TODAY'S CASE (DIRECT TAX)

Sep 21, 2023

++ I-T- It is material which AO has in his possession when he forms belief and not what he gathers thereafter, that is relevant to test tenability of reassessment proceedings : HC

++ I-T- Application u/s 12AA & 80G rejected for not being filed electronically - the condition of filing form electronically was not conveyed to applicant & electronic form 10A was not available at time of filing - rejection of applications is unsustainable: HC

++ I-T- Addition for unexplained cash credit can sustain as issue failed to meet test of creditworthiness and genuineness : HC

++ I-T-Re-assessment order is invalidated where the AO does not consider reply submitted by the Assessee to Show Cause Notice issued : HC

++ I-T- Where relevant information relied on by AO before passing order is not put to assessee, then assessee's ability to file contentions against such order is compromised - order merits being quashed: HC

++ I-T- Brand names invest in owner commercial rights and fall within scope of intangible assets, which is amenable to deprecation u/s 32(1)(ii) of Act : HC

Sep 20, 2023

++ It is impermissible for High Court to admit an appeal without framing substantial question of law - issuance of notice prior to admission without framing any substantial question of law, is not contemplated u/s 260A: SC

++ I-T - Personal hearing conducted via video conferencing was disrupted by audio issues - assessment orders were passed without proper hearing being given - orders stand quashed - hearing be conducted afresh: HC

++ I-T - Assessee- co-operative society is entitled to deduction under Section 80P(2)(a)(i) of the Act in respect of interest earned from funds utilised for statutory reserves: HC

++ I-T - As per settled precedent, power of revision cannot be exercised based on presumptions alone: HC

++ I-T - Sales incentive if, made on principal to agent basis, would come within the purview of commission u/s 194H of the Act, and TDS must be dedcuted on it : ITAT

++ I-T - At stage of issuance of reopening notice, AO needs to only form prima facie belief that on basis of material on record, income had escaped assessment: ITAT

++ I-T - Concealment by assessee calls for penalty u/s 271(1)(c): ITAT

++ I-T - Mere non-filing of TDS statement is a technical default where no penalty is warranted : ITAT

Sep 19, 2023

++ I-T - Delhi HC directed the Department to treat writ petition as representation made to them, and render decision qua same, as per law, and pass reasoned order: HC

++ I-T - If for purpose of sec 115J, assessee claimed depreciation at rates provided under I-T Rules, then action of AO in redrawing P&L A/c and adopting rates prescribed under Companies Act, is unauthorized: HC

++ I-T - Bonafide mistake or debateable issue cannot tantamount to furnishing of inaccurate particulars or concealment of income, so as to invoke penalty: ITAT

++ I-T- Additions framed by AO w.r.t. secured and unsecured loans given by the assessee, are unsustainable, where such loans are given from the assessee's own funds and not from borrowed funds: ITAT

++ I-T - Since assessee delayed in making payments within prescribed due date under respective PF Act, assessee's claim for deduction u/s 36(1)(va) deserves rejection: ITAT

Sep 18, 2023

++ I-T - Wife's entitlement to 50% of beneficial ownership in husband's shareholding by operation of Portuguese Civil Code for purpose of checking taxability u/s 2(22)(e), is not available: HC

++ I-T- Since AO and Tribunal have allowed part of commission payment for purpose of business, Revenue can not take contradictory course of action : HC

++ I-T - If AO has fully explained reasons for reopening, it cannot be said that order passed u/s 148A(d) is nonspeaking nor such order can be branded as outcome of non-application of mind: HC

++ I-T - Imposition of penalty u/s 271(1) is invalid, if SCN u/s 274 did not specify charges against assessee as to whether it is for concealment of particulars or furnishing of inaccurate particulars of income: HC

++ I-T - Merely because summons issued to some of creditors could not be served or they failed to attend before AO, is no ground to treat loans taken by assessee from those creditors as non-genuine: HC

++ I-T- 'Goodwill' is an asset under Explanation 3(b) to Section 32(1) of the Act: HC

++ I-T - In absence of any incriminating materials shown to be found in course of search, action of AO in making addition u/s 153A cannot be sustained: HC

++ I-T - Once cash in hand was duly reflected in seized books, such cash could not be construed as unexplained: ITAT

++ I-T- If assessee has sufficient interest free own funds to lend monies interest free, no addition for notional interest is required to be made : ITAT

++ I-T- Disallowance u/s 143(1)(a) wrt employees contribution to ESIC & PF is invalid, where such payment is made beyond due date prescribed in respective Acts: ITAT

++ I-T- CIT(A) is correct in deleting addition u/s 68 of Act to as credit worthiness of persons involved in transactions is verified by CIT(A) : ITAT

++ I-T- Claim of deduction u/s 80P cannot be denied to assessee only on basis that assessee has not file return of income within due date u/s 139(1) of Act : ITAT

Sep 16, 2023

++ I-T - Additions u/s 68 on account of unexplained cash deposits could not be sustained where AO has himself accepted source of deposits: ITAT

++ I-T-Mentioning amount in books as donation, cannot per se be basis to prejudice assessee-trust, if otherwise established from documents that transaction was of nature of providing services for consideration allowed by Memorandum of Association : ITAT

++ I-T As per settled position in law, penalty u/s 271(1)(c) cannot be imposed w.r.t an issue which is debatable in nature : ITAT

++ I-T- Where claim for deduction was made u/s 10A based on certificate of Accountant which was bona fide & required facts relating thereto were furnished, then no penalty is imposable: ITAT

++ I-T- Assessment order passed by AO in name of non -existing entity is null and void ab initio : ITAT

Sep 15, 2023

++ I-T - Co-operative credit society is eligible for deduction u/s 80P(2) unlike co-operative banks which are entitled to deduction u/s 80P(4): SC

++ I-T- Penalty imposed u/s 272A is invalid where AO does not reply to letters of assessee seeking time extension, leading the assessee to believe that his request had been granted : ITAT

++ I-T - If there is no live link between information received by AO and belief formed by AO that income had escaped assessment, then re-assessment proceedings initiated by AO are bad in law: ITAT

++ I-T- Power of revision need not be exercised where AO has taken one of several possible views regarding a relevant issue & where view adopted by AO is not necessarily incorrect or prejudicial to Revenue's interest: ITAT

++ I-T- Application for registration of trust u/s 12AB is rightly rejected where the trust is involved in activities outside India without obtaining necessary approval from the Board as per Section 11(1)(c) : ITAT

++ I-T - If employees' contributions to P.F. and E.S.I.C. were deposited after due date, such payments are not allowable as deduction u/s 36(1)(va): ITAT

++ I-T - No satisfaction has to be recorded by the AO for imposing penalty under Section 271B of the Income Tax Act: ITAT

++ I-T- Assessee eligible to claim deduction u/s 14A if proved assessee is in business of 'manufacture': ITAT

Sep 14, 2023

++ I-T- Power of revision is rightly exercised where AO does not conduct any inquiry w.r.t. issue of allowability of deduction claimed by assessee : ITAT

++ I-T- Addition for unexplained unsecured loan not to be made as assessee has discharged primary burden cast upon it : ITAT

++ I-T-Power of revision invoked to quash re-assessment order but on grounds not part of said order; revisionary order stands quashed: ITAT

++ I-T - Late filing fee imposed by AO in respect of delayed filing of TDS statement which is after effective date of June 01, 2015 for amendment brought in section 200A, need no interference: ITAT

++ I-T-Re-assessment unsustainable where the 'reasons to believe' are based on very vague and nonedescript reasons & where no material providing foundation for holding belief is available: ITAT

++ I-T- Reiteration of statutory language employed in Section 147 that the AO has 'reason to believe' towards escapement of income is per se inadequate: ITAT

++ I-T- Vague feeling or suspicion of AO towards possible escapement would not permit to reopen a completed assessment in defiance of statutory requirement of substantial nature: ITAT

