TODAY'S CASE (DIRECT TAX)

December 31, 2020

++ Settlement Commission assumes exclusive jurisdiction to exercise the powers & perform functions of ITO in relation to the case from date on which application is made & until order u/s 245D (4) is passed: ITAT

++ Notices issued u/s 200A for computation and intimation of late fee payment u/s 234E for delay in filing TDS statements, for period prior to 01.06.2015 are invalid: ITAT

++ Power of revision is rightly exercised where issue of taxability of ALV of unsold flats held by assessee as builder & developer, was not considered by AO during original assessment: ITAT

++ Minor mistakes, typological errors or absence of stock registers do not ipso facto amount to incompleteness of accounts as per Section 145(3): ITAT

++ Depreciation on newly established factory premises cannot be availed, without any conclusive evidence that the factory premises and plant and machineries were either put to use or ready to use: ITAT

December 30, 2020

++ Entire quantum of bogus purchases made from the grey market, need not be disallowed, when the sales corresponding to such purchases are not doubted: ITAT

++ Interest u/s 220(2) is chargeable from the date of default of fresh demand notice issued after the fresh assessment made consequent to the orders of the appellate authorities: ITAT

++ Power of revision u/s 263 is rightly exercised where the AO omits to examine the merits of the assessee's claim for provision of warranty expenses & does not conduct any enquiry on such issue: ITAT

December 29, 2020

++ Penalty u/s 271(1)(c) is unsustainable when AO changed grounds for levy of penalty from furnishing inaccurate particulars of income to concealment of income: ITAT

++ Exemption u/s 10(23C)(vi) cannot be denied on grounds registration granted to assessee by the CCIT had been cancelled: ITAT

++ Disallwance of SPV Charges as Business expenditure cannot be sustained when the same is penal in nature: ITAT

December 28, 2020

++ No penalty is imposable if any claim is made in good faith & without any intent to conceal particulars of income & furnish inaccurate particulars thereof: HC

++ Re-assessment proceedings initiated without service of SCN to assessee, are unsustainable: ITAT

++ Order passed u/s 263 is unsustainable, where CIT does not render specific findings as to what is erroneous in the assessment order & what aspect must be re-examined: ITAT

++ Unless the initial onus cast on assessee is discharged, such burden doesn't shift on to Revenue to prove otherwise & non-issuance of summons per se does not bolster assessee's case: ITAT

December 26, 2020

++ Primary onus lies upon the assessee to justify based on the documentary evidence that expenditure claimed by it were not incurred in connection with exempted income: ITAT

++ Additions for bogus purchases made from dubious seller, need not be framed to extent of the entire quantity of such purchases, where corresponding sales are not doubted: ITAT

++ Re-opening of assessment u/s 147 based on an issue which was examined during original assessment, qualifies as change of opinion & is impermissible in law: ITAT

December 24, 2020

++ Additions on account of bogus purchases cannot be made without rejecting the books of accounts: ITAT

++ That assessee is engaged in real estate business & in buying/selling land for profit, is per se insufficient to infer that profit from sale of agricultural land is taxable as Income from Business or Profession: ITAT

++ Re-assessment cannot be resorted to after passage of four years from relevant AY, where no new grounds exist to justify such proceedings: ITAT

++ A co-operative society, mainly engaged in providing banking business to its member need not file ITR so as to be eligible for deduction u/s 80P: ITAT

December 23, 2020

++ I-T liability on compensation awarded by MACT - Petitioner not being aggrieved party & not having right to any such award from MACT, does not have locus standi to maintain present petition: HC

++ Re-assessment is invalid if grounds for resorting to such proceedings, are not supplied to assessee: ITAT

++ Power of revision need not be exercised where relevant evidence furnished by assessee during original assessment, is already examined by AO: ITAT

++ Interest subsidy received under Technology Upgradation Fund Scheme for Textile and Jute Industries qualifies as capital receipt: ITAT

December 22, 2020

++ Addition on account of unexplained investment is not sustainable when assessee furnishes relevant details such as bank statements, ITRs & audit returns: ITAT

++ Forfeited amount for failed sale transaction cannot be added to the assessee's income because it does not appear in books of accounts of assessee: ITAT

December 21, 2020

++ Net loss incurred in the process of recovery of money loaned, merits being allowed as business loss: ITAT

++ Expenses incurred by pharmaceutical company on giving gifts & freebies to doctors in order to promote medicines manufactured by it, is allowable as business expense u/s 37: ITAT

++ Penalty u/s 271(1)(c) cannot be imposed where additions have been framed on the basis of estimation: ITAT

++ Stamp duty paid for unregistered lease agreement does not qualify for depreciation as an 'intangible asset' u/s 32(1)(ii): ITAT

++ Non-acceptance of any plea raised by an assessee is not tantamount to a mistake apparent on record: ITAT

