TODAY'S CASE (DIRECT TAX)

May 31, 2024

++ I-T- Where a deduction has not been allowed in respect of bad debts written off under the 2nd stream, the question of charging the recovery effected out of such bad debts written off to tax will not arise: ITAT

++ I-T- Assessee declared much lesser income from agriculture in current AY, in relation to earlier AYs & without valid explanation for such difference; additions u/s 69A upheld: ITAT

++ I-T- Since AO computed income on total basis without giving bifurcation Pr. CIT wrongly formed belief that order is erroneous and prejudicial to interest of revenue : ITAT

++ I-T- AO Kolkata who framed assessment did not have jurisdiction over assessee as mandated by CBDT Instruction No. 1/2011 : ITAT

++ I-T- It is fit case for remand where assessee receives notices through ITBA portal instead of from the AO concerned: ITAT

++ I-T- Revenue should intimate exact reason for disallowing claim of assessee while processing return : ITAT

May 30, 2024

++ I-T- Honesty of assessee cannot attract penal provisions under income tax act : HC

++ I-T- CIT(A) cannot touch upon on an issue which does not arise and assessed while framing assessment order : ITAT

++ I-T - Mere making of claim, which is not sustainable in law by itself will not amount to furnishing inaccurate particulars of income by assessee, for levy of penalty: ITAT

++ I-T- Disallowance u/s 36(1)(iii) of the Act is sustainable where the advances or investments were made from the interest free funds available: ITAT

++ I-T- CIT(A)'s order directing enhancement of additions framed on account of Agricultural income, is invalid, where CIT(A) does not furnish any reasons to justify enhancement of income: ITAT

May 29, 2024

++ I-T- In assessment order reasons have to be given as to why explanation of assesssee is not acceptable : HC

++ I-T- Additions framed u/s 69A on account of unexplained money, not tenable where source of cash is properly explained by assessee: ITAT

++ I-T- Re-assessment is invalid where based solely on report supplied by DIT (Inv.) & where jurisdiction u/s 148 is assumed without independent investigation on part of AO as to whether income escaped assessment: ITAT

++ I-T- An expenditure cannot be disallowed solely because the AO opines such expense to be very large or because some vouchers were not available: ITAT

May 28, 2024

++ I-T- Where law requires issuance of notice u/s 143(2) before framing additions, any additions framed without issuing such notice, are lacking in jurisdiction & hence, unsustainable: ITAT

++ I-T- AO cannot make addition u/s 68 of Act merely based on information contained in reasons for reopening of assessment without conduct any enquiry : ITAT

++ I-T- AO by not taking route of Section 153C, gone totally wrong in carrying out assessment as regular assessment framed u/s 143(3) of Act: ITAT

++ I-T- Basis of cash sales made in earlier FY cannot be adopted as parameter for accepting cash sales made during year - ITAT

++ I-T- Notional rental income is not chargeable in case closing stock of units is held as work-in-progress : ITAT

++ I-T- Commissioner of Income Tax could not have exercised jurisdiction u/s 263 of Act : ITAT

++ I-T- Since sources for cash seized is properly explained no addition is required: ITAT

++ I-T- Rejection of claim does not ipso facto leads to levy of penalty : ITAT

May 27, 2024

++ I-T- At stage of assumption of jurisdiction u/s 148A(d), all merit objections that may be raised by assessee are not required to be decided pointwise by Revenue : HC

++ I-T- Exercise of powers u/s 153D cannot be done mechanically and authority must reflect appropriate application of mind : HC

++ I-T- Fresh writ petition filed by the assessee to raise an issue cannot be entertained where assessee omitted to raise said issue in an earlier writ petition filed in respect of the same matter: HC

++ I-T- The direction of Pr.CIT to make additions on account of cash found in the course of search with aid on the contour of Section 69 A r.w. Section 115BBE without effective opportunity cannot be countenanced in law: ITAT

++ I-T- Additions framed u/s 69A on account of unexplained money dropped where assessee files necessary evidence & bank statements to prove availability of cash or to explain source of cash deposits: ITAT

++ I-T- Additions made to returned income should be taken as real income of the assessee and available for subsequent application: ITAT

