TODAY'S CASE (DIRECT TAX)

July 31, 2024

++ I-T- If the assessee earns interest/dividend income out of investments with co-operative society the same is entitled to deduction u/s 80P(2)(d) of the I.T. Act: ITAT

++ I-T- Requirement of furnishing Audit Report in prescribed form along with return is directory in nature prior to 01.04.2014 ; is mandatory post 01.04.2014 while filing returns electronically: ITAT

July 30, 2024

++ I-T- Search assessment is invalidated where the information based on which such proceedings were commenced, was already available with the AO during course of search : HC

++ I-T- Re-assessment proceedings are invalidated where commenced based on incorrect factual premises : HC

++ I-T- Department's appeal lacks merit & cleared for filing without due application of mind; hence, not maintainable: HC

++ I-T- Revenue must recalculate capital gain considering date of agreement for purpose of applicability of section 50C of Act : ITAT

++ I-T- Additions framed u/s 69A pare invalid, where assessee is found to have sufficient cash in hand available for depositing the amount in question: ITAT

July 29, 2024

++ I-T- Assessee did not appear for personal hearing despite service of multiple notices, leading to considerable wastage of time and resources ; costs of Rs 30000/- imposed: HC

++ I-T-Citing a different provision in the SCN does not vitiate an assessment order in that respect, where the provisions in question are substantially similar : HC

++ I-T-Penalty u/s 269T is rightly imposed where assessee conducted massive cash transactions u/s 269SS and for which assessee does not have proper explanation : HC

++ I-T In funds of assessee exceeded amount of investment in shares, no disallowance of interest on borrowed funds can be made by AO by invoking provisions of Section 14A of the Act read with Rule 8D of the Income Tax Rules: ITAT

July 27, 2024

++ I-T-Transaction involving transfer of unutilised shares cannot be deemed to be sale of shares so as to attract levy of Long Term Capital Gain u/s 112: ITAT

July 26, 2024

++ I-T- Demand notice issued mechanically merits being quashed, where passed in ignorance of assessment order giving clean chit to assessee: HC

++ I-T- No disallowance under section 36(1)(iii) can be made if funds are available with the assessee, which are sufficient to meet the investment: ITAT

++ I-T- Penalty rightly quashed where assessment order proposing penalty is itself quashed: ITAT

++ I-T- Where public trust claims deduction under Chapter VIA & due to absence of separate provision in ITR for Section 80GGA at time of filing it, then claim being clubbed u/s 80G is valid: ITAT

++ I-T- Assessee's acceptance of the cash in the form of SBNs, assessee being an Urban Cooperative Bank, which is not being covered by the RBI Circular, cannot be considered as unexplained for addition U/s. 68 of the Act: ITAT

July 25, 2024

++ I-T- When the income of agricultural land is exempt from tax, then said exempt income cannot be added to books profit while calculating the MAT u/s. 115JB : ITAT

++ I-T- Deduction u/s 80P cannot be denied to a cooperative society, in respect of interest income earned from money invested in cooperative banks: ITAT

++ I-T- Existence of loan account not disputed - waiver of such outstanding loan cannot be clubbed with capital account and deemed unexplained; tax levied u/s 115BBE not tenable: ITAT

July 24, 2024

++ I-T- Re-assessment - additions quashed as assessee given fresh opportunity to adduce evidence; nevertheless, assessee failed to participate in hearing despite multiple notices - costs of Rs 40000/- imposed on assessee: HC

++ I-T- Re-assessment invalidated where AO fails to record reasons for re-opening assessment & omits to apply mind before issing notice: ITAT

++ I-T - Merely because there were rates differential amongst purchases from different vendors, it cannot be sole reason to infer over-invoicing / inflation of purchases: ITAT

++ I-T- Proceeds from sale of unsold lottery tickets lying with assessee who is engaged as dealer of lottery tickets, is to be construed as business income : ITAT

++ I-T-Business loss incurred by the assessee after exclusion of price money from net profit is eligible for set off against winning from lotteries under section 71 of the Act: ITAT

++ I-T- Provisions of Section 44AE cannot be applied to an assessee whose contractor engaged in leasing vehicles owns less than 10 vehicles: ITAT

