necessary for Invoking Income Tax Reassessment Proceedings: ITAT [Read Order] The ACIT vs NK Proteins Pvt. Ltd CITATION:   2024 TAXSCAN (ITAT) 1451 The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) ordered that a reassessment of an already closed assessment must be substantiated with valid reasons. If such reasons or a productive outcome has not arisen from such reassessment proceedings, then such reopening of an assessment is bad in law. In light of such submissions, the bench held that the reasons for CIT(A) to quash such reassessment are accurate, and the addition made by AO under Section 43(5) is unreasonable and should be deleted. The bench held that the reassessment was invalid in the eyes of the law. ITAT Gives Trust Another Opportunity, Remits Registration Application to CIT(E) [Read Order] Community for the Advancement of Education vs CIT CITATION:   2024 TAXSCAN (ITAT) 1455 The Jaipur Bench of the Income Tax Appellate Tribunal (ITAT) held that the rejection of registration of Trust under Section 12 AB of Income Tax Act, 1961 due to alleged non-genuineness of activities and non-registration under Rajasthan Public Trust Act, 1959, warrants a de novo consideration by the Commissioner of Income Tax (Exemption) CIT(E). Thus, the appeal is allowed for statistical purposes, and the matter is remitted to the CIT(E) for decision on the application afresh after providing reasonable opportunity to the appellant of being heard. Duty Drawback and License Sale Income should be included in Gross Receipts u/s 44AD for Presumptive Taxation: ITAT [Read Order] Pradeep Modi vs ITO CITATION:   2024 TAXSCAN (ITAT) 1460 The Kolkata Bench of Income Tax Appellate Tribunal ( ITAT ) ruled that duty drawback and license sale income should be included in the gross receipts for the purpose of presumptive taxation under Section 44AD of Income Tax Act,1961. The appellate tribunal referred to previous rulings, including Sanjay Bahl vs. ITO and Smt. Urmila Tank vs. ITO, which confirmed that duty drawback is part of gross receipts. It concluded that Section 44AD applied in this case, and the assessee’s revised tax offer should be accepted, as it had been inadvertently omitted earlier. As a result, the tribunal allowed the appeal, set aside the CIT(A) and AO’s decisions, and directed the AO to accept the revised income computation provided by the assessee. Delay may be condoned when Bona Fide ‘Sufficient Cause’ is Proven, Negligence not a valid Excuse: ITAT Visakhapatnam [Read Order] Bala Tripura Sundari Boppana vs ITO CITATION:   2024 TAXSCAN (ITAT) 1462 The Visakhapatnam bench of Income Tax Appellate Tribunal ( ITAT ) has ruled that the delay shall be condoned if there is sufficient bonafide cause and not due to the negligence of the assessee. Considering these,  the ITAT condoned the delay and remanded the case to the CIT(A) for a decision on merits. The tribunal directed the CIT(A) to provide a fair opportunity of hearing to the assessee while clarifying that its decision to condone the delay should not influence the merits of the case. The appeal was thus allowed for statistical purposes. Goodwill Depreciation: ITAT allows Depreciation Claims for AYs 2016- 18 Despite 2021 Finance Bill Exclusion [Read Order] Suzlon Energy Ltd vs The DCIT CITATION:   2024 TAXSCAN (ITAT) 1464 In a recent ruling, the Ahmedabad Bench of the Income Tax Appellate Tribunal ( ITAT ) allowed claims for goodwill depreciation from the amalgamation for the assessment years ( AY ) 2016-18 despite the 2021 finance bill exclusion. The ITAT, comprising T.R. Senthil Kumar ( Judicial Member ) and Vasat Mahadeokar ( Accountant Member), The above mentioned amendments are to take effect from 01st April 2021 and will only apply to the assessment years 2021-22 and subsequent assessment years. Provisions u/s 14A of Income Tax Act not Applicable in Computing Book Profit u/s. 115JB: ITAT [Read Order] Suzlon Energy Ltd vs The DCIT CITATION:   2024 TAXSCAN (ITAT) 1464 Recently, the Ahmedabad Bench of the Income Tax Appellate Tribunal ( ITAT ) held that the provisions of Section 14A of the Income Tax Act, 1961, are not applicable in computing book profit under Section 115JB of the act. The Tribunal held that the provisions of Section 14A of the Income Tax Act cannot be applied to computing the book profit under Section 115JB of the Income Tax Act. ITAT deletes Addition on Alleged Bogus LTCG due to Procedural Lapses and Denial of Cross-Examination Rights [Read Order] Sh. Shobhit Gupta vs ACIT CITATION:   2024 TAXSCAN (ITAT) 1466 In a recent ruling, the Delhi Bench of the Income Tax Appellate Tribunal ( ITAT )  deleted the additions related to alleged bogus Long-Term Capital Gains (LTCG) due to procedural lapses and denial of cross-examination rights to the assessee. The bench, comprising Pradip Kumar Kedia ( Accountant Member ) and Yogesh