TODAY'S CASE (DIRECT TAX)

May 31, 2023

++ I-T - All original notices u/s 148 referable to 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 - All notices u/s 148 relatable to A.Y 2013-14 & 2014-15 which are beyond permissible time limit, are liable to be treated as illegal and without jurisdiction: HC

++ I-T- By virtue of CBDT's Circular No. 17/2019 , dated 8th August, 2019 Revenue's appeal having tax effect not exceeding Rs. 5O Lakhs should be dismissed : ITAT

++ I-T- No penalty for failure to deduct tax in respect of discount/commission can be imposed as belief of assessee is one of possible view : ITAT

++ I-T-Re-assessment proceedings are invalidated where assumption of jurisdiction is based on an entirely incorrect set of facts: ITAT

++ I-T- Search assessment order u/s 153A is invalid when no evidence shows that additional income offered at the time of search and seizure operation was out of either any money, bullion, jewellery or other valuable article or thing or any entry in the books of account or other documents or transactions found in the course of search : ITAT

May 30, 2023

++ I-T - Provisions of Section 45(5A) cannot be made applicable retrospectively particularly because the sub-section was expressly inserted w.e.f. Apr 1, 2018: HC

++ I-T - Sec 148 notices issued to assessees which were issued under unamended section 148, shall be deemed to have been issued u/s 148A as substituted by the Finance Act, 2021: HC

++ I-T - Notice which could not have been issued in old regime period due to becoming time barred as per then operating provision, would also not be permissible to be issued post Apr 01, 2021: HC

++ I-T - All notices u/s 148 relatable to A.Y 2013-14 & 2014-15 which are beyond permissible time limit, are liable to be treated as illegal and without jurisdiction: HC

++ I-T - If case was selected for scrutiny of large share premium and assessee has not justified same by way of either submission or furnishing requisite details, then such case calls for consideration afresh: ITAT

++ I-T - Excise duty cannot be included in value of closing stock of finished goods at end of accounting period: ITAT

++ I-T - Additions framed u/s 69A cannot later be converted to additions u/s 69C: ITAT

May 29, 2023

++ I-T- SCN & assessment order merit being set aside where passed without granting assessee an opportunity to present its case, thus breaching rules of natural justice: HC

++ I-T - Failure on part of assessee to pay tax in its entirety in respect of declaration made u/s 183 would be deemed to have never been made under IDS: HC

++ I-T- Revenue can bring expenditure incurred in earlier years to tax in subsequent years if it is proved that expenditure incurred is bogus : ITAT

++ I-T- Merely providing the evidence relied upon by the AO cannot substitute the fundamental requirement of providing the opportunity for cross- examination: ITAT

++ I-T- Case can be remanded back to AO to admit details of payee with PAN numbers and pass fresh order as these details were not before lower authority earlier : ITAT

May 27, 2023

++ I-T- Filing of Form 67 is procedural in nature and the assessee should not be denied the benefit of foreign tax credit for such delay: ITAT

++ I-T - New assessment order passed pursuant to directions from CIT on exercise of revisionary power u/s 263, merits being quashed, where revisionary order itself is quashed: ITAT

May 26, 2023

++ I-T-In order that an expenditure may be allowed as a deduction u/s 37, it need not be incurred with the object of gaining a direct benefit: ITAT

++ I-T- Addition should be restricted to the extent of 25% of the purchases: ITAT

May 25, 2023

++ I-T- Once income is determined under normal computation of income then it implies that all other provision including provision of setting off loss/unabsorbed depreciation will equally be applicable: ITAT

++ I-T - UPS, Printer and Projector form part of computer peripherals and on which depreciation @ 60% is allowed: ITAT

++ I-T - If no addition was made in hands of 'giver' for want of incriminating material, then same transaction cannot be accepted as based upon any incriminating material in hands of 'taker' : ITAT

++ I-T- Once exemption claimed by assessee u/s 11 of the Act has been denied, the income of assessee has to be assessed as "business income" and assessee is entitled for all usual deductions under the provisions of the Act : ITAT

May 24, 2023

++ I-T - Assessee should be allowed benefit of deduction u/s 54B if purchase in new property has been made out of advances received towards sale of agricultural properties held by assessee: ITAT

++ I-T -Power of revision u/s 263 cannot be exercised w.r.t. an issue which is debatable in nature: ITAT

++ I-T- Amount forfeited by assessee out of share capital issued by it will not fall within the scope of Section 56(2)(ix) : ITAT

