TODAY'S CASE (DIRECT TAX)

July 30,2022

++ I-T - Legitimate share of profit received by partner of LLP, on basis of their capital contribution, which is duly audited & maintained in books of A/c, merits benefit of exemption u/s 10(2A): ITAT

++ I-T - AO indulged in suspicion, conjecture and surmises and acted without any evidence to make addition u/s 69A for addition of cash deposits: ITAT

++ I-T - No individual assessee can be denied exemption u/s 54F merely because he was holder of 50% of share in house property jointly with his/her spouse: ITAT

July 29, 2022

++ I-T - Additions framed u/s 68 & 69C merit be framed solely because AO did not accept explanation given by three persons to explain creditworthiness of transaction: ITAT

++ I-T - Question of remission to file of first appellate authority arises only where assessee has indeed raised any fresh argument, supported by material/s, before said authority: ITAT

++ I-T - Mere reliance on report of Investigation Wing and statement of third party which do not even mention assessee's name, is no basis to treat any LTCG as bogus and make additions u/s 68: ITAT

++ I-T - Revenue cannot be allowed to demand different stand in current A.Y if there is no change of facts and circumstances during preceding and succeeding years: ITAT

++ I-T - Order u/s 263 is invalid where assessee is not validly served SCN due to being in judicial custody & where no personal hearing is granted: ITAT

++ I-T - Expenditure claimed on account of ESOP is allowable deduction u/s 37(1): ITAT

++ I-T - Repeated failure of assessee to produce books of account calls for best judgment assessment u/s 144: ITAT

++ I-T - Weighted deduction u/s 35(2AB) merits allowance once R&D facility has been recognized by DSIR: ITAT

July 28, 2022

++ I-T - Power of revision u/s 263 is rightly exercised where AO estimates gross receipts for agricultural produce without first considering reasonableness of cotton yield per hectare : ITAT

++ I-T - Claim of deduction u/s 80P can't be allowed on interest income received from Axis Bank :ITAT

++ I-T - If dividend income is already required to be excluded by virtue of section 10, then same cannot be brought within ambit of section 11: ITAT

++ I-T - Each and every erroneous order cannot be subject matter of revision, unless it is pre-judicial to interest of Revenue: ITAT

++ I-T - FAA should not dismiss explanation of assessee as well as remand report of AO at threshold by merely alleging same as afterthought and self serving: ITAT

++ I-T- No further addition can be made when assessee itself offers income from unrecorded receipts higher than estimation of profit made by CIT(A) - ITAT

July 27, 2022

++ I-T - Transaction of re-investment in debentures cannot be deemed to be bogus where such debentures are genuine, tax is paid thereon re-investment scheme is approved by High Court : ITAT

++ I-T - E-Assessment - clear reasons must be given for accepting or rejecting assessee's request for personal hearing through video conferencing: ITAT

++ I-T- Depreciation on trucks used for business purpose can be allowed only where trucks are complete with body & ready to be put to use : ITAT

++ I-T - Assessment made in hands of non-existent entity pursuant to compulsory amalgamation, which was duly intimated to AO, is invalid assessment: ITAT

++ I-T - Assessee is not liable for capital gains if has given only permissive possession and not legal possession of land to builder and developer : ITAT

++ I-T - Exemption u/s 11 cannot be allowed as 'DMH" applied sum for benefit of assessee and sec 13 is intended to eliminate any possibility of Trusts fund being used for benefit of any interested person : ITAT

July 26, 2022

++ I-T - When substantial justice & technical considerations are pitted against each other, cause of substantial justice deserves to be preferred : ITAT

++ I-T - Consideration earned by an investor from sale of shares, cannot be treated as business income, following principal of consistency in previous years: ITAT

++ I-T - Deduction u/s 80IB is available in case where undertaking develops and builds housing project on profits derived from such housing project: ITAT

++ I-T - Failure to prove identity of creditors and their capacity and genuineness of transactions, calls for addition u/s 68: ITAT

++ I-T - If assessee is unable to establish source of moneys deposited in his bank accounts, then only peak balance in his bank accounts could be added as unexplained money u/s. 69/69A: ITAT

++ I-T - Unless revenue establishes that assessee is owner of seized documents, provisions of sec. 153C cannot be invoked : ITAT

++ I-T - Claim of deduction u/s 80IB(10) can be denied as legislature has not only defined 'inner measurements' of residential unit 'at floor level' but also same has to be increased by thickness of walls : ITAT