++ I-T - Husband is entitled to claim deduction u/s 54 in respect of new residential house property purchased in name of his wife: ITAT

May 25, 2024

++ I-T- Assessee cannot claim to have been denied an opportunity of personal hearing, where assessee fails to avail of such opportunities despite being served several notices: HC

++ I-T- Assessment order is invalidated, where passed by an AO not having territorial jurisdiction over assessee concerned: ITAT

++ I-T- CIT(A) is statutory first appellate authority and has independent power of calling for information and examination of evidences and possesses co- terminus power of assessment apart from appellate powers: ITAT

May 24, 2024

++ I-T- In order to seek review, it has to be demonstrated that order suffers from an error contemplated under Order 47 Rule 1 CPC which is apparent on face of record and not an error which is to be fished out and searched: HC

++ I-T- Order holding assessee liable to deduct TDS on certain amount, was passed by an AO who lacked jurisdiction over assessee; order is non speaking too - order quashed & matter remanded: ITAT

++ I-T- Penalty notice & order invalidated where specific charge against assessee between concealment of particulars of income & furnishing inaccurate particulars of income, is not mentioned: ITAT

++ I-T- In respect of addition u.s 68 of the Act, when all documents provided and no scrutiny by AO of the documents, addition solely on the basis of Investigation Wing report is to be deleted: ITAT

++ I-T- The payment of royalty for right to use or access to technical know- how and information is revenue expenditure: ITAT

++ I-T - Assessee is eligible for claim of cost of funds on interest income received from banks : ITAT

++ I-T- Computer software licenses is eligible for claim of depreciation at 60% : ITAT

May 23, 2024

++ I-T- While exercising the powers under Section 127 of the Act, the administrative convenience of the Revenue and the need for 'coordinated investigation' would take precedence over the logistical difficulties faced by the assessee: HC

May 22, 2024

++ I-T- Re-assessment proceedings vitiated where based entirely on data received from DGGST & where commenced without due application of mind: HC

++ I-T- Provisions of Section 279(2) pertaining to compounding of offences under I-T Act, do not prescribe any time frame for filing such application: HC

++ I-T- Re-assessment notice issued to partnership firm which ceased to exist on account of its dissolution, is invalidated: ITAT

++ I-T- As per settled principle of law, burden rests on assessee to provide sufficient cause which prevented assessee from filing appeal within prescribed period of limitation: ITAT

May 21, 2024

++ I-T- Unexplained income - That assessee was trading in shares of a company suspended from Stock Exchange cannot per se lead to suspicion, where transactions in question are not proven as bogus: HC

++ I-T- Power of revision u/s 263 cannot be exercised with regard to those items which were not subject matter of scrutiny by the AO during original assessment: ITAT

++ I-T- AO can extend scope of limited scrutiny to complete scrutiny only if information is received of the assessee having evaded payment of tax: ITAT

++ I-T- Assessee is not guilty of furnishing inaccurate particulars of income, where no information given in ITR is found to be incorrect or inaccurate: ITAT

++ I-T-Amount received by employee from employer as compensation for loss of employement, on closure of company, partakes character of capital receipt; amount not taxable in employee's hands: ITAT

++ I-T- Sec 69A is not applicable for the assets/transactions recorded in the Books of Accounts: ITAT

++ I-T- Additions framed vide assessment order not tenable, where revisionary order u/s 263, based on which such additions were framed, was itself quashed: ITAT

May 20, 2024

++ I-T - Escapement of income due to claim of deduction u/s 80-IB(10) was certainly a subject matter of appeal and admittedly so and on this income reassessment is not permissible : HC

++ I-T - Additions framed u/s 68 on account of unexplained cash credit cannot be sustained where AO does not specify how such additions had been computed: ITAT

++ I-T - Charitable organisation cannot be denied registration u/s 12AB solely on grounds that it is managed by one person, but where its activities are for the benefit of the entire society at large: ITAT

++ I-T - Material to be considered for invoking Search assessment should be seized in course of search u/s 132 of the Act on searched action or requisitioned u/s 132A: ITAT

++ I-T - Failure of AO in recording the satisfaction based on any material seized during the course of the search, vitiates search assessment proceeding: ITAT

