ITAT Ahmedabad

Complemented Assessment cannot be reopened U/s. 147/148 on Borrowed Satisfaction

Hitesh Ashok Vaswani Vs DCIT (ITAT Ahmedabad)

Hitesh Ashok Vaswani Vs DCIT (ITAT Ahmedabad) The power to reopen a completed assessment under Section 147 of the Act has been bestowed on the Assessing Officer, if he has reason to believe that any income chargeable to tax has escaped assessment for any assessment year. However, this belief that income has escaped assessment has [&hellip...

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Section 143(2) Notice to Erstwhile Non-Existent Partnership Firm is Void-ab-Initio

Intas Lifesciences Vs ACIT (ITAT Ahmedabad)

The issue under consideration is whether AO is correct in issuing notice u/s 143(2) in the name of erstwhile partnership firm which was a non-existent entity at that point of time?...

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Mere depreciation claim on Goodwill cannot be termed As Colorable

Urmin Marketing P.Ltd. Now known as Unicorn Packaging LLP Vs DCIT (ITAT Ahmedabad)

Urmin Marketing P.Ltd. Now known as Unicorn Packaging LLP Vs DCIT (ITAT Ahmedabad) Vs DCIT (ITAT Ahmedabad) Scheme of the amalgamation can be approved under the provisions of section 2(1B) of the Act where shareholders holding not less than 75% in the value of shares of the amalgamating company become the shareholders of the amalgamated [...

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Section 147/148 proceedings on mere investigation wing information was not valid

Hitesh Ashok Vaswani Vs DCIT (ITAT Ahmedabad)

Hitesh Ashok Vaswani Vs DCIT (ITAT Ahmedabad) In the present case the search information received from the investigation wing was used to form the reason to believe by the AO but without applying the mind. Thus the reasons were merely recorded on the borrowed satisfaction by the AO. The source for all the conclusions was […]...

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In absence of enduring nature Product development expenses are revenue expense

ACIT Vs Setco Automobiles (ITAT Ahmedabad)

ACIT Vs Setco Automobiles (ITAT Ahmedabad) In the present case, the issue is about allowability of product development expenses which were held by A.O. be a capital in nature. We find that ld. CIT(A) while deciding the appeal for A.Y. 2002-03 and following it has given a finding that due to incurring of product development […]...

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Deduction Claimed as R&D Expense For Development on Mechanism to Produce Customised Products Allowed

Harsha Engineers Ltd. Vs DCIT (ITAT Ahmedabad)

The issue under consideration is whether deduction can be claimed under Research and Development (R&D) for Amount incurred towards development on a mechanism to produce customised products?...

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Assessee holding General Power of Attorney with respect of Land Sold Not Liable for Capital Gains

ITO Vs Sejal Gopalbhai Shah (ITAT Ahmedabad)

ITO Vs Sejal Gopalbhai Shah (ITAT Ahmedabad) The issue under consideration is whether capital gain will be taxed in the hands of general power of attorney holder with respect to land sold? ITAT states that, the assessee was just general Power of Attorney holder with respect to the lands in dispute. This fact has not […]...

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If Assessee Engaged in Accommodation Entries Only Commission to be Added on Estimation Basis

Arydeep Developers Pvt. Ltd.Vs ITO (ITAT Ahmedabad)

The issue under consideration is whether for assessee engaged in providing accommodation entries only commission amount to be added on estimation basis or entire amount of accommodation entry to be added?...

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Section 14A Disallowances cannot be applied to provision of Section 115JB

Gujarat Urja Vikas Nigam Ltd Vs DCIT (ITAT Ahmedabad)

Gujarat Urja Vikas Nigam Board Vs DCIT (ITAT Ahmedabad) The AO during the assessment proceedings has made the disallowance of Rs.50.85 crores in determining the income under normal computation of income under the provisions of Section 14A read with Rule 8D of Income Tax Rule. The AO made the addition of the same disallowance while [&helli...

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Excise Duty related to earlier years allowed under section 43B

DCIT Vs Adani Wilmar Ltd. (ITAT Ahmedabad)

In the instant case, the assessee in the year under consideration has claimed an expense under the head prior period item in its profit and loss account. Such prior period item was representing the excise duty with respect to waste i.e. Spent Earth generated during the manufacturing process. The assessee during the assessment proceedings ...

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Shortfall Due to its Excess Spending allowed to C/F in full for Set off against Incomes – Section 11

Gnyan Dham Vapi Charitable Trust Vs DCIT Exemptions (ITAT Ahmedabad)

The issue under consideration is whether where a trust has incurred shortfall due to its excess spending in a particular year, such deficit or shortfall allowed to be c/f in full for set off against the incomes in  subsequent years under s.11(1)(a) and Section 11(1)(b) of the Act?...

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ITAT Restored Case to AO Regarding TDS Applicability u/s 194A on Financial Charges Paid for Car Loan

Samir Synthetics Mills Vs DCIT (ITAT Ahmedabad)

The issue under consideration is whether the disallowance u/s 40(a)(ia) is justified for non deduction of TDS u/s 194A on financial charges paid for car loan?...

