TODAY'S CASE (DIRECT TAX)

April 29, 2023

++ I-T - SETCOM shall take decision in respect of undisclosed income only after following due procedure as required u/s 245: SC

++ I-T- ITAT has power to admit and consider ground raised otherwise than by revised return: ITAT

++ I-T - Application for condonation of delay by assessee, should not be rejected without considering reasons for such condonation: ITAT

April 28, 2023

++ I-T - A demerger company cannot be allowed depreciation on assets created as consequence of scheme which is more than deprecation allowable to earlier entity: ITAT

++ I-T If there be interest free funds available to an assessee sufficient to meet its investments and at the same time the assessee had raised a loan it can be presumed that the investments were from the interest free funds available: ITAT

++ I-T - If amount of Liquidated Damages was not finalized during year under consideration, same should not be offered to tax during year under consideration: ITAT

++ I-T - Assessee should not be deprived off to get justice from judicial authorities because of technical latches: ITAT

++ I-T-Deduction u/s 80P cannot be allowed w.r.t. interest received from nationalised banks : ITAT

April 27, 2023

++ I-T - Provision for imposition of late fee u/s 234E was introduced w.e.f. 01.07.2012 & so late fee imposed for periods prior to 01.06.2015 is not sustainable : ITAT

++ I-T - Once payee has been found to have included payments received and already paid taxes, then payer/deductor can at best be asked to pay only interest on delay in depositing tax: ITAT

April 26, 2023

++ I-T- When interest income is incidental to the acquisition and installation of an asset and not directly liable for tax, assessee is entitled for the credit of the TDS from the interest income which has been duly received by the Government : ITAT

April 25, 2023

++ I-T - No addition can be made in respect of completed assessment in absence of any incriminating material: SC

++ I-T - Penalty or Confiscation is 'proceeding in rem' and therefore, loss in pursuance to same is not available for deduction u/s 37 regardless of nature of business: SC

++ I-T - If assessee has properly explained identity & creditworthiness of share applicants and genuineness of transactions and has also explained source of source of funds, no addition is called for u/s 68: ITAT

++ I-T - Additions framed u/s 69C are unsustainable where based entirely on conjectures and surmises: ITAT

++ I-T - AO cannot refuse to admit that cash credits were proved, simply because lender companies were categorized by investigation wing as accommodation entry providers: ITAT

++ I-T - For addition u/s 69, it is duty of AO to establish by way of cogent & sustainable evidence that assessee has invested unaccounted money or income: ITAT

++ I-T - Since land sold was proven to be used for agriculture purpose in preceding two years and purchase has taken place within stipulated period, then buyer is eligible for exemption u/s 54B on income from agriculture: ITAT

April 24, 2023

++ I-T- Look Out Circular would not continue where person named in Circular is no longer needed by originating agency : HC

++ I-T - Where AO had no sufficient tangible material at his command to form bonafide belief that income of assessee has escaped assessment, he is not permitted to initiate reassessment proceedings: HC

++ I-T - AO doesn't have legal basis to acquire jurisdiction for reassessment u/s 147, if he solely relied on report of Information Wing, without framing independent application of mind before initiating reopening: ITAT

++ I-T - Revisionary proceedings u/s 263 merit being set aside where based on incorrect presumption that details of bad debts were not considered during original assessment : ITAT

++ I-T - Scrutiny assessment proceedings would initially be confined only to issues and questionnaire, enquiry, investigation etc. would be restricted to such issues in limited scrutiny: ITAT

April 22, 2023

++ I-T- For the purposes of Sec 11 (1)(a) and 11(2), nnless the taxes paid are deducted, it can be said that the amount of income, to that extent, is available for application or accumulation : ITAT

++ I-T- AO and CIT(A) while compputing disallowance must consider only those investments which yielded dividend/exempt income during the year : ITAT

April 21, 2023

++ I-T - Cost related to project of construction / development of building becomes eligible for deduction against revenue recognized from said project in proportion of project completed: ITAT

++ I-T- PCIT has merely remitted issue back to AO to redo assessment without clearly bringing on record how transactions is non-genuine, which is wrong : ITAT

++ I-T - Power of revision cannot be exercised in respect of an aspect which is carefully examined by the AO & also been allowed by jurisdictional High Court: ITAT

April 20, 2023

++ I-T - Interest income shall be taxable under head 'income from other sources' and not as 'business income', and hence should be excluded from computation of deduction u/s 80HHC: SC

++ I-T - Any rectification order is required to be passed either suo moto by AO or at behest of assessee, upto four years from end of F.Y in which assessment was completed, in terms of Sec 154(7): ITAT

++ I-T - Payment of PF & ESI which was not made within due date prescribed under PF & ESI Act, merits disallowance u/s 36(1)(va), even if it has been filed before due date of filing return of income: ITAT

++ I-T - AO can be said to have exceeded his jurisdiction in enquiring into issues beyond scope of limited scrutiny, if case before him is not converted to complete scrutiny: ITAT

++ I-T - Transaction involving interest between sister concerns & assessee cannot partake of nature of either deposit or loan though interest might have been paid thereon : ITAT

April 19, 2023

++ I-T - Delay of one day in uploading assessment order or generating DIN cannot make assessment order unsustainable in law: HC

++ I-T - Original notices u/s 148 referable to old regime and issued between Apr 01, 2021 to June 30, 2021 would stand beyond prescribed permissible timeline of six years from end of A.Y 2013-14 & 2014-15: HC

++ I-T - Original notices u/s 148 referable to old regime and issued between Apr 01, 2021 to June 30, 2021 would stand beyond prescribed permissible timeline of six years from end of A.Y 2013-14 & 2014-15: HC

++ I-T - Penalty u/s 271F is sustainable where assessee does not file ITR or any justification for non-filing: ITAT

++ I-T - As per settled position in law, penalty cannot be imposed solely due to any claim of the assessee getting rejected : ITAT

++ I-T - Anything charged by assessee by way of excise duty and sales tax cannot be taken into account as they do not have any element of profit: ITAT

April 18, 2023

++ I-T - There is no power to CIT to set aside assessment order u/s 263, in case of inadequate enquiry, even if such enquiry is incomplete: ITAT

++ I-T - Notices u/s 148 referable to the old regime would stand beyond prescribed permissible timeline of six years from end of A.Y 2013-14 and A.Y 2014-15: HC

++ I-T- Re-assessment proceedings are unsustainable where SCN & order are bereft of any details: HC

++ I-T- Before framing additions u/s 68, onus rests with AO to establish creditworthiness of creditor & genuineness of transaction; such onus cannot be shifted onto assessee : HC

++ I-T- Search assessment - Addition u/s 153A not tenable in case of non-abated assessment, where no evidence incriminating the assessee is found during Search operation & where assessment gets finality before date of Search: HC

April 17, 2023

++ I-T - If after making complete payment, merely because registered sale deed is not executed because construction was not completed in all respects, that would not disentitle assessee from claiming benefit u/s 54F: ITAT

++ I-T - No penalty 'shall be' imposed u/s 271(1)(b) and u/s 271F of the Act, if assessee 'proves that there was a reasonable cause for the said failure' : ITAT

++ I-T- If an assessee is entitled to certain deductions under Income Tax Act, same should not be disallowed, merely because of any bona fide mistake or error by taxpayer: ITAT

++ I-T-Because there is violation of provisions of section 194C(7) disallowance of u/s 40(a)(ia) does not arise if the assessee complies with the provisions of section 194C(6) of the Act: ITAT

April 15, 2023

++ I-T- Tax credit to the assessee cannot be denied merely on the grounds that the deductor has not filed its revised TDS return which is beyond the control of the assessee: ITAT

April 14, 2023

++ I-T-Deduction u/s 10AA of I-T Act is available for those articles which on import to unit located in SEZ, were thereafter re-exported: HC

++ I-T - Provisions of Section 144 cannot be invoked under mistaken belief that assessee's ITR was not on record, whereas such ITR is found to be in place : HC

++ I-T- Section 254 empowers ITAT to rectify orders rendered erroneous due to acts of omission or commission; ITAT rightly recalled order passed without noticing that assessee was not informed of hearing: HC

++ I-T- Original notices u/s 148 pertaining to old regime & issued b/w 01.04.2021-30.06.2021, are beyond prescribed permissible timeline of 6 years from end AY 2013-14 & AY 2014-15; are time barred: HC

April 13, 2023

++ I-T - Additions u/s 68 upheld by CIT(A) without assigning any justifiable reasons, is unsustainable: ITAT

++ I-T - Re-assessment cannot be sustained where based on change of opinion & where no new facts have been brought on record to justify re-assessment: ITAT

++ I-T - Differences in Form 26AS is no basis to make addition, if assessee has demonstrated that such difference is on account of inclusion of service tax by payer of this receipt after subjecting it to TDS: ITAT

++ I-T - In case of employer, omission to pay dues/liability to employee over period of time and resultant benefit derived by employer, would qualify as cessation of liability: ITAT

