TODAY'S CASE (DIRECT TAX)

February 29, 2024

++ I-T - Share premium received by issuance of shares is on capital account and gives rise to no income: HC

++ I-T- Proviso to Section 244A refers to refund on basis of tax determined u.s 143(1) of the Act or regular assessment, which will necessarily include not only advance tax/TDS paid during the year but also the SA Tax paid: HC

++ I-T - Bogus investment made in assessee's company deserves to be considered as unexplained cash credit u/s 68: ITAT

++ I-T - Addition for unexplained investment of cash given by assessee to Mr. Nilesh Ajmera has to be deleted as AO does not provide opportunity to assessee to cross-examine Mr. Nilesh Ajmera : ITAT

++ I-T- When assessee is liable to tax amount u/s 68, cannot escape liability to tax such income by saying that income is applied towards investments in equity shares of company : ITAT

February 28, 2024

++ I-T - If motive of assessee was to acquire land to earn profit through activity of development of land through his own partnership firm as builder, he is not eligible for exemption u/s 54F on LTCG: ITAT

++ I-T- Deduction in respect of delayed deposit of amount collected towards employees' contribution to PF cannot be claimed evenwhen deposited within due date of filing of return: ITAT

++ I-T- Additions framed on grounds of unexplained income are unsustainable where AO deems transactions in question to be bogus, but where no facts justify such a conclusion: ITAT

++ I-T- In absence of contrary proved by Revenue and following decision of coordinate benches, on identical circumstances, addition made u/s 68 is rightly deleted: ITAT

++ I-T - Mere incorrect declaration of turnover by accountant of taxpayer cannot form basis for addition on account of undisclosed money u/s 69A: ITAT

++ I-T- Application for registration need reconsideration as its rejection was against Circular no. 6 of 2023 issued by CBDT: ITAT

++ I-T- Deduction can be granted u/s 80P(2)(d) to assessee on bank interest received from co-operative banks: ITAT

February 27, 2024

++ I-T- Proviso appended to Section 50C duly protects assessee from considering Stamp Duty value as full sale consideration in AY 2011; LTCG computed in assessee's hands in AY 2011 merit being quashed: ITAT

++ I-T- In absence of any incriminating material in an unabated assessment, additions/disallowances made by AO needs to be quashed : ITAT

++ I-T- Evidences relied upon by AO in the form of excel sheets does not constitute adequate evidence to draw adverse inference against the assessee, in the absence of any other corroborative evidence: ITAT

++ I-T- Computation of income by the AO giving effect to the CIT's direction is an assessment order which is appealable: ITAT

February 26, 2024

++ I-T- Re-assessment cannot be based entirely on audit objections, considering that opinion rendered by audit party in regard to the law cannot, for purpose of such belief, add to or colour the significance of re-assessment: HC

++ I-T- True evaluation of the law in its bearing on the assessment must be made directly and solely by AO: HC

++ I-T- Section 35(2AB) while speaking of expenditure incurred does not link the same to the approval of the R & D facility by the DSIR: HC

++ I-T- If assessment order cannot be held as erroneous for want of inquiry then it is essential on part of PCIT to give conclusive finding that order passed by AO is not sustainable : ITAT

++ I-T- AO & CIT(A) omitted to consider the relevant evidence furnished by Assessee to explain certain expenditures incurred; additions framed pursuant to re-assessment merit being quashed: ITAT

++ I-T- No prejudice has been inflicted upon Revenue, when applicable tax rate for invoice payment is properly accounted for and included appropriate TDS deduction : ITAT

++ I-T- Disallowance under the provision of section 14A r.w.r. 8D of Income Tax Rules cannot exceed the exempted income : ITAT

++ I-T- Penalty order seeking to impose penalty u/s 271(1)(c) is rendered non est due to absence of DIN in penalty order: ITAT

February 24, 2024

++ I-T- Net profit rate to be applied to unaccounted sales has to be justifiable rate depending upon nature of business and other facts: ITAT

++ I-T- If assessee is liable to deduct tax and failed to deduct tax then only section 40(a)(ia) to be applied, not for short deduction : ITAT

++ I-T- An expenditure cannot be deemed to be unexplained, where it is reflected in books of accounts & where the expenditure was made through banking channels: ITAT

++ I-T- Assessee could not be held to be an assessee in default once recipient of income has offered such income in their return of income and paid due taxes thereon: ITAT

February 23, 2024

++ I-T - Writ court should not simply dismiss any appeal without considering if any substantial question of law is involved or not: SC

++ I-T - Apex Court dismissed appeal on ressessment owing to low tax erffect: SC

++ I-T- Presumptive tax cannot be imposed where AO deems certain scrip to be bogus & unexplained but without establishing there to have been any price manipulation with said scrip : ITAT

++ I-T - Amortized amount of premium paid for acquiring lease rights over plot of land, is eligible for deduction: ITAT

February 22, 2024

++ I-T - Addition for bogus purchase on estimate basis is not sustainable as corresponding sales have been accepted : ITAT

++ I-T- Once the n.p. rate is estimated, AO cannot based this disallowance on the same books of accounts for the purpose of disallowance by invoking provisions of section 40(a)(ia) of the Act or general disallowance u/s 37 of the Act: ITAT

++ I-T- Since assessee is engaged in scrap trade, explanation so furnished cannot be discarded summarily without bringing any adverse material on record by AO : ITAT

++ I-T- 455-day delay in filing appeal cannot be condoned where no cogent causes or reasons are put forth to explain the same: ITAT

++ I-T- Restricting the disallowance on account of bogus purchases to profit element is allowed : ITAT

February 21, 2024

++ I-T - Petition has to be dismissed on ground of low tax effect as being covered by the Circular No. 17 of 2019 issued by Department of Revenue: SC

++ I-T - If no defects could be pointed out by AO in cash book furnished by Assessee, no infirmity can be found in reasoning adopted by Authority while deleting such addition: SC

++ W-T - Criminal appeal will be abated once assessee is discharged from offence being died: SC

++ I-T - Gift claimed to have been received by assessee from his minor sons for which source was not proved, calls for addition in hands of assessee: SC

++ I-T - Disclosures made in course of search and statement recorded u/s. 132(4) itself cannot be construed as undisclosed income and no penalty can be levied on estimation: ITAT

++ I-T - Once issue has been duly examined and conscious decision has been arrived by AO, then in absence of any material contrary brought on record by PCIT, Section 263 proceeding cannot be invoked: ITAT

++ I-T - Deduction u/s 80IC cannot be allowed where Assessee did not file Form 10CCB along with ITR on or before due date for filing ITR for relevant AY: ITAT

++ I-T - Even lack of adequate inquiries by AO should result fulfilment of critical twin conditions u/s 263 : ITAT

February 20, 2024

++ I-T - Single Judge relegated assessee to avail appellate remedy & thus, is responsible for protecting assessee from recovery proceedings; no recovery be made till disposal of appeal: HC

++ I-T- AO has discretion to conduct enquiry & then re-open assessment, as the word shall used in the provisions of Section 148, would mean may, thus indicating discretionary power of AO: HC

++ I-T- Re-opening assessment requires presence of tangible evidence leading to clear conclusion that income otherwise taxable, has escaped assessment; reasons recorded for commencing re-assessment are invalid, where not based on proper application of mind: HC

++ I-T- Assessee received Rs. 15 Lakhs as cash gift on account of marriage; additions cannot be sustained where information to prove credit worthiness of donors, has been submitted: ITAT

++ I-T - Since assessee earned income from sale of plot held as long-term, nature of income has to be long-term capital gain and it cannot be Income from Other Sources : ITAT

++ I-T - Consistent view taken for more than 12 years in assessee's own case establishes estimation of income and CIT (A) does not commit any illegality or irregularity : ITAT