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Section 271E penalty cannot be imposed for Payment for purchases

B. P. Patel and Co. Vs ITO (ITAT Ahmedabad)

B. P. Patel and Co. Vs ITO (ITAT Ahmedabad) It is elementary to say that the ‘satisfaction’ can only be formed by the person who is competent to impose penalty and not a lower ranking authority. The law provides for imposition of penalty by an officer of the rank of the Joint Commissioner. Thus, the […]...

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Trust managing Liquid & Solid Industrial Wastes can claim section 11 exemption

DCIT- Exemptions Vs Naroda Enviro Projects Ltd. (ITAT Ahmedabad)

DCIT-Exemptions Vs Naroda Enviro Projects Ltd. (ITAT Ahmedabad) We find that main object of assessee company was converted as per Section 25 of Companies Act clarifies that assessee company is in area of environmental protection, abetment of pollution of water, air, solid, etc. generated by industrial units in and around Vatva and Odhav a...

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Expenses incurred to keep setup of business in existence during temporary lull was allowable

Atul Babubhai Shah Vs JCIT (ITAT Ahmedabad)

Atul Babubhai Shah Vs JCIT (ITAT Ahmedabad) Conclusion: All the expenses incurred by assessee during the temporary lull period were eligible for deduction as the same were necessary to incur or keep its business setup in existence. Held: During assessment proceedings, AO observed that assessee for the year under consideration claimed bus...

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Compensation for Relinquishment of Right to Sue for Breach of Contract is non taxable Capital Receipt

Popular Estate Management Ltd. Vs. DCIT (ITAT Ahmedabad)

The issue under consideration is whether the CIT(A) is correct in confirming the addition while treating the compensation received for relinquishment of right to sue as taxable business income & accordingly considered it as revenue receipt as against the capital receipt?...

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Remuneration to Partners as Representative of HUF Allowed u/s 40(b)

Shreeji Corporation Vs JCIT (ITAT Ahmedabad)

The issue under consideration is whether remuneration paid to a partner acting in a representative capacity as karta of HUF is allowed u/s 40(b)?...

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In a tax neutral exercise, no addition towards unutilized CENVAT credit is warranted

Asta India Pvt. Ltd. Vs DCIT (ITAT Ahmedabad)

whether the CIT (A) is correct in confirming addition u/s 145A of the Act to closing stock for unutilized Cenvat credit in respect of credit inputs or capital goods purchased?...

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Depreciation on Weaving Looms Allowed as same was ready for use

Chhatariya Firetech Industries Vs JCIT (ITAT Ahmedabad)

The issue under consideration is whether the depreciation on purchase of New Weaving Looms allowed in case of assessee?...

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AE cannot be considered for the purpose of comparable

Lonsen Kiri Chemical Industries Ltd. Vs DCIT (ITAT Ahmadabad)

Lonsen Kiri Chemical Industries Ltd. Vs DCIT (ITAT Ahmadabad) Once the comparable company becomes the AE of the assessee in the year under consideration, then such company cannot be considered for the purpose of comparable. Case Summary: – Facts of the case: The assessee is a joint venture of two companies namely Well Prospering Ltd...

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Assessee not liable to justify source of source of money received by him

Mahipal Ishwarlal Sottany Vs ITO (ITAT Ahmedabad)

Assessee is not expected to prove the genuineness of the cash deposited in the bank accounts of those creditors because under law the assessee can be asked to prove the source of the credits in its books of account but not the source of the source...

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Assessment Order passed on Dead Person is Void ab Initio

Late Shri Keshavlal Somnath Panchal Through Widow & Legal Heir Vs ITO (ITAT Ahmedabad)

Service of notice upon a dead person under section 142(1) would not authorise him to assume jurisdiction to pass assessment order on the L/Rs. also....

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Mere Form No. 3CEB filing cannot make assessee liable for Section 92BA investigation

Ashish Subodhchandra Shah (HUF) Vs PCIT (ITAT Ahmedabad)

Merely because a prescribed Form No. 3CEB was filed in accordance with Rule 10E r.w.s. 92BA of the Act would not make an assessee susceptible to onerous investigation proceedings on such transactions where the assessee prima facie demonstrates that Section 92BA of the Act is wholly inapplicable in any manner at the first instance...

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Where own funds exceeds investment, no disallowance of interest can be made u/s 14A

Gujarat State Energy Generation Ltd. Vs ACIT (ITAT Ahmedabad)

Gujarat State Energy Generation Ltd. Vs ACIT (ITAT Ahmedabad) Held that if the assessee can demonstrate the availability of surplus interest free funds for making investments that are generating tax free income, disallowance under Section 14A of the Act would not be justified. In this case, the own fund of the assessee exceeds the amount ...

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Validity of addition for Undervaluation/Understatement/ Shortage of closing stock

Shyam Cotsyn India Ltd. Vs ITO (ITAT Ahmedabad)

Shyam Cotsyn India Ltd. Vs ITO (ITAT Ahmedabad) Understatement of stock or unrecorded sale If the assessee has overvalued its closing stock of the earlier assessment year which suggests that amount of profit was increased by that amount or the loss was decreased by the same amount of that assessment year. As such the effect […]...

