TODAY'S CASE (DIRECT TAX)

June 30, 2022

++ I-T - If investment made by assessee is neither more than amount declared by her during assessment proceedings nor outside books, then same cannot be declared as unexplained: ITAT

++ I-T - Expenses which is incurred to bring building in same form and no new asset came into existence, are revenue in nature and hence, allowable u/s 37: ITAT

++ I-T- Expenses incurred for providing gifts, travel facilities & hospitality to medical practitioners in form of sales promotion expenses can't be allowed: ITAT

++ I-T - Once dispute is settled under DTVSV, then penalty or interest can be levied on disputed claim as per provisions of DTVSV 2020: ITAT

++ I-T - If there is no direct nexus between R&D activities carried out and product manufactured by assessee company, then R&D expenditure cannot be allocated to manufacturing unit: ITAT

++ I-T - Assessee's failure to explain source of source cannot be treated as his failure to discharge onus u/s 68: ITAT

++ I-T - Failure of AO to carry out necessary verification in relation to share application money received by assessee in terms of Sec 68, which renders assessment prejudicial to interest of Revenue, merits revision u/s 263: ITAT

++ I-T - Transaction made through RTGS even on Recognised Stock Exchange does not prove its genuineness and does not negate allegation of providing bogus gains to beneficiaries so as delete additions u/s 68: ITAT

June 29, 2022

++ I-T- Assessment order is deemed to be erroneous insofar as it is prejudicial to interest of revenue as order is passed without making inquiries or verification, which should have been made by AO: ITAT

++ I-T - Claim of professional charges can be allowed as liability is crystallized only after receipt of bills in AY 2013-14: ITAT

++ I-T - Once substantive additions are made in hands of entry providers, then protective addition need not be made in hands of beneficiaries: ITAT

++ I-T - Actual annual rent received by assessee cannot be substituted by notional rent without AO arriving at finding that leased property can be reasonably expected to be let out for higher sum: ITAT

++ I-T- If loan is utilized for purpose of acquiring any capital asset, same on its waiver, would not constitute income changeable to tax : ITAT

June 28, 2022

++ I-T - Once taxpayer has opted not to respond to reasons accompanying notice u/s 148-A(b), plea raised by him assessee w.r.t. wrongful assumption of jurisdiction at hands of ITO, is without merit: HC

++ I-T - Once belated TDS amount stands deposited along with interest, there is no reason to continue with criminal proceedings initiated u/s 276B & 278B IPC: HC

++ I-T - Sec 148 notices issued to taxpayer under unamended sec 148, shall be deemed to have been issued u/s 148A as substituted by the Finance Act, 2021 and treated to be showcause notices in terms of Sec 148A(b): HC

++ I-T - Re- assessment framed without supplying copy of reasons to assessee is not valid assessment & cannot not be sustained : ITAT

++ I-T - If application moved by assessee requesting for admission of additional evidence under Rule 46A was forwarded to AO and he was given sufficient time to rebut same, there is no violation of Rule 46A: ITAT

++ I-T - Mobilization charges payments made is reimbursements on which deduction of tax at source is not warranted - ITAT

++ I-T- Nexus between expenses sought to be disallowed and earning of dividend income has to be seen before applying rule 8D of IT Rules : ITAT

++ I-T - Travelling charges disallowance of 10% on estimation basis is just and proper in absence of complete reconciliation : ITAT

June 27, 2022

++ I-T - In order to be covered within second proviso to Sec 40(a)(ia), furnishing of certificate in prescribed form proving existence of conditions stated in first proviso to section 201(1), is sine qua non : ITAT

++ I-T - Arbitration award given to partner in lieu of relinquishment of certain rights and interests in assets which have no connection with assets of partnership firm, cannot be taxed u/s 28(iv): ITAT

++ I-T - Consideration paid for perpetual lease can reasonably include not only cost of construction of building but also cost of proportionate land: ITAT