July 23, 2024

++ I-T- Additions framed u/s 69A are untenable where affidavits submitted by assessee's parents to explain source of cash deposits, were discarded by AO without consideration : ITAT

++ I-T- Short term capital gains returned by the assessee in terms of provisions of section 50 of the Act on assets held for a period of more than 36 months be treated as long term capital gains: ITAT

++ I-T-Additions framed u/s 68 are upheld where assessee is unable to prove genuineness of transaction involving purchase and sale of penny stock: ITAT

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

++ I-T- When cash generated out of sales has been credited in the books of accounts, the provisions of Sec.69A could not be invoked: ITAT

++ I-T- If any amount invested is purely a strategic investment & for purpose of commercial expediency, then AO cannot hold such investments to be for non-business purpose: ITAT

July 22, 2024

++ I-T- Re-assessment proceedings are invalidated where mandate of Section 148A is not satisfied, in the sense that less than 7 days' time is provided for filing reply to SCN: HC

++ I-T-Re-assessment order is invalidated where passed in the name of a non-existent entity which ceased to exist on account of amalgamation: HC

++ I-T-Re-assessment is invalidated where based on change of opinion: HC

++ I-T- Since mistake made is subsequently rectified, addition made u/s 68 is not justifiable: ITAT

++ I-T- Invoking Section 144 of the Act is improper when assessee has filed a return of income and complied with the notices : ITAT

++ I-T- Mere suspicion or conjecture is not sufficient to sustain an addition u.s 69A of the Act : ITAT

++ I-T- Assessment order passed on best judgment basis is upheld where assessee fails to discharge onus of proving its claims through cogent evidence: ITAT

++ I-T- Disallowance in excess of exempt income cannot be sustained under Section 14A of the Act: ITAT

July 20, 2024

++ I-T- In respect of completed assessments/unabated assessments no addition can be made in absence of any incriminating material found in course of search: ITAT

++ I-T-Additions framed u/s 68 on account of unexplained cash credit upheld where the assessee is unable to prove the source of cash deposited: ITAT

++ I-T- Section 36(1)(va) is required to be construed strictly : ITAT

++ I-T- If employees contributions are not paid within due dates specified under the respective acts, assessee will not be entitled to deduction under section 36(1)(va) of the Act : ITAT

July 19, 2024

++ I-T- An unsecured loan taken by assessee cannot be made basis to file two consecutive additions u/s 68 of the Act: ITAT

++ I-T- Merely because there is mistake in filing corresponding columnsin ITR, the same will not result in enhancement of assessee's income - YES: ITAT

++ I-T- Assessee's initial admission die to incorrect understanding of law cannot operate as an estoppel to the assessee to claim that no capital gains can be inferred in its hands: ITAT

++ I-T- Re-assessment rightly quashed, where found to be based on change of opinion rather than any new fact coming to AO's attention : ITAT

July 18, 2024

++ I-T- A.O's cannot treat assessee as AOP when AO had failed to place on record any material which would even remotely suggest that there was a concerted effort by the beneficiaries to earn income jointly: ITAT

++ I-T-Additions framed in respect of cash deposited in assessee's account, are valid, where such money is deposited by assessee's parents who are established as having capacity to make such deposits: ITAT

++ I-T- As per settled position in law, the period of limitation for filing appeal is to be reckoned from the date of knowledge of the order to be appealed against : ITAT

++ I-T- Provisions of Section 69 cannot be invoked where investments in question are duly recorded in account books & where their source is mentioned in audited balance sheet: ITAT

++ I-T- Additional evidence furnished for the first time before ITAT merits being allowed, where the same has direct bearing for adjudicating the matter : ITAT

++ I-T- Non-compliance with notice issued u/s 142(1), cannot lead to imposition of penalty u/s 272B, more so where service of notice is marred by inadequate compliance : ITAT

July 17, 2024

++ I-T - NRE accounts are exempt from inclusion in total income under Section 10(4) of the Act, particularly when the funds originate from sources beyond the tax authority's jurisdiction : HC

++ I-T- Re-assessment cannot be commenced based on incriminating evidence being recovered in course of Search conducted u/s 132 of the Act: ITAT

