Top Stories ITAT Weekly Round Up By Aiswarya Krishnadas – On March 16, 2024 5:12 pm – 26 mins read This is the weekly round of the Income Tax Appellate Tribunal ( ITAT ) that were published at Taxscan.in from March 09, 2024  to March 15 are analytically summarized in this Round-Up. Relief to Toyota Financial: ITAT directs Re-Adjudication on Taxability of Interest Income from NPAs Toyota Financial Services India vs The Assistant Commissioner of Income Tax CITATION: 2024 TAXSCAN (ITAT) 366 The Bangalore division of the Income Tax Appellate Tribunal ( ITAT ) provided Toyota Financial with relief by instructing a reevaluation of the tax implications related to the interest income derived from Non-Performing Assets ( NPAs ). The tribunal, comprising George George K (Vice President) and Laxmi Prasad Sahu (Accountant Member), remanded the matter to the CIT (Appeals) after granting a reasonable opportunity to the assessee. Additionally, the assessee was instructed to adhere to the hearing notice and refrain from seeking unnecessary adjournments to expedite the case’s resolution AO and CIT (A) ignores Cash Deposit Evidences: ITAT deletes addition u/s 69A Pravinbhai Mumabhai Bharwad vs The Income Tax Officer CITATION: 2024 TAXSCAN (ITAT) 346 The Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) has ruled to overturn the addition made under section 69A under Income Tax Act, as both the Assessing Officer (AO) and the Commissioner of Income Tax (Appeals) [CIT (A)] overlooked crucial evidence pertaining to cash deposits. A single-member bench, presided by Suchithra Kemble, emphasized that the taxpayer had provided details regarding the land sale and associated consideration, as well as evidence of withdrawals from the father’s account. Regrettably, both the Assessing Officer and the CIT (A) had disregarded this crucial evidence. Consequently, the taxpayer’s appeal was allowed. Taxpayer submits ITRs and Bank statements for Proving Genuineness of Unsecured Loan: ITAT deletes

addition u/s 68 Income Tax Officer vs Aashna Developers Pvt. Ltd CITATION: 2024 TAXSCAN (ITAT) 376 After the taxpayer presented Income Tax Returns ( ITRs ) and bank statements to demonstrate the authenticity of the unsecured loan, the Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) removed the addition under Section 68 of the Income Tax Act, 1961. The two-member bench, comprising Siddhartha Nautiyal (Judicial member) and Waseem Ahmed (Accountant member), upheld the findings of the CIT (A) and directed the AO to delete the addition. The ITAT condemned the Revenue’s decision to treat the interest on the alleged loans as genuine while deeming the loans themselves as bogus, ultimately dismissing the revenue’s appeal. Defective Penalty Notice: ITAT deletes penalty Imposed u/s 271AAB of Income Tax Act Landcraft Developers (Pvt.) Ltd vs ACIT CITATION: 2024 TAXSCAN (ITAT) 329 The Delhi bench  of  Income Tax Appellate Tribunal (ITAT) deleted the penalty imposed under Section 271AAB of the Income Tax Act, 1961 due to the defective penalty notice issued by the assessing officer. Therefore the two-member bench Of Challa Nagendra Prasad, (Judicial Member) and N.K. Billaiya,

(Accountant Member)  held that the penalty notice issued on 31/03/2015 is defective and, accordingly, entire penalty proceedings gets vitiated. Hence, the penalty levied  under Section  271AAB of the  Income Tax  Act in the facts and circumstances of the instant case would have no legs to stand in the eyes of law. Accordingly the bench allowed  the appeal filed by the assessee. Rajkumar counsel appeared for the assessee and  Jeetendra Kumar Kale counsel appeared for revenue ITAT Orders Re-adjudication on Section 80P(2)(e) Deduction for Agricultural Loans Provided to Members under Income Tax Act M/s. Savanoor Primary Agricultural Co-operative Societ vs ITO CITATION: 2024 TAXSCAN (ITAT) 336 The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) has issued an order for re-adjudication regarding the deduction for agricultural loans provided to members under Section 80P(2)(e) of the Income Tax Act, 1961. The bench directed the AO to investigate whether the interest income was earned from investments in compliance with the relevant Karnataka Co-operative Societies Rules and Act. If the income was found to be a result of compulsory compliance, it would be entitled to deduction under section

80P(2)(a)(i) of the Income Tax Act. With these instructions, grounds 5 to 8 were remanded to the files of the AO. Failure To file Audit Report along with return of income by Auditor: ITAT directs to allow exemption u/s 11 of the Income Tax Act Karma Falya Trust vs D.C.I.T CITATION: 2024 TAXSCAN (ITAT) 343 The Ahmedabad bench Income Tax Appellate Tribunal ( ITAT ) while directing to allow exemption under section 11 of the Income Tax Act, 1961 held that the auditor failed to file the audit report along with the return of income. It was observed by the tribunal that  In the present case also, the assessee obtained the Audit Report dated 31.10.2018 from the Auditor but could not file the same on Income Tax Portal. Thus, the audit report was prepared well within the time. Thus, the CIT(A) should have taken cognisance of the same and the Assessing Officer should have also taken into account Audit Report for allowing the exemption under Section 11 of the Income Tax Act to the assessee. Therefore  the single member bench Suchitra Kamble (Judicial Member) allowed the appeal filed by the assessee. IIT does not falls in status of Central Government for Invoking of Rule 3 and Section 17(2) of Income Tax: ITAT ACIT vs Indian Institute of Technology CITATION: 2024 TAXSCAN (ITAT) 374 The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) noted that the Indian Institute of Technology (IIT) does not fall under the status of the Central Government for invoking Rule 3 and Section 17(2) of the Income Tax Act, 1961. However, the tribunal, comprising M. Balaganesh (Accountant member) and Anubhav Sharma (Judicial member), viewed that “view that though Ld. CIT(A) has fallen in error in holding that assessee falls in status of Central Government for the purpose of Section 17(2) of the Act, the impugned order of Ld. CIT(A) still deserves to be upheld as Ld. AO has fallen in error by straightaway invoking Rule 3 for computing value of the perquisite and treat assessee in default in deducting tax at source on said value, without first recording a finding as to whether there is ‘concession’ and the case is covered by Section 17 (2) (ii) of the Act.” ITAT dismisses Application for

Condonation of Delay of 451 days regarding appeal for Penalty Proceedings Inderjit Singh Manchanda vs Commissioner of Income Tax CITATION: 2024 TAXSCAN (ITAT) 340 The Mumbai bench of Income Tax Appellate Tribunal ( ITAT ) dismissed the application filed for condoning the delay of 451 days regarding the appeal for the penalty proceedings. Therefore  the two-member bench of C V Bhadang, (Vice President) and B R Baskaran, (Accountant Member) dismissed the appeal filed by the assessee and dismissed the application for condoning the delay. Failure to File Audit Report in Form 10CCB before ITR filing due date: ITAT disallows Deduction Claim u/s 80IC M/s Securico Electronics India Ltd vs ACIT CITATION: 2024 TAXSCAN (ITAT) 365 The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) recently ruled on a case where deduction claims under Section 80IC of the Income Tax Act, 1961 were disallowed due to the failure to submit the audit report in Form 10CCB before Income Tax Return ( ITR ) filing. After examining the submissions and the facts of the case, the bench, consisting of Narendra Kumar Billaya (Accountant member) and Yogesh Kumar U.S (Judicial member), noted that the audit report in Form No. 10CCB was filed after the due date for ITR filing. The tribunal emphasized that compliance with the provisions of filing the Audit Report under Section 80IC within the stipulated time was crucial for claiming the deduction under this section. Additionally, the tribunal found no merit in the argument that the assessee had been claiming deductions under Section 80IC since the previous assessment year. Therefore, the ITAT concluded that the appeal filed by the assessee lacked merit and subsequently dismissed it. Interest paid on loans borrowed for real estate and finance business is allowable as deduction: ITAT deletes Disallowance Shri Gurcharan Singh Bhatia vs ACIT

CITATION: 2024 TAXSCAN (ITAT) 350 The Delhi bench of Income Tax Appellate Tribunal ( ITAT ) while deleting the disallowance made by the assessing officer towards the interest expenses held that interest paid on loans borrowed for real estate and finance business is allowable as deduction After reviewing the submissions of both parties the two-member bench of Shamim Yahya, (Accountant Member) and Challa Nagendra Prasad, (Judicial Member) Deleted the disallowance made by the assessing officer and held that interest paid on loans borrowed for real estate and finance business is allowable as deduction. Gross Receipts of Charitable Trust Exceeding Threshold Mentioned u/s 2(15) of Income Tax Act Not a Ground for Registration Cancellation: ITAT Meerut Development Authority vs Commissioner Of Income Tax CITATION: 2024 TAXSCAN (ITAT) 338 In a major ruling, the Delhi bench of the Income Tax Appellate Tribunal (ITAT) noted that surpassing the threshold of gross receipts for charitable trusts as outlined in Section 2(15) of the Income Tax Act does not constitute sufficient grounds for the cancellation of registration. The bench of Anubhav Sharma (Judicial member) and M. Bal Ganesh (Accountant member) held that the activities carried out by the assessee would be charitable activity under section 2(15) of the Act and in any case, the registration cannot be cancelled under Section 12AA (3) of the Income Tax Act with retrospective effect from 01.04.2009. Even if the gross receipts of the assessee exceeds the threshold limit prescribed in the proviso under Section 2(15) of the Act, still there is no need for cancellation of the registration under Section  12AA(3) of the Income Tax Act. Rejection of Application of Exemption claimed u/s 80G of

Income Tax Act on account of failure to produce Documentary Evidence: ITAT directs Readjudication Sanj Sawali Care Foundation vs CIT (Exemptions) CITATION: 2024 TAXSCAN (ITAT) 370 The Income Tax Appellate Tribunal ( ITAT ) of Pune bench while observing the rejection of the application of exemption claimed under Section 80G of the Income Tax Act, 1961 on account of failure to produce the documentary evidence directed readjudication. Accordingly the ITAT bench of  Sarathi Chaudhury, ( Judicial Member ) & G.D. Padmahshali, ( Accountant Member ) after reviewing the submissions of both parties  remand the matter back to his file to CIT(E) and directed to examining and verifying all documentary evidence furnished by the applicant-assessee. Non-Forwarding of draft Assessment Order specified u/s 144C(1) of Income Tax Act: ITAT quashed Assessment order DCIT vs Newbury Holding Two Ltd CITATION: 2024 TAXSCAN (ITAT) 352 The Delhi bench of Income Tax Appellate Tribunal ( ITAT ) recently quashed assessment order passed under Section 153C of the Income Tax Act, 1961 due to non-filing of draft assessment order specified under Section 144(1) of the Income Tax Act, 1961. After reviewing the submissions of both parties the two-member bench of Dr. B. R. R. Kumar, (Accountant Member) and Saktijit Dey, (Vice President) quashed assessment order passed under Section  153C of the Income Tax Act due to non-filing of draft assessment order specified under Section 144(1) of the Income Tax Act. Amit Goel, CA, Pranav Yadav, Advocate, Nippun Mittal, CA & Ms. Anjali Jain, Advocates appeared for assessee and  Vizay B. Vasanta, Sanjay Kumar appeared for revenue. No addition shall be made u/s 68 of Income Tax Act, when Authenticity/Genuineness of Share Application Money received from various investors are fully explained: ITAT M/s Trinity Global Enterprises Ltd vs Income Tax Officer CITATION: 2024 TAXSCAN (ITAT) 358 The Delhi bench of Income Tax Appellate Tribunal ( ITAT ) ruled that addition under Section 68 of the Income Tax Act, 1961 should not be made, when authenticity/genuineness of share application money received from various investors are fully explained. After reviewing the submissions of both parties the two-member bench of Dr. B. R. R. Kumar,( Accountant Member ) and Yogesh Kumar US, ( Judicial Member ) deleted the addition made under Section 68 of the Income Tax Act and confirmed that Authenticity/Genuineness Share Application Money received from various investors are fully explained by the assessee. To Read the full text of the Order CLICK HERE No disallowance towards business loss incurred Erection and Testing Services of Hindustan Thermal: ITAT DCIT vs Hindustan Thermal EPC Company Pvt. Ltd CITATION: 2024 TAXSCAN (ITAT) 371 The two member

