TODAY'S CASE (DIRECT TAX)

April 29, 2024

++ I-T -Members of Settlement Commission appointed amongst persons of integrity & outstanding ability & having special knowledge in/experience of direct taxes; unfortunate that SETCOM's orders are challenged without establishing them to be contrary to law or lacking in jurisdiction: HC

++ I-T- Unless a case of bias, fraud or malice is alleged, then Department cannot assail SETCOM's order: HC

++ I-T- Re-assessment vide Faceless Assessment u/s 144 of I-T Act, is barred by Section 31 of IBC 2016, which is binding upon all creditors of corporate debtor: HC

++ I-T- Resolution Plan under IBC, once approved, nullifies any claims pertaining to a period prior to approval of said Plan: HC

++ I-T - Once assessee has produced all supporting documents which includes profit & loss account, balance sheet and copy of ITR of creditors, then identity & creditworthiness is established: ITAT

++ I-T - Assessee shall provide monthly figures to arrive at year-end average of deposits received from members, interest paid thereon & investments made in FDs from external funds, for calculating Sec 80P deduction: ITAT

++ I-T - It shall not be necessary to issue authorization u/s 132 separately in name of each person where authorization has been issued mentioning thereon more than one person: ITAT

++ I-T- Since facts have not yet been verified by AO, issue of CSR expenditure can be remanded back for reconsideration: ITAT

++ I-T - Failure to substantiate cash deposits by employer during festival will not automatically lead to additions u/s 68, in absence of any opportunity of hearing: ITAT

April 27, 2024

++ I-T - Bonafide claim of deduction by assessee which was accepted in first round of proceedings does not tantamount to furnishing of inaccurate particulars, simply because it was disallowed later: ITAT

++ I-T - In order to invoke revisionary jurisdiction u/s 263, twin conditions of error in order and also prejudice to interest of Revenue must be established independently: ITAT

April 26, 2024

++ I-T - High Court need not intervene in matter involving factual issues; petitioner may utilise option of appeal: HC

++ I-T - Unexplained cash credit - additions u/s 68 unsustainable where based on conjecture & surmise alone: ITAT

++ I-T - Re-assessment is invalid where based only on a suspicion that income escaped assessment & where not based on concrete reasons to believe for commencing such proceedings : ITAT

++ I-T - Income from sale of flats cannot be computed in assessee's hands, where legal possession of flats had not been handed over to buyers in that particular AY: ITAT

++ I-T - Investment activities in venture capital which are not covered in negative list under Schedule III to SEBI Regulations, qualifies for deduction u/s 10(23FB): ITAT

April 25, 2024

++ I-T - If income from stock-in-trade are held as investments, then provisions of section 14A would apply to such income: ITAT

++ I-T- Revisionary powers u/s 263 can't be exercised when AO has neither assumed facts incorrectly nor there is incorrect application of law : ITAT

++ I-T- Issue of interest is debatable issue on which two views are possible and AO accepted one of views for which PCIT cannot assume revisional jurisdiction: ITAT

++ I-T - Estimation of profit element from purchases should be done reasonably if assessee could not conclusively prove that purchases made are from parties as claimed, in absence of confirmations from them: ITAT

++ I- T- Triplex flats purchased are interconnected and can be considered as "a residential unit" as per definition of section 54F of Act : ITAT

++ I-T- AO omitted to probe issue of cash payments made over specified limit; revisionary power u/s 263 is rightly exercised: ITAT

++ I-T-Power of revision unnecessarily exercised where AO had no scope to examine creditworthiness & genuineness of assessee's creditors: ITAT

++ I-T-As per settled law, in absence of enabling powers, no disallowance can be made : ITAT

April 24, 2024

++ I-T- Income surrendered before approaching Settlement Commission not covered u/s 115BBE, where this provision did not exist during relevant AYs: HC

++ I-T- Entire interest expenditure is allowable as deduction if loan funds is not diverted for non-income earning activities/personal purposes : ITAT

++ I-T- Sale consideration cannot be considered as unexplained cash credit if sale takes place in online platform and sale consideration is received through stock broker in banking channels : ITAT