December 19, 2020

++ That the CIT differs with the view taken by AO, after due examination of records by the latter, does not make the assessment order erroneous - power of revision need not be exercised: ITAT

++ Nomenclature in a particular manner in a balance sheet will per se not be conclusive for determination of nature of transaction: ITAT

++ Where transactions between shareholder & company create mutual benefits & obligations, then any sum received by the former is not deemed dividend: ITAT

December 18, 2020

++ Tribunal cannot dismiss an appeal in limine for non-appearance of the assessee & it is obliged to decide upon the appeal on merits regardless of the assessee or its representative being present: HC

++ Search assessment cannot be resorted to where no material incriminating the assessee is found in course of search operations: HC

++ Provisions of Section 143(1) & 143(3) are different from each other & so the nature of assessments under both provisions are different as well: HC

++ SCN proposing penalty is invalid if it omits to specify exact charges against assessee: ITAT

++ A cooperative bank is essentially a cooperative society and both are eligible for deduction u/s 80P: ITAT

December 17, 2020

++ Penalty u/s 271(1)(c) imposed on basis of unproven claims of purchases, is not sustainable: ITAT

++ Sales tax subsidy received as per State Govt. Scheme is to be treated as capital receipts: ITAT

++ Assessee repaid loans through banking channel & reflected such transaction in Ledger a/c - additions framed u/s 68 are unwarranted: ITAT

++ Power of revision u/s 263 is rightly exercised where AO does not make due enquiry when allowing certain claims raised by assessee - assessment order so passed is erroneous & prejudicial to Revenue's interests: ITAT

++ Deduction u/s 80IA cannot be denied if documents submitted by claimant establish it to be a developer & not works contractor: ITAT

December 16, 2020

++ If no incriminating material is found during Search operations, no addition is to be made in exercise of power u/s 153A: ITAT

++ As assessee cannot be entitled to claim of deduction of bad debt for the same loan/advances twice, one u/s 36(1)(vii) & other u/s 36(1)(viia) of the Act: ITAT

++ Environmental Protection Fees cannot be equated to consideration paid for acquiring mining rights: ITAT

++ Section 250(6) obligates the CIT(A) to pass order stating points for determination, the decision thereon & the rationale behind such decision: ITAT

December 15, 2020

++ That assessee did not maintain stock register with quality-wise details in current AY is invalid grounds to reject valuation method consistently followed in past AYs: ITAT

++ Additions framed to assessee's income are unsustainable where based solely on information recovered from search operations at third-party premises: ITAT

++ Deduction is allowed in respect of donation given to a charitable institution even if its approval is subsequently withdrawn: ITAT

++ Additions framed for undisclosed investment in stock & profit from sale of undisclosed stock, are invalid, if based solely on orders passed by the CESTAT in respect of assessee: ITAT

December 14, 2020

++ If the object of a trust is partly religious & partly charitable, it is entitled to exemption u/s 11(1)(a) & for registration u/s 12AA, where its income or corpus is not utilised for non-religious or non-charitable purposes: HC

++ Assessment order passed without approval u/s 153D & not involving due application of mind, is invalidated: ITAT

++ Provisions of Section 194H do not apply to principal-to-principal transactions between a company manufacturing medicines & the stockist of such company: ITAT

++ Where an assessee is illiterate, it becomes the duty of the I-T authorities to assist the assessee in tax compliance by giving correct advice & following best practices as per principles of natural justice: ITAT

December 12, 2020

++ Suspicion due to mis-match in postal address of a party summoned u/s 131, is per se insufficient to justify disallowance of the entire payment made to such party: ITAT

++ Additions u/s 68 cannot be framed solely because noticees u/s 133(6) did not respond to such notices issued & where assessee otherwise proved creditworthiness of such parties: ITAT

December 11, 2020

++ Penalty notice issued u/s 271(1)(c) is invalidated if it omits to specify the sub-section being invoked to commence such proceedings: ITAT

++ An assessee cannot altogether claim depreciation on the business asset as well as income from the same business asset as income from the house property: ITAT

++ Penalty u/s 271(1)(c) is upheld where assessee fails to disprove charges of concealment of income & furnishing inaccurate particulars & does not cooperate in assessment proceedings: ITAT

++ Obtaining prior approval of PCIT is mandatory precondition for AO to widen the scope of scrutiny, if the case is selected for limited scrutiny under CASS: ITAT

++ Declaration of asssessee's income in statement recorded u/s 132(4), cannot ipso facto be treated as undisclosed income for invoking provisions of Section 271AAB: ITAT

December 10, 2020

++ Income of a charitable trust is exempt from tax to the extent applied for charitable purpose: HC

++ Re-assessment order is void ab initio if notice u/s 148 is not served in terms of Section 282 at the assessee's correct address, within reasonable period of time: ITAT

