TODAY'S CASE (DIRECT TAX)

Dec 30, 2023

++ I-T - If Charity Commissioner had given sanction to charity trust to sell flats at enhanced consideration as per Bombay Public Trust Act, 1950, advance cash received by trust cannot be added as its income: ITAT

++ I-T - Annual lettable value of vacant property in form of unsold units/flats held as stock-in-trade by assessee which were let out in past but remained vacant during year is to be computed at NIL: ITAT

++ I-T - Disallowance u/s 14A read with rule 8D is to be in relation to income which does not form part of total income: ITAT

++ I-T - Once assessee trust is eligible for deduction claimed u/s 11(2) r.w.s 11(1), a mere delay in filing of Form-10 shall not be enough to make additions: ITAT

++ I-T - Non-disclosure of particular bank A/c can give rise to doubt about transactions reflected in such saving account but deposits in such bank A/c in itself do not represent income: ITAT

Dec 29, 2023

++ I-T- Financial harship no grounds to entirely waive off requirement of 20% pre-deposit, more so where Department already presented option of paying pre-deposit in instalments: HC

++ I-T - Where assessee surrenders undisclosed income during search action for relevant year, tax rate has to be charged as per provisions of section 115BBE : ITAT

++ I-T - Expenditure which was not incurred for any infringement of law and rather by-product of commercial activity, are not hit by Explanation 1 to Section 37: ITAT

++ I-T - Failure of assessee to prove identity and creditworthiness of creditor as well as genuineness of transaction, calls for addition u/s 68: ITAT

++ I-T - Every unaccepted claim of assessee by Revenue Department would not attract levy of penalty u/s 271: ITAT

++ I-T - Continuation of reopened assessment after quashing such reassessment itself by CIT, is not sustainable: ITAT

Dec 28, 2023

++ I-T- Any payment by a company, not being a company in which the public are substantially interested, shall be treated as deemed dividend to the extent of which the company possess accumulated profit : ITAT

++ I-T- Assessee omits to consider provision made against overlay expenses for computing book profit u/s 115JB of the Act; aspect overlooked by AO - revisionary power rightly exercised: ITAT

++ I-T - Since business receipt shown by assessee cannot be subject to tax in its entirety, it is only element of profit embedded in such gross business receipts which needs to be brought to tax: ITAT

++ I-T - Since assessee has acquired very casual attitude throughout assessment proceedings and not answered for show cause, penalty levied for non-attendance is justified: ITAT

++ I-T - Since assessee was not able to discharge its onus of proof about amount credited in his bank account, additions are rightly made u/s 68 & 69C: ITAT

++ I-T- Disallowance u/s 14A cannot be sustained where assessee is not shown to have earned any exempt income during relevant AY : ITAT

Dec 27, 2023

++ I-T-The estimation of rate of profit return must necessarily vary with the nature of business and no uniform yardstick can be adopted: ITAT

++ I-T-Amount paid to retiring partner for giving up interest held in partnership firm, qualifies as capital expenditure: ITAT

Dec 26, 2023

++ I-T- Interest earned from investment made in fixed deposits, out of funds received for setting up power transmission system would not be amenable to tax : HC

++ I-T- Enterprise in whose favour work has been allotted or agreement has been entered shall alone be entitled to claim deduction u/s 80IA (4) of Act : ITAT

++ I-T- If income does not result at all, there cannot be a levy of tax even though a book entry is made: ITAT

++ I-T- Pr.CIT cannot merely set aside assessment on the basis of a new fact coming on record without exerting himself and providing some basis to dislodge the response of the assessee on such new material: ITAT

++ I-T- Re-assessment proceedings warrant interference with where reasons to believe that income escaped assessment, is based on certain transactions done by Assessee & where Assessee also did not file ITR for relevant AYs: ITAT

Dec 23, 2023

++ I-T- Deduction in respect of leave encashment claimed by Central Government employee, is allowed, where amount claimed is within limit of Rs 25 Lakhs as specified in Notification No 31/2023 : ITAT

Dec 22, 2023

++ I-T-Penalty imposed u/s 271(1)(c) is valid, where Assessee failed to provide any explanation for his failure to disclose entire professional income, thereby having concealed his income: HC

++ I-T- Section 148A is not applicable where information emanated from searched party & materials/documents pertained to/relates to the both Assessees : HC

++ I-T- Observation of PCIT is general and does not hold order of AO to be erroneous insofar as prejudicial to interest of Revenue : ITAT

++ I-T - Assessee is allowed to claim interest expenditure against remuneration received from firm : ITAT

++ I-T - Assessee's case falls u/s 153C and AO has righty framed assessment u/s 153C r.w.s. 143(3): ITAT

Dec 21, 2023

++ I-T- Assessee, a senior citizen, unable to respond to Show Cause Notices, being unaware of the notices having been issued via online mode - case remanded for re-consideration: ITAT

++ I-T-Computation of Short Term Capital Gain u/s 50 does not disentitle an assessee to any exemption under Chapter IVE, which is otherwise available in respect of a Long Term Capital Asset : ITAT

++ I-T-Computation of Short Term Capital Gain u/s 50 is not computation of income under heading Capital Gains, but is subject to exemptions u/s 54 & 54F if requisite conditions of such sections are fulfilled : ITAT

++ I-T- Interest income generated on funds owned by Government of India is not income in hands of Assessee-company but it is income of Government; hence it is not required to be taxed in hands of Assessee: ITAT

++ I-T- If notice issued u/s 148 being primary notice for starting reassessment proceedings is bad in law, entire reassessment proceedings become bad and without jurisdiction: ITAT

++ I-T- Case can be remanded back and if assessee is able to provide complete trail of transfer of money then AO would delete addition to that extent in hands of assessee : ITAT

++ I-T- Case can be remanded for fresh examination to verify source for additions made in hands of assessee as explained before settlement commission : ITAT

++ I-T- Any unexplained expenditure, if source is not explained, is assessable u/s.69C of the Act, but not u/s.69B of the Act: ITAT

Dec 20, 2023

++ I-T - Power to extend time given to CA appointed u/s 142(2A) is vested in AO & such power cannot be exercised by superior officers such as CIT: HC

++ I-T- Three-year delay by Department in filing appeal is not condonable where no application for condonation of delay is filed & where no reasonable explanation is provided for such delay : HC

++ I-T- Discretionary power invested in a specified authority should be exercised by that authority alone & none else, even if it causes administrative inconvenience : HC

++ I-T- Legislative intent & consequently, the law, empowers only the AO to extend time limit for conducting special audit, given to special auditor appointed as per provisions of Section 142(2A): HC

++ I-T- Stay on Assessment order sought on grounds of financial stringency; Assessee did not maintain proper records & failed to make prima facie case in its favor; stay denied: HC

++ I-T- Expression 'if any' specifically used in Sec 69A amplifies that where books of account are not maintained, it would not be possible to invoke this provision : HC

Dec 19, 2023

++ I-T - If there is no failure on part of assessee with regard to providing material facts, then notice issued u/s 148 & 149 for re-opening assessment is not sustainable: HC

++ I-T - AO is not required to give detailed reasons for accepting or not accepting particular transaction, and record should reflect if AO applied his mind to transaction in issue, for initiating revision u/s 263: HC

++ I-T - Once deductee allows deductor to retain money towards tax, then nature of amount cannot change and deductee would be entitled to credit of amount retained by deductor towards tax: HC

++ I-T- Stay on assessment order allowed where refund payable to Assessee far exceeds the 20% predeposit amount mandated by law: HC

++ I-T - No disallowance is permitted u/s 14A r/w Rule 8D, if interest-free funds available to assessee were more than investments made in AY in issue: HC

++ I-T- Penalty notice must clearly specify exact clause of Section 271(1)(c) which has been invoked: HC

