The Income Tax Appellate Tribunal (ITAT) overturned a Principal Commissioner of Income Tax (PCIT) order under Section 263. The Tribunal held that the PCIT cannot invoke revisionary powers simply because they desire a deeper investigation, establishing that inadequate enquiry is not equivalent to no enquiry by the Assessing Officer (AO).
The Income Tax Appellate Tribunal (ITAT) ruled that a Mauritian shipping companys freight income could not be taxed in India under Article 7 (Business Profits) of the DTAA. The decision was based on the finding that its Indian agent was commercially independent and did not constitute a Permanent Establishment (PE).
After the High Court rejected the capital gains argument, the Tribunal applied Section 14 to classify the receipt from the trusteeship surrender. Since the amount did not fit into any specific head of income (Salary, Business, or Capital Gains), the ITAT ruled it must be taxed under the residuary head, Income from Other Sources.
The ITAT granted relief by ruling that the higher tax rate under Section 115BBE cannot be applied to income voluntarily disclosed during a survey if no specific unexplained cash credit or investment section (like 68 or 69) was invoked. The Tribunal held that the disclosed income remains taxable, but only at normal tax rates.
The ITAT refused to condone the Revenues 100-day delay in filing an appeal, holding that busy officer or bureaucratic delay does not constitute sufficient cause. The Tribunal emphasized that the law of limitation binds Government departments equally, and vague excuses are not acceptable.
The ITAT ruled that loose, uncorroborated diaries maintained by a third party are dumb documents and cannot be the sole basis for major tax additions or the denial of Section 11 exemption for a charitable trust. The Tribunal emphasized that suspicion is not a substitute for proof, and denying Section 11 requires concrete evidence of a violation under Section 13.
The ITAT confirmed that Section 54F capital gains exemption covers the entire investment in a new residential house, including the cost of land, even if purchased early. It ruled that land is an inseparable component, upholding the construction timeline as sufficient compliance.
ITAT rules that “hardship compensation” received by a flat owner from a builder during society redevelopment is a capital receipt, not taxable income. It adjusts the cost of acquisition.
ITAT Mumbai quashes reassessment (AY 13-14, 14-15) as AO missed the Rajeev Bansal-mandated “surviving limitation.” S. 149 prevails over S. 148A procedural timelines.
The Tribunal confirmed a co-operative banks use of a mixed accounting system (mercantile/receipt basis) for NPA interest, prioritizing consistency and adherence to RBI/NABARD prudential norms over the AOs theoretical objection. This ruling solidifies that regulatory requirements trump mechanical accounting changes.