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

July 16, 2024

++ I-T- Exemption u/s 10(38) cannot be denied where assessee is not found to have been involved in manipulation of sales scrip & hence proceeds from sale of shares cannot be deemed to be unexplained money: ITAT

++ I-T- When AO has made proper enquiry then on disputing certain facts and figures from financials alone, assessment order cannot be held erroneous and prejudicial to interest of Revenue : ITAT

++ I-T- Case can be remanded to examine claim of assessee that money belongs to small investors : ITAT

July 15, 2024

++ I-T- Re-assessment cannot be resorted to based on AO having erroneously concluded that taxable income escaped assessment: HC

++ I-T- Assessment order merits being set aside where assessee was given about 7 days' time to file reply to Show Cause Notice, which is grossly inadequate time for assessee to submit evidence: ITAT

++ I-T - Since additional evidence placed on record are not tested earlier, case can be remanded back to give revenue fair chance to tax correct income of assessee : ITAT

++ I-T- Order passed on best judgment basis sustained as assessee failed to discharge onus of proving genuineness of transactions flagged by AO: ITAT

July 13, 2024

++ I-T- Section 55(2)(b) of the Act talks of other capital asset, which segregates from sub-clause (iiia) to section 55(2)(aa)B of the Act, that talks about Bonus shares specifically: ITAT

++ I-T- As assessee's 2nd return is valid return available at time of processing u/s 143(1), CPC ought to have taken into consideration 2nd return and subject it to processing : ITAT

July 12, 2024

++ I-T- Addition should be restricted to extent of bringing the gross profit rate on alleged bogus purchases at the same rate of other genuine purchases: ITAT

++ I-T- Assessee is entitled to claim of deduction u/s 37(1) of the Act, when there was a temporary suspension and/or lull in business of assessee: ITAT

++ I-T- Re-assessment commenced after expiry of three years from end of relevant AY, is invalid, where the quantum of alleged escaped income is less than Rs 50 Lakhs: ITAT

July 11, 2024

++ I-T- Case can be remanded back in interest of justice and for non-affording reasonable opportunity of being heard by subordinate authorities : ITAT

++ I-T- A company cannot claim to have incurred expenditure on cost of improving a flat as an individual, more so if assessee fails to file necessary documentary evidence for claiming Cost of Improvement: ITAT

++ I-T- Re-assessment unsustainable, where found to be based on change of opinion on part of AO: ITAT

July 10, 2024

++ I-T- Power of condonation of delay need not be exercised only in exceptional cases; delay merits being condoned where claimant faces genuine hardship if delay in filing ITR not condoned: HC

++ I-T- Revisionary order u/s 263 is invalidated if passed without due application of mind or without independent satisfaction that original order was erroneous & prejudicial to revenue's interests: HC

++ I-T- Income arising from fish farming activity is a business income; provisions of chapter IV of I-T Act applicable to compute income correctly: ITAT

++ I-T-Additions framed u/s 69A quashed as AO did not conduct enquiry to prove that money withdrawn by assessee was spent for personal purposes: ITAT

July 09, 2024

++ I-T- It is trite law that when an order entails adverse civil consequences or is prejudicial to the person concerned, it is essential that principles of natural justice be followed: SC

++ I-T- Even if statute is silent regarding Show Cause Notice and hearing, the Court would read into such provision the inherent requirement of notice and hearing before prejudicial order is passed: SC

++ I-T- Resolution Plan under IBC, once approved, is binding on all stakeholders; all demands raised stand extinguished: HC

++ I-T-Power of revision u/s 263 is rightly exercised where the PCIT has made out a clear case of certain aspects not having been considered by the AO during original assessment : ITAT

++ I-T- Gift received by assessee under family arrangement cannot be taxed u/s 56(2)(x) where AO & CIT(A) do not appreciate the nature & purpose of such family arrangement: ITAT

++ I-T- As per settled law, no addition can be made the assessment framed u/s 153A dehors incriminating material found during the search : ITAT

++ I-T-Disallowance made u/s 115JB by resorting to re-assessment, cannot be sustained, where AO lacked jurisdiction to re-open assessment : ITAT