++ I-T - Additions framed on grounds of undisclosed investments are unsustainable where assessee is jewellery trader & makes investments using income generated from such business : ITAT

++ I-T - Re-assessment commenced based on belief of illicit transactions done by a non-existent company is defect which is not technical irregularity & cannot be cured by applying Section 292B: ITAT

April 12, 2023

++ I-T - Once withdrawals & deposits during year in two bank accounts maintained by assessee and deposits so made duly stand explained by earlier withdrawals, then no adverse view is warranted: ITAT

++ I-T - Exemption u/s 54 should be allowed, after considering date of possession of new residential premises instead of date of sale of agreement and date of registration: ITAT

++ I-T - Provisions of Section 80P are inapplicable to a cooperative credit society which is not a primary cooperative bank : ITAT

April 11, 2023

++ I-T - In absence of evidence that commission was earned only in Gangtok, Sikkim resident companies cannot claim that they are liable to pay tax under Sikkim Manual, 1948 and not under Income Tax Act, 1961: SC

++ I-T - 'Fails to deduct' occurring u/s 271C(1)(a) would not include payer who caused delay in remittance of TDS deducted by him: SC

++ I-T - Receipts from DEPB and duty drawback schemes are not eligible for deduction u/s 80-IB: SC

++ I-T - SCN issued u/s 148 is illegal & without jurisdiction where it is issued beyond permissible time limit w.r.t. relevant AY : HC

++ I-T - Re-assessment order upheld where assessee is found to have indulged in accomodation entries & was unable to furnish the details of other parties : ITAT

++ I-T -Income reported in Form- 26AS cannot be treated as sacrosanct document to determine assessee's earnings & cannot solely be relied on to settle an issue against assessee : ITAT

++ I-T - Failure to deduct TDS - No straight jacket definition for reasonable cause for imposing penalty; must be ascertained on case to case basis & considering assessee's actions: ITAT

++ I-T - Where compensation awarded under Land Acquisition Act is held to be non taxable by Supreme Court, then Department cannot utilise revisionary power u/s 263 to tax it: ITAT

++ I-T - Where compensation awarded under Land Acquisition Act is held to be non taxable by Supreme Court, then Department cannot utilise revisionary power u/s 263 to tax such monies: ITAT

++ I-T - Compensation received for surrendering old house for re-development purposes, is capital receipt, since amount is paid to compensate for personal loss & other hardships and inconveniences likely to be caused : ITAT

April 10, 2023

++ I-T- Assessee is not entity covered u/s 80P(4) and is entitled to deduction u/s 80P in respect of income from activities specified u/s 80P(2)(a)(i) : ITAT

++ I-T - Affidavits which are duly notorized hold legal identity which cannot be rejected merely on surmises without having any contrary material on record: ITAT

++ I-T- Since speculative loss can not be adjusted against business income, to find out real nature of transaction case can be remanded back AO - ITAT

++ I-T- Loss incurred on account of derivatives would be deemed business loss under proviso to section 43(5) and not speculation loss : ITAT

++ I-T - Re-opening of assessment can be sustained where based solely on report of Investigation Wing and not involving any independent application of mind by AO : ITAT

++ I-T- Where there is no pending assessment and no incriminating material found during search, no addition can be made in assessment proceedings u/s. 153C r.w.s. 143(3) of the Act: ITAT

++ I-T- The date on which AO of the person other than the one searched assumes possession of the seized assets would be the relevant date for applying the provisions of Section 153A of the Act: ITAT

April 08, 2023

++ I-T - Expenses incurred by company towards day-to-day routine operations & not having any enduring benefit, cannot be deemed to be capital expenditures : ITAT

++ I-T- AO is duty-bound to accept the genuineness of the transaction when the identity of the creditor and genuineness of the transaction through account payee cheque has been established: ITAT

++ I-T - Unexplained cash credit - additions upheld where no details of investors filed by assessee: ITAT

April 07, 2023

++ I-T - Amendment made to Section 153C with effect from Jun 1, 2015 will be applicable to search operations conducted prior to June 1, 2015: SC

++ I-T - Once erroneous assessment order has resulted into loss of Revenue in form of tax, it will surely attract revisionary interference u/s 263: SC

++ I-T - Assessee cannot be penalised u/s 271B due to an error on part of assessee's auditor, due to which correct audited books of accounts could not be submitted: ITAT

++ I-T - Quietus of completed assessments can be disturbed only if there is evidence regarding undisclosed income or AO has information in his possession showing escapement of income: ITAT