July 25, 2022

++ I-T - Assessee not given sufficient time to furnish reply to draft order, during peak of COVID pandemic & lockdown - Thick-skinned approach of Revenue not tenable: HC

++ I-T - Work taken up ancilliary to supply of Rolling Stock does not amount to professional or technical service so as to warrant deduction of TDS u/s 194J: HC

++ I-T - Institution set up for charitable purpose does not lose its character as such solely because it collected or received any fee or consideration: HC

++ I-T - When language of statute is unambiguous & admits of only one meaning, no question of construction of a statute then arises: HC

++ I-T - Deduction for R&D - DSIR is statutorily bound to issue the Form 3CL within 120 days as per Rule 6(7A)(ba): HC

++ I-T - Adjudicating authorities under Income Tax Act being quasi judicial authorities, can grant approval with retrospective effect if such mechanism is provided in Income tax Act: ITAT

++ I-T - In absence of any discrepancies pointed by Revenue in books of accounts maintained, restriction of disallowance of payment of labour charges to 10% is justified :ITAT

++ I-T - Power of revision u/s 263 cannot be exercised solely because CIT takes a view different from opinion taken by AO: ITAT

July 23, 2022

++ I-T - There cannot be any addition of unexplained expenditure by relying on a statement recorded u/s 132(4) without there being any independent corroborative evidence: ITAT

++ I-T - Loose sheets seized during search u/s 132 have evidentiary value : ITAT

July 22, 2022

++ I-T - Assessee cannot be allowed to take benefit of plea of no service of notice u/s 148 when even as per various documents, assessee was having three addresses as per PAN records: ITAT

++ I-T - Penalty imposed u/s 112(a) of Customs Act on account of any omission or commission in contravention of law, cannot be allowed as business expenditure u/s 37(1) of I-T Act: ITAT

++ I-T - Windmills installed on or before 31/03/2012 continued to be eligible for benefit of higher depreciation @ 80% for AY 2013-14 and subsequent years and said benefit was not withdrawn from AY 2013-14 onwards: ITAT

++ I-T - Order passed by AO is not non-est in eye of law and it is valid order, in case of procedural mistake committed by AO in not dealing to each and every objections raised by assessee: ITAT

++ I-T - Deduction u/s 80IB cannot be denied to an assessee where delay in granting completion certificate is on part of municipal corporation: ITAT

July 21, 2022

++ I-T - Final assessment order passed without adhering to request of personal hearing, is clear violation of faceless assessment scheme: HC

++ I-T - Re-assessment notice merits being quashed where issued after passage of 6 years from date of end of relevant AY: HC

++ I-T - Without recording any specific findings, AO cannot invoke the proviso to Sec 2(15) for holding that assessee fell under the category of advancement of general public utility : ITAT

++ I-T - Revisional power u/s 263 cannot be exercised unless Commissioner is able to establish that order of AO is erroneous and prejudicial to interest of Revenue: ITAT

++ I-T - Where assessee can claim higher rate of depreciation @ 30% in respect of vehicles, where assessee is unable to establish that it is engaged in business of letting out vehicles on hire: ITAT

++ I-T - Fleeting statement, on standalone basis, cannot possibly give rise to 'reason to believe' on face of manifestation: ITAT

++ I-T - Penalty u/s 271(1)(c) cannot be upheld where assessee makes full & true disclosure of facts necessary for assessment : ITAT

++ I-T - If assessee has established source of creditors, no addition is warranted u/s 68 on account of unexplained credits: ITAT

July 20, 2022

++ I-T - If Pr. CIT has not suggested basis of inquiry to be carried out by AO, then order passed by AO cannot be deemed to be erroneous in so as far as it is prejudicial to interest of Revenue: HC

++ I-T - Re-assessment proceedings merit being halted where AO ignores assessee's replies to SCN & so proceeds on incorrect information : HC

++ I-T - Additions framed u/s 68 upheld where assessee is able to establish the creditworthiness & genuineness of loan transactions in question : HC

++ I-T - Re-assessment notice issued beyond 4-year limitation period is time-barred; such defect cannot be remedied u/s 292B: HC

++ I-T - Writ remedy need not be invoked against appealable orders & where appellate remedy is unused: HC

++ I-T - As per principle of sublato fundamento cadit opus , where foundation of re-opening of assessment is removed, collateral proceedings under Section 263 will become invalid: ITAT