July 08, 2024

++ I-T- Re-assessment vitiated where approval granted therefor, is subsequently withdrawn: HC

++ I-T- Re-assessment is invalidated where not based on independent application of mind by the AO & where based entirely on report supplied by the Investigation Wing : ITAT

++ I-T- Assessees are entitled to claim deduction under section 80G of the Act in respect of such donations which formed part of the spend towards CSR: ITAT

July 06, 2024

++ I-T- Penalty u/s 271(1)(c) rightly imposed where assessee fails to justify not declaring income in ITR submitted in response to notice issued u/s 148; any income declared is done so under compulsion & is not voluntary disclosure: ITAT

++ I-T- No addition u/s 68 can be made when assessee has explained source of source of unsecured loans : ITAT

July 05, 2024

++ I-T- Notice issued u/s 148 is invalid since AO assumed jurisdiction on basis of borrowed satisfaction without there being any live link between information and material on record : HC

++ I-T- Revision proceedings is invalid where commenced based upon proposal received from the Additional CIT: ITAT

++ I-T- When any person who is required to deduct any sum in accordance with the provisions of this Act or referred to sub-section (1A) of section 192 does not deduct or does not pay as required by or under this Act, then such person be deemed to be an'Assessee in default' qua such tax: ITAT

July 04, 2024

++ I-T- Power u/s 119(2)(b) has to be exercised liberally and delay in filing Audit Report is condonable where assessee would suffer genuine hardship otherwise: HC

++ I-T- Re-assessment invalidated where based on change of opinion & where no failure to make full & true disclosure of facts is attributed to assessee: HC

++ I-T- Proceedings against deceased person are null & void; penalty imposed on deceased assessee for non-compliance with SCNs & orders stands quashed: HC

++ I-T - Mere execution of sale deed without complete transfer of consideration does not constitute transfer of property for purpose of levying capital gains: ITAT

++ I-T - Denial of deduction u/s 80P is valid only upto income earned by cooperative societies through non-members: ITAT

++ I-T - Reassessment - failure of AO to issue notice u/s 143(2) prior to finalizing reassessment order cannot be condoned by referring Section 292BB: ITAT

July 03, 2024

++ I-T- Application for revision of order dismissed in limine on grounds of delay; case remanded for re-consideration: HC

++ I-T- As per Section 119(2)(b), power to condone applications relate to claims for amount exceeding Rs 50 lakhs are to be considered by CBDT; however it is impermissible for CBDT to pass order on merits: HC

++ I-T- Additions framed u/s 68 for unexplained income & u/s 69 for unexplained expenditure not tenable where complete transactional details are furnished & not doubted: HC

++ I-T- Delay in filing ITR is per se insufficient reason to estimate assessee's profit @15% on turnover, more so where audited financial report is filed in timely manner: ITAT

++ I-T- For invoking section 69A, assessee should be found to be owner of any money, bullion, jewellery or other valuable article & which is not recorded in the books of account: ITAT

++ I-T- TDS credit can be allowed based on AIS, where details pertaining to TDS, advance tax & other payments are reflected in Form 26AS: ITAT

++ I-T- Lending money with the primary intention of earning interest can be considered a business activity, but nature and manner of lending, as well as the frequency, should be taken into account: ITAT

July 02, 2024

++ I-T- Assessee is entitled to deduction u/s 54 on purchase of new property considering date of possession, when it is completed, as date of purchase of property : ITAT

++ I-T- Without pointing out any specific defect, disallowance of 50% travelling expenses due to availability of self-made vouchers which is below limit allowed u/s 40A(3) is not justified : ITAT

++ I-T- In absence of any conferment of power by statute, Tribunal cannot condone delay in filing application in Form 10AB: ITAT

July 01, 2024

++ I-T- As per settled law, search assessment order u/s 153C is valid where no material incriminating the assessee is found in course of search proceedings: ITAT

++ I-T- Withdrawal of depreciation claim cannot lead to a case of concealment of particulars of income so as to justify imposition of penalty u/s 271(1)(c) : ITAT

++ I-T- When part refund is granted to assessee, it should be first adjusted towards outstanding interest and then against tax payable : ITAT