TODAY'S CASE (DIRECT TAX)

March 22, 2025

++ I-T - All dues including statutory dues owed to Central Government, if not part of Resolution Plan, shall stand extinguished: SC

++ I-T- Delay in filing application for renewal of Section 80G merits condonation for representation before CIT(E), if such delay was caused due to error in filing Form 10A by consultant who was not well aware of procedure: ITAT

++ I-T - Genuineness of transaction cannot be questioned when source is properly explained: ITAT

++I-T - CSR donations are allowed for deduction under section 80G : ITAT

++ I-T - Income from manufacturing activities shall be treated as eligible income for purpose of accumulation u/s 11(1), if artificial limbs for disabled persons were manufactured from property held in trust: ITAT

March 21, 2025

++ I-T- Re-assessment - additions framed in respect of issues unrelated to the grounds for re-opening assessment, are not tenable: ITAT

++ I-T - Revisionary jurisdiction u/s 263 cannot be invoked merely on basis of change of opinion: ITAT

++ I-T - Assessee is entitled for deduction u/s 54 if he has invested amount in excess of capital gain derived from transfer of house property towards construction of new house: ITAT

++ I-T- No additions can be made u/s 69 on basis of dumb document found at premises of third party, in absence of any corroboration: ITAT

++ I-T - Merely because assessee does not challenge particular addition or disallowance in appeal, does not mean that claim for such exclusion from income or deduction lacked bona fides: ITAT

++ I-T- As is trite law, unless a direct nexus between borrowed funds & the advances was established, no disallowance could be made: ITAT

++ I-T- If purchaser has utilized amount deposited in Capital gain account scheme well within stipulated time line for acquisition and construction of new residential property, he can't be denied exemption u/s 54F: ITAT

++ I-T- Capital gain exemption u/s 54F can't be denied, if genuineness of payments made towards purchase of property is not doubted: ITAT

March 20, 2025

++ I-T - Once there is no incriminating document or information or material pertaining to previous assessment years, action u/s.153C could not have been taken: ITAT

++ I-T- Failure to respond to notice u/s 271(1)(b) will not attract penalty, if there was sufficient cause on behalf of assessee for such failure: ITAT

++ I-T - Value as on date of agreement shall be taken as stamp duty for purpose of Sec 56(2), if sale consideration was paid by account payee cheque/ ECS on or before date of registration of immovable property: ITAT

++ I-T- Additions u/s 69A upheld where assesee fails to provide evidence or details to explain source of amounts deposited in assessee's account: ITAT

++ I-T- Exemption u/s 11 shall not be denied for belated furnishing of Form 10, without considering reasonable cause for such delay: ITAT

++ I-T- AO cannot made addition u/s 69B merely on basis of assumption, without establishing fact of understatement of investment, at very first instance: ITAT

++ I-T - Penalty notice is invalidated where AO fails to specify whether penalty is levied for concealment of income or for furnishing inaccurate particulars, leading to inconsistent penalty order: ITAT

March 19, 2025

++ I-T - Interest paid to assessee u/s 244-A of Income Tax Act, will be recoverable, if appeal filed by I-T Department is decided against assessee: HC

++ I-T- Re-assessment - AO must provide relevant incriminating material to assessee - proceedings invalid where assessee not given opportunity to present explanations: HC

++ I-T - Revenue Department cannot, indefinitely attach assessee's properties without taking further steps to resolve matter, simply by suspecting escapement of tax on income: HC

++ I-T - AO acted in breach of SOP u/s 144B, and deprived assessee of reasonable opportunity of placing all relevant material, documentation necessary for AO to take legally informed decision; AO's action is invalid: HC

++ I-T - No addition can be made u/s 68 merely because summon issued u/s 131 to directors of investment company were not complied with, if assessee has filed all evidences qua subscribers: ITAT

++ I-T - Revisionary interference for setting aside assessment order u/s 263 is invalid, if PCIT has not given any reasoning as to how order of AO was prejudicial interest of revenue: ITAT

++ I-T - Once assessee provides evidence to establish the identity, genuineness, and creditworthiness of lenders, then onus shifts to Revenue to prove otherwise u/s 68: ITAT

