TODAY'S CASE (DIRECT TAX)

June 30, 2023

++ I-T - Re-opening of assessment cannot be upheld if notice issued omits to mention as to what information was not disclosed by assessee, confirms: SC

++ I-T - Sec 80IA(5) cannot be so interpreted so as to ignore provisions of Sec 79, by virtue of which business losses incurred in relevant AY, had been lapsed, confirms: SC

++ I-T - Assessment order and consequential demand notice u/s 156 without affording natural justice to assessee, merits to be rejected: HC

++ I-T - There is no bar on partners of firm against introducing capital by way of cash: HC

++ I-T - Any unabsorbed depreciation available to assessee on Apr 01, 2002 will be dealt with in accordance with provisions of section 32(2) as amended by Finance Act, 2001: HC

++ I-T- Penalty imposed u/s 272A warrants being set aside where reasons for non-compliance with Show Cause Notices is genuine and not deliberate: ITAT

++ I-T- Cash withdrawn by an individual & held for use as a cautionary measure, cannot be deemed to be unexplained, where assessee has demonstrated origin of cash & purpose for withdrawal: ITAT

June 29, 2023

++ I-T - Since assessee had effective remedy available u/s 144C, basis for initiating reopening cannot be challenged by invoking writ jurisdiction under Article 226: HC

++ I-T - Since basic grievance of assessee stands redressed, consequential refund shall be remitted to assessee at early date with applicable interest in accordance with law: HC

++ I-T- Re-assessment proceedings also entail that assessee be given an opportunity to present submissions against the same: HC

++ I-T- Re-assessment order merits being quashed where it contains certain allegations or facts which were not contained in the SCN issued before passing such order: HC

++ I-T- Order passed u/s 148A(d) is not a substitute for order of assessment if any to be passed by the AO during the course of the re-assessment proceedings: HC

++ I-T- AO is statutorily obliged to look into entire material placed before concluding that income found has escaped assessment warranting re-assessment & tax thereupon: HC

++ I-T- Deduction u/s 80IC can be allowed as claiming such deduction, in return of income filed within prescribed time limit is not mandatory but directory : ITAT

++ I-T- In banking companies when shares & securities are held as stock in trade, dividend income is considered as business income and Sec 14A cannot be applied : ITAT

++ I-T- Issue of unexplained cash credit can be remanded to file of AO for adjudication afresh after verifying matter on points submitted by assessee : ITAT

June 28, 2023

++ I-T - Re-assessment proceedings merit being sustained where grounds for commencing the same have been holistically examined by AO : HC

++ I-T- Re-assessment order and notice issued in the name of an entity that ceases to exist by virtue of amalgamation, is unsustainable: HC

++ I-T-Re-assessment order merits being set aside where the time granted to the assessee to file reply to notice proposing re-assessment, is thoroughly inadequate : HC

++ I-T- In the absence of any stay against the passing of final assessment order, limitation period for passing the assessment orders did not cease to operate or get extended merely due to pendency of the writ petition: HC

++ I-T- AO's order is bad in law when he has no jurisdiction to issue notice u/s 143(2) - ITAT

++ I-T- Addition for unexplained income can not be made by AO without any independent enquiry to verify genuineness of transactions: ITAT

++ I-T - Where notice issued u/s 274 r/w/s 271 is stereotype one and AO has not specified any charge for which such notice was issued, then no penalty is leviable: ITAT

June 27, 2023

++ I-T- Entity engaged primarily in achieving objectives of general public utility and charity is entitled to exemption u/s 2(15): HC

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

++ I-T - Revenue should refund entire amount of income tax recovered by them from ex-army official, which was exempted and which they had paid in respect of disability pension: HC

++ I-T - Income tax recovery against director of company u/s 179 merits to be quashed, if director proves lack of control on financial affairs: HC

++ I-T - Expenditure incurred for rehabilitation of sister concern can be said to be wholly incurred for purpose of commercial expediency, and hence allowable u/s 28: HC

