TODAY'S CASE (DIRECT TAX)

September 26, 2024

++ I-T- Assumption of jurisdiction under Section 147 of the Act is impermissible on the basis of mere change of opinion: HC

++ I-T - Collecting jewellery of 906.9 grams by woman in married life of 25-30 years is not abnormal, and there is no proper yardstick adopted by AO to treat only 400 grams as reasonable and treat other as 'unexplained': ITAT

++ I-T - Once source of deposits of bank account is explained and admitted, then again making addition on account of withdrawals of deposits from such account, is unjustified: ITAT

++ I-T- The liability to deduct tax at source would arise only if there is payment of any commission or brokerage within the meaning of Section 194H: ITAT

September 25, 2024

++ I-T- Deduction u/s 80P is rightly disallowed where ITR is not filed as per provisions of Section 139: ITAT

September 24, 2024

++ I-T- Unexplained cash credit - additions framed u/s 68 are sustainable, where assessee receives share premium from various entities & fails to establish identity & creditworthiness of share applicants & genuineness of transactions: ITAT

++ I-T- Addition in matters involving bogus purchases, warrants being restricted to 4% of the quantum of such purchases: ITAT

++ I-T - If confirmation letters along with bank statements and ITR acknowledgements for returns are filed by lenders to show identity & creditworthiness, no addition is permitted u/s 68: ITAT

++ I-T - Trade creditors written off, are taxable u/s 41(1) instead of charging same u/s 68: ITAT

September 23, 2024

++ I-T - Mere information on Insight Portal can't be considered as evidence based on which PCIT can assume jurisdiction u/s 263 especially when assessee has explained that transactions are pertaining to another person: ITAT

++ I-T - Assessment order admittedly finalized against non-existing company becomes void: ITAT

++ I-T - Whether donors had capacity to make gift to assessee, needs to be ascertained, before determining taxability of such gift: ITAT

++ I-T - If payments for professional fees have been made through banking channels and TDS has also been deducted, then such payment cannot be doubted: ITAT

++ I-T - Expenditure incurred for purpose which is set out primarily and essentially related to operation or work of the firm constituted profit earning apparatus of assessee is in nature of revenue expenditure: ITAT

September 21, 2024

++ I-T - Newspaper publication activity (which had resulted into losses or nominal profits during the relevant previous years), cannot be regarded as activity in the nature of trade commerce or business: ITAT

++ I-T - Allegation of rigging share prices & providing accommodation entry- charges dropped where not backed by cogent evidence: ITAT

++ I-T - Ad hockey disallowance rightly quashed where assessee produces requisite evidence: ITAT

September 20, 2024

++ I-T - Revenue is not permitted to express different opinion based on very same facts disclosed during original assessment proceedings: HC

++ I-T - No distinction to be made between direct and indirect expenses that are eligible for deduction under Section 35 D of the Income Tax Act: HC

++ I-T - Non-investment of sale consideration or portion thereof in designated capital gains would not come in way of assessee claiming exemption so long as assessee had invested said amount for construction: HC

++ I-T - Assessee sought repeated adjournments without valid reason; costs of Rs 2000/- per appeal imposed on assessee; nevertheless, case remanded for de novo hearing, given tight scheduling of notices & interests of justice: ITAT

++ I-T - Interest received by credit cooperative society from investment held, cannot be treated as it's operational income, as interest received is not from credit facilities provided to its members as envisaged u/s 80P(2)(a)(i): ITAT

++ I-T - Where DVO has power to estimate value independently & fails to do so, then PCIT's action to seek fresh report & revise the assessment, is outside scope of Section 263: ITAT

September 19, 2024

++ I-T - Miscellaneous income such as commission, discount charges, sale of wastages and diesel sales are to be treated as income derived from industrial undertaking: HC

++ I-T - If any statute has been enacted, there cannot be insertion of any word beyond the contents of the statute: HC

++ I-T - Contributions to PF/ESI paid before the due date u/s 139(1) of the Act are allowable as deduction: ITAT

++ I-T - No license is granted under Income tax Act to misuse presumptive scheme of taxation and camouflage undisclosed income from unexplained sources under guise of turnover/gross receipt: ITAT

++ I-T - If no return of income is filed by tax-payer, then appeal can only be admitted by CIT (A) only when tax-payer has paid advance tax which was payable by him: ITAT