++ I-T-Where penalty u/s 270A is imposed by AO, parallel penalty proceedings u/s 270A cannot be commenced by CIT(A) based on same set of facts: ITAT

++ I-T-Assessee is entitled to interest on refund arising out of excess amount paid as self- assessment tax: ITAT

++ I-T - Interest on compensation and enhanced compensation shall be considered as ‘income from other sources' and taxable u/s 56(2): ITAT

March 18, 2025

++ I-T - Allowance in respect of bad debts u/s 36(1)(vii) is allowable only if debt was taken into account for computing income of assessee in previous year in which amount is written off: HC

++ I-T- Delay in filing ITR ought to be condoned where factors such as issues in I-T portal & operational challenges due to COVID pandemic, were not considered: HC

++ I-T - If assessee has not proved genuineness of purchases, which inter alia include source of making payment for such purchases, such case calls for addition u/s 69C: HC

++ I-T - AO can initiate reassessment proceedings for year which has already been assessed u/s.143(3), if material information was not disclosed correctly & truly by assessee: ITAT

++ I-T - No TDS is applicable u/s 194C on fuel charges paid by assessee if same was reimbursed on cost-to-cost basis: ITAT

++ I-T - AO can't disallow commission expenses incurred by insurance company, without examining PAN details along with related documents placed on record by way of additional evidence under Rule 29: ITAT

March 17, 2025

I-T - Since any estimation involves element of guess work, it can't be stated with degree of conviction that particular methodology is only one that can be legally adopted in given case: HC

++ I-T - Reasons furnished at first instance to assessee have to be looked into, for initiating reopening, and same can't be improvised subsequently: HC

++ I-T - If assessee has incurred expenditure and offers no explanation about its source or explanation offered is not in opinion of AO satisfactory, said expenditure may be deemed as income of assessee: HC

++ I-T - Audit opinion is no basis for reopening of case: HC

++ I-T - Change of mind/ opinion of AO in reopening assessment, can't be camouflaged under 'reason to believe' would be contrary to settled legal principle of reopening: HC

++ I-T - Sec 153C is premised on material/ information in course of search which pertain to third party alone as opposed to discovery of connection or link between searched person and non-searched entity: HC

++ I-T - If amount was given for business purpose of company, then same would not fall within definition of deemed dividend u/s 2(22)(e): ITAT

++ I-T - Uncorroborated watsapp chat alone shall not form basis for addition to assessee's hand: ITAT

++ I-T - Grant received from government which was incurred on infrastructure projects, and booked as 'assets' in balance sheet, shall be treated as income on which organization can claim depreciation: ITAT

March 15, 2025

++ I-T - If assessee offered amount received upon surrender of tenancy rights to capital gains and made investment in REC bonds as per Sec 54EC, transactions by assessee can't be treated as colourable device: ITAT

++ I-T - Notice u/s 148 issued without obtaining prior approval from appropriate authority, is invalid: ITAT

++ I-T - No addition can be made u/s 68 merely based on suspicion or surmise, without bringing on record any evidence as to how assessee was invovled in alleged connived transactions: ITAT

March 13, 2025

++ I-T- Liabilities Cannot Be Deemed Ceased Solely Due to Time Passage Without Verification : ITAT

++ I-T- Once creditor has explained as to how and manner in which credit was given to the assessee, and amount was received through banking channels, then without brining any material to impeach the source of credit, addition cannot be made u/s.68: ITAT

++ I-T- Genuineness of expenditure cannot be doubted solely due to absence of ITRs & where evidence such as declarations, PAN, Aadhar details of relevant individuals, are furnished: ITAT

++ I-T- Unsecured loans received by company from its directors, which are used to make payments for property purchases on company's behalf need not be treated as unexplained cash credit: ITAT

++ I-T- Assessment order passed u/s 14A warrants adjustment where it involves incorrect application of the pre-amendment provisions of Rule 8D: ITAT

++ I-T- Disallowance of proportionate interest u/s 36(1)(iii) is unwarranted where assessee's explanation about regular business transactions with sister concern is substantiated through accounts of both parties: ITAT