++ I-T - Interest earned on deposits in Co-operative Banks registered under Maharashtra Co-operative Societies Act, can be claimed as deduction u/s 80P(2)(d) : ITAT

++ I-T - Video shooting expenditure incurred by assessee of various tourist locations for business purposes, is revenue expenditure: ITAT

++ I-T - Once assessee offers explanation in support of source of money, onus shifts to I-T Department to prove that explanation offered is not plausible, and no addition is permitted u/s 69A: ITAT

++ I-T- Statutory expression comes into play only when concerned taxpayer denies his liability to be assessed under Act : ITAT

++ I-T- Addition framed u/s 69A on account of unexplained money upheld in part only, where cash in question is part of a business transaction, yet it is not established how much of it pertains to demonetisation period: ITAT

Sep 13, 2023

++ I-T- Interest levied cannot be waived since it has to be seen as forming integral part of Settlement : HC

++ I-T- Merely making sweeping observation in negative manner is not correct to hold that information submitted by assessee, is not sufficient as Revenue must specifically make reference to those details which is incomplete : ITAT

++ I-T- Making any addition in anticipation for transactions which has still not taken place cannot be held to be justified : ITAT

++ I-T- If notice issued u/s 274 r.w.s. 271(1)(c) is defective then it is liable to be quashed: ITAT

++ I-T- Comprehensive income on account of revaluation of investments & by virtue of which increase in value of investments taken by assessee as notional income is uncertain income; cannot be made subject matter of book profit u/s 115JB: ITAT

Sep 12, 2023

++ I-T - If time was made 'essence of agreement to sale' but balance sale consideration is paid through unexplainable channel property was rented before taking its possession, then income from such agreement for sale attracts sec 56(2)(vii)(b): ITAT

++ I-T- Case can be remanded as neither AO nor CIT(A) has examined facts regarding amount of interest received from members as well as interest received from other then members :ITAT

++ I-T- Although principle of Res Judicata does not apply to Income Tax matters, Revenue cannot randomly attribute certain income under a different head, where it has accepted head of income as declared by assessee, in preceding AYs : ITAT

++ I-T- No addition u/s 68 needs to be made as entries pertaining to cash sales and corresponding bank accounts have been duly reflected in books of accounts : ITAT

++ I-T - Merely because vehicle is registered in name of partner, is no basis to deny depreciation on said vehicle to partnership firm: ITAT

++ I-T- Assessee has made justified claim of bad and doubtful debts and same should be allowed as an expenditure : ITAT

++ I-T- Addition u/s 68 can not stand when burden of proving genuineness of transactions and creditworthiness of parties stood discharged : ITAT

++ I-T- FMV @ Rs. 150 per sq. yard, is justifiable and there is no illegality in deleting addition of Rs. 5,21,73,922 and reducing capital gain : ITAT

++ I-T- Printers, scanners, server, formed, integral part of computer, and is eligible for deduction of depreciation, @ 60% : ITAT

Sep 11, 2023

++ I-T- Assessment order passed against entity not in existence is not valid order: HC

++ I-T- Re-assessment order merits being quashed where personal hearing not given to Assessee before passing order: HC

++ I-T- The income from holiday homes is to be treated as business income of assessee but same will not be eligible for deduction u/s 80P of the Act: ITAT

++ I-T- Addition u/s 68 is not to be made when details/evidences furnished, proves identity, creditworthiness of investors and genuineness of transactions : ITAT

++ I-T- Power of revision need not be exercised where it is found to be based on the erroneous presumption that the AO omitted to look into certain aspects of the matter: ITAT

Sep 09, 2023

++ I-T - Since extinguishment of any right in capital asset also results in transfer in relation to capital asset, transfer of development rights by assessee will amount to transfer of capital asset: ITAT

++ I-T - Since Employees' Contribution to PF/ESI deducted by employer retains character as income by virtue of Sec 2(24)(x), failure to deposit same before due date attracts Sec 36(1)(va) disallowance: ITAT