++ I-T- Provisions of Section 56(2)(ix) will apply on where certain advance money has been received in the course of negotiations for transfer of capital asset : ITAT

May 23, 2023

++ I-T- Re-assessment cannot be resorted to where the assessee did not fail to disclose relevant facts in course of scrutiny assessment: ITAT

++ I-T- PCIT erred in exercising revisionary jurisdiction on the ground that AO having not examined the applicability and invocation of the provisions of Section 56(2)(vii)(b) of the Act: ITAT

++ I-T- Revisionary power u/s 263 is rightly exercised where AO omits to inquire into or verify certain expenses claimed by assessee, while passing original assessment order: ITAT

++ I-T- Payments to banks for utilization of credit card facilities are bank charges & not commission; TDS u/s 194H is not payable thereon: ITAT

May 22, 2023

++ I-T- ITAT's dismisssal of assessee's appeal on grounds of limitation, is justified where delay in filing appeal is attributable to assessee's own decision to pursue remedy directly before High Court : HC

++ I-T- If revenue peruse penalty demand which is not covered under VSVS scheme then in that case revenue should hear case on merits, so to that order can be restored to CIT(A) : ITAT

May 20, 2023

++ I-T- If assessee does not raised any issue either before CIT(A) or before Tribunal as additional ground then, issue does not germane to subject matter of appeal before Tribunal : ITAT

May 19, 2023

++ I-T- If the demand is likely to get scaled down, this aspects will have to be taken into account by AO while dealing with application for stay: HC

++ I-T- CIT(A) erred in making the addition when assessee has clearly explained the source of cash deposit in his bank account : ITAT

++ I-T- Where the substantial justice was pitted against technicality of non-deliberate delay, the cause of substantial justice was to be preferred : ITAT

++ I-T-Re-assessment is invalid when there is no failure on part of assessee to disclose relevant facts necessary for assessment: ITAT

May 18, 2023

++ I-T- Order must be restored in cases where there are no valid reasons for the reduction in the profit : HC

++ I-T- As assessee has sufficient interest free own funds far exceeded investments made no proportionate disallowance is warranted u/s 14A on ground that separate account are not maintained : ITAT

++ I-T- Additions framed u/s 68 are valid, where assessee furnishes name, address, sale bill, bank statements etc of the relevant persons who deposited money : ITAT

++ I-T-It is fit case for remand where employees contribution to PF and ESI, is disallowed, despite assessee's contention of it being paid in some cases within grace period provided under the respective Acts: ITAT

May 17, 2023

++ I-T - In case of entrustment to carrier otherwise than under contract of sale of goods, possession of carrier would not convert it into owner of goods, for purpose of invoking Sec 69A: SC

++ I-T - If identity and creditworthiness of depositor has not been proved nor genuineness of transaction is proved, no addition can be made u/s 68: ITAT

++ I-T - Abnormal increase in cash sale and their deposit in bank account consequent to demonization could not be basis for rejection of account and addition u/s 68: ITAT

++ I-T - Revenue can be directed to restrict disallowance u/s 36(1)(va) of Act towards PF & ESI to extent of employee contribution : ITAT

++ I-T- PCIT need not set aside assessment order in exercise of power u/s 263 if assessment proceedings are carried out after making proper enquiry and taking plausible view : ITAT

++ I-T- Based on written submission and evidences produced can one more opportunity be provided to assessee to prove that commission payments is genuine business expenditure : ITAT

May 16, 2023

++ I-T-Where primary facts necessary for assessment are fully and truly disclosed the AO is not entitled to reopen the assessment on a change of opinion: HC

++ I-T - If directors of subscriber companies have not come personally in response to summons issued by AO, adverse inference cannot be taken against assessee solely on this ground: ITAT

++ I-T- Once the delayed payment of employee's contribution to PF and ESI beyond the due date of respective Acts, has been interpreted to be deemed income, then the same is not allowable claim, therefore no such deduction of claim can be allowed: ITAT

May 15, 2023

++ I-T- As per settled law, when alternate statutory remedy of appeal is available, the same should be exhausted first before entertaining a writ petition: HC

++ I-T- Order passed by the AO and sustained by the CIT(A) without issuing notice to the assessee contravenes the rules of natural justice & so must be quashed: ITAT

++ I-T - Inadequate enquiry would not by itself give occasion to Commissioner to pass orders u/s 263, merely because he has different opinion in such matter: ITAT

