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TODAY'S CASE (DIRECT TAX)

Taxindiaonline.com



October 23, 2021

++ I-T - In respect of professional fees paid by hospital to it's consultant doctors, TDS is to be deducted u/s 194J & not u/s 192, where consultant doctors do not enjoy privileges offered to resident-employee doctors: ITAT

++ I-T Act - Expenses incurred by assessee for incomplete projects that are work-in-progress and cannot be claimed as revenue expenditure : ITAT

++ I-T Act - CIT cannot exercise revisionary jurisdiction u/s 263, when assessee has duly furnished evidences relating to investments and same are duly examined by CIT but no major discrepancy is found: ITAT

October 22, 2021

++ I-T - Error of stating tax payable as total income, when filing ITR, does not amount to concealment of income or furnishing inaccurate particulars of income : HC

++ I-T - Order passed by NFAC is unsustainable where assessee is not given personal hearing & replies to SCN are not considered: HC

++ I-T - Purchases made against cash cannot be deemed to be bogus based on presumptions alone : HC

++ I-T - Term 'put to use' in proviso to sec. 36(1)(iii) is applicable to capital asset & income-earning apparatus facilitating business activity : HC

++ I-T - Since difference in valuation between value determined by stamp duty authority and declared as sale consideration is less than 10%, no addition is warranted u/s. 56(2)(vii)(b)(ii) : ITAT

++ I-T - AO's order that does not reflect proof of enquiry of proposed disallowance can be set aside u/s 263 as being erroneous and prejudicial to interest of revenue :ITAT

++ I-T - Interest income earned by co-operative society from co-operative bank is allowed as deduction u/s 80P(2)(d) : ITAT

++ I-T - AO's order, passed after conducting necessary enquiries and considering entire material available on record, cannot be set aside u/s 263 as being erroneous and prejudicial to interest of revenue : ITAT

October 21, 2021

++ I-T - Search assessment u/s 153A cannot be resorted to where no material incriminating the assessee is found in course of search operations : ITAT

++ I-T- PCIT has rightly invoked power u/s 263 as activities for which claim u/s 80IA (4) is claimed and allowed by AO does not come under purview of infrastructure project : ITAT

++ I-T - Where order is passed u/s 143(3) & not u/s 144, it implies that subsequent compliance in assessment proceedings is good compliance & default committed earlier are ignored : ITAT

++ I-T - Re-opening of assessment merits being sustained where it is based on proper information sourced from the jurisdictional DCIT : ITAT

++ I-T - Re-assessment notice issued without prior approval of jurisdictional CIT contravenes mandate of Section 151(2) and hence is invalidated : ITAT

++ I-T- It would be reasonable to sustain addition @ 10% of amount of bogus purchases, being profit element involved therein : ITAT

++ I-T Interest on funds borrowed by assessee to give interest-free loan as a measure of commercial expediency should be allowed as deduction u/s 36(1)(iii) : ITAT

++ I-T- On The basis of mere disallowance of expenditure claimed as per books of account, penalty u/s 271(1)(c) cannot be levied unless any particulars in return of income has been found to be false or incorrect: ITAT

++ I-T - Penalty notice issued u/s 271(1)(c) r/w Sec 274 cannot be sustained where relevant charge against assessee, forming basis for imposing penalty, is not specified: ITAT

October 20, 2021

++ Benami Act - Benefit which accrues, after shares of one shareholder are legally transferred to another, is a ground to presume it as benami transaction under Benami Act - HC

++ I-T - No disallowance u/s 43B can be when interest on Term Loan has been paid by debit to CC Account as it would result into actual payment of interest on term loans : ITAT

++ I-T - Initiation of penalty proceedings as per one limb of sec. 271(1)(c) and levy of penalty u/s 271(1)(c) as per the other limb, renders penalty levied as invalid: ITAT

++ I-T - CIT justified in exercising his powers of revision u/s. 263 and directing AO to tax interest income as it is neither of nature specified in Sec. 80P(2)(a)(i) or 80P(2)(d) : ITAT

++ I-T - Amount received by assessee as salary and incentive, on which assessee has already paid taxes, cannot be double taxed as deemed dividend :ITAT

++ I-T - Once interest has been disallowed u/s 43B in preceding years, then, crediting of such interest in a subsequent year in which same is waived under OTS will result to a double taxation of amount: ITAT

++ I-T - Loan on which assessee pays interest, cannot be construed as deemed dividend u/s 2(22)(e) : ITAT

++ I-T - Disallowance of expenditure u/s 14A cannot exceed exempt income earned for relevant year : ITAT

++ I-T - Expenses incurred by assessee as specified u/s 35D, before commencement of business are eligible for deduction:ITAT

October 19, 2021

++ I-T - VsV - assessee has option to settle only that appeal filed by assessee, appeal filed by the Department or by both: HC

++ I-T - Assessee is not required to cross-examine individuals whose sworn statements will not be used against assessee : HC

++ I-T - Part of sale consideration retained in Escrow Account is deemed to have accrued to assessee and should be considered while computing capital gains u/s 48 : HC

++ I-T - additions on account of net profit cannot be framed solely due to mis-match between Form 26AS & turnover shown in Profit & Loss account : ITAT

++ I-T - When assessee has entered into agreement with builder and invested capital gain for purchase of residential unit, he is entitled to deduction u/s 54, even if builder has not completed construction: ITAT

++ I-T - For initiating process of levying penalty u/s 271E, recording of satisfaction in assessment order by AO is mandatory : ITAT

++ I-T Act - Minimising tax liabilities through lawful means is not illegal : ITAT

++ I-T Act - Interest income earned on loans advanced must be treated as business income and corresponding expenditure must be allowed: ITAT

October 18, 2021

++ I-T - AO is duty-bound to give a speaking order, clearly stating reasons for rejecting assessee's objections to reopening - HC

++ I-T - Statement of third party cannot be sole base to make addition in hands of assessee in case of search in absence of any corroborative material :ITAT

++ I-T - Letting out of land independently which is part of business asset of assessee can be treated as income from business :ITAT

++ I-T - Power for expanding scope of proceedings u/s 147 does not lie with PCIT and he cannot expand scope of proceedings u/s 147 by raising issue of deduction u/s 54B :ITAT

++ I-T Act - Expenses incurred by assessee for welfare of its employees that derive benefit for assessee's business are allowable as business expenditure u/s 37(1) : ITAT

++ I-T - Deduction on interest expenditure merits being allowed u/s 36(1)(iii) where such expense is incurred on loans taken for business purposes, factum of which is established through the assessee's balance sheet : ITAT

++ I-T - delay in filing appeal merits being condoned where there is no culpable negligence or mala fide on part of the assessee in delayed filing of appeal: ITAT

++ I-T - Penalty notice u/s 271(1)(c) gets vitiated where inapplicable charge between concealment of income or furnishing inaccurate particulars of income, is not struck off: ITAT

++ I-T - Since bad debt written off for shortage of garments and return of uniform, are directly related to business of assessee, same can be allowed : ITAT

++ I-T - AO's order cannot be set aside u/s 263 for making deep enquiry in a heuristic way only on presumption and assumption that something new may come out: ITAT

October 16, 2021

++ I-T - AO cannot make addition u/s 68, when assessee has proved genuineness of transaction and AO possesses no adverse material against assessee: ITAT

++ I-T- Even where tax is not collected but assessee has furnished form 27BA, assessee cannot be held liable to have violated provisions of sec. 206C :ITAT

++ I-T - Penalty u/s 271(1)(c) is not imposable where assessee erroneously accounts provision for interest twice: ITAT

October 14, 2021

++ I-T - State Legislature has lost its legislative competence to enact laws to impose tax on sales of ENA, upon enactment of 101st Constitution Amendment: HC

++ I-T - After consideration of material on record, when AO has conclusively taken one view, assessment cannot be re-opened based on same material to take another view : HC

++ I-T - For purposes of reopening assessment, assessee's duty does not extend beyond disclosing fully and truly all primary relevant facts : HC

++ I-T- Revenue does not have power to re-open case of assessee on same material, when original assessment u/s 143(3) is made on same set of documents : ITAT

++ I-T - When every detail is filed before AO and CIT (A), disallowance of property tax and interest expenses u/s 24 by AO and upheld by CIT (A) is not correct : ITAT

++ I-T - For purposes of sec. 28(iv), amount received on account of share capital ought not to be treated as business income : ITAT

++ I-T - No order can be passed u/s 263 against a non-existing entity: ITAT

October 13, 2021

++ I-T - In absence of any allegation against assessee of non-disclosure, reopening assessment beyond 4 years is a case of change of opinion of AO, which is bad in law :HC