Kumar U.S ( Judicial Member ) was of the opinion that a grave error was committed by the AO in denying the opportunity of cross-examination by the assessee and deleted the addition made by the AO. Purchases Treated as Bogus in Another Year Cannot Solely Justify Similar Treatment for Year Under Consideration: ITAT [Read Order] M/s. A. P. Fashion Pvt. Ltd. vs Pr. CIT (Central)-2) CITATION:   2024 TAXSCAN (ITAT) 1467 The Kolkata Bench of the Income Tax Appellate Tribunal ( ITAT ) ruled that purchases treated as bogus in one financial year cannot automatically be presumed bogus in another year without sufficient evidence specific to that period. The tribunal further observed the purchases were of finished products (fancy sarees) directly linked to subsequent sales ruling out any intent to inflate expenses via bogus entries.  The tribunal held that merely treating a party as a shell company for other years cannot automatically discredit its transactions for the year under consideration. So, the tribunal quashed the revision order passed by the PCIT under Section 263. The appeal was allowed. ITAT upholds Staff Welfare Addition made by AO due to No Evidence Submitted by Assessee [Read Order] Subhrashi Enclave Pvt vs ITO CITATION:   2024 TAXSCAN (ITAT) 1463 In a recent ruling, the Kolkata bench of the Income Tax Appellate Tribunal ( ITAT ) found adequate allowed salary and rent claims made by the assessee due to adequate proof and upheld the addition of staff welfare made by the assessing officer ( AO ) due to insufficient evidence. The Tribunal, after going through the documents submitted by the assessee, held that ‘the salary and bonus expenses, along with rent and electricity expenses, deserve to be allowed in full.’ The bench upheld the addition of Rs. 22,700 towards staff welfare expenses due to lack of evidence. Taxability of Interest Income Depends on the Investor, Not the Name on the Deposit: ITAT [Read Order] Kamalbhai Babulal Kahar vs ITO CITATION:   2024 TAXSCAN (ITAT) 1470 The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) ruled that the taxability of interest income depends on the person who made the investment, not on whose name the deposit is held. The two member bench comprising T.R. Senthil Kumar (Judicial Member) and Annapurna Gupta (Accountant Member)found no merit in the arguments of the counsel for the assessee. It noted that the CIT(A) had correctly rejected the assessee’s explanation. The taxability of interest income depends on the person who made the investment, not on whose name the deposit is held. As a result, the tribunal upheld the order of the CIT(A). In short,the appeal filed by the assessee was dismissed. ITAT Restores Trust’s Corpus Donations Case for Fresh Hearing Over Notice and Email ID Issues [Read Order] Batanagar Education and Research Trust vs ITO CITATION:   2024 TAXSCAN (ITAT) 1474 The Kolkata Bench of the Income Tax Appellate Tribunal ( ITAT ) restored the trust’s corpus donation matter for a fresh hearing due to the trust’s non-compliance caused by the lack of awareness of notice and email id issues. The tribunal observed that the assessee was not given an opportunity to present facts and documents before the CIT(A). So, the tribunal concluded that the appeal should be restored to the CIT(A) for fresh adjudication. The tribunal directed the CIT(A) to allow the assessee to present its submissions and supporting documents. Relief to Toyota: ITAT upholds quashing of Separate Benchmarking of Royalty after Margin accepted to be at ALP [Read Order] The Deputy Commissioner of Income Tax vs M/s. Toyota Kirloskar Motor Pvt. Ltd CITATION:   2024 TAXSCAN (ITAT) 1469 The Income Tax Appellate Tribunal, Bangalore recently granted relief to Toyota, upholding the order of a Transfer Pricing Officer ( TPO ) in which the royalty was separately benchmarked after the margin was accepted to be at Arm’s-Length Price ( ALP ) by the TPO. Upholding the precedence of the prior decision by the ITAT in the Assessee’s own case for A.Y. 2009-10, the Tribunal proceeded to reject the grounds raised by the Revenue; the cross-appeals being counter to the main appeals were held to become infructuous in this instance. 