News Update

Untitled Document


June 12, 2021

++ I-T - In the absence of enabling provisions u/s 200A of the Act, such levy of late fee is not valid: ITAT

++ I-T - additions towards Fringe Benefit Tax merit being framed in respect of expenditure incurred towards electricity consumption in residential premises of the assessee's employees: ITAT

++ I-T - Penalty notice u/s 271(1)(c) is invalid where non-applicable sub-section has not been struck off & the applicable sub-section is not mentioned: ITAT

++ I-T - Revisionary power cannot be exercised based on doubt alone, where otherwise no deficiency is found in original assessment order: ITAT

June 11, 2021

++ I-T - Addition u/s 68 cannot be made solely based on statement recorded during course of survey proceedings: ITAT

++ I-T - When incorrect, wrong and non-existing reasons are recorded by AO for reopening of assessment, such reopening must be set aside: ITAT

++ I-T - Non-service of summons issued to some of the creditors or their failure to appear before AO cannot solely be a ground to make addition u/s 68: ITAT

++ I-T - Assessee being charitable or religious institution is eligible for depreciation on fixed assets: ITAT

++ I-T - Addition with respect to non-genuine purchases must be restricted only to profit element of income earned thereunder : ITAT

++ I-T - In respect of an issue that is not a subject matter of re-assessment, limitation u/s 263(2) runs from date of original assessment as there is no merger in such case - ITAT

++ I-T - Any expenditure that does not bring any additional advantage to assessee's business is revenue expenditure: ITAT

++ I-T - conversion of limited scrutiny into complete scrutiny is invalid - ad hoc additions are not tenable: ITAT

++ I-T - When assessee-company is not owner of lender company but there is a common shareholder with substantial shareholding and voting power of more than 10% in assessee and lending companies, amount received in hands of assessee must be treated as deemed dividend u/s 2(22)(e): ITAT

June 10, 2021

++ Provisions of Sec. 115BBE are not attracted where surrender of undisclosed income is not covered under provisions of Ss. 68, 69, 69A, 69B, 69C & 69D : ITAT

++ A statement that element of personal expenses cannot be ruled out, is per se insufficient grounds to disallow travelling & telephone expenses otherwise incurred for business purposes : ITAT

++ Sale consideration as declared by assessee is to be accepted, where the variance in value of property is in the value of tenancy rights adopted by assessee as sale consideration: ITAT

++ In case of bogus purchases, only the profit arising from non-payment of tax thereon, is to be considered for framing additions, rather than the entire quantum of purchases made: ITAT

++ In respect of valuation of property, the report of the DVO is binding upon the AO, unless any glaring errors are pointed out therein : ITAT

++ Dismissing appeal without hearing issue on merits contravenes mandate provided u/s 250(6) : ITAT

++ When assessment order lacks a finding of fact, it can be set aside u/s 263 by revisionary jurisdiction of PCIT: ITAT

++ Only advances given to assessee's own employees and not employees of associate companies can be allowed u/s 36(2)(i): ITAT

++ Profits of life insurance business has to be taken to be annual average of surplus disclosed in actuarial valuation report of year: ITAT

June 09, 2021

++ I-T - If employer had admittedly not paid remittance of employees' contribution to PF within due dates, then he was not entitled to deduction of such amount: ITAT

++ I-T - When g ross turnover of taxpayer seems to be higher than net profit, then provisions of presumptive tax u/s 44AD will not be applicable: ITAT

++ I-T - Deduction u/s 80IA(4), granted in first year of claim, cannot be denied in subsequent years, unless assessee has changed original terms and conditions in first year: ITAT

++ I-T - PCIT cannot hold reassessment order to be erroneous on ground that AO failed to make addition w.r.t. issue that never formed basis for reopening of case : ITAT

++ I-T - Additions framed u/s 68 cannot be upheld where assessee has established three limbs of genuineness, creditworthiness and identity of transactions: ITAT

++ I-T -Disallowance of sales costs is untenable where in identical circumstances, no such disallowance was made in previous AYs: ITAT

++ I-T - Penalty u/s 221(1) is rightly imposed where it is clearly established that the assessee did not pay tax withing the stipulated time : ITAT

++ I-T - Past history plays vital role in determining profit on estimation basis: ITAT

June 08, 2021

++ I-T - Garnishee notice cannot be issued without first passing a speaking order, in which AO reaches a finding on as to whether or not the recipient of the garnishee notice owes any money to the alleged defaulter: HC

++ I-T - Recovery of tax arrears - Attachment - Grievance against certain contents in attachment notice can be raised before Competent Authority - Intervention of High Court unwarranted: HC

++ I-T - Differences in interest rate paid on loans, does not call for addition u/s 40A(2)(b): ITAT

++ I-T - No disallowance of interest could be made for amounts advanced out of term loan, if advances were made before date of disbursement of term loan: ITAT

++ I-T - Provisions of sec 13(1)(b) are attracted in case of charitable societies only and not in case of religious societies: ITAT

++ I-T - Addition framed in respect of bogus purchases, allegedly made from Hawala dealers, warrants being restricted to the excess gross profit rate earned therefrom : ITAT

++ I-T - Disallowances u/s 40A(2)(b) for classifying expenditure as excessive or unreasonable is not satisfied as comparable market rate for same services provided by unrelated parties are higher : ITAT

