TODAY'S CASE (DIRECT TAX)

March 30, 2023

++ I-T - Claim for deduction u/s 80P is conditional on filing return within due date prescribed u/s 139(1) of I-T Act : HC

++ I-T - Revisionary order barred by time where copy of order not validly served to assessee & where Revenue unable to discharge burden of establishing existence of order : ITAT

++ I-T - Additions framed on grounds of unexplained bank deposits are sustainable where assessee does not contest charges, furnish submissions or reply to SCNs or even appear for hearing : ITAT

March 29, 2023

++ I-T - CBDT Circular No. 6 of 2016 on recharacterization of gains on transfer of listed shares/securities and subsequent clarification, is retrospective in operation: HC

++ I-T - Principles of natural justice are contravened where assessment u/s 153 r/w Section 144 is done by AO without giving assessee an opportunity of personal hearing : HC

++ I-T - No disallowance of interest can be made when interest-bearing funds exceed the investments made by assessee in securities yielding exempt income : ITAT

++ I-T - Re-assessment invalid where commenced by AO without considering the supporting documents adduced by assessee to explain sources of income : ITAT

++ I-T - Penalty u/s 271B need not be imposed where book results shown by assessee were substantially accepted by Revenue as genuine & delay in audit of accounts was duly explained: ITAT

++ I-T - To impose or not to impose penalty is at the discretion of the authority to be exercised judicially & on considering all relevant circumstances ; AO can drop penalty for bona fide or technical breach of provisions: ITAT

March 28, 2023

++ I-T - Date of Panchnama last drawn can be said to be relevant date and hence starting point of limitation of two years for completing block assessment proceedings: SC

++ I-T - Refund may be withheld u/s 241A, subject to reasons being recorded in writing on how grant of refund in opinion of FAC is 'likely to adversely affect revenue': HC

++ I-T - Re-assessment invalid where based on re-appreciation of material already available during original assessment & thus amounts to change of opinion : HC

++ I-T - Tribunal cannot entertain application for condonation of delay where appeal itself is not maintainable before the Tribunal: ITAT

++ I-T- No addition can be made only on the basis of declaration in the absence of supporting evidences: ITAT

++ I-T- Expenditure made towards registration fee for increase in authorised capital is capital expenditure: ITAT

++ I-T- Merely because assessee has declared business loss during relevant year does not imply that he has no creditworthiness : ITAT

March 27, 2023

++ I-T - Applicant must be given opportunity of being heard, before application u/s 270AA(2) seeking immunity from penalty proceedings is rejected: HC

++ I-T - Writ against black money act proceedings and penalty notices consequent thereto, cannot be entertained, if statutory appellate remedy was not exhausted: HC

++ I-T - Jurisdiction of SETCOM is limited to passing orders with regard to 'undisclosed income' of applicants only: HC

March 25, 2023

++ I-T - When AO is making addition based on certain adverse material in his possession, it is his fundamental duty to disclose such material to assessee and seek his rebuttal: ITAT

++ I-T - Mere non-appearance of Directors of company, cannot form basis for treating share application money as unexplained: ITAT

++ I-T- AO cannot usurp the power of the CIT and recommend a revision u/s 263 : ITAT

March 24, 2023

++ I-T - If any investment made in F.Y immediately preceding A.Y, for which, assessment is being made, if remains unexplained, then AO can add that amount as unexplained investment: ITAT

++ I-T - Charitable trust engaged in promotion of export of gems, is not hit by proviso to section 2(15) as far as activity of conducting exhibitions of gems within India or overseas is concerned: ITAT

++ I-T - Where assessee has claimed losses by booking cost of purchase of original shares and retain cost of additional shares due to split and bonus shares at NIL, there is no loss to Revenue: ITAT

++ I-T - Where assessee has filed sufficient details to prove identity, genuineness and creditworthiness of transaction, no addition is called for u/s 68: ITAT

++ I-T - If identity & creditworthiness of share subscriber companies and genuineness of transaction of applying for equity shares stands sufficiently explained, then no addition is called for u/s 68: ITAT

March 23, 2023

++ I-T- No exemption shall be allowed to assessee if any relief has been allowed u/s 10(10C) of the Act for any Assessment Year in respect of the amount received or receivable on voluntarily retirement or termination of service: ITAT

++ I-T-No action u/s 263 of the Income Tax Act ought to have been taken by the PCIT by exercising revisionary power when matters are in appeal before CIT(A): ITAT

