TODAY'S CASE (DIRECT TAX)

May 31, 2021

++ I-T - Expression 'reason to believe' cannot be read to mean that AO should have finally ascertained escaped fact by legal evidence or conclusion: HC

++ I-T - Internet expenses incurred towards export of software are to be excluded both from export turnover as well as total turnover while computing deduction u/s 10A - HC

++ I-T - Once assessee pays self-assessment tax, in case refund arises it would be entitled to interest u/s 244A(1)(b) of the Act on self assessment tax from date of payment of self-assessment tax till date of actual payment of refund: ITAT

++ I-T - Unless AO has additional evidences to corroborate findings recorded by CBI that assessee has paid on-money for purchase of property, no addition can be made merely based on CBI charge sheet when proceedingspending before CBI Court: ITAT

++ I-T - Following order passed by Tribunal in assessee's own case for previous year, addition for bogus purchases can be upheld @ 12.5% of bogus purchases: ITAT

++ I-T - Penalty not sustainable if notice omits to specify exact charge between concealment & furnishing of inaccurate particulars: ITAT

++ I-T - In case of unabated assessment, addition can be made only if incriminating material is found during search: ITAT

++ I-T - In absence of any incriminating material, no jurisdiction can be assumed by the AO u/s 153C of the Act : ITAT

++ Penalty imposed u/s 271(1)(c) will not survive where additions which formed basis for levy of penalty, themselves are set aside : ITAT

++ I-T - Business transaction for purchase of property is outside purview of sec 2(22)(e) - YES: ITAT

May 29, 2021

++ I-T - Where provisions of Section 271AAB is sought to be applied on an assessee, the AO is obliged to specify the particular clause u/s 271AAB which is applicable: HC

++ I-T - AO gets jurisdiction to reopen assessment only after recording reasons for reopening & thereafter, issuing notice u/s 148 within prescribed time & only on fulfilment of conditions prescribed therein: ITAT

++ I-T -Power of revision is rightly exercised where the CIT proceeds on totally incorrect assumption of facts : ITAT

++ I-T - Benefit of depreciation is to be allowed while claiming exemption u/s 11 : ITAT

May 28, 2021

++ I-T - Documentary evidences showing asset as trading will over rule the typographical error that asset is written as fixed asset in balance sheet: ITAT

++ I-T - Claim of expenses due to valuation of stock at lower of cost or net realizable value are allowable, where such expenses arise due to particular accounting method followed by the assessee : ITAT

++ I-T - When Commissioner does not apply his mind independently and gives approval in a mechanical manner for issuing notice u/s 148, reopening of assessment is invalid: ITAT

++ I-T - If there is no transfer of possession at material time, then invokation of section 53A of TP Act to brand such transaction as 'transfer' u/s 2(47)(v) is not permitted: ITAT

++ W-T - Asessee is entitled for exemption u/s.5(i) of the WT Act, because lands are given on lease to a trust and the trust has used the lands for running various educational institutions, which comes under the definition of charitable purpose: ITAT

++ I-T - Business loss can't be disallowed on the contentions that no business was carried out by the assessee: ITAT

++ I-T - AO cannot arrive at a conclusion based merely on survey report without conducting independent enquiry: ITAT

++ I-T - Adjustment made by CPC u/s 143(1)(a) without intimating taxpayer about such proposal, is not permissible: ITAT

++ I-T - When income is disclosed by assessee not voluntarily but on account of material seized during survey, penalty u/s 271(1)(c) will be attracted: ITAT

May 27 2021

++ I-T - Re-opening of assessment is not sustainable where the AO does not dispose of objections raised by assessee: HC

++ I-T - Assessment order is unsustainable where it is passed without considering the assessee's request for adjournment, which is in violation of principles of natural justice: HC

++ I-T - Withdrawal of claim for weighted deduction u/s 35, in a bid to purchase peace with the Department & to avoid vexatious litigation, cannot be treated as an accomodation entry aimed at tax evasion: ITAT

++ I-T - Expenditure in respect of rent of office premises & office maintenance expenses incurred by a company in respect of its sister entities, is allowed where the sister units did not carry out any significant activities : ITAT

++ I-T - Mere investment in share capital made in AY 2009-10, ipso facto does not suggest that the assessee has income in that year, in the absence of any concrete material evidence to prove same: ITAT

