TODAY'S CASE (DIRECT TAX)

January 30, 2021

++ I-T - Failure to establish identity of Creditor and genuineness of loan transaction attract addition u/s 68 : HC

++ Power of rectification of mistake can be exercised only when such mistake is an obvious & patent mistake which is not required to be established by argument or long drawn reasoning: ITAT

January 29, 2021

++ Registeration u/s 12AA cannot be denied to assessee merely because some of the objects of the assessee are religious in nature: ITAT

++ Exemption u/s 11-13 is allowable if applicant's registration u/s 12A is restored by the Tribunal & such order attains finality: ITAT

++ Payments towards PF & ESI must be allowed where made after due date in their parent Acts, but before due date for filing I-T return: ITAT

January 28, 2021

++ Deduction u/s 80P(2)(a)(i) cannot be denied solely because co-op society lent money to members undertaking non-agricultural work & if society received interest at rates at par with commercial banks: HC

++ Penalty cannot be survive if the accompanying additions have been quashed: HC

++ I-T - Benefit of Sec 80IAB is available on lease rental generated by SEZ developer: ITAT

++ Addition u/s 68 cannot be based solely on unserved notices when there is no other material to prove the accomodation entries: ITAT

++ Addition u/s 69A towards on-money receipts cannot be framed in company's hands when such receipt is already offered to tax in hands of it's director: ITAT

January 27, 2021

++ High Court is not empowered to test adequacy of opinion formed by AO u/s 132: HC

++ Expenses incurred on R&D do not qualify as capital expenses: HC

++ Disallowance of interest u/s 36(1)(iii) is not tenable where it is not proven that advances given to sister units were in fact in respect of business transactions: ITAT

++ Depreciation of revised WDV of assets aquired from holding company is allowed, where there is change in shareholding pattern: ITAT

January 25, 2021

++ I-T - Addition on account of revised capital gain under Sec 50C cannot be added to assessee's income, even when his revision petition is barred by limitation : HC

++ Grant of registration & issue of assessment or exemption u/s 11 are separate & distinct & process of registration u/s 12AA cannot be made an occasion for deciding upon eligibility for exemption u/s 11: ITAT

++ Assessment order is unsustainable where based solely on third party's statements taken behind assessee's back & without permitting cross examination of the deponent: ITAT

++ Appeal merits re-consideration where dismissed in limine without hearing the assessee: ITAT

++ Compensation received from municipality for cutting of trees to make way for electrical wires, forms part of assessee's trading operations where such trees were used for generating essential oils & sale thereof - Such compensation received qualifies as agricultural income & is non taxable: ITAT

January 23, 2021

++ I-T - Onus to prove expenditure and its connection with business carried on by taxpayer, would lie upon taxpayer himself: ITAT

++ I-T - Second proviso to Sec 40(a)(ia) is curative in nature and hence, benefit of such proviso is available to transactions made during F.Y 2011-12: ITAT

++ Addition u/s 68 on account of share capital & share premium cannot be made particularly merely because Revenue has failed to rebut documents produced by assessee: ITAT

++ When assessee files all necessary evidences on record before the AO, then failure of the creditor parties to appear, per se, cannot form the basis to invoke provisions u/s 68: ITAT

++ Disallowance of interest cannot be made on the basis of diversion of interest bearing capital for making investment in the capital of partnership firm: ITAT 

January 22, 2021

++ I-T - Sec 11 exemption to state cricket associations - matter be heard in Feb: SC LB

++ Pepsi Foods Ltd challenge to validity of Sec 254(2A) - hearing deferred to Feb 24: SC LB

++ Advance received for sale of land based on MOU cannot be treated as STCG merely because a registered sale deed had not been executed: ITAT

++ Deduction on shifting loss must be allowed, where RBI mandates booking such loss at time of shifting & recording of such shifted securities at lower of book value or market value as on the date of shifting: ITAT