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A.O. cannot refer the matter to DVO to reduce FMV

Shri Dinesh Khodidas Patel HUF Vs ITO (ITAT Ahmadabad)

Shri Dinesh Khodidas Patel Vs ITO (ITAT Ahmadabad) The issue under consideration is whether A.O. is correct in referring the matter to DVO to find FMV by rejecting valuation report submitted by assessee? In the present case, assessee sold a land along with others co-owners. It had submitted the valuation report as on 1-4-1981 of […...

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ITAT allows set-off of Derivative losses against Business Income

Magic Share Traders Ltd Vs ITO (ITAT Ahmedabad)

Magic Share Traders Ltd Vs ITO (ITAT Ahmedabad) The issue under consideration is whether a company dealing in ‘derivatives’ could be considered as engaged in speculative business as per Section 73 or not? In the present case, the assessee seeks set off of losses arising from derivative losses as non-speculative business losses. The Re...

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For some bogus purchases Entire purchases can’t be added to income

Sonal Parekh Vs ITO (ITAT Ahmedabad)

Sonal Parekh Vs ITO (ITAT Ahmedabad) The issue under consideration is whether the addition under section 69C for Bogus purchases are justified in law? In the give case, A.O. has received the information from VAT department that the assessee is dealing with Hawala dealers for some purchases and hence he has re-open the assessment. AO [&hel...

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Trust to accumulate 25% of income derived from property before application

Indian Medical Association Vs ITO (ITAT Ahmedabad)

Indian Medical Association Vs ITO (ITAT Ahmedabad) Having regard to the plain language of the above provision, it is clear that a charitable or religious trust is entitled to accumulate twenty-five per cent, of its income derived from property held under trust. For the present purposes, the donations the assessee received, would constitut...

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CIT(A) cannot dismiss an appeal in a summary manner

Kaushalkumar G Patel Vs ITO (ITAT Ahmedabad)

On perusal of the impugned orders would indicate that the ld.CIT(A) has simply concurred with the  AO  without formulating specific points and taking note of details available before the Id.CIT(A). In a way, the appeals were dismissed in summary manner. This act is amounting to miscarriage of justice. This exercise of power at the end o...

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Aseesee can have both Trading & Investment Portfolio for Business Income & Capital Gain

DCIT Vs Niketan Krishorchandra Patel (ITAT Ahmedabad)

The issue under consideration is that whether the assessee having business of land trading can show capital gains from arising out of transfer of land and claim exemption u/s 54F?...

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Foreign exchange loss due to currency fluctuation was not a speculation but a business loss

DCIT Vs Acalmar Oils & Fats Ltd. (ITAT Ahmedabad)

Forward contracts in the nature of hedging transactions in course of normal import export activities to cover up losses on account of foreign exchange valuation difference results in business losses and not speculative one....

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Reference to DVO under Section 142A Unlawful in absence of tangible material

Dashrathbhai G. Patel Vs DCIT (ITAT Ahmedabad)

Dashrathbhai G. Patel Vs DCIT (ITAT Ahmedabad) Unlawful reference u/s Sec 142A in absence of tangible material and adopting FMV under different section 55A was in gross contradiction of law Conclusion: Since AO had merely issued reference to DVO under s.142A without any background or reasons and the Valuation Officer, in turn, had conferr...

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Section 68 cannot be applied in relation to the sales receipt

Shree Sanand Textiles Industries Ltd. Vs DCIT (ITAT Ahmedabad)

The ITAT Ahmedabad has harped upon the mechanical practices adopted by the Assessing Officers to make addition u/s 68. The moot point is that a sale which already forms part of books of account cannot be added again u/s 68 due to the reasons that Sales are already recorded in the books of accounts and the addition of the same amounts t...

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Agriculture land situated beyond 8 kms is not Capital Asset & Section 50C not applies

DCIT Vs Shri Ravjibhai Manibhai Patel (ITAT Ahmedabad)

DCIT Vs Shri Ravjibhai Manibhai Patel (ITAT Ahmedabad) If an agriculture land is situated beyond 8 kms. from the local limit of any municipal or cantonment area, whose population is more than Rs.10 lakhs, then that would not fall within the ambit of definition ‘capital assets. This demarcation of the geographical situation of the land [...

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No penalty leviable if finding of AO on bogus purchases was set aside

DCIT Vs Sri Anil J Kothari (ITAT Ahmedabad)

Court concurs with the CIT(A) and the ITAT that once the finding of the AO on bogus purchases was set aside, it could not be said that there was any concealment of facts or furnishing of inaccurate particulars by the Assessee that warranted the imposition of penalty under Section 271(1)(c) of the Act....

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Reopening Based on change of opinion and in absence of any adverse tangible material was invalid

DCIT Vs Surat Urban Development Authority (SUDA) (ITAT Ahmedabad)

In such cases, assessments can be reopened only if an income assessable to tax has escaped on account of failure of the assessee to disclose all the material facts fully and truly. In other words, the AO has to demonstrate that income of the assessee has escaped assessment on account of its failure to disclose all material facts of the as...

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No section 68 addition can be made for non-recording of Statement on Oath by mere one Person

Prerna Developers Vs ITO (ITAT Ahmedabad)

Where out of 14 persons, 13 persons have duly confirmed the booking advances made to assessee and their creditworthiness was also examined by AO but no negative inference was drawn by him, no addition could be made under section 68 just because one person who had only advanced an meager amount, had not recorded the statement under oath as...

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Interest on deposit received by Co-Op Bank made in ordinary course of business is Business Income

Anand People Co-Op. Bank Ltd. Vs DCIT (ITAT Ahmedabad)

Anand People Co-op Bank Ltd. Vs DCIT (ITAT Ahmedabad) The issue under consideration is that the Income of interest received on advances should be considered as income from other sources or not? The brief facts of the case is that assessee has filed return of income declaring total income at Rs. NIL on 13.10.2015. The […]...

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Section 68 addition justified for unexplained LTCG from penny stock

Bhagwatiben Vinodkumar Surani Vs ITO (ITAT Ahmedabad)

Addition of long-term capital gain against an investor who invested in a penny stock company in connection with the penny stock scam involving Rs. 36,000 Crores was upheld as additions made on account of detailed enquiries being carried out by Kolkata Investigation Directorate with regard to 84 penny stocks company as well as SEBI and no ...

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Expense on feasibility study for improving day to day working is allowable as revenue expenditure

JCIT (OSD) Vs Adani Logistics Ltd. (ITAT Ahmedabad)

JCIT (OSD) Vs Adani Logistics Ltd. (ITAT Ahmedabad) During the course of assessment proceedings the AO observed that the appellant has incurred an amount of Rs. 6,00,00,000/- on account of legal and professional fees paid to one M/s. Emerging India Investment Advisors Pvt. Ltd. It was further found by the Ld. AO that such expenditure [&he...

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Son’s share in HUF will become property of son’s HUF & father’s share will come to son in his individual capacity

Adhiraj Pranay Shodhan HUF Vs ITO (ITAT Ahmedabad)

The assessee before us is a HUF. During the relevant previous year, the assessee sold three properties. In the income tax return filed by the assessee, however, only the capital gains on sale of 1/2 of these properties were shown. When the Assessing Officer probed this apparent discrepancy, it was explained that these properties were purc...

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Penalty not levaible on addition made solely based on declaration

Jethanand Khemchand Luhana Vs DCIT (ITAT Ahmedabad)

When no money, bullion, jewellery or book entry was found at the time of search, and only evidence against the assessee is an admission of additional income made in the statement under section 132(4), whether such admission tantamount to disclosure of money, bullion, jewellery or diary and income disclosed is to be considered as concealed...

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Sales bogus if investee is a penny stock company, with no credentials, and the sale rates artificially hiked, with no real buyers

Bhagwatiben Vinodkumar Surani Vs ITO (ITAT Ahmedabad)

(a) The scrip is a penny stock, purchased at a low price, which is over a period of time ramped up by operators acting in benami names or name lenders. The purchases are off market purchases, and not reported on the exchange; (b) purchase/s is back dated, i.e., per a back dated contract note, paid for in cash, so that there is no trail...

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No Service Tax Disallowance if same not forms part of Turnover- Section 43B

SDCE Projects (P) Ltd. Vs DCIT (ITAT Ahmedabad)

 Assessee not having routed service tax amount through profit and loss account, there was no question of making disallowance under section 43B on account of delayed payment of service-tax....

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Receipts from leasing of cinema hall with furniture & fixtures, plant & machineries and other amenities, was “business income”

Deep Muliplex P.Ltd. Vs DCIT (ITAT Ahmedabad)

The question before us is, whether the receipts derived from leasing out of the cinema hall, along with furniture & fixtures, plant & machineries and other amenities, was 'business income'  as contended by the assessee or 'income from other sources' as treated by the Department....

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No transfer as per section 47(xiii) in case land acquired by assessee company from partnership-firm succeeded by it

A.C.I.T. Vs Neptune Industries Ltd. (ITAT Ahmedabad)

Where the existing company acquired all the assets and liabilities of the partnership firms in the manner as provided under section 47(xiii) then the same would not be considered as transfer and there was no requirement under the provisions of section 47(xiii) that the firms should be converted into the company....

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No set off of loss on sham and collusive transactions between sister concerns

RPK Warehousing (P.) Ltd. Vs ITO (ITAT Ahmedabad)

Loss on the transactions in castor oil and castor seeds entered between sister concerns could not be allowed to be set-off against business income and LTCG on sale of land as these were speculative transactions as assessee had not obtained the delivery of goods of alleged trading since the purchased item was sold on the same day in the sa...

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Return filed U/s. 153A would be deemed to be return filed U/s.139

Sureshbhai Gordhanbhai Prajapati Vs DCIT (ITAT Ahmedabad)

Where assessee had filed return under section 153A, which was accepted by revenue, therefore, no penalty under section 271(1)(c) could be imposed for concealment of income because return filed under section 153A would be deemed to be return filed under section 139....