June 07, 2021

++ I-T - Faceless Assessment - assessment order merits being set aside where it is passed without giving a personal hearing to the assessee or without considering the assessee's reply to SCN : HC

++ I-T - Once a SCN-cum-draft assessment order is issued, the noticee's statutory right to file a reply and to seek a personal hearing kicks in & which cannot be curtailed: HC

++ I-T - When money lending is part of business of assessee company, no addition u/s 2(22)(e) can be made: ITAT

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

++ I-T - Legislation that modifies accrued rights or imposes obligations or new duties or attaches new disability must be treated as prospective unless legislative intent is clearly to give the enactment a retrospective effect: ITAT

++ I-T - In case of bogus purchases where corresponding sales are not doubted, only profit embedded in the sales should be brought to tax - ITAT

++ I-T - Prior period interest expenses relating to work-in-progress must be allowed if they have not been claimed as deduction in earlier year: ITAT

++ I-T - Co-operative credit society engaged in providing credit facilities only to its members, cannot be construed as primary co-operative bank and hence, not hit by Sec 80P(4): ITAT

++ I-T - Acquisition of holding company, resignation of existing directives and delay occurred in appointing new Directors by process of law, constitutes sufficient cause for filing appeal with delay: ITAT

June 05, 2021

++ I-T - Assessment order passed without conducting necessary verification and analysis or examination of evidence is erroneous and prejudicial to interest of Revenue for purposes of invoking revisionary jurisdiction u/s 263 : ITAT

++ I-T - When an exercise is revenue neutral, action on part of Revenue authority is not sustainable: ITAT

++ I-T - When income accrues before amalgamation/slump sale, it must be taxed in hands of predecessor company: ITAT

June 04, 2021

++ I-T - Search - Seizure of documents - Assessee must approach relevant authority for release of relevant documents - Writ petition not maintainable where such option is not exercised: HC

++ I-T - Assessment order merits being set aside where the assessee is not given an opportunity to submit its replies to the draft order-cum-show cause notice : HC

++ I-T - If there is live link between material which suggested escapement of income and information of belief, then AO is justified in initiating proceedings u/s 147: HC

++ I-T - Whether there is live link between material which suggested escapement of income and information of belief, then AO is justified in initiating proceedings u/s 147: HC

++ I-T - When assessee has discharged onus cast upon him to prove identity, creditworthiness and genuineness of transactions, no addition can be made to assessee's income u/s 68: ITAT

++ I-T - Benefit of claiming depreciation u/s 32 cannot be denied to assessee merely because assets are not registered in assessee's name: ITAT

++ I-T - Only when activities of assessee can be reckoned as in nature of trade, commerce and business with profit motive, proviso to sec. 2(15) gets attracted: ITAT

++ I-T - Penalty order is vitiated where the specific charge is not set out in the notice & where both parts of the penalty provision stand without striking off the inapplicable part: ITAT

++ I-T - Provisions of Sec 269SS are not to be invoked, where cash transaction in question is done to meet day-to-day emergency expenses: ITAT

++ I-T - Interest expenses are to be allowed where they are incurred in respect of assets leased by the assessee-company & where income in the form of rental & maintenance charges is credited to Profit & Loss and accordingly offered to tax: ITAT

June 03, 2021

++ Re-opening of assessment is sustainable where the AO does not dispose off the objections raised by the assessee against such proceedings: HC

++ Assessment order passed by AO based on technical approval granted by JCIT u/s 153D without application of mind is a nullity: ITAT

++ When assessee files revised return, notice issued u/s 143(2) with reference to original return does not become invalid: ITAT

++ Wealth Tax - Question of suppression in valuation of jewellery does not arises when it is already declared in wealth tax return: ITAT 

++ When land sold by assessee is proved to be an agricultural land, assessee is entitled to benefits u/s 54B: ITAT

June 02, 2021

++ Order passed by National Faceless Assessment Centre merits being set aside, where passed without enabling assessee file reply to show cause notice issued : HC

++ It is axiomatic that incorrect application of law also envelopes within its scope a case of non-application of the relevant provisions of law : ITAT

++ Sec 35D permits amortization of certain capital expenses which are incurred in the preliminary stage of the company or in the normal course of business: ITAT

++ Partial disallowance of telephone expenses is sustained where element of its personal use is not ruled out: ITAT

++ Expenses attributable to earlier years but crystallised in year under consideration ought to be allowed: ITAT

++ In case of bogus purchases where sales are established, only profit element embedded in these purchase transactions can be brought to tax: ITAT

June 01, 2021

++ Writ petition assailing auction of property for recovering tax arrears, is not maintainable, where auction has not yet taken place: HC

++ AO cannot make addition purely on basis of statement given u/s 132(4) without showing any incriminating material found during course of search that has e direct nexus with income declared u/s 132(4): ITAT

++ Action u/s 263 can be taken only when twin conditions of the order being erroneous and prejudicial to interest of Revenue are satisfied: ITAT

++ At stage of invoking jurisdiction u/s 147 it is not required to test whether material would conclusively prove escapement of income: ITAT

++ Power of revision cannot be exercised in respect of a non est order: ITAT

++ Sale consideration of property cannot be determined only on the basis of Form 26AS: ITAT