++ I-T - If expenditure has been incurred by assessee voluntarily, even without necessity, but if it is for promoting business, then deduction of same would be permissible u/s 37(1): HC

++ I-T- No addition of foreign currency can be made in hands of assessee as someone else is claiming ownership of foreign currency and signed inventory of seized material : ITAT

++ I-T- Order passed by CIT(A) is upheld where provisions of Rule 46A of I-T Rules are not violated, since Assessee produced only those documents before CIT(A), which had also been submitted before AO : ITAT

++ I-T-Loss of books of account as claim cannot relieve assessee from the burden of explaining the nature and source of deposits in bank accounts: ITAT

++ I-T- Even if investment in shares is violation of sec 10(23C)/11(5), such violation cannot be basis for addition u/s 68 in hands of assessee : ITAT

Dec 18, 2023

++ I-T- Re-assessment exercise is invalidated where both ACIT & PCIT mechanically approve the same without considering where there actually is any under-assessment involved: HC

++ I-T-There is no practical efficacy in carrying forward business losses, unabsorbed depreciation, & capital losses unless there is a possibility of setting off those losses in future : HC

++ I-T- Exparte re-assessment order merits being quashed where Assessee-company's director, who mainly operated all company affairs, was arrested abroad & kept in police custody, due to which he was unable to participate in assessment proceedings: ITAT

++ I-T- Amounts invested by Co-operative Societies under compulsion would be entitled to deduction under section 80P(2)(a)(i) of the Act: ITAT

Dec 16, 2023

++ I-T- Order of PCIT can be set aside as order passed by NFAC is not found to be passed without due application of mind as has been set out by PCIT : ITAT

++ I-T- Date of allotment letter is relevant for determining FMV of asset/flat: ITAT

++ I-T- Expenditure incurred by the assessee to provide free samples of goods as additional items to the purchaser during the course of its sales is not liable for addition u.s 194H: ITAT

Dec 15, 2023

++ I-T - Nature of expenditure should be examined before its characterization as to 'capital' or 'revenue': HC

++ I-T - Revenue Department cannot charge annual letting value under 'income from house property' since principle of res-judicata does not apply in income-tax proceedings: HC

++ I-T - In case of completed assessment, only if incriminating material is found during course of search, then Assessing Officer has jurisdiction to initiate proceedings u/s 153A: HC

++ I-T- Notice issued in name of dead person is unenforceable in eyes of law: HC

++ I-T -The sine qua non for acquiring jurisdiction to reopen an assessment is that such notice should be issued in name of correct person: HC

++ I-T- Expenditure incurred wholly and conclusively for purpose of business and profession should be allowed : ITAT

++ I-T -Partner purchased property in name of partnership firm - No evidence that partner relinquished share in property upon dissolution of firm; additions framed in hands of partner u/s 50C are sustained: ITAT

++ I-T - Assessment order framed in the name of the deceased assessee is non-est in law: ITAT

++ I-T- Entire bogus purchases cannot be added and addition of 1.71% based on gross profit as sustained by CIT(A) is justified : ITAT

Dec 14, 2023

++ I-T- Deduction u/s 80IA cannot be allowed in respect of existing business which expands its business operations by adding a niche consumer base & in which case, no new undertaking has come into existence: HC

++ I-T- As per settled position in law, AO need not write a detailed order, as long as assessment record indicates that a query was raised & was answered : HC

++ I-T- Search assessment order is invalidated where no material to incriminate assessee is found in course of Search operations : HC

++ I-T- Re-assessment notice and order merit being set aside, where both are issued without granting an oral hearing to the Assessee : HC

++ I-T- As per settled position in law, addition @ 6% of purchases is fair and reasonable, in respect of bogus purchases: HC

Dec 13, 2023

++ I-T- Royalty paid by assessee towards use of logo of for particular period is to be treated as revenue expenditure: HC

