TODAY'S CASE (DIRECT TAX)

November 30, 2024

++ I-T - For disallowance u/s 14A, only those investments which yielded exempt income, have to be considered: ITAT

++ I-T- Deduction u/s 80IA(4) is allowed where all major conditions such as development of irrigation, water supply systems, roads are satisfied, except for the minor condition of not entering into a JV or consortium: ITAT

++ I-T - Once address for serving of notice of hearing is mentioned in Form No. 35, it is obligatory on part of CIT(A) to send notice of hearing to said address as envisaged in first proviso to Rule 127(2): ITAT

November 29, 2024

++ I-T - Omission to issue notice u/s 143(2) within time stipulated in respect of any assessment is fatal: HC

++ I-T - Once assessee offers explanation about nature & source of credit transaction standing in its books, then burden of proof to show that such explanation is unsatisfactory shifts on AO: HC

++ I-T - Sec 153C does not by itself preclude AO from reopening assessments u/s 147/148, based on information found during search conducted u/s 132 in respect of another person: HC

++ I-T - Chief CIT ought to have addressed issues/justification as flagged by taxpayer in supporting its case for grant of waiver of interest u/s 234C: HC

++ I-T- Accomodation entries - Additions framed in the hands of assessee be quashed, where real beneficiaries are identified & additions are framed in their hands: ITAT

++ I-T - If cash interest income has already been admitted and offered to tax by partner of firm as his own undisclosed income, then same cannot be added as unexplained cash credit u/s 68: ITAT

++ I-T - If CIT (A) has dismissed appeal of assessee ex-parte without deciding issues arising in appeal before him on merits, then appellate order of CIT(A) is in violation of Sec 250(6): ITAT

November 28, 2024

++ I-T - Electrical fittings forms part of plant & machinery and assessee is eligible for depreciation and additional depreciation on such parts of plant & machinery: HC

++ I-T- Entry indicating date of service is not primary evidence & could not be relied upon to deny petitioner's rectification application on grounds of being time-bar; Department failed to substantiate valid service of order: HC

++ I-T- Additions u/s 68 are sustainable where assessee successfully explains nature & source of alleged monies & files sufficient evidence to prove identity & creditworthiness of cash creditors & genuineness of transaction: ITAT

++ I-T - If assessee is having sufficient capital & free reserves which far exceeds investment in shares, then dividend income earned out of it will be exempt: ITAT

++ I-T - If no incriminating material is unearthed during search related to unabated assessments, no addition is called for: ITAT

November 27, 2024

++ I-T - If assessee never received any benefit or enjoyed money that it has received as advance, then no benefit was derived out of said transactions, and Sec 41(1) r/w/s 28(iv) is not applicable: HC

++ I-T - If assessee has discharged burden of proving source of cash/SBN deposited in bank and AO has failed to rebut same, no addition is permitted u/s 69A: ITAT

++ I-T - If assessee has submitted detailed documents to support her claim of genuineness & creditworthiness of lenders, then no addition is permitted on account of unexplained loan u/s 68: ITAT

++ I-T - Re-assessment not tenable where commenced without due application of mind by the AO, as no clear case of failure to make full & true disclosure of material facts is made out: ITAT

November 26, 2024

++ I-T - If co-operative banks are carrying its banking business activities, then deduction u/s. 80P(2)(d) shall not be granted on interest income received by them: ITAT

++ I-T - Addition in respect of purchases cannot be made if there is no question of introducing bogus purchases without doubting the sales: ITAT

++ I-T- Additions framed u/s 69A are unsustainable where framed based on assumptions alone & where not based on any material recovered during search and seizure: ITAT

++ I-T- Raising a claim which is subsequently found to be unsustainable is not tantamount to furnishing inccurate particulars of income so as to warrant imposition of penalty: ITAT

++ I-T - Section 11(1)(a) does not impose any condition for claiming set apart on surplus or deposit: ITAT

++ I-T- AO 's addition is arbitrary where assessee has duly provided documentary evidences: ITAT

++ I-T- Claiming deductions through a belatedly-filed ITR is not tantamount to furnishing inaccurate particulars of income, inviting penalty u/s 271(1)(c): ITAT

++ I-T - Unless AO make any allegations that assessee has failed to disclose relevant facts for assessment, such assessment cannot be reopened beyond 4 years if it was completed u/s 143(3): ITAT