May 18, 2024

++ I-T- Additions framed on account of unexplained cash credit & unexplained money, are not tenable where cash deposits & withdrawals were of personal funds & were done through banking channels: ITAT

++ I-T- Benefit of section 11(2) can not be denied merely on reasoning that form 10 is filed belatedly: ITAT

++ I-T- Unexplained money - Additions sustained as assessee unable to provide proper explanation for amount withdrawn & subsequently deposited into same bank account: ITAT

May 17, 2024

++ I-T- No final orders imposing penalty should be passed till appeal of assessee is decided by CIT : HC

++ I-T - Not following binding decision of High Court on identical facts by Tribunal is mistake apparent on record : HC

++ I-T- If payment is made for purchase of agricultural produce to cultivator, grower or producers then no disallowance shall be made u/s. 40A(3) of Act : ITAT

++ I-T-Additions on account of unexplained bank deposits are not tenable where amount in question is money saved by assessee throughout her career: ITAT

++ I-T-Additions framed on account of unexplained cash credit quashed, where deposits are out of cash realised from various parties to whom sales were made by assessee: ITAT

++ I-T-Client code modification following execution of trades, is meant to correct genuine errors in placing orders and is meant for exceptional, rather than routine use: ITAT

++ I-T-An expenditure cannot be disallowed where it has not been claimed at the first instance while determining the taxable income : ITAT

May 16, 2024

++ I-T- Not providing cross-examination of maker of the statement on which AO relies upon to take adverse view against an assessee is a serious flaw which render the action of AO a nullity : ITAT

++ I-T- 84-day delay in filing appeal before CIT(A) is condonable, where caused due to assessee's ill health; matter remanded for reconsideration: ITAT

++ I-T- Amount of enhancement is deemed to be income of previous year in which it is received for purposes of 'enhanced compensation' taxable as capital gain: ITAT

++ I-T- DDT liability is distinct and separate from the liability to pay income-tax on the total income of an assessee : ITAT

May 15, 2024

++ I-T- Assessment order quashed where passed without considering assessee's request for adjourment seeking additional time to file reply to Show Cause Notice: HC

++ I-T-Re-assessment invalidated where assessee makes full & true disclosure of material facts necessary for assessment & where AO has no new tangible evidence: HC

++ I-T - There cannot be any justification for allowing a deduction u/s 37(1) or u/s 28, of write-off of amount paid on encashment of this corporate guarantee: ITAT

++ I-T-If an expenditure has no connection with exempt income, then such expenditure cannot be disallowed u/s 14A: ITAT

++ I-T- Disallowance of payments made under PF & ESI merits being recomputed, where delay in payment is on account of banks being closed on certain national holidays: ITAT

May 14, 2024

++ I-T- Assessee cannot be worsened of in appeal filed by him when relief already granted could be withdrawn: ITAT

++ I-T- Statement taken from deponent pursuant to Search & Seizure operations, cannot be deemed to be legally enforceable, where it does not contain signature of persons named therein : ITAT

++ I-T - Assessee is entitled to deduction u/s 57(iii) of any other expenditure which is not in nature of capital expenditure which is laid out or expended wholly & exclusively for purpose of earning such income: ITAT

May 13, 2024

++ I-T- Re-assessment - detailed inquiry into assessee's income cannot be made at time of finalisation of re-assessment order: HC

++ I-T- A case already subjected to re-assessment cannot be re-opened where no new material relating to escapement of income is unearthed: HC

++ I-T- Order mandating predeposit of 20% of tax demanded be quashed, where passed without examining whether assessee made out prima facie case for waiver of pre-deposit: HC

++ I-T- If the assessments concluded are not in accordance with the law, it is not change of opinion, but it is a valid reason for reopening the assessments by AO : HC

May 11, 2024

++ I-T - Assessing Officer cannot deny benefit merely on basis of documentation: ITAT

++ I-T - AO shall grant resultant benefit u/s 50C on sale of immovable property, by taking valuation based on sheet of registrar: ITAT

++ I-T - Interest income earned by agricultural cooperative society from investment out of its surplus funds is eligible for benefit of Section 80P(2)(a): ITAT