++ I-T- Fact that expenses were incurred for prospective clients is good enough for Assessee to claim deduction thereon, as every expense does not always translate into corresponding income: HC

++ I-T- Once objections to draft assessment order within time limit is filed before DRP then final assessment order ought to be passed by AO in accordance with directions issued by DRP: HC

++ I-T- As per settled position in law, the manner of treatment of an item concerning expenditure and income in books of accounts or financial statement does not determine its liability under I-T Act: HC

++ I-T- Once share of the respective member is allotted by the AOP then AOP cease to be the owner of property in question : HC

++ I-T-Entries in the books of accounts are not determinative of true nature of transaction and nature of income : ITAT

++ I-T- There is no locus standi with AO to question the certification of DSIR, when DSIR is the authority considered competent by the legislature for R&D approvals : ITAT

Dec 12, 2023

++ I-T- Deduction u/s 24(a) claimed in respect of rental income declared as income from house property, is allowed in current AY, where also allowed in past AYs: ITAT

++ I-T- As per trite law, making any claim which is subsequently found to be unsustainable cannot per se be sufficient grounds to impose penalty on assessee on grounds of furnishing inaccurate particulars of income: ITAT

++ I-T- Re-assessment quashed where reason to believe on part of AO was based solely on uncorroborated information sourced from the Investigation Wing & not involving any independent investigation or application of mind by AO : ITAT

++ I-T- 324-days delay in filing appeal cannot be condoned where Assessee is commercial entity with legally trained people available & in which case, pleas available to an individual cannot be availed by a commercial entity: ITAT

++ I-T- In respect of completed/unabated assessments, no addition can be made by AO in absence of any incriminating material found during the course of search u.s 132 or requisition u.s 132A of the Act: ITAT

++ I-T- PCIT has rightly set aside assessment order u/s 263 as assessee fails to establish its stand on both issue for which case was selected for scrutiny : ITAT

++ I-T- Where assessee agreed for addition by AO, matter must be remitted to AO for further investigation: ITAT

Dec 11, 2023

++ I-T-CIT(A) cannot complete assessment u/s 153A/144 when assessee company neither made any compliance nor submitted any details to substantiate its claim: ITAT

++ I-T- Books of accounts & vouchers are not required in return filed u/s 44AD; the same income cannot be taxed twice once in the hands of HUF and once again in the hands of the assessee: ITAT

++ I-T- Approval u/s.80G can be granted to assessee when assessee has given entire details of shares sold and received by the company towards its corpus for carrying out charitable activities : ITAT

++ I-T- Addition in respect of investments made in imports/purchases by assessee out of his capital/accounted income cannot be made in cases where source of investment has not been doubted by AO : ITAT

++ I-T- Face value cannot be taken into consideration for making addition on basis of difference between premium charged and premium determined by valuer : ITAT

++ I-T- Once facility is approved, the entire expenditure so incurred on development of R&D facility has to be allowed for weighted deduction as provided by Section 35(2AB): ITAT

++ I-T- Provisions of section 56(2)(vii)(b) are inapplicable to a company; provisions of Section 56(2)(x) which may apply to a company are applicable to AY 2018-19 and onwards: ITAT

++ I-T- Revisionary power u/s 263 need not be invoked where documentary evidence on record indicates that AO made sufficient inquiry into relevant issue: ITAT

++ I-T- No addition for Unexplained cash credit can be made as assessee has furnished all evidences proving identity and creditworthiness of investors and genuineness of transactions : ITAT

++ I-T-Provisions of Section 50C providing for tax on full value of consideration in certain cases, cannot be invoked in respect of certain property which is held as stock-in-trade : ITAT

++ I-T- Assessee did not participate in assessment proceedings despite service of several notices - case remanded for fresh hearing in interests of justice - nevertheless, cost of Rs 5000/- imposed on Assessee for needlessly expending time & resources of the Revenue: ITAT