++ I-T - Cash deposits made during demonetization cannot be treated as unexplained u/s 69A, without considering evidences and submissions of assessee related to source of funds: ITAT

Sep 08, 2023

++ I-T- No failure to make full & true disclosure of facts necessary for assessment, attributed to assessee - Revenue did not point out any contrary facts - Re-assessment order quashed: HC

++ I-T - Amount which was forfeited towards security deposit, cannot be claimed as business loss: HC

++ I-T - If tax payable by assessee on long-term capital gains earned from sale of shares, was duly paid by assessee on next due date of advance tax, then no interest u/s 234C is levaible: ITAT

++ I-T - Since AO has not given any reasoning nor stated any charge of concealment of particulars or furnishing of inaccurate particulars, penalty imposed by AO are not sustainable: ITAT

++ I-T- Provision for obsolete stock can be allowed as deduction subject to satisfying that valuation is done based on principle that at cost or market price or not realizable value, whichever is less: ITAT

++ I-T- Exparty assessment as well as penalty for non-compliance of notice u/s 271(1)(b) is not sustainable: ITAT

++ I-T - Failure to disclose source of cash credits calls for addition: ITAT

Sep 07, 2023

++ I-T - If reply filed assessee was not considered by AO before making assessment, there is breach of principles of natural justice: HC

++ I-T - Where Revenue is not able to establish that order passed by Tribunal on finding of fact was perverse, no interference is called for: HC

++ I-T - If transaction was off market transaction of listed shares held by assessee as investment in its balance sheet, then AO cannot assume commercial prudence over same for making additions : ITAT

++ I-T- When scrutiny assessment and subsequent assessment order u/s 143(3) was passed, appeal proceedings against processing and adjustment made by CPC, becomes infructuous: ITAT

++ I-T - Since assessee has not been able to explain source of investments made by it, then AO has rightly made addition as unexplained investments in hands of assessee u/s 69: ITAT

++ I-T - Where amendment to Sec 54B came only after 2013 and AY relates to 2006-07, amendment will not be applied for previous year: ITAT

++ I-T - Charging of interest @ 16% is quite reasonable and this is for regular business commitment and completion of projects : ITAT

Sep 06, 2023

++ I-T - Notice issued by AO on wrong premise or facts, cannot be sustained: HC

++ I-T - No notice u/s 148 would be issued for past AYs by resorting to larger period of limitation prescribed in newly substituted clause (b) of Section 149(1) : HC

++ I-T - Since break-up of provision for expenses needs to be examined factually based on evidences in order to decide applicability of TDS provisions, case deserves to remanded: ITAT

++ I-T - Mere pendency of rectification application u/s 154 is no ground to condone delay in filing statutory appeals against assessment order: ITAT

++ I-T - Mere non-accounting of expired stock as part of opening stock wouldn't have any impact on profitability so declared by assessee: ITAT

++ I-T - Since share premium received by assessee for valuation was found as per FMV, no addition is warranted u/s 56(2)(viib): ITAT

++ I-T- Re-assessment proceedings commenced without obtaining requisite sanction u/s 151 merit being quashed : ITAT

++ I-T - Failure of assessee to substantiate inordinate delay in filing of appeal calls for no condonation: ITAT

Sep 05, 2023

++ I-T - Order on objection to reopening shall be detailed one and shall deal with every submission made by assessee: HC

++ I-T - Where approval for reopening of proceedings was not given by PCIT or Chief CIT, reopening notice deserves to be quashed: HC

++ I-T - Where scope of adjudication on facts is limited to jurisdiction of ITAT, writ court can only interfere in case of substantial question of law: HC

++ I-T- Retracted statement of Shri Bhagat is not reliable piece of evidence and addition u/s 68 cannot have been made solely basis same in absence of other corroborated material evidences : ITAT

++ I-T-When framing additions w.r.t. bogus purchases, only the profit element embedded therein should be considered, rather than the entire quantum of purchases: ITAT