++ I-T- Section 69C includes expenditures reflected in account books, as well as those discovered during Search & Seizure for which no valid explanation is forthcoming from assessee: ITAT

++ I-T- Penalty imposed u/s 273B upheld where assessee unable to provide just cause for failure to file audit report within prescribed due date as per Section 44AB: ITAT

++ I-T- Assessee cannot contest validity of penalty notice on grounds of irrelevant provision not being struck off, by highlighting such defect for the first time before ITAT itself: ITAT

++ I-T- Lower authorities erred in disallowing long term capital loss : ITAT

++ I-T- Revisionary order u/s 263 invalidated where passed in ignorance of repeated factual submissions to prove that original assessment order is not erroneous or prejudicial to revenue's interests: ITAT

April 23, 2024

++ I-T- Addl. Commr. or above ranking officer to probe how I-T portal reflected demand being raised against assessee, despite Revenue not having issued any notice or passed any order against assessee: HC

++ I-T- Donations given out of accumulated funds u/s 11(2) are not allowable as application of income for charitable or religious purposes and the same shall be deemed to be income of assessee : ITAT

++ I-T- Additions framed u/s 68 are unsustainable, where assessee proved identity, genuineness & creditworthiness of creditors from whom unsecured loans were received : ITAT

++ I-T - Travelling conveyance expenses should be disallowed to extent of bills which were not verifiable and have no nexus with business of assessee: ITAT

++ I-T - While computing capital gain, value of consideration reduced by cost of improvement and cost of acquisition and also expenditure incurred for transfers are to be considered: ITAT

++ I-T- Reasonableness of an expenditure has to be adjudged from the point of view of the businessman and not of the Revenue: ITAT

++ I-T- There is no justifiable basis for making addition u/s 69 for unexplained investment to surrendered business income which has been duly offered in return : ITAT

++ I-T- Leasehold rights in land are not within purview of section 50C of Act : ITAT

April 22, 2024

++ I-T- Power of sanctioning re-assessment is coupled with duty on part of Revenue to apply mind to whether or not such proceedings are to be resorted to; such power is not be exercised casually or perfunctorily: HC

++ I-T- Assessment order quashed where passed without considering relevant documents furnished by assessee & without considering assessee's objections to variation in computing of income: HC

++ I-T- Re-assessment exercise commenced to tax supposed purchase of MFs is not tenable, where assessee's contentions regarding non taxability thereof, are ignored: ITAT

++ I-T- The phraseology of Rule 11 UA r.w Section 56( 2)(viib)Explanation (a) do not thrust the requirement of Valuation Report for substantiation of valuation under NAV method: ITAT

++ I-T- Disallowance of toll taxes paid by transport contractor, is unsustainable, considering toll expenses are statutory in nature & are fixed by toll plazas & highway authorities: ITAT

++ I-T- Re-assessment is invalid when there is no failure on part of assessee to make full & true disclosure of material facts necessary for assessment: ITAT

++ I-T- Benefit of accumulation can be allowed as delay is condoned by CBDT Circular No. 6 of 2020 : ITAT

April 20, 2024

++ I-T- Exercise of jurisdiction u/s 263 is invalid if AO has taken particular view, which though, may not be only view, but certainly can be possible view : ITAT

++ I-T- Additions framed on account of unexplained money upheld as assessee was unable to prove source of cash deposited in assessee's bank account : ITAT

April 19, 2024

++ I-T- Denial of deduction u/s 80IC can create perception of genuine hardship, where claimant paid tax in excess of what was due; order denying deduction merits re-consideration: HC

++ I-T- If material found during search are not incriminating in nature AO can not made any addition u/s 153A in respect of unabated assessment: ITAT

++ I-T - Interest earned on short term deposit out of borrowed funds during period prior to commencement of business, is totally foreign to business objects of assessee, and not eligible for set off: ITAT

April 18, 2024

++ I-T- Re-assessment cannot be sustained where based on borrowed satisfaction & where conducted in a mechanical manner: ITAT

++ I-T- There is no scope of extrapolation in search assessment based solely on assumptions and surmises in absence of any tangible material qua the relevant assessment year: ITAT

++ I-T- Assessee is entitled for depreciation on goodwill arising out of difference between cost of acquisition and net value of assets and liabilities as per book value of CAPL : ITAT

++ I-T- Enhancement of income is not sustainable if CIT (A) not follow sec 251 and no notice given to assessee of enhancement : ITAT

++ I-T- Registration of trust u/s 12A denied due to inadvertent error by assessee in filing Form 10AB but with wrong selection code; case remanded for reconsideration: ITAT

++ I-T- Additions framed on account of unconfirmed cash loans upheld in part, where assessee is unable to discharge onus of proving source of cash deposits : ITAT

++ I-T- Petitioner's CIBIL score lowered due to same PAN being issued to another assessee who defaulted on loan; I-T Deptt to inform CIBIL of remedial measures taken: HC

April 17, 2024

++ I-T - Sales supported by payments through banking channel which were not only disclosed in VAT returns but duly verified & accepted by VAT Department, cannot be treated as bogus to invoke Sec 68: ITAT

++ I-T - Since application filed for condonation of delay is rejected by order without stating reason is set aside and application is restored for reconsideration: HC

++ I-T- Re-assessment - if assessee submits objections thereto, then AO must pass order dealing with objections & also establish that facts presented by assessee are prima facie incorrect: HC

++ I-T- Deduction u/s 43B in respect of GST cannot be disallowed, where assessee is found to have paid GST before due date of filing ITR: ITAT

April 16, 2024

++ I-T- Mere existence of power to assess or reassess six AYs' immediately preceding AY corresponding to year of search or 'relevant assessment year' would not justify invocation of Section 153C - HC

++ I-T - Act & Rules thereto provide a method for service of notices & orders; communication of notices before any action is taken, is mandatory: HC

++ I-T- Assessee cannot be expected to be logged in to I-T portal at all times, so as to be notified of actions taken by Department: HC

++ I-T - Expenses written off is only allowable if assessee offers said amount as income in previous years: HC

++ I-T- Deduction u/s 35(1)(ii) in respect of donation made to scientific research institute, is rightly denied, where no evidence is furnished to show valid approval was taken from prescribed authority for taking donation: ITAT

++ I-T- Penalty imposed u/s 271(1)(c) merits being quashed where exact charge between concealment of facts and furnishing inaccurate particulars of income, are not specified : ITAT

++ I-T- Penalty is unwarranted where the complete factual data pertaining to Assessee's claim was also available before AO during the course of assessment : ITAT

++ I-T- Assessee has not involved in manipulation of stock prices for purpose of earning bogus LTCG : ITAT

April 15, 2024

++ I-T- Re-assessment notice is invalidated where it is issued to an assessee by an AO who does not have jurisdiction over the assessee concerned : HC

++ I-T- AO is not empowered to independently evaluate face value of unquoted equity shares by adopting valuation method other than one chosen by assessee : HC

++ I-T - Absence of service of notice u/s 143(2) through specified means, cannot be cured by invoking provisions of section 292BB: ITAT

++ I-T - Cost of any project cannot be construed as expenditure, rather it is cost from which project is to be executed and on execution of that Project resultant profit/loss has to be offered for tax: ITAT

++ I-T - In absence of AO pointing out that there is no nexus between interest bearing funds and their utilization for making advances for earning interest income, no disallowance u/s 57(iii) is tenable: ITAT

April 13, 2024

++ I-T- Rate of levy of penalty on undisclosed income which is part of return of income should be levied @20% and not 30% : ITAT

++ I-T- Appeal can be dismissed for non-prosecution where assessee does not participate in hearing despite ample opportunities: ITAT

++ I-T - Claim allowed by AO without ascertaining correct facts renders such assessment order erroneous so far as prejudicial to interest of revenue: ITAT

April 12, 2024

++ I-T- Where notional interest income credited by assessee to P&L a/c as per requirement of Indian Accounting Standard is not actually accrued to assessee, it is not liable for taxation under Real Income principle: ITAT

++ I-T- There will be no addition u/s 68 if genuineness of transaction is proved and buyback is carried out as per procedure prescribed : ITAT

++ I-T - No addition is permitted u/s 40A(2) unless AO has any material to show that payment made by assessee is unreasonable & excessive: ITAT

++ I-T- Disallowance on account of interest is unwarranted where assessee has sufficient funds to lend interest-free loans & advances & uses the same for earning income offered to tax : ITAT

++ I-T- Notice issued u/s 147 beyond period of 4 years is without jurisdiction when AO failed to record anywhere in his satisfaction or belief that income chargeable to tax has escaped assessment : ITAT

++ I-T- Capital gain arising from sale of agricultural land is exempt from tax : ITAT

April 11, 2024

++ I-T - Claim of business expenses cannot be allowed where it is not conclusively established that said expenses were indeed incurred for business purposes: HC

++ I-T - SC's writ jurisdiction under Article 226 cannot be invoked in submissions advanced relating to merits of the matter: HC

++ I-T - Challenge to re-assessment proceedings does not hold, where based solely on the argument that re-assessment notice was not issued through email: HC

++ I-T - Writ remedy cannot be invoked where appellate remedy available & unused & where no real contravention of principles of natural justice is made out : HC

++ I-T - Revisionary power rightly exercised as AO omitted to examine aspects pertaining to sourcing of capital by assessee; original order was rendered erroneous & prejudicial to revenue's interest: HC

++ I-T- Since reasons recorded for reopening are general and vague without referring to facts or accounts of assessee reopening of case is bad in law: ITAT

++ I-T- AO can merely based on statement of Shri Mukesh Banka which has been retracted subsequently held unsecured loans as unexplained cash credit : ITAT

++ I-T - AO need to make only one satisfaction note, if Assessing Officer is same for ‘person searched' and ‘other person' u/s 153C: ITAT

April 10, 2024

++ I-T- Re-assessment order is invalid where passed through non-speaking order & without due application of mind: HC

++ I-T- If Revenue audit raises objection that assessment is not completed in accordance with provisions of I-T Act, it cannot be treated as change of opinion : HC

++ I-T- SC's judgment in UoI vs Ashish Agarwal neither intends nor mandates concluded assessments being re-opened & hence reliance on this judgment to re-open assessments is invalid: HC

++ I-T - If entire sale consideration was received by assessee's son and same was offered to tax by him in his return, then assessee's case cannot be reopened on account of difference in stamp valuation: ITAT

++ I-T- AO has failed to examine issue and completed assessment with addition in arbitrary manner without application of mind : ITAT

++ I-T- Assessment cannot be revised if there is no jurisdictional error in order or if it has been passed after due application of mind : ITAT

April 09, 2024

++ I-T-Order passed u/s 179 of the Act merits being set aside where assessee is not given proper notice before the order came to be passed: HC

++ I-T- Assessee deserves another opportunity to furnish evidence before the Department authorities, on account of having failed to do so due to being engaged in legal dispute over another matter: HC

++ I-T - Addition on account of bogus accommodation entries should be restricted to 12.5% of bogus purchases as reduced by gross profit rate already declared by assessee on these transactions: ITAT

++ I-T - Loans & advances given in normal course of business and transaction in question benefits both borrower and payee companies, provisions of section 2(22)(e) cannot be invoked: ITAT

++ I-T - Deduction u/s. 80-IA(4) shall not be allowed to enterprise which carries civil contract work for developer of infrastructure facility: ITAT

April 08, 2024

++ I-T - Assessee, a cooperative bank, was unable to file ITR within due date due to compelling circumstances; delay condoned, more so where assessee genuinely faces hardships otherwise: HC

++ I-T- Case can be remanded as contentions raised before Tribunal has never raised before AO/CIT (A) and there is need for examination of factual aspects: ITAT

April 06, 2024

++ I-T - No ad-hoc disallowance of travel expenses expenses can be made, if I-T have not disputed genuineness of vouchers, payments, approvals & travel dates: ITAT

++ I-T - No addition can be made on assumption framed u/s 153A de-hors incriminating material found during search: ITAT

++ I-T- Disallowance made under Section 40A(3) is untenable where the Department has not established the nexus between commission payment and sales made: ITAT

