TODAY'S CASE (DIRECT TAX)

March 30, 2024

++ I-T - Assessment order issued in name of non-existent company, is invalid: HC

++ I-T - Re-assessment is invalidated where sanction for the same u/s 151 has been granted without considering that assessee duly furnished full & true information to AO : HC

++ I-T - Re-assessment is invalid where such exercise is not based on any tangible material to infer escapement of assessment: HC

March 29, 2024

++ I-T- Once the citizen deposits the tax upon coming to know of his liability, it cannot be said that he has deliberately or willfully evaded the depositing of tax and interest in terms of Section 234A can be waived: HC

++ I-T- Secured creditor has priority charge over secured asset, over claims of I-T Department & other Departments; any excess amount recovered by Secured Creditor from auction of secured asset, over & above the dues payable to it, are to be remitted to the Departments: HC

++ I-T - Receipts of sale of scrap being part & parcel of activity and being proximate thereto would also be within ambit of gains derived from industrial undertaking for purpose of computing deduction u/s 80-IB: HC

++ I-T - Once assssee on year of reversal has paid taxes on excess provision and similar feature appeared in earlier years and assesee had payments for liquidated damages on delay of deliverables, no adverse inference can be drawn: HC

March 28, 2024

++ I-T- The order of the ITSC can only be reopened in cases of fraud or misrepresentation: HC

++ I-T - Income so surrendered on account of investment in excess stock during course of survey cannot be brought to tax under deeming provisions of section 69B: ITAT

++ I-T-Power of revision need not be exercised where facts do not reveal any lack of enquiry by AO into relevant issue & when twin requirements of order being erroneous as well as prejudicial to Revenue's interests, are not satisfied: ITAT

++ I-T -Penalty u/s 271(1)(c) cannot be imposed where an assessee claims deduction u/s 80P while being ineligible therefor, but being under the bona fide impression of being eligible for such benefit : ITAT

March 27, 2024

++ I-T- Prerequisite of condition precedent of reason to believe that income chargeable to tax escaped assessment on correct facts, is to be satisfied by AO for valid jurisdiction to issue reopening notice; absence thereof vitiates proceedings : HC

++ I-T- Re-assessment is invalidated where based on change of opinion in respect of evidence which had already been furnished before AO during original assessment : HC

++ I-T- Re-opening of assessment cannot be sustained where the AO is not found to have any tangible material to form a belief that income has escaped assessment : HC

++ I-T - 'Change of opinion' does not constitute justification and reasons to believe that income chargeable to tax has escaped assessment : HC

++ I-T- Additions framed based on statements taken from third parties, cannot be sustained where assessee was not given an opportunity to cross examine deponents of these statements : ITAT

++ I-T- Jurisdiction assumed u/s 147 is unsustainable in law as 'reason to believe' is clearly absent: ITAT

++ I-T - Claim of depreciation can be disallowed in absence of any cogent material except certain documents relating to electricity and maintenance expenses : ITAT

March 26, 2024

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

++ I-T- Re-assessment order came to be passed without considering assessee's replies to SCN, contravenes rules of natural justice & hence merits being quashed: HC

++ I-T - If reasons for reopening assessment is based on incorrect facts or conclusions, certainly notice issued for reopening cannot be sustained: HC

++ I-T- Non-speaking & unreasoned order passed u/s 139(9) is not sustainable where passed without considering assessee's contention of being incorrectly treated as engaged in operating a business : HC

++ I-T - Simply because transaction has been carried out through banking channels or confirmation of parties has been furnished would not make a non-genuine transaction into genuine one: ITAT

++ I-T - Share transactions done through stock exchange cannot be treated as bogus simply on basis of statement of some brokers that they have provided accommodation entry in various scrips: ITAT

March 23, 2024

++ I-T-Disallowance of salary paid is upheld where such payments are of doubtful veracity & have been paid to certain employees, none of whom are available to confirm that they truly were employed by payer-assessee : ITAT

++ I-T - If sale of shares took place through Stock exchange and sale consideration was received by stock broker in banking channels, then sale consideration cannot be considered as unexplained cash credit: ITAT

++ I-T- Even if inquiry was termed as inadequate, that would not by itself give occasion to PCIT to pass orders u.s 263 of the said Act, merely because he has a different opinion in the matter: ITAT

March 22, 2024

++ I-T - Income Tax exemptions available to individual Scheduled Tribe Members cannot be extended to partnership firm: ITAT - SB