Dec 09, 2023

++ I-T- Re-assessment cannot be resorted to solely on assumption that Assessee did not file ITR for relevant AYs, thus revealing non-application of mind on part of AO: ITAT

Dec 07, 2023

++ I-T- Market value of the power supplied by the State Electricity Board to the industrial consumers should be construed to be the market value of electricity & the Board's rate when it supplies power to the consumers, has to be taken as the market value for computing the deduction under Section 80IA: SC

++ I-T- As per settled precedent, levy of interest is consequential and hence mandatory, and is not directory: ITAT

++ I-T-Assessee selling shares of a company present in the list of alleged bogus companies, cannot lead to the inference that such shares were traded to earn bogus long term capital gains: ITAT

++ I-T- 'Reason to believe' is suggestive of its prima-facie characteristics and not established or conclusive facts or information: ITAT

Dec 06, 2023

++ I-T - In absence of any finding of any constitutional infirmity in a provision, Courts are not empowered to invalidate a provision, on account of different organs of State not being involved in scrutinising each other's wisdom in exercise of duties: HC

++ I-T- A composite contract cannot be dissected by the Adjudicating Authority, where no internal tool exists to permit the same & where no external tool is made available to permit dissection of an otherwise indivisible contract: HC

++ I-T- Revenue authorities are obliged to apply the tax laws onto the proven facts of a case & the authority is not at liberty to presume or assume any facts: HC

++ I-T-Adjudicating authority is obliged to record reasons for concluding as to why re-assessment proceedings have been commenced, even in ex parte proceedings: HC

++ I-T- Assessment order vitiated where mandatory SCN u/s 143(2) not issued to assessee; such defect cannot be remedied by taking recourse to Section 292BB: HC

++ I-T- When deposits are sourced out of advance received from group concerns duly recorded in books of accounts, no addition could be made u/s 69A of Act : ITAT

++ I-T- Addition of bad debts is not sustainable as it is contrary to assessee's financial statements : ITAT

Dec 05, 2023

++ I-T- Not submitting supporting details is insufficient to frame additions on grounds of unexplained investment u/s 69 where otherwise investment made is disclosed on record: ITAT

Dec 04, 2023

++ I-T- As per settled position in law, an individual seeking to invoke the equitable jurisdiction of a High Court must approach this Court displaying bona fide : HC

++ I-T-Employees' contribution to PF & ESI is rightly disallowed where PF & ESI are deposited after due date prescribed under respective Acts, in light of Apex Court's verdict in Checkmate Services Pvt Ltd: ITAT

++ I-T-Intent of legislature to enact proviso to section 153C(1) of the Act is to compute the six-year period, in respect of which re turns are required to be filed by third- party u/s 153C of the Act : ITAT

Dec 01, 2023

++ I-T - AO needs to satisfy himself that undisclosed income belongs to any person other than person with respect to whom search was made u/s 132 or whose books of account were requisitioned u/s 132A: HC

++ I-T - Power to extend end date for completion of proceedings & compliances, which was conferred on Central Government u/s 3(1) of TOLA, cannot extend period of limitation provided u/s 149(1)(a) I-T Act: HC

++ I-T - Criminal proceedings initiated u/s 276CC deserves to be quashed for wilful failure to file ITR for reason that return filed after receipt of SCN for prosecution led to claim of refund on account of prepaid taxes: HC

++ I-T - Section 245C(5) as amended by the Finance Act, 2021, is to be read down by removing retrospective last date of Feb 01, 2021 as May 31, 2021: HC

++ I-T - Tax implication of re-casted books of accounts can only be found if assessee files return of income in pursuance of re-casted books of accounts: HC

++ I-T - Change of opinion does not constitute justification and/or reasons to believe that income chargeable to tax has escaped assessment: HC

++ I-T - Since deductor failed to deposit tax with government, recovery proceedings can only be initiated against deductor and not deductee: HC

++ I-T - No addition is permitted on account of unexplained deposits u/s 69 in absence of ‘beneficial ownership': HC