News Update

PM, V-P to hold straight talk with All States’ Governors on worsening COVID-19 situationJustice Chandrachud inaugurates portals for judgements, e-filing 3.0Indian industrial output contracts 3.6% in FebUnidentified gunman shoots dead oner person & seriously injures another in Paris hospitalMarch retail inflation rises to 5.52%GST - 'Air Springs' act as shock absorber designed specifically for Motor Vehicles - rightly classifiable under CTH 8708 attracting @28% and not under CTH 4016 @18%: AARGST - 'Polypropylene Non-woven Bags' is classifiable under HSN 3923 at 18% and not at 5% under 6305: AARIndian regulator grants nod to Russian Sputnik V vaccineGST - 'Wheat' imported is destined to importer's factory for further processing and it is not to the primary market - Therefore, services of loading, unloading, packing, storage or warehousing is not entitled to exemption under 12/2017-CTR: AARMassive blaze at Russia’s historic St Petersburg factory; dozens evacuatedST - SVLDRS - Disagreement over estimated amount - No specific record made available by Revenue that communication of hearing was sent on 'email id' or via 'SMS' - SVLDRS-3 set aside: HCCus - Issue is purely contractual between petitioner, on the one hand and private respondents on the other - In such a case, it would not be open to the Writ Court to issue any Mandamus: HCPresident Kovind discharged from AIIMS after bypass surgeryGST - All stakeholders are treading in the new GST regime with uncertainties as the path is comparatively unfamiliar, unmarked and unpaved - Order of detention is an example of such uncertainty: HCSoaring COVID-19 cases - Drug Inspectors to monitor stocks of RemdesivirVAT - Bill of Entry cannot be regarded as title to goods as per provisions of Customs Act: HCI-T - Provisions of sec. 2(22)(e) are not applicable when assessee is not a shareholder: ITATRising COVID-19 cases - India embargoes export of Remdesivir and its API
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April 12, 2021

++ I-T - Expenditure accrued but not actually incurred by taxpayer during year merits to be allowed, if taxpayer follows mercantile system of accounting: HC

++ I-T - Deduction u/s 10A and 10B can be given particularly when concerned unit is formed by splitting up or reconstruction of business already in existence: HC

++ I-T - Society registered u/s 12AA but not registered to any board imparting education is not entitled to benefit of sec. 10(23C)(iiiab): ITAT

++ I-T - For purposes of sec. 69C, failure on part of assessee to prove its claim would lead to rejection of disallowance thereunder: ITAT

++ I-T - When assessee parks surplus fund temporarily by charging interest more than prevailing rate of interest on FDR, interest so charged cannot be held unreasonable: ITAT

++ I-T - Provisions of sec. 2(22)(e) are not applicable when assessee is not a shareholder: ITAT

++ I-T - Direction for apportionment of goodwill between assessee and its parent company, affiliates and subsidiaries without any material or basis is contrary to law: ITAT

++ I-T - At stage of issue of notice u/s 148, AO should only have reason to believe not established fact of escapement of income: ITAT

++ I-T - Once CIT(E) is satisfied about objects and genuineness of a trust's activities and sufficient compliance of other applicable law, provisions of secs. 11 and 12 shall apply from AY following FY in which application for grant of registration u/s 12A and u/s 80G(5)(vi) is made: ITAT

April 10, 2021

++ I-T - Quasi-judicial authority is statutorily obliged to pass reasoned orders - rejection of Stay application is unsustainable where no reasons are recorded for arriving at such a conclusion: HC

++ I-T - Delay in filing returns for the relevant AY can be condoned where sufficient reason is furnished for the same: HC

++ I-T - Interest accrued on corpus fund must be added in corpus fund only and cannot be treated as assessee's income: ITAT

++ I-T - Merely because AO adopts incorrect method for working out disallowance, entire disallowance does not become untenable in law: ITAT

April 09, 2021

++ I-T - Income accrued on loans advanced by investment company, is not be liable to be assessed under provisions of Interest Tax Act: ITAT Third Member

++ I-T - AO has no jurisdiction to enquire source of income earned overseas, if he is satisfied that such source for acquisition of property represents remittance from abroad from taxpayer himself: ITAT

++ Making a wrong claim is not at par with concealment or giving of inaccurate information that may call for levy of penalty u/s 271(1)(c): ITAT

++ When interest expenditure is allowed u/s 36(1)(iii), only net interest amount can be taxed: ITAT

++ Order passed by AO without conducting enquiry and recording his satisfaction is deemed to be erroneous and prejudicial to interest of Revenue for purposes of Sec 263: ITAT

++ Deduction u/s 80IA can be claimed in respect of income from ICDs: ITAT

++ In absence of any specific inaccuracies or shortcomings, AO cannot substitute his own value in place of value determined either on DCF method or NAV method: ITAT

April 08, 2021

++ I-T - Amalgamation reserve being capital in nature, cannot be treated as falling u/s 28(iv): HC

++ Re-opening of assessment is unwarranted when there is no failure on part of assessee to make full & true disclosure of material facts necessary for assessment: HC

++ Trust cannot be denied exemption u/s 11, where its registration certificate is lost in natural calamity of floods, due to which assessee is unable to present same before Revenue: HC

++ In come is to be taxed when it is actually received, if assessee follows project completion method: ITAT

++ Strategic investment is subject to disallowance u/s 14A: ITAT

April 07, 2021

++ Third proviso to Sec 254(2A) does not permit extension of stay order beyond 365 days even if taxpayer was not responsible for delay in hearing: SC Larger Bench

++ Power of revision is not to be exercised where the original assessment order is prejudicial to Revenue's interests, but is not erroneous: HC

++ Power of revision u/s 263 is rightly exercised where the AO allows deduction u/s 80P to assessee without making any enquiry or proper application of mind: HC

++ Carried forward MAT credit of amalgamating company can be availed by amalgamated company: ITAT

April 06, 2021

++ If a transaction is found to be bogus, based on subsequent information, then disclosure of same during original assessment is not disclosure of true & full facts: HC

++ Loan taken from bank cannot be treated as unexplained money: ITAT

++ TDS u/s 194H need not be deducted in respect of a transaction occurring between two persons on principal to principal basis : ITAT

++ Fasli Khasra is official document prepared by Revenue based on physical inspection of agricultural land & so a presumption of truth is attached to such document: ITAT

++ Assessee is eligible for deduction u/s 54F in respect of residential house property purchased in name of spouse : ITAT

April 05, 2021

++ I-T - Only those investments, which yield exempt income can be considered for arriving at average value of investments to compute the disallowance u/s 14A read with Rule 8D: ITAT

++ I-T - Since registration of institution u/s 12AA is cancelled after making donation by assessee, disallowance u/s 35(1)(ii) cannot be made on ground that institution engaged in laundering of unaccounted money: ITAT

++ I-T - Re-opening of assessment is bad in law as reasons recorded for re-opening of assessment does not show that there is failure on part of assessee to truly and fully disclose material facts necessary for the assessment: ITAT

++ I-T - As per proviso to sec. 50 , value of property determined for purpose of stamp value at time of property's registration shall not be taken as sale consideration for working out capital gain: ITAT

++ I-T - Expenses paid to relatives can be disallowed, if AO of opinion that such expenditure is excessive having regard to fair market of goods, services or facilities for which payment is made: ITAT

April 03, 2021

++ I-T - Benefit u/s 11(4A) can be allowed to Trust only upon compliance with twin conditions, namely any Institution or Trust being profits and gains of business: HC

++ Excess consumption of electricity resulting in suppressed production has no basis for computing alleged suppressed production on estimation: ITAT

++ Additions u/s 68 for assessee's failure to establish genuineness & creditworthiness of loan creditors are unsustainable, where additional evidence filed by assessee is not considered: ITAT

++ Search assessment u/s 153A is invalid if no material incriminating the assessee is found in course of Search operations: ITAT

April 02, 2021

++ I-T - A cricket association which qualifies as charitable institution, cannot be denied exemption u/s 11 & 12 on account of it having earned incidental profit from sale of match tickets: HC

++ I-T - Scope of Sec 254(2) is restricted to rectify any mistake in order apparent on face of it and would not extend to review such order: HC

++ Order of cancellation of registration granted u/s 12A must be held to be effective from date on which hearing on first show-cause notice was concluded such notice was formally acquiesced by trust: ITAT

++ I-T - Re-opening of assessment is unsustainable where PCIT sanctions notice u/s 148 without ensuring that the AO records reasons for such exercise, after due application of mind: ITAT

++ I-T - Expenditure incurred out of corpus funds can't be claimed as application of income: ITAT

++ I-T - Benefit of indexed cost of improvement can only be claimed where cost has been actually incurred by taxpayer till date of sale: ITAT

++ I-T - If there is repeated non-compliance by AO to letters issued by CIT(A), then it is open to CIT(A) to decide appeal on basis of materials available on record before him: ITAT

++ I-T - AO has to identify expenditure incurred by taxpayer which is directly attributable to earning of exempt income: ITAT

++ I-T - No disallowance can be made in highly debatable issue by conducting rectification proceedings u/s 154: ITAT

April 01, 2021

++ I-T - SCN can be questioned before Writ Court provided, taxpayer is able to establish that such notice was issued without any jurisdictional fact in existence: HC

++ I-T - AO has no jurisdiction to initiate reopening proceedings on mere change of opinion: HC

++ I-T - Sale proceeds of certified emission reduction credit should be treated as capital receipt: HC

++ I-T - If AO has not applied mind while recording reasons that income has escaped assessment and solely relied on information from Investigation Wing, then reopening is not permitted: HC

++ I-T - If Form 10 is filed within the stipulated time and during the course of assessment proceedings before the AO, there is no bar prohibiting the assessee from modifying the figure in the application : HC

++ I-T - Penalty u/s 271(1)(b) need not imposed if AO is satisfied with compliances made by assessee & where no additions are made to assessee's income: ITAT

++ I-T -It is fit case for remand where the assessee is not provided with sufficient opportunity of hearing before disposal of appeal: ITAT

++ I-T - Onus is on assessee to prove that no interest bearing funds were utilized for investment in these assets which yielded exempted income: ITAT

++ I-T- If sales are not in doubt then only profit element of bogus purchases can be brought to tax: ITAT

++ I-T - Interest paid by assessee to related parties @ 15% can't be considered to be excessive or unreasonable having regard to the fair market value of the goods, services or facility for which payment is made: ITAT

++ I-T - Only profit element from inflation of expenses is to be taxed and not the entire amount following direction issued by Settlement Commission in assessee's group company similar cases: ITAT

++ I-T - Assessee engaged in developing infrastructural facility is entitled to benefits of deduction u/s 80IA(4): ITAT