ITAT Weekly Round-Up: 14 To 20 July 2024

Final Assessment Passed Within Two Days Of Issuing Intimation, Violation Of 143(1) IT Act : Mumbai ITATCase Title: Add More Real Estate Developers LLP verses The Asst. Director of Income-taxThe 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).Merely Because The Transactions Are Made Through Banking Channel Does Not Itself Prove The CreditworthinessCase Title: M/s Sankpal Developers vs Income Tax OfficerThe Mumbai ITAT held that merely because the transactions are made through a banking channel does not itself prove the creditworthiness of the lender and genuineness of the transaction.Additions Can't Be Made In Cases Of Unabated Assessments Without Incriminating Material: Mumbai ITATCase Title: Assistant Commissioner of Income Tax vs. Mansha Agencies Pvt. LtdThe 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.'Reasons To Believe' For Reopening Must Based On Credible Information : Kolkata ITATCase Title: Alosha Marketing Pvt. Ltd verses Assistant Commissioner of Income TaxWhile 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.Cash Deposits During Demonetization Alone Is No Basis To Make Addition In Absence Of Glaring Error In Books: Mumbai ITATCase Title: Anil Champalal Jain verses ITOFinding 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.Loans Brought Forwarded Can't Form Basis For Addition In Current Year if Genuineness Is Established: Mumbai ITATCase Title: Arun Babulal Shah verses CIT Appeal NFACFinding that the genuineness of loan transactions is not verified by the Income tax Authorities, the Mumbai ITAT held that no additions are permitted on account on unsecured loans by disregarding the confirmations & identity of loan creditors produced by assessee.Assumption Of Jurisdiction Based On Wrong Facts Can't Form Basis For Initiating Reopening: Mumbai ITATCase Title: Laxman Gore Shreshtha verses DCITThe Mumbai ITAT there is no question of concealment of fact when the assessee had itself declared the income in its return which was assumed by the AO to be an escaped income.Technical Error In Making Application For Final Approval Is No Basis To Deny Benefit Of Sec 80G: Kolkata ITATCase Title: North Eastern Social Research Centre verses CIT(Exemption)Referring to the decision in case of Anudip Foundation for Social Welfare vs. CIT(Exemption), Kolkata – ITA No. 1341/Kol/2023, the Kolkata ITAT held that assessee will not be deprived of the benefit of Sec 80G due to technical errors occurred in making application because of the confusion and misunderstanding on in properly interpreting the relevant provision.Payments Made To Overseas Company For Services Utilized Abroad, Does Not Warrant Tax Deduction At Source U/s 195: Delhi ITATCase Title: QAI India Ltd. verses DCITThe New Delhi ITAT held that when the taxpayer company has utilized the service of a company outside India and payment has also been made outside India, then taxpayer company would not be liable for deduction of tax at source u/s 195.Statutory Authority Must Not Grant Approval U/s 153D Mechanically: Delhi ITAT Criticizes On Unjust Exercise Of Discretion By AOCase Title: Mysore Bhaskara Pankaja verses ACITWhile emphasizing that the obligation of granting approval acts as an inbuilt protection to the taxpayer against arbitrary or unjust exercise of discretion by the AO, the New Delhi ITAT held that approval granted u/s 153D should necessarily reflect due application of mind and if the same is subjected to judicial scrutiny, it should stand for itself and should be self-defendingBlock Period Of Six AYs For Purpose Of Sec 153C Has To Be Reckoned From Date Of Receipt Of Documents By AO: Delhi ITATCase Title: Akansha Gupta verses ACITThe New Delhi ITAT held that for purposes of assessment u/s 153C, the date of recording of satisfaction of AO will be deemed date for the possession of seized documents.AO Can't Make Additions Solely Based On Retracted Statement Of Third-Parties If Assessee Has Claimed Opposite: Chennai ITATCase Title: Shri Rajagopal Saravanan verses ACITReferring to the decision of Madars High Court in case of P.V. Kalyanasundaram, the Chennai ITAT held that once the assessee had denied payments made by it, then he cannot be expected to prove the negative.Indexation Benefit Shall Be Given To Taxpayer Based...

ITAT Weekly Round-Up: 14 To 20 July 2024

Mariya Paliwala

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