TODAY'S CASE (DIRECT TAX)

Oct 31, 2022

++ I-T- PCIT is wrong in exercising power u/s 263 if AO has made necessary enquiry, applied his mind on issue, examined facts properly and has taken a possible view : ITAT

++ I-T- To exercise power u/s 263 it is mandatory that twin conditions of order being erroneous insofar as it is prejudicial to interest of revenue should be satisfied : ITAT

++ I-T- Unless there is specific material collected, merely on basis of inference from circumstances, purchase can not have been held to be bogus : ITAT

++ I-T- If assessee has furnished all material it is for AO to decide manner of examining details and failure on part of AO, cannot be ground for reopening of assessment : ITAT

++ I-T- Land in question is agricultural land and no tax is required to be deducted on purchase of land u/s 194IA of Act : ITAT

++ I-T- Assessee cannot be asked to produce more details then what is generally kept by assessee in relevant line of business: ITAT

++ I-T- Interest income derived by co-operative housing society through investments made is entitled to deduction u/s 80P(2)(d) : ITAT

Oct 29, 2022

++ I-T- Board circular not binding on appellate authorities, is also not binding on income tax authorities, where favorable to taxpayer : ITAT

++ I-T- As assessee is consistently following Project Completion Method for declaring income, there is no need to show advance received in Project as income for relevant year : ITAT

Oct 28, 2022

++ I-T - No addition u/s 68 can be made for unexplained credit as assessee has duly proved identity and creditworthiness of lender company and also genuineness of transaction : ITAT

++ I-T - Following decision of co- ordinate Bench of Tribunal in assessee's own case for preceding AY, can issue of shares at high premium can be accepted : ITAT

++ I-T - Error envisaged by Section 263 is not one that depends on possibility as a guess work, but it should be actually an error either of fact or of law : ITAT

++ I-T - Additional depreciation is allowable even for assets acquired prior to Mar 31, 2005, provided installation of such assets is after Mar 31, 2005: ITAT

++ I-T - Deduction u/s 80IB(10) can not be allowed as condition of completing construction within period of five years is not satisfied : ITAT

++ I-T - Club membership and royalty expenses need not be disallowed if no technical knowledge or skill has been transferred for same: ITAT

++ I-T - Issue of deemed dividend can be remand to file of AO for de novo adjudication after necessary examination/verification of details : ITAT

++ I-T - Assessee is eligible for depreciation on non-compete fee, as same would fall under category of intangible asset : ITAT

++ I-T - Late filing fee u/s 234E of the Act cannot be imposed on assessee for any technical breach or error : ITAT

Oct 27, 2022

++ I-T - Re-assessment order passed by AO without allowing an opportunity of personal hearing is unsustainable : HC

++ I-T - Re-assessment upheld since details of suspicious trading activity not disclosed; nonetheless order is quashed since assessee's replies not considered: HC

++ I-T - Re-assessment - High Court's intervention not needed when there is prima facie merit in the reasons recorded for commencing proceedings & where assessees are free to raise all contentions before AO: HC

++ I-T - Re-assessment against deceased assessee can be continued, where assessee was alive at time when SCN u/s 148 was issued & where details of assessee were amended by AO in order: HC

Oct 26, 2022

++ I-T - Reply to SCN filed on two occasions not considered when passing final order - order & demand notice quashed, being against natural justice: HC

++ I-T - Assessee cannot allege contravention of rules of natural justice, where assessee availed opportunity to file reply to SCN & where remedy of appeal is yet to be availed: HC

++ I-T - While proceedings commenced against deceased assessee are null, participation of legal heirs in assessment or re-assessment would lead to continuation of proceedings: HC

++ I-T - Where legal heir of deceased assessee informs AO about assessee having passed away, same is not tantamount to legal heir's participation in proceedings: HC

++ I-T- Jurisdiction of High Court to interfere with orders passed by Courts below confined to hearing on substantial question of law : HC

++ I-T- No interference of HC as no substantial question of law arises for consideration: HC

++ I-T- AO having issued and served the impugned notice under Section 148 of unamended Act could not have issued another notice under Section 148A(b) of Act : HC

Oct 25, 2022

++ I-T - Reasons recorded for reopening assessment are to be read as they were recorded by AO and same cannot be supplemented: ITAT

++ I-T - Sec 41(1) cannot be invoked in respect of share application money which continues to remain outstanding pending allotment of shares: ITAT

++ I-T - Addition u/s 41(1) can be made only when amount has been written off by assessee Company in its books of account: ITAT

++ I-T - Once it is determined that certain receipt is not in nature of income, then it cannot be considered in book profit for purpose of computation u/s 115JB: ITAT

++ I-T - Expenses paid to legal and professionals for opinion about legal and tax consequences of prospective investment cannot be considered to be capital expenditure: ITAT

