TODAY'S CASE (DIRECT TAX)

January 17, 2025

++ I-T- Provision for 7-day response period upon received notice u/s 148A, does not mandate exclusion of public holidays: HC

++ I-T - Twin conditions for transfer of assessee's case u/s 127, from one AO to another, is mandatory: HC

++ I-T - Both Faceless AO and Jurisdictional AO have concurrent jurisdiction as far as assessment, re-assessment or re-computation u/s 147 is concerned: HC

++ I-T - Designated authority under DTVSV Act, 2020 cannot reopen assessment after final certificate is issued u/s 5 of DTVSV Act and all disputes with regard to 'tax arrear' stand concluded: HC

++ I-T- NFAC gave assessee less than 7 days to reply to Show Cause Notice, which is grossly insufficient & unreasonable time frame; case remanded: ITAT

January 16, 2025

++ I-T- Section 275(1)(a) does not impose absolute bar on initiating penalty proceedings during pendency of appeal; it only limits period within which such proceedings can be completed: HC

++ I-T- Where assessee has alternative statutory remedy available under I-T Act, it is not appropriate to address merits of the case or interfere with re-assessment process: HC

++ I-T- Writ petition assailing Search assessment proceedings is invalid, where filed by assessee at the very end of limitation period: HC

++ I-T - Expenditure which was not for acquiring any tangible or intangible asset but for conducting business of banking better and more efficiently, is revenue expenditure for banks: ITAT

++ I-T - Once resolution Plan has been approved by Adjudicating Authority, then all proceedings pending in respect of Corporate Debtor are barred thereafter and cannot be allowed to continue: ITAT

++ I-T- Merely because, for another year purchases made by assessee from the said concern AVPL have been treated by the AO as bogus, that in itself cannot be made the sole basis to treat the purchases made by the assessee from the said concern for the year under consideration as bogus: ITAT

++ I-T - AO cannot discard report of registered valuer regarding determination of fair market value of land, without making reference to DVO: ITAT

++ I-T - Addition of unexplained expenditure is required in hands of assessee, if he has utilised funds from foreign credit cards for his personal use and owners of credit cards never claimed that said expense belong to them: ITAT

January 15, 2025

++ I-T- Re-assessment order valid where assessee fails to explain nature & source of certain income disclosed in course of Search operations: HC

++ I-T - Entire purchases can't be disallowed if AO never doubted production & sales, merely because ITC availed on purchases made by assessee was not admissible and assessee had paid tax under VAT Act: HC

++ I-T - If AO had not made specific allegation that assessee had paid money through banking channel and received back cash against those payments, then matter shall be remanded to AO to consider afresh: HC

++ I-T - No tax can be levied on advance amount received by assessee for agreed sale proceeds, if no sale of land was actually executed during year under consideration: ITAT

++ I-T - 'Shastras & scriputres' define only way of life of civilized society and they are definitely not religion specific for benefit of public at large, and hence no reason to deny exemption u/s 80G(5) to trust: ITAT

++ I-T- When new flat is obtained on transfer of old flat, assessee's claim for deduction u/s 54 of the Act is justified: ITAT

January 14, 2025

++ I-T - Notwithstanding that LTCG are excluded from total income of assessee u/s 10(38), same are required to be taken into account in computing book profit and income tax payable u/s 115JB: HC

++ I-T - Based on information received from another agency on insight portal, there cannot be reopening, unless AO satisfies after considering such information, that income has escaped assessment: HC

++ I-T - Liability discharged towards Government relating to Electricity duty payable from allotment of equity, is allowable in terms of Sec 43(d): HC

++ I-T - If sales are not doubted and purchases were not under-valued or inflated, no additions are permitted on account of alleged bogus purchases: ITAT

++ I-T - if assessee could not give complete addresses of parties to whom payments were made and there are similar PAN numbers for different vendors, then contract expenses deserves reasonable disallowance: ITAT

++ I-T - If potential disallowances did not impact tax liability due to extensive available deduction, and assessment order is not prejudicial to revenue in any practical sense, then PCIT's revisionary action u/s 263 is futile: ITAT

++ I-T- The addition made by AO is genuine when assessee failed to discharge the onus of establishing the identity, genuineness of the transaction and creditworthiness or financial strength of the shareholder: ITAT

January 13, 2025

++ I-T - If for advancement & furtherance of charitable activity, other activities are done which are incidental and funds are invested for said purpose, it can't be said that purpose for granting registration u/s 12A was wrongful: HC

++ I-T- Co-accused individuals now allowed to apply separately for compounding of offences, regardless of whether main accused company filed for compounding: HC

++ I-T - Assessment order quashed where passed without considering either Show Cause Notices or the responses filed thereto: HC

++ I-T - Merely producing bank statement cannot prove genuineness of transaction, once trail of cash deposits was unexplained: ITAT

++ I-T - Adhoc additions are not permitted without resorting to rejection of book results u/s 145(3): ITAT