bench of Delhi Income Tax Appellate Tribunal ( ITAT ) held that no disallowance should be made towards the business loss incurred on erection and testing services of Hindustan Thermal. After reviewing the submissions of both parties the two-member bench of M Balaganesh (Accountant Member) and C. N. Prasad, (Judicial Member) no disallowance should be made towards the business loss incurred on erection and testing services of Hindustan Thermal. Satyen Sethi,counsel appeared for assessee and Sandip Kumar Mishra counsel appeared for revenue. ITAT quashes reassessment proceedings initiated on basis of incorrect facts recorded by AO Shri Anuj Chaudhary vs Income Tax Officer CITATION: 2024 TAXSCAN (ITAT) 361

The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) quashed reassessment proceedings initiated on the basis of incorrect facts recorded by the assessing officer. After reviewing the submissions of both parties the two-member bench of Dr. B. R. R. Kumar ( Accountant Member ) and Saktijit Dey, ( Vice President )  quashed  the reassessment by holding that assumption of jurisdiction under Section 147 of the Income Tax Act in the instant case is based on incorrect facts recorded thereon. Section 80P(2)(a)(i) Deduction under income Tax Act allowable on Interest Income from Mandatory Co-op Bank Investments under State Societies Act M/s. Kalika Parameswari Co-operative Society Ltd vs ITO CITATION: 2024 TAXSCAN (ITAT) 367 In a recent decision, the Delhi bench of the Income Tax Appellate Tribunal (

ITAT ) determined that under Section 80P of the Income Tax Act, 1961, interest income from investments in cooperative society banks is eligible for deduction, provided such investments are obligatory under the Karnataka State Societies Act, 1959. The ITAT emphasized that if the investments were made out of compulsion under the Act and relevant Rules, they would be part of the petitioner’s business activity, thus qualifying for the benefits of Section 80P(2)(a)(i) of the Income Tax Act. Consequently, the appeals filed by the petitioner were allowed. No Errors or Infirmities Found in Assessment Order Prejudicial to Revenue’s Interest: ITAT sets aside order passed by PCIT u/s 263 of Income Tax Act Simbhaoli Power Pvt Ltd vs Pr. C.I.T CITATION:

2024 TAXSCAN (ITAT) 334 The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) recently made a significant decision, overturning an order passed by the Principal Commissioner of Income Tax ( PCIT ) under section 263 of the Income Tax Act, 1961. The ITAT found no errors or infirmities prejudicial to the revenue’s interest in the assessment order, thereby setting aside the PCIT’s decision. The bench comprising Yogesh Kumar U.S. (Judicial member) and N.K. Billaiya (Accountant member), did not identify any error or infirmity in the assessment order that could render it erroneous and prejudicial to the interest of the Revenue. Consequently, the ITAT set aside the PCIT’s order and reinstated that of the Assessing Officer dated 22nd December 2016. Cash Deposit received from Mother as Gift during

demonetization period properly Explained: ITAT deletes Addition u/s 69A Shri Rahul Udayashankar vs The Income-tax Officer CITATION: 2024 TAXSCAN (ITAT) 364 The Bangalore bench of the Income Tax Appellate Tribunal ( ITAT ) has ruled in favor of the taxpayer, overturning the addition made under section 69A of Income Tax Act, 1961. The tribunal found that the cash deposit, received as a gift from the taxpayer’s mother during the demonetization period, was adequately accounted for. A single-member bench of Chandra Poojari (Accountant member), concluded that the addition made by the assessing officer could not be upheld as the assessee clearly provided the explanation of the cash deposit.

The ITAT determined that the Rs. 25,00,000/- deposit into the taxpayer’s bank account had been properly explained, leading to the deletion of the contested addition. As a result, the taxpayer’s appeal was allowed. Comparable chosen for ITES and IT segment are within tolerance limit provided in proviso to Section 92CA Income Tax Act: ITAT dismiss revenue Appeal Income Tax Officer vs Excult Client Services I P Ltd CITATION: 2024 TAXSCAN (ITAT) 355 The Mumbai bench of Income Tax Appellate Tribunal ( ITAT ) while dismissing the revenue appeal held that the comparable chosen for ITES and IT segment are within the tolerance limit provided in proviso to section 92CA of the Income Tax Act, 1961 After reviewing the submissions of both parties the two-member bench of S Rifaur Rahman, (Accountant Member) and Amit Shukla, (Judicial Member) observed that comparable chosen for ITES and IT segment are within the tolerance limit provided in proviso to section 92CA of the Income Tax Act. No one appeared for assessee during the proceedings and Shilpa N.C appeared for revenue. ITAT deletes addition u/s 68 of Income Tax Act on Submission of Requisite Documents Trident Towers Pvt. Ltd vs ACIT CITATION:   2024 TAXSCAN (ITAT) 345 In a major ruling, the Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) deleted the addition under section 68 of the Income Tax Act, 1961 upon submission of requisite documents by the taxpayer.

Thus, the two-member bench of the ITAT, including Anubav Sharma ( Judicial member ) and M. Balaganesh ( Accountant member ) removed the addition related to the unsecured loan received by M/s. Powmex Sales Pvt. Ltd under Section 68 of the Income Tax Act. Accordingly, the appeal of the assessee was partly allowed. Gratuity Paid to Employee Classified as Salary, Deemed Expense allowable u/s 37(1) of Income Tax Act: ITAT Twinings Private Ltd vs DCIT CITATION: 2024 TAXSCAN (ITAT) 332 In a recent ruling, the Kolkata bench of the Income Tax Appellate Tribunal ( ITAT ) highlighted that the  gratuity paid to an employee is classified as salary, hence deemed an allowable expense under Section 37(1) of the Income Tax Act, 1961. The ITAT bench comprising Sanjay Garg (Judicial Member) and Girish Agarwal (Accountant Member), expressed bewilderment at the prolonged delay in processing the assessee’s application for approval. Despite the delay, the assessee had been consistently making payments to LIC for the group gratuity scheme and claiming deductions accordingly.

