RECENT DECISIONS OF THE INCOME TAX APPELATE TRIBUNAL
K.S. SATISH
Chartered Accountant, Mysore
NOT INCOME
In Shyam Telelink Ltd. v. ITO (2006) 101 TTJ (Del) 387 where the assessee took a project loan from a bank for which another person stood guarantee and the guarantor discharged the said loan, the Delhi `H` Bench held that the same did not constitute income in the hands of the assessee.
ACCRUAL
Where the assessee received additional compensation and interest thereon pursuant to the judgement of the District Judge against which both the assessee and the Land Acquisition Officer filed appeals in the High Court, while the additional compensation was taxable as per section 45(5) even though it was subject-matter of further appeal, the interest did not accrue to the assessee since there was an appeal pending in the High Court and could not be taxed till the matter reached finality ruled the Delhi `F' Bench in DCIT v. Bhim Singh Lather (2006) 100 TTJ (Del) (TM) 170.
BUSINESS LOSS
In DCIT v. Maruti Udyog Ltd. (2006) 99 ITD 666 (Del) where the assessee-company borrowed loans in foreign currency to meet its working capital requirements, the Delhi `A' Bench took the view that the additional liability incurred in respect of such loans outstanding at the end of the year on account of the difference between the foreign exchange rate prevailing at the end of the year and the rate at the time of borrowal was an ascertained liability and that such a loss was allowable as a trading loss.
CAPITAL GAINS
Exemption under section 54 is allowable even if the new residential house is purchased in a foreign country and even if borrowed funds have been utilised for purchasing the residential house opined the Mumbai `J' Bench in Mrs. Prema P. Shah v. ITO (2006) 101 TTJ (Mum) 849.
UNEXPLAINED INVESTMENT
The Jodhpur Bench has in ITO v. Prakash Chand (2006) 100 TTJ (Jd) 639 expressed the view that addition on account of unexplained investment in construction of house cannot be made merely on the basis of the report of the Inspector of Income Tax as he is not a technical person for making such valuation.
REVISED RETURN
In Smt. Bhanuben Chimanlal Malavia v. ITO (2006) 100 TTJ (Rjt) 337, the Rajkot Bench has held that there is no bar for filing a revised return showing loss for the first time.
DOUBLE TAXATION AVOIDANCE AGREEMENT
Taxability in one country is not a sine qua non for availing relief under the Double Taxation Avoidance Agreement from taxability in the other country ruled the Mumbai `C' Bench in ADI v. Green Emirate Shipping & Travels (2006) 100 ITD 203 (Mum).
PENALTY
In Bhagat & Co. v. ACIT (2006) 101 TTJ (Mum) 553 where the assessee during the course of survey under section 133A surrendered income on account of expenses not being fully verifiable and being supported by only self-vouchers with a request not to levy penalty and the assessment was made accepting the said income without bringing on record any other evidence to prove that the assessee had inflated the expenses, the Mumbai `D' Bench held that penalty under section 271(1)(c) could not be levied since it was a conditional surrender of income which was accepted by the Department.
APPEAL
The assessee cannot as a matter of right claim withdrawal of the appeal filed before the Commissioner (Appeals) but the Commissioner (Appeals) can permit the assessee to withdraw the appeal if the Department does not object to it and if he is judiciously satisfied ruled the Chennai `D' Bench in M. Loganathan v. ITO (2006) 99 ITD 246 (Chn).
TRIBUNAL
The Chennai `A' Bench in DCIT v. Hydraulics Ltd. (2006) 99 ITD 310 (Chn) has taken the view that an appeal to the Tribunal under section 253(6) or a miscellaneous petition under section 254(2) seeking rectification of its order has to be signed by the assessee or the Assessing Officer, as the case may be and that an appeal or miscellaneous petition signed by their authorised representative is not maintainable.