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Reopening of assessment after expiry of limitation period & based on change of opinion is invalid

Krutika Developers P. Ltd. Vs ITO (ITAT Ahmedabad)

The interdiction in the proviso appended to section 147 puts an embargo in the exercise of power at the end of the AO in cases where scrutiny assessment has taken place and four years have expired from the end of relevant assessment year. In such cases, the assessment cannot be reopened unless it its demonstrated that income has escaped a...

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ITAT imposes penalty on appellant for not appearing before AO & CIT(A)

Tariqrashid M. Munshi Vs ITO (ITAT Ahmedabad)

Tariqrashid M. Munshi Vs I.T.O (ITAT Ahmedabad) ITAT held that assessee deserve to be penalized for non-appearance before theCIT (A) and Assessing Officer and  imposes penalty of Rs. 5000/- upon the assessee and instructed him to deposit the same in the Income Tax Office before the commencement of his proceedings before the AO. FULL TEXT...

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Affordable house to low income group amount to ‘Relief to Poor’ & eligible for section 11 exemption

Surat Urban Development Authority (SUDA) Vs DCIT (ITAT Ahmedabad)

The issue under consideration is that whether the activities carried out by Surat Urban Development Authority are considered as Charitable Activities and hence entitled to the exemption under section 11 of the Income Tax Act or not?...

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Section 68 addition based on handwritten confirmation of lenders

South Shourne Corporation (India) Vs ACIT (ITAT Ahmadabad)

AO was not justified in making addition under section 68 where assessee had furnished evidences such as PAN and copies of bank statements of lenders which proved identity and creditworthiness of lenders and genuineness of impugned loan transactions....

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Lack of opportunity renders Section 263 revisional order a nullity

Smt. Shardaben B. Patel Vs Pr. CIT (ITAT Ahmedabad)

The revisional action under Section 263 of the Act in unsustainable in law on two counts; (i) A revisional action which began with a nondescript notice and culminated in revisional order without any effective opportunity despite specific request is an order passed in blatant transgression of natural justice & (ii) The Revisional CIT made ...

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Share application Money in Cash- False details- Penalty Justified

Deepak Petrochem Ltd. Vs DCIT (ITAT Ahmedabad)

Deepak Petrochem Ltd. Vs DCIT (ITAT Ahmedabad) Brief facts of the case are that the assessee has filed its return of income on 30.10.2002 declaring total loss at Rs.29,31,379/-. The case of the assessee was selected for scrutiny assessment and notice under section 143(2) was issued and served upon the assessee. On scrutiny of the [&hellip...

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ALP provisions apply even if assessee is eligible for 100% section 10A/10B tax exemption

Doshi Accounting Services Pvt. Ltd. Vs DCIT (ITAT Ahmedabad)

Transfer Pricing: ITAT held that even if an assessee is eligible for tax exemption at the rate of hundred percent under section 10A/10B of the Act, then also the arm’s length price on international transactions deserve to be determined under section 92C of the Act. ...

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Section 54F Deduction cannot be denied for mere non deposit of amount in bank a/c

Nandkishore Ramanlal Parikh- HUF Vs ITO (ITAT Ahmedabad)

Where assessee did not deposit sale consideration in the bank account maintained under the capital gains scheme before the due date of filing of return but otherwise purchased new house within two years, as stipulated in section 54F(1), then deduction under section 54F could not be denied to assessee....

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Company entitled for depreciation on Vehicle registered in name of director

Gold Finch Jewellery Ltd. Vs D.C.I.T. (ITAT Ahmedabad)

Though vehicles were registered in the name of directors of company, beneficial ownership vested with assessee since payment was made for the purchase of vehicles by the assessee. Thus, assessee was duly entitled for depreciation thereon, especially when assessee had claimed other expenses in connection with vehicle and non-disallowance t...

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Depreciation allowed in 1st Year cannot be disallowed in subsequent year(s) without change in facts

Bodal Chemicals Ltd. Vs Add. CIT (ITAT Ahmedabad)

Once revenue allowed the deduction for the depreciation claimed by the assessee, then it is debarred to reject the claim of the assessee in the subsequent year on the WDV carried forward from the earlier assessment year....

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Deduction U/s. 54 on Gain from Relinquishment of right in bungalow

Bhavin Piyushbhai Palkhiwala Vs ITO (ITAT Ahmedabad)

Relinquishment deed was made in financial year 2008-09. Thus, if any tax was required to be levied, then the same was to be levied in assessment year 2009-10, i.e., next year. Hence, assessee was entitled to benefit under section 54....

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Section 54F | Computation of holding period | Allotment date or Possession date

Nilam R. Kataria Vs ACIT (OSD) (ITAT Ahmedabad)

From ‘date of allotment’ of capital asset, i.e., 15-2-2007 the holding period was more than 36 months on sale of property on 4-8-2010 as such, revenue authorities were not justified in treating the holding period from date of registration of property, i.e., 30-9-2009 and treating it as short-term capital gains, deduction under section...

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Provision for interest liability accrued but not provided in books is deductible

DCIT Vs Core Healthcare Ltd. (ITAT Ahmedabad)

Provision for interest liability which was accrued but not provided for in books of account would be deductible under section 36(1)(iii) of Income Tax Act, 1961....