++ I-T - Since delay in filing appeal is condoned, case on merits can be remanded for reconsideration to pass order after considering documentary evidences : ITAT

++ I-T - Since concealment of income or furnishing of inaccurate particulars of income are two different forms, they cannot be inter mixed : ITAT

July 19, 2022

++ I-T - Attachment of bank a/c - order rejecting Stay petition upheld where assessee unable to establish prima facie case, financial strigency or balance of convenience: HC

++ I-T - I f deductions on freight, telecommunication & insurance attributable to delivery of computer software u/s 10A are allowed only in Export Turnover, they must also be allowed in Total Turnover: HC

++ I-T - Criminal prosecution of assessee is justified where assessee supressed income & filed ITR belatedly, punishable u/s 276C & 276CC: HC

++ I-T - Re-assessment commenced based on allegations of non-filing of ITR & non-payment of tax, merit being quashed, where documents furnished by assessee establish otherwise : HC

++ I-T - Writ Court in exercise of jurisdiction under Article 226 of Constitution, cannot entertain a challenge to assessment order on sole ground that statutory remedy of appeal stood foreclosed by law of limitation: HC

++ I-T - If two views possible and AO has accepted one, PCIT cannot assume jurisdiction u/ s 263 : ITAT

++ I-T - Shares purchased by assessee can't be held to be depreciable intangible asset : ITAT

++ I-T - Allowance of any claim of assessee by way of incomplete enquiry by AO renders such assessment as erroneous, warranting revisionary interference: ITAT

July 18, 2022

++ I-T - Scope of proceedings u/s 153A had to be confined only to material found in course of search and not to unabated assessment: ITAT

++ I-T - Explanation-1 to Section 32 is not applicable to expenditure incurred in relation to renovation of leasehold premises if they are not related to building construction material: ITAT

++ I-T - TDS - Provisions of Sec 194J & not those of Sec 192 apply to retainer doctors engaged by hospitals: ITAT

++ I-T - Assessee is NRI and sum in Dubai bank account are subject matter of taxation in Dubai no addition u/s 68 can be made : ITAT

July 16, 2022

++ I-T - Charitable trust is required to furnish Form No.10 along with Return of Income from A.Y 2016-17 onwards, for claiming deduction u/s 11(2): ITAT

++ I-T - Penalty u/s 269S need not be levied for accepting one time loan in cash to meet business exigency, without considering 'reasonable cause' explained by assessee: ITAT

++ I-T - Additions framed on account of dis-proportionate rental income received by assessee on one hand from third party & on the other from assessee's own daughter, is upheld: ITAT

July 15, 2022

++ I-T - Sufficiency or inadequacy of reasons to believe cannot be gone into while considering validity of act of authorization to conduct search & seizure: SC

++ Benami Act - Orders u/s 24(4) as interim measure, in order to protect their interest, does not require them to provide opportunity of cross examination of witnesses to Assessee: HC

++ I-T - Additions framed on the basis of statements & without permitting assessee to cross-examine deponents, cannot be sustained : ITAT

++ I-T - When no cash is involved in transaction of said allotment of shares, conversion of these liabilities into share capital and share premium cannot be treated as unexplained cash credits u/s 68 : ITAT

++ I-T - As assessee's HUF, Sajal Kar, has not been hitherto assessed under Income Tax Act, it cannot have been brought within realm of provisions of Sec 171 : ITAT

++ I-T - Ex-parte order passed levying penalty u/s 271(1)(b) merits adjudication afresh, if there factual is dispute regarding service and compliance of such notice: ITAT

++ I-T- One more opportunity can be given to assessee to prove sundry creditors by obtaining confirmation about them : ITAT

++ I-T - Interest on refund cannot be denied where delay in claiming or disbursal of refund not attributable to assessee : ITAT

++ I-T - It is a fit case for remand where approval u/s 80G is refused to a trust, where trust's counsel was unable to appear on date of hearing : ITAT

++ I-T- When all particulars with respect to claim having been truly furnished, then for mere disallowance of claim in law would not tantamount to charging assessee with concealing/furnishing inaccurate particulars of income : ITAT

July 14, 2022

++ I-T - No addition can be made merely based on surrender letter when details of payments are fully explained before tax authorities: ITAT

++ I-T - 902-days delay in filing appeal is not condonable where assessee has not provided any proper explanations or reasons for the same : ITAT

++ I-T - Foreign Exchange Gain derived from export business has be given benefit of deduction u/s 10AA: ITAT