++ I-T- When an income is taxed / addition is made to taxable income in an earlier year, assessee may claim that income arising in subsequent year / subsequent period is sourced out of the income taxed earlier: ITAT

++ I-T - If assessee has proved his ownership over money, recorded cash received from sub-contractors, and explained nature & source of cash, then no addition is permitted u/s 69A on basis of cash deposits: ITAT

March 22, 2023

++ I-T - When adverse view is to be drawn on basis of statement of third party, then person affected should be afforded opportunity to rebut such statement and cross examination if asked for: ITAT

++ I-T - IBC - Section 31 - Resolution Plan of Adjudicating Authority is binding on corporate debtor, creditors, guarantors & other stakeholders, due to which I-T Department cannot question the Plan: ITAT

++ I-T- Interest income earned out of investments made from surplus funds would be taxable under the head 'income from other sources' and would not be eligible for deduction u/s 80P(2)(a)(i) of the I.T.Act: ITAT

March 21, 2023

++ I-T - Cash payments received upon delivery of electronic appliances to their purchases, cannot be deemed to be suspicious transactions: HC

++ I-T - Re-assessment cannot be sustained when it is not based on any new tangible evidence uncovered by Revenue: HC

++ I-T - Re-assessment cannot be resorted to when there is no omission or failure on part of the assessee to disclose facts necessary for assessment : HC

++ I-T - Sale of shares cannot be deemed to be bogus based on suspicion alone or solely because assessee made substantial capital gains from shared held for over 3 years: ITAT

++ I-T - When claim of excess stock is not properly verified, then readjudication is warranted after taking cognizance of reconciliation filed by assessee: ITAT

March 20, 2023

++ I-T - If reassessment orders in lender companies accepts money if at all received from companies operated by some unscrupulous persons, then money received by assessee is not non-genuine u/s 68: ITAT

++ I-T - Cash deposit cannot be treated as unexplained money where made out of cash balances available with assessee & duly reflected in books of account: ITAT

++ I-T- Donations made as per guidlines formulated for corporate social responsibility for central public sector enterprises can be allowed as business expenditure : ITAT

++ I-T- The phrase 'by way of advance or loan' appearing in sec2(22)(e) of the Act must constitute to mean impugned advances or loans, which is enjoyed by the shareholder for merely because on account of being a partner or a Director in the company, which the beneficiary owner of shares : ITAT

March 18, 2023

++ I-T- Delay in submission of tax audit report is mere only technical breach of law which does not warrant levy of penalty u/s 271B of Act : ITAT

++ I-T - Where income on sale of wind power is accepted as such by Revenue, then it would not be justified in disallowing depreciation claimed on the such windmill at the eligible rates : ITAT

++ I-T - Onus to establish genuineness of any expenditure incurred by assessee lies on himself, even though certain expenditure was incurred to maintain/improve property: ITAT

March 17, 2023

++ I-T - If assessee has failed to substantiate its claim by failing to discharge its primary legal onus of proving that expenses were incurred exclusively for purpose of business, then additions are possible u/s 69A: ITAT

++ I-T - Dividend Distribution Tax - Excess tax paid by assessee merits being refunded where assessee's wholly owned subsidiary duly remits Dividend Distribution Tax on dividends declared by it: ITAT

++ I-T- Assessee cannot claim deduction in respect of non-refunded security deposit during the year under consideration as a business loss where security deposist was an adjustment against period for which assessee used premises without paying any rent : ITAT

++ I-T- The first requirement of furnishing the return electronically is a mandatory one, the second one of sending acknowledgement of such filed return to the CPC is only directory: ITAT

March 16, 2023

++ I-T - Provisions of section 10(23C)(vi) have excluded receipts and expenses outside India: HC

++ I-T - Reassessment proceedings initiated solely on basis of 'change of opinion', does not comply with jurisdictional foundation u/s 147: HC

++ I-T - Disallowance u/s 14A r/w Rule 8D cannot be sustained where assessee had sufficient interest free surplus fund to make investment: HC

++ I-T - Penalty imposed beyond limitation period without specifying any valid reason for delay, is unsustainable : HC

++ I-T - No addition is permitted in assessment order passed u/s 153C r/w/s 143(3), in absence of any incriminating material unearthed during course of search: ITAT

++ I-T - Only excess rent paid by charitable society over and above prevailing market rate, can be brought to tax as per provisions of section 13(1)(c) r/w 13(3): ITAT

March 15, 2023

++ I-T - Re-assessment proceedings based on alleged bogus purchases, are invalid where AO has some confusion regarding purchases made & also does not furnish to assessee copies of the material relied on: HC

++ I-T - Re-assessment proceedings commenced in name of entity which ceases to exist by way of amalgamation, is invalid: HC

++ I-T - Reopening initiated by AO solely on basis of audit objection, without any independent application of mind, merits to be quashed: HC

++ I-T - Any notice of reopening issued by Assessing Officer without any independent application of mind would laid its validity: HC

++ I-T - If subsidiary company is established as SPV out of stipulation of bid documents, then question of use of borrowed funds or using interest free advances is not of much consequence: ITAT

++ I-T -Credit of tax paid under sub-section (1) of section 115JB is to be given under MAT provisions : ITAT

++ I-T - Search assessment framed u/s 153A is unsustainable where no material incriminating the assessee is found in course of Search operations u/s 132 : ITAT

March 14, 2023

++ I-T - If party feels that Court's records do not reflect correct position, then party is required to approach Court; in absence of such step, Court is right to accept that what is on record: HC

++ I-T - Assessment in name of company which was amalgamated and stood dissolved, is void, and framing of assessment in name of such company is not merely procedural difficulty, which can be cured: HC

++ I-T - When agents act on behalf of non-resident ship-owners or charterers, they would step into shoes of principal and hence, provision of Sec 172 would apply and not provision of Sec 194C: HC

++ I-T - Wrong assessment order passed in name of non-existent company i.e., erstwhile company, amounts to nullity and cannot be cured u/s 292B: HC

++ I-T - Re-assessment proceedings cannot be based solely on suspicion & where not backed by proper evidence : HC

++ I-T - Charge/imputation set aside by judicial forum, cannot be reopened in parallel proceedings: HC

++ I-T - Reopening initiated only on basis of change of opinion and not any new tangible material, cannot be sustained: HC

March 13, 2023

++ I-T - Additions framed on grounds of bogus purchases merits being set aside where assessment order travels beyond scope of SCN by grossly over-stating quantum of additions : HC

++ I-T - AO should re-investigate whole aspect of huge transactions of purchases & sales of Gold and silver and find out who are real beneficiaries of these transactions, before making addition u/s 68: ITAT

++ I-T - Merely because agricultural income earned at one district were deposited in bank account at another disctrict, such cash deposits cannot be held to be sourced out of undisclosed income: ITAT

March 11, 2023

++ I-T - AO cannot simply decline credit of TDS, and he is bound to verify TDS certificate issue in accordance with provisions of law: ITAT

++ I-T - In absence of any cogent material brought by Revenue establishing that assessee had earned bogus gain, no addition is permitted solely on basis of suspicion: ITAT

March 10, 2023

++ I-T-Liability u/s 179 cannot be fastened onto company director who had very limited role in management & where no evidence proves gross neglect, misfeasance or breach of duty: HC

++ I-T - In case of acquisition of land by Government by way of compulsory acquisition, Department cannot be heard to say that there is suppression of value and consequently question of invoking Sec 50C does not arise: HC

++ I-T - Re-assessment cannot be resorted to in respect of company which ceases to exist due to its amalgamation, more so where Department had been duly informed about such amalgamation : HC

++ I-T - AO cannot retain seized assets awaiting finalization of future possible liability for indefinite period without deciding application of person concerned who is legitimately in position to explain source of asset so seized: HC

March 09, 2023

++ I-T - In respect of proceedings where first proviso to Section 149(1)(b) is attracted, benefit of TOLA' 2020 will not be available to Revenue: HC

++ I-T - Since construction companies are not owners of respective Toll Roads and Toll Bridges, in respect of BOT scheme entered into with Government, they are ineligible to claim depreciation on such toll bridges: HC

++ I-T - Re-assessment is invalidated where commenced in name of entity that ceases to exist on account of its merger with another entity : HC

++ I-T - Validity of orders u/s 148A and consequential notices u/s 148 which was revived as per Apex Court's ruling in Ashish Agarwal case, cannot be examined by ignoring limitation as per first proviso to Sec 149(1): HC

March 07, 2023

++ I-T - Interest expenditure incurred by assessee in relation to investments which gave rise to income not forming part of total income, cannot be disallowed under Rule 8D: ITAT