++ I-T- Penalty imposed u/s 271B merits being set aside where assessee was incapacitated due to serious illness & so was unable to furnish ITR & Audit Report within specified time limit : ITAT

May 13, 2023

++ I-T - Foundation for making search assessments u/s 153A/153C can be said to be existence of incriminating material showing undisclosed income detected as result of search: SC

++ I-T - Application seeking clarification need not be entertained, if such application is actually in form of review which requires detail consideration at length looking into importance of matter: SC

++ I-T- Where AO did not make any addition on issue in respect of which reasons were recorded at time of issuing notice u/s 148, sequitur is that AO could not have made an addition on account of said issue: ITAT

++ I-T - Person making salary payment is required to make deduction towards tax at source only at time of making such payment; both accrual of payment & making of payment must exist: ITAT

++ I-T - Disallowance u/s 40A(3) cannot be made where no discrepancy is found in books of accounts, but rather because books of accounts were not maintained by assessee: ITAT

May 12, 2023

++ I-T - Assessment u/s 153-C merits to be quashed, if no incriminating material was found in case of either from assessee or from third party: SC

++ I-T - Taxability of retirement receipts in hands of retired partner cannot be decided simply on basis of sum paid to him in excess of his capital contribution, without considering if such excess is attributable to goodwill: SC

++ I-T - Statement recorded during survey operation u/s 133A may be relevant material but in absence of further materials to substantiate it, it could not be basis for making addition: ITAT

++ I-T- Bonus amount paid by an employer to an employee out of appreciation for the latter, falls outside the purview of Section 17(iii) of the Act: ITAT

++ I-T - If land was shown as agricultural land in Revenue records, same was not converted to non-agricultural land and was situated beyond 8 km from municipal limits, then its sale is eligible for deduction u/s 2(14)(iii): ITAT

++ I-T- Commission expenses cannot be disallowed without considering business expediency for which such amounts had to be paid to parties & where all details have been furnished by assessee : ITAT

May 11, 2023

++ I-T- Central Processing Unit cannot exceed its jurisdiction so as to frame adjustment u/s 143(1)(a)(iv): ITAT

++ I-T- When the assessee has submitted the documents relating to identity, genuineness of the transaction, and credit-worthiness of the subscribers, then AO is duty bound to conduct an independent enquiry to verify the same: ITAT

++ I-T- For availing the benefit u/s 35(2AB), what is relevant is not date of recognition or the cut-off date mentioned in certificate of DSIR or even date of approval, rather the existence thereof shall be sufficient: ITAT

May 10, 2023

++ Cooperative credit society cannot be held to be a cooperative bank; is eligible for benefit u/s 80P: SC

++ I-T - Only thing in a Judge's decision binding a party is the principle upon which matter is decided; it is important to analyze a decision & isolate from it ratio decidendi : ITAT

++ I-T- For the lack of specific finding by the AO as to whether the deposits during demonetization period were in old currency or new currency, benefit of doubt could be given to the assessee : ITAT

++ I-T - Principles of consistency need to be adopted, if there is no change in facts as well as law with respect to issue raised by assessee: ITAT

++ I-T- Assessee should file a fresh rectification application if the assesee is aggrieved for non-granting of TDS credit : ITAT

++ I-T- Any payment of interest to any partner which is authorised by, and is in accordance with, the terms of the partnership deed and relates to any period falling after date of such partnership deed shallnot be deducted in computing the income chargeable under the head profits and gains of business or profession : ITAT

May 09, 2023

++ I-T- Faceless Assessment - Section 148A(b) gives 7 days' time to file reply to notice; notice asking for reply in 3 days' time merits being quashed: HC

++ I-T- Making a claim which is subsequently found to be unsustainable in law is insufficient grounds for imposing penalty u/s 271(1)(c): HC

++ I-T- Re-assessment cannot be commenced based on evidence that is already on record during original assessment: HC

++ I-T- Protective assessment is unwarranted where assessee is able to discharge onus for showing nature & source of credit entries: HC

May 08, 2023

++ I-T- Once the borrowing is utilised for the purpose of business by the assessee, the interest paid on such borrowing would be squarely eligible for deduction u/s. 36(1)(iii) of the Act : ITAT

++ I-T- Disallowance made for late deposit of employees' share of PF & ESI contributions, is sustainable , where made beyond due dates under relevant Acts: ITAT

++ I-T- Assessee society is under legal obligation to satisfy the CIT(Exemption) about the genuineness of its activity: ITAT