May 10, 2024

++ I-T- Re-assessment - At initial stage of enquiry u/s 148A, AO has to satisfy whether income of assessee has escaped assessment & if 3 years have lapsed from last date of relevant AY, then AO must satisfy escaped income exceeds Rs 50 Lakhs: HC

++ I-T- While Rule 24 of Income Tax (Appellate) Tribunal Rules, 1963, requires ITAT to decide appeal on merits even when a party is not appearing or is not representing, grossly delayed appeal is rightly dismissed: HC

++ I-T- The only jurisdiction of the High Court in a reference application is to answer the questions of law that are placed before it: HC

++ I-T- No addition can be made towards unproved sundry creditors u/s 143(3) r.w.s.153C if such addition is not backed by any incriminating material found in search : ITAT

++ I-T- Re-assessment commenced beyond 4-year limitation can be sanctioned by Pr.CCIT, CCIT, PCIT or CIT only; re-assessment beyond limitation sanctioned by Additional Commissioner is invalid: ITAT

++ I-T- Irregularity in obtaining sanction of competent authority, is a substantive defect which is not curable under I-T Act: ITAT

++ I-T - If assessee was not shareholder of company advancing loan to it, amount of loan could not be treated as deemed dividend in its hands: ITAT

++ I-T - Even if some rental income is earned with intention of applying it for charitable & educational activity, then gross receipts should be treated as having been earned from carrying out educational activity: ITAT

May 09, 2024

++ I-T - Assessee given insufficient time to file reply to Show Cause Notice; assessment order quashed; matter remanded for reconsidering assessee's replies: HC

++ I-T - Assessee has 5 email IDs & responded to communications received on one of these IDs; Assessee cannot claim to have been denied an opportunity of personal hearing before passing of order: HC

++ I-T- Additions framed u/s 68 r/w Section 115BBE are unwarranted where assessee duly explains nature & source of cash receipts, through sufficient documentation: ITAT

++ I-T- Re-assessment cannot be resorted to beyond 4 years from end of relevant AY, where assessee has not failed to file ITR or to make full & true disclosure of facts necessary for assessment: ITAT

++ I-T- Receipt of subscription fees can't be considered as commercial activity: ITAT

May 08, 2024

++ I-T - Anything made taxable by rule-making authority u/s 17(2)(viii) should be 'perquisite' in form of 'fringe benefits or amenity': SC

++ I-T- AO not barred from issuing more than one SCN; Fresh SCN seeking information is not without jurisdiction, more so where HC itself directed re-doing of assessment: HC

++ I-T- Appeal before CIT(A) (NFAC) is rightly dismissed where it has been delayed by over one year without just & reasonable cause: ITAT

++ I-T- Re-assessment unsustainable, where based on third party statements & not corroborated by incriminating evidence: ITAT

++ I-T- Re-assessment invalidated where triggerred by change of opinion, on account of being based on material already available during original assessment: ITAT

May 07, 2024

++ I-T-Interest income earned by a co-operative society on its investments held with a cooperative bank would be eligible for claim of deduction under Sec.80P(2)(d) of the Act: ITAT

++ I-T- Addition cannot be made merely for reason that assessee got property transferred through registered sale without making payment to vendor: ITAT

++ I-T- Addition which is not based on the reasons for reopening is un-sustainable sans notice u/s 148 of the ACT: ITAT

++ I-T- Re-assessment need not be resorted to, where no income has escaped assessment or where no evidence is put forth to establish escapement of income: ITAT

++ I-T- Penalty imposed u/s 271(1)(c) are not sustainable where additions based on which penalty was imposed, are themselves set aside : ITAT

May 06, 2024

++ I-T - Grant of registration u/s 12A can't be denied by invoking Sec 13(1)(b), as provisions of section 13 would be attracted only at time of assessment and not at time of grant of registration: ITAT

++ I-T- Joint ownership in two residential properties at the time of sale of the original asset does not disentitle the assessee to claim of deduction under section 54F of the Act: ITAT

++ I-T - If assessee was prevented from production of evidences because of its non-availability or delay in its retrieval coupled with ongoing several reassessment, assessee should be allowed to adduce additional evidence: ITAT

++ I-T- If assessee is otherwise found eligible, CIT(E) should grant provisional approval to assessee under Clause (iii) to First Proviso to section 80G(5): ITAT

