INCOME TAX
Infrastructure Companies laying Roads On BOT Basis Are Not Owners, Can't Claim Depreciation On Toll Roads: Mumbai ITAT
Emphasizing that ownership is a sine qua non for availing depreciation, and roads/ bridges are public properties, the Mumbai ITAT held that an infrastructural development company which has laid down roads cannot claim depreciation over same. The Division Bench comprising Amarjit Singh (Accountant Member) and Sandeep Singh Karhail (Judicial Member) denied depreciation claim on toll...
'Technological Impediment Can't Be A Reason To Harass Assessee' : Supreme Court Asks Income Tax Dept, CBDT To Resolve Software Issues
Technological impediment cannot be a reason to harass an assessee, said the Supreme Court while asking the Income Tax Department to upgrade its software to ensure that mistakes do not occur in the future.The Court directed that the Central Board for Direct Taxes should also take necessary steps for rectifying the software.A bench comprising Justices PS Narasimha and Sandeep Mehta was hearing...
Foreign Entity Having Valid Tax Residency Certificate Is Eligible To DTAA Benefit On Long-Term Capital Gain From Sale Of Share Of Indian Entity: Delhi ITAT
While observing that the Assessee submitted a valid Tax Residency Certificate (TRC) which is certainly statutory evidence, the Delhi ITAT granted India-Singapore DTAA benefit under Article 13(4) on long term capital gains on sale of share of an Indian company. The Tribunal emphasized that the burden is on the Revenue Department to establish that the entity has been formed and operated...
Reworking Value Of Investments Held In Subsidiary By Applying DCF Method Is Permitted, Once Correctness Of Valuation Stands Proved: Delhi ITAT
Referring to Explanation to Section 56(2)(viib), the Delhi ITAT held that the assessee is entitled to suitably modify the Net Asset Value (NAV) as long as the NAV is capable of being substituted by some proof or competent evidence. Further, finding that the assessee has produced the valuation report as well as the market valuation of Hotel Residence AG Switzerland in German...
Unaccounted Money Brought In The Garb Of Unsecured Loan: Mumbai ITAT Confirms Addition U/s 68
Finding that loans were nothing but accommodation entries and the repayment is also nothing but return of accommodation entries, the Mumbai ITAT held that the money which has been brought in the garb of unsecured loan is nothing but the unaccounted money of the assessee, and deserves to be added u/s 68. Section 68 of Income Tax Act aims to ensure individuals and...
AO Was Not Intimated About Removal Of Company's Name From ROC, Draft Assessment Can't Be Said To Have Passed In Name Of Non-existent Entity: Delhi ITAT
While finding that the AO/DRP was not informed about striking off the name of non-resident assessee from the ROC, the Delhi ITAT held that assessee cannot take a plea that draft assessment order was against the non-existing entity or the company whose name is struck off. Further, pointing that the objections of non-existence of company were filed only on the day on which the...
Provision For Leave Encashment Not Debited To P&L A/c, Can't Be Added As Employer's Income: Ahmedabad ITAT
The Ahmedabad ITAT held that provision for leave encashment which was inherited by the assessee on account of restructuring exercise of the GEB, by virtue of which, huge number of employees had been onboarded by the assessee-company, cannot be added to assessee's income. The Division Bench of Annapurna Gupta (Accountant Member) and T.R. Senthil Kumar (Judicial Member) observed that...
Agriculturalist Is Not Supposed To Maintain Books Of Account U/s 44AA For Claiming Exemption U/s 10(1): Delhi ITAT
While granting exemption on agricultural income u/s 10(1), the Delhi ITAT held that assessee being an agriculturalist, is not supposed to maintain books of account as per Sec 44AA. Section 44AA of Income tax Act deals with the maintenance of books of accounts by certain persons carrying on business or profession. Finding regularity and consistency of declared agricultural income...
External Development Charges Collected In Advance By Builder From Prospective Flat Owners, Can't Be Brought To Tax: Delhi ITAT
The Delhi ITAT held that when the project under consideration is not yet completed, the advance collected by infrastructure companies from the buyers cannot be charged to profit and loss account. The Division Bench of S. Rifaur Rahman (Accountant Member) and Anubhav Sharma (Judicial Member) observed that “the assessee has collected the same for providing the common services...
Income Tax Act | Supreme Court Refuses To Give Retrospective Application To 2022 Amendment To S.80DD Regarding 'Jeevan Adhar' Policies
In a recent case, the Supreme Court refused to give the retrospective operation to the amended Section 80DD of the Income Tax Act, 1961 (“IT Act”) which provided an option to the subscriber the Jeevan Adhar Policy (“Policy”) upon attaining the age of 60 years to discontinue the deposit made under the policy and make use of the money accumulated for the benefit of the disabled person...
ITAT Weekly Round-Up: 18 To 24 August 2024
Income Tax Deduction Allowable To Interest Income 'Attributable' To Cottage Industry Business: ITATCase Title: Potheri Village Weaning Food Manufacturing Womens Development Industrial Coop Versus ITOThe Chennai bench of Income Tax Appellate Tribunal (ITAT) has held that the income tax deduction allowable to interest income 'attributable' to cottage industry business.Gift Received...
AO Made No Enquiries In Respect Of Large Investment Made By Assessee Without Any Cash: Ahmedabad ITAT Upholds Revision U/s 263
Finding that no enquiries were being carried out by AO in respect of the discrepancies which were very much evident out from the large investment made by assessee in property even when assessee has no such cash, the Ahmedabad ITAT held that the order of AO was rightly treated as erroneous and prejudicial to the interest of the revenue by the Pr. CIT.As per the Explanation 2 to section 263 of...