++ I-T- Additions framed on account of unexplained income are unsustainable where assessee's accounts are audited & no mis-match is found in sales, purchases & stock in-trade: ITAT

++ I-T - Assessee deposits amount in CGDS A/c and thereafter investment in new residential house property by utilizing such amount so deposited, deserves exemption u/s 54F: ITAT

April 05, 2024

++ I-T - Interest income derived by co-operative society from its investments held with co-operative bank would be entitled for claim of deduction u/s 80P(2)(d): ITAT

++ I-T - If assets were brought in books on closing WDV from demerged company as on effective date of demerger & depreciation was duly claimed on such WDV year after year, such depreciation is allowable: ITAT

++ I-T- Where assessee has made suo motu disallowance, then no question of making another disallowance u/s 14A, arises, where no defect is found in the suo motu calculation : ITAT

++ I-T- AO ought not to have made any disallowance without aid of any incriminating materials found during search : ITAT

++ I-T- When revenue does not pay full amount of refund but part amount is paid, it will be liable to pay interest on balance outstanding amount : ITAT

++ I-T- Disallowance made u/s 14A r.w.r. 8D cannot be subject matter of disallowance while determining net profit u/s 115JB: ITAT

April 04, 2024

++ I-T- Writ court cannot entertain a writ petition where assessee also has available, the option of statutory appeal available: HC

++ I-T - Assumption of jurisdiction u/s 153C based on documents which did not disclose any unaccounted income, is invalid : ITAT

++ I-T - Once assessee receives sale consideration and executes agreement to sell, then flat sold through agreement to sale cannot be shown in Work-In-Progress at cost: ITAT

++ I-T - If AO has taken plausible view which cannot be said to be incorrect on basis of facts available nor is against any provisions of Income Tax Act, then Pr. CIT cannot substitute his view u/s 263: ITAT

++ I-T - Simply holding that AO was required to make more enquiries is not valid ground to hold assessment order as erroneous and prejudicial to interests of Revenue: ITAT

April 03, 2024

++ I-T- Even if AO of searched person & other person is common, the only requirement is that a single satisfaction note in capacity as AO of searched person is sufficient : HC

++ I-T- Merely because assessment orders are passed on the same date as on dates when orders passed u/s 153C r/w Section 143(3), would not mean that Assessment Orders are without jurisdiction: HC

++ I-T- Assessee facing extreme financial hardship & hence unable to make pre-deposit of entire 20% of tax demanded; Assessee permitted to pre-deposit 10% of tax demanded: HC

April 02, 2024

++ I-T- Mere generation of surplus from year to year cannot be basis for rejection of application u/s 10(23C) (vi) of Act : HC

++ I-T- Re-assessment is rightly set aside where no basis is made out for AO to have reasons to believe that taxable income escaped assessment: HC

++ I-T- Re-assessment rightly quashed where based on change of opinion & when there is no failure of assessee to make full & true disclosure of fact: HC

++ I-T- Addition for unexplained expenditure can not be made based on mere suspicion, surmise and conjectures : ITAT

++ I-T - Income cannot be estimated taking into account only receipt entries ignoring expenditure entries : ITAT

++ I-T- Notices u/s 148 issued by AO's at Gurgaon are void and bad in law: ITAT

April 01, 2024

++ I-T - If AO for reasons best known to him has issued notices on public holiday asking assessee to respond to them immediately, it can't be basis to press charges for deliberate non-compliance on part of assessee: ITAT

++ I-T - If AO has rightly assessed income at normal rates of tax and there is no loss of revenue to department, then consequent order passed by AO is not prejudicial to interest of revenue: ITAT

++ I-T- Power of revision u/s 263 is rightly exercised where AO omits to consider bogus nature of loan given by assessee : ITAT

++ I-T - If assessee has produced confirmation of Sundry Creditors along with their bank statement & ledger account, no addition can be made on outstanding balance: ITAT

++ I-T - Activity of trust for publishing advertising in newspaper is intrinsically linked for newspaper activity falls within ambit of 2(15)(i) and conditions imposed in sub-clause (ii) of proviso has to be fulfilled: ITAT