++ I-T- Registration granted u/s 12AA/12AB can't be cancelled by PCIT with retrospective effect : ITAT

++ I-T- Advances given to subsidiaries for purpose of commercial expediency need not be disallowed, once nexus is established : ITAT

February 19, 2024

++ I-T- Capitalization of expenses cannot be denied merely on statement given by assessee without adducing evidence of other necessary parties : HC

++ I-T- Re-assessment order merits being quashed where passed without granting opportunity of personal hearing to assessee: HC

++ I-T- Contributions to PF & ESI were deposited in employees' accounts beyond due date; that order rejecting deduction u/s 36(1)(va) was passed u/s 143(1) is inconsequential: HC

++ I-T- To meet ends of justice, one more opportunity can be given to asssessee to establish with supporting evidences, that claim is civil expenditure allowable under Act : ITAT

++ I-T- Even if identity and creditworthiness of sum found credited is accepted, assessee has miserably failed on point of genuineness of transaction recorded : ITAT

++ I-T- Disallowance of cash transaction u/s 40A is invalid, where no transaction in cash is made above the limit of Rs 20000/- in one day : ITAT

++ I-T- Income from sub-letting property is income from house property : ITAT

February 17, 2024

++ I-T- When assessee makes deposits of TDS belatedly then it is onus upon assessee to furnish break-up of TDS deposited by him : ITAT

++ I-T - Penalty u/s 271D could not be imposed after expiry of larger period of limitation: ITAT

++ I-T - Deferred revenue expenditure having no enduring benefit cannot be treated as capital in nature: ITAT

++ I-T - Additions are permitted in case of bogus purchases only to extent of profit embedded therein: ITAT

February 16, 2024

++ I-T - Electoral Bonds Scheme, and FA 2017 amendments allowing unlimited corporate political donations, are unconstitutional: SC - CB

++ I-T- Re-assessment proceedings are unsustainable where twin conditions of income escaping assessment & assessee's failure to make full and true disclosure of facts necessary for assessment, are not satisfied: HC

++ I-T- As per settled position in law, rectification of an order is not permissible in respect of an order involving a debatable issue : HC

++ I-T- Criminal prosecution of an assessee would fail where sanction for the same has been granted without examining relevant facts of the matter: HC

++ I-T- Addition framed u/s 69A based on third party's statements are invalid, where assessee was not permitted to cross examine the deponent of such statements : ITAT

++ I-T- Re-assessment - AO cannot act beyond scope of actual reasons for reopening of assessment: ITAT

February 15, 2024

++ I-T-Re-assessment is unsustainable when there is no failure on part of the assessee to make full and true disclosure of facts necessary for assessment : HC

++ I-T - In respect of bogus purchases, addition at rate of 6% of bogus purchases is fair and reasonable : HC

++ I-T - No addition u/s 153A can be made by AO in absence of any incriminating material found during search: HC

++ I-T- Since AO has made sufficient inquiry during course of regular assessment u/s 143(3), no need to pass fresh assessment order as per direction of PCIT : HC

++ I-T- In respect of bogus purchases, addition at rate of 6% of bogus purchases is fair and reasonable : HC

++ I-T - Element of chargeable commission should be limited to extent of bogus entries : ITAT

++ I-T - In absence of deeming provisions, section 115BBE can not apply and income of Rs. 50 lacs be taxed under head 'Income from Business/profession' with normal tax rate: ITAT

++ I-T - AO cannot reduce amount of positive income if same was adjusted against unabsorbed depreciation: ITAT

February 14, 2024

++ I-T - Real estate developers are liable to pay TDS u/s 194C on External Development Charges paid to Urban deelopment authority / State government agency: HC

++ I-T - Failure to adhere to interim order passed by writ court may result in variation of such order and maintain status quo: HC

++ I-T- An order of re-assessment is invalidated where reply furnished by assessee to Show Cause Notice is not considered before passing order : HC

++ I-T- Clerical error committed by AO while passing assessment order, is per se insufficient to invoke revisionary powers, where order is not found to be erroneous or prejudicial to revenue's interests : HC

++ I-T - If delay was not adopted by assessee as strategy to litigate with Revenue since he will not gain anything by making appeal time-barred, delay in filing appeal deserves to be condoned: ITAT

++ I-T - Rent which is given to Club towards providing Office space exclusively used for carrying out business activity of such lender is not having any nexus with any of club activities, shall be taxed as income from house property: ITAT

++ I-T- Section 269SS of the Act does not deals with the receipt of ‘sale consideration of immovable property' in cash, it only deals with loan or deposit and not the sale consideration of immovable property: ITAT

++ I-T- Assessee is eligible to claim deprecation on assets in addition to claim of capital expenditure already claimed as application of income : ITAT

February 13, 2024

++ I-T- Order passed by CIT(A) quashed, being passed in ipse dixit & not based on any reasoning, reflecting non-application of mind into the matter: HC

++ I-T- Re-assessment order passed without granting assessee an opportunity of personal hearing; order stands quashed, being violative of principles of natural justice: HC

++ I-T- Best of judgment assessment order passed for a high-pitch assessment, is invalid, where passed without acknowledging assessee's request for personal hearing & without granting such hearing: HC

++ I-T - Reopening cannot be sustained in absence of any tangible material with AO to infer escapement of income : HC

++ I -T - Incorrect claim or erroneous claim would not amount to willful evasion : HC

++ I-T - Where difference recorded between sale value of flats sold by assessee and stamp value of such flats is within 10% margin, no addition to be made : ITAT

++ I-T- As per settled position in law, deduction of payments made towards Employee's Contribution to PF & ESIC warrants being disallowed where such payment is made beyond the due date prescribed in the respective Acts: ITAT

++ I-T - Interest income cannot be treated differently from contract receipts merely because such income flows from a different source: ITAT

++ I-T - AO has no power to tinker book results by any adjustments other than adjustments provided in explanation to Section 115JB and addition made by AO does not fall within any ambit of adjustments: ITAT

February 12, 2024

++ I-T- Principles of natural justice are violated where re-assessment notice is not received by assessee, due to which assessee is unable to furnish reply thereto, leading to order being passed ex parte: HC

++ I-T- Re-assessment notice & consequent order merit being quashed where the same are not delivered to the assessee in a valid manner: HC

February 10, 2024

++ I-T- Exemption u/s 54F is allowed where a new residential property is purchased from sale proceeds of an erstwhile residential property, within the stipulated time limit: ITAT

++ I-T- Assessee's appeal merits being dismissed due to non prosecution of the same, despite being given reasonable opportunities to present its case: ITAT

++ I-T- Re-assessment order is invalidated where there is no linkage between the reasons recorded for re-assessment and the conclusion drawn that taxable income had escaped assessment : ITAT

February 09, 2024

++ I-T- It is imperative for AO to specify the relevant limb, so as to make the Assessee aware 'as to what is the charge made against him' so that he can respond accordingly: ITAT

++ I-T- Disallowance u/s 14A cannot be ruled out when there is a nexus between foreign advance received and purchase of mutual fund units: ITAT

++ I-T- Upon initiation of re-assessment proceedings, there is no requirement of conclusive satisfaction of the escapement of income & only prima facie opinion of escapement of income is required: ITAT

++ I-T - Deduction claimed u/s 80IA(4)(iii) can be allowed in respect of income derived from industrial undertaking which operate and maintains industrial park developed under Industrial Park Scheme, 2002 : ITAT

February 08, 2024

++ I-T-Interest u/s 234C of the Act is applicable only on the returned income filed by the assessee: ITAT

++ I-T- Since revision is conducted on bedrock of AO's proposal hence conditions prescribed in section 263 are not fulfilled : ITAT