++ I-T - No addition can be made u/s 153A in absence of any incriminating material found during course of search, in case of completed assessment: ITAT

++ I-T - Purpose behind a subsidy is paramount test to determine its character between capital or revenue; source of funds or manner of disbursal of subsidy is immaterial: ITAT

++ I-T - If assessment order is apparently erroneous so far as prejudicial to interest of Revenue having been decided in favour of assessee without ascertaining same, revision by PCIT u/s 263 need no interference: ITAT

Oct 22, 2022

++ I-T - Functional dissimilarity and huge differences in FAR analysis calls for exclusion of such comparable for purposes of benchmarking: ITAT

++ I-T - Interest expenses in respect of funds which are not deployed on development project but are otherwise available for financing activities, cannot be disallowed by treating it as capitalization in project cost: ITAT

++ I-T - Assessee is not in default for lapses committed by his employer who acting as Agent of Revenue was tasked to deduct tax at source from salary of assessee and deposit it in credit of Government: ITAT

Oct 21, 2022

++ I-T - Difference of opinion over correct method for determining ALP per se does not warrant interference: HC

++ I-T- AO while passing order can not travel beyond list of 35 items that are listed in order of Settlement Commission: ITAT

++ I-T - Justification for exercise of power u/s 153A has to be found by AO by making subjective satisfaction on basis of objective material and it must be reflected in reasons: ITAT

++ I-T - If survey team mixed two figures on different dates and differences noted by them regarding goods/ornaments is not commensurate with accounting principle, then onus lies on Revenue to prove contrary: ITAT

++ I-T - PCIT is wrong in exercising power u/s 263 if AO has made necessary enquiry, applied his mind on issue, examined facts properly and has taken a possible view: ITAT

Oct 20, 2022

++ I-T - Myriad charitable institutions, in course of achieving object of general public utility, can carry on business or provide services in relation thereto for consideration, with conditional stipulations: SC LB

++ I-T - writ court's intervention is unwarranted where assessee omits to furnish relevant information regarding trade in crypto currency & where matter is still open before AO: HC

++ I-T - re-assessment warrant interference with where assessee's objections to such proceedings have not been considered by Revenue, leading to violation of rules of natural justice: HC

++ I-T - Re-assessment order & notice passed in name of non-existent entity is nullity: HC

++ I-T - Section 40A(3) not intended to restrict business activities; insistence of payment by crossed cheque or crossed bank draft enables AO to ascertain whether payment is genuine or whether out of income from disclosed sources: ITAT

++ I-T- PCIT is wrong in exercising power u/s 263 if AO has made necessary enquiry, applied his mind on issue, examined facts properly and has taken a possible view: ITAT

++ I-T - Claim made by assessee towards LTCG can be allowed in absence of contrary evidence produced by Revenue on record: ITAT

Oct 19, 2022

++ Trust which is involved in 'trade or commerce' and charges over and above cost, would cease to be Charitable Institution: SC LB

++ I-T - where assessee-company does not furnish information about Risk Management Strategy formulated by its Board, AO is justified in commencing re-assessment proceedings, having considered the nature of such information: HC

++ I-T - Unsecured loans can be added as income when there is no proper proof for source and nature of credit: ITAT

++ I-T - Addition of unsecured loans can be made if essential ingredients of lenders financials are not established: ITAT

Oct 18, 2022

++ I-T - assessment order merits set aside where assessee was not allowed an opportunity of personal hearing, leading to violation of rules of natural justice: HC

++ I-T - Faceless Assessment - assessee be given personal hearing before assessment order is passed & failure to do so violates rules of natural justice: HC

++ I-T - provisions of Section 144B as well as rules of natural justice are contravened where an assessment order is passed without providing an opportunity to personal hearing: HC

++ I-T - transfer of assessment from one jurisdiction to another is invalid where assessee is not given opportunity of personal hearing to present objections thereto: HC

++ I-T - While following order passed in assessee's own case for PY, CIT (A) is not justified in placing reliance on one issue and not on other issue dealing with identical facts and circumstances: ITAT

Oct 17, 2022

++ I-T - PF and ESI contribution specified u/s 36(1)(va) on or before due date stipulated in respective statute, is essential condition for claiming deduction on such contribution: SC LB

++ I-T - Adjustment by way of intimation u/s 143(1), on debatable and controversial issues, is beyond scope of section 143(1) of Act: ITAT

++ I-T - Pr. CIT can not have in exercise of his revisionary jurisdiction u/s 263 stepped in to control or, in fact steer discretion of AO: ITAT

++ I-T - Without complying with the three conditions mentioned in section 271AAA, penalty under it is not imposable: ITAT

++ I-T - Addition made towards unaccounted sales is not sustainable in absence of incriminating material: ITAT

Oct 15, 2022

++ I-T - Merely because Assessee has claimed expenditure which claim is not accepted by revenue, by itself does not attract penalty u/s 271(1)(c): ITAT

++ I-T - In absence of production of books of account, CIT(A) is reasonable in restricting net profit estimation @ 2.5% of total turnover: ITAT

++ I-T - Addition for undisclosed income can't be made merely based on retracted statement: ITAT

Oct 14, 2022

++ I-T - re-assessment u/s 148A is invalid where commenced after passage of 3 years from end of relevant AY & where amount in question is lesser than Rs 50 lakhs: HC

++ I-T - SCN violates the rules of natural justice, where it allows only 3 hours time for assessee to prepare for & attend personal hearing & where it is directly uploaded to portal without any intimation: HC

++ I-T - Once AO was satisfied with explanation of assessee, change of opinion would not enable CIT to exercise jurisdiction u/s 263: ITAT

++ I-T - AO cannot treat loan transaction as non-genuine on mere conjuncture and surmises, more so, when lender is income-tax assessee: ITAT

++ I-T - Addition of unexplained cash loan can't be upheld if it is merely based on entry found in the seized documents, without the same being corroborated with any other evidences: ITAT

++ I-T - re-assessment invalid where it is based on same set of information that was already available to AO during original assessment: ITAT

++ I-T - If income from other sources is much more than income from business, then assessee's case squarely falls under exception clause provided in Explanation to Section 73: ITAT

++ I-T - Following latest co-ordinate bench order issue of payment of excess sugarcane price can be remanded back to AO to decide it afresh - ITAT

++ I-T - Merely stating that AO has examined transaction doesn't debar PCIT from highlighting that AO order is not in accordance with law: ITAT

++ I-T - Books of accounts can't be rejected without giving any finding that account books are unreliable, incorrect or incomplete: ITAT

Oct 13, 2022

++ I-T - Whether a expenditure is capital or revenue in nature or whether it is partly capital or partly revenue in nature, is a highly debatable issue & in respect of which no penalty can be imposed: ITAT

++ I-T - Interest received on enhanced compensation u/s 28 of the Land Acquisition Act is part of compensation and hence is not taxable - ITAT

++ I-T - Issue of unexplained income can be remanded back for reconsideration for passing order after considering additional evidences - ITAT

++ I-T - If AO took one of the possible views then action of AO cannot be faulted with by PCIT u/s 263 merely because he might have different view on matter - ITAT

++ I-T - Sufficiency of material for forming belief of escapement of income, calls for no interference in reopening order: ITAT

++ I-T - When order of CIT (A) itself has not been served to assessee, it cannot be held that there was delay in filing of appeal before Tribunal: ITAT

++ I-T - Trading loss incurred in sale of gold & diamonds to closely held/related parties, cannot be disallowed, if transactions are audited and fully supported by bills & vouchers through banking channels: ITAT

Oct 12, 2022

++ I-T - 'Dispatch' as per Sec 13 of IT Act, 2000 is sine qua non for issuance of Notice through electronic mail for the purpose of Sec 149: HC

++ I-T - AO shall consider objections raised for reopening of assessment by assessee during reassessment proceedings and pass orders afresh on merits: HC

++ I-T - Set off of business loss is not one of prohibited items for setting off of loss from income earned by assessee: HC

++ I-T - Statement of person cannot be relied upon as evidence to make addition if opportunity to cross-examine is not given to assessee: HC

++ I-T - provisions of Section 148A require the AO to give 7 days' notice to file reply to SCN and any lesser period does not satisfy mandate of Section 148A: HC

++ I-T - Appeal of Revenue to upheld protective additions can be dismissed as Court by separate order has upheld order of ITAT deleting substantive additions on merits: HC

++ I-T - PCIT has righty invoked revisionary power u/s 263 based on survey data pointing out discrepancies in claim of deduction u/s 80JJAA: ITAT

++ I-T - Service tax component being statutory levy, cannot be included in gross receipts for computing deemed taxable income u/s 44BBA: ITAT

++ I-T - provision made for payment of gratuity to employees of trust engaged in charitable activities, will be exempted from tax as per Section 11: ITAT

Oct 11, 2022

++ I-T - An order not dealing with contentions raised by assessee in reply to SCN, is non-reasoned order & merits being quashed: HC

++ I-T - Sec 148 notice sent to assessee by speed post as well as notice available on ITBA portal and sent by email, though bearing distinct DINs are genuine :HC

++ I-T - Transactions can not be doubted merely because there is funds transfer by depositors from another source of investment before giving loans/advances to assessee : ITAT

++ I-T - Statement recorded subsequent to search has got evidentiary value and can be relied upon in making additions: ITAT

++ I-T - Cost of acquisition can be set off against sale consideration of plant & machineries which are not obsolete : ITAT