++ I-T - Sanction given by CIT u/s 151 without recording his own independent satisfaction, renders reopening notice as invalid: ITAT

++ I-T- Stamp duty & registration charges not to be included in cost of acquisition of property; such expenses are permissible for deduction u/s 54: ITAT

++ I-T - Assessee is eligible for depreciation on goodwill arose to assessee on account of scheme of amalgamation: ITAT

January 11, 2025

++ I-T- As is trite law, no addition can be made in a Section 153A assessment unless based on incriminating material found during search conducted u/s 132: ITAT

January 10, 2025

++ I-T - Reduction on face value of share resulting in proportional reduction in right of preference shareholder to dividend or his share in distribution of net assets upon liquidation, amounts to transfer as per Sec 2(47): SC

++ I-T - Delay in preferring appeal ought to be condoned if there is no allegation that delay in filing of appeal is mala fide or it is deliberate, rather it is bona fide based on wrong advise of counsel: HC

++ I-T - AO could not assume jurisdiction merely and solely relying upon information made available on insight portal without forming any independent opinion on basis of material on record: HC

++ I-T -After April 01, 2002, provisions of Sec 32(1) shall apply whether or not assessee has claimed deduction in respect of depreciation in computing his total income: HC

++ I-T - Failure to adhere to principles of natural justice and denial of opportunity of personal hearing, before passing assessment order u/s 143(3) r/w/s 144B, calls for denovo assessment: HC

++ I-T - Deduction u/s 80IA is not available on installation of new turbine by assessee being new power plant, as same cannot be treated as new industrial undertaking: HC

++ I-T - Every loss of Revenue as consequence of order of AO cannot be treated as prejudicial to interest of Revenue, so as to invoke revision u/s 263: ITAT

++ I-T - Starting point for initiating penalty proceedings would be date on which AO writes letter to ACIT recommending issuance of SCN and limitation would run from date of letter of AO recommending ‘initiation' of penalty: ITAT

++ I-T - If there is no difference in quantity of excess stock at business premises and excess stock was calculated by survey team on estimated basis only, then AO can't calculate tax on surrendered stock as per Sec 115BBE: ITAT

January 09, 2025

++ I-T - Neither share applicant gets right to receive interest on share application money nor notional interest accrues to it, in absence of allotment of shares: ITAT

++ I-T - Gains arising by valuation of monetary assets and liabilities of foreign operations as at end of year cannot be treated as real income of assessee: ITAT

++ I-T - Without showing defect in purchases & sales, AO can't allege that inflow and outflow of stock may not be matching so to disbelieve 'sales': ITAT

++ I-T - Amount received for Annual Maintenance Contracts for elevators as 'advance' in beginning of year is proportionately transferred to Revenue account at end of every month, such method is in accordance with AS-9: ITAT

++ I-T - If assessee has deducted TDS and also reflected transaction in GST return alongwith bills in support of nature of services, then transaction cannot be treated as bogus to disallow expenses debited: ITAT

++ I-T - If AO has not established that assessee was involved in price rigging, then no additions are permitted on account of bogus gains u/s 69C: ITAT

January 08, 2025

++ I-T- Re-assessment notice issued u/s 148 in name of company which ceased to exist on account of it being struck off the Registrar of Companies, is invalidated: HC

++ I-T - Adopting monthly cash sales and thereby calculating amount of undisclosed income on account of cash deposits during period of demonization, is not justified: ITAT

++ I-T - Provision of expense of stamp duty in pursuance of scheme of amalgamation, is eligible for deduction, if same was actually incurred during relevant year: ITAT

++ I-T- Issue of notice u/s 143(2) is sine qua non to assume jurisdiction to proceed with the assessment in a case: ITAT

January 07, 2025

++ I-T- The 2015 amendment to provisions of Section 153C, replacing belongs to with pertains to , only applies to searches conducted prior to date of amendment: HC

++ I-T- Income from sale of properties during relevant AY are classifiable as capital gains & not business income, where assessee consistently derives income from letting out properties : HC

++ I-T - There shall be live nexus between reasonable belief of escapement of income on basis of fresh material which came to possession of AO during course of search and escapement of income: ITAT

++ I-T - When amounts shown as payable in balance sheet and debt gets acknowledged by assessee, there cannot be any remission or cessation of liability in terms of Sec 41(1): ITAT

++ I-T - If transfer of stock in trade to fixed assets is not going to impact profit & loss A/c and is not going to increase income of assessee, then no addition is permitted in hands of assessee: ITAT

++ I-T - Expenditure towards CSR activities is allowable deduction u/s 80G: ITAT

++ I-T- Additions framed u/s 68 cannot be framed where AO relied solely on investigation report without specific evidence regarding assessee's involvement in accommodation entries: ITAT

January 06, 2025

++ I-T- Assessment order quashed where passed without granting opportunity of personal hearing: HC

++ I-T- Re-assessment proceedings cannot be commenced in respect of a partnership firm which has since been dissolved : HC