++ Provisions of Section 2(22)(e) are applicable in respect of a shareholder receiving any loan from a company, where such loan is adjusted in the end of the relevant AY: ITAT

++ Provisions of Section 52(2) do not apply onto genuine transactions of sale of property, unless it is proven that consideration reflected in sale deed is under-states: ITAT

++ Penalty u/s 271A is not leviable if reasonable cause is shown to exist behind that particular default which invited penalty proceedings: ITAT

December 09, 2020

++ Additions framed based on documents retrieved from premises of a third party are unsustainable, where veracity of such documents is disproved in the assessment of such third party: ITAT

++ Re-assessment notice is invalid, if issued in name of a non-existent entity which has since been amalgamated with another company & where fact of such merger was known to AO: ITAT

++ Addition in respect of undisclosed sales is to be restricted only to profit embedded, where purchases corresponding to such sales have been recorded in books of accounts: ITAT

++ Payments made by company to its sister units cannot baldly be deemed to be payment against purchases, without there being evidence of any purchases: ITAT

December 08, 2020

++ An assessee is not at liberty to change the head of certain income, as per own will or convenience: ITAT

++ Power of revision cannot be exercised based solely on suspicions harbored by the CIT: ITAT

++ Development rights held by a civil contractor, qualify as business assets and not capital assets: ITAT

++ Revenue is required to conduct specific enquiry as regards the facts stated by the assessee before imposing penalty u/s 271F: ITAT

++ If there is failure on part of the AO to make an enquiry on the issue which calls for an enquiry, that renders the order of assessment erroneous and prejudicial to the interests of Revenue: ITAT

December 07, 2020

++ Power of revision need not be exercised solely due to CIT's difference of opinion with AO & where the AO took one of several views possible regarding the relevant issue: HC

++ Re-assessment is not sustainable if no material exists for AO to form reasonable belief of taxable income having evaded assessment: ITAT

++ Intimation regarding late fee filing u/s 234E cannot be issued u/s 200A(3) prospectively if return is filed belatedly but before insertion of section 200A(1)(c): ITAT

++ Trust or society seeking registration u/s 12AA is not bound to furnish documents in original, for purpose of verification - certified copies satisfy mandate of Rule 17A: ITAT

December 05, 2020

++ It is fit case for remand for reconsideration of additional evidence, where assessee is unable to furnish the same before the AO, due to the assessee's accounting staff having left it's employment: ITAT

++ Income arising from export cannot be divested from the export business of the undertaking for the purposes of Section 10A/10B: ITAT

December 04, 2020

++ Past history of assessee is a proper & reasonable basis for estimation of income of assessee when books of account get rejected u/s 145(3): ITAT

++ Goodwill is covered by the expression 'any other business or commercial right of a similar nature' in Explanation 3(b) to Sec 32: ITAT

++ Re-opening of assessment is unsustainable where AO does not dispose off the assessee's objections to such proceedings, through a speaking order: ITAT

++ Quantum of income declared by share applicants, is per se insufficient criteria to ascertain their credit-worthiness: ITAT

++ Where AO accepts assessee's explanations in respect of an issue without making any enquiry or examining evidence, any order so passed is erroneous & prejudicial to Revenue's interests - revisionary powers rightly exercised: ITAT

December 03, 2020

++ Life insurance policy is not property which can be transferred in the mode and manner prescribed u/s 2(47) of the I-T Act: ITAT

++ Re-assessment notice is quashed if mandatory requirement of recording reasons for resorting to such proceedings, is not complied with: ITAT

++ CIT(E) is bound to assess only the genuine charitable activities proposed in line with objects of the Trust and not what the trust has actually done: ITAT

++ If the AO has not verified facts of TDS materials filed on record, such lapse by the AO in original assessment is no grounds to re-open assessment: ITAT

December 02, 2020

++ Duty demand based on statements recorded from witness, while assessee was not permitted to cross examine such witness - case remanded for re-hearing: HC

++ Assessment order is non est if passed in name of non-existent merged company, despite having knowledge of its merger: ITAT

++ No addition for differences as undisclosed turnover can be made if entire transaction takes place through banking channel & bills of entry & invoices are available for verification: ITAT

++ Once protective addition is made by AO in hands of firm on basis of statements of partner which was later on retracted, then AO cannot make substantive addition of same amount in hands of partner: ITAT

December 01, 2020

++ Admission of additional evidences by CIT(A) without providing an opportunity of being heard to the AO while finalising the Block Assessment, is invalid: HC

++ Where a research project relating to scientific development, has received approval as per Rules 18D & 18DA of the I-T Rules, it is not open to the AO to question the approval so granted: HC

++ Re-assessment proceedings are invalid if notice u/s 143(2) is issued beyond the prescribed statutory limit: ITAT

++ Expenditure incurred on replacement of Jigs and fixtures qualifes as revenue expenditure: ITAT