++ I-T - AO has no power to review and this power is not to be confused with power to re-assess: HC

++ I-T - Reopening purely on re-examination of very same material based on which original assessment order was passed, can't be sustained in notable absence of fresh tangible material within knowledge of AO: HC

++ I-T - If refusal to interfere with ITAT's order is based solely on parameters of judicial review, Writ Court's order can't be construed as affirmation of view expressed by ITAT and relating to merits of appeal: HC

++ I-T - If consequential assessment required to be passed by AO to whom matter was remanded by Appellate/Revisional Authority, requires him to re-adjudicate issue afresh, then such exercise shall be completed within time limit u/s 153(2A): HC

++ I-T - PCIT has correctly held that assessment order is erroneous & prejudicial to interest of Revenue in respect of issues, in absence of adequate enquiry by Assessing Officer on same: ITAT

++ I-T - Surrender of leasehold rights amounts to 'transfer' as per Sec 2(47) as it amounts to extinguishment of rights and therefore, should be taxed as 'capital asset' as per Sec 2(14) : ITAT

++ I-T - Deeming fiction of section 2(22)(e) can be applied only in hands of beneficial owner of shares in both lender and receiving companies: ITAT

March 21, 2024

++ I-T- Provisions of Section 148A clearly require that an assessee be granted opportunity of personal hearing & an order passed in non-compliance with this requirement stands vitiated: HC

++ I-T - Assessee cannot assume that Tax Deducted at Source will cover entire tax liability for relevant Assessment Year even without filing his returns and declaring his total income: HC

++ I-T - Change of opinion does not constitute justification and/or reason to believe that income chargeable to tax has escaped assessment: HC

++ I-T - Scheme of Sec 115JB, particularly in relation to Clause (f) of Explanation 1 therein, does not envisage any addition of disallowance computed u/s 14A to calculate MAT as per Sec 115JB: HC

++ I-T - For purpose of levying penalty u/s. 271(1)(c) finding given in quantum proceedings cannot be conclusive for purpose of penalty proceedings: ITAT

++ I-T - If there is no employer-employee relationship between taxpayer and doctors, expenditure incurred for distributing free samples to the Doctors cannot be construed as fringe benefits: ITAT

++ I-T- Mere fact that land used is converted to non-agricultural prior to date of sale would not convert land as agricultural land : ITAT

March 20, 2024

++ I-T- Intimation of adjustments being proposed would not be of any relevance e once it is found that the application for stay remained pending : HC

++ I-T- It is not permissible for AO to make any other addition, if AO has chosen not to make addition in respect of items for which reasons are recorded by issuing notice u/s 148 : ITAT

++ I-T - When two views are legally possible and AO adopts one view Assessment Order cannot be said to be erroneous for CIT to invoke jurisdiction u/s 263 : ITAT

++ I-T - In absence of any direct incriminating evidence against assessee, there is no preponderance of probability of assessee being involved in price rigging of scrips: ITAT

++ I-T - If every particular regarding claim of deduction on account of interest expenditure is available before AO and there is no concealment by assessee of these particulars, there can be no levy of penalty: ITAT

++ I-T- AO should have given opportunity to assessee before carrying out rectification u/s. 154, so as to explain various certificates which are issued by VIL to assessee for lower deduction of TDS : ITAT

March 19, 2024

++ I-T- Rules of natural justice are contravened where notices of hearing are not sent to valid email addresses indicated by assessee & order passed in consequence thereto is invalidated : HC

++ I-T - Provisions of Section 148A clearly require that an assessee be granted opportunity of personal hearing & an order passed in non-compliance with this requirement stands vitiated: HC

++ I-T - If no error is being found by AO qua acceptance and genuineness of transaction of assessee, then AO cannot initiate reopening, and if reopening is not permitted, then CIT cannot issue notice u/s 263: ITAT

++ I-T - Additions framed u/s 68 were rightly quashed where the assessee has discharged onus of identity, creditworthiness and genuineness of transaction : ITAT

++ I-T- Addition cannot be framed on account of unexplained cash credit, where assessee has recorded the sales in its books and there is no adverse finding qua stock and purchases: ITAT

March 18, 2024

++ Benami Act - 'Adjudicating authority' is best suited to decide question of Benami nature of property in case of 'provisional assessment order': HC

++ I-T-As per settled position in law, a personal hearing to the assessee is mandatory in an enquiry under Section 148A(b) of the I-T Act : HC