November 25, 2024

++ I-T- When there is no uncertainty regarding consideration for services to be rendered, income should be recognized immediately upon receipt : HC

++ I-T-Cash deposit in assessee's bank account cannot be treated as unexplained investment u/s 69 in entirety, notwithstanding assessee's claim that it originated from agricultural sales: ITAT

++ I-T- Section 80P(4) is designed to exclude only cooperative banks that operate like commercial banks; assessee, being a housing co-operative society, is eligible for claiming deduction u/s 80P: ITAT

++ I-T- Revisionary order passed u/s 263 on allegations of failure of AO to initiate penalty proceedings, is invalid, where PCIT misinterpreted original order & did not provide proper findings regarding penalty u/s 270A: ITAT

November 23, 2024

++ I-T- As per settled position in law, once Supreme Court decides a matter, it is not as if it is making any new law but it is as if it is only restating what the law has always been : ITAT

++ I-T- Amendments to Sections 36(1)(va) and 43B introduced by Finance Act, 2021, cannot override the legal principles set by decision in Checkmate Services P. Ltd. : ITAT

++ I-T - Re-assessment proceedings are invalidated where provisions of Section 151 pertaining to grant of sanction for re-assessment, are not followed: ITAT

++ I-T - Funds received from subsidiary in form of advances shall be allowed u/s 36(1)(iii), if same was utilized for purpose of business: ITAT

November 22, 2024

++ I-T - Mere sale of agricultural land does not make assessee liable to pay capital gains tax, either short-term or long-term: HC

++ I-T - If object of formula is to arrive at profit from export business, then expenses excluded from export turnover have to be excluded from total turnover also: HC

++ I-T - Solely because re-assessment notice is issued within a period of four years of assessment order, it cannot be said that the AO can assume jurisdiction, more so where based on change of opinion: HC

++ I-T - As is trite law, notices issued under Sections 142(1), 144 and 148 in the name of a deceased assessee are void ab initio : HC

++ I-T - Re-assessment invalid where not based on any tangible evidence not available during original assessment, thus being based on change of opinion: HC

++ I-T - Assessee shall be allowed time to produce bank statement & ITRs of previous years to prove that she had sufficient cash in hand, in order to explain source of cash, before making additions: ITAT

++ I-T - Interest paid for delayed payment of customs duty cannot be at par with penalty paid for any infringement of law: ITAT

++ I-T - If interest free & own funds are advanced to sister concern, then charging of notional interest does not arise: ITAT

November 21, 2024

++ I-T - Bonus shares that have been distributed to assessee without any consideration, does not amount to income: HC

++ Black Money Act - Initiation of prosecution u/S 51 Black Money Act not dependent on completion of assessment proceedings u/S 10 for tax evasion: HC

++ I-T - AO must consider identity and creditworthiness of depositors on basis of documents placed on record by assessee, before making any addition u/s 68: HC

++ I-T- Absence of any material available on record to have live nexus with information received by AO invalidates re-assessment: HC

++ I-T - If trust has incurred expenditure and applied income/donation received by it for charitable purpose, then such trust is entitled to benefit of same: HC

++ I-T- Assessee's 'right to collect toll' is not an ‘intangible asset' under explanation 3(b) of Section 32(1)(ii): ITAT

November 20, 2024

++ I-T- Provisions of Section 40A need not be applied onto an assessee whose business operates on cash basis & where relevant cash transactions are made out of business expediency: ITAT

++ I-T- Indexation benefit allowed to assessee in cases where allotment letter issued by the Housing Society reveals assessee legally holding the property: ITAT

++ I-T- Profit would arise only on transfer of title of property and receipt of advance or booking amount cannot be treated as trading receipt of year under consideration: ITAT

++ I-T- Addition u/s 68 is sustained where assessee fails to explain source of cash deposits despite opportunities granted by AO: ITAT

++ I-T - Recording reserve in consequence to amalgamation order, which was passed for purpose of balancing accounts based on double entry system employed, cannot give rise to any benefit in course of business: ITAT

++ I-T- Provision for probable losses recognized by the assessee is allowable deduction under relevant accounting standards & tax regulations: ITAT

November 19, 2024

++ I-T - If AO has not merely acted upon information received from investigation wing but also has reconciled same with balance sheet, which suggests due application of mind by AO, then reopening is justified: ITAT

