ITAT Kolkata

Section 68 Addition for Share Capital unjustified if Creditworthiness Proved

Sanmin Trading & Holding Pvt. Ltd. Vs ITO (ITAT Kolkata)

Sanmin Trading & Holding Pvt. Ltd. Vs ITO (ITAT Kolkata) The issue under consideration is whether addition made u/s 68 on the ground that the share capital received is seen not a genuine credit is justified in law? ITAT states that section 68 of the Act provides that if any sum found credited in the […]...

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CSR expenses incurred before 01.04.2015 deductible as business expenses

Garden Reach Ship Builders & Engineers Ltd. Vs PCIT (ITAT Kolkata)

The amendment brought about by way of Explanation 2 to section 37 by Finance Act, 2014, was only with effect from 01.04.2015. ITAT held that the amendment in question is not retrospective. Expenditure incurred in CSR in accordance with guidelines issued by the Govt. of India is allowable as a deduction for both A.Y. 2013-14 and A.Y. 2014...

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ITAT Remand Case to AO to Decide Treatment of Interest from FDR made for Contract Business

Manjit Singh Malhi Vs ACIT (ITAT Kolkata)

The issue under consideration is whether CIT(A) is correct in treating the interest from Fixed deposits made in connection with Contract business as income from ‘Other sources’ in place of income from ‘Business’?...

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AO cannot ignore provisions of section 55(2)(b) in computation of indexed cost

Devendra Kumar Shroff Vs ITO (ITAT Kolkata)

Computation of indexed cost of acquisition by the AO, taking the cost of acquisition at the cost price of 15.04.1976 without considering the provisions of section 55(2) clause (b) and taking the base cost inflation index at 406 is bad in law and we direct that Rs. 8,30,000/- must be taken as the cost of acquisition instead of Rs.1,122/-.....

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Excavators, Bull dozers & Wheel Loaders eligible for higher rate of depreciation

DCIT Vs Dozco Infratech Pvt. Ltd. (ITAT Kolkata)

CIT Vs Dozco Infratech Pvt. Ltd. (ITAT Kolkata) Assessee shows that depreciation claimed by the Assessee @ 30% on Excavators, Bull dozers and Wheel Loaders has been rightly claimed and should be allowed in full as against @ 15% allowed by the Assessing Officer. Learned departmental representative vehemently contended during the course of ...

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Section 37: Mark to Market Loss due to Foreign Exchange Allowed

Kesoram Industries Ltd. Vs DCIT (ITAT Kolkata)

The issue under consideration is whether the addition of ‘Mark to market’ Loss made by AO on account of disallowance of loss on foreign exchange forward contract loss is justified in law?...

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Not providing opportunity to assessee to cross examine witnesses makes the order nullity

IQ City Foundation Vs ACIT (ITAT Kolkata)

Hon’ble Supreme Court examined the omission on the part of the AO not providing opportunity to assessee to cross examine of two witnesses and held that it was a serious flaw and since the statements of those witnesses were made the basis of the impugned order this omission on the part of AO makes the order nullity inasmuch as it amounte...

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Advance receipt by Lending Company in the course of business cannot be treated as Deemed Dividend

DCIT Vs Svarna Infrastructure & Builders Pvt. Ltd. (ITAT Kolkata)

The issue under consideration is whether the receipt of advance vis-a-vis no accumulated profit in case of lending company is considered as deemed dividend u/s 2(22)(e)?...

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Amount paid as compensation to related company in respect of vacation of property was allowable business expenditure.

Peerless General Finance & Investment Co. Ltd. Vs DCIT (ITAT Kolkata)

Peerless General Finance & Investment Co. Ltd. Vs DCIT (ITAT Kolkata) Conclusion: Amount paid as compensation by assessee to related company in respect of vacation of property occupied by that company was made after much negotiation and it was thus in accordance with business of assessee and therefore, the same was allowable. Held:  ...

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Deemed dividend provisions not attracted to running account with Group companies to meet business exigencies

Budhia Agencies Pvt. Ltd. Vs DCIT (ITAT Kolkata)

Budhia Agencies Pvt. Ltd. Vs DCIT (ITAT Kolkata) Learned authorized representative vehemently contends that the impugned deemed dividend addition is not sustainable in the eyes of law. His case as per page 4 of the paper-book indicating the assessee’s ledger in the books of M/s Republic Tractor Motor Pvt. Ltd. is that it had been [&hell...

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ITAT refers back matter of ₹ 3.2 Crore addition for Share premium to AO

Fabline Engineers Pvt. Ltd. Vs ITO (ITAT Kolkata)

Fabline Engineers Pvt. Ltd. Vs ITO (ITAT Kolkata) This appeal preferred by the assessee is directed against the order of the Ld. CIT (Appeals) – 7, Kolkata dated 28-02-2018 passed ex parte, whereby he dismissed the appeal of the assessee for non-prosecution. 2. The assessee in the present case is a company, which is engaged [&hellip...

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Section 68 addition Not Justified in case of Issue of Shares in Exchange of Shares

ITO Vs DSR Impex Pvt. Ltd. (ITAT Kolkata)

The issue under consideration is whether the addition u/s 68 is justified in case of issuance of shares in exchange of shares?...

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CSR expense of Company Prior to 01.04.2015 cannot be disallowed

ACIT Vs Eastern Coalfields Ltd. (ITAT Kolkata): ITA No. 890 & 891/Kol/2019

Amendment in section 37(1) of the Act has been introduced w.e.f. 1st April, 2015 and does not apply on the facts of the case and the disabling provision as stated in Explanation 2 to section 37(1) refers only to such corporate social responsibility expenditure as u/s. 135 of the Companies Act, 2013...

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section 68 not apply to allotment of shares for non-cash consideration

ITO Vs Trilokpati Exim Pvt. Ltd. (ITAT Kolkata)

ITO Vs Trilokpati Exim Pvt. Ltd. (ITAT Kolkata) When assessee had allotted shares for consideration other than cash then provisions of section 68 ( cash credit ) does not apply FULL TEXT OF THE ITAT JUDGEMENT The captioned appeal filed by the Revenue, pertaining to assessment year 2012-13, is directed against the order passed by […...

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Additional Depreciation u/s 32(1)(iia) Allowed even if Assessee Engaged in Generation of Electricity

West Bengal State Electricity Distribution Co. Limited Vs DCIT (ITAT Kolkata)

The issue under consideration is whether Additional Depreciation u/s 32(1)(iia) will be allowed if the assessee engaged in generation of electricity?...

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Reopening in case of previously completed scrutiny cannot be taken up after 4 years

HLG Memorial Hospital Pvt. Ltd. Vs ACIT (ITAT Kolkata)

HLG Memorial Hospital Pvt. Ltd. Vs ACIT (ITAT Kolkata) In the reasons supplied to the petitioner, there is no whisper, what to speak of any allegation, that the petitioner had failed to disclose fully and truly all material facts necessary for assessment and that because of this failure there has been an escapement of income […]...

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Bank Account disclosed in ITR found in search cannot be treated as Incriminating Material

Sarva Priya Holdings Pvt. Ltd. Vs DCIT (ITAT Kolkata)

The issue under consideration is whether the addition made by AO u/s 68 by considering the share application money received by assessee as unexplained cash credit is justified in law?...

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Disallowance for plugging profit leakage cannot be supported: ITAT

Urban Infraprojects Pvt. Ltd. Vs ACIT (ITAT Kolkata)

ITAT states that, anyhow disallowing 10% of the expenditure on the ground that profit leakage has to be plugged cannot be supported. Keeping in view the facts and circumstances of the case, some disallowance of a random amount of 5 lakhs, in our view, would meet the end of justice. In the result, the balance disallowance is deleted and th...

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Ex Parte Order is Not Justified if Notice is Served on Wrong Address

Vibgyor Tech Solutions Pvt. Ltd Vs ITO (ITAT Kolkata)

The issue under consideration is whether ex parte order passed by CIT(A) because of non attendance of assessee on the date of hearing is justified in law?...

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Income from Foreign Asset Earned through Pension mentioned in FA Schedule is Not Taxable in India

Sankha Mukherjee Vs ACIT (ITAT Kolkata)

The issue under consideration is whether the addition on the income from foreign asset earned through the retirement plan mentioned in FA schedule is taxable in India or not?...

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No section 271B Penalty for Not furnishing Audit Report before ITR Filing

Vrinda Sales P. Ltd Vs ITO (ITAT Delhi)

Vrinda Sales P. Ltd Vs ITO (ITAT Delhi) The issue under consideration is whether CIT(A) is correct in levying penalty under Section 271B for not auditing books of accounts/ furnishing reports of the audit of books of accounts on the due date of filing Income Tax Return (ITR)? ITAT states that, in the instant case, […]...

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Payment of Royalty for Purchasing Right to Re-Produce Film-Music is a Revenue Expense

Saregama India Ltd. Vs DCIT (ITAT Kolkata)

The issue under consideration is whether payment of minimum guarantee royalty for purchasing right to reproduce film-music is considered as capital expense or revenue expense?...

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Order passed without service of Notice of hearing- ITAT refereed matter back to CIT(A)

Jagannath Cement Works P. Ltd Vs ITO (ITAT Kolkata)

Jagannath Cement Works P.Ltd Vs ITO (ITAT Kolkata) In this case ld. CIT(A) has noted that appeal was posted for hearing on thrice i.e 13-08-2019, 14-08-2019 and 22-08-2019 and finding that none appeared on behalf of assessee, he dismissed the appeal preferred by the assessee. However, from a perusal the impugned order there is no [&hellip...

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Second section 263 revision on same subject quashed by ITAT

Amritrashi Infra Pvt Ltd Vs PCIT (ITAT Kolkata)

Second revision u/s 263 quashed by ITAT holding not permissible on the same subject matter on which specific direction given by First PCIT have been complied by AO. Doctrine of merger applied....