++ I-T - Genuineness of transaction of sale and purchases of jewellery cannot be doubted merely for reason that purchases and sales were made on same date but at different price: ITAT

++ I-T - Registration u/s 12AB cannot be denied where trust in question has supplied all desired information as per CIT(E)'s query letter : ITAT

++ I-T - Difference between income reported in Form No. 26AS and income reflected in audited financial of assessee, is no basis to make addition, unless there are specific discrepancies in his books of accounts: ITAT

++ I-T - In absence of any co-relation between inflation of wages and unexplained expenditure disclosed on account of renovations and repairs, claim of telescoping does not arise: ITAT

++ I-T - Employees' contribution retains its character as deemed income by virtue of Sec 2(24)(x), unless conditions spelt by Explanation to Sec 36(1)(va) stands satisfied: ITAT

++ I-T - Capital receipts are deemed to be revenue receipts by legal fiction, if assessee fails to prove nature and source of cash credits: ITAT

March 06, 2023

++ I-T- Deductee/assessee cannot be called upon to pay tax, which has been deducted at source from his income: HC

++ I-T- Where no limitation is prescribed, the statutory authorities must initiate action within a reasonable time and such reasonable time would be 4 years for initiation for proceedings u/s 201: HC

++ I-T - In case of employees' contribution, any failure to pay within prescribed dates under respective PF Act of Scheme, will result in negating employer's claim for deduction permanently u/s 36(1)(va): ITAT

++ I-T - There has to be failure on part of assessee to truly and fully disclose neccesary information which leads to escapement of income, in order to invoke reopening proceedings: ITAT

++ I-T - Mere suspicion is no ground for treating any transaction as bogus and income from such transaction as 'unexplained', in absence of any evidence: ITAT

March 04, 2023

++ I-T - Prior period expenditure cannot be disallowed, unless expenditure in question had crystallized during year under consideration: ITAT

++ I-T - If receivable are already surrendered during search and accepted by department and taxes are paid in respect of these amounts, then addition on same cash reciepts would amount to double taxation: ITAT

++ I-T - Sec 263 does not visualise case of substitution of judgment of Principal CIT for that of AO who passed assessment order, unless decision is held to be wholly erroneous: ITAT

++ I-T - If quantum addition made in case of assessee is already deleted, then consequential levy of penalty u/s 271(1)(c) has not legs to stand in eyes of law: ITAT

March 03, 2023

++ I-T - 89-day delay in filing appeal to High Court is condoned where such delay was caused due to assessee attempting to pursue appellate remedy before ITAT: HC

++ I-T - Issuance of notice u/s 274 is statutory requirement before passing penalty order u/s 271(1)(c): ITAT

March 02, 2023

++ I-T - Once writ petition is permitted to be withdrawn & petitioner is permitted to avail statutory remedy, any observation on the merits of the case ought to be avoided: HC

++ I-T - Where investments are made by a Cooperative society in a banking entity & not a cooperative society, then deduction u/s 80P is not allowed to the investor: HC

++ I-T - Re-assessment order quashed where passed before date of personal hearing sought by assessee & where AO also does not respond to assessee's request: HC

++ I-T - Where assessee is not given opportunity to file reply to draft assessment order & SCN, it amounts to violation of principles of natural justice : HC

March 01, 2023

++ I-T - Assessment order passed without considering or responding to assessee's application for adjournment, clearly contravenes rules of natural justice & so must be set aside : HC

++ I-T - Having sat over the assessee's application & without submitting any reply thereto, AO is wrong in suddenly directing assessee to furnish reply to SCN in 24 hours' time: HC

++ I-T - Re-assessment proceedings cannot be resorted to when there is no failure on part of assessee to make full & true disclosure of facts relevant for assessment: HC

++ I-T - Re-assessment proceedings are unsustainable where details of party with whom assessee allegedly transacted with, are not specified: HC

++ I-T - Non-deduction of TDS - Although penalty is set aside in light of relief granted in assessee's own case, such benefit will not be extended if assessee again defaults in deducting TDS: ITAT

++ I-T - Income Tax proceedings cannot continue in respect of assessee which is undergoing insolvency process & moratorium has been imposed by NCLT in this regard : ITAT

++ I-T - Net loss cannot be allowed to be carried forward, where assessee did not file ITR within due date prescribed therefor: ITAT