++ Addition cannot be made on adhoc basis without pointing out any specific defect or instance of non-maintenance of vouchers: ITAT

++ Delay in filing appeal to CIT(A) merits being condoned, where caused due to shifting of registered office & factory: ITAT

++ Addition u/s 153C are unsustainable when the assessment is not abated on the date of search: ITAT

January 21, 2021

++ I-T - No TDS on roaming charges paid to other telecom operators: ITAT

++ I-T - A common order of approval cannot be passed by JCIT for passing assessment order for non-abated assessments u/s 153A for different assessment years : ITAT

++ Penalty u/s 271AAb cannot be levied even if there is no search u/s 132: ITAT

++ Deduction u/s 54EC & 54F can be granted when transfer of tenancy rights are assessed under head capital gains on grounds that no purchase price was paid for tenancy: ITAT

++ The Uniform Accounting Standard for revenue recognition for ARCs recognize upside income if a non-charitable trust suffers shortfall of recovery over purchase consideration: ITAT

January 20, 2021

++ I-T - Waiver of pre-deposit cannot be given merely because the assessee is a Government institution : HC

++ I-T - Cancellation of registration of State Cricket Associations due commercial nature of activities - matter posted for hearing in Feb: SC LB

++ I-T - Invoking machinery & process of High Court for settlement of personal scores of the petitioner is impermissible: HC

++ I-T - Addition on account of bogus purchases cannot be made when AO has also allowed benefit u/s 10AA on the same transaction: ITAT

++ I-T - No TDS liability can be attached to any payments without examining nature & characterstic of same: ITAT

++ I-T - Retrospective application of Sec 50C - Assessee seeks settlement under VsV Scheme - Competent Authority directed to consider assessee's application: HC

++ I-T - Addition on account of bogus purchases cannot be deleted merely because gross profit would be higher the purchases of the material from non-existing person: HC

++ Deduction of Education Cess and SHEC is allowable while computing income chargeable under the head profits and gains of business or profession: ITAT

++ Penalty u/s 271(1)(c) not imposable without mentioning exact cause for imposing the same: ITAT

++ Provisions of section 40(a)(ia) are inapplicable to cases where the assessee has deducted TDS u/s 194C instead of 194J: ITAT

January 19, 2021

++ I-T - Law does not debar employment of relatives or children of shareholder or owner if they are otherwise duly qualified to hold positions: ITAT

++ Assessee is entitled to the project completion method even in the absence of maintenance of regular books of accounts: HC

++ Even 90% of returned income can be disallowed, where the Managing Director had secured the business of the company in foreign countries: HC

++ I-T - Reopening of assessment cannot be made merely on incorporation of interest on partners capital and remuneration:HC

++ I-T - Deduction u/s 35(2AB) for in-housing Scientific Research and development expenditure can be allowed when the DSIR does not approve of such expenditure in the Form 3CL: ITAT

++ Penalty proceedings are invalid where specific charges for levying penalty are not stated: ITAT

++ Re-opening of assessment is invalid, where based on information which does not pertain to the assessee & involving wrong presumptions of AO: ITAT

++ Depreciation on Xerox machine has to be allowed @ 60%, more so where the same is an integal part of a computer system: ITAT

++ An educational institution can be treated as charitable u/s 2(15) if its predominant objective is education and not to earn profits: ITAT

January 18, 2021

++ I-T - Due dates for filing of audit reports & ITRs cannot be delayed indefinitely, on whims & fancies of taxpayers: HC

++ Term 'agreement' in Sec 56(2)(vii)(b) does not specify any document with title agreement - Thereby, date of transfer of title of immovable property is immaterial for purpose of Sec 56(2)(vii)(b): ITAT

++ Assessee provides vehicles to Govt agencies engaged in solid waste management system - Deduction u/s 80IA allowed thereon: ITAT

++ Re-assessment - assessee baldly stated to not have received notice without rebutting Revenue's postage pre-paid, proving proper service of notice at assessee's correct address - Proceedings upheld: ITAT

++ Unabsorbed short term brought forward capital loss can be set off against the income arising in current AY: ITAT

++ Unexplained investment - Additions framed based on bills found in Search operation at third party premises are upheld, as assessee accepted bill in its name: ITAT

January 16, 2021

++ Income tax - CBDT directed to pass reasoned order on why due dates cannot be extended: HC

++ An amount which has already been adjusted with dividend amount distributed by company as per Section 2(22)(3), must be excluded from deemed dividend u/s 2(22)(e): ITAT

++ Disallowance framed by the AO are not sustainable where no reasons are assigned for the same & where such disallowances are based on surmises alone: ITAT

++ Additions on account of accrued interest are not tenable when no money is received by way of interest or dividend nor the investment amount was returned: ITAT

++ Search assessment cannot be resorted to where no material incriminating the assessee has been seized in course of Search operations: ITAT

January 15, 2021

++ When computing MAT credit u/s 115JAA, the tax portion must include surcharge and Education Cess: ITAT

++ Single incident of non-compliance with notice issued u/s 142(1) is not compelling reason to impose penalty u/s 271(1)(b): ITAT

++ AO conducted best of judgment assessment due to non availability of relevant documentary evidence, which the assessee was unable to submit due to being incapacitated by illness - Case remanded - Assessee to pay costs for inconvenience caused to Department: ITAT

++ It is case for remand where CIT A passes ex parte order without hearing assessee, on account of assessee's non-appearance on date of hearing: ITAT

January 14, 2021

++ Income tax - No need to intervene if CBDT has considered representations and taken a decision in its wisdom not to extend due dates for filings: HC

++ An amount earlier treated as loan in books of account & repaid as such, cannot be treated as a gift - Where husband treats loan given to wife as gift, then loans given to unrelated parties cannot similarly be treated as gift: ITAT

++ Where contribution to EPF is not made on or before due date prescribed in Explanation to Section 36(1)(va), then deduction of such amount is not allowable: ITAT

++ Non-consideration of Supreme Court judgment constitutes mistake apparent on record within the meaning of Section 254(2): ITAT

++ Assessment order cannot be branded as erroneous by the CIT merely because it has been worded differently or more elaborately: ITAT

++ Power of revision is erroneously exercised where the CIT does not examine the issues at hand: ITAT

January 13, 2021

++ Where assessee's business is accepted by AO by accepting assessee's returns of income, then AO cannot doubt source of cash income generated from such business: ITAT

++ Bogus purchases - Additions are upheld where assessee does not establish genuineness of purchases & where notices u/s 133(6) elicit no response: ITAT

++ Penalty cannot be imposed solely due to deduction benefit being claimed under mistaken belief: ITAT

++ Re-assessment cannot be resorted to based on discrepancy pointed out in audit objection, when the appeal against original assessment is already pending before CIT(A): ITAT

January 12, 2021

++ I-T - Loans given by cooperative credit societies to nominal members qualify for purpose of deduction u/s 80P(2)(a)(i) of I-T Act: SC LB

++ Registration of a Society u/s 12A is deemed to be allowed if no decision is taken on application for 12 years, though it should have been decided within the period of 6 months: HC

++ Provisions of Section 50C of the Act do not apply onto transfer of leasehold right in plot of land: ITAT

++ Expense incurred on attending training courses for acquiring knowledge & technical expertise for better management of the process, is directly connected to business of assessee & is to be allowed as business expenses: ITAT

++ Where property purchased in joint ownership is transferred by joint owners, any profit or loss therefrom is to be shared by joint owners & not in the hands of one person to exclusion of the other: ITAT

January 11, 2021

++ Subsidy received by assessee under a Government Scheme has to be treated as capital receipt and is not taxable: ITAT

++ Disallowance u/r 8D is to be computed after considering assessee's accounts & only if method adopted by assessee is found to be unsatisfactory: ITAT

++ Donation made by assessee to an approved Trust cannot be denied deduction, where registration granted u/s 35(1)(ii)(iii) to the trust was subsequently withdrawn: ITAT

January 09, 2021

++ Powers of CBDT beneficial in nature; must be exercised for proper administration of fiscal laws without causing undue hardship to taxpayers: Guj HC

++ Guj HC directs CBDT to consider extending due date for ITR & TAR filing; fresh hearing of petition seeking extension on Jan 12

++ Re-assessment proceedings cannot be sustained if based solely on report of the Investigation Wing & not involving any independent application of mind by the AO: ITAT

++ Provisions of Section 40A(3) are applicable on payments made for acquiring stock-in-trade & other material & cannot be applied onto payments made for procuring agricultural produce: ITAT

++ Additions u/s 68 are not tenable where assessee discharges onus of establishing identity & creditworthiness of parties & genuineness of transactions: ITAT

January 08, 2021

++ Late Fee cannot be charged in respect of TDS returns filed for period prior to introduction of Section 200A which introduced levy of such fee: ITAT

++ Re-assessment proceedings are upheld where AO obtains tangible information pointing towards escapement of income from taxation & when there is proper application of mind by the AO when commencing proceedings: ITAT

++ Bogus purchases supposedly made from the grey market, need not be disallowed in entirety & additions warrant being framed only in respect of the profit element embedded therein: ITAT

++ Penalty u/s 271(l)(c) cannot be levied when both the charges inaccurate particulars of income and concealment of income are mentioned in the penalty notice: ITAT

January 07, 2021

++ PCIT cannot excersise revisionary power u/s 263 solely due to difference of opinion with the AO: ITAT

++ Cash credit loan can assessed as unexplained cash credit because income source of the person giving the loan is not fully explained: ITAT

++ Surplus in one AY does not per se change the character of the trust to a business or profit making entity which is otherwise a charitable trust advancing work of general public utility: ITAT

January 06, 2021

++ Excess salary refunded as per the provisions of law cannot be added to the taxable to income of the assessee: ITAT

++ Addition u/s 68 is not tenable where Revenue omitted to conduct enquiry into genuineness of transactions: ITAT

++ Disallowance cannot be made by AO solely due to dis-agreement with accounting method adopted by assessee & which was earlier accepted by Revenue: ITAT

++ Addition on account of unaccounted investment cannot be framed based on estimation notings found during search operation: ITAT

January 05, 2021

++ Addition on account of unaccounted cash seized during the search operation fund cannot be added to assessee's income in absence of corrobrative evidence: ITAT

++ Penalty u/s 271(1)(c) cannot be imposed where additions are framed on estimate basis: ITAT

January 04, 2021

++ Interest income earned from money lending business is taxable under the head Business Income: ITAT

++ Recognition u/s 80G(5)(vi) cannot be denied solely on grounds that financial statements for some period were not submitted, when in fact assessee is already registered u/s 12AA: ITAT

January 02, 2021

++ Review of Tribunal's order under the garb of rectification of mistake, is not permissible in law: ITAT

++ Amounts received by manufacturer from State Government as Industrial Promotion Assistance, qualifies as capital receipt: ITAT

January 01, 2021

++ Revenue cannot compute tax liability on a broad and generalized basis, by rejecting estimates provided by assessee & in ignorance of mandate of Rule 28AA: HC

++ Interest paid before commencement of production by a company on amounts borrowed for the acquisition and installation of plant and machinery cannot be taxed as income u/s 56: HC

++ Dismissal of appeal on technical grounds, vide ex parte order passed without hearing the assessee, is unsustainable: ITAT

++ Exemption u/s 12AA is to be allowed to a trust engaged in imparting education, where the claimant had put forth evidence of its compliance with the Right to Education norms, but the same was ignored by the CIT(E): ITAT

++ Penalty u/s 271B cannot be imposed for not maintaining books of account: ITAT