ITAT
No Addition Is Permitted U/s 68 On Account Of Share Premium Once Taxpayer Has Proved Identity & Creditworthiness Of Share Subscribers: Kolkata ITAT
On finding that the CIT(A) has failed to point out any defect and discrepancy in the evidence and details furnished by the assessee but simply upheld the order of the AO in a mechanical manner, the Kolkata ITAT held that once the assessee has proved the identity and creditworthiness of the share subscribers, the burden shifts upon the AO to examine the evidence and made...
Equal Amount Of Investment In Equity Of Other Entity Was Made Against Credits In Form Of Share Capital & Premium: Kolkata ITAT Justifies Addition U/s 68
Noticing that against the alleged credits in the form of share capital & share premium, an equal amount of investment in equity of other entity has been made, the Kolkata ITAT confirmed the addition made u/s 68 of the Income Tax Act. Section 68 of the Income Tax Act, aims to ensure individuals and corporations transparently disclose their income by addressing unexplained cash...
No Addition Is Permitted U/S 41(1) In Absence Of Evidence Showing Cessation Of Liability: Delhi ITAT
The New Delhi ITAT held that unless and until there is evidence to show that the liability has ceased to exist, there cannot be any addition u/s 41(1) of the Income Tax Act, and hence, deleted the addition made by AO. As per Section 41(1) of the Income tax Act, where an allowance or deduction has been made in the assessment for any year in respect of loss, expenditure or...
Mere Difference Of Opinion With AO Is No Basis To Exercise Revisionary Power U/s 263: Chandigarh ITAT Confirms Sec 80P Deduction Granted By AO
The Chandigarh ITAT quashed the revision order u/s 263 holding that application of mind is discernible from examination of the record and that “the power under Section 263 of the Act was exercised on the basis of a mere difference in opinion with the AO, rendering such exercise of revisionary power to be invalid”. Section 263 of the Income Tax Act is a provision that empowers...
Payment Made Overseas For Providing Information On Tariff Change Is Not 'FTS' And Hence Does Not Warrant TDS Deduction U/s 195: Delhi ITAT
The New Delhi ITAT held that no tax is deductible at source u/s 195 on payments made to overseas logistics company for rendition of logistics services, as such services cannot be treated as fees for technical services (FTS) as defined in Explanation 2 to Section 9(1)(vii). Finding that the sole basis of the Revenue for holding that the payment made to overseas logistics...
Impact Of Working Capital Adjustment On Outstanding Trade Receivable Must Be Verified Before Making ALP Adjustment Qua Notional Interest: Ahmedabad ITAT
The Ahmedabad ITAT remitted the issue of transfer pricing adjustment regarding interest on overdue trade receivables in case of entity engaged in manufacturing of pharmaceutical products, while emphasizing that no further adjustment is warranted on outstanding receivables from AEs once working capital adjustment is already factored in. The credit period means the time period provided...
Rectification Order Passed In Name Of Non-Existent Entity Despite Having Knowledge Of Its Merger, Is Invalid: Mumbai ITAT
The Mumbai ITAT held that rectification order passed in the name of a non-existent entity, despite informing Revenue regarding its merger, is non-est in the eyes of law. The Division Bench comprising Prashant Maharishi (Accountant Member) and Raj Kumar Chauhan (Judicial Member) observed that “the internal correspondence of the Revenue also shows that the Assessing Officer was...
Interest Received By Overseas Head Office From Its Indian Permanent Establishment Is Not Taxable In View Of Treaty Benefits: Mumbai ITAT
Referring to the provision of Article 12 and 7 of the India-France DTAA which demonstrate that interest payment made by the permanent establishment to the head office are not taxable in the hands of the head office, the Mumbai ITAT held that interest received by the overseas head office (HO) from its Permanent Establishment (PE) is not taxable under beneficial provision of...
CSR Expenditure Is Mandatory, Does Not Justify Disallowance Of Section 80G Deduction: ITAT
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that expenditures under corporate social responsibility (CSR) are mandatory and does not justify disallowance of these expenditures under Section 80G of the Income Tax Act if other conditions of Section 80G are fulfilled. The bench of Anubhav Sharma (Judicial Member) and M. Balaganesh (Accountant Member) has observed that...
Receipts From CRM Services Not Taxable In India As Royalty Or FTS: ITAT
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that receipts from Customer Relationship Management (CRM) services are not taxable in India as royalty or Fee for Technical Services (FTS).The bench of Saktijit Dey (Vice President) and Brajesh Kumar Singh (Accountant Member) has observed that on November 26, 2019, the assessee filed a revised return of income, declaring income...
Date Of Possession Of New Property To Be Considered As Date Of Acquisition; ITAT Allows Deduction
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that the date of possession of new property to be considered as date of acquisition and the assessee is entitled to deduction under Section 54 of the Income Tax Act on the purchase of new property.The bench of Raj Kumar Chauhan (Judicial Member) and Prashant Maharishi (Accountant Member) has observed that the date of possession...
Final Assessment Made By AO After Expiry Of One Month Of Receiving Directions From Dispute Resolution Panel, Is Time Barred: Chennai ITAT
The Chennai ITAT recently held that the final assessment order dated Nov 21, 2017 passed after expiry of one month from the end of the month in which the DRP directions were received by the Revenue is barred by limitation and hence, “passed wholly without jurisdiction and therefore, null in the eyes of law”. Section 144C(13) of Income tax Act mandates the completion of...