++ I-T - Remuneration paid to Working Partner in cash within permissible limits as per section 40(b), cannot be disallowed u/s 40A(3): ITAT

++ I-T - Interest expenditure having no direct nexus with own funds and utilization for business purpose, calls for disallowance u/s 36(1)(iii): ITAT

June 25, 2022

++ I-T - Power of revision u/s 263 cannot be exercised where PCIT lacks requisite jurisdiction, i.e., order passed by AO contains no errors: ITAT

++ I-T - Exemption benefit u/s 54 does not merits acceptance, if new flat purchased from sale of joint property by assessee was in name of his wife: ITAT

++ I-T - Investor is not eligible to claim deduction u/s 54 on capital gains which is earned from sale of industrial plot and not residential house: ITAT

June 24, 2022

++ I-T - Provisions of Sec 14A inapplicable on profits from shares where shares were held as stock-in-trade and not as investment particularly by banks : HC

++ I-T - Writ court's intervention against penalty order is unwarranted, where it is result of search & seizure operations which led to conclusion of assessee having indulged in tax evasion: HC

++ I-T - Penalty imposed u/s 271(1)(c) must necessarily be based on satisfaction based on certain material evidence going to establish that assessee concealed particulars of income or furnished inaccurate particulars of income: HC

++ I-T - Acceptance of referral fee by medical practitioner is forbidden by enforceable code of conduct and assessee company can not claim tax deduction in respect of such expenditure : ITAT

++ I-T - AO lacks jurisdiction to enter jurisdiction u/s 153C in absence of any incriminating material found in course of search that has bearing on determination of total income of assessee: ITAT

++ I-T- Since interest income is to be subjected to tax as income from other sources u/s 56, provisions of Sec 57 will govern allowability of expenses :ITAT

++ I-T - Since annual value determined by Revenue is devoid of any rational endorsement, addition made for rental income can be deleted : ITAT

++ I-T - Interest paid for extra commercial considerations cannot be allowed as deduction u/s 80IB: ITAT

June 23, 2022

++ I-T - It is trite law that if Revenue does not challenge a High Court's judgment on an issue in respect of one assessee, then it cannot challenge such verdict in respect of some other assessee: HC

++ I-T - TDS not leviable on compensation amount received by person for land taken over for construction of metro rail project, where such person is not specified person u/s 46 of I-T Act: HC

++ I-T - Re-assessment cannot be contested on jurisdiction, where same AO who passed original order also passes re-assessment order: HC

++ I-T - Royalty income to excluded from calculation of deduction u/s 80HHC, where assessee unable to prove royalty received from subsidiary, relates to export business : HC

++ I-T - Factual finding recorded by the lower authorities or by the ITAT cannot be contested for being invalid, solely because another conclusion or finding could have been recorded : HC

++ I-T - Revisionary jurisdiction u/s 263 initiated upon failure of assessee to substantiate his claim, leading to prejudice of Revenue's interest, calls for no interference: ITAT

++ I-T - If sufficient own interest-free funds are available, presumption is that funds used for making interest free advances calling for no disallowance of interest : ITAT

June 22, 2022

++ I-T - Penalty notice is invalid where relevant charge against assessee between concealment of income or furnishing inaccurate particulars of income, has not been specified: ITAT

++ I-T - If charitable trust had furnished relevant documents evidencing donations made eligible for deduction u/s 80GGA/80G, then disallowance of such claim resulting from computational error merits rectification u/s 154: ITAT

++ I-T - Employer would be eligible for claiming deduction in respect of delayed payment of PF of employees contribution, if paid before due date of filing return: ITAT

++ I-T - Following order passed by Tribunal, in assessee's own case on identical issue, assessee need not capitalized entire finance cost : ITAT

++ I-T - Disallowance u/s 14A cannot be more than exempt income earned by Assessee during assessment year in question: ITAT