++ I-T- There is no cogent material to evidence and suggest that without passing consideration, land owner registered agreement of sale -cum-GPA in favour of assessee : ITAT

February 07, 2024

++ I-T- Inadvertent error made by ITR filer in computing total income is not tantamount to suppression of material facts; officer scrutinising ITR is duty-bound to bring any errors in ITR to filer's notice: HC

++ I-T - Addition for for cash deposits as unexplained cash credit u/s 68 can not be made merely on suspicion : ITAT

++ I-T - Non-existence of a written agreement between an NRI Assessee and agent engaged in renovating the former's residence, cannot be grounds to disallow deduction on renovation expenses claimed by the Assessee : ITAT

++ I-T-Employee's contribution to PF & ESI deposited after due date - Issue settled vide SC judgment in Checkmate Services Pvt. Ltd. - No deduction allowed where contribution made after due date prescribed in relevant law - Deduction rightly disallowed: ITAT

++ I-T-Prior to 1/6/2016 buyback under section 77A of the companies act is covered by the provisions of taxes in the hence of the company u.s 115QA of the act: ITAT

February 06, 2024

++ I-T - Sec 148A(b) mandates only to supply information to assessee and not material, based on which AO has formed prima facie opinion that any chargeable income to tax has escaped assessment: HC

++ I-T - Order passed by assessing authority rejecting application u/s 270AA and order passed by revisional authority rejecting revision petition, in cursory manner, cannot be sustained: HC

++ I-T - Claim of assessee for exemption of Long Term Capital Gains u/s 10(38) cannot be held to be bogus on basis of presumption in absence of any evidence: HC

++ I-T - Non-drawing of legal inference by AO at relevant point of time cannot result in holding that there is no true and full disclosure of primary facts by assessee: HC

++ I-T - When no addition has been made in the earlier year on account of imputation of interest cost, opening balance could not be considered in the year in question and the addition has to be limited only to the advances made during the relevant Assessment Year: ITAT

February 05, 2024

++ I-T- Merely on basis of lack of fixed assets or other business activity of lender, transactions of unsecured loan extended by NBFC to assessee cannot be doubted : ITAT

++ I-T- Matter can be remanded back to CIT(A) as it failed to adhere legitimate expectations and passed a non descript and cryptic order : ITAT

++ I-T- Revisional Power u/s 263 of the Act is not meant to substitute the opinion of a superior tax authority on mere difference of opinion: ITAT

++ I-T - In absence of Form 3CL, entire claim for weighted deduction u/s 35(2AB) cannot be allowed, however, normal deduction can be allowed : ITAT

++ I-T- Mere two different agreements does not give rise to different residential property : ITAT

++ I-T-When sales have been accepted as genuine the entire purchases cannot be treated as non-genuine: ITAT

++ I-T- Since no evidences are placed by assessee disallowance to extent of 2% of expenditure claimed is justified : ITAT

February 03, 2024

++ I-T- When assessee is holding investment as stock-in-trade, no disallowance under Section 14A of the Act can be made: ITAT

++ I-T- Amendment in section 43D sought to be made effective w.e.f 1/04/2018 is liable to be treated as retrospective in nature: ITAT

February 02, 2024

++ I-T- When AO probes share applicants u/s 56(2)(viib), then AO cannot question their identity, creditworthiness & genuineness of transaction, that too when assessee has satisfied initial burden cast upon him u/s 68 of I-T Act: ITAT

++ I-T- The year of chargeability as per section 45(3) is the 'year in which transfer takes place': ITAT

++ I-T - Interest income derived by co-operative society from co-operative bank is eligible for deduction u/s 80P(2)(d), even if same is in nature of 'profits & gains of business' or 'income from other sources': ITAT

++ I-T- When the assessee generates any exempted income, then if any disallowance of interest is warranted that will be made under the provisions of section 14A of the Act: ITAT