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Order must be passed in reasonable time in absence of prescribed statutory time limit with reference to collection of taxes

Adani Enterprise Ltd. Vs DCIT (ITAT Ahmedabad)

Adani Enterprise Ltd. Vs DCIT (ITAT Ahmedabad) We notice that no time limit has been prescribed for passing order under s.206C of the Act. The CIT(A) has assumed that in the absence of statutory time limit provided, the provisions of Section 201(3) of the Act providing time limit for deduction of tax at source can […]...

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Section 14A Disallowance cannot surpass quantum of exempt income

Shri Harish M. Kukreja Vs ITO (ITAT Ahmedabad)

Shri Harish M. Kukreja Vs ITO (ITAT Ahmedabad) The solitary issue involved in the present appeal is towards extent of disallowance permissible under s.14A of the Act. We find merit in the plea raised on behalf of the assessee that the disallowance under s.14A of the Act cannot surpass the quantum of exempt income in […]...

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Retrospective amendment cannot change tax withholding liability, with retrospective effect

DCIT Vs Amol Dicalite Ltd. (ITAT Ahmedabad)

Retrospective amendment in law does change tax liability in respect of an income, with retrospective effect, but it cannot change tax withholding liability, with retrospective effect....

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Section 153A: Completed assessment cannot be interfered in absence of discovery of incriminating material during search

ACIT Vs The M/s. Samor Properties Pvt. Ltd. (ITAT Ahmedabad)

Section 153A: Completed assessment cannot interfered absence discovery incriminating material during search ...

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Interest income from money lending activities is business income despite non-registration of assessee as NBFC

Soham Securities Ltd. Vs ITO (ITAT Ahmedabad)

Interest income earned by assessee engaged in money lending in a systematic manner had to be taxed as business income in spite of the fact that assessee was not having registration with RBI as NBFC....

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Section 11(1)(a) Excess expenditure incurred in earlier years can be set off against income of subsequent year

DCIT (E) Vs Shree Bhartimaiya memorial Foundation (ITAT Ahmedabad)

DCIT (E) Vs Shree Bhartimaiya Memorial Foundation (ITAT Ahmedabad) The solitary question that arises for adjudication whether the trust has incurred deficit due to excess spending on the object of the trust during the particular year and whether excess expenditure incurred in earlier years by the trust could be allowed to be set off again...

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Temporary /makeshift superstructure not eligible for Section 54F exemption

Shri Harshad M Thakkar (Gandhi) Vs DCIT (ITAT Ahmedabad)

Shri Harshad M Thakkar (Gandhi) Vs DCIT (ITAT Ahmedabad) We are at loss to understand as to how the factual aspects like lack of basic amenity and a non-descript temporary makeshift shelter/ superstructure of insignificant worth can convert a land into a residential house. The vast open land with naturally grown grass, a grossly asymmetri...

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No addition made in the hands of partnership firm on account of capital contributed by partner

M/s Jaylaxmi Land Developers Vs ITO (ITAT Ahmadabad)

M/s Jaylaxmi Land Developers Vs ITO (ITAT Ahmadabad) There cannot be any addition made in the hands of the partnership firm on account of the capital contributed by the partner of the firm to the firm. In case any justification is required for the source of fund in the hands of the partner, then partner […]...

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CBDT circular on Low Tax Effect applies also to pending appeals: ITAT gives relief in 628 Cases

ITO Vs Dinesh Madhavlal Patel (ITAT Ahmedabad)

CBDT Circular dated 8th August 2019, enhancing the monetary limits for Dept appeals, states that the modifications shall come into effect from the date of issue of the Circular, it must be interpreted to mean that the enhanced limits apply not only to appeals to be filed in future but also to appeals pending for disposal as on now....

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TCS U/s. 206C(1C) on Outsourcing of job for collection of toll tax

DCIT Vs M/s.Ahmedabad Vadodara Express Way Co. Ltd. (ITAT Ahmedabad)

DCIT Vs M/s. Ahmedabad Vadodara Express Way Co. Ltd. (ITAT Ahmedabad) It is seen that the assessees have given only permission to the collecting entities to collect the toll fees and maintain the toll plazas by employing a specified category of persons and supervise them and deposit the toll collection in the signatory account of [&hellip...

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Brokerage paid by purchaser cannot be taken into account for Section 50C

ITO Vs Smt. Rajani Manhar Bhagat (ITAT Ahmedabad)

Since the market value of immovable property sold by assessee had to be Rs.2,60,05,348/- and the purchase consideration together with costs towards obtaining vacant property should stand at Rs.2,26,00,000/-, therefore, the long term capital gain would be Rs.34,05,348/- as per section 50C and the brokerage costs incurred on sale considerat...

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Non-charging of interest on loan to director – Perquisite?

DCIT Vs Shri Shekhar G. Patel (ITAT Ahmedabad)

Non-charging of interest on the loan amount given by lending company to its director could not be a perquisite as no remuneration or salary in the capacity of the director had been drawn from the lending company nor any interest expenditure was shown in its profit and loss account....

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ITAT on Exclusion of Interest and Rent for computing remuneration allowable to partners

ACIT Vs M/s. Asian Food Industries (ITAT Ahmedabad)

ACIT Vs M/s. Asian Food Industries (ITAT Ahmedabad) This is a settled principle of law that the interest income for the purpose of ascertaining ceiling on the basis of book profit, the profit shall be in the profit and loss account. The interest income, thus, cannot be notionally be excluded for the purpose of determining […]...

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Penalty on the grounds of retrospective amendment not justified

DCIT (E) Vs Baroda Cricket Association (ITAT Ahmedabad)

DCIT (E) Vs Baroda Cricket Association (ITAT Ahmedabad) Article 20(1) of the Constitution of India provides certain protection in this regard which states that no person can be convicted for any offence except for a violation of a law in force at the time of action charged an offence, nor be subjected to a penalty […]...

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Penalty cannot be imposed on disallowance of creditors for want of address verification

Kishor A. Sewani Vs ITO (ITAT Ahmedabad)

Where sundry creditors arising out of the purchases debited in the profit and loss account as revenue expenses, were added to income of assessee for want of the addresses of said creditors, that did not mean assessee had concealed the particulars of income or furnished inaccurate particulars of income, so as to impose penalty under sectio...

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TDS u/s 195 on commission paid to overseas agents?

DCIT (OSD) Vs Jay Chemical Industries Ltd. (ITAT Ahmedabad)

Commission paid to non-resident agent was not liable to tax under the provisions of act when the services were rendered outside India, payments were made outside India and there was no permanent establishment or business connection in India, therefore, assessee was not required to deduct TDS u/s 195(2)....

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Addition for Cash deposit in Bank explained without supporting documents justified

Amit Subhaschandra Acharya Vs ITO (ITAT Ahmedabad)

Amit Subhaschandra Acharya Vs ITO (ITAT Ahmedabad) The issue in the instant case relates to the cash deposited by the assessee amounting to Rs. 4,40,000/- in his saving bank account. The assessee claimed that the cash was deposited out of his past savings, salary income and out of the income of his wife. But the […]...

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Penalty justified for Deliberate non-disclosure of income

Smt Joyti Sunil Maniyar Vs ITO (ITAT Ahmedabad)

Smt Joyti Sunil Maniyar Vs ITO (ITAT Ahmedabad) In the notice issued u/s 142(1) dated 11.10.2011 a specific query was raised by the AO about the capital gain income. After that, the assessee vide reply dated 22.11.2011 conceded the fact of non-disclosing the capital gain income. From the above, it is transpired that the assessee […...

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Claim of deduction accepted by AO despite unequivocal language of Act is erroneous U/s. 263

Paras Chinubhai Jani Vs Pr. CIT (ITAT Ahmedabad)

Claim of deduction accepted by the AO despite unequivocal language of the Act, in our view, is erroneous as contemplated under s. 263 of the Act. Such error on the part of the AO has caused definite prejudice to the interest of the Revenue. ...

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TCS not deductible if buyer declares use of goods for Manufacture

ACIT (OSD) Vs M/s. Bansal Ship Breakers P. Ltd. (ITAT Ahmedabad)

ACIT Vs M/s. Bansal Ship Breakers P. Ltd. (ITAT Ahmedabad) Any person responsible for collecting taxes (TCS) under section 206(1) need not to do so if he obtains a declaration from the buyer that he is purchasing the goods for re-use in manufacturing process or producing article or things. It does not say that such […]...

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Assessee entitled to challenge correctness of DVO’s valuation before CIT(A)

Lovy Ranka Vs DCIT (ITAT Ahmedabad)

Section 50C is a deeming provision and Assessing Officer is obliged to compute capital gains by taking valuation arrived at by DVO in place of the actual consideration received by assessee,  assessee is entitled to challenge correctness of DVO's valuation before CIT(A) and ITAT. DVO has to be given an opportunity of hearing...

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ITAT condones delay in appeal filing due to illness of chief accountant

Shri Pawan S. Jalan Vs ACIT (ITAT Ahmedabad)

Shri Pawan S. Jalan Vs ACIT (ITAT Ahmedabad) If we consider the explanation of the assessee filed before the ld.CIT(A), which has been partly reproduced in the order of the ld.CIT(A) on page no.3, then it would reveal that chief accountant of the company was ill and failed to hand over assessment order to the […]...

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Leave Travel Concession not available on Foreign Travels

Shri Rajeshkumar Navnitlal Dani Vs ITO (ITAT Ahmedabad)

Shri Rajeshkumar Navnitlal Dani Vs ITO (ITAT Ahmedabad) Provision of sec. 10(5) of the Act only that reimbursement of travel concession or assistance to an employee is exempted which was incurred for travel of the individual employee or his family members to any place in India and nowhere in this clause it had been stated […]...

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TDS not deductible on Roaming Charges paid by Telecom Company

Ms Bharti Airtel Ltd. Vs ACIT (ITAT Ahmedabad)

ITAT held that roaming charges paid by the appellant to other telecom companies are not covered under ‘fee for technical service’ and such payments are out of the purview of TDS provision of 194J of the Act. ...

