TODAY'S CASE (DIRECT TAX)

August 31, 2020

++ Expenses incurred on repair & renovation, meant for preserving & maintaining an existing asset, qualify as revenue in nature: ITAT

++ Penalty u/s 271B is not imposable if AO fails to verify audit status of books of account before specified date & only emphasizes on furnishing audit report: ITAT

++ Receipt of on-money, being prevalent practice in sale or purchase of property, cannot per se lead to presumption of concealment of income or evasion of tax: ITAT

++ AO is obligated to record specific findings at time of imposition of penalty: ITAT

August 29, 2020

++ Income arising from collection of maintenance charges is taxable as income from other sources and not as income from house property - expenses incurred on maintenance of property are deductible from such income: ITAT

++ Only that income which falls under the deemed provisions mentioned in the I-T Act, would be taxable under the deeming provisions - any other income not evisaged by the Act cannot be made taxable on notional or hypothetical basis: ITAT

++ Additions on account of unexplained cash credit are unwarranted when there is a verifiable trail relating to cash withdrawals: ITAT

++ Additions framed on account of bogus purchases are unsustainable if based solely on information sourced from the Investigation Wing: ITAT

August 28, 2020

++ Purchases made by assessee cannot be deemed to be bogus, if they tally with corresponding sales & stock figures in books of accounts: ITAT

++ A society must furnish details such as constitution of its members, funds received & their utilisation towards its stated charitable objectives, in order to be eligible for exemption: ITAT

++ Penalty proceedings u/s 271AAB can be initiated in respect of the whole of the sum which is admitted by the assessee pursuant to Search operation: ITAT

++ AO cannot pass penalty order u/s 271(1)(b), without first issuing SCN specifying the grounds for which penalty is being imposed: ITAT

August 27, 2020

++ Reasoned order must necessarily be passed while allowing fully or partly, any refund claimed by assessee: HC

++ Transfer of assessment to a new AO is unsustainable where no reasons are assigned for passing such order & assessee's objections to such transfer are overlooked: HC

++ Provisions u/s 139(3) pertaining to carry forward of business loss u/s 72(1) regarding filing of returns within time prescribed u/s 139(1), are also applicable to provisions relating to unabsorbed depreciation: ITAT

++ If share capital transactions are disclosed in returns filed, additions u/s 68 cannot be framed without any material incriminating the assessee, being found in Search operations: ITAT

++ Additions framed on account of unexplained cash deposits merit being reduced in quantum where some cash is utilised for meeting personal & household expenses: ITAT

August 26, 2020

++ Income tax - For purpose of capital gains tax u/s 45, date of award against land acquisition is to be construed as date of accrual of capital gains: SC Larger Bench

++ High Court's intervention is not warranted in cases involving factual disputes such as mis-match in PAN, which is caused due to confusion arising from the assessee having obtained multiple PANs: HC

++ Workstation in form of plant & machinery are inseparable from building - use of workstation & use of building are incidental - Section 56(2)(iii) is invokable here: ITAT

++ Additions framed in pursuance of Search assessment are not sustainable where no incriminating evidence is found in search proceedings: ITAT

++ Additions in respect of unsecured loans, framed on grounds that creditors did not respond to notices issued u/s 133(6) are not tenable, where assessee discharges initial burden of proving genuineness of transaction: ITAT

++ Disallowance of bogus purchases be restricted to profit element embedded in such purchases & entire quantum of purchases need not be disallowed: ITAT

August 25, 2020

++ Production of original assessment order, in process of filing appeal against it, cannot be dispensed with where no valid reasons are put forth to justify such request: HC

++ Search assessment u/s 153C is unwarranted, where no material implicating the assessee, is seized in course of Search operations conducted at third party's premises: ITAT

++ Where assessee declared higher rate of Gross Profit in subsequent AYs, the same figure cannot be adopted when estimating GP rate of current AY: ITAT

++ Additions framed on account of unexplained cash credits merit being sustained where share application money is received from a non-existent entity & where the recipient of such amount is also unable to explain its source: ITAT

++ Addition framed on grounds of bogus or unaccounted purchases made from grey market, merits being restricted to the profits embedded therein, where the corresponding sales are not doubted: ITAT

++ Non-deduction of TDS is insufficient to impose penalty u/s 271(1)(c) where genuineness of expenditure claimed or payments made, is not doubted - non-deduction of TDS is not tantamount to submitting inaccurate particulars of income or concealment of particulars of income: ITAT

August 24, 2020

++ Where assessee-company installs certain capital goods for use in business operations, it is not required to monitor the outcome of the use of such items: ITAT

++ Accrued income which was offered for taxation in earlier AYs, if received in current AY, cannot suffer tax once again: ITAT