10% Tolerance Band u/s 43CA Applies Retrospectively to Address Stamp Valuation Discrepancies: ITAT [Read Order] ACIT vs Ashiana Housing Limited CITATION:   2024 TAXSCAN (ITAT) 1476 The Kolkata Bench of Income Tax Appellate Tribunal ( ITAT ) ruled that the 10% tolerance band under Section 43CA introduced by the Finance Act, 2020 to address stamp duty valuation discrepancies applies retrospectively. The tribunal confirmed that the amendments were remedial, aimed at addressing unintended consequences so it should apply retrospectively from the date the provision came into effect. The tribunal dismissed the revenue’s appeal and directed the AO to verify cases falling within the 10% tolerance band and allow relief accordingly. ITAT Restores Appeal to CIT(A) for De Novo Adjudication, Upholding Timely Filing of the Appeal [Read Order] Khodidas Vandas Patel Discretionary Trust vs Income Tax Officer CITATION:   2024 TAXSCAN (ITAT) 1472 The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) restored the appeal filed by the assessee to the Commissioner of Income Tax (Appeals) [CIT(A)] for de novo adjudication, upholding that the appeal was filed within the prescribed time limit. The two member bench comprising Dr.B.R.R Kumar ( Vice President ) and Suchitra Kamble ( Judicial Member ) upon reviewing the order of the CIT(A), noted that the issue had not been adjudicated on its merits. Since the appeal was filed on time and the CIT(A) had not addressed the merits, the tribunal decided to restore the matter to the CIT(A) for de novo adjudication, with a valid notice of hearing sent to the assessee via email. In short,the appeal filed by the assessee was allowed for statistical purposes. ITAT Restores Case to CIT(A) for Reconsideration of Rs. 13.35 Lakh Unexplained Cash Deposits due to Non-Consideration of Assessee’s Evidence [Read Order] Kamalbhai Babulal Kahar vs ITO CITATION:   2024 TAXSCAN (ITAT) 1470 The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) restored the case to the Commissioner of Income Tax (Appeals) [CIT(A)] for reconsideration of the ₹13.35 lakh unexplained cash deposit addition due to non-consideration of key evidence, including proof of his fish trading business and related payments. It was observed that the CIT(A) relied only on part of the information provided by the assessee, overlooking key details such as the previous year’s accepted business income, payments made by cheque for fish-seeds, and the existence of a valid business license. Since the CIT(A) failed to account for these facts, the tribunal decided to remand the case for reconsideration, allowing the assessee an opportunity to present their case. In short,the appeal filed by the assessee was allowed for statistical purposes. Interest Income received from Co-Op Society/Banks entitled to Deduction u/s 80P(2)(d): ITAT [Read Order] Prathamika Krushi Pathina Sahakara vs ITO CITATION:   2024 TAXSCAN (ITAT) 1477 The Income Tax Appellate Tribunal ( ITAT ), Bangalore recently affirmed that deductions under Section 80P(2)(d) of the Income Tax Act, 1961 may be availed on interest income received from co-operative societies or banks. With respect to the decision of the Supreme Court in Kerala State (supra), the Bench restored the matter back to the concerned Assessing Officer to examine whether the interest income is received from Co-operative Society or Co-operative Banks. While allowing the present Appeal, ITAT clarified that if the interest income was found to have been received from Co-operative Society, then the same shall be entitled to deduction under Section 80P(2)(d) of the Act. No Incriminating Evidence found for Rs. 14.3 Cr Addition: ITAT dismisses Revenue’s Appeal [Read Order] ACIT vs Shalimar Lakecity Pvt. Ltd. CITATION:   2024 TAXSCAN (ITAT) 1465 In a recent ruling, the Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) dismissed the appeal filed by the revenue as the bench was of the opinion that the addition of Rs. 14.3 crores made by the assessing officer ( AO ) was not supported by any incriminating evidence.

The ITAT observed that there was no adverse incriminating material or document found in the premises of the searched person based on which the addition was made. The bench did not find any infirmity in the impugned order and upheld the order passed by the CIT( A ). Non-Compliance with AO Notices Despite Being Indian Oil Corporation Employee Aware of Tax Obligations: ITAT Upholds Penalty [Read Order] Ashutosh Das vs Assistant Commissioner of Income Tax CITATION:   2024 TAXSCAN (ITAT) 1475 The Kolkata Bench of the Income Tax Appellate Tribunal ( ITAT ) upheld the penalty for non-compliance with assessing officer notices stating that the assessee being an Indian Oil Corporation employee failed to fulfill tax obligations despite being aware of procedural responsibilities. The tribunal observed that the assessee failed to provide any plausible explanation for the non-compliance with the notices. The tribunal confirmed the penalty imposed under Section 271(1)(b) of the Income Tax Act, 1961. Loan Interest Deduction u/s 48 of Income Tax Valid Despite Prior Claim u/s 24(b), Amendment to S. 48 Effective from AY 2024-25: ITAT [Read Order] Bani Broto Banerjee vs Commissioner of Income Tax CITATION:   2024 TAXSCAN (ITAT) 1484 The Kolkata Bench of the Income Tax Appellate Tribunal ( ITAT ) confirmed that taxpayers can claim loan interest deductions under Section 48 of the Income Tax Act even if they have already claimed similar deductions under Section 24(b).