++ I-T - Merely because statement recorded u/s 131 is not in favour of Revenue, cannot be disregarded without any material on record : ITAT

++ I-T - Any legal proposition which cast additional burden/liability on assessee cannot be implemented retrospectively: ITAT

Oct 10, 2022

++ I-T - Payments made in cash in respect of transaction involving purchase of land, can be disallowed, where such cash payment is made in unavoidable & exceptional circumstances explained by assessee: ITAT

++ I-T - In respect of concluded assessments, earlier assessment completed should not be disturbed in search assessments without existence of any incriminating material relatable to such A.Y: ITAT

++ I-T- Employees contribution to PF&ESI paid by assessee before due date of filing return of income is allowable deduction : ITAT

++ I-T - It is fit case for remand where assessee is not given enough opportunities to present relevant documents before AO : ITAT

++ I-T - Re-assessment cannot be sustained where based on change of opinion: ITAT

++ I-T-Additions can be deleted if it is not disallowed in previous years by other AO's: ITAT

Oct 08, 2022

++ I-T - TDS need not be deducted in respect of a payment which is not made but only a provision for which is made in books of accounts: ITAT

++ I-T - Additions framed on account of unexplained cash credit are untenable, where assessee provides necessary details to explain all the alleged cash creditors & details of persons to whom amounts were advanced: ITAT

Oct 07, 2022

++ I-T - Re-opening of assessment merits being upheld where assessee never filed ITRs and where assessee is found to have indulged in heavy cash transactions: HC

++ I-T - Provisions of clause (b) of Section 148A of I-T Act allow 30 days' time for an assessee to file reply to SCN : HC

++ I-T - Re-assessment upheld where at time of original assessment, AO was unaware of assessee being accomodation entry operator & it was later discovered that certain transactions escaped assessment: HC

++ I-T - Amended provisions of Section 154 cannot be applied with retrospective effect in respect of AY which precedes year of amendment of provisions : ITAT

++ I-T - Previous history of assessee must be taken into consideration by lower authorities while providing order: ITAT

++ I-T - Reassessment initiated on basis of borrowed satisfaction without any independent application of mind by AO, merits to be quashed: ITAT

Oct 06, 2022

++ I-T - Violation of natural justice is not fatal in all situations & wholistic view should be taken of the issue, such that the interests of all parties are properly balanced: HC

++ I-T - Writ petition is not maintainable where although the rules of natural justice are contravened, the assessee also has parallel appeals pending before Appellate Authorities : HC

++ I-T - Re-opening of assessment is valid where a prima facie case of escapement of income is made out: HC

++ I-T - Sufficiently established identity, creditworthiness and genuineness of transactions of purchases made by assessee from sundry creditors, debars addition u/s 68: HC

++ I-T - Disallowance towards discount given & additions framed u/s 43B are invalid, where Revenue fails to establish that assessee received any sum over & above net billed amount: ITAT

++ I-T- Revenue cannot make difference between banking companies/nationalized bank and cooperative societies while treating accrued interest on NPA : ITAT

++ I-T- No disallowance of interest can be made if interest free own funds far exceeds loans and advances made to sister concern : ITAT

++ I-T- Assessee is not eligible to exemption u/s 54B where investment is made in name of grandson of assessee : ITAT

Oct 04, 2022

++ I-T - Public functionary can be held liable for malicious acts in name of excercise of power : HC

++ I-T - If figures of sales and purchase were not doubted by AO, he cannot make additions on presumption of bogus purchases: HC

++ I-T - In absence of enabling provisions, CPC Bangalore lacks jurisdiction to make any disallowance in order u/s 143(1): ITAT

++ I-T - Additions framed on account of alleged cash receipts are invalid where no witnesses to such payments are available to testify & are based solely on statements: ITAT

++ I-T - Once income of trust is applied for its objects and stands maintained in seperate books of account, trust is eligible to claim exemption u/s 11: ITAT

++ I-T - Rejection of valuation of shares as per DCF method is without any evidence on record and can not be upheld : ITAT

Oct 03, 2022

++ I-T - 6 months' limitation for deciding refund claims is to be followed strictly: HC

++ I-T- Customs duty paid for yacht can be allowed as it is not used by assessee for its own personal use and has operated yacht for benefit and use of entities paying operating fee : ITAT

++ I-T - No addition on account of bogus sundry creditors can be made, if AO fails to substantiate non-availability of vendors: ITAT

Oct 01, 2022

++ I-T- There is no prejudice to interest of Revenue when payments under question has already been added by AO in order of assessment: ITAT

++ I-T - Amount loaned from one company to another company in ordinary course of business, cannot be treated as deemed dividend, in hands of person who is major shareholder in lender-company : ITAT

++ I-T - Power of revision is to be exercised only when double conditions of original assessment order being erroneous as well as prejudicial to revenue's interest, are satisfied : ITAT