++ I-T - Additions to income & disallowance u/s 14A are upheld where assessee transacted in equity shares of different scrips of bogus companies : ITAT

++ I-T-AO by accepting claims for exemptions arisen from transaction with penny stock renders assessment erroneous and prejudicial to interests of Revenue: ITAT

++ I-T - In absence of any adverse remark on activity of trust, merely on technical ground for intervening period, registration granted u/s 12AA cannot be canceled for this period: ITAT

April 06, 2023

++ I-T - Where assessee has sufficiently explained about impounded documents and expenses having nexus to them, no addition is warranted u/s 69C on account of unexplained expenditure: ITAT

++ I-T - If assessee had no absolute ownership of brand name and he merely obtained right & license to use said brand name on products manufactured by it, then expenditure incurred in relation thereto is revenue in nature: ITAT

++ I-T - Employee's contribution to ESI/PF, though deposited long before due dates of filing return u/s 139(1), merits disallowance u/s 36(i)(va), if same is not deposited before due date under PF Act: ITAT

++ I-T - If no enquiry which is warranted in facts & circumstances of case, was made by AO resulting in erroneous assessment order insofar as prejudicial to interest of Revenue, such case merits revision u/s 263: ITAT

++ I-T - Once AO had nowhere invoked Explanation 5A to sec.271(1)(c), there is hardly any justification on Revenue's part to quote general principles of furnishing of inaccurate particulars u/s.271(1)(c): ITAT

++ I-T - Refund received out of non-compete agreement cannot be construed as salary for purpose of charging to tax: ITAT

++ I-T - Once source of funds, capacity of investors and genuineness of transaction stand explained, then no addition is permitted u/s 68: ITAT

++ I-T-AO cannot entertain any new claim other than by way of revised return of income but appellate authorities can admit such claim and grant relief to the assessee : ITAT

++ I-T- Once tassessee has offered income u/s 44AD of the Act on presumptive basis then assessee is not required to maintain books of account on a regular basis : ITAT

April 05, 2023

++ I-T - Proviso to section 56(2)(vii) qua stamp value as on date of agreement, though preceded by payment of part consideration by cheque, cannot be given effect to: ITAT

++ I-T - Assessment order cannot be treated as erroneous, merely because no inquiry was conducted by AO: ITAT

++ I-T - If assessee has duly disclosed availability of cash-in-hand at beginning of year and well before demonetization period, then same cannot be treated as unexplained: ITAT

++ I-T - If Explanation 2 to section 263(1)(a) has not been invoked in notice issued u/s 263, then same cannot be applied to pass order u/s 263: ITAT

++ I-T - Amount of interest paid on capital borrowed for purpose of business should be allowed as deduction while computing business income: ITAT

++ I-T - Subsidy received from Government of Maharashtra shall not reduce actual costs of assets u/s 43(1) for purpose of allowing depreciation u/s 32: ITAT

April 04, 2023

++ I-T -When assessee already admitted the sales as revenue receipt, there is no case for making the addition u/s 68 or tax the same u/s 115BBE again : ITAT

++ I-T - It is fit case for remand where findings of CIT(A) are not based on any objective analysis of evidence & merely rehashes submissions of both parties : ITAT

++ I-T - Expenditure incurred by assessee w.r.t. existing customers & was incurred solely for purposes of business, merits being allowed u/s 37(1) : ITAT

++ I-T - Search assessment u/s 153C against assessee, based on material recovered from search operation conducted w.r.t. third party & where evidence recovered does not pertain to assessee, is invalid: ITAT

April 03, 2023

++ I-T - Assessment order is invalid where it is verbatim reproduction of SCN issued to assessee, thereby reducing procedure to an empty formality : HC

++ I-T - Notices issued u/s 153C issued in name of deceased assessee are invalid, in light of settled precedent: ITAT

++ I-T - Cash payments made in violation of section 40A(3) merits disallowance: ITAT

April 01, 2023

++ I-T - Once assessee has failed to prove execution of agreement or their possession, then AO should adopt stamp price of land as actual sale price in light of Sec 56(2)(vii)(b) r/w 1st & 2nd proviso therein: ITAT

++ I-T - Addition made w.r.t. profits from diamond purchases is upheld, where assessee is not shown to have sufficient bank balance to purchase diamonds & is unable to explain how such purchases were made: ITAT

++ I-T - There is no legal capacity for two parties to transaction entered by way of registered deed to cancel same, except with permission of Court as prescribed u/s 31 of Specific Relief Act: ITAT