++ I-T - Dismissal of assessee's appeal in limine by CIT(A), without going into merits of issues, solely due to non-appearance of assessee, is unsustainable, being in direct contravention of Section 250(6): ITAT

++ I-T - CIT(A) has powers co-terminus with those of the AO and is permitted under law to make own inquiry or direct AO to inquire into the matter, in case of assessee's absence : ITAT

September 18, 2024

++ I-T - Information received from Investigating Unit of Revenue cannot be sole basis for forming belief that income of assessee has escaped assessment: HC

++ I-T - Revenue must condone delay in filing the Form 10B i.e. Audit Report so as to enable assessee trust to get exemption u/s 11, in case of genuine hardship in delay in submitting Form 10B: HC

++ I-T - Income Computation and Disclosure Standards is applicable only for computation of income chargeable under specified heads of income and not for purpose of maintenance of books of accounts: HC

++ I-T - AO cannot challenge Order of CIT(A) without challenging reopening of assessment since CIT (A) has quashed assessment as there was no valid reason for reopening of assessment: ITAT

++ I-T - 'Reason to believe' suggest that belief must be of an honest and reasonable person based upon reasonable grounds and AO may act on direct or circumstantial evidence but not on suspicion, gossip or rumor: ITAT

++ I-T - Re-assessment order sustained by CIT(A) is invalid where it is contrary to Stay Order granted by jurisdictional High Court following Insolvency Resolution Proceedings involving assessee: ITAT

++ I-T - A ssessee engaged in real estate business advertisement expenses claimed for promotion of business of assessee are allowable as revenue expenditure u/s 37(1) of the Act: ITAT

September 17, 2024

++ I-T- No addition u/s 69A can be made as whatever funds have been deposited during demonetisation period, assessee has duly explained source of same : ITAT

++ I-T- It is sufficient for an assessee to write off debts as irrecoverable in their accounts without proving actual irrecoverability : ITAT

++ I-T- There is no need to pass order u/s 263 as AO has passed order after due application of mind and verification of creditworthiness and genuineness of transactions : ITAT

++ I-T- Interest on borrowed funds used for purchasing land, which was intended for business but not yet fully utilized due to financial constraints, merits being allowed as deduction u/s 36(1)(iii): ITAT

September 16, 2024

++ I-T- Amendments to assessments should be made if TDS certificates are produced within two years from end of relevant AY : HC

++ I-T- No limitation period applies to invoking the court's jurisdiction under Article 226 of the Constitution : HC

++ I-T- Failure to file Audit Report through digital mode, would be fatal to a claim made u/s 80IA(7) : HC

++ I-T- Use of donations/funds by renowned Society/Trust already working for charitable purposes, should not be discarded from seeking exemption merely on technicalities, such as production of the receipts/entries: HC

++ I-T- Mistake which had occurred on account of misinterpretation of law in submission of ITR, can always be corrected & rectified in terms of Section 154: HC

++ I-T- Section 133 grants broad powers to I-T authorities to request information if deemed relevant to any inquiry or proceeding under I-T Act; notice issued u/s 133(6) valid: HC

++ I-T - Not striking off irrelevant portion in penalty notice by not specifically mentioning offence committed by assessee, becomes fatal to penalty proceedings: ITAT

++ I-T - PCIT must have sufficient evidence to support his claim that order is erroneous and prejudicial to interests of revenue, and mere suspicion or conjecture is not sufficient for invoking Sec 263: ITAT

September 14, 2024

++ I-T- Any question of law may be allowed to be raised only in order to correctly assess the tax liability of the assessee: ITAT

++ I-T- Additions framed u/s 69A on account of unexplained money are unsustainable where assessee properly explains source of cash deposited during Demonetisation drive : ITAT

++ I-T- The addition of provision of bad and doubtful debts as per P&L account to determine the book profits u/s. 115JB of the act is not warranted: ITAT

September 13, 2024

++ I-T- Merely proving the identity of the investor does not discharge the onus of the taxable in the capacity or creditworthiness has not been established beyond doubt: ITAT

++ I-T - Remittance made by assessee to foreign subsidiaries is not taxable in India in hands of recipient company, and there is no obligation for payer i.e. assessee to deduct tax at source u/s 195: ITAT

++ I-T- Expenses incurred by assessee-company for business purposes & for recovering advances given by assessee to a land aggregator, merit being allowed u/s 37: ITAT

