Addition under 69A for unexplained cash deposits is valid if notices were served. Issue: Whether the assessment order adding Rs. 1.76 crores as unexplained money under Section 69A was valid, particularly regarding the initiation of reassessment proceedings under Section 148. Whether the writ jurisdiction could be invoked to challenge the assessment. Facts: The assessee was… Read More »
Gift addition upheld due to lack of disclosed source by donor (Grandmother). I. Section 153A (Search Assessments) & Section 132 (Search and Seizure): Revenue Wins Issue: Validity of assessments under Section 153A following a search and seizure operation. Facts: A search revealed substantial undisclosed income and investments. The investigation uncovered undisclosed income from activities related… Read More »
Revision justified for loan verification needed but not done by AO. I. Section 194-I (TDS on Rent) & Section 263 (Revision): Revenue Wins Issue: The assessee failed to deduct TDS on the full amount of rent paid. PCIT’s Action: Found the Assessing Officer’s (AO) order erroneous for not verifying TDS compliance on the total rent… Read More »
Section 44AD Presumptive Taxation Applied to Nursing Home ; Partner’s Statement Not Sole Basis for Addition Issue: Whether the Assessing Officer (AO) was justified in adding back undisclosed income based solely on a partner’s statement when the assessee, a partnership firm running a nursing home, had declared its income under the presumptive taxation scheme of… Read More »
Section 40(a)(ia) Disallowance Quashed; Payments to Government and Unpaid Amounts Exempt from TDS Issue: Whether disallowance under Section 40(a)(ia) of the Income-tax Act, 1961, is justified when the payments were made to the Government of Maharashtra, or were not actually paid or credited during the relevant assessment year. Facts: Assessment Year: 2017-18. The assessee, a… Read More »
Aborted IPO Expenditure Allowed as Revenue Expenditure Under Section 37(1) Issue: Whether expenditure incurred by an assessee-company on an abandoned Initial Public Offering (IPO) can be allowed as revenue expenditure under Section 37(1) of the Income-tax Act, 1961. Facts: Assessment Year: 2019-20. The assessee-company, engaged in manufacturing botanical drugs, incurred expenditure on an IPO that… Read More »
ESOP Discount Allowed as Business Expenditure Under Section 37(1) Issue: Whether the issuance of shares at a discount under an Employee Stock Option Plