TODAY'S CASE (DIRECT TAX)

May 31, 2022

++ I-T - Re-assessment is invalid where AO does not consider assessee's reply to SCN before passing order : HC

++ I-T - Power of revision need not be exercised where AO is found to have made complete inquiry into issue raised by PCIT for conducting revision: ITAT

++ I-T - AO cannot impose penalty u/s 271AAC where the matter is pending disposal before Settlement Commission following application by assessee : ITAT

May 30, 2022

++ I-T - Once order passed by ITAT already stands confirmed by judgment of Apex Court, appeal seeking fresh disposal by ITAT by way of remand is infructuous: HC

++ I-T - Question as to taxability and mischaracterization of income, merits to be examined in case of dispute of factual circumstances: HC

++ I-T - Commission paid to directors of assessee-company cannot be allowed as business expenditure, where directors in question are not shown to have any experience in managing assessee's business : HC

++ I-T - Section 56(2)(vii)(c) is not applicable to bonus shares :ITAT

++ I-T - In absence of any prejudice being caused to the Revenue, revisional proceeding are wrongly started by PCIT: ITAT

++ I-T - Additions framed u/s 68 are unsustainable where based solely on suspicion: ITAT

May 28, 2022

++ I-T - Power of revision cannot be exercised where CIT records no reasons for disagreeing with the findings recorded by AO: ITAT

++ I-T - U/s 263, PCIT can set aside original assessment that has been completed without proper enquiries: ITAT

++ I-T - Once initial documents are admitted by CIT(A) and remand report has been called upon from AO, then same cannot be rejected without any cogent reasons and conducting necessary enquiries : ITAT

May 27, 2022

++ I-T - For AYs prior to AY 2021-22, provisions of Section 43B cannot be applied for determining due date under Explanation to Section 36(1)(va) : ITAT

++ I-T - Fair market value of land/building could not be deduced only on basis of comparable sale consideration furnished by sub-registrar office: ITAT

++ I-T - Exercise of revisionary powers u/s 263 is not in accordance with law as no basis given by CIT(E) for rejecting claim of assessee: ITAT

++ I-T - Disallowance made u/s 36(1)(iii) where assessee fails to establish commercial expediency in doing financial transactions, is valid : ITAT

++ I-T - Case can be remanded to give oppurtunity to assessee to explain source of investment: ITAT

++ I-T- Sale of non-agricultural plot of land is a transfer of capital asset and attracts capital gain tax: ITAT

++ I-T - Deduction u/s 54F is to be given only to assessee who has invested entire money : ITAT

May 26, 2022

++ I-T- It is appropriate to restore case to AO for taking necessary action in accordance with law in light of order of NCLT, Kolkata : ITAT

++ I-T - As per mandate of CBDT Instruction, AO cannot travel beyond scope of limited scrutiny so as to enlarge scope of assessment by framing additions on different grounds: ITAT

++ I-T - VAT laws permit belated payment of tax with interest & are not hit by Explanation I to Section 37(1); interest on delayed payment of VAT allowable u/s 37: ITAT

++ I-T - No addition can be made on mere conjecture and surmises without any corroborative material : ITAT

May 25, 2022

++ I-T- Re-opening of assessment is unsustainable where the order u/s 148A(d) is issued by a non-jurisdictional AO : HC

++ I-T - Addition of undisclosed investments u/s 69 can be upheld when assessee fails to explain contents of documents found during search : ITAT

++ I-T - Re-assessment is invalid if based on very same facts which were available at time of original assessment : ITAT

++ I-T - Error in filing claims does not disentitle assessee from claiming a lawful expenditure : ITAT

++ I-T - Onus rests with the AO to establish that rent receivable is lesser than ALV of property in question: ITAT

May 24, 2022

++ I-T - Set off allowed of loss suffered from transactions in derivatives, against business income earned from infrastructure business u/s 70 : HC

++ I-T - Section 50C not to apply if transaction undertaken qualifies as 'adventure in the nature of trade': ITAT

May 23, 2022

++ I-T - Re-assessment cannot be initiated when assessment proceedings for the relevant AY are still on-going: HC

++ I-T - Re-assessment is valid where AO applies mind while recording reasons for re-assessment & where AO conducts own investigation after receiving inputs from Investigation Wing: HC

++ I-T - Re-assessment unsustainable when there is no income escaping assessment, as that Revenue itself assessed income for relevant AY: HC

++ I-T - Where any statute leads to some hardships, Revenue is obliged to construe these provisions in a reasonable manner : HC

++ I-T - Where assessee sells land as agricultural land & where such land is later converted to non-agricultural purpose by new owner, then assessee cannot be held liable to pay LTCG : ITAT

++ I-T - CIT (A) is right in restricting addition by estimating expenditure to tune of 5% of teak wood sales instead of 20% estimated by AO : ITAT

May 21, 2022

++ I-T- CIT rightly passed revision order u/s 263 as no material evidences are available to substantiate claim of cost of improvement & redevelopment expenditure : ITAT

++ I-T- Reference made by AO to DVO u/s 55A is bad in law :ITAT

++ I-T- PCIT order merely setting aside AO's order without independently dealing with merits of issue is untenable : ITAT

May 20, 2022

++ I-T - Addition made by AO in absence of any incriminating material, merely on basis of suo-motu disclosure made before ITSC, is not sustainable: ITAT

++ I-T - Assessment order, made on basis of statements recorded from third parties that are neither provided nor cross-examination is given to assessee, is bad in law : ITAT

++ I-T - Delay in filing TDS quarterly statements is per se insufficient grounds to impose penalty, more so where reasonable explanation is given to explain such delay : ITAT

++ I-T- Reassessment proceedings are invalid as AO fails to indicate how and why assessee has failed to make full and true disclosure of all material facts necessary for assessment : ITAT

++ I-T- Ad hoc disallowance of telecom expenses can't be made by merely stating that assessee could not justify business expediency : ITAT

++ I-T - Additions u/s 153C invalid where no material incriminating the assessee is found in course of search proceedings : ITAT

++ I-T- Addition for bogus purchases should be restricted to gross profit involved in such purchases : ITAT

May 19, 2022

++ I-T - As mandated by newly inserted Sec 148A, re-assessment proceedings must necessarily be preceded by SCN : HC

++ I-T - If Department does not dispute that particlar question of law could also be gone into in pending appeals, there should be no impediment to appellate Tribunal to consider assessee's grounds regarding same: HC

++ I-T - While computing income from insurance business u/s 44 and First Schedule of the Act, profit/loss on sale/redemption of securities/investments are not taxable : ITAT

++ I-T - No addition can be made u/s 68, when assessee has discharged their onus and nothing adverse is found against them : ITAT

++ I-T - Assessment cannot be set aside u/s 263 by PCIT without conducting any enquiry/verification : ITAT

++ I-T- Co-operative society is entitled to claim deduction u/s 80P(2)(d): ITAT

May 18, 2022

++ I-T - Notice issued against dead person u/s 148 is null and void and all consequent proceedings/orders being equally tainted are liable to be set aside : ITAT

++ I-T- In absence of contrary proved by evidences it is always presumed that non-interest bearing funds have been used for advancing to parties : ITAT

May 17, 2022

++ I-T - Case can be remanded to pass a de novo orders on merits on issue of reopening of assessment as there is lack of clarity on facts of case - HC

++ I-T - Re-assessment proceedings untenable where assessee not given opportunity to file reply to SCN: HC

++ I-T - Period taken by assessee for rectifying defects or curing omissions, does not entail receipt of interest u/s 244A :HC

++ I-T - Disallowance of depreciation on inflated URD purchases without making addition of alleged purchases is wrong : ITAT

++ I-T - No addition in assessment completed u/s 153C can be made without material found in course of search if unabated assessments is already completed prior to search: ITAT

++ I-T - Municipal Ratable Value of property or actual rent offered in return, whichever is higher, is to be adopted as fair rent : ITAT

++ I-T- CAM charges are subject to deduction of tax at source u/s 194C at 2% as it is in nature of contractual payments : ITAT

May 16, 2022

++ I-T - Appeal u/s 260A is to be entertained only when it directly & substantially affects rights of parties or if factual findings are perverse: HC

++ I-T - Where facts on record show that tax is paid without any evasion, it cannot be presumed that there was any wilful attempt to evade payment of tax : HC

++ I-T - Information or material pertaining to different AYs may give rise to suspicion but not reason to believe for reopening of assessment : ITAT

++ I-T- Addition u/s 68 is not justified when genuineness of transaction in respect to issue of shares is established : ITAT

May 14, 2022

++ I-T - Re-opening of assessment merits being sustained where falsity of certain claims made by assessee are exposed in course of audit : ITAT

++ I-T - Books of accounts cannot be rejected u/s 145(3), simply because stock register is not maintained : ITAT

++ I-T - Income for application for charitable purpose is to be computed in accordance with commercial principles: ITAT

May 13, 2022

++ I-T - Income chargeable to tax that has been under-assessed would fall under the deemed cases, where income chargeable to tax has escaped assessment : HC.

++ I-T- Auction conducted by Income Tax Department is not irregular as there exists liabilities of assessee which third respondent has undertaken to discharge : HC

++ I-T - Notice u/s 148 issued upon deceased is void ab initio : HC

++ I-T- Transfer order u/s 127(2) is without jurisdiction if such order is not supported by reasons : HC

++ I-T - No addition u/s 69 can be made if two conditions are not satisfied: there must be some investment and assessee is short of explanation: ITAT

++ I-T - When nature and source of old currency notes is fully supported and substantiated, no addition u/s 68 can be made: ITAT

++ I-T - AO must pass penalty order either before end of FY in which proceedings, during course of which action for imposition of penalty is initiated, are completed or before 6 months from end of month in which order of CIT(A)/Tribunal is passed; whichever is later: ITAT

May 12, 2022

++ I-T - Consideration paid by amalgamated company over and above net assets of amalgamating company should be considered as goodwill warranting depreciation u/s 32(1) : ITAT

++I-T- Since there is need to have clarity on true facts about transaction, issue of addition of unsecured loan can be remanded back for reconsideration : ITAT

++ I-T - AO can disregard valuation method adopted by assessee only when it is not as per Rules contained in Explanation (a)(i) to sec. 56(2)(vii)(b) : ITAT

++ I-T - Since assessee has discharged its primary burden by furnishing source of investment no addition u/s 69 can be made without evidences : ITAT

++ I-T - Deduction u/s 54F is allowable to extent of amount of capital gain invested/utilized till filing of return by Assessee u/s 139(4) : ITAT

++ I-T - Assessment can be reopened if disclosure made by assessee is full but not true : ITAT

++ I-T - AO cannot make addition u/s 69 if there are sufficient sources of cash deposits received by assessee : ITAT

May 11, 2022

++ I-T - Additions u/s 68 sustained where assessee fails to furnish evidence to prove identity or creditworthiness of creditors or establish genuineness of loan transaction : ITAT

++ I-T - Corpus donation received by a trust for utilisation for specific purposes qualifies as capital receipt & is non taxable even if trust is not registered u/s 12A: ITAT

++ I-T- Amendments inserted by Finance Bill in Sec 36(1)(va) as well as Sec 43B are applicable only from AY 2021-22: ITAT

++ I-T - If claim of additional depreciation by assessee was remanded back for re-adjudication in previous years, then similar action is warranted in current year also : ITAT

++ I-T - Payment of supplementary lease rent under lease agreements entered into before Mar 31, 2007 is exempt u/s 10(15A) : ITAT

++ I-T - Addition of cash deposits cannot be made as assessee has availability of cash in form of withdrawals : ITAT

++ I-T - Entire amount of bogus purchases cannot be added to assessee's income : ITAT

May 10, 2022

++ I-T - HC was obliged to deal with all issues raised before it in appeal & pass reasoned order; absence of reasons to back disinclination in entertaining appeal is unsustainable: SC

++ I-T - Reasons recorded for re-assessment are invalid where they are unable to establish as to how taxable income escaped assessment: HC

++ I-T- It is fit case for remand where assessment order is passed without assessee having received SCN or being able to file reply thereto : HC

++ I-T - Writ Court's intervention is unwarranted where re-assessment is based on valid reasons & where final order is yet to be passed: HC

++ I-T - LOC cannot be issued based on mere suspicion of a person opening bank accounts in other countries or investing in a foreign company : HC

++ I-T - Loss suffered by assessee on account of exchange difference as on date of balance sheet is item of expenditure u/s 37(1): ITAT

++ I-T - Invoking revisionary jurisdiction without pointing out any infirmity in inquiry conducted by AO, is clearly beyond ourview of section 263: ITAT

May 09, 2022

++ I-T - Issue of jurisdiction going to root of the cause can be raised at any belated stage of proceedings, including appellate stage: HC

++ I-T - Rules of natural justice contravened where assessee is given only few hours' notice for personal hearing; order quashed: HC

++ I-T - Faceless Assessment - Rules of Natural Justice contravened where assessee unable to upload Stay Petition: HC

++ I-T - Order for transfer of assessment u/s 127 is administrative order which causes no prejudice to assessee, more so where assessee cannot be permitted to choose AO : HC

++ I-T - Matter remanded for reconsideration in light of applicable precedent judgment of High Court: ITAT

++ I-T - Case can be remanded back as investigation is required to find out fact who is having possession of property : ITAT

++ I-T - No addition when no incriminating material found during search: ITAT

May 07, 2022

++ I-T - Reassessment order passed without disposing objections of assessee merits adjudication afresh: HC

++ I-T - Notarized sales agreements can't be discarded in front of loose rough estimated papers to make additions, in absence of contrary evidences to rebut same: ITAT

May 06, 2022

++ I-T - Assessee who is deriving both income from profession as well as from business need not be audited u/s 44AB: HC

++ I-T - Writ courts not empowered to legislate or take policy decisions beyond four corners of law; intervention unwarranted as Settlement application rightly dismissed: HC

++ I-T- Declaring any law to be unconstitutional is the last recourse which a court may opt for: HC

++ I-T - Revocation of registration u/s 12AA - Merely recording the wordings of Section 12AA is insufficient; CIT(E) must establish how Trust's activities are not genuine or not in accordance with objectives: HC

++ I-T - Disallowance of Employee's Contribution to EPF is invalid where such payment is made within grace period given to assessee : ITAT

++ I-T- Revisionary proceedings can be quashed if AO passes assessment order after due application of mind and proper enquiries : ITAT

May 05, 2022

++ I-T - Addition u/s 56(2)(vii)(b) can be made as assessee fails to submit records of investments & nor valuation certificate of shares is submitted: ITAT

++ I-T - Provisions made by insurance company for IBNER and IBNR claims on scientific basis and also certified by valuer, satisfies entire ingredient for its allowance u/s 37(1): ITAT

++ I-T - When AO revises penalty imposed u/s 271(1)(c), then whatever order passed prior to such revised order, becomes infructuous : ITAT

++ I-T- Sec 2(22)(e) is not to apply as transaction involved is not in nature of loan: ITAT

++ I-T - Making any claim which is subsequently disallowed, is per se insufficient to infer furnishing inaccurate particulars of income to impose penalty u/s 271(1)(c) : ITAT

May 04, 2022

++ I-T - Over 90000 re-assessment notices issued under old provisions of Section 148 despite enforcement of amended provisions u/s 148A - SC permits SCNs to proceed under new provisions: SC

++ I-T - Late fee levied u/s 234E for period prior to 01.06.2015 should be deleted as clause (c) of section 200A(1), as substituted by Finance Act, 2015, is prospective in nature : ITAT

++ I-T - Expenses incurred for defending directors in criminal litigations are admissible expenses provided they are incurred in order to protect business interest of assessee: ITAT

++ I-T - Where AO takes one plausible view from several plausible views reasonably possible, assessment cannot be held erroneous/prejudicial to interest of revenue : ITAT

++ I-T - Depreciation for Andhra Project and Earth-work Project is rightly allowed as maintenance work and labour work of these projects involve use of plant and machinery : ITAT

++ I-T - In relation to revisional jurisdiction, period of limitation begins to run from date of assessment order : ITAT

++ I-T- In absence of any defect pointed out in books maintained, disallowance of raw material consumed is to be deleted: ITAT

++ I-T - Where AO takes one plausible view from several plausible views reasonably possible, assessment cannot be held erroneous/prejudicial to interest of revenue :ITAT

May 03, 2022

++ I-T - Failure of assessee to comply with demand notice u/s 156 makes him liable for interest for belated period: HC

++ I-T - Re-assessment is unsustainable where there is no failure on part of assessee to make full & true disclosure of material facts necessary for assessment: HC

++ I-T - Principles of natural justice are contravened when assessee's objections to SCN are not considered before passing assessment order : HC

++ I-T - When there is violation of principle of natural justice, availability of appellate remedy does not operate as bar to maintainability of writ petition: HC

++ I-T - Where discretion is conferred upon quasi-judicial authority whose decision has civil consequences, the term may which denotes discretion should be construed to mean a command : HC

May 02, 2022

++ I-T- Beneficial owner is eligible for declaration u/s 59 of Black Money Act: HC

++ Benami Act - Section 2(9)(A) and Section 2(9)(C) are substantive provisions creating offence of benami transaction, and hence provisional attachment order under such provision can only have effect prospectively: HC

++ I-T - All similar matters should receive similar treatment except where factual differences require different treatment: HC

++ I-T - 217-day delay in filing appeal is condoned where appellant is delayed & is unable to present relevant documents due to being in police custody : HC

++ I-T - Assessee cannot be prejudiced for not submitting application u/s 119(2)(b) within limitation, when in fact no limitation period had been prescribed : HC