++ I-T - When assessment u/s 143(3) was framed, then reopening has to be made in terms of stipulation of 1st Proviso to section 147: ITAT

++ I-T- Reopening of assessment with incorrect reasons is bad in law : ITAT

June 21, 2022

++ I-T - If AO has taken one of possible views based on information, then it is not necessary that AO should put all discussions and observations in assessment order : ITAT

++ I-T - For purpose of section 54F, date of sale is 'date of agreement to sell' and not when full & final consideration is received by seller: ITAT

++ I-T - Advances made in ordinary course of business could not be treated as 'deemed dividend' u/s 2(22)(e): ITAT

++ I-T - Merely because assessee has failed to produce lenders, is no ground for disbelieving transaction of frequent cash deposits: ITAT

++ I-T - Reference to DVO u/s 142A for purpose of Section 69C is invalid: ITAT

Junne 20, 2022

++ I-T - Action of Pr. CIT cannot be faulted per se, simply because assessee may possibly explain its stance with factual corroboration in proceedings before AO arising from revisional proceedings u/s 263: ITAT

++ I-T- Gain resulting from agricultural land was not liable to be considered as income u/s 45 : ITAT

++ I-T - Any income in current account need not be assessed as undisclosed income, once genuineness of claims was found to be true after verification: ITAT

++ I-T - Debatable issue clearly falls beyond ambit of expression 'mistake apparent from record', and hence rectification order passed u/s 154 under such circumstances merits to be set aside: ITAT

++ I-T - No ad hoc additions can be made u/s 36(1)(iii), without evidencing that interest-bearing funds were actually utilised for purpose of advancing funds on which no interest was charged by assessee: ITAT

June 18, 2022

++ I-T - Non-appearance before AO or non-compliance with statutory notices u/s 148/ 143(2) & 142(1), justifies action of AO in making ex-parte assessment to best of his judgement: ITAT

++ I-T- Overlooking mandatory provision of law in original assessment is apparent mistake of law which is rectifiable u/s 154: ITAT

++ I-T- Merely because assessment order is cryptic one, it cannot be said that order is erroneous and prejudicial to interest of Revenue: ITAT

June 17, 2022

++ I-T - Entire royalty expenditure for use of technical know-how is revenue expenditure in absence of any vested advantage to assessee : ITAT

++ I-T - When bank statement reflects both cash withdrawals and cash deposits within gap of few days, then no addition is warranted u/s 69A if there is plausible explanation: ITAT

++ I-T - Penalty levied u/s 271(1)(c) is unsustainable on account of defect in statutory notice issued u/s 274, as well for reason that penalty is levied on addition made on mere estimations: ITAT

++ I-T - Additions made primarily on the basis of oral evidence of third parties, without giving fair opportunity of hearing and right to cross-examine those parties to assessee, merits to be quashed: ITAT

++ I-T - When i nitiation of criminal proceedings against company and its directors, culminated in prison time for key person, non-appearance cannot be put against company leading to ex-parte assessment: ITAT

++ I-T - Carried forward long term capital loss can be allowed to be set off against long term capital gain arisen during concerned year: ITAT

++ I-T- Addition u/s 2(22)(e) for deemed dividend can be made as all basic conditions are satisfied : ITAT

++ I-T - Failure of AO in specifying limb under which he intends to initiate penalty proceedings, vitiates very levy of such penalty: ITAT

June 16, 2022

++ I-T - additions framed u/s 68 in respect of investments made by assessees in a penny stock, merit being sustained where assessee is unable to furnish any reasonable explanation for sudden & steep rise in share prices in the midst of recession: HC

++ I-T - Pre-operative expenditure cannot be allowed as business expenditure, if company has not at all completed set up of business so as to commercially starts its operation: ITAT

++ I-T - Addition of spare parts & tools which are not independent of plant & machinery, but are parts of machinery, can be treated as installation of plant and machinery so as to claim additional depreciation: ITAT