++ I-T - Merely because some infirmity is noted in stamp paper, it could not have resulted into stating that whole transaction is bogus: ITAT

++ I-T -Dept. is directed to grant credit of DDT to assessee by giving necessary directions to jurisdictional AO to correct data uploaded to OLTAS database: ITAT

++ I-T - Interest expenses directly connected to interest income which assessee has received on deposits from company, are eligible for deduction: ITAT

July 13, 2022

++ I-T - Deduction in respect of profit retained for export business merits being allowed where claimant is clearly engaged in exporting certain items and in storage & handling of cargo at major ports: HC

++ I-T - Assessee cannot seek physical hearing under Faceless Assessment Scheme, which assessee did not opt for & also forfeit an opportunity of hearing which was offerred: HC

++ I-T - Writ petition need not be entertained where assessee has concurrently exercised statutory remedy of appeal: HC

++ I-T - Where income arises out of operations performed in more than one jurisdiction, then it has nexus with each jurisdiction & no one state can exercise right to tax income which has not arisen in that state: ITAT

++ I-T - Additions framed u/s 68 of the Act merit being reduced in quantum, where they are framed & sustained without proper appreciation of facts : ITAT

++ I-T - Re-igniting settled controversy by resorting to power u/s 263 which is nothing but arbitrariness and mis-appreciation of facts on part of Pr. CIT, calls for dismissal of revisionary order u/s 263: ITAT

July 12, 2022

++ I-T - For claiming benefit u/s 10B(8), twin conditions of furnishing declaration and that too before due date of filing original return are to be complied with: SC

++ I-T - Criminal prosecution laid based on the alleged failure to comply the demand notice will not survive where demand & penalty are subsequently quashed by ITAT: HC

++ I-T - Power of revision u/s 263 need not be exercised where original assessment order is neither erroneous nor prejudicial to Revenue's interests: HC

++ I-T - Test of validity of transfer of assessment u/s 127 is as to whether or not larger public interest & object behind I-T Act is being satisfied : HC

++ I-T - Delay in filing appeal by assessee's CA cannot be made ground to reject appeal on limitation: HC

++ I-T - Payment made under Employee's contribution to PF & ESI cannot be disallowed where such payments are made before due date of filing ITRs: ITAT

July 11, 2022

++ I-T - There is complete non-application of mind by AO and Addl. CIT who has given his approval u/s 153D :ITAT

++ I-T - No issue can be resurrected by assessee when it is conclusively settled by Tribunal: ITAT

++ I-T - Written off investment in the field of capital can be claimed as bad debt or business expenditure: ITAT

++ I-T - Power of revision cannot be exercised where based on different treatments of similar transactions : ITAT

++ I-T - CIT (A) rightly deleted addition made u/s 68 for unexplained cash credit as transactions are genuine : ITAT

July 09, 2022

++ I-T - Tribunal will not interfere in well reasoned order of below authorities as assessee fails to submit relevant details : ITAT

++ I-T - Absence of details of crops grown & evidence of sale of Agricultural produce in form of bills, is no basis to treat entire Agricultural income as income from other sources: ITAT

++ I-T- Since explanation-2 introduced by FA, 2021 in Sec 36(1)(va) is prospective in nature disallowance cannot be made of amount of employees' contribution towards PF&ESI if deposited before due date of filing return : ITAT

July 08, 2022

++ I-T - For purpose of computing capital gains, date of acquisition of immovable property is to be date of its allotment to the buyer: ITAT

++ I-T - Payment made towards employees' contribution to PF & ESI cannot be disallowed where payment though delayed under respective Acts, is still made within the due dates for filing ITRs: ITAT

++ I-T - Once project completion method of revenue recognition followed by assessee was in compliance with ICAI accounting guidelines, and same was duly examined by AO, then it is no basis to invoke revision: ITAT

++ I-T- Since assessee is able to substantiate commercial expediency, disallowance of interest u/s 36(1)(iii) can be deleted : ITAT

++ I-T - Search assessment order is unsustainable where no evidence incriminating the assessee is found in course of Search operations : ITAT

++ I-T - Revenue erred in objecting admission of additional evidences: ITAT

July 07, 2022

++ I-T - Question of application of Sec 40A(3) will not apply to cash payments received by horse racing business, if there is diversion of income and expenditure: ITAT