++ I-T - Interest u/s 244A can be allowed for entire month even when payments/adjustments are made on the last day of the month: ITAT

++ I-T - Amount received as donation with specific direction shall be treated as Corpus of assessee that is not taxable u/s 11(1)(d): ITAT

May 26, 2021

++ At stage of issuing reopening notice, writ court cannot investigate into adequacy or sufficiency of reasons: HC

++ In absence of true & full disclosure, SETCOM cannot go beyond scope of Sec 245C and adjudicate additional income found by Department during seizure: HC

++ Authorities are empowered to adjudicate new issues identified during course of proceedings and there is no impediment as such: HC

++ Not filing appeal on contesting issues does not tantamount to concealment of income & furnishing inaccurate particulars of income for purposes of imposing penalty u/s 271(1)(c): ITAT

May 25, 2021

++ Disallowance of purchases made from grey market be restricted to profit element embedded therein, where purchases themselves are not doubted: ITAT

++ As determined by stamp duty authorities or consideration received or accruing as a result of the transfer to the assessee whichever is more, shall be value of property: ITAT

++ Addition u/s 68 cannot sustain where not made based on any seized material found during Search & is rather based on post-search enquiries: ITAT

++ For purpose of granting exemption, a restricted meaning has to be given to the expression agricultural land u/s 2(14) (iiib) of the Act: ITAT

May 24, 2021

++ Writ remedy against recovery of tax arrears, is not available where assessee is not in a position to challenge such demand for interest: HC

++ Expression 'reason to believe' cannot be read to mean that AO should have finally ascertained fact by legal evidence or conclusion: HC

++ Sale of property - Valuation done by DVO u/s 50C merits being adopted in current AY, where such valuation is also favored in other precedent cases: ITAT

++ Merely stating that assessee made investments exceeding amount shown in the sale deed would not fasten any liability on the assessee u/s 69B: ITAT

++ Order of CIT(E) in denying registration u/s 12AA cannot be sustained as grant of registration and the issue of assessment or exemption are separate and distinct: ITAT

++ Commercial transaction between the companies does not attract section 2(22)(e) unless convincingly proved with material by Revenue that transactions are not commercial in nature: ITAT

++ Disallowance for bogus purchases can be reduced to the extent of profit element embedded in these purchase where sales are not in doubt: ITAT

May 22, 2021

++ I-T - In case of re-assessment, the AO is obliged to dispose off objections raised by the assessee against such proceedings, by means of a speaking order: HC

++ I-T - Settlement of cases u/s 245C cannot be construed as absolute right of assessee: HC

++ High Court cannot adjudicate intricacies in Accounting System made by taxpayer, which was scrutinized by Income Tax Department: HC

++ I-T - For a business liability that has arisen in a particular year, deduction should be allowed in that year though the liability might be discharged at a future date: ITAT

May 21, 2021

++ Non-mention of an SCN on the Income Tax e-portal is a technical error at best - Proceedings not vitiated where SCN is served manually & proof of service is available: HC

++ Principles of natural justice are violated where an assessee is given only 24 hours' time to comply with the options given under a draft assessment order: HC

++ Expression 'reason to believe' cannot be read to mean that AO should have finally ascertained such fact by legal evidence or conclusion: HC

++ At stage of issuing reopening notice, writ court cannot investigate into adequacy or sufficiency of reasons: HC

++ 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

++ When AO has cause or jurisdiction to suppose that income has escaped assessment, he can be said to have reason to believe that income has escaped assessment: HC

++ Once substantive additions are confirmed in hands of assessee, protective additions no longer stand: ITAT

May 20, 2021

++ It is in contravention to very object of Vivad se Vishwas scheme to reject a declaration on ground of being ineligible without giving chance to declarant to explain its case: HC

++ Re-assessment cannot be initiated beyond 4 year limitation unless assessee defaults in filing return or omits to make full & true disclosure of income: HC

++ CBDT Circular No. 5/2019 dated 05.02.2019 fixing threshold limit of tax value involved, for purpose of filing appeal to High Court, applies onto Wealth Tax cases as well as income tax matters: HC

++ The term new does not mean that there is impediment to cull out new facts from informations provided by taxpayer at time of original assessment: HC

++ The expression reason to believe cannot be read to mean that AO should have finally ascertained fact by legal evidence or conclusion: HC