++ I-T - If notice issued u/s 148A(b) proceeded on completely incorrect premise, then order based on such notice deserves to be set aside: HC

++ I-T - Provisions of Direct Tax Vivad se Vishwas Act, 2020 do not make any distinction as to mode in which appeal is preferred as long as it is pending: HC

++ I-T - If assessee had made specific request to afford opportunity of personal hearing through video conference, then Revenue is required to grant same to assessee: HC

++ I-T - If show cause notice-cum-draft assessment order is issued to assessee, reasonable opportunity is required to be given to him: HC

June 26, 2023

++ I-T - Taxpayer cannot be construed as owner of windmill for purpose of disallowing electricity charges, if such fact is not conclusively established, upholds: SC

++ I-T- No interest u/s 234E can be imposed for periods of respective AYs prior to June 1, 2015 : ITAT

++ I-T- CIT(A) erred in confirming the addition in absence of any supporting evidence and documents filed by the assessee : ITAT

++ I-T- Payment made by assessee are directly related to business activity and incurred wholly and exclusively for purpose of business and allowable as business expenditure - ITAT

++ I-T- Determining terms and conditions of the agreement are crucial for determination of the nature of transaction between the assessee and distributors/dealers and whether the payment allowed by the assessee is in the nature of discount or commission attracting the provision of section 194H: ITAT

June 24, 2023

++ I-T- Provisions of Section 56(2)(vii)(b) need not be invoked where the property is transferred as a gift & so aspect of consideration does not arise: ITAT

++ I-T- ITAT should interefere in cases where the Revenue has failed to provide any findings to rebut the case: ITAT

++ I-T- Assessee's claim for deduction u/s 54B is justified where the purchase of agricultural land is made in the name of the assessee's spouse & which was paid for entirely by the assessee : ITAT

June 23, 2023

++ I-T- Writ petition challenging a SCN which is preliminary in nature, cannot be entertained, more so where Petitioner-Noticee did not furnish reply thereto: HC

++ I-T- Disallowance of rent expenses, depreciation, legal expenses is unwarranted where assessee is able to explain link of such expenses with its business: HC

++ I-T- 238-day delay in filing appeal is condonable when there is reasonable cause for the same & where NFAC dismissed appeal without invoking powers vested u/s 249 of Act: ITAT

++ I-T- Section 145(3) cannot be invoked on the mere ground that GP rate is low as compared to earlier year: ITAT

++ I-T-When assessee has apparently made incorrect claim in its return of income which is against the provisions contained under PF & ESIC as to depositing the employees' contribution on account of PF & ESIC within a particular time frame, any deposit thereafter would not be entitled for deductions : ITAT

June 22, 2023

++ I-T - It is not open for Revenue authority to exercise powers of reopening of assessment which had already become final, in case there is no non-disclosure on part of assessee: HC

++ I-T- There is no need to interfere with findings of CIT(A) as CIT(A) deleted additions on appreciation of evidences, considering remand report as well as rejoinder of assessee : ITAT

++ I-T - Following particular method of accounting in books of accounts with regard to expenditure, would not preclude assessee from claiming entire expenditure in current year itself : ITAT

++ I-T- Disallowance u/s. 14A read with rule 8D should not exceed the exempt income earned by the assessee: ITAT

June 21, 2023

++ I-T- AO erred in holding that the assessee was not maintaining proper accounts when there are evidences on record of the same : ITAT

++ I-T- Disallowance w.r.t. allegedly bogus purchases merits being restricted to the profit element embedded therein where the manufacturing activity & corresponding sales using such material is not doubted: ITAT

++ I-T- CIT(A) erred in not giving credit to the assessee when he indeed did declare the cash under the head of 'sundry miscellaneous income:: ITAT

++ I-T- Expenditure incurred on travel expenses merits being allowed u/s 37(1), where the same is in keeping with the nature of the assessee's business of supplying electronic gadgets which requires some amount of travel : ITAT

++ I-T- Addition of AO must be upheld in cases where AO has relied on the well reflected investigation report : ITAT