++ I-T - Asssessment order u/s 143(3) r.w.s. 153A is rightly made as there are valid seized material avaiable with Revenue : ITAT

++ I-T - Income derived from approved activity from SEZ is liable to be allowed as deduction u/s 80IA: ITAT

++ I-T - Case can be remanded back to PCIT to examine submission of assessee sent through email : ITAT

++ I-T - Assessee's appeal merits dismissal on limitation where sufficient reasons not given for delay in filing appeal: ITAT

++ I-T - Addition u/s 56(2)(viib) is made where consideration for issue of shares exceeds fair market value of shares: ITAT

++ I-T - Case can be remanded as addition in hands of the assessee u/s 56(2)(vii)(b)(ii) is made without making reference to valuation officer :ITAT

July 06, 2022

++ I-T - After amendment of Sec 80HHC, commission for export is available for deduction u/s 80HHC: HC

++ I-T - If advantage in incurring expense facilitates business more efficiently & more profitably leaving fixed capital untouched, then such expenditure is revenue in nature : HC

++ I-T - No addition of loss on sale and purchase of shares can be made in absence of any tangible material produced on record by Revenue after reopening of assessment: HC

++ I-T - Expenditure incurred by society, not for charitable purpose but promotes international welfare in which India is interested in, not eligible for exemption: ITAT

++ I-T - Re-opening of assessment based on some grounds which are not part of reasons recorded for re-assessment, is unsustainable: ITAT

++ I-T - Unless funds are borrowed for making deposits to earn interest income, such interest paid on borrowings cannot be allowed as deduction in computation of income from other sources : ITAT

July 05, 2022

++ I-T - Lease equalization charges which is claimed by taking recourse to provisions of Companies Act, Accounting Standard and Income Tax Act, merits allowance: ITAT

++ I-T - Reduction of profit if substantiated through proper evidences, cannot lead to rejection of books u/s 145(3): ITAT

++ I-T- When as a result of bills raised by concerned parties, liability on account of expenses has arisen and crystallized in relevant year same can be allowed : ITAT

++ I-T - Reopening made on wrong set of facts and sanction granted u/s 151 in very mechanical manner and without application of mind, renders such assessment bad in law: ITAT

++ I-T - Power of revision u/s 263 cannot be exercised where CIT does not demonstrate as to how original assessment order is erroneous or prejudicial to Revenue's interest: ITAT

++ I-T - Documents collected by department from computers of M/s RNS Infrastructure Ltd cannot be described as evidence so as to fasten tax liability on assessee : ITAT

++ I-T - Assumption of PCIT that AO has estimated profits by applying sec 44AD and allowed interest and depreciation on estimated profit, is not correct interpretation of AO's order : ITAT

++ I-T - Additions u/s 68 merit being sustained where AO does not have any doubts regarding source of funds: ITAT

++ I-T - Power of revision is rightly exercised where AO omits to follow mandatory provisions of law: ITAT

++ I-T - Compensation given by NHAI for acquiring land are exempt for tax purposes: ITAT

July 02, 2022

++ I-T- Merely because there is absence of discussion thereon can't by itself is an indicator that AO has failed to examine issue : ITAT

++ I-T - If dominant purpose is charitable then incidental activities are not required to be treated as business in nature : ITAT

July 01, 2022

++ I-T - Amount received in excess of amount standing to credit of partnership firm which is paid towards notional gain on revaluation of land is liable to tax : HC

++ I-T - Prosecution of assessee upheld where wilful concealment of correct income by not filing ITR within time stipulated, is clearly established : HC

++ I-T - Re-assessment - Best of judgment order - Assessee not diligent in pursuing matter, failed to give adequate reply to notices; cannot later allege contravention of natural justice: HC

++ I-T - One opportunity can be granted to assessee as offence is compoundable: HC

++ I-T - Case can be fixed for either limited scrutiny or complete scrutiny and in case it is for complete scrutiny, then no written approval is required by AO from PCIT: ITAT

++ I-T - Penalty imposed u/s 271(1)(c) sustained where assessee does not submit any evidence to show that it made voluntary disclosure during assessment proceedings, before detection of bogus loss claimed: ITAT

++ I-T - Assessee did not write off provisions for doubtful debts due to fear of losing right to civil proceedings for recovery of debts; deduction allowed for provision of doubtful debts: ITAT

++ I-T - Amount received in excess of amount standing to credit of partnership firm which is paid towards notional gain on revaluation of land is liable to tax : ITAT