++ I-T - In absence of any independent application of mind by AO and in absence of any live link between information received and material available record, reopening notice can't be sustained: HC

++ I-T - Reason to believe that income has escaped assessment cannot be framed by AO, in absence of any new tangible material available him: HC

++ I-T - Notice for re-opening issued in absence of any new tangible material available with AO, has to be infered as 'mere change of opinion': HC

++ I-T - If there was no mis-match between sales & purchases, after verification of stocks, no addition would be called for: ITAT

++ I-T - If certain profit was already granted deduction u/s 80-IA, to extent specified in first part of Sec 80-IA(9), then claim of deduction u/s 80HHC would not be available for 'lease rental' income: ITAT

++ I-T - Once AO has accepted in original assessment that there is no violation of section 40A(3) and none of payments exceeded twenty-thousand in cash, then reopening on very same issue is change of opinion: ITAT

January 04, 2025

++ I-T- CSR contributions, while not deductible as business expenses u/s 37(1) due to amendment in Finance Act, 2014, still qualifies for deduction u/s 80G, as they are applied from total income: ITAT

++ I-T - If AO was not within his jurisdiction to examine transaction of unsecured loan, then same cannot be subject matter of revisionary proceeding u/s 263: ITAT

++ I-T- Power of revision cannot be invoked in order for PCIT to take a second, changed opinion in respect of the relevant issue: ITAT

January 03, 2025

++ I-T - Retrospective legislation cannot affect vested rights: HC

++ PIL - Unilateral modification of I-T Department's utility software, which disables rebate claim u/s 87A after 5 July 2024, deprives eligible taxpayers of their statutory right to rebate; such procedural changes cannot override legislative provisions: HC

++ I-T - Absence of independent opinion that income has escaped assessment due to any failure on part of assessee in disclosing fully & truly all material facts, renders reopening unsustainable: HC

++ I-T - If issues raised in reasons for reopening are duly covered in details provided by assessee along with Significant Accounting Policies as per Audited Accounts, then same issues can't for basis for reopening: HC

++ I-T- As per settled position in law, re-assessment cannot be resorted to solely for purposes of re-verifying facts : ITAT

++ I-T-Interest income earned on Fixed Deposits with Cooperative Banks/Scheduled Banks partakes character of business income & is eligible for deduction u/s 80P(2)(a)(i): ITAT

++ I-T - Mere confirmation of disallowance in quantum proceedings did not justify penalty without evidence of intentional concealment or misrepresentation: ITAT

++ I-T - Exemption prescribed u/s 10(23C) cannot be denied on ground that institution is not registered u/s 12AA: ITAT

January 02, 2025

++ I-T - If assesse fails to offer any explanation or an unsatisfactory explanation, AO would proceed to invoke deeming provision of assuming that same is undisclosed income of taxpayer: ITAT

++ I-T - Merely because Tahasildar has left blank columns of crops grown / cultivated, is no reason derive conclusion by assuming that immovable property is capital asset: ITAT

++ I-T - Failure of AO to specify specific limb of Sec 270A(9) under which assessee was held to have under-reported income in consequence of misreporting of income, renders levy of penalty unsustainable: ITAT

++ I-T - Cash payments properly justified by journal entry and banking channel, cannot be said to be violative to Sec 269T: ITAT

++ I-T - Broker of stock exchange merely acting as intermediary on behalf of clients, cannot be held to be a person who is paying any interest to clients, and hence, cannot be fastened with TDS liability u/s 194A: ITAT

++ I-T - Survey fee paid to doctors for services rendered by them for ascertaining efficacy of products of pharma company, can't be called as freebies falling within meaning of Explanation to Sec 37(1): ITAT

January 01, 2025

++ I-T - Interest earned on borrowed funds which was kept for acquiring coal mine, is not revenue receipt, if coal mine was aborted and borrowings were repaid: HC

++ I-T - No penalty need not be imposed on assessees u/s 271B, if no prejudice is caused to Revenue Department on account of any belated furnishing of audit report as per Sec 44AB: HC

++ I-T- Assessment order is invalidated where it frames additions based on figures which are not mentioned in the preceding Show Cause Notice : HC

++ I-T- Assessment order frames significant addition to assessee's income based on unexplained transactions, but without considering assessee's replies; case remanded: HC

++ I-T-Where property's stamp duty value exceeds value of its consideration, then as per provisions of Section 56(2)(vii), difference between the two figures is the assessee's income: ITAT

++ I-T - Shortfall of refund shall be regarded as shortfall of tax and should then be considered for purposes of computing further interest payable to assessee u/s 244A till date of grant of such refund: ITAT

++ I-T - When there is neither loan or deposit in bank account or shares & securities which represented undisclosed income, no addition is permitted by virtue of fourth proviso to section 153A: ITAT

++ I-T- Requirement to file Form No. 10B along with ITR is procedural in nature & substantial compliance suffices; exemption u/s 11 cannot be denied solely due to late filing of Form 10B: ITAT