++ Additions framed on the basis of presumption & conjecture, rather than on any cogent material, warrant being set aside: ITAT

August 22, 2020

++ Bogus purchases - quantum of additions reduced where Revenue relied solely on information sourced from DGIT (Inv) & did not carry out own inquiry, but where assessee too could not disprove such charges: ITAT

++ Additions framed u/s 68 are not sustainable where assessee discharged its onus by filing relevant documents proving genuineness of transaction & creditworthiness of shareholders: ITAT

++ Provisions of Section 43CA cannot be invoked where as per ready reckoner rate as on the date of agreement to sell property, there is no difference between consideration received & ready reckoner rate for the purpose of payment of stamp duty: ITAT

++ Where assessee is compensated by the State Govt for acquisiton of land coupled with TDR rights, it is unfair for Revenue to presume cash transaction & invoke provisions of Sec 50C: ITAT

August 21, 2020

++ Though cess is collected as part of income tax, the same does not render such cess to be taxable u/s 40a(ii): ITAT

++ Framing of disallowance without recording satisfaction as mandated u/s 14A(2), is not sustainable: ITAT

++ Assessment proceedings become non est where they are conducted in respect of a non existent entity: ITAT

++ Additions framed u/s 153A are not sustainable where any evidence incriminating the assessee is not found during search proceedings: ITAT

August 20, 2020

++ Reassessment proceedings initiated based on claims accepted by AO at the time of original assessment, amounts to be change of opinion in the absence of any new facts or material: ITAT

++ Bank guarantee commission, interest on TDS, interest on service tax and interest on professional tax cannot be considered for purpose of disallowance u/s 14A r.w. Rule 8D: ITAT

++ If TDS exemption certificate is valid throughout that FY in which there is no question of late deduction, then no interest is payable: ITAT

August 19, 2020

++ It is settled stance in law that penalty cannot be initiated for that provision of Section 271(1)(c), which is different from the provision for which penalty proceedings are initiated: ITAT

++ AO cannot record findings behind assessee's back & not provide any reasons behind the same - additions framed in such manner are unsustainable: ITAT

++ Bogus purchases - quantum of additions merits reduction where AO relies solely on information sourced from DGIT (Inv) & does not conduct own enquiry, but where assessee too fails to disprove such charges: ITAT

++ Benefit u/s 54EC cannot be withheld if sale proceeds are invested in notified bond within stipulated period: ITAT

August 18, 2020

++ Penalty is imposable only when there is a wilful attempt to evade payment of tax, such as making false entries in books of accounts: HC

++ Where revisionary order passed u/s 263 is set aside, then assessment order passed in consequence thereto merits being quashed as well: ITAT

August 17, 2020

++ Fact of the payer having deducted TDS cannot be taken as sole decisive factor to treat the amount paid to be the income of the recipient: ITAT

++ During reopening of assessment, AO cannot examine issues other than those in respect of which such proceedings were initiated: ITAT

++ A cooperative society not engaged in banking operations is not eligible for deduction u/s 80P(2)(a)(i): ITAT

++ AO cannnot ignore the reply of show cause notice by the assessee requesting time to file objection before AO: HC

August 14, 2020

++ AO is not expected to raise additional queries where already satisfied about admissibility of claim on the basis of materials & details supplied: ITAT

++ Addition framed for bogus purchases merits reduction in quantum, considering the peculiar nature of the assessee's business: ITAT

++ As balance amount of VAT & taxes payable is closing balance of the earlier AYs which is brought forward to current AY, such amounts cannot be disallowed u/s 43B: ITAT

August 13, 2020

++ Payments made by cheque are per se not sacrosanct enough to prove genuineness of purchases, where the surrounding circumstances are suspect: ITAT

++ In case of bogus purchases made from Hawala dealers, only the profit element embedded therein is to be taxed - estimation of such profit depends on facts & circumstances of each case: ITAT

++ Not substantiating a particular claim cannot be construed to be concealment of particulars of income, so as to invite penalty u/s 271(1)(c): ITAT

++ Additions framed solely based on information sourced from third parties, are not sustainable, where not backed by independent inquiry: ITAT

August 12, 2020

++ Salary paid to employees cannot be disallowed without brining anything on record to prove that such payments were bogus in nature: ITAT

++ Provisions of Section 36(1)(viia) specifically permit deduction in respect of provision for bad & doubtful debts made by assessee: ITAT

August 11, 2020

++ Completed assessments can be interfered with by the AO while making assessment u/s 153A only on the basis of some incriminating material unearthed during search & which was not produced during original assessment: ITAT

++ Consideration paid for purchase of property cannot be presumed based on unsubstantiated notings on loose paper seized during search operation: ITAT