The tribunal clarified that amendments to Section 48 will apply only from Assessment Year (AY) 2024-25 onwards. For the relevant assessment year (2014-15), the tribunal explained that the amendment did not apply and ruled that the interest expenditure was indeed part of the cost of acquisition. So, the tribunal deleted the addition of Rs. 1,90,78,228 made by the AO and allowed the appeal. Late Filing of Form 67 Cannot Override Rights under DTAA: ITAT Allows FTC Claim [Read Order] BGA Electrical & Services Private Limited vs The Deputy Commissioner of Income Tax CITATION:   2024 TAXSCAN (ITAT) 1483 The Kolkata Bench of the Income Tax Appellate Tribunal ( ITAT ) ruled that procedural delays, such as late Form 67 filing, cannot invalidate a taxpayer’s right to claim a Foreign Tax Credit ( FTC ) under a Double Taxation Avoidance Agreement ( DTAA ). The tribunal concluded that procedural delays should not hinder substantive claims like FTC when the claim is genuine and supported by tax payments in the foreign jurisdiction. The tribunal allowed the appeal directing the CPC to grant the FTC of Rs. 75,000 to the assessee. Failure of Lower Authorities to Consider Assessee’s Evidence on Bank Deposits: ITAT Remands Case to CIT(A) [Read Order] Faeza Nisarahmed Soniwala A-605 vs The ITO CITATION:   2024 TAXSCAN (ITAT) 1485

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) remanded the case to the Commissioner of Income Tax(Appeals) [CIT(A)] for fresh adjudication after finding that the lower authorities failed to adequately consider the evidence provided by the assessee regarding bank deposits. The two member bench comprising Suchitra R.Kamble(Judicial Member) and Dr.BRR Kumar(Accountant Member) noted that the Revenue authorities had not fully considered the assessee’s evidence and decided to remand the case to the CIT(A) for a fresh review. The CIT(A) was instructed to issue a new notice to the assessee and adjudicate the matter, ensuring timely compliance and disposal of the case. ITAT quashes S.263 Revision Order and Annuls CIT(A) Order due to Invalid Assessment [Read Order] Kolet Resort Club Pvt. Ltd vs Income Tax Officer CITATION:   2024 TAXSCAN (ITAT) 1461

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) quashed the Section 263 revision order and annulled the Commissioner of Income Tax(Appeals) [CIT(A)] order due to the invalidity of the assessment. At the beginning of the hearing, both parties acknowledged that the Tribunal had quashed the order passed by the Principal Commissioner of Income Tax(PCIT) under Section 263 on 01.10.2024. Since the Section 263 order was invalidated, the subsequent proceedings were also deemed invalid. As a result, the impugned order passed by the CIT(A) was annulled. 1 Day Delay is not a Delay in filing Income Tax Appeal Belatedly: ITAT restores Gratuity Addition Matter to CIT(A) [Read Order] Vaddadi Madhusudana Rao vs Asst.Commissioner of Income Tax CITATION:   2024 TAXSCAN (ITAT) 1468 In a recent ruling, the Vishakapatanam bench of Income Tax Appellate Tribunal ( ITAT ) has ruled that the 1 day delay is not a delay in filing the income tax appeal belatedly. The bench restored the gratuity addition matter to the Commissioner of Income Tax (Appeals) [CIT(A)]. In light of the principles and the judicial precedents, the bench of Balakrishnan S. (Accountant member) and K. Narasimha Chary (Judicial member) restored the matter to the CIT(A) directing to provide reasonable opportunity.

The appeal was allowed accordingly. Plea of Technical Glitch Rejected for Delayed EPF, ESI Payments: ITAT upholds Disallowance of 1.75L [Read Order] Jagati Mining Company Private Limited vs The ACIT CITATION:   2024 TAXSCAN (ITAT) 1480 In a recent ruling, the Surat Bench of the Income Tax Appellate Tribunal ( ITAT ) held that the disallowance made by the Central Processing Centre (CPC) on account of delayed Provident Fund (PF) and Employee State Insurance (ESI) payments was adequate and should be allowed. The tribunal added that it cannot be excused unless there is a valid reason for such delay. The two member bench of ITAT consisting of Pawan Singh (Judicial Member) and Bijayananda Pruseth (Accountant Member) held that the decision of the Supreme Court in the case of Checkmate Services Pvt. Ltd, is to be followed. The bench found that the Surat Bench of ITAT had dismissed a similar appeal in the case Shri Raghukul Textprints Pvt, Ltd. vs. DCIT and held the addition of 1Lakh made by the CPC along with the order of the CIT(A) to be adequate. As a result, the appeal made by the assessee was dismissed