Framing of Assessment in name of non-existing entity is invalid and Void Ab-initio: ITAT quashes Assessment Order u/s 143(3) of Income Tax Act Solvent Real Estate Pvt. Ltd. vs ITO CITATION: 2024 TAXSCAN (ITAT) 347 The Kolkata bench of the Income Tax Appellate Tribunal ( ITAT ) invalidated the assessment order under Section 143(3) of the Income Tax Act, 1961 stating it as null and void from the beginning, citing the assessment being made in the name of a non-existent entity. The tribunal, comprising Sanjoy Sharma ( Judicial Member ) and Rajesh Kumar ( Accountant Member ) upholding the decision of the  Supreme Court in the case of CIT vs. Maruti Suzuki observed that the framing of assessment in the name of non-existing entity is invalid and void ab-initio and cannot be sustained. Accordingly, the ITAT nullified the assessment order, allowing the additional ground raised by the assessee. Information from Pen drive / Laptop of Employees Not Deemed Credible Evidence alone for Tax Assessments: ITAT directs AO to Delete Additions Relating to Capitation Padmashree Dr. D.Y vs DCIT CITATION: 2024 TAXSCAN (ITAT) 335 In a recent ruling, the Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has delivered a significant directive to the Assessing Officer (AO), compelling the deletion of additions related to capitation fees. The tribunal emphasized that information solely obtained from pen drives or laptops of employees cannot be deemed as credible evidence for tax assessments.

The tribunal observed that “the information found in the pen drive/laptop of employees cannot be considered as credible evidences, unless they have been corroborated with any other evidence. Accordingly, no credence could be given to the abstract entries made in the pen drive/laptop. Accordingly, we are of the view that the AO could not have made additions on the basis of those information.” Application for approval u/s 80G of Income Tax Act filed within Prescribed Time limit: ITAT allows appeal Shri Kailash Math Trust vs The CIT(Exemption) CITATION: 2024 TAXSCAN (ITAT) 330 The Pune bench of Income Tax Appellate Tribunal ( ITAT ) while allowing the appeal filed by the assessee held that application for approval under section 80G of the Income Tax Act filed within the prescribed time limit. Therefore  the two-member bench Of Satbeer Singh Godara, ( Judicial Member ) and Dr. Dipak P. Ripote,( Accountant Member ) held that the Assessee Trust had applied for registration within the time allowed under the Act. Accordingly the bench allowed  the appeal filed by the assessee. No Denial of Capital Gains Deduction u/s 54 once Requisite Conditions are Met: ITAT Mukesh Harilal Mehta vs Income Tax Officer 16(3)(1) CITATION: 2024 TAXSCAN (ITAT) 381 In a significant decision, the Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) overturned the findings of the Commissioner of Income Tax (Appeals) [CIT(A)] regarding the eligibility of the assessee to claim deduction under Section 54 of the Income Tax Act, 1961. The tribunal bench, comprising Rahul Chaudhary (Judicial Member) and Om Prakash Kant (Accountant Member), noted that the appellant had received an occupation certificate for the Rustomjee Oriana project, where the purchased flat (Flat No. B-902) was located on 07/11/2015. The bench also observed that the possession of the flat was granted to the appellant on 15/03/2016.

Based on these facts, the tribunal bench concluded that the appellant satisfied the conditions outlined in Section 54 and should be allowed the deduction. Interest earned on deposits kept for Business cannot be taxed as Income from other Sources: ITAT Addl. CIT vs Bokaro Power Supply Company Pvt. Ltd CITATION:   2024 TAXSCAN (ITAT) 369 The Delhi bench of Income Tax Appellate Tribunal ( ITAT ) ruled that interest earned on deposits kept for the purpose of business could not be taxed under income from other sources. Respectfully following the aforesaid judicial precedents the two-member bench Of M. Balaganesh ( Accountant Member ) and C. N. Prasad, ( Judicial Member ) dismissed the appeal filed by the revenue. M. P. Rastogi, counsel appeared for the revenue and Kanv Bali, counsel appeared for revenue. No Disallowance of Interest Expenditure not claimed during Deposit of Tax in Return: ITAT directs re-adjudication WLD Investments Pvt. Ltd vs DCIT CITATION: 2024 TAXSCAN (ITAT) 327 The Delhi bench  of  Income Tax Appellate Tribunal (ITAT) while directing readjudication observed that no interest expenditure should be disallowed which has not been claimed during the deposit of tax in return.

Therefore  the two-member bench Of Pradip Kumar Kedia, (Accountant Member) and Saktijit Dey, (Vice President) set aside the first appellate order and remit the matter back to the AO for determining the issue afresh on the basis of relevant facts that may be placed by the assessee before the AO. ITAT directs AO to re-compute book profit u/s 115JB of  Income Tax  Act by giving  opportunity of being heard to assessee M/s The Oriental Insurance Co. Ltd vs DCIT CITATION: 2024 TAXSCAN (ITAT) 328 The two member bench  of  Income Tax Appellate Tribunal (ITAT) Delhi bench directs assessing officers to re-compute book profit under Section 115JB of the Income Tax Act, 1961  by giving the opportunity of being heard to assessee. After Reviewing the facts  the two-member bench Of Yogesh Kumar U.S (Accountant member) and Narendra Kumar Billaiya,(Accountant Member) directed the AO to re-compute the book profit under Section 115JB of the Income Tax  Act by giving reasons for making adjustment and giving an opportunity of being heard to the assessee. ITR Filing by Due Date u/s 139 of Income Tax Act Is mandatory for Political Party to Claim exemption u/s 13A: ITAT Refuses to Stay Recovery Against INC Indian National Congress vs Deputy Commissioner of Income Tax CITATION: 2024 TAXSCAN (ITAT) 331 The New Delhi Bench of the Income Tax Appellate Tribunal ( ITAT ) refused to stay recovery against the Indian National Congress ( INC ) and ruled that ( ITR ) filing by due date under Section 139 of the Income Tax Act, 1961 is mandatory for political party to claim exemption under Section 13A of the Income Tax Act, 1961. A Two-Member Bench comprising observed that “On the basis of the aforesaid discussion, and having regard to the legal position and the material on record, it is reasonable to conclude that the income tax authorities have not made any error in denying the exemption claimed by the assessee under Section 13A of the Income Tax Act due to violation of clause (d) of the first Proviso as well as third Proviso to Section 13A of the Income Tax Act.