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No section 271(1)(c) Penalty on Income Surrendered Voluntarily during Assessment

Aravind Kumar Agarwal Vs ACIT (OSD) (ITAT Kolkata)

The issue under consideration is whether Penalty u/s 271(1)(c) can be levied in the case where the assessee surrendered the income voluntarily during the course of the assessment?...

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Loose papers cannot be classified as ‘incriminating material’ unless AO establishes nexus

Mani Square Ltd Vs ACIT (ITAT Kolkata)

For instance, scribbling or rough notings found on loose papers cannot be straightaway classified as ‘incriminating material’ unless the AO establishes nexus or connect of such notings with unearthing of undisclosed income of the assessee. This nexus or connect has to be brought out in explicit terms with corroborative material or evi...

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Transfer of division under scheme of arrangement can’t termed as Slump Sale

ACIT Vs Mcnally Bharat Engineering Co. Ltd. (ITAT Kolkata)

ITAT states that, in the given facts and circumstances and going by the clauses of the Scheme and reading them harmoniously and together the Tribunal held that the transfer of Lift Division comes within the purview of Section 2(47) of the Act but cannot be termed as a slump sale....

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Sale of tea manufactured from leaves purchased from third parties is agricultural activity & eligible for deduction of 60%

DCIT Vs Luxmi Tea Company Ltd (ITAT Kolkata)

The issue under consideration is whether income from sale of tea manufactured and sold from tea leaves purchased from third parties was from non-agricultural activity and therefore, was not eligible for deduction of 60%?...

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FMV determination without giving opportunity of being heard to Assessee is Unjustified

Astik Mondal Vs ITO (ITAT Kolkata)

The issue under consideration is whether Fair Market Value of property determined without giving access to the DVO’s report to Assessee and without considering the Assessee’s objections is justified in law?...

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No Section 263 invocation If AO taken One possible view out of Many

Electro Urban Co-Operative Credit Society Ltd. Vs PCIT (ITAT Kolkata)

PCIT’s action under challenge is not sustainable since the Assessing Officer had taken one of the possible views only in this factual backdrop. It is reversed therefore....

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Section 201(3)(ii) Limitation not applicable to Non resident Assessee

ITO (International Taxation) Vs Bata India Ltd. (ITAT Kolkata)

ITO Vs Bata India Ltd. (ITAT Kolkata) There is no dispute on the basic fact that the Assessing Officer’s order herein dated 10.06.2009 passed u/s 201(1A) r.w.s. 195 of the Act has raised interest payment in issue of ₹1,02,545/- for the reason that it failed to pay the TDS deducted on royalty payments to the […]...

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Interest on Loan cannot be disallowed on mere assumptions

Subhakaran Sampatlall (HUF) Vs ITO (ITAT Kolkata)

The issue under consideration is whether the AO is correct in disallowing the net interest as debited to Profit & Loss A/ c of the proprietary concern?...

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ITAT grants stay as appellant already paid 20% Tax Demand

Shubh Share Broking Pvt. Ltd Vs ITO (ITAT Kolkata)

Assessee needs to seek stay of outstanding demand since his Bank account has been attached by the department. Also he has financial stringency. Attachments to bank accounts withdrawn to enable assessee to pay tax demand....

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Merely reason to believe not sufficient to reopen assessments beyond 4 year period

Amrabathi Investra (P) Ltd. Vs ITO (ITAT Kolkata)

Amrabathi Investra (P) Ltd. Vs ITO (ITAT Kolkata) In the assessee`s case in the reasons supplied to the assesseee, as noted in above para, there is no whisper, what to speak of any allegation, that the assessee had failed to disclose fully and truly all material facts necessary for assessment and that because of this […]...

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Section 50C- No addition for Minor Valuation Differences

Dulari Devi Hetamsaria (L/H of Shyam Sundar Hetamsaria) Vs ACIT (ITAT Kolkata)

Dulari Devi Hetamsaria (L/H of Shyam Sundar Hetamsaria) Vs ACIT (ITAT Kolkata) ITAT Mumbai, in the case of M/s John Flower ( India) Pvt. Ltd, in ITA No.7545/Mum/2014, for A.Y. 2010-11, order dated 25.01.2017 held that if the difference between the valuation adopted by the Stamp Valuation Authority and declared by the assessee is less [&he...

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Transactions not Bogus, if All Ingredients necessary for Genuine Business Transaction Exist

Dhandhia Gems Vs ITO (ITAT Kolkata)

The issue under consideration is whether the addition made by AO by considering the transaction entered by the assessee as bogus transactions are justified in law?...

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Section 35D benefit once granted in initial year cannot be denied in subsequent years

DCIT Vs Asian Hotels East Limited (ITAT Kolkata)

Once the claim under section 35D of the Act was accepted in the initial year i.e. AY 1995-96, then the clock had started running in favour of the assessee which was to continue for the entire period of ten years and the benefit once granted in the initial year could not be denied in the subsequent years....

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Puja Expenses for Smooth functioning of Business allowable

Capital Tours (India) Pvt. Ltd. Vs ITO (ITAT Kolkata)

It is noted that the assessee is into the business of truck plying in North-East States and it is common knowledge that the drivers and cleaners before they start their journey on their trucks conduct puja of the God they believe and they incur expenses for buying garlands, bhog etc. for safe and smooth running of the vehicle while they g...

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Retention money taxable in year of contract condition fulfillment

DCIT Vs EMC Limited (ITAT Kolkata)

Right to receive the retention money is accrued only after the obligations under the contract are fulfilled and the assessee had no vested right to receive the same in this assessment year, therefore, it would not amount to an income of the assessee in the year in which it is retained....

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No section 12AA registration denial for mere non-filing of IT return

Kolkata Police Pre-Paid Taxi Booth Society Vs CIT (ITAT Kolkata)

The issue under consideration is whether the CIT(E) is correct in rejecting the Application for grant of registration u/s 12AA for mere non-filing of Income Tax Return?...

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Ao verified loan based on CASS parameter: CIT(A) cannot invoke jurisdiction u/s 263

Citystar Ganguly Projects Ltd. Vs PCIT (ITAT Kolkata)

ITAT states that AO had made specific enquiry into loan transactions of assessee based on the CASS parameter. In response to enquiries made under section 133(6), loan creditors had filed their documents/details to substantiate/prove their identity(ies), creditworthiness and genuineness of the loan transactions. AO having examined all the ...

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Consider Only Dividend bearing Securities for Section 14A disallowance R.W. Rule 8D(2)(iii)

PricewaterhouseCoopers Private Limited Vs ACIT (ITAT Kolkata)

In the light of judgment of Coordinate Bench of ITAT Kolkata in the case of REI Agro Ltd, we note that only dividend bearing securities should be considered for disallowance under rule 8D(2)(iii) of I.T. Rules....

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No incriminating material, no addition – Kolkata ITAT

Kusumlata Sonthalia vs. PCIT (ITAT Kolkata)

Kusumlata Sonthalia vs. PCIT (ITAT Kolkata) Preliminary issue of whether the addition could be framed u/s 153A of the Act in respect of a concluded proceeding without the existence of any incriminating materials found in the course of search. The scheme of the Act provides for abatement of pending proceedings as on the date of […]...

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High rate Depreciation Not allowed on vehicles used for Advertisement

Tapan Kumar Biswas Vs ITO (ITAT Kolkata)

Whether the higher rate of depreciation can be granted to the vehicles used for the display of advertisement under the provisions of the Income Tax Act, 1961....

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Section 68: Sales declared as Income in books cannot be treated as cash credit

Bhagwant Merchants Private Limited Vs ITO (ITAT Kolkata)

ITAT states that the assessee has disclosed the sale of shares in its books of account. Once the sale is declared as income by the assessee, the question of treating the same amount as a cash credit u/s 68 of the Act results in double addition. Thus, the addition is also bad on merits. Hence, the appeal of the assessee is allowed....

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IPA received as Subsidy is Capital in nature & hence Not Taxable

DCIT Vs SovaIspat Limited (ITAT Kolkata)

The issue under consideration is whether industrial Promotion Assistance (IPA) received by the assessee-Company from the West Bengal Government is taxable under income tax?...

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Hospitalization & Death of Director’s Parent genuine reason for non-attendance

Vasan Technology Pvt. Ltd. Vs ITO (ITAT Kolkata)

If the Assessing Officer passed the order without giving opportunity of being heard to the assessee, then in such situation appellate authority should set aside the impugned order and remand the matter back to the file of AO for fresh adjudication....

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Section 68: Issue of shares in lieu of shares was not unexplained credit

ITO Vs Bhagwat Marcom Pvt. Ltd. (ITAT Kolkata)

The issue under consideration is whether the addition u/s 68 on account of share capital and share premium by treating the same as unexplained cash credit is justified in law?...

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Students Contribution for Building Development Fund is capital receipt

Vidya Bharati Society for Education & Scientific Advancement Vs ACIT (ITAT Kolkata)

Vidya Bharati Society for Education & Scientific Advancement Vs ACIT (ITAT Kolkata) Merely because the contributions from students were collected under the nomenclature of development fee cannot ipso facto lead to conclusion that it cannot be considered to be corpus contribution. It is true that in terms of section 12(1) read with sec...

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Section 45(2) not apply on Land transferred by partner as capital contribution recorded as stock-in-trade in books of firm

ITO Vs Shri Mahendrabhai D. Zalavadia (ITAT Rajkot)

ITO Vs Shri Mahendrabhai D. Zalavadia (ITAT Rajkot) The issue under consideration is whether section 45(2) will be applicable in situation where Land transferred by partner as capital contribution recorded as stock-in-trade in the books of firm? In the given case, ITAT state that the impugned land was transferred by the partners to the fi...

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Section 68- No addition for duly explained cash deposited in bank

ACIT Vs Siddhartha Bhargava (ITAT Kolkata)

ACIT Vs Siddhartha Bhargava (ITAT Kolkata) The issue under consideration is whether Cash deposits in bank account held as unexplained u/s 68 is justified? During the assessment proceedings, the assessee had produced bank account of the assessee in Punjab National Bank (PNB) and HSBC. On verification of the bank accounts, it was found that...

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Section 80IB(10) deduction not eligible on Income not having Business Connection

Satern Griha Nirman Pvt. Limited Vs ITO (ITAT Kolkata)

Satern Griha Nirman Pvt. Limited Vs ITO (ITAT Kolkata) Facts of the Case: The assessee in the present case is a Company, which is engaged in the business of Builders and Property Developers. The return of income for the year under consideration was filed by it on 17.09.2011 declaring total income at ‘NIL’. During the […]...

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Assessee subjected to search, cannot be placed on a different pedestal than assessee who is not subjected to search

ACIT Vs. Majestic Commercial Pvt. Ltd (ITAT Kolkata)

In our considered view therefore, although the name of the assessee does not feature in the panchnama, in view of the fact that warrant of authorization executed by the Department contained its name, the proceedings u/s 153A were validly initiated against the assessee....

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No section 68 addition can be made on the basis of mere statements

Modern Malleables Limited Vs DCIT (ITAT Kolkata)

Modern Malleables Limited Vs DCIT (ITAT Kolkata) Conclusion: Addition made u/s. 68 only on the basis of two statements which could not stand the scrutiny of law, was not justified and therefore, the addition could not be sustained as per law. Held: AO got information from the Investigation Wing pursuant to search operation conducted at [&...

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Bogus Capital Gain: No adverse inference could be drawn against assessee on the basis of untested statements without allowing opportunity of cross-examination

Shankar Lal Daruka Vs ITO (ITAT Kolkata)

We note that the fact that neither the statement relied on by the authorities below were provided to the assessee nor any cross examination was allowed to prove the veracity of the statement. We note that the fact that in the statement of third party, the name of the assessee was not implicated. Even otherwise, according to Learned Counse...

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Section 68 had no application when shares were allotted under a barter system

DCIT Vs Alishan Steels Pvt (ITAT Kolkata)

Section 68 had no application when the shares were allotted by the assessee-company under a barter system as the respective parties did not receive cash nor did pay any cash, there was no real credit of cash in the cash book and the question of inclusion of the amount of the entry as unexplained cash credit could not arise....

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CIT cannot exercise revision power if AO had taken permissible view on the issues

Eveready Industries India Ltd. Vs PCIT (ITAT Kolkata)

While passing the assessment order AO had followed the permissible view in law which could not be said to be 'unsustainable in law'. Therefore, the jurisdictional facts for usurping the jurisdiction u/s 263, being absent, the action of CIT to exercise revisional jurisdiction was without jurisdiction and all subsequent actions were 'null' ...

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Section 68 not applicable to Share Purchase against Issuance of Share

ITO Vs Pansu Commercial Pvt. Ltd. (ITAT Kolkata)

This is a simple case of acquiring shares of certain companies from certain shareholders without paying any cash consideration and instead the consideration was settled through issuance of shares to the respective parties. Hence, we hold that provision of section 68 of the Act are not applicable in the instant case and accordingly the ent...

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Bogus capital gains from penny stocks- ITAT restricts addition to 30%

Neha Chowdhary Vs ITO (ITAT Kolkata)

Neha Chowdhary Vs ITO (ITAT Kolkata) Bogus capital gains from penny stocks- It emerges that from a perusal of these case files that although the assessee has produced her documentary evidence before the lower authorities about the impugned sums to be in the nature of income derived from the sales of shares, the fact remains […]...

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No Section 68 Addition for issue of Shares on Premium in lieu of shares

Blooming Tradelink Pvt. Ltd. Vs ITO (ITAT Kolkata)

The sole issue involved in this appeal of assessee is against the action of Ld. CIT(A) in confirming the addition of Rs.5,01,00,000/- made by AO u/s. 68 of the Income-tax Act, 1961 (hereinafter referred to as the Act) on account of bogus share capital including share premium...

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Reopening invalid if reasons for same not speaks of escapement of income

DCIT Vs. Aryan Mining & Trading Corporation Ltd. (ITAT Kolkata)

As there was no whisper about escapement of income, i.e., loss created by misusing client’s code modification, in the reasons for reopening conveyed to the assessee, therefore, no addition in respect of this could be made without making any addition in respect of the item shown to have escaped assessment in the reasons recorded....

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No Section 14A disallowance if Assessee not used borrowed fund to make investment

Motilal Chunilal & Muktalal Shaw (HUF) & Ors. Vs Asstt. CIT (ITAT Kolkata)

The question raised in appeal is challenging the action of CIT(A) in confirming the addition made on account of Section 14(A) r.w.s. 8D(2)(ii)&(iii) of the Rules....