++ I-T - Denial of personal hearing to assessee by revenue authorities amounts to violation of principles of natural justice that falls within domain of writ jurisdiction: HC

++ I-T - AO shall restrict addition in assessee's hands up to 12.5% of aggregate value of bogus/unverified purchases that form part of assessee's sales and/or closing stock for year under consideration : ITAT

++ I-T - Appeals filed by Revenue are not maintainable since assessment orders as well as consolidated appellate order of CIT (A) not in existence on ground of barred by limitation :ITAT

++ I-T - PCIT's order u/s 263 is not valid, when issue referred to in notice forming basis of invoking provision of sec. 263 has been thoroughly examined by AO : ITAT

++ I-T - PCIT rightly invoked Sec 263 to interdict assessment order as AO had not made any enquiry at all on five issues pointed out : ITAT

October 12, 2021

++ I-T - As per VSV Scheme, 2020, Form 3 can be issued to assessee only when appeal is pending : HC

++ I-T - Power of revision u/s 263 cannot be exercised solely because CIT approaches issue from different perspective, based on same set of facts: HC

++ I-T - Where in given set of circumstances two inferences of fact are possible, that one drawn by the lower appellate court will not be interfered by High Court in second appeal: HC

++ I-T - Expenses wholly and exclusively incurred in normal course towards gifts, travel facility or similar freebies given to medical practitioners are not hit by Explanation 1 to Sec. 37 : ITAT

++ I-T - Disallowance u/s 40A(3) can be made, when cash payment is made beyond limit prescribed and case is not covered in exceptions mentioned u/Rule 6DD : ITAT

++ I-T - For purposes of reopening assessment of other person u/s 153C for any AY earlier to year of search, documents found during search must be incriminating in nature and have direct co-relation with additions made : ITAT

++ I-T- In absence of any satisfaction recorded by AO with respect to examination of books to verify correctness of claim, disallowance u/s 14A cannot be sustained if satisfaction is mandatory for invoking provisions of rule 8D - ITAT

++ I-T- Running a hostel is akin to a running educational institution which falls within the provision of Sec 2(15): ITAT

October 11, 2021

++ I-T - If search is qua a place and there are two entities in one premises, there can be a common search operation: HC

++ I-T - Re-opening of assessment initiated in respect of deceased assessee is not sustainable: HC

++ I-T - Assessee can file declaration under VSV Act for disputed interest charged under Ss 234A, 234B or 234C: HC

++ I-T - After completion of assessment u/s 143(3), AO cannot issue notice seeking clarifications from assessee : HC

++ I-T- Assessment proceeding is vaild as based on seized documents received by AO during search conducted in some other cases : ITAT

++ I-T - Disallowance made u/s 14A cannot be added to assessee's book profit u/s 115JB: ITAT

++ I-T - When seized documents do not pertain to assessee, no addition can be made based on them without any other corroborative evidence on record: ITAT

++ I-T - Assessment cannot be based on mere suspicion, conjectures or surmises but on legitimate basis from which reasonable inference of any expenditure being of disallowable nature can be drawn and initial burden of finding such material is on AO: ITAT

October 09, 2021

++ I-T - Ad hoc disallowance of expenditure on belief of there being some element of personal expenditure, is unsustainable, where assessee is company & not firm or proprietary concern: ITAT

++ I-T - Interest paid on loan taken to purchase property for business purposes can be claimed as business expenditure u/s 36(1)(iii), after deducting tax at source : ITAT

++ I-T - Opening balance carried forward from earlier year can neither be treated as credit during current year nor assessed in subsequent AY as unexplained investment/cash u/s 68 : ITAT

++ I-T- Expenses incurred on corporate social responsibility for AY 2014-15, cannot be disallowed invoking Explanation-2 to section 37(1) of the Act as this explanation is prospective in nature : ITAT

++ I-T- In absence of contrary proved by Revenue and following order passed by coordinate bench of ITAT, AO can be directed to delete the penalty levied u/s 272A(2)(k) : ITAT

++ I-T- Professional fees paid to the firm of consultant after deducting the TDS can't be disallowed : ITAT

October 08, 2021

++ I-T - Assessment order passed by the NFAC merits being quashed where it is not preceded by issuance of SCN or draft assessment order to the assessee : HC