++ I-T - Since resolution plan as approved by Adjudicating Authority shall be binding on corporate debtor, it will prevent Regulatory bodies including Tax Departments from questioning resolution plan: ITAT

++ I-T - AO can be said to have exceeded his jurisdiction, if he treats closing cash in hand as income from undisclosed sources which was not mandated under 'limited scrutiny' notice issued u/s 143(2): ITAT

++ I-T - Additions framed u/s 68 upheld where assessee is unable to establish reasonableness of share premium received vis-a-vis fair market value of shares : ITAT

++ I-T - Substantial reasons for non appearance cannot be overruled while passing ex-parte order: ITAT

++ I-T- Penalty u/s 271E can not be imposed based on vague and non-descript loose papers : ITAT

June 15, 2022

++ I-T - Re-assessment order passed without first considering assessee's reply in response to notice issued u/s 148 is unsustainable & more so when no reasoning is given by AO: HC

++ I-T - Power of revision rightly exercised where issue of disallowance of late payment of EPF beyond due date, has not been considered by AO : ITAT

++ I-T - Government Corporation like any other assessee cannot be allowed to plead preferential treatment to escape responsibilities of representing their case before tax authorities: ITAT

++ I-T - Merely on account of mistake in accounting treatment by mistakenly showing any sum under head 'loans and advances' instead of trade receivables', section 36(1)(iii) cannot be invoked: ITAT

++ I-T - If entire income as admitted by assessee is not proved, every expenditure incurred cannot be treated as unexplained income of assessee: ITAT

++ I-T - Tax shall be charged on income of trust at maximum marginal rate in pursuance to provisions of section 164(1): ITAT

June 14, 2022

++ I-T - Penalty cannot be imposed u/s 271(1)(c) solely due to bona fide error by assessee while filing ITRs : HC

++ I-T - AO did not review emails received is not grounds enough to reject application for extension of date of personal hearing, received through email : HC

++ I-T - Re-assessment commenced based on unverified information contained in a complaint filed by assessee, is unsustainable :HC

++ I-T - CSR expenses allowed u/s 37(1) where they pertain to period prior to amendment of Section 37 which disallowed such claim: ITAT

++ I-T - No TDS liability can be attached on payments made for advertising/marketing services to FII which has no PE in India: ITAT

++ I-T - Interest paid in respect of capital borrowed for business purposes constitutes allowable deduction u/s 36(1)(iii): ITAT

June 13, 2022

++ I-T - Action of Income Tax Authorities in trying to cover up default on their part in not having notice served properly upon assessee, cannot be appreciated: HC

++ I-T - Deposit of employees' contribution towards ESI and PF paid before due date of filing of return can be allowed as amendment which is brought in by Finance Act, 2021 apply w. e. f. AY 2021 - 22 : ITAT

++ I-T - Exercise of revisional jurisdiction by PCIT is without any justification as PCIT has sought to reappraise evidence in garb of revisional jurisdiction: ITAT

++ I-T - Amount which is rightfully offered as income by assessee during assessment proceedings must be added to Book Profit for purposes of section 115JB :ITAT

June 11, 2022

++ I-T - For re-assessment, existence of belief has to be bonafide & has to be based on material which is relevant & specific in nature & is discernable from facts on record : ITAT

++ I-T - When there is legal disability or physical impossibility in creating tenancy & due to which property is left vacant, then there is no possibility of rent being realized & rent cannot be said to be receivable: ITAT

++ I-T - Penalty levied u/s 271(1)(b) merits being quashed since assessee did not receive notice issued u/s 142(1) or 142(2A) on account of change of address : ITAT

June 10, 2022

++ I-T - Where amount of underreporting of income is consequent to increase in disallowance voluntarily estimated by assessee, such case is not fit for imposing penalty u/s 270A : HC

++ I-T - While quashing criminal proceedings, uncontroverted averments in complaint without any addition or subtraction should be looked into to examine whether offence can be made out or not: HC