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ITAT deletes adhoc disallowance of payment to Football Players

United Mohan Bagan Football Team Pvt. Ltd. Vs ITO (ITAT Kolkata)

The assessee is a private limited company mainly engaged in the activity of running a football team. It filed its return of income for the Assessment Year 2012-13 declaring Nil Income....

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Section 68 not apply if Assessee proves identity, creditworthiness & genuineness

ITO Vs Sunglow Dealcom Private Limited (ITAT Kolkata)

The assessee is a company and is in the business of investment. An addition of unexplained cash credit u/s 68 of the Act, were made by the Assessing Officer on the ground that the assessee failed to explain the sources of funds for the share capital received by it at a premium. On appeal the ld....

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Interest cannot be charged on Debit Balance of Partner if Partnership Deed prohibits the same

DCIT Vs Ms. India Housing (ITAT Kolkata)

DCIT Vs Ms. India Housing (ITAT Kolkata) We note that as per clause 10 of the Partnership Deed, no interest was to be charged or paid to the partners in respect of balances standing to the debit or credit of their capital account. As per Partnership Act, 1952, the partners can carry on any business […]...

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Benefit of exemption u/s 11 cannot be denied in case of deemed registration u/s 12A

The Bengal Chamber of Commerce & Industry Vs Income-tax Officer (ITAT Kolkata)

Order under section 143(1) denying benefit of exemption under section 11 in case of granting of deemed registration by CIT after expiry of time limit of six months was contrary to the legal principles and thus, rejection of assessee’s application for rectification under section 154 was invalid....

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Excess stock already accounted by Assessee before search cannot be taxed as undisclosed Income

ACIT Vs New Horizons Limited (Kolkata High Court)

ACIT Vs New Horizons Limited (Kolkata High Court) It is observed that physical verification of stock was carried out by the assessee-company in the month of January and February, 2015 as a matter of internal control and surplus stock of Rs.4,70,54,450/- found on such physical verification was duly incorporated by the assessee-company in i...

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Receipt accounted as income cannot be taxed again under some other section

New Pooja Jewellers Vs ITO (ITAT Kolkata)

New Pooja Jewellers Vs ITO (ITAT Kolkata) In this case we find that these advances have subsequently been recorded as sales of the assessee firm and that these sales have been accepted as income by the AO during the year. He has not disturbed the sales of the assessee. When a receipt is accounted for […]...

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Disallowance u/s 40(a)(ia) not applicable to Short-Deduction of TDS

A.K. Industries Vs ACIT (ITAT Kolkata)

Impugned disallowance u/s 40(a)(ia) does not apply in a case involving short deduction of TDS. ITAT therefore go by the very reasoning and direct the Assessing Officer to delete the impugned disallowance....

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No section 68 addition merely based on AO’s surmises & conjectures

Blue Lotus Designers Pvt. Ltd Vs ITO (ITAT Kolkata)

Since both the nature & source of the share application received was fully explained by assessee thus, assessee had discharged its onus to prove the identity, creditworthiness and genuineness of the share applicants and addition made by AO u/s 68 was based on conjectures and surmises which could not be justified....

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Section 80IC deduction cannot be restricted merely for higher profit margin

DCIT Vs Goodcare Pharma Pvt. Limited. (ITAT Kolkata)

Since higher profit margin was earned by section 80-IC unit on account of lower cost of production due to various incentives and availability of raw material at lower rates, there was no reason to restrict assessee’s claim for deduction under section 80IC....

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Performance Bonus not forms part of salary for HRA calculation

Sudip Rungta Vs DCIT (ITAT Kolkata)

Clause (h) of Rule 2A specifically provides that ‘salary’ includes dearness allowance, if the terms of employment so provede, but excludes all other allowances and perquisites. Accordingly, the performance bonus received by the appellant did not form part of ‘salary’ for the purposes of computing exemption u/s 10(13A) of the Act....

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Salary of NRI seafarer not taxable in India for Service rendered outside India

Arnab Bose Vs DCIT (ITAT Kolkata)

Arnab Bose Vs DCIT (ITAT Kolkata) In the instant case, the employer has directly credited the salary, for services rendered outside India, into the NRE bank account of the seafarer in India. In our considered opinion, the aforesaid Circular is vague in as much as it does not specify as to whether the Circular covers […]...

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Genuine Advances from customers cannot be treated as undisclosed income

Shri Sanjay Agarwal Vs ITO (ITAT Kotkata)

When assessee received advances from customers and the same were subsequently adjusted against goods sold to them, then, the advances could not be treated as unexplained cash credit under section 68, therefore, addition under section 68 made by AO on account of unexplained cash advances was deleted....

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Addition not maintainable on the basis of mere statement recorded during survey

Rohitaswa Das Vs ACIT (ITAT Kolkata)

 Statement recorded during survey, under section 133A, does not have a evidentiary value on its own and, therefore, no addition was maintainable on the basis of statement recorded during the course of survey as there was no evidence supporting the statement....

