Cash Deposits During Demonetization Alone Is No Basis To Make Addition In Absence Of Glaring Error In Books: Mumbai ITAT

Finding that cash sales as part of the trading result offered for taxation by the assessee is not disputed, the Mumbai ITAT held that addition is permitted on account of cash deposit during demonetization on mere allegation that books of account are manipulated without its rejection. The Bench presided by Prashant Maharishi (Accountant Member) observed that “Mere cash deposit or...

'Reasons To Believe' For Reopening Must Based On Credible Information : Kolkata ITAT

While quashing the reopening proceedings, the Kolkata ITAT held that any allegation of escapement of income must be backed by information expressing 'reason to believe' and such belief requires to be based on some credible or relevant material. The ITAT clarified that mere borrowed satisfaction from Investigation Wing is no justified ground for initiating reopening, when no...

Additions Can't Be Made In Cases Of Unabated Assessments Without Incriminating Material: Mumbai ITAT

The Mumbai ITAT held that no addition can be made by AO in respect of completed/unabated assessments, in absence of any incriminating material found during the course of search u/s 132 or requisition u/s 132A. Section 132A of Income tax Act empowers income tax authorities to carry out a search and seizure of books of accounts, documents, cash & jewellery. Referring to...

Merely Because The Transactions Are Made Through Banking Channel Does Not Itself Prove The Creditworthiness

The Mumbai ITAT held that merely because the transactions are made through banking channel does not itself prove the creditworthiness of the lender and genuineness of the transaction. The Bench of Prashant Maharishi (Accountant Member) observed that “Subsequent repayment of the accommodation entry naturally does not show that the originally credit is genuine and provider of the...

Final Assessment Passed Within Two Days Of Issuing Intimation, Violation Of 143(1) IT Act : Mumbai ITAT

The Mumbai ITAT held that the AO has no jurisdiction to make any adjustment in final assessment order passed u/s 143(3) before thirty days of receiving any response from the assessee on basis of intimation issued u/s 143(1). As per Section 143 of the Income tax Act, the response received from the assessee, if any, shall be considered before making any adjustment, and in a case where...

Section 254(2) Applies Only Rectification Of Mistake, Can't Be Utilised For Recall And Review Order: ITAT

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) has held that the provision of Section 254(2) of the Income Tax Act is intended to only rectify the mistake apparent from the records, and the power of Section 254(2) of the Income Tax Act cannot be utilized to recall and review the order on its merit.The bench of Raghunath Kamble (Judicial Member) and Narendra Prasad Sinha...

Scrip Can't Be Called Penny Stock When Shares Retained For More Than 10 Years; ITAT Deletes Addition

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT), while deleting the addition, held that scrip cannot be called penny stock when shares are retained for more than 10 years.The bench of Kavitha Rajagopal (Judicial Member) and Amarjit Singh (Accountant Member) has observed that the assessee, being a SEBI-registered FPI, is engaged in investment in various companies out of which the...

ITAT Half Yearly Digest: January To June 2024 - PART II

Failure To Produce Share Certificate Is No Basis To Doubt Share Purchase Transaction: Mumbai ITAT Refers Art 265 Of ConstitutionCase Title: Shantaben Fathechand Mehta verses Income-tax Officer Referring to Article 265 of the Constitution of India, the Mumbai ITAT remanded the case to the file of AO with direction to verify factual aspects, pertaining to the purchase of the shares in...

ITAT Half Yearly Digest: January To June 2024 - PART I

S. 54F Exemption Not Available On Property Predominantly Being Used For Religious Purposes: ITATCase Title: Asstt. CIT Versus Iqbal Ali KhanThe Hyderabad Bench of Income Tax Appellate Tribunal (ITAT) has held that exemption under Section 54F of the Income Tax Act is not available on property predominantly being used for religious purposes.ITAT Deletes Addition Of Unexplained Investment In...

Non-Filing Of GST By Supplier Can't Be The Reason For Reopening Assessment After 4 Years: ITAT

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that no reopening can be done after the expiry of four years from the end of the relevant assessment year unless any income chargeable to tax has escaped assessment for the reasons of the failure on the part of the assessee to disclose truly and wholly all material facts necessary for the assessment. The bench of Amit...

No Material To Prove Cheque Paid For Donation Has Been Ploughed Back By Way Of Cash: ITAT

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has allowed deduction to the assessee as there was no material to prove that the check paid for donation has been ploughed back by way of cash.The bench of Sunil Kumar Singh (Judicial Member) and B.R. Baskaran (Accountant Member) has observed that the AO has not brought any material to disprove the evidence furnished by the assessee...

Income Tax Addition Can't Be Made On Cash Deposits During Demonetization Period: Delhi ITAT

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the department is precluded from making any addition under Section 68 of the Income Act in respect of the cash deposits made into bank accounts during the demonetization period.The bench of Challa Nagendra Prasad (Judicial Member) and Avdhesh Kumar Mishra (Accountant Member) has observed that there cannot be any addition...