++ I-T - If proceedings have not even been concluded by statutory authority, writ Court should not interfere at such pre-mature stage: HC

++ I-T - Assessee cannot claim extension of last date to seek payment of tax with late fee under Direct tax VsV Scheme, in absence of any such vested right: HC

++ I-T - If trust had filed Form-10 during course of assessment and before completion of assessment, then same should be considered by AO while considering claim of benefit u/s 11(2): ITAT

++ I-T - Once records are forming part of assessment records for earlier year, there is no need to call for remand report of AO at stage of CIT (A): ITAT

++ I-T - If deposits have been made out of book balances, there is no reason to estimate income there from: ITAT

June 09, 2022

++ I-T - Power of revision need not be exercised where PCIT does not point out any inadequacy in original assessment order: ITAT

++ I-T - Section 68 being rule of evidence, onus is on assessee to establish source and nature of credits in question: ITAT

++ I-T - Penalty notice is invalid where inapplicable charge between concealment of income & furnishing inaccurate particulars of income is not struck off : ITAT

++ I-T - Case can be remanded to check and confirm source of investment as nexus theory is not always a correct test :ITAT

++ I-T - No disallowance of interest expenditure is warranted under Rule 8D(2)(ii) r.w.s. 14A, if investments were made out of own funds: ITAT

++ I-T - Assessee cannot be allowed to cover any sum disclosure amount by claim of expenditure, which were totally afterthought: ITAT

June 08, 2022

++ I-T - Revisionary powers to be exercised only if PCIT disagrees with view taken by AO in original assessment order : ITAT

++ I-T- As jurisdiction of AO to pass order u/s 154 to withdraw relief granted u/s 14A is held to be barred, issues involved in cross appeals stand disposed of : ITAT

++ I-T - If employee's share of contribution is made on or before due date for furnishing return u/s 139(1), then employer would be entitled to claim deduction u/s 43B: ITAT

++ I-T - If assessee fails to furnish information relating to trading liabilities, addition can be made on estimated basis : ITAT

June 07, 2022

++ I-T - Summary rejection of the objections to re-assessment is insuffient & the AO is required to respond to each and every objection raised by assessee : HC

++ I-T - Re-assessment order merits being quashed where it is passed without considering objections raised by assessee thereto : HC

++ I-T - Re-assessment order warrants being quashed where based on sound information which goes to show that income otherwise taxable had escaped assessment: HC

++ I-T - Revenue's appeals filed in matters involving bogus LTCG arising from penny stocks, are not maintainable, where special order to file appeal is not obtained as per Circular No. 23/2019 : ITAT

++ I-T - Question of law settled in previous assessment years merits status quo in current assessment years, in case of identical circumstances: ITAT

++ I-T - Failure of AO to give full effect to order of CIT(A) in respect of appeal order, is clear cut case of mistake apparent on record: ITAT

June 06, 2022

++ I-T - Failure to consider assessee's response to reasons for reopening, renders violation of mandate of Section 148A(c): HC

++ I-T - Once receipt of amount is treated as receipt from sale of property, then loss or gains have to be treated under relevant head of income for taxation purpose: ITAT

++ I-T - If identity, credit-worthiness & genuineness of transactions are duly verified by AO and no adverse finding was recorded, then no addition of sundry creditors should be made by treating it as ingenuine: ITAT

++ I-T - CIT is said to have travelled beyond SCN u/s 263, if he has not given any definite finding by recording cogent reasons why order of AO is erroneous and prejudicial to interest of revenue: ITAT

++ I-T - If assessee has not filed any supporting evidences to substantiate its claim that fixed expenditure has to be incurred even though there is no business activity, such claim need no acceptance: ITAT

++ I-T - Addition of sundry payments can be made to extent not incurred wholly and exclusively for purpose of carrying on business of assessee : ITAT