++ Re-assessment notice is sustainable where the Revenue receives fresh material to infer escapement of income chargeable to tax: ITAT

++ Provisions of Section 50C cannot be invoked by disregarding the actual market value of the property on account of the litigation involved in respect of the property: ITAT

August 10, 2020

++ Completed assessment cannot be re-opened consequent to search operations, where no material incriminating the searched party is found during such proceedings: ITAT

++ Amount paid as commission cannot be disallowed for non-deduction of TDS u/s 40(a)(ia), where such amount paid is less than Rs 10000/-: ITAT

++ Revenue's appeal which is dismissed on grounds of low tax effect prescribed in relevant CBDT Circular, cannot be resurrected by re-categorizing the matter under a different Circular: ITAT

++ Delay in e-filing of appeal can be condoned where defects in it were removed & appeal is filed within a reasonable period being less than one month of being instructed to do so by CIT(A): ITAT

August 08, 2020

++ Expenses incurred by a hotel on renovation & repair of rooms, do not qualify as capital expenditure, where there is no guarantee that such changes would last very long & if the hotel is not being empowered to raise room tariff: HC

++ A crime investigation agency set up by the Government is not eligible for registration u/s 12AA & u/s 80G as its activities are not categorised as charitable in nature: ITAT

++ Disallowance u/s 40A(2)(b) can be made solely because the rent payment was made to a related person of the assessee company: ITAT

August 07, 2020

++ Provisions of Section 47(v) are invokable only where entire share capital of the subsidiary company is be held by the holding company: HC

++ Case warrants remand where CIT(A) sustains disallowance of provisions for warranty without recording findings on assessee's past records & whether such provision was made on a scientific basis: ITAT

++ Re-opening of assessment is invalidated where not based on any tangible evidence which leads to formation of belief of some taxable amount escaping assessment: ITAT

++ Expenses incurred on victory celebrations of certain politicians in elections & incurred on erecting their posters, is not allowable expenditure u/s 37: ITAT

August 06, 2020

++ Disallowance made u/s 14A r/e Rule 8D cannot exceed quantum of exempt income: ITAT

++ If an issue is already subject matter of enquiry during original assessment, then re-opening of assessment to revisit the same issue, would be based on change of opinion & unsustainable: ITAT

++ Expenses incurred on education of an employee, conditional upon the employee serving in the employer-company, is allowable as business expense, considering that the employer's business would benefit therefrom: ITAT

August 05, 2020

++ Order passed u/s 201(1) & 201(1A) is not sustainable where the officer who passed such order is not vested with jurisdiction over TDS matters: ITAT

++ Tax and interest liability computed by AO on a different sheet of paper, will form part of the assessment order where the AO approves such computation immediately or some time later: ITAT

++ Provision for costs on completed contracts based on identified & ascertained present liabilities, is allowed where based on technical assessments & projections of project managers, who are experts in their field: ITAT

++ Difficulty in activation of TAN & being informed about TDS liability only upon receiving demand notice, is sufficient plea to explain delay in filing returns: ITAT

++ Once assessee accepts the goods purchased from the railway as scrap & allows TCS, then such goods resold by assessee will not part take a different character: ITAT

August 04, 2020

++ Interests of the Revenue lie in collecting tax in a legal & justified manner - taxes collected in excess of what is payable cannot be retained or be treated as revenue: HC

++ Assets received on partition of property cannot ipso facto be treated as capital assets, where there is no provision in the I-T Act to such effect: HC

++ Deemed dividend can be assessed only in case of a person who is a shareholder of lender company & not in the hands of any other person: ITAT

++ It is apt for AO to verify assessee's claims of having incurred expenses in course of business, where assessee puts forth no corroborative evidence to justify such claim: ITAT

August 03, 2020

++ Advance made by subsidiary company to its holding company in course of business, for providing of corporate guarantee by the latter company, is not treatable as deemed dividend: HC

++ Cooperative society is entitled to deduction u/s 80P even where it is engaged in banking or financial activities: HC

++ Power of revision is rightly exercised, where original assessment order is erroneous and prejudicial to Revenue's interest, where AO failed to invoke provisions of Section 50C despite its applicability: ITAT

++ Search assessment u/s 153C cannot be intiated against an assessee based on material found during Search operations conducted at premises of a third party: ITAT

August 01, 2020

++ It is fit case for remand where assessee is unable to participate in proceedings due to the lockdown caused by the COVID pandemic: ITAT

++ Levy of fees u/s 234E is not permissible adjustment contemplated u/s 200A for the period prior to June 01, 2015: ITAT

++ Additions framed for unexplained cash credits are unsustainable where assessee adequately explains source of deposits & where Revenue fails to justuify rejection of evidence submitted by assessee: ITAT