++ I-T- Undisclosed Income Must Be Taxed Based on Ownership Structure: ITAT

++ I-T- When assessee has not included recovery of telecommunication expenses and migration on the job training services in the figure of 'export turnover' while computing deduction u/s 10AA of the Act same cannot be excluded: ITAT

March 12, 2025

++ I-T- Proviso to Section 36(1)(iii) aims to exclude interest costs from being deductible during the period from when loan is initially taken until asset created by borrowing is used in business: HC

++ I-T- Section 36(1)(iii) does not distinguish between capital borrowed for revenue or capital assets: HC

++ I-T - Merely because cash were deposited during demonetization period, does not make it tainted: ITAT

++ I-T- Retrospective denial of exemption u/s 11 and 12, on grounds of the claimant having been registered u/s 12A, is invalid: ITAT

++ I-T- Re-assessment invalid where based solely on conjecture & without being based on any corroborative evidence or independent verification by AO: ITAT

++ I-T - Income received by originator from securitization trust in nature of EIS did not accrue or arise from investment, then said trust was not entitled to deduct TDS on same: ITAT

++ I-T - Assessee cannot be given benefit of Explanation (5) to Sec 271(1)(c), if he had not communicated in his return, income which was sought to be brought to taxation as result of search: ITAT

++ I-T - Status quo as regards exemption u/s 11 shall be maintained in case of educational trust if same was allowed under identical circumstances in previous year: ITAT

++ I-T- No penalty could be levied u/s 271D if AO failed to record satisfaction in assessment order, with regard to violation of provisions of Sec 269SS: ITAT

++ I-T - AO is not permitted to tax income twice in reopening, which has already suffered disallowance in original assessment proceedings, on basis of change of opinion: ITAT

March 11, 2025

++ I-T- Assessment proceedings can be continued against a deceased assessee's legal heir only if they are initiated during the lifetime of the assessee: HC

++ I-T - Discrepancies leading to short deduction of tax, which resulted on account of unintentional clerical mistakes, is no basis to levy penalty u/s 271 in absence of any malice: ITAT

++ I-T- Re-opening of assessment would not be permitted for a fishing or a roving inquiry as a part of requirement of main provision of section 147 of the Act: ITAT

++ I-T - Proof of delivery are irrelevant consideration to test proprietary of source of cash deposits, if neither books were rejected nor cash sales were discredited: ITAT

++ I-T - PCIT is permitted to exercise his jurisdiction u/s 263 in setting aside assessment order of AO, if same was erroneous as well as prejudicial to interest of Revenue: ITAT

++ I-T - If CIT(A) had given categorical finding that all repayments of loans were reflected in bank statement, then AO can't challenge this finding without bringing material to show that said finding was incorrect: ITAT

++ I-T - With regard to unaccounted cash payments, if any, recorded against shops purchased by certain persons, then enquiry or action, if any, can be taken on those respective persons only: ITAT

++ I-T - If creditworthiness of shareholders and genuineness of such credits were not established by assessee, addition u/s 68 is called for: ITAT

March 10, 2025

++ I-T- ITAT's jurisdiction u/s 254(2) limited to rectifying apparent errors & does not extend to reviewing substantive decisions: HC

++ I-T- Reopening beyond statutory four-year period & and where material facts necessary for assessment are properly disclosed by assessee, is invalid: HC

++ I-T - Any attempt to reopen case on very same material would amount to review of order passed by predecessor AO, which is not permissible: HC

++ I-T- AO has authority to decide on stay of demand; PCIT can only review a matter once AO has made a reference or assessee is aggrieved by AO's order: HC

++ I-T - Pre-requisites for Sec 263 are concurrent satisfaction of revisional authority that order is both erroneous and prejudicial to interests of revenue: HC

++ I-T - Lack of enquiry will render order of AO erroneous and prejudicial to interest of revenue, thereby justifying revisionary interference u/s 263: ITAT

++ I-T - If additional income is linked inextricably with that of business income, then only profit embedded in it needs to be added: ITAT