++ I-T - Manufacturer is eligible for claiming deduction u/s 80IC: ITAT

June 04, 2022

++ I-T - Re-opening of assessment upheld where based on discovery of apprehended untruthfulness of facts previously disclosed: HC

++ I-T - Court not obliged to consider those judgments which are not cited during oral arguments but are submitted after conclusion of arguments: HC

++ I-T - Employer is entitled to claim deduction of employee's share of ESI & PF u/s 43B, if same has been deposited prior to filing of return of income u/s 139(1): ITAT

++ I-T - There is no provision in statute that no disallowance of expenditure could be made on investments made in earlier years: ITAT

++ I-T - Provisions of Section 36(1)(va) & 43B impose liability on assessee and therefore cannot be construed as applicable with retrospective effect unless legislature specifically says so: ITAT

June 03, 2022

++ I-T - Power of compounding of offences is a quasi judicial power, as it definitely entails judicial element & discretion in compounding is not unfettered : HC

++ I-T - Re-opening of assessment sustained where sanction for it rightly granted & where assessee engaged in complex web of pre-arranged or artificial transactions leading to escapement of income : HC

++ I-T - High Court expresses ire against Department for recovery of tax dues in contravention of natural justice, settled legal position & relevant Board Circulars; costs of Rs. 50K imposed : HC

++ I-T- In cases of search & seizure, Department cannot seize and retain documents of title beyond 15 days: HC

++ I-T- Case can be remanded to AO for giving proper opportunity to assessee as addition is made because of non-submission of details by assessee: ITAT

++ I-T - Since amendment brought in by FA, 2021 applies w.e.f. AY 2021 - 22, employees' contribution to ESI and PF deposited before due date of filing of return can be allowed :ITAT

++ I-T- Time limit for investment of LTCA is 6 months from date of transfer and even if such investment falls under two FYs, benefit of investment of Rs. 50 Lakhs individually in each FY cannot be denied : ITAT

June 02, 2022

++ I-T - Penalty u/s 271(1)(c) upheld where assessee did not furnish explanation to refute allegations of concealment of income or of furnishing inaccurate particulars of income: HC

++ I-T - Company cannot be held liable for tax dues payable by one of its directors : HC

++ I-T - Re-assessment invalid where income is less than Rs 50 lakhs & where SCN is not issued within limitation prescribed u/s 149 : HC

++ I-T - Writ petition cannot be sustained where filed in respect of proceedings which are yet to be concluded: HC

++ I-T - Re-assessment invalid where assessee made full & true disclosure of material facts necessary for assessment: ITAT

++ I-T - Withdrawal of recognition u/s 35(1)(ii) in hands of payee does not affect the right & interest of assessee for claim of deduction u/s 35(1)(ii): ITAT

June 01, 2022

++ I-T - Late filing fee under Sec 234E cannot be imposed in respect of a period which preceded the year in which this new levy was brought into effect: HC

++ I-T - Calcutta High Court sets aside ex-parte order and expunges adverse observation made against counsel for assessee and imposition of cost : HC

++ I-T - Assessment order passed hastily without giving any thought to response furnished by assessee merits being set aside : HC

++ I-T - Merely because Revenue classifies facts already on record as 'information', does not vest it with power to issue re-assessment notice u/s 148 post order u/s 148A(d): HC

++ I-T - Exclusion of 'other income' in only one leg of computing net income and effective rate of tax in Ghana is not the right approach: ITAT

++ I-T - Power of revision is rightly exercised where AO passes assessment order accepting assessee's contentions, but without considering the basic details of the case: ITAT

++ I-T - Where information is factual and not false and is merely communicated to AO, AO is empowered to invoke provisions u/s 147 r.w.s. 148 : ITAT

++ I-T - Once assessee has shown low NP rate in comparison to immediately preceding assessment year which raises situation of leakage of revenue, such case calls for addition on basis of sales/turnover ratio: ITAT