++ I-T - Once availability of cash in hands of assessee is accepted, then deposit of such cash in bank account cannot be doubted: ITAT

++ I-T - Mere bald allegation that assessee has made payments to UPDA for paying illegal gratification to politicians/Bureaucrats, ais not sufficient to make addition: ITAT

++ I-T- Reopening of assessment beyond four-year limitation is invalid where the Revenue could not establish any failure of assessee to disclose necessary facts: ITAT

++ I-T- Correction of error where trust inadvertently seeks registration u/s 12A(1)(ac)(vi), meant for new entities, instead of correct section 12A(1)(ac)(i) for existing trusts, is allowed, especially when it receives only 3 years of registration instead of the eligible 5 years: ITAT

++ I-T- Bogus purchases - assessee failed to prove genuineness of purchases made from supplier - additions restricted to 5% of total purchases: ITAT

November 18, 2024

++ I-T - Infusion of equity capital as measure of financial support, while surely a contractual obligation, cannot consequently be understood to mean payment for 'work undertaken': HC

++ I-T - Expression 'action for imposition of penalty is initiated' clearly refers to date on which first introductory step for such action is taken: HC

++ I-T - Incorrect mention of assessee's name in notice issued to it for default in deduction of tax at source is mere clerical error: HC

++ I-T - If assessee has already included income from AOP or Body of Individuals (BOI) in their taxable income, any post-tax share received from AOP/BOI cannot be taxed again in assessee's hands: HC

++ I-T - Proceedings u/s 148A are initiated only when Income Tax officers suspect that taxpayer may have concealed income during any assessment year: HC

++ I-T - If AO had committed factual mistake in clubbing opening as well as closing balance of inventories instead of taking provision made by assessee, then addition made by AO merits deletion: HC

++ I-T - As long as there remains a dispute / litigation, income going to be earned by assessee cannot be said to have 'accrued' or 'arisen' to assessee: HC

++ I-T- Concern of AO, while passing consequential order, has to be limited to those specific issues that have been remanded to it for consideration by Commissioner: HC

++ I-T - While determining assessment of relevant years, assessing authority cannot determine assessment for earlier years without enquiry: HC

November 16, 2024

++ I-T - Revision u/s 263 is not warranted if AO has properly conducted enquiry during course of assessment: ITAT

++ I-T - If assessee is not owner of property of which he acted as GPA holder, and no profit arises on executing sale deed by assessee and neither any capital asset is transferred, then no capital gains is taxable in hands of assessee: ITAT

++ I-T - Words used in section 147 are 'Reason to believe' and not Reason to suspect: ITAT

November 15, 2024

++ I-T- Insufficient diligence in pursuing appeal justifies denying a request for condonation of delay: ITAT

++ I-T- AO has jurisdiction under Explanation (3) to Section 147, to make addition on an issue which was not subject matter of the reasons recorded, if such issue is noticed by AO during subsequent proceedings: ITAT

++ I-T - If details of profits claimed to have been given to firm as loans, is not established, then unaccounted share of profits in firm is taxable in hands of individual parters: ITAT

++ I-T - Prize winning from unsold lottery tickets are taxable as 'business income' and not 'income from other sources': ITAT

++ I-T - Power of revision is rightly exercised where PCIT erroneously presumes that AO omitted to record satisfaction for initiating penalty proceedings: ITAT

November 14, 2024

++ I-T- The only jurisdiction of High Court in a reference application is to answer questions of law that are placed before it: HC

++ I-T - In absence of any tangible explanation in treating advertisement expenses as capital in nature since no corporeal asset has been created, such expenses cannot be treated as capital in nature: ITAT

++ I-T - Simpliciter violation of certain notification issued by RBI or demonetization scheme announced by Government of India will not entitle the Revenue to make addition u/s.69 or 69A: ITAT

++ I-T- As is trite law, no penalty u/s. 271(1)(c) is leviable based on the addition or disallowance made on an estimate basis: ITAT

++ I-T- For levying penalty u/s 271(1)(c), AO has to clearly prove that assessee concealed particulars of income or furnished inaccurate particulars of income: ITAT

++ I-T- When a property is valued by DVO, who is an expert, neither AO nor CIT - A has any right to reject the same, so far as computation of capital gain u/s 50C is to be determined: ITAT