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Section 269SS not applicable to transactions between relatives

Snehalata Sitani Vs JCIT (ITAT Kolkata)

Where the loans were taken by assessee in cash from his relatives, the transactions between relatives were not in the nature of loans or deposits as envisaged in section 269SS and the penalty imposed under section 271D was accordingly cancelled....

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Brought forward business losses for more than 8 years can be adjusted against book profits

Peerless Hospitex Hospital & Research Centre Ltd. Vs DCIT (ITAT Kolkata)

While computing book profit u/s 115JB, assessee company was entitled, to deduct the B/F business losses as the restriction, contained in Sec.72 of the I.T. Act on carrying forward the unabsorbed business losses for more than 8 years, did not apply in computing the Adjusted Book Profit u/s 115JB....

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Section 10AA Deduction allowable on disallowance proposed in assessment

DIC Fine Chemicals Pvt. Ltd. Vs DCIT (ITAT Kolkata)

DIC Fine Chemicals Pvt. Ltd. Vs DCIT (ITAT Kolkata) It was a case where on account of the disallowance made by the AO, the loss returned by the assessee stood converted into positive sum and made the appellant eligible to claim deduction u/s 10AA of the Act. We thus find that as per the position […]...

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No section 92CA(3) Adjustment for Corporate Guarantees

DCIT Vs Gujarat NRE Coke Ltd (ITAT Kolkata)

The issue under consideration is whether the deletion of adjustment made u/s 92CA(3) of the Act on account of interest on loan and on account of corporate guarantees is justified in law?...

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Depreciation cannot be considered for computing section 14A disallowance

Sudha Apparels Ltd. Vs DCIT (ITAT Kolkata)

Depreciation claimed by assessee under section 32 cannot be considered for the purpose of computing disallowance under section 14A because section 14A deals only with the expenditure and not any statutory allowance, such as depreciation under section 32....

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Section 263 Order on Non-Existent Entity is unsustainable

Durja Vinimay Pvt. Ltd. Vs PCIT (ITAT Kolkata)

The issue under consideration is whether Passing of revisionary order against amalgamating company which was not in existence on the date of order is justified in law?...

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No Penalty for Cash loan received from father for reasonable cause

Ashok Kumar Bagaria Vs JCIT (ITAT Kolkata)

Since assessee had given reasonable cause for availing loan in cash from his father within the meaning of section 271D, therefore, he would be out of the rigours of levy of penalty under section 271D and no penalty could be levied....

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Penalty for Failure to get accounts audited cannot be levied if books not maintained

Somnath Ghosh Vs ITO (ITAT Kolkata)

Assessee assailed the imposition of penalty under section 271B imposed by AO on account of failure to get accounts audited under section 44AB. Assessee contended that penalty was not justified as no books of account were maintained by assessee....

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Requirement of issuance of notice within prescribed time U/s. 143(2)

ITO Vs Globsyn Technologies Ltd. (ITAT Kolkata)

ITO Vs Globsyn Technologies Ltd. (ITAT Kolkata)  is the contention of the ld. AR is that no notice u/s 143(2) of the Act was served within the stipulated time prescribed in the Act and the reassessment order was without jurisdiction and prayed to dismiss the appeal filed by the revenue. Further he submitted that the […]...

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Retrospective amendment in section 9(1)(vi) cannot override India-Ireland DTAA

Ixia Technologies International Ltd. Vs ACIT(IT) (ITAT Kolkata)

Ixia Technologies International Ltd. Vs ACIT(IT) (ITAT Kolkata) Since assessee`s case is covered by beneficial provisions of the India-Ireland DTAA, hence the retrospective amendment made in the provisions of section 9(1)(vi) of the Act, which provides that royalty would include consideration for transfer of all or any rights in respect o...

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Addition cannot be made by merely relying on 26AS

Mercury Car Rentals Pvt. Ltd. Vs DCIT (ITAT Kolkata)

Mercury Car Rentals Pvt. Ltd. Vs DCIT (ITAT Kolkata) During the course of assessment proceeding, the AO observed that assessee failed to reconcile interest income to the extent of Rs.67,939/- with its books of accounts and therefore added back the said amount as undisclosed interest income of the appellant as shown in the Form 26AS. [&hel...

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Long-term capital loss on listed shares eligible for set-off against taxable income

M/s. United Investments Vs ACIT (ITAT Kolkata)

M/s. United Investments Vs ACIT (ITAT Kolkata) In this case the assessee had incurred loss on sale of shares after paying STT & these shares were held on investment a/c for period more than 12 months. The assessee claimed that the loss incurred was to be assessed under the head ‘capital gains’ and its set […]...

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No addition u/s 68 for bogus LTCG without substantial evidence

L. K. Prahladka, HUF Vs ITO (ITAT Kolkata)

Since assessee had brought all the relevant material to substantiate its claim that transactions of the purchase and sale of shares were genuine and AO had brought nothing controverting material to deny the same, therefore, the long term capital gain (LTCG) on sale of shares of M/s. KAFL claimed as exempt by assessee could not be treated ...

