Practical Knowledge With CAAJ

The Delhi bench of ITAT has held that the presumption under Section 292C  The Delhi bench of ITAT has held that the presumption under Section 292C of the Income Tax Act in respect of assets, books of account, etc. at the time of search or survey is only a deeming provision. The deeming provision cannot be applied mechanically where the explanation and the details given by the assessee has not been shown to be untrue or contrary to the facts stated before the authorities.

The credit for TCS should be given to the assessee who is finally The credit for TCS should be given to the assessee who is finally and lawfully assessed to tax in respect of the income on which TCS has been collected, irrespective of the person in whose name the TCS certificate has been issued and that what is applicable for TDS should also be applicable for TCS and merely because there is no Rule identical to Rule 37BA(2)(i) of the Rules with reference to TCS provisions, it cannot be the basis for the Revenue to deny the legitimate claim for credit of TCS made by an assessee. (ITAT Bangalore, ITA Nos.12 to 15/Bang/2023, date of order 06.02.2023)

The ITAT bench in Delhi held that the AO was not justified in disallowing  The ITAT bench in Delhi held that the AO was not justified in disallowing the expenditure by invoking the provisions of Section 40(A)(2)(b) of the Act because he simply compared the assessee's salary payment in the year under consideration with that of the earlier year to come to the conclusion of excessive salary payment. The expediency, legitimacy and the business needs of the expenditure will have to be examined from the businessman’s point of view and not from the department's view as held by Hon'ble Gujarat High Court in the case of Voltamp Transformers (P.) Ltd. v. CIT  129 ITR 105 and Hon'ble Rajasthan High Court in the case of CIT v. Consulting Engineering Group Ltd 365 ITR 284.

The High Court of Madras has held that the Income-tax Act does not provide  The High Court of Madras has held that the Income-tax Act does not provide for any pre-condition for grant of stay of recover and the Office Memorandum F.No. 404/72/93-ITCC dated 31-7-2017 only increases the rate of disputed demand from 15% as set out under Instruction No. 1914 dated 21-3-1996 to 20%. However, the actual tax to be demanded, ranging from 0% to 100%, would depend upon the existence of three factors, viz., (i) prima facie case, (ii) financial stringency and (iii) balance of convenience and the officer would only dispose of an application for stay after considering the aforementioned factors. (Karangipully Vinothkumar vs. Income-tax Officer)

The assessing officer has to decide the issues involved before  The assessing officer has to decide the issues involved before him on its merit and cannot passed the assessment order only based on the admissions/surrender made by the assessee representative. He ought to have decided the matter on merit in accordance with law, not based on the admission or refusal of the assessee. Also the principle of estoppels is not applicable to income tax proceedings and the authorities should bear in mind that the right income of the assessee to be taxed in the right assessment year and well within the limitation as prescribed in the Act. (ITAT bench of Delhi, date of order 09.01.2023)

The ITAT bench of Mumbai has held that mere delay in filing Form No. 67   The ITAT bench of Mumbai has held that mere delay in filing Form No. 67 as per the provisions of Rule 128(9) will not preclude the assessee from claiming the benefit of foreign tax credit in respect of tax paid outside India by relying on the decision of the coordinate bench where it was held that there is no amendment on these aspects in Section 90 of the Act and the Rules cannot override the Act and therefore the filing of Form No. 67 is not mandatory but it is directory. (ITA no.2789/Mum/2022, date of order 06.01.2023)

The ITAT bench Allahabad deleted the addition in case of search & seizure   The ITAT bench Allahabad deleted the addition in case of search & seizure on the ground that it is not uncommon in India that gold jewellery belonging to married daughters will be kept in safe custody by her mother, as it is very much within the preponderance of human probability in Indian Society. The onus was shifted to department to carry out further investigations to rebut claim of the assessee, before rejecting assessee’s contentions. ( ITA No.573/Alld/2014)

The ITAT bench of Mumbai direct the AO to delete the additions made u/s 40(a)  The ITAT bench of Mumbai direct the AO to delete the additions made u/s 40(a)(ia) relating to security charges and held that the provisions of sec.194C are not attracted for expenses claimed as security charges where the security charges involve supply of manpower only and does not involve “carrying on of any work” within the meaning of the definition of the term “work” given in the Explanation III. Further, the supply of manpower also may not fall under the provisions of sec. 194J relating to “professional fees”. (ITA No. 6366/Mum/2018)

The ITAT bench of Pune has direct to AO to allow TDS credit The ITAT bench of Pune has direct to AO to allow TDS credit to the assessee and held that the requirement for allowing credit is only of the amount of tax deducted at source and not the amount eventually getting deposited with the Government after deduction. Since the TDS was duly deducted by the employer from the salaries credited/paid to the assessee for the year under consideration, therefore the benefit of TDS has to be allowed in Intimation u/s 143(1) of the Act notwithstanding the fact that it was not deposited. (ITA No 29/Pun/2022, date of order 30.01.2023)

 The Delhi High Court has set aside the order under section 148A(d)  The Delhi High Court has set aside the order under section 148A(d) of the Act and held that information/material which formed the basis for triggering the assessment/reassessment proceedings was required to be furnished to the assessee. In this case, the AO observed that certain unsecured loan transactions entered by the assessee were accommodation entries, but he did not provide the entire material on which he relied to the assessee.

Where the assessee has submitted all details as requested Where the assessee has submitted all details as requested by the AO and the AO has applied its mind to the information and framed the assessment, jurisdiction under section 263 of the Income Tax Act cannot be assumed. The Delhi High Court upheld the ITAT's decision in PCIT vs Pushp Steel & Mining (P.) Ltd. (date of order 17.01.2023)

TDS credit cannot be denied to the developer if the buyer of property  TDS credit cannot be denied to the developer if the buyer of property deducted tax only at the time of sale deed execution and the corresponding income was offered to tax by the assessee either during the current year or in any of the prior years using the percentage completion method.