++ I-T - After 4 years from end of relevant AY, even if AO has tangible material to conclude income has escaped assessment, he cannot reopen assessment unless he discloses what is the material fact which was not truly and fully disclosed by assessee : HC

++ I-T - For purposes of sec. 36(1)(va), date of deposit of cheque in bank is relevant and not date of clearance of cheque: ITAT

++ I-T - Merely making a claim not sustainable in law by itself, where assessee's expenditure is disallowed by AO, does not amount to furnishing of inaccurate particulars of income : ITAT

++ I-T - Additions in respect of deemed rent from unsold flats, cannot be sustained where all conditions in exclusion clause of Sec 22 are satisfied: ITAT

++ I-T - In case of bogus purchases, additions can be framed only in respect of profit embedded therein, rather than the entire quantum of the purchases : ITAT

++ I-T - Once assessee has own funds more than investment, no disallowance under Rule 8D(2)(ii) can be made : ITAT

++ I-T - Addition u/s 68 cannot be made on conjectures, disregarding direct evidence placed on record :ITAT

++ I-T - When an order is set aside, then assessment framed pursuant to that order cannot survive on a standalone basis and is liable to be vacated : ITAT

++ I-T - Voluntary expenditure in nature of donations is liable to be disallowed unless business expediency is proved : ITAT

October 07, 2021

++ I-T - Once order u/s 263 was made within period of two years from end of F.Y in which order sought to be revised was passed, such order is not time barred u/s 263(2): SC

++ I-T - Reassessment proceeding initiated u/s 148 that stands substituted after enactment of Finance Act, 2021, i.e., on or after 01.04.2021, is invalid : HC

++ I-T - Assessment order merits being quashed where it is based on statements taken from certain persons & where assessee is not permitted to cross examine deponents of such statements: HC

++ I-T - Assessee given insufficient time of 2 days to file reply to SCN; assessment order quashed: HC

++ I-T - Once competent authority has given certificate that housing project has been completed on a certain date, Revenue cannot deny deduction u/s 80IB(10), alleging that project is incomplete : ITAT

++ I-T - Immunity can be granted from disallowance of expenses on account of non/short deduction of taxes when assessee/payer furnishes certificate in prescribed form : ITAT

++ I-T - Penalty levied u/s 271(1)(c) is not valid when inappropriate words in notice are not struck off and notice does not specify the limb of the provisions under which penalty has been initiated : ITAT

++ I-T - For purposes of sec. 69A, where assessee discloses primary facts, burden shifts on Revenue to unprove them : ITAT

++ I-T - No addition can be made towards deemed ALV of unsold flats held by assessee as stock-in-trade of its business of a builder and developer : ITAT

++ I-T - Deeming provisions of sec. 56(2)(vii) cannot be invoked on normal business transaction of issuance of shares : ITAT

October 06, 2021

++ I-T - Seized documents along with statement recorded u/s 133A constitute valid piece of evidence, which can be used in assessing undisclosed income : ITAT

++ I-T - Revenue cannot pick and choose certain amounts representing share of beneficiaries and tax in the hands of the Trust : ITAT

++ I-T - Deduction is to be allowed for belated payment of employee contribution to PF/ESI, deposited beyond due date stipulated under relevant statutes governing PF/ESI but deposited before due date for filing ITR u/s 139(1) of the 1961 Act : ITAT

++ I-T - A ssessee is entitled to depreciation on WDV of assets received from demerger of UP Jal Vidyut Nigam along with corresponding liabilities which it owns to Uttaranchal Govt: ITAT

++ I-T - When AO applies his mind on given facts and material on record and takes a possible view, assessment order cannot be cancelled u/s 263, unless shown that AO's view is not tenable either in law or on facts : ITAT

++ I-T - fundamental principle of justice requires the Assessing Officer to discover and collect evidence and confront the assessee before making any disallowance : ITAT

++ I-T - If AO does not assess/reassess income, which was basis of notice u/s 148, AO cannot assess income under some other issue independently : ITAT

++ I-T - CIT (A) must admit additional evidence only after providing opportunity to AO and obtaining his response : ITAT

++ I-T - When assessee owns plant and machinery, engaged for manufacturing purpose, assessee is entitled to claim deduction for depreciation u/s 80IB : ITAT

++ I-T - CIT (A) should not dismiss any appeal in limine by treating same as non-est , simply because taxpayer has filed it manually in paper form: ITAT