++ I-T - T here is no bar u/s 68 that loan cannot be given by person from amount borrowed by him from others: ITAT

++ I-T - In case of bogus bills arranged from carious entities at lower cost, reasonable disallowance of purchases would meet possibility of revenue leakage: ITAT

March 08, 2025

++ I-T - If income, escapement of which is basis of formation of reason to believe is not assessed or reassessed, then AO can't independently assess only that income which comes to his notice subsequently: ITAT

++ I-T - PCIT can't substitute his views with that of AO, if AO's view on issue is plausible one: ITAT

++ I-T - Completed assessment can be interfered with by AO u/s 153A only based on incriminating material/ undisclosed income, unearthed during search, which was not disclosed during original assessment: ITAT

++ I-T- Agricultural income adequately supported by documentation can justify cash deposits made during the demonetization period: ITAT

March 07, 2025

++ I-T - Re-assessment proceedings are not permitted if entire edifice is based on perusal of case records which were already considered during scrutiny assessment concluded u/s 143(3): ITAT

++ I-T- Re-assessment not tenable when no tangible material comes to light to show that income otherwise taxable, escaped assessment & where based entirely on change of opinion: HC

++ I-T-Deduction u/s 36(1)(viii) allowed assessee applies ratio of total income to total expenses from entire business & then applies it to income derived from eligible business: HC

++ I-T- Assessment order violates principles of natural justice, where reply filed by assessee to Show Cause Notice is not considered, despite reply being submitted within limitation period: HC

++ I-T - Addition u/s 68 is not justified, in absence of involvement of assessee in price rigging or any cash trail related proof of rotation of assessee's own cash: ITAT

++ I-T - If assessee is regular investor and there is no reason to suspect purchase & sale of shares undertaken by assessee, then long term capital gains declared by assessee can't be considered as bogus: ITAT

++ I-T - Once source of cash is taxed, it cannot be further taxed as unexplained cash expenditure: ITAT

++ I-T - If AO has considered issues according to merits and also followed decision of jurisdictional high court in assessee's own case, then assessment order of AO cannot be treated as erroneous: ITAT

++ I-T- Re-assessment invalidated where based on change of opinion of AO, rather than any new tangible evidence coming to light: ITAT

++ I-T - Deeming provision of section 69A deals with unexplained money and it comes into play only if assessee is found to be owner of jewellery or valuable articles: ITAT

March 06, 2025

++ I-T - If entire transaction is covered within ambit of business activity of assessee and was carried out in pursuance of main objects of company, then compensation as per MOU is to be treated as business income: ITAT

++ I-T - At stage of reopening of assessment, AO is not required to prove escapement of income, but to link information received with reason to believe that income has escaped assessment: ITAT

++ I-T - If lender companies have provided their bank account statements highlighting withdrawals towards account payee cheque given as loan, then identity of lenders cannot be doubted: ITAT

++ I-T - If assessee is only awarded contract for design & construction of tunnel as specified in tender document and job is over when construction of tunnel is done, it is not eligible for deduction u/s 80IA: ITAT

++ I-T - AO is entitled to make suitable estimations of profits in given business where documentary evidences are not available to support correctness of profits derived from business, to his satisfaction: ITAT

++ I-T- Aditions framed in pursuance of search assessment valid where based on material extracted from regular books of accounts, rather than from material recovered during search: ITAT

++ I-T - Deduction u/s 80IA is available to assessee who undertakes work of developing/ operating and maintaining any infrastructure which fulfills conditions mentioned in Sub-section (4) of Sec 80IA: ITAT

++ I-T- Additions unsustainable, where assessee-firm successfully explains source of investment, as being derived from capital contributions by 12 partners of the firm: ITAT

++ I-T - Taxes paid by VCFs in their returns would be qua income derived by them in their own accord, and hence taxes paid on such income can't be claimed by way of credit by investors: ITAT

++ I-T- As is trite law, purchase of residential property in wife's name does not invalidate claim for deduction u/s 54F, as long as investment is made from sale proceeds of assessee's property: ITAT