++I-T- Assessee can be denied the benefit for the bad debts merely on the reasoning that such bad debts were not claimed in the profit and loss account but adjusted against the provision of bad debts : ITAT

++ I-T- Disallowance of interest paid to persons who furnish form 15G/H can be made in the hands of the assessee u/s. 40(a)(ia) of the Act : ITAT

June 20, 2023

++ I-T - If there has been violation of principles of natural justice, then such matter has to be remanded back to AO for fresh decision: HC

++ I-T- Expenditures claimed by assessee are rightly disallowed where unable to furnish relevant documents such as vouchers to prove incurring of such expenses: HC

++ I-T- Power of revision is rightly exercised where AO exceeds scope of instructions given vide remand order: HC

++ I-T- Payment of entrance fees for becoming member of Cricket Club of India can be allowed as it would inure benefits for business of assessee : ITAT

++ I-T- Depreciation on machinery cannot be allowed when there is no manufacturing activity taking place & when no revenue is earned at all: ITAT

June 19, 2023

++ I-T- Re-assessment proceedings merit being quashed where AO overlooks the response filed by the assessee and does not deal with each objection raised: HC

++ I-T-Assessment order merits being set aside where passed without considering certain documentary evidence sought to be furnished by assessee: HC

++ I-T- Re-assessment notice and order issued in the name of an entity that ceased to exist by virtue of amalgamation with another company, is unsustainable: HC

++ I-T- Assessment order & consequent demand notice merit being set aside where SCN are sent to a defunct email ID, & so are not received by assessee & no reply is furnished thereto: HC

++ I-T -Where foreign employer directly credited salary for services rendered outside India into NRE bank account of non-resident seafarer in India, same could be brought to tax in India in terms of section 5 of the Act: ITAT

++ I-T CIT(A) erred in making proportionate disallowance of building repairs treating the same against the rental income : ITAT

++ I-T- CIT(Exemption) was justified in rejecting the application seeking registration u/s. 80G of the Act : ITAT

June 17, 2023

++ I-T- AO should first grant benefit of quantity of jewellery that is declared by assessee's wife and mother in VDIS scheme as well as in return before making addition for unexplained income : ITAT

++ I-T- As per settled law, CIT(A) is obligated to dispose off appeals on merits & it is fit case for remand where appeal is dismissed solely for non prosecution : ITAT

June 16, 2023

++ I-T - If expenditure incurred for any purpose which is offence or which is prohibited by any law for the time being enforced in India or outside India shall not be allowable : ITAT

++ I-T - Expenses incurred for import of rubber process oil, loss on price fluctuation, freight and retention charges are allowable as deduction u/s 37(1) of Act : ITAT

++ I-T - If transaction of scrips took place in recognized stock-exchange which is not under control of assessee and consideration is passed through banking channel, then abnormal ups and down in share market is no basis to disallow LTCG: ITAT

++ I-T- Interest income received on temporary Fixed Deposits is eligible for exemption u/s 10AA :ITAT

June 15, 2023

++ Benami - Consideration money supplied by husband for acquiring property in wife's name does not necessarily imply Benami Transaction: HC

++ I-T - Notice and assessment framed in non-compliance of CBDT's Instructions are to be held as without valid jurisdiction: HC

++ I-T - Reopening notice issued through speed post at address given on PAN Data base is sufficient to return a finding regarding service of notice at correct address: HC

++ I-T - Flaw in method of accounting and maintenance of qualitative & quantitative details calls for addition: HC

++ I-T - Merely by selling entire land after dividing it into various parts, without altering character of land, which is for industrial purposes, cannot be considered as adventure in nature of trade: ITAT

++ I-T- Cash amount proven to be generated by an practicing Advocate on account of professional income, cannot be deemed to be unexplained income : ITAT

++ I-T Impugned order passed by CIT (E) must be set aside in cases where the assessee has not been given the opportunity of being heard: ITAT

++ I-T- Merely some inadequacy can't render assessment order erroneous u/s 263 where extent of inquiry has been questioned by Revisional Commissioner : ITAT