++ I-T - If payment was not made within due date of filing return u/s 139(1) to government account, then VAT payment cannot be allowed as deduction though it was not routed through P&L A/c: ITAT

++ I-T - No addition is permitted u/s 153A in absence of incriminating documents found during course of search: ITAT

March 16, 2024

++ I-T- Cost of asset and cost of raising money for purchase of asset are two different and independent transactions : ITAT

March 15, 2024

++ I-T - Addition u/s 56(2)(x)(b) is rigtly made since assessee has purchased property for consideration less than value determined by DVO in accordance with sec 50C : ITAT

++ I-T- Notice of hearing not considered by assessee due to certain medical exigency faced by proprietor of firm - assessee deprived of proper hearing - case remanded: ITAT

March 14, 2024

++ I-T- In case of supposed bogus purchases, the entire quantum of purchase need not be disallowed & purpose is fulfilled by disallowing the profit element embedded therein : ITAT

++ I-T- Power of revision cannot be exercised by PCIT with intent of substituting findings of AO, solely because PCIT disagrees with findings of AO : ITAT

++ I-T- Co-operative banks which are members of co-operative societies & deposits made by co-operative societies in such cooperative banks are eligible for deduction u/s 80P(2)(d) of Act : ITAT

++ I-T- Expenses claimed by assessee in form of exceptional items is not admissible and same is income earned on giving right to use land at concession rate : ITAT

++ I-T- Costs warrant being imposed on assessee for failing to appear before lower authorities during assessment proceedings, thereby causing waste of time & resources : ITAT

March 13, 2024

++ I-T-Re-assessment notice is invalid, where PCIT grants approval to issuance of notice u/s 148 prior to even digitally signing of notice u/s 148A(b) as well as to date of passing of order u/s 148A(d) : HC

++ I-T - Mere 'change of opinion' is no basis to intiate reopening proceedings: HC

++ I-T - Considering GST in sales, will work as contra entry and has to be considered in opening stock, purchase & closing stock also, which ultimately result in tax neutral exercise: ITAT

++ I-T- ESOP expenditure is allowable expenditure in hands of company; disallowance of such expenditure without considering preliminary facts & applicable judgments, is invalid: ITAT

++ I-T- Protective addition cannot be held as substantive addition when the Department has not taken proper cognizance in the cases, where the substantive addition should have been done : ITAT

++ I-T - As assessee satisfies ingredients namely identity and creditworthiness of lenders as well as genuineness of loans taken therefore no addition is required u/s 68 of Act : ITAT

March 12, 2024

++ I-T- Re-assessment is vitiated where reasons for re-opening assessment are not communicated to the assessee: HC

++ I-T- No addition of income can be made on estimate basis without rejecting books of account : HC

++ I-T- No addition can be made on basis of mere surrender made during survey/search unless same is corroborated by some tangible evidence : ITAT

++ I-T- Share application received of Rs. 90,00,000 can't be added u/s 68 of Act : ITAT

++ I-T - Furnishing of return by due date u/s 139 is mandatory for political party to claim exemption u/s 13A: ITAT

March 11, 2024

++ I-T-Criminal prosecution launched u/s 276B r/w Section 278AA for delay in TDS deduction, is set aside, where delay is caused due to concerned accounts officer having left petitioners' service on maternity leave: HC

++ I-T- On basis of explanation supported with evidence which is provided by assessee, addition for cash found cannot be made : ITAT

March 09, 2024

++ I-T- Section 50C(1) is an anti-avoidance provision to prevent evasion of tax by showing lesser consideration in the transactions : ITAT

++ I-T- Where it is settled that subsequent amendment by Finance Act, 2020 would apply retrospectively, then it is trite that same principle applies even in respect of initial introduction of the proviso by Finance Act, 2018: ITAT

++ I-T- Additions framed u/s 68 on account of unexplained cash credit cannot be sustained, where the assessee has provided explanation for the money in question: ITAT

March 08, 2024

++ I-T- As per Section 43B, Excise duty would be deductible only on the payment basis in the year in which it is actually paid: HC

++ I-T- Criminal prosecution of petitioner for being Principal Officer of defaulting company; Department omitted to verify whether Petitioner was involved in management & administration of the company - prosecution order quashed: HC

++ I-T- Primary onus would be on the Assessee to substantiate its claim qua issue in hand by producing the relevant parties and/or evidence : ITAT