++ Additions u/s 68 in respect of unsecured loan obtained are unsustainable when evidence at hand shows that loan was obtained through regular banking channels: ITAT

++ Interest cannot be levied u/s 234E for delayed filing of TDS returns in respect of period prior to 01.06.2015: ITAT

May 19, 2021

++ Open terrace area cannot be included in built up area for purpose of benefit u/s 801B(10): HC

++ Re-assessment upheld where based on new information not considered by AO during original assessment: HC

++ Sec 170 makes successor-company liable for affairs of amalgamating-company - Re-assessment cannot be assailed solely because SCN is issued in name of erstwhile company: HC

++ Income from benami firms is rightly treated as such where the assessee fails to prove that profits of firms were distributed to partners according to profit-sharing ratio: ITAT

May 18, 2021

++ I-T - SCN & consequent assessment order are unsustainable, where assessee is given insufficient time of 4 days to file reply to SCN & where assessee's reply seeking more time, is not considered: HC

++ I-T - Once Form Nos. 15G & 15H are duly submitted by taxpayer before Department, then he cannot be fastened with disallowance u/s 40(a)(ia) for non-deduction of tax at source: ITAT

++ I-T - Addition on account of bogus purchase should be restricted to extent of transactions where taxpayer had failed to establish genuineness: ITAT

++ I-T - Taxpayer trust must ensure full & proper participation before CIT(E) and make available all necessary details before seeking registration u/s 12AA: ITAT

++ I-T - For rejecting view taken for earlier years, there must be change in facts, situation or law: ITAT

++ I-T - No addition can be made u/s 68 on basis of false or bogus figures, if no actual credit of cash or otherwise received by taxpayer: ITAT

++ I-T - Natural gas which comes through pipelines cannot be used for same purposes as compressed natural gas required as automobile fuel, and hence compression amounts to manufacture: ITAT

++ I-T - Even if valuation of property for purpose of stamp duty is 10% more than sale consideration, then such consideration will be accepted at face value and provisions u/s 50C will not be invoked: ITAT

++ I-T - Where loan received by a person from a company is not gratuitous & has been given in return of an advantage conferred upon the company by the assessee in the form of interest, such loan does not qualify as deemed dividend : ITAT

++ I-T - For purposes of sec. 68, if parties do not appear despite having received summons, assessee cannot be blamed for having failed to prove identity of creditors: ITAT

May 17, 2021

++ Reasonable order of penalty & additions calls for no interference, if asessee neither contests quantum nor makes any convincing submission: ITAT

++ Receipt of share premium cannot be treated as income or revenue receipt to be taxable u/s 56(1): ITAT

++ AO cannot reopen assessment u/s 147 merely based on reason to suspect caused by information provided by another authority: ITAT

++ Ad hoc additions on the basis of surmises is not permissible when expenses are claimed based on audited financial statements: ITAT

++ When CIT does not specify how assessment order passed by AO is erroneous, such order cannot be held as prejudicial to interest of Revenue: ITAT

++ When stamp duty authorities accept original value of property as per sale deed, there is no basis for AO to to apply enhanced value for purposes of Section 50C: ITAT

May 15, 2021

++ I-T - It is a fit case for remand where the CIT (A) records contradictory findings, in accepting additional evidence submitted by the assessee while concurrently holding that no additional evidence is liable to be accepted: ITAT

++ I-T - Penalty u/s 271(1)(c) r/w Sec 274 is unsustainable where SCN omits to mention whether assessee conceals particulars of income or furnished inaccurate particulars of income : ITAT

++ I-T - Penalty u/s 271(1)(c) cannot be imposed solely because it is lawful to do so & unless the party obliged, either acted deliberately in defiance of law or was guilty of contumacious conduct or dishonest act: ITAT

May 14, 2021

++ If books of accounts are rejected, AO must estimate profits based on best judgment & either past year results or comparative profits declared in similar line of trade in commodities: ITAT

++ Issue of shares at face value by amalgamated company to shareholders of amalgamating company in pursuance of scheme of amalgamation legally recognised in court of law does not fall u/s 56(2)(viib): ITAT

++ Additions framed u/s 69 are sustainable where the assessee is unable to submit cogent evidence to substantiate the source of cash deposited in its bank account: ITAT

++ Revisionary order passed u/s 263 becomes infructuous where original assessment order in respect of which CIT exercised power of revision, is itself set aside : ITAT