June 14, 2023

++ I-T- Interest income earned on the investment of surplus money with banks is eligible for exemption u/s.80P(2)(a)(i) of the Act: ITAT

++ I-T- CIT(A) erred in not giving an reasonable opportunity to the AO for making his case on the material made available before him by way of calling remand report : ITAT

++ I-T-CIT(A) erred in making the disallowance when the amount was deposited by the assessee after the due date mentioned in the 1952 Act : ITAT

++ I-T- Issue of deduction u/s 80P(2)(a)(i) can be remitted back to CIT(A) as CIT(A) earlier taken figures wrongly and in what manner he has collected information is not clear : ITAT

June 13, 2023

++ I-T- PCIT has rightly invoked its revisional jurisdiction after applying its mind to the facts of the case : ITAT

++ I-T- Since there is inbuilt in congruency in valuation of DVO, addition made on account of re-computation of LTCG taking into consideration DVO report cannot sustain : ITAT

++ I-T- It is fit case for remand where assessee is to be given another chance to present its case before the lower authorities : ITAT

++ I-T- Notice issued u/s 271(1)(c) without striking off irrelevant clause is not valid and accordingly, penalty levied can be deleted - ITAT

June 12, 2023

++ I-T - If charge memo was approved by Competent Authority i.e. Finance Minister, it cannot be pleaded that chargesheet issued in course of departmental proceedings was issued without jurisdiction: HC

++ I-T - Disallowance indicated u/s 14A is only to extent of disallowing expenditure incurred by assessee in relation to tax exempt income: HC

++ I-T - If genuineness, identity and capacity of creditor stands proved, then no addition is permitted u/s 68: HC

++ I-T - Once final order of assessment is passed determining liability of assessee to pay particular amount and such amount is not paid within time limit as prescribed u/s 220(1), then assessee would be deemed to be in default: HC

++ I-T - Adverse material collected at back of assessee if not confronted and not allowed for cross-examination, such material cannot be considered against assessee in Income Tax proceedings: ITAT

++ I-T - If PCIT while setting aside action of AO and remitting matter back for further enquiries, did not bring any definite material to show any incorrect assumption of facts, then he cannot invoke Section 263: ITAT

June 10, 2023

++ I-T- Section 189 keeps the firm alive for the purposes of assessment despite its dissolution and ensures that firm which is dissolved does not escape the liability to tax after its dissolution: ITAT

++ I-T-When a notice under section 148 of the said Act is issued and the noticee files a return and seeks reasons for the issuance of the notice, AO is bound to furnish reasons within a reasonable time : ITAT

June 09, 2023

++ I-T As per settled law, no addition can be made in respect of completed assessment in absence of any incriminating material being found in course of Search operations: HC

++ I-T- Re-assessment - Order passed without considering assessee's reply to Show Cause Notice - order stands quashed: HC

++ I-T - If Assessee has demonstrated that fixed deposits made are out of salary income earned by him, then addition is warranted on account of those FDS in name of unexplained investment: ITAT

++ I-T- Sec 271AAA comes into play only when assessee fails to state manner of having derived corresponding undisclosed income and not otherwise : ITAT

++ I-T- Disallowance made for late deposit of employees' share of PF/ESI contribution to relevant funds beyond date prescribed under respective Acts can be sustained : ITAT

June 08, 2023

++ I-T - AO should not trigger reassessment proceedings simply on basis of information made available to him which had its source in insight portal: HC

++ I-T- Late fees u/s 234E of Act can be levied only prospectively w.e.f. 01.06.2015 : ITAT

June 07, 2023

++ I-T- Where transaction of gift of property is between brother & sister, it falls outside ambit of provision of Section 56(2)(vii)(b) of the Act: ITAT

++ I-T - Amendment to section 56(2)(x) brought in by Finance Act, 2020 of increasing tolerance limit from 5% to 10%, is curative in nature: ITAT

++ I-T - Disallowance made on grounds of bogus expenditures, without first specifying any defect in the books of accounts and records maintained by the assessee, is invalid: ITAT