++ I-T- Advances given by assessee & later written off as losses following assessee's inability to recover them, qualify as business loss & not capital loss, considering such advances were given for acquiring business inventories : ITAT

++ I-T- Additions framed u/s 69A unsustainable where framed in respect of assets supposedly owned by assessee, but where such assets do not reflect in assessee's books of accounts: ITAT

September 12, 2024

++ I-T - Reassessment notice issued in defiance of faceless assessment scheme as framed by CBDT u/s 151A Vide CBDT Notification No. 18/2022, is invalid: HC

++ I-T- Power of revision u/s 263 is rightly exercised where AO omits to apply provisions of Section 115BBE on income surrendered by assessee: HC

++ I-T - Penalty proceedings are included in expression 'assessment' and true nature of penalty is imposition of additional tax: ITAT

++ I-T - Date of acquisition of property has to be reckoned from date of its allotment, for purposes of computing short-term capital gain or loss: ITAT

++ I-T- Cooperative banks are cooperative societies engaged in banking business; cooperative society is eligible for deduction u/s 80P in respect of interest income earned from cooperative banks: IT

September 11, 2024

++ I-T - Legislative amendment to Section 80DD of I-Tax Act, intended to benefit disabled persons, cannot be applied retrospectively to insurance contracts: SC

++ I-T - Expression 'company' used u/s 115JB(2)(b) is to be inferred to be company under Companies Act and not to entity which is deemed by a fiction to be a company for purpose of Income Tax Act: ITAT SB

++ PBPT Act - ASJ's order sanctioning prosecution invalidated where it merely summarizes grounds raised in complaint & where it omits to record reasons or to examine nature of allegations: HC

++ I-T- As is settled law, a legal question can be raised at any stage, including before the highest court, if it has not been addressed by lower courts: HC

++ I-T- Method of stock valuation depends upon the facts & circumstances of each case; any method applied in one case cannot be precedent binding upon other cases: HC

++ I-T- Orders dt. 21/03/2018 passed by the AO in relation to FY 2010-11 are beyond time limit stipulated u/s 201(3) of the Act & are time barred, hence quashed: ITAT

++ I-T- Once the investment and lending is for commercial expediency, there is absolutely no scope for making disallowance of interest u/s 36(1)(iii) of the Act: ITAT

September 10, 2024

++ I-T- Reopening notice is rendered invalid where based on settled facts & amounting to a change of opinion rather than new evidence: HC

++ I-T- CIT (A) correctly deleted the additions made by the AO for fixed assets & application of income, given that AO improperly considered gross receipts & failed to accurately compute application of income u/s 11 and 12: ITAT

++ I-T - If detailed enquiries were made by NaFAC on stipend expenditure incurred by educational trust on its trainees before allowing exemption u/s 11, then Sec 263 can't be invoked upon NaFAC: ITAT

++ I-T- Deduction allowed to assessee-company on interest income earned from cooperative banks u/s 80P(2)(d): ITAT

September 09, 2024

++ I-T- Re-assessment notice upheld where it complies with provisions of Section 151 pertaining to securing approval for commencing re-assessment proceedings: HC

++ I-T- As per settled law, an appeal should be heard on merits if tax due is ultimately paid: HC

++ I-T- Exparte order is rightly passed, where assessee has been issued multiple notices & where assessee fails to comply with any of them; best judgment assessment is rightly resorted to where no violation of Section 145 is made out : HC

++ I-T- As is settled law, activities of statutory bodies carrying out public functions, do not inherently qualify as commercial activities: HC

++ I-T - Deeming fiction u/s 50 may be restricted to chargeability of gain as short-term capital gain, but asset remains long-term capital asset and does not become short-term capital asset by virtue of section 50C: ITAT

++ I-T- Date of possession of the property should be regarded as date of actual purchase for the purpose of claiming exemption u/s 54F : ITAT

++ I-T-Provision for warranty expenses would be allowable in the event of assessee proves that same has been computed on the basis of past experience and on scientific basis: ITAT

++ I-T- Revisionary order invalidated as CIT omitted to specify as to how original assessment order was erroneous or prejudicial to revenue's interests: ITAT

September 07, 2024

++ I-T- Cash deposits made in demonetised currency notes, recorded in assessee's books is not unexplained income, where collected before the appointed day for prohibition: ITAT

++ I-T - If there is no whisper regarding under-reporting on total income as consequence to misreporting as envisaged u/s 270A(8), no penalty is leviable u/s 270A: ITAT