++ I-T - Donation made to trust which is otherwise not approved during relevant period as per CBDT Circular, is not eligible for deduction u/s 35(1): ITAT

++ I-T- Assessee could have filed application in Form No.10AB on or before 30.09.2022, which assessee failed to do : ITAT

++ I-T- AO erred in making addition for completed/non abated assessment as no incriminating material found during course of search :ITAT

May 04, 2024

++ I-T - Initial burden of proof rested on assessee to substantiate his claim of having incurred expenditure on improvement of property: ITAT

++ I-T - Agricultural income can be treated by ITO as undisclosed income in absence of any substantial / corroborative material to prove same: ITAT

++ I-T - Income from sale of property has to be classified & characterised only in manner of computation as per section 45(2): ITAT

May 03, 2024

++ I-T - If assessee is not charging VAT paid on purchase of goods & services to its P&L account i.e., not claiming it as expenditure, there is no requirement to treat refund of such VAT as income: ITAT

++ I-T - Interest received u/s 28 of Land Acquisition Act 1894 awarded by Court is capital receipt being integral part of enhanced compensation and is exempt u/s 10(37): ITAT

++ I-T - No additions are permitted on account of bogus purchases, if evidence submitted on purchase going into export and further details provided of sellers remaining uncontroverted: ITAT

++ I-T- Provisions of Section 56(2)(vii)(a) cannot be invoked, where a necessary condition of the money received without consideration by assessee, has not been fulfilled: ITAT

++ I-T- As per settled position in law, cooperative housing society can claim deduction u/s 80P, if interest is earned on deposit of own funds in nationalised banks: ITAT

++ I-T- Since difference in valuation is minor, considering specific exclusion provision benefit is granted to assessee : ITAT

++ I-T - Presumption u/s 292C would apply only to person proceeded u/s 153A and not for assessee u/s 153C: ITAT

May 02, 2024

++ I-T- Scrutiny assessment order cannot be assailed where assessee confuses it with order passed pursuant to invocation of revisionary power u/s 263: HC

++ I-T- Assessment order invalidated where passed in rushed manner to avoid being hit by impending end of limitation period: HC

++ I-T- Additions framed on account of bogus purchases merits being restricted to profit element embedded therein, where AO has not doubted sales made out of such purchases: HC

++ I-T- Miscellaneous Application before ITAT delayed by 1279 days without any just causes or bona fide; no relief for assessee: HC

++ I-T - Assessee is eligible for deduction u/s 54EC on account of investment made in REC Bonds, provided both investments were made within period of six months as prescribed u/s 54EC: ITAT

++ I-T - PCIT cannot invoke revisionary jurisdiction u/s 263 when there is no case of lack of enquiry or adequate enquiry on part of AO: ITAT

++ I-T - If purchases & corresponding sales were duly matched, it cannot be said that same were made out of disclosed sources of income: ITAT

++ I-T- Reopening of assessment is invalid as while recording reasons for reopening of assessment, AO has not thoroughly examined materials available in his own record : ITAT

May 01, 2024

++ I-T- Writ court is not required to interfere with assessment order, where assessee also has available option of statutory appeal: HC

++ I-T-Transfer of assessment is sustained, where assessee does not reply to any notice issued in this regard & where valid reasons exist for transferring assessment: HC

++ I-T - For assessment to be re-opened, it is required that AO should have reason to believe that income of assessee had escaped assessment and said belief should be honest & reasonable: ITAT

++ I-T - If there was no delay in filing appeal, then no application seeking condonation of delay in filing appeal was filed by assessee: ITAT

++ I-T - Rule 11UA does not mentions pre-condition of approval of balance sheet by Annual General Meeting: ITAT

++ I-T - Reference could be made to Departmental Valuation Officer only when value adopted by assessee was less than fair market value: ITAT

++ I-T - No revision u/s 263 can be initiated if there was no lack of enquiry on part of Assessing Officer on aspect of allowability of claim of deduction u/s 57: ITAT

++ I-T- If assessee has explained source of deposit from receipt of sale consideration of plot then assessee's explanation cannot be negated to made addition u/s 69A: ITAT