++ I-T- Penalty notice issued u/s 274 merits being set aside where irrelevant limb between concealment of income & furnishing inaccurate particulars of income is not struck off: ITAT

++ I-T- Exemption u/s 10(23C)(iiiad) is to be allowed where assessee is found to be eligible for exemption u/s 11 and 12 of the Income Tax Act : ITAT

May 06, 2023

++ I-T-If assessee is carrying on business & has some undisclosed stock then same is taxable as undisclosed business income, it is cannot be held as undisclosed investment: ITAT

++ I-T-Additions framed are sustainable where assessee receives share capital and share premium but does not submit details to establish creditworthiness of creditors and genuieness of transaction : ITAT

++ I-T- As per settled law, invoking section 154 would be untenable when matter requires adjudication upon the issue which is debatable issue : ITAT

++ I-T- Where additions made in assessment order on basis of which penalty for concealment is levied, are deleted, there remains no basis at all for levying penalty for concealment : ITAT

May 05, 2023

++ I-T - Merely on basis of recording of inventory in books of accounts, transaction of sale of development rights in property would not become stock in trade: SC

++ I-T - Where assesse is private limited company and following mercantile system of accounting, then he has to be allowed these tenancy vacancy charges on accrual basis: ITAT

++ I-T - Exemption u/s 10(23C) cannot be disallowed solely because an eductional institution purchases second hand luxury car, albeit for use by its principal & staff, thereby being in relation to running of educational institution: ITAT

++ I-T- When money has flown from the bank account of assessee it should not make any difference when the same has been shown to be credited to the Governments account: ITAT

May 04, 2023

++ I-T- Re-assessment is invalid where there is no tangible evidence available with AO to justify exercise of such power: HC

++ I-T- As per settled law, once the quamtum additions has been deleted, there is no scope for levy of penalty : ITAT

++ I-T-217-day delay in filing appeal merits being condoned where assessee's tax consultant did not take cognizance of all the tax demands raised : ITAT

May 03, 2023

++ I-T - What is reasonably attributable to operations carried out in India alone can be taken to be income of business deemed to arise or accrue in India: SC

++ I-T - Educational trust cannot be said to be established solely for imparting education if it is indulging into huge systematic profit, and therefore not eligible for exemption u/s 10(23C): SC

++ I-T- Search assessment is invalidated where no satisfaction note has been prepared by AO as AO of the person subjected to Search operations: HC

++ I-T- Search assessment is invalid if no satisfaction note is recorded by AO as AO of person subjected to Search : HC

++ I-T - If Department proposes to invoke section 69 for taxing unexplaine d investments, it cannot harp on presumption u/s 132(4A): ITAT

++ I-T-Interest income being inextricably linked to assessee's business activities as credit society, would be eligible for deduction under Section 80P(2): ITAT

May 02, 2023

++ I-T-If repeated & detailed queries are asked after issuance of notice u/s 143(2) but without any addition, or disallowance, there is deemed formation of opinion : HC

++ I-T- Re-assessment initiated for period prior to specified date as per scheme of amalgamation against a non-existent entity, is unsustainable: HC

++ I-T- Power of appellate authority is co-terminus with that of Assessing Officer; any lacunae in procedure can well be corrected even at appellate stage: HC

++ I-T- There is nothing in sub-clause (5) of Section 80IA to suggest that profits derived by assessee from eligible business can be adjusted against notional losses which stand absorbed against profits of other business: HC

++ I-T- In order to exercise jurisdiction u/s 263 of the Act, twin conditions have to be fulfilled, that is, not only should the order be erroneous, but it should also be prejudicial to the interest of the revenue: HC

++ I-T- Re-assessment - it is incumbent upon AO to disclose the nature of information received by it for due compliance of the requisite condition prescribed u/s 148A(b): HC

May 01, 2023

++ I-T-AO cannot proceed with re-assessment if the grounds mentioned in re-assessment are non-existent : ITAT

++ I-T - Failure of assessee to file neccesary documents despite several opportunities, calls for cost, in case prayer for readjudication of those documents stands accepted: ITAT

++ I-T - If assessee has explained about identity, creditworthiness and financials of each of share subscriber company individually, no addition is warranted u/s 68 on account of unexplained credit: ITAT

++ I-T-CIT(A) has all power to entertain any additional grounds raised & as per settled law, must exercise discretion to or not to permit raising of an additional grounds: ITAT

++ I-T - Vacancy allowance u/s 23(1)(c) is available only when property is 'actually let out' and not based on intention of letting out: ITAT