++ I-T- Any query raised by AO and left unanswered by assessee during assessment proceedings, will not render assessment order erroneous on account of non application of mind: ITAT

September 06, 2024

++ I-T - If assessee had participated in proceedings, then notice issued would be deemed to be valid even if there were infractions by way of legal fiction: HC

++ I-T- Petitioner-Bank to have precedence over I-T Department for recovery of tax dues through attachment of property, over which both have placed charges: HC

++ I-T- E-assessment order is invalidated where passed by jurisdictional AO instead of being passed by AO under Faceless Assessment Scheme: HC

++ I-T - In absence of incriminating material/jurisdictional fact stated in Satisfaction Note against assessee, satisfaction note prepared by AO does not satisfy requirement of law as stipulated u/s 153C: ITAT

++ I-T - If motive of investment of assessee was to derive income by way of dividend, then income from purchase of shares is to be treated as capital gain: ITAT

++ I-T- Revenue expenses cannot be rejected merely because Appellant fails to produce agreement to establish that such expenses were incurred : ITAT

September 05, 2024

++ I-T- Assessment order quashed where seemingly passed in a rushed manner so as to avoid exceeding limitation period, due to which assessee's submissions were not considered: HC

++ I-T - Object of introduction of faceless assessment would be defeated if show cause notice u/s 148 is issued by Jurisdictional AO: HC

++ I-T- Assessee-trust's multifaceted objectives do not qualify it for exemption u/s 10(23C)(vi), as it is not exclusively serving educational purposes: HC

++ I-T- Appeal cannot be maintained before High Court where tax amount involved is below enhanced threshold of Rs. 1 Crore, as per Circular No. 17 of 2019: HC

++ I-T - Once Assessing Officer accepts books of account and entries in books of account are matched, there is no case for making unexplained addition u/s 68: ITAT

++ I-T - Once having accepted rental income offered to tax by assessee in his return, AO cannot deny that property was leased out in AYs, though for short period: ITAT

September 04, 2024

++ I-T- No exemption from faceless procedure can be read by combined reading of provisions of Section 144B for purpose of issuance of notice u/s 148: HC

++ I-T-Re-assessment proceedings invalidated where AO commenced them in ignorance of relevant materials on record, as well as order passed by CIT (A) resolving the issues involved; CIT also warrants being penalised for sanctioning re-assessment in such situation & without due application of mind: HC

++ I-T- Addition framed under Section 69A for unexplained cash deposits, is unwarranted where framed in respect of cash deposited by the bank's customers : ITAT

++ I-T- Refund of a statutory fees which has been provided under I-T Act for filing an appeal is not covered under the right to property as enshrined in the Constitution of India : ITAT

++ I-T- Even if appeal is dismissed on ground that already assessee has got relief, then there is no such provision that appeal fees filed u/s 249 is to be refunded: ITAT

September 03, 2024

++ I-T- Capital gains from sale of shares, reported in ITR filed after block period, should be included in block period's undisclosed income : HC

++ I-T- E-assessment order is invalidated where passed after allowing only 4 days' time to file reply to SCN, instead of the 7 days' time mandated in Section 144B: HC

++ I-T- Order passed u/s 119(2)(b) merits being quashed, where delay in filing audit reports is not substantial & where audit reports are filed before due date of filing ITR : HC

++ I-T - Credit of TDS should be allowed for same year in which income has been claimed to have accrued/arising and included for determination of taxable income: ITAT

++ I-T - Definition of 'export turnover' in section 10A excludes from its ambit any expenses incurred in foreign exchange in providing technical services outside India for year under consideration: ITAT

++  I-T - Amount actually received by assessee from builder as per tripartite agreement shall only be taxable as capital gains: ITAT

September 02, 2024

++ I-T - Re-assessment cannot be commenced when there is no failure on assessee's part to make full and true disclosure of material facts during original assessment: HC

++ I-T - Issue as to whether or not there was in fact a suppression, is question of fact that has to be determined by AO/ DRP before whom assessee has admittedly filed his objections, and cannot lie before writ court: HC

++ I-T - Amount paid by assessee for obtaining mining rights in e-auctions, can be countenanced as income of assessee: HC

++ I-T- Theory of human behaviour and preponderance of probabilities cannot be cited as a basis to turn a blind eye to the evidence produced by respondent: ITAT