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ITAT disallows claim of interest on home loan by showing SOP as Let out

Shri Hitesh H Budhbhatti Vs ITO (ITAT Ahmedabad)

Shri Hitesh H Budhbhatti Vs ITO (ITAT Ahmedabad) The allowability of interest expenditure on borrowed capital for purchase of residential house under s.24 of the Act is in question. As per Section 23(2) of the Act, the gross annual value of the residential house shall be taken at ‘nil’ where such house is in the […]...

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Exemption U/s. 54F cannot be denied for Purchase of Plot in HUF name

Kanaiyalal Muljibhai Patel Vs ITO (ITAT Ahmedabad)

Kanaiyalal Muljibhai Patel Vs ITO (ITAT Ahmedabad) The issue before us is, whether the house constructed by the assessee on a plot purchased in the name of HUF, exemption under section 54F, is available to the assessee or not ? The Revenue is of the opinion that for claiming exemption under section 54F, the investment ought […]...

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Income on sale of technical concept was taxable as non-compete fee u/s 28(va)

Ashish Tandon Vs ACIT (ITAT Ahmedabad)

Income on sale of a technical concept, that assessee developed on his own, with respect to website malware monitoring was non-compete fee taxable as business income under section 28(va) as the consideration was in respect of parting the knowledge by assessee concerning confidential information relating to the business....

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Only ‘mistake apparent from record’ can be rectified U/s. 254 (2)

ITO Vs Devendra J Kothari (ITAT Ahmedabad)

High Court faulted the Tribunal's decision of reducing the penalty as a 'way to bypass the minimum limit' and the Tribunal was in error in granting the relief, the same does not constitute a mistake apparent from the record so as to enable the Tribunal to revisit its decision...

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Loss incurred on derivative transactions allowable as business loss

Magic Share Traders Ltd. Vs DCIT (ITAT Ahemdabad)

Since loss arising from derivative transactions were excluded from being regarded as speculative business under section 43(5)(d) as per Explanation to section 73, therefore, the loss incurred on account of derivatives was business loss and allowed to be set off against business income....

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Company Eligible for deduction of expense on Vehicle Registered in the name of Director

DCIT Vs M/s. Deversons Industries Pvt.Ltd. (ITAT Ahmedabad)

DCIT Vs M/s. Deversons Industries Pvt.Ltd. (ITAT Ahmedabad) The Assessing Officer during the assessment proceedings found that the vehicles were registered in the individual name of the Directors. But the assessee claimed the depreciation and the vehicle expenses in its income-tax return. However, the Assessing Officer was of the view tha...

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No disallowance u/s 40(a)(ia) on payment to film distributors u/s 40(a)(ia) if not subject to TDS

ITO Vs M/s. Eylex Films Pvt. Ltd. (ITAT Ahmedabad)

Payment to the film distributors is not subject to TDS and therefore disallowing expense by invoking the provisions of Section 40(a)(ia) is not justified...

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Deduction u/s 10B allowable based on approval from STPI despite non-ratification by Board

DCIT Vs Ms Hitech Infosoft (ITAT Ahmedabad)

Deduction under section 10B could not be denied on the ground that the approval of STPI units of the assessee was not ratified by the Board of approvals as mandated u/s 10B....

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Deduction U/s. 54F can be claimed against Gain on Multiple Assets in Multiple Years

Shri Pankaj Chimanlal Patel (HUF) Vs DCIT (ITAT Ahmedabad)

Shri Pankaj Chimanlal Patel (HUF) Vs DCIT (ITAT Ahmedabad) The essential controversy in the instant case is whether deduction under 54F of the Act is available in respect of capital gains arising from sale of more than one long term capital assets, not being residential house (original asset) against the construction or purchase of one [&...

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Validity of exclusive method of accounting for valuing closing stock

DCIT Vs. Ms. Adani Gas Ltd. (ITAT Ahmedabad)

Assessee was justified in following exclusive method of accounting for valuation of closing stock as entire exercise was tax neutral and there was no impact on the profitability of assessee due to method of accounting followed. ...

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Expenditure on removal of encumbrance includible in cost of new house property

ACIT Vs Himanshu Jayanti Lal Kamdar (ITAT Ahmedabad)

While computing exemption under section 54F, expenditure incurred towards vacating the new house property from tenants were includible as part of its cost, because existence of encumbrance was specified in the purchase agreement and original cost of acquisition was much lower than fair market value of the house property due to such attach...

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Exemption U/s 54F allowable on capital gain on sale of depreciable assets

Shri Shrawankumar G. Jain Vs ITO (ITAT Ahmedabad)

Assessee was entitled to claim exemption under section 54F on gain earned on the sale of factory shed as factory shed inherently being long-term capital asset as per the provision of Section 2(42A) even if sale of factory shed was subject to short-term capital gain on the basis of deeming provision as specified under section 50. ...

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Income from shares transaction is capital income and not depends on frequency, magnitude of transaction

Shri Ashokkumar Khimraj Vs ITO (ITAT Ahmedabad)

Income from purchase and sale of shares was liable to be taxed under the capital gain instead of income under the head business and profession as the frequency, magnitude of transaction in a systematic manner could not be the criteria to hold that assessee was engaged in the business activity of shares....

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December 2020