November 13, 2024

++ I-T - Non-addition of any income on account of same being interest commensurate with TDS deposits, or making further enquiries would not confer PCIT with jurisdiction to pass an order u/s 263 : HC

++ I-T - If there is settlement arrived at between members of Hindu undivided family, then cost with reference to acquisition of property would have to be assessed as per Sec 49(1)(i): HC

++ I-T - Joint venture undertaking which was awarded a contract for full-fledged development of Airport, can be said to be 'developer' eligible for deduction u/s 80-IA(4): HC

++ I-T - If tax is deductible at source, then assessee shall not be called upon to pay tax himself to extent to which tax has been deducted from that income: HC

++ I-T - Revenue authorities are not justified in continuing retention of books of accounts and other documents contrary to provision of Sec 132(8): HC

++ I-T- Power of revision is unwarrantedly exercised where it is based on incorrect assumption of facts: ITAT

November 12, 2024

++ I-T- Delay in filing ITR be condoned where during relevant period, the assessee, a doctor, was engaged in work on account of on-going COVID 19 pandemic & where the assessee suffered personal losses in such period: HC

++ I-T-As is trite law, once resolution plan is approved, any claims that were not lodged before resolution professional during insolvency proceedings are extinguished: HC

++ I-T - Tax authorities are not entitled to tax entire transaction, but only income component of disputed transaction, to prevent possibility of revenue leakage: HC

++ I-T - No demand can be raised against deductee on account of failure to deposit amount of Tax Deducted at Source by deductor: HC

++ I-T- Exemption from Excise duty does not fall in the definition of income as envisaged under Section 2(24)(xviii) of the Act: HC

++ I-T- Income tax cannot be levied on hypothetical income & only real income can be taxed; no tax can be charged on an amount which is not actually earned: HC

++ I-T- For purpose of Section 35(2AB), once a facility is recognized, all related expenditures should be eligible for deductions, regardless of prior approvals: ITAT

++ I-T- Re-assessment proceedings are invalidated where the reasons for re-assessment are not justified: ITAT

November 11, 2024

++ I-T- Additions framed u/s 69 unwarranted where assessee has sufficient cash to justify bank deposits made in its account, even after accounting for potential expenses: ITAT

++ I-T - Commission income from such sale of agriculture produce on behalf of farmers duly offered for tax in ITR, merits TDS deduction both u/s 194H and 194Q: ITAT

++ I-T- Undisclosed income - additions framed based on statements taken from third parties, are invalidated where assessee is not permitted to cross examine deponents of such statements: ITAT

++ I-T- Addition u/s 68 are unsustainable where assessee has successfully explained nature & source of alleged unsecured loan & has proven identity, creditworthiness of cash creditors & genuineness of transactions : ITAT

++ I-T- Addition u/s 69A was unjustified, as there was no concrete evidence to suggest that the cash deposits were from undisclosed sources: ITAT

November 09, 2024

++ I-T- Additions framed u/s 69A are not tenable where cash generated out of sales & collection from debtors has been recorded in books of accounts: ITAT

++ I-T- Only burden cast upon assessee under Section 56(2)(viib) r/w Rule 11UA, is to establish that methodology adopted for valuation of shares, is recognised method of valuation; no aditional burden of proving veracity of expert opinion can be foisted : ITAT

++ I-T- Striking off irrelevant limb is mandatory condition or requirement to be followed by AO while issuing penalty notice; failure to do so would vitiate the proceedings: ITAT

November 08, 2024

++ I-T- Show-Cause-Notice cum draft assessment order is invalid where it allows assessee only 2 days' time to file reply thereto; principles of natural justice contravened: HC

++ I-T- Survey - Onus is on Revenue to bring cogent material evidence on record to show that assessee incurred expenditure which are not recorded in books of accounts: ITAT

++ I-T- As is settled position in law, adjudicating authority should not dismiss a case on mere technicalities & should take a liberal approach while deciding issue of delay condonation: ITAT

++ I-T- Unexplained cash receipts - Additions u/s 68 unwarranted where based entirely on information received from Investigation Wing & without any independent probe by AO: ITAT

++ I-T- Law applicable in I-T matters is that law which is in force during relevant AY; provisions of Section 144C applying to non-residents inapplicable to assessee who was resident during relevant AY: ITAT