October 05, 2021

++ I-T - As per settled law, Department officers should not seek undue advantage from assessee's ignorance of law & should render all reasonble assistance for securing any relief : HC

++ I-T - Draft assessment order passed by NFAC is unsustainable where it is passed without considering assessee's reply to SCN : HC

++ I-T - Provisions of Section 159(3) inapplicable where SCN is issued in name of deceased assessee; such notice is void ab initio : HC

++ I-T - Additions on account of bogus purchases merit being restricted to the profit element embedded in the purchases rather than the entire quantum of the purchases : ITAT

++ I-T - A federation whose objective is to promote feeling of unity amongst persons engaged in trade & commerce, qualifies as being engaged in charitable purpose u/s 2(15) : ITAT

++ I-T - Penalty cannot be imposed where the penalty notice does not mention the exact charge against the assessee, between concealment of income and furnishing inaccurate particulars of income : ITAT

++ I-T Share capital and unsecured loan received by assessee as per amalgamation approved by HC cannot be added as unexplained income u/s 68 : ITAT

October 04, 2021

++ Indigo Airlines wins major income tax case - ITAT Special Bench rules that credits received for selection of plane engines are capital receipts

++ I-T - Credits received by airlines for selection of engines are capital receipts, since business activity of airline is to earn revenue from passenger & cargo transportation: ITAT

++ I-T - Assessment order without 'opportunity to show cause' merits to be set aside: HC

++ I-T - Rule of discretion & self imposed restraint qua writ court has to be applied strictly when it comes to fiscal statutes as long as exceptions such as NJP violation are not attracted: HC

++ I-T - Tribunal, being last authority to examine factual position, its order cannot be challenged on factual dispute: HC

++ I-T - Department cannot retain seized assets whose worth is more than disputed tax liability of assessee, if any assessment was pending during relevant point of time: HC

++ I-T- Assessment can't be framed in name of an non-existent entity : ITAT

++ I-T - Additions framed in search assessment are unsustainable where they are not based on any incriminating material seized in course of search operations : ITAT

++ I-T -Re-opening of assessment - reasons recorded cannot be substituted at a later point in time by subsequent evidences: ITAT

++ I-T - During relevant AY, no penalty u/s 271(1)(c) can be levied on statutory liabilities pertaining to preceding AY : ITAT

++ I-T - Security deposit taken at time of giving a property on lease, is treatable as capital receipt and will not be taxable : ITAT

++ I-T - Assessee's claim u/s 12AA cannot be rejected for a mere mistake in spelling of the trust's name : ITAT

++ I-T - If deduction has been allowed in AY in which claim was first made, AO cannot withdraw relief for subsequent years if there is no change in facts and circumstances of case : ITAT

++ I-T- AO does not have jurisdiction to reopen assessment if reason to believe escapement of income is based on erroneous facts : ITAT

++ I-T - Assessee engaged in business of development of website and providing Call Centre Back End Services is eligible to claim deduction u/s 10A : ITAT

++ I-T - additions framed to assessee's income are sustained where assessee cannot furnish sufficient details to determine the profit arising out of the sale of the built-up space : ITAT

October 01, 2021

++ I-T - If person carrying goods shows documents to explain goods and records statement u/s 132(4) that articles belong to a firm and are part of its stock-in-trade, goods must not be seized u/s 132 : HC

++ I-T - U/s 179(1), if tax due from private company cannot be recovered, every person who was company's director at any time during previous year shall be jointly and severally liable for payment of outstanding tax : HC

++ I -T - Interest on late payment of TDS cannot be imposed on assessee where clearance of assessee's cheque for TDS payment is delayed due to technical error on part of bank: ITAT

++ I-T - When assessee files revised return during course of assessment before being pointed out by AO in notice u/secs. 142(1) and 143(2), assessee cannot be held to have furnished inaccurate particulars of income u/s 271(1)(c) : ITAT

++ I-T - Penalty u/s 271(1)(c) cannot be levied for furnishing inaccurate particulars of income, merely because assessee accepts addition made towards particular income: ITAT

++ I-T - No addition for undisclosed income can be made in absence of direct material found by Revenue: ITAT

++ I-T - Penalty u/s 271(1)(c) cannot be initiated against undisclosed income of previous year found during search : ITAT

++ I-T - Notice u/s 143(2) is mandatory for purpose of making assessment u/s 143(3) : ITAT