++ I-T-Additions framed on account of providing accomodation entry merit being sustained where assessee is unable to provide confirmation for certain sales made : ITAT

++ I-T- Change in order can only be done by invoking powers of revision and not by passing order of rectification u/s 154 of Act - ITAT

Sep 04, 2023

++ I-T - Statement recorded u/s 133A has no evidentiary value: HC

++ I-T - AO can reopen assessment on ground of 'reason to believe' and not merely on ground of change of opinion: HC

++ I-T - Addition made u/s 43B on conversion of unpaid interest into funded interest loan treating same as interest payment, deserves to be deleted : HC

++ I-T - Only profit element in accommodation entries are to be added as income: HC

++ I-T - If AO has reopened assessment on basis of change of his opinion that method used by assessee to calculate return should have been different, reopening should be quashed: HC

++ I-T - For claiming benefit of Section 80JJ, it is not required that workmen has worked for 300 days in previous year relevant to AY: HC

++ I-T- Addition u/s 68 can not stand when burden of proving genuineness of transactions and creditworthiness of parties stood discharged - ITAT

++ I-T - Failure of assessee to satisfactorily discharge his onus in establishing genuineness of transaction, calls for addition u/s 68: ITAT

++ I-T- AO cannot disallow deduction u/s 80P where the same was never claimed by assessee in ITR, in which case, AO has travelled beyond scope of ITR : ITAT

++ I-T- Section 40A(3) cannot be applied if cash payments made due to business expediency and being genuine transaction and parties are identifiable : ITAT

Sep 02, 2023

++ I-T- Penalty under Section 276B of I-T Act can be imposed where Assessee deposits full TDS amount with interest & also furnishes sufficient reasons for delay in deposit of TDS : HC

++ I-T- Penalty is meant to serve as a deterrent and cannot be imposed when there is no occasion for its imposition: HC

++ I-T - Once assessee comes under exempted category and explained his source of cash deposits, no addition is permitted u/s 69A: ITAT

++ I-T - If intimations regarding late filing fee have been issued separately for each quarters, then assessee should have filed separate applications for rectifying each intimations: ITAT

++ I-T- Findings of Revenue is not opposed that assessee has defaulted in depositing TDS with government account : ITAT

++ I-T - Once Revenue is accepting rate of interest and charging thereof, then refusal to accept quantum of payment is impermissible: ITAT

++ I-T - It would be open to Revenue to revise assessment order while appeal against it is still pending: ITAT

Sep 01, 2023

++ I-T - Where four years had expired from end of relevant AYs as provided u/s 151(1), it is only Pr CIT or Chief CIT who could have accorded approval for reopening and not ACIT : HC

++ I-T - Where mere one day delay in receiving notice shall not cause any prejudice to Revenue, in interest of justice, fair opportunity must be given to assessee for considering its reply: HC

++ I-T - Revenue Department should proceed against assessee only after issuing notice in relation to such proceeding: HC

++ I-T - Reopening notice issued against deceased assessee merits to be quashed: HC

++ I-T - Where notice issued to assessee did not specify charge levelled against assessee which triggered process of imposition of penalty, no penalty can be imposed: HC

++ I-T - No substantial question of law arises in case of settled legal position regarding disallowance u/s 14A: HC

++ I-T-Agricultural Credit Societies cannot be termed as Co-operative Banks: ITAT

++ I-T- AO cannot pass multiple assessment orders on its own without any direction from any higher administrative or appellate authority : ITAT

++ I-T- Computation under clause (f) of Explanation 1 to Section 115JB(2) is to be made without resorting to computation as contemplated u/s 14A r/w Rule 8D of I-T Rules: ITAT

++ I-T- Power of revision is rightly exercised where original assessment order passed is not found to be erroneous or prejudicial to Revenue's interests : ITAT

++ I-T- Insurance claim cannot be denied deduction under sections 80HH/80IA of the Act: ITAT

++ I-T- Interest income earned on FDs and loans are in nature of business income: ITAT