Consequently, in our view, the Applicant has been unable to make out a strong prima facie case against the interpretation of Section 13A of the Income Tax Act as adopted by the Revenue to deny the exemption, so far it is relevant for the purposes of examining the merits of the present Application.” Revenue recognition Methodology accepted by Revenue must remain unchanged across years until and unless modified in Initial year: ITAT Ralsons Infrastructure Pvt. Ltd vs PCIT-3 CITATION:   2024 TAXSCAN (ITAT) 378 In a recent ruling, the Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) emphasized the principle of consistency in revenue recognition methodologies across fiscal years unless modified in the initial year. Consequently, the two-member bench, comprising Madmitha Roy ( Judicial member ) and Waseem Ahemed ( Accountant member ), concluded that there was no error in the Assessing Officer’s order prejudicial to revenue interests.

They ruled that the PCIT’s order was unsustainable, and consequently, partially allowed the grounds of appeal presented by the assessee. Unexplained Expenditure justified as Business Promotion Expenses with Relevant Bank Statements: ITAT deletes Addition u/s 69C Mandeep Singh Anand 130 vs ACIT CITATION:   2024 TAXSCAN (ITAT) 375 The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) removed the addition under Section 69C of the Income Tax Act, 1961 after justifying unexplained expenditure as business promotion expenses with relevant bank statements. The bench observed that the CIT(A) did not have the authority to introduce a new source of income and failed to provide proper notice to the assessee regarding the proposed change. Consequently, the additions made by the AO and upheld by the CIT(A) were considered to be on different grounds and were deleted. As a result, the grounds raised by the assessee were allowed. The decision was made by Yogesh Kumar U.S ( Judicial member ) and M. Balaganesh ( Accountant member ) of the ITAT.

TDS interest paid on Account of Expenses on repair and maintenance of Aircrafts not allowable: ITAT India Flysafe Aviation Ltd vs DCIT CITATION: 2024 TAXSCAN (ITAT) 372 The Delhi bench of  Income Tax Appellate Tribunal (ITAT) ruled that interest paid on account of expenses on repair and maintenance of aircrafts are not allowable expenditure. After reviewing the submissions of both parties the two-member bench Of M. Balaganesh (Accountant Member) and Anubhav Sharma, (Judicial Member) held that interest paid on account of expenses on repair and maintenance of aircrafts are not allowable expenditure. Failure to point out deficiency in books of account of Mobile distribution business: ITAT deletes 30% Disallowance made on Expenditure Zheng Yuan Mobiles Pvt. Ltd. vs DCIT CITATION:   2024 TAXSCAN (ITAT) 351 The Delhi bench of Income Tax Appellate Tribunal ( ITAT ) deleted 30% disallowance made on the expenditure incurred on mobile distribution business due to failure to point out the deficiency in books of accounts. Therefore the two-member bench Of Shamim Yahya, ( Accountant Member ) and Anubhav Sharma, ( Judicial Member ) Deleted the disallowance made by the assessing officer.

Accordingly the bench allowed  the appeal filed by the assessee. ITAT directs re-adjudication with respect to date of Acquisition of Property to determine stamp Duty Value Rajkumar Anandchand Jain vs Dy. Commissioner of Income Tax CITATION: 2024 TAXSCAN (ITAT) 328 The two member bench  of  Income Tax Appellate Tribunal (ITAT) Mumbai bench  directed readjudication with respect to date of acquisition of property to determine the stamp duty value of immovable property sold by the assessee Rajkumar Anandchand Jain. Therefore the two-member bench Of Rahul Chaudhary,(Judicial Member) and Prashant Maharishi, (Accountant Member)  directed readjudication with respect to date of acquisition of property to determine the stamp duty value of immovable property sold by the assessee Accordingly the bench allowed the appeal for statistical purposes. Disallowance of Income Tax Deduction u/s 10AA on Audit objection grounds lack Independent View:

ITAT quashes Revision Order Pinkcity Jewelhouse Pvt. Ltd vs Principal Commissioner of Income Tax CITATION:   2024 TAXSCAN (ITAT) 380 The Jaipur bench of the Income Tax Appellate Tribunal ( ITAT ) overturned the revision order issued by the Principal Commissioner of Income Tax ( PCIT ), which had disallowed Income Tax Deduction under Section 10AA of the Income Tax Act, 1961. It was also lacked independent view of the PCIT. The ITAT bench, comprising Dr. S. Seetha Lakshmi ( Judicial Member ) and Rathod Kamlesh Jayantbhai ( Accountant Member ), observed that the revisionary proceeding under Section 263 was solely based on an audit objection, lacking independent judgment from the PCIT. Moreover, considering that the claim had been accepted upon reopening the case after the survey, the tribunal quashed the PCIT’s order. No addition shall made when Commission earned from Consignment Sale of Foodgrains are reflected in P&L Account:

ITAT Income Tax Officer vs Keshar Devi CITATION: 2024 TAXSCAN (ITAT) 362 The Delhi bench of Income Tax Appellate Tribunal ( ITAT ) held that no addition should be made when commissions earned from consignment sale of food grains are reflected in profit and loss account. After reviewing the submissions of both parties the two-member bench of Dr. B. R. R. Kumar (Accountant Member) and Saktijit Dey (Vice President) dismissed the appeal filed by the revenue. No appeal should be filed when Moratorium u/s 14 IBC are issued by NCLT for initiating CIRP: ITAT M/s. Kaushal Silk Mills Pvt. Ltd. vs Income Tax Officer4(2)(2) CITATION:   2024 TAXSCAN (ITAT) 356 The Mumbai bench of Income Tax Appellate Tribunal ( ITAT ) ruled that no appeal should be filed when moratoriums under Section 14 of Insolvency and Bankruptcy Code ( IBC )are issued by the National Company Law Tribunal for initiation of the Corporate Insolvency Resolution Process ( CIRP ) against Corporate Debtors. Therefore since proceedings under I&B code have already been initiated/decided and moratorium has been declared by prohibiting all the proceedings against the corporate debtors including execution of any judgment, decree or order of any court of law, tribunal, arbitration panel or other authority, present appeals in the present format are not maintainable After reviewing the submissions of both parties the two-member bench Of Kuldip Singh, ( Judicial Member ) and Padmavathy S, ( Accountant Member ) dismissed the appeal filed by the assessee.

Teena Jain Advocates appeared for assessee and P.D. Chougule appeared for revenue. Section 80IA claim permitted on gross basis without offsetting losses from other Industrial Units: ITAT allows Deduction Pragati Power Corporation Ltd vs ACIT CITATION:   2024 TAXSCAN (ITAT) 348 The bench of the Income Tax Appellate Tribunal ( ITAT ) in Delhi, has observed that the deduction claim under Section 80IA under Income Tax Act, 1961 shall be permitted on gross basis without offsetting the losses from the other industrial undertakings. The bench of C.N.Prasad (Judicial member) and Dr. B.R.R. Kumar (Accountant member) observed that the whether the loss making unit was also eligible for deduction under section 80- IA of the Income Tax Act and if so the claim of deduction under section 80-IA of the Act has to be computed for both eligible units. It was found that the CIT (A) has not adjudicated on the addition made by the AO in respect of the interest income which was not derived from the business of the eligible undertaking. TDS Credit shall not be denied when Income from Sale of Agriculture property not reflected in ITR:

ITAT Dhirajlal Savailal Shah vs The Income Tax Officer CITATION:   2024 TAXSCAN (ITAT) 341 The Ahmedabad bench Income Tax Appellate Tribunal ( ITAT ) recently held that  the Tax Deduction at Source ( TDS ) credit should not be denied when the income from sale of agriculture property was not reflected in Income Tax Return ( ITR ). Therefore  the single member bench Suchitra Kamble ( Judicial Member ) observed that Tax Deduction at Source( TDS ) credit should not be denied when the income from sale of agriculture property was not reflected in Income Tax Return ( ITR ). Relief to Amazon India: Delivery Cost and Warranty Expenses not part of AMP Expenditure, rules ITAT Amazon Seller Services Private Limited vs The Commissioner of Income-Tax (TP) CITATION:   2024 TAXSCAN (ITAT) 382 The Bangalore Bench of the Income Tax Appellate Tribunal ( ITAT ) made a ruling regarding the treatment of various expenses, including share-based compensation ( SBC ), depreciation, and amortization, as operating expenses.

The Tribunal Bench, consisting of George George K ( Vice President ) and Laxmi Prasad Sahu ( Accountant Member ), stated that these expenses should not be considered as incurred for brand development, as they are post-sales activities and form part of sales expenditure. It was also clarified that there was no lack of inquiry in this regard. After considering all facts, the Income Tax Appellate Tribunal Bench concluded that delivery costs and warranty expenses should not be classified as part of AMP expenditure. Income Tax Form No. 10BA Submission is Mandatory for Claiming Section 80GG Deduction: ITAT The Income Tax Appellate Tribunal ( ITAT ) in Bangalore has ruled that submission of Income Tax Form No. 10BA is mandatory for claiming deductions under Section 80GG of the Income Tax Act, 1961. However, the assessee failed to comply with this requirement. As a result, the ITAT directed the Assessing Officer (AO) to allow the deduction once the form is filed. The bench, consisting of George George K (Vice President) and Chandra Poojari (Accountant Member), emphasized the necessity of filing Form No. 10BA to claim the deduction under Section 80GG. Consequently, the issue was referred back to the AO to grant the deduction after considering Form No. 10BA in conjunction with Rule 11B of the Income Tax Act Rules, 1963. As a result, the appeal of the assessee was allowed.

ITAT deletes addition made towards loss incurred on derivative transaction carried through proper banking channel: ITAT Kulvinder Nath Marwah vs ACIT CITATION: 2024 TAXSCAN (ITAT) 354 The Delhi bench of Income Tax Appellate Tribunal ( ITAT ) deleted additions made towards the loss incurred on the derivative transactions carried through the proper banking channel. After reviewing the submissions of both parties the two-member bench Of M. Balaganesh, ( Accountant Member ) and Anubhav Sharma, ( Judicial Member ) deleted additions made towards the loss incurred on the derivative transactions carried through the proper banking channel. Deferred Revenue expenditure incurred on account of leased Aircraft Engine Improvement: ITAT directs re adjudication India Flysafe Aviation Ltd. vs DCIT CITATION:   2024 TAXSCAN (ITAT) 360 The Delhi bench of Income Tax Appellate Tribunal ( ITAT ) directed readjudication with respect to deferred revenue expenditure incurred on account of leased aircraft engine improvement. After reviewing the submissions of both parties the two-member bench Of M. Balaganesh ( Accountant Member ) and Anubhav Sharma, ( Judicial Member ) restored the file to AO after considering the decision of coordinate Bench in the case of the assessee for AY 2012-13. Thus directed readjudication with respect to deferred revenue expenditure incurred on account of leased aircraft engine improvement. ITAT allows Deduction claimed u/s 80IA of Act on Account of Profit derived as per Agreement with DIAL Celebi Delhi Cargo Terminal Management India Pvt. Ltd vs ACIT CITATION:   2024 TAXSCAN (ITAT) 373 The Delhi  bench  of  Income Tax Appellate Tribunal ( ITAT ) allowed deduction claimed under Section 80IA of the Income Tax Act, 1961 on account of profit derived as per the agreement with Delhi International Airport Limited ( DIAL ).