++ I-T-Insertion of Section 115BBE is only prospective in nature: ITAT

June 06, 2023

++ I-T- Assessee took undue advantage of technical error in assessment order - filing petition with such mischevious intent is strongly deprecated - petition dismissed - fine of Rs. 1 lakhs imposed on assessee: HC

++ I-T-A plain reading of Section 48 would provide that the entirety of sale consideration does not constitute 'income': HC

++ I-T- AO has not brought on record any concrete material to justifiy addition based on estimation of Scrap Sales: ITAT

++ I-T- Addition u/s 56(2)(viib) made by AO can be directed to be deleted as no mistake is found in valuation adopted by assessee : ITAT

++ I-T- In absence of any contrary material brought on record to rebut findings of lower authorities, Tribunal found no reason to interfere with order of CIT(A) making enhancement of disallowance u/s 14A : ITAT

June 05, 2023

++ I-T- Solely because assessee inadvertently offers a receipt for levy of tax, tax cannot be levied thereon if it is not otherwise constitute assessee's income: HC

++ I-T- Deliberate attempt is not made by assessee to evade tax by filing false return : HC

++ I-T- Assessment order merits being set aside where the rules of natural justice are contravened by not giving assessee access to materials seized in course of search: HC

++ I-T- Based on order passed by coordinate Bench in identical situation, a case can be remanded to files of CIT(A) having jurisdiction over assessee : ITAT

++ I-T- Following order passed by Tribunal in assessee's own case for preceding year addition made for Director's foreign travelling expenses can be removed : ITAT

++ I-T - Assessee is entitiled to deduction u/s 80P(2)(d) on entire amount of interest income received from Co-operative Bank : ITAT

June 03, 2023

++ I-T- AO erred in making the addition when the alleged sum was used by the assessee for its objects : ITAT

++ I-T- Grants constitute the income of the assessee when the assessee was not authorised to use the said grants for any purpose : ITAT

++ I-T- Late fee can not be levied u/s 234E of the Act for late filling of TDS Return which pertains to the period prior to 01-06-2015 : ITAT

++ I-T- When there are two reasonable interpretations of a taxing provision, then that interpretation favoring the assessee must be adopted : ITAT

June 02, 2023

++ I-T- In absence of requisite material/reasons, transfer of assessment jurisdiction from Mumbai to Jaipur can not be allowed : HC

++ I-T- Power of revision can be triggerred merely because the expectations of the Revisional Commissioner are purportedly not met or because the AO did not examine certain issues the way the PCIT would want to: ITAT

++ I-T- Where competent authority has issued Form 3CL entitling assessee to claim deduction in respect of both capital & revenue expenditure, then Department cannot disentitle assessee from availing deduction by ignoring Form 3CL : ITAT

++ I-T- Issue of payment of employees contribution to PF and ESI can be remitted back to AO for verification of proof of payments as per section 36(1)(va) of Act : ITAT

++ I-T- When there is similarity in products sold, then there cannot be much difference in GP rate applied for estimating profit : ITAT

++ I-T- Penalty can be levied u/s 272A(2)(k) for failure to file quarterly statements within statutory time : ITAT

June 01, 2023

++ I-T- PCIT cannot assume jurisdiction u/s 263 if AO, has applied his mind to issue under consideration and has taken legally plausible view : ITAT

++ I-T- Quantum and penalty proceeding are different and any addition made in quantum proceeding do not ipso facto empower revenue to levy penalty u/s 271(1)(c) of Act : ITAT

++ I-T-Strict conditions provided in Rule 37BA should be read in the provisions of Section 199(1) to make it workable in genuine cases where department is sure no double credit is allowed or claimed : ITAT

++ I-T- Once the income is determined through percentage of turnover rejecting the books of accounts then the A.O becomes powerless to again go through the books of accounts and make separate addition: ITAT

++ I-T- Delay in making payment under EPF & ESI funds is rightly disallowed where payments were made after the due dates prescribed in the relevant Acts : ITAT