++ I-T- Additions framed u/s 69 are unsustainable where none of the conditions of investment not being recorded in books without any proper explanation about their nature or source , have been satisfied: ITAT

++ I-T- Assessee cannot claim violation of the principles of natural justice, where assessee was given multiple opportunities to present his case but did not avail of the same: ITAT

March 07, 2024

++ I-T - Differentiation made by State between employees of Central and State Governments as well as other employees u/s 10(10AA) is neither discriminating nor violative of Art 14 of Constitution: HC

++ I-T - When before ITAT there was no controversy as regards date of filing of return by assessee or Form 10B, then AO cannot, in garb of giving effect to order of ITAT, initiate new controversy: HC

++ I-T - Actual carrying on of agricultural operation was not necessary condition when Assessee claimed that agricultural land sold was not within jurisdiction of municipality: HC

++ I-T - Fifth proviso can only apply where one has to determine whether time limit of three years and ten years in Section 149(1) are breached: HC

++ I-T - If Assessing Officer does not have reason to believe but only reason to suspect, then reopening of assessment is not satisfactory: HC

++ I-T - Change of opinion does not constitute justification and/or reason to believe that income chargeable to tax has escaped assessment: HC

March 06, 2024

++ I-T - Expenditure incurred with regard to removal of overburden of mines, which is part of process of extracting lignite/minerals/ores from lower seams, is revenue expenditure u/s 37: ITAT

++ I-T- Re-assessment order is rightly quashed when there is no finding of AO as to if these expenses were not wholly and exclusively for purpose of assessee's business : ITAT

++ I-T-Disallowance cannot be made on ad hoc basis without specifying any specific default & without submitting cogent evidence : ITAT

++ I-T- If assessee under mistake, misconception or on not being properly instructed, is over-assessed, the Department is required to assess & ensure that only legitimate tax dues are collected : ITAT

March 05, 2024

++ I-T - Even though assessee has successfully not discharged its primary onus cast upon him to explain source of credits in its books, AO should carry out full enquiry after going through evedinces: ITAT

++ I-T - Case can be remanded back to PCITto decide issue of jurisdiction at threshold and thereafter proceed as per law : ITAT

++ I-T- Section 147 of the Act does not postulate conferment of power upon AO to initiate reassessment proceedings upon a mere change of opinion: ITAT

++ I-T- Additions framed u/s 68 on account of unexplained cash credit are sustainable, where assessee fails to provide satisfactory explanation for share application money and share premium received: ITAT

March 04, 2024

++ I-T- Deduction of TDS by donor would not be determinative factor for denial of benefits u/s 11 and 12 of I-T Act, claimed by NGO engaged in charitable activities: HC

++ I-T- In a tax matter, a party cannot as a matter of right seek for stay on recovery of tax demand raised, just because an appeal has been filed against the demand: HC

March 02, 2024

++ I-T - Distributor/ franchisee are not liable for TDS u/s 194H on receipts earned from selling sim cards of telecom companies: SC

++ I-T- Without findings regarding fair market rate of interest AO cannot held that interest paid by assessee is excessive warranting disallowance of expenditure u/s 40A(2)(b) of Act : ITAT

++ I-T- Transaction of gift of specified shares by donor companies to M/s. Glebe Trading is valid gift and not sham and void transaction for benefit of assessee: ITAT

++ I-T-The word 'business' occurring in clause (iv) of Section 32(1) cannot be said to include 'profession' as well: ITAT

++ I-T-Commission paid to agents cannot be disallowed where the same is paid in relation to the assessee's business : ITAT

++ I-T- PCIT was justified in invoking Section 263 of the Act when AO has properly verified all the issues raised by the assessee : ITAT

March 01, 2024

++ I-T - Formation of reasonable belief that income of Assessee in particular assessment year has escaped assessment is condition precedent for acquiring jurisdiction u/s 147/148 for re-opening assessment: HC

++ I-T - AO has power to reopen provided there is tangible material to come to conclusion that there is escapement of income and reasons must have live link with formation of belief: HC

++ I-T - It is wilful evasion of tax due which is crux of offence u/s 276C(2) and not mere failure to pay tax: HC

++ I-T- State is entrusted with dealing of public money & is engaged in fiduciary relationship with common citizen; State cannot be unjustly enriched at the cost of citizens : HC

++ I-T - Party cannot be permitted to approbate and reprobate in same breath or take mutually destructive pleas: HC