Therefore the two-member bench Of M. Balaganesh ( Accountant Member ) and Yogesh Kumar U.S. ( Judicial Member )  allowed deduction claimed under Section 80IA of the Income Tax Act, 1961 on account of profit derived as per the agreement with Delhi International Airport Limited ( DIAL ). Authorities Fails to Realise Company’s Running Maintenance Office Expense: ITAT allows expenses u/s 24 (a) of Income Tax Act Armasol Properties Pvt. Ltd vs ITO, Ward-12(3), Kolkata CITATION: 2024 TAXSCAN (ITAT) 349 The Kolkata bench of the Income Tax Appellate Tribunal ( ITAT ) approved the claim for the company’s ongoing office maintenance expenses under Section 24(a) of the Income Tax Act, 1961, which the authorities had failed to realise. The tribunal of Sanjoy Sharma ( Judicial member ) and Rajesh Kumar ( Accountant member ) observe that  both AO and CIT(A) have failed to appreciate and understand the fact that the assessee was a company and has to incur certain expenses to keep its office running. The assessee has rightly claimed the loss of Rs. 5, 66, 441/- which has to set off against the house property income.

No Disallowance u/s 40A(2) towards Payments of Supervision and Risk Management Charges to Relative Concerns: ITAT M/s Trinity Global Enterprises Ltd vs Income Tax Officer CITATION: 2024 TAXSCAN (ITAT) 358 The Delhi bench of Income Tax Appellate Tribunal ( ITAT ) held that no disallowance should be made under Section 40A(2) of Income Tax Act in respect of payments of supervision and risk management charges to relative concerns. After reviewing the submissions of both parties the two-member bench Of Dr. B. R. R. Kumar,( Accountant Member ) and Yogesh Kumar US, ( Judicial Member )  held that no disallowance should be made under Section 40A(2) of Income Tax Act in respect of payments of supervision and risk management charges to relative concerns. ITAT deletes addition made on account of non-inclusion of  GST on Sales in Profit and Loss Account Infinite Water Solutions Pvt. Ltd vs CPC, Bengaluru CITATION:   2024 TAXSCAN (ITAT) 342

The Mumbai  bench Income Tax Appellate Tribunal ( ITAT ) deleted the addition made on the account of non -inclusion of Goods and Service Tax ( GST )on sales in profit and loss account . Therefore the two member bench of  Vikas Awasthy,( Judicial Member ) and  Shri Gagan Goyal, ( Accountant Member ) observed that  the CIT (A) erred in upholding the action of the CPC, of making addition on account of non-inclusion of the GST on sales in profit and loss account. ITAT directs to Examine allowability of claim for Deduction of Service Tax made during Assessment Proceedings Technoforce Solutions (I) Private Limited vs DCIT, Circle-1, Nashik CITATION: 2024 TAXSCAN (ITAT) 357 The Pune bench  of  Income Tax Appellate Tribunal ( ITAT ) directed to examine the allowability of the claim for the deduction of service tax made during the assessment proceedings. Therefore  the two-member bench Of Inturi Rama Rao, ( Accountant Member ) and Partha Sarathi Chaudhury, ( Judicial Member ) directed to examine the allowability of the claim for the deduction of service tax made during the assessment proceedings. Amounts Advanced for Business Transactions between shareholding entities not Deemed Dividend u/s 2(22)(e) of IT Act:

ITAT deletes Addition ACIT vs Adiish Jain CITATION: 2024 TAXSCAN (ITAT) 359 The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) amount advanced for business transactions between shareholding entities are not deemed dividend under Section 2(22)(e) of the Income Tax Act, 1961. Therefore the bench deleted additions made by the assessing officer. After reviewing the submissions of both parties the two-member bench of M. Balaganesh (Accountant Member) and Anubhav Sharma (Judicial Member) relied upon the decision of CIT Vs Creative Dyeing and Printing Pvt. Ltd and observed that amount advanced for business transaction between shareholding entities are not deemed dividend under Section 2(22)(e) of the Income Tax Act, 1961. Therefore the bench dismissed the appeal filed by the revenue. Satish Aggrawal, counsel appeared for assessee and Kanv Bali, counsel appeared for revenue. Failure to establish element of Bogus Sale of Shares as Unexplained with respect to LTCG on Shares:

ITAT deletes addition Bharatkumar Gangaram Patel vs The Income Tax Officer CITATION: 2024 TAXSCAN (ITAT) 339 The Ahmedabad bench of Income Tax Appellate Tribunal ( ITAT ) while deleting the addition made by the assessing officer the two member bench held that the revenue authority failed Therefore the bench determined that the independent verification of the transactions was limited by the Assessing Officer to the extent of investigation report but the same has not doubted purchase of the shares off-market and, therefore, the same cannot be made bogus sale of shares at the available period when the assessee sold the shares was not involving the assessee to manipulate the price of the scrip then the entire case of the Revenue fails. However, while processing the return of income, the entire amount of Rs.8,10,00,000/- was adjusted against the income tax liability, thereby, creating liability of FBT demand of Rs.73,45,724/- along with interest charged of Rs.18,38,871/- under section 115WJ of the Income Tax Act.Therefore  the two-member bench of Suchitra Kamble, ( Judicial Member ) and Waseem Ahmed, ( Accountant Member ) allowed the appeal filed by the assessee. Product Development Expenses shall be treated as Revenue Expenditure, eligible for Deduction: ITAT Himenviro Environmental vs ACIT CITATION: 2024 TAXSCAN (ITAT) 363 In a significant decision, the Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) ruled that product development expenses should be classified as revenue expenditure and are eligible for deduction. The two-member bench of Yogesh Kumar U.S ( Judicial member ) and M. Balaganesh ( Accountant member ) agreed with the AO that there was no concept of deferred revenue expenditure under the Income Tax Act, as explicitly stated in sections 35AB and 35ABB of the Income Tax Act. Considering the nature of the expenses incurred by the company for product development, the tribunal concluded that the entire expenditure was revenue in nature and thus eligible for deduction as revenue expenditure in the year of incurrence. Transport Services or Medical Expenses Reimbursement provided to non-employees excluded from FBT liability:

ITAT deletes Addition M/s. Prakash Industries vs The ACIT CITATION: 2024 TAXSCAN (ITAT) 344 The Delhi Bench of the Income Tax Appellate Tribunal ( ITAT ) ruled in favor of the assessee by removing the addition related to transport services or medical expenses reimbursement provided to non-employees, thereby exempting them from Fringe Benefit Tax ( FBT ) liability. Considering CBDT Circular No. 8/2005 dated 29.08.2005 and judgments of Coordinate Bench of the ITAT Bangalore in the case of Wipro Ltd. regarding medical expenses, and the order of the Coordinate Bench of the ITAT Pune in the case of Brihan Maharashtra Sugar Syndicate Ltd. concerning loans given to employees, the tribunal concluded that no further addition other than the amount of Rs. 113,86,653/- was liable for computation regarding FBT liability. ITAT allows Deduction of ESOP expenses claimed within the time limit prescribed u/s 139(5) of Income Tax Act Fortune Park Hotels Limited vs ACIT Circle-9 (2) CITATION: 2024 TAXSCAN (ITAT) 368 The Delhi bench of Income Tax Appellate Tribunal ( ITAT ) allowed deduction of Employees Stock Option Plan ( ESOP ) claimed within the time limit prescribed under Section 139(5) of the Income Tax Act, 1961. Therefore the two-member bench of M. Balaganesh ( Accountant Member ) and Yogesh Kumar U.S, ( Judicial Member ) held that claim of deduction of ESOP expenditure was made by the assessee in the revised return filed on 31/03/2019 which is well within the time limit prescribed under Section 139(5) of the Income Tax Act. JCIT’s approval for Search assessment u/s 153D of Income Tax Act deemed Mechanical without mindful consideration: ITAT nullifies Search Learned Joint Commissioner of Income Tax vs Central Range-4 Delhi CITATION: 2024 TAXSCAN (ITAT) 353 The  Delhi bench  of  Income Tax Appellate Tribunal (ITAT) held that approval under Section 153D of the Income Tax Act, 1961 granted by the Joint Commissioner of Income Tax (JCIT)  for the search assessment was mere mechanical manner without due application of mind. Therefore the bench nullified the search proceedings.

Therefore  the two-member bench Of Inturi M. Balaganeshr (Accountant Member) and Yogesh Kumar Us, (Judicial Member) concluded that approval under Section  153D of the Income Tax  Act has been granted by the JCIT in the instant case before is  a mechanical manner without due application of mind, thereby making the approval proceedings by a high ranking authority, an empty ritual. Thus the bench allowed the appeal filed by the assess. Interconnect usage Payment received by Foreign Company from Indian telecom Operator not Taxable as ‘Royalty’: ITAT M/s. HCG Global Communications Ltd vs DCIT (IT) CITATION: 2024 TAXSCAN (ITAT) 379 The Bangalore bench of the Income Tax Appellate Tribunal ( ITAT ) ruled that the interconnect usage payments received by a foreign company from an Indian telecom operator should not be classified as ‘Royalty’. The two-member bench, consisting of Chandra Poojari ( Accountant member ) and George George K ( Vice President ), determined that the amount received by the assessee company from the Indian telecom operator for interconnect usage did not meet the criteria for taxation as “royalty”. Accordingly, the ruling was made in favor of the assessee, resulting in a partial allowance of the appeal. 719g Jewellery found in locker declared Stri Dhan from Parents: ITAT deletes Addition u/s 69 Mudita Chaturvedi vs ACIT CITATION: 2024 TAXSCAN (ITAT) 377 The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) eliminated the additional assessment under section 69 of the Income Tax Act, following the declaration of 719 grams of jewellery found in the locker as Stri Dhan, received from the assessee’s parents. The tribunal, comprising Yogesh Kumar ( U.S ) and N.K.Billaya ( Accountant member ) stated that “Considering family background of the assessee possession of 719.91 grams gold jewellery cannot be ruled out. Considering the facts in totality we do not find any merit in the impugned addition we accordingly direct the AO to delete the same.”

In the result, the appeal of the assessee is allowed.   ITAT allows Depreciation claims on Aircraft put to use for a period less than 180 days India Flysafe Aviation Ltd. vs DCIT CITATION: 2024 TAXSCAN (ITAT) 360 The Delhi bench of Income Tax Appellate Tribunal ( ITAT ) allowed depreciation claims on the aircraft put to use for a period less than 180 days. After reviewing the submissions of both parties the two-member bench Of M. Balaganesh ( Accountant Member ) and Anubhav Sharma, ( Judicial Member ) allowed depreciation claims  on aircraft put to use for a period less than 180 days. Central Govt issues Posting Orders for 40 new ITAT Members across Nation: Who are they The Central Government has appointed 40 new members to the Income Tax Appellate Tribunal ( ITAT ) bench across the nation.

The government has provided the list of names of the members appointed which includes judges, advocates, Chartered Accountants and IRS officers. Income Tax Appellate Tribunal ( ITAT ) Established in January 1941, the Income Tax Appellate Tribunal ( ITAT ) stands as a pivotal quasi-judicial institution, specializing in the adjudication of appeals under the Direct Taxes Acts. Originally comprising six Members forming three Benches in Delhi, Kolkata ( Calcutta ), and Mumbai ( Bombay ), its scope has progressively expanded. Presently, the ITAT operates 63 Benches spread across 27 different stations, ensuring comprehensive coverage in nearly all cities hosting a High Court.