November 07, 2024

++ I-T- As is trite law, I-T authorities should charge only legitimate taxes, which are liable to be paid; assessees must not be punished for bona fide errors: ITAT

++ I-T-Disallowance of certain expenses is unwarranted where AO does not doubt genuineness of such expenditures or claims: ITAT

++ I-T - Assessee is not barred from claiming deduction u/s 80G in respect of donations made to approved institutions even though same is made in discharge of CSR obligation u/s 135 of Companies Act: ITAT

++ I-T- As per settled position in law, loans cannot be deemed dividends if the recipient is not a shareholder; employee contributions must be paid on time as per the relevant statutes to qualify for deductions: ITAT

++ I-T- Assessment order passed in name of a non-existent company which ceases to exist on account of its amalgamation, is rendered void: ITAT

++ I-T-Additions framed warrant being set aside, where Departmental authorities omitted to verify genuineness of creditors, despite evidence being available : ITAT

November 06, 2024

++ I-T- Re-assessment cannot be commenced in respect of certain income which is subsequently found to be beyond the jurisdiction of Indian tax authorities: HC

++ I-T- Re-assessment is invalidated where commenced based on incorrect factual assertions made by AO & where AO omits to consider the evidence presented: HC

++ I-T- An assessee who fails to avail opportunity granted to make submissions & produce documents in support of thereof cannot complain about violation of natural justice: HC

++ I-T- Sine qua non for invoking power of revision is that the original assessment order must be erroneous as well as such that it causes loss of revenue: HC

++ I-T- Additions framed u/s 68 merit being sustained in part, where assessee fails to substantiate source of funds in question : ITAT

November 05, 2024

++ I-T- Power of revision not to be invoked as assessment order does not reveal lack of enquiry by AO in relevant issues; order is neither erroneous nor prejudicial to revenue's interests: ITAT

++ I-T- Bogus purchases - Additions rightly estimated @ 12.5% of total purchases made, where assessee fails to provide breakup of profit from genuine & non-genuine purchases: ITAT

++ I-T- Disallowance of advertisement & marketing expenses incurred by medical professional, is invalid, where such expenses were allowed in past AYs & where assessee complied with all regulations governing advertising practices: ITAT

++ I-T- Sections 43A & 37 of I-T Act operate different from each other; additions framed on account of foreign exchange fluctuation unwarranted, where similar claims were accepted in past AYs: ITAT

++ I-T - Amendment of increasing of tolerance band from 5% to 10% u/s 56(2)(x) shall be applicable retrospectively: ITAT

++ I-T- Partnership firm is entitled to claim TCS credit where it reflects in account of original license holder, who has not declared the income or claimed the credit: ITAT

November 04, 2024

++ I-T- When the substantive addition itself will not survive in the eyes of law, fate of protective addition will be same: ITAT

++ I-T- Revision is not possible merely because guideline value was higher than sale consideration shown in the deed of conveyance and same cannot be sole reason for holding that assessment is erroneou s: ITAT

++ I-T - Where interest payment is towards loans borrowed for purchase of land, then same may be allowed to be capitalized: ITAT

++ I-T - Funds received from customers in form of advances having been utilized for purpose of business of assessee, is 'commercial expidiency: ITAT

++ I-T - Reopening shall be quashed, if AO has simply reopened assessment based on information obtained from Investigation Wing and there is no application of mind: ITAT

November 02, 2024

++ I-T- Re-assessment cannot be resorted to, where no failure to make full & true disclosure of material facts necessary for assessment is attributed to assessee: ITAT

++ I-T-While calculating income, net income should be considered as taxable income after reducing the expenditure incurred towards earning of such income: ITAT

November 01, 2024

++ I-T- Organisation established by GoI & which is engaged in research in microwave electronics, warrants being granted exemption u/s 11: ITAT

++ I-T- Suppressed sales - additions not tenable where based solely on statements given by third parties: ITAT

++ I-T- Reasons to believe based on which re-assessment is conducted, do not require AO to have definitive legal evidence: ITAT

++ I-T- Additions based on statements taken from third parties, are invalidated where assessee is not permitted to cross examine their deponents: ITAT

++ I-T- Interest and penalties accompanying additions are quashed, where the additions themselves are set aside: ITA