ITAT Kolkata deletes a lakh addition made u/s 69A against an interior decorator, ruling the amount cannot be taxed as unexplained money if already offered to tax.
The Income Tax Appellate Tribunal (ITAT), Delhi, allowed a retired individual’s appeal, deleting an addition of made under Section 69A of the Income Tax Act, 1961
The ITAT deleted transfer pricing adjustments for Advertisement, Marketing, and Sales Promotion (AMP) expenses, confirming no international transaction existed with the AE. The ruling held that the Bright Line Test (BLT) is invalid and that since the entity-level TNMM was accepted, no separate AMP adjustment was permissible.
The ITAT ruled that the Rs. 5.97 crore received by a charitable trust for a cultural event were tax-exempt donations, not business income hit by Section 2(15) proviso. The Tribunal held that TDS deduction or invoice issuance does not change the essential charitable character of the receipt, relying on a binding Delhi High Court judgment.
The ITAT confirmed the deletion of a Rs.1.84 crore addition on demonetisation cash deposits, ruling they were genuine sales proceeds. The Tribunal held that since the audited books were accepted and the cash increase was explained by business changes, the addition based on mere suspicion was invalid and caused double taxation.
The ITAT quashed the entire assessment order, ruling that the DCIT (Exemption), Ghaziabad, lacked jurisdiction to pass the order since no mandatory Section 127 transfer order was produced. The Tribunal held that without a valid transfer order from the original AO, the assessment is illegal, arbitrary, and void ab initio.
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The Tribunal held that a ₹15.22 crore one-time payment to distributors, necessitated by a business model shift, was a valid revenue expenditure under Section 37, driven by commercial necessity. The ruling affirms that business prudence justifies compensation to maintain continuity without creating a capital asset.
ITAT Mumbai held that discount on issue of Employee Stock Option Plan [ESOP] is allowable as deduction in computing income under the head profits and gains of the business. Accordingly, appeal of revenue dismissed and order of CIT(A) upheld.
The ITAT ruled that only the Gross Profit (GP) percentage on unaccounted purchases, not the entire purchase value, is taxable as undisclosed income. The Tribunal rejected the inflated purchase rate of Rs. 1,500 based solely on a partner’s statement, instead fixing a fair estimated rate of Rs. 770 per unit.