++ I- T- Additions cannot be framed on estimate basis, based on assumptions and presumptions, without furnishing cogent evidence to corroborate the estimation : ITAT

March 05, 2025

++ I-T - Non-applicability of rule of res judicata in income tax matters should not unnecessarily disturb rule of consistency to be followed on factual matters repeated from one A.Y to another A.Y: ITAT

++ I-T - Alternate accommodation charges/rent can't be treated as consideration paid as part of share in land & building or both under specified agreement and therefore, would not fall within ambit of Sec 194-IC: ITAT

++ I-T - If assessee has included cash sale as his income in total sale, then same can't be considered as cash credit u/s 68 in absence of adverse remark on corresponding purchase shown by assessee in books of A/c: ITAT

++ I-T - If transactions were carried through banking channel, then no addition is permitted on account of unexplained cash credit: ITAT

++ I-T- Payments for royalty & consultancy qualify as legitimate business expenses, where supported by an agreement & evidence of services received: ITAT

++ I-T - Once basis of proceeding is gone, all consequential acts, actions, and orders would fall to ground automatically: ITAT

++ I-T - Mere mistake in mentioning of wrong sub clause of section 10(23C) by counsel, is no basis to deny exemption u/s 10(23C)(iiiab) to government financed university: ITAT

++ I-T - Rule 75 is not applicable to contribution made to EPF, if it is not recognised provident fund: ITAT

++ I-T- Disallowance of finance charges due to alleged failure to demonstrate utilization of advances for business purposes, is not tenable when there is no diversion of funds for non-business purposes: ITAT

March 04, 2025

++ I-T- Statement under Section 131 of the Act, taken under duress & subsequently retracted, cannot be treated as valid evidence : ITAT

++ I-T - Unless delay is attributable to assessee, interest should be reckoned from beginning of assessment year as per Sec 244A: ITAT

++ I-T- Re-assessment proceedings & consequent additions u/s 69C are valid, where AO omits to adequately examine available records: ITAT

++ I-T- Disallowance of loan transactions between sister units upheld as assessee failed to provide valid evidence to substantiate commercial expediency & where personal benefits arise therefrom due to their common director: ITAT

++ I-T - Rule of appropriation contained in Explanation to Sec 140A(1) would be attracted only at time of payment of self assessment tax at time of filing return of income: ITAT

++ I-T - Capital gain on investment made in residential property can't be denied merely because assessee has deposited amount within five days of due date of filing of ITR: ITAT

++ I-T- An unsatisfactory explanation does not automatically lead to deeming amount as income u/s 68: ITAT

March 03, 2025

++ I-T - Merely because trade creditors did not respond to notices u/s 133(6) or summons u/s 131 before AO, is no basis to presume that those creditors are not in existence, so as to invoke Sec 41(1): ITAT

++ I-T- Seized cash cannot be adjusted against advance tax liability; adjustment against self assessment tax is permitted only: ITAT

++ I-T - If there is no discussion in assessment order about disallowance of interest income, then adding same as income while making its computation is not correct: ITAT

++ I-T- Power of revision rightly exercised where AO allows an exemption being claimed by assessee, despite assessee not having furnished requisite documentation to back up its claim: ITAT

++ I-T - If assessee successfully demonstrated that share capital & share premium was received from companies whose identities & creditworthiness are proved, then no addition is warranted u/s 68 on account of unexplained investment: ITAT

++ I-T - Assessee is entitled to exemption on retirement gratuity and leave encashment received by him at time of superannuation on prorata basis based on his employment tenure with State Government: ITAT

++ I-T - Order passed without assigning any reasons i.e. non-speaking order, is violative of principles of natural justice, and not sustainable in law: ITAT

March 01, 2025

++ I-T- Additions framed u/s 69A are invalid where loans received by assessee were not found to be unexplained money, bullion, or jewellery: ITAT

++ I-T- Where AO has not recorded any dissatisfaction with assessee's method, then the AO is not justified in applying Rule 8D: ITAT

++ I-T- Certain reimbursements, such as for bank charges, electricity, staff welfare, do not attract TDS under I-T Act: ITAT