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Section 68 not applies to Swapping of shares

ITO Vs Saffron Comtrade Pvt. Ltd. (ITAT Kolkata)

This is a simple case of acquiring shares of certain companies from certain shareholders without paying any cash consideration and instead the consideration was settled through issuance of shares to the respective parties. That is, section 68 of I.T. Act, 1961 does not apply to cases of purchase of share assets and allotment of shares by ...

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LTCG from penny stocks cannot be treated as bogus if documentation is in order and no fault found by AO

Chandra Prakash Jhunjhunwala Vs DCIT (ITAT Kolkata)

Chandra Prakash Jhunjhunwala Vs DCIT (ITAT Kolkata) FULL TEXT OF THE ITAT JUDGEMENT The captioned appeal filed by the Assessee, pertaining to assessment year 2014-15, is directed against the order passed by the Commissioner of Income Tax (Appeal)-21, Kolkata, which in turn arises out of an assessment order passed by the Assessing Officer ...

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Document which is already on file of AO cannot be treated as additional evidence

DCIT Vs Ashok Walia (ITAT Kolkata)

DCIT Vs Ashok Walia (ITAT Kolkata) As far the second limb of Assessing Officer’s grievance, i.e. against the admission of additional evidence by way of admitting a copy of acknowledgment of the return dated 31.07.2008, we find that this contention is also devoid of legally sustainable merits. A document which is already on the file [&he...

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Penalty cannot be levied for mere filing of Form No. 3CB instead of Form 3CA

M/s. PMC Rubber Chemicals India Pvt. Ltd. Vs ACIT (ITAT Kolkata)

M/s. PMC Rubber Chemicals India Pvt. Ltd. Vs ACIT (ITAT Kolkata) We note that the assessee has filed form no. 3CD and 3CB and the same has not been disputed therefore the tax audit report was on record and hence the penalty should not be levied. However the Assessing Officer disputed that instead of form […]...

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Section 54F Exemption cannot be denied if assessee invests entire consideration in construction of residential house

Vijay Mahipal v. ITO (ITAT Kolkata)

Vijay Mahipal v. ITO (ITAT Kolkata) If the assessee invests the entire consideration in construction of the residential house within three years from the date of transfer he cannot be denied deduction u/s 54F of the Act on the ground that he did not deposit the said amount in capital gain account scheme before the […]...

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Uniform Allowance to staff not Taxable under Fringe Benefits

Mumtaz Hotels Limited Vs DCIT (ITAT Kolkata)

Mumtaz Hotels Limited Vs DCIT (ITAT Kolkata) CIT(A) opined that the said clothes were not protective ones and they are not uniforms and not compulsory uniform under the statute. We find that the employees’ uniforms have traditionally been used as a functional necessity. It is noted from the record that the assessee assumed the financial...

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Reassessment based on usurpation of jurisdiction on non-existing jurisdiction is invalid

Dipti Mehta Vs ITO (ITAT Kolkata)

When income which was the foundation on which he based his belief of escapement of income was absent /disappeared then AO’s very usurpation of jurisdiction was on non-existing jurisdictional fact which rendered his usurpation of jurisdiction to reopen the assessment legally untenable and so null in the eyes of law and therefore, the rea...

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No addition u/s 68 if burden of proof discharged by filing sufficient evidences

ITO Vs M/s Megasun Merchants Pvt. Ltd. (ITAT Kolkata)

ITO Vs M/s Megasun Merchants Pvt. Ltd. (ITAT Kolkata) Conclusion: Since assessee had discharged its onus to prove the identity, creditworthiness and genuineness of the share applicants by filing sufficient evidences and accordingly, the onus shifted to AO to disprove the materials placed before him and as AO failed to do so, addition of s...

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Deduction allowable on interest on late deposit of VAT, Service Tax, TDS

M/s. Emdee Digitronics Pvt. Ltd Vs PCIT (ITAT Kolkata)

Interest paid on late deposit of VAT, Service Tax, TDS etc, was not penal in nature and the same was allowable as business expenditure under section 37(1)...

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TDS return filing delay due to sudden resignation of Accountant constitute Sufficient Cause

Sudip Roy Choudhury Vs JCIT(TDS) (ITAT Kolkata)

Sudip Roy Choudhury Vs JCIT (TDS) (ITAT Kolkata) in the present case, the assessee deducted the TDS and deposited the same. Even there was no failure to submit return in Form 26Q. There was only failure for its timely submission – which by all counts is a technical breach. Further the delay had happened due […]...

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Subsidy received under TUF Scheme is Capital Receipt

M/s Deepak Spinners Ltd Vs DCIT (ITAT Kolkata)

M/s Deepak Spinners Ltd Vs DCIT (ITAT Kolkata) We note that the issue under consideration whether the subsidy received under TUF scheme is a capital receipt or revenue receipt. The ld. CIT(A) treated it as part of fixed assets and held that said subsidy should be reduced from the cost of fixed assets. Held by […]...

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