++ Search assessment is invalid where no satisfaction note has been recorded in case of person-searched for invoking jurisdiction u/s 153C : ITAT

++ Sales tax subsidy received for expansion of assessee's existing industry is capital in nature: ITAT

May 13, 2021

++ Establishment of material facts & circumstances on basis of evidences cannot be done by High Court under Article 226 of Constitution: HC

++ If bank is already valuing its securities at the lesser between investment at costs or market price, then AO cannot further revalue such securities for tax purposes: ITAT

++ Surplus funds kept in fixed deposits having inextricable link with project - interest earned must be reduced from work in progress & cannot be assessed as income from other sources: ITAT

++ Re-opening of assessment is unsustainable where based entirely on information received from Investigating Wing: ITAT

++ Addition u/s 68 cannot sustain when assessee proves identity of investor, its creditworthiness and genuineness of transaction: ITAT

May 12, 2021

++ I-T - AO should refrain from recovering tax dues, if tax demand is in dispute and is pending consideration before appellate authority: HC

++ I-T - If charitable body applies its income on acquisition of capital asseets, allowance of depreciaton on such assets would not amount to double deduction: HC

++ I-T - Principles of natural justice are contravened where an order is passed before expiry of the time prescribed for filing reply to SCN & also without considering the reply furnished by the assessee : HC

++ I-T - Attachment of property by Tax recovery officer cannot override commitment under sale agreement: HC

++ I-T - Disallowance u/s 36(1)(va) in respect of employees contribution to PF and towards ESIC is sustainable, where such payments are made beyond the period prescribed in the specified Act : ITAT

++ I-T - When despite being given opportunities, there is no compliance by assessee, AO can proceed to conclude best judgment assessment u/s 144: ITAT

++ I-T - Disallowance should be restricted to profit element embedded in non-genuine purchase and not entire purchase: ITAT

++ I-T - New asset defined in sec. 54F as 'a residential house' must be understood in plural: ITAT

May 11, 2021

++ I-T - Department cannot adjust refund dues of taxpayer, without issuing separate intimation u/s 245 for adjustment of outstanding demands, which were already under stay by direction of Tribunals & High Courts: HC

++ I-T - Reassessment will be invalid in absence of tangible matrial, if no addition was made by AO and query answered by taxpayer in original assessment proceedings stood accepted: HC

++ I-T - If no new material surfaced during reassessment on which AO could have formed requisite belief with regard escaped assessment, especially when taxpayer has made full disclosure, no reopening is permitted: HC

++ I-T - Correctness of computation of net loss for purpose of arriving at book loss and for purpose of MAT in contrast with returns filed u/s 139 in refund, cannot be tested under Article 226: HC

++ I-T - Premium paid for Keyman Insurance policy cannot be treated as business expenditure, without establishing nexus between business and such premium expense: HC

++ I-T - No appeal merits adjudication if tax effect in respective case is less than threshold limit prescribed by CBDT Circular: HC

++ I-T - It is a fit case for remand where the assessee does not receive a proper hearing due to notice of hearing being delivered at the incorrect address & not being served at the assessee's correct address: ITAT

++ I-T - Disallowance should be restricted to profit element embedded in non-genuine purchase and not entire purchase: ITAT

++ I-T - Appeal must be dismissed when assessee avails 'Vivad Se Viswas Scheme 2020' and files necessary declaration: ITAT

++ I-T - Addition cannot be made to assessee's total income merely based on surmises, conjectures and without any valid evidences: ITAT

++ I-T - U/s 36(1)(v), any provision or contribution made to an approved gratuity fund is allowable, provided it should be approved by Chief CIT: ITAT

May 10, 2021

++ I-T - Assessment order cannot be contested directly through writ petition, where no stay petition is filed against such order: HC

++ COVID 2nd wave - Extension of I-T due dates - No coercive measures against any assessee - Any assessee to be given 3 weeks' prior notice to approach relevant authority or court: HC

++ Expenses incurred towards keeping the business primed up, cannot be capitalized: HC

++ When assessment is unabated or concluded on date of search, no addition can be made in absence of incriminating material found as a result of search: ITAT

++ AO cannot reject identity and credit worthiness of company & genuineness of transaction in one AY & accept them in immediately succeeding AY: ITAT

++ Deduction u/s 54F - relevant date for determining purchase of property is date on which full consideration is paid & possession is taken and not date on which initial payment is made: ITAT

++ While computing disallowance u/s 14A r.w. r 8D(2) average value of investments, only those investments which yield exempt income for the year should be considered: ITAT

++ Receipt in current AY of any amount given as advance in earlier AY, cannot be deemed unexplained cash deposits: ITAT

May 08, 2021

++ Expenditure in foreign exchange has to be excluded from both export turnover & total turnover while computing eligible deduction u/s 10A: HC

++ Reopening of assessment by AO without independent application of mind, merely on basis of report from Investigation Wing, is not in accordance with law: ITAT

++ While examining application seeking registration u/s 12AA, CIT(E) should only examine if objects of Trust are charitable in nature and its activities are in consonance with its objects: ITAT

May 07, 2021

++ Agricultural land does not normally qualify as 'property' as defined in Explanation to Sec 56(2)(vii), but may qualify as such in certain exceptional cases : ITAT

++ Appeal is not maintainable with CIT(A) u/s 246A or any other provisions of I-T Act against interlocutory order passed by AO: ITAT

++ When AO follows direction of Pr. CIT in order passed u/s 263, power of revision cannot be done on ground that AO has not travelled beyond the directions: ITAT

++ Non-granting of opportunity to assessee to cross-examine witness is illegal and fatal to assessment order: ITAT

++ For non-compliance of provisions of sec. 194C(7), assessee's claim cannot be denied if there is compliance on assessee's part of provisions u/s 194C(6): ITAT

May 06, 2021

++ Disallowance u/s 14A r.w.r. 8D cannot go beyond extent of exempted income: ITAT

++ Penalty proceedings is not sustainable when notice issued by AO is bad in law being vague & ambiguous: ITAT

++ Additions framed in respect of cash gifts received by assessee on occasion of marriage, are invalid where genuineness & source of cash gifts& identity of donors is established: ITAT

++ Where registration certificate of a trust u/s 12A is not filed before the CIT (A), this factor cannot be sole basis for rejecting the trust's claim for exemption u/s 11: ITAT

May 05, 2021

++ Change of opinion on part of new AO is no grounds to re-open concluded assessment: HC

++ Invoking Sec 2(15) solely due to revenue arising from organising seminar cannot make a Trust lose its charitable nature: ITAT

++ Interest income earned from investment of surplus funds with Co-operative Banks is eligible for deduction u/s 80P(2)(d) or 80P(2)(a)(i): ITAT

++ Owning ships or barges is not a condition for availing of benefits of Sec 33AC: ITAT

++ CIT is obliged u/s 263 to not only point out error in assessment order but also to record findings mentioning how such order is erroneous: ITAT

May 04, 2021

++ Re-opening of assessment is valid only when exact reasons behind such exercise are specified before the assessee & not by just informing assessee that certain reasons to believe exist : HC

++ No addition can be made to assessee's income when no incriminating material is found during course of search from assessee's premises: ITAT

++ Where despite of court decree, there is uncertainty of realization of interest income therefore same is rightly not recognized in the books of accounts: ITAT

May 03, 2021

++ I-T - Penalty u/s 271(1)(c) is sustainable where assessee does not show any reasonable cause for non-submissions of returns within the period prescribed u/s 153(1): HC

++ I-T - Even if a small part of cause of action arises within territorial jurisdiction of HC, the same by itself may not be considered to be a determinative factor compelling the High Court to decide the matter on merits: HC

++ Assessee cannot parallely maintain a statutory appeal as well as a writ petition in challenge of the same order: HC

++ To re-open assessment made u/s 143 (3) after expiry of 4 years from end of relevant AY, reasons recorded must allege failure on assessee's part to disclose fully & truly material facts necessary for assessment: ITAT

++ If on basis of material on record, assessee is entitled to a relief that remained to be allowed, the same constitutes mistake apparent from record rectifiable u/s 154: ITAT

May 01, 2021

++ Tribunal, being last fact finding Authority, is under legal obligation to record correct finding of fact, rather than summarily remanding files without adjudicating on preliminary issue: HC

++ AO cannot simply refuse to grant deposit orders of lesser amount than 20% for obtaining stay, during pendency of appeal, by passing non-speaking order: HC

++ Search assessment order u/s 153C passed for second time, is invalid, where no additional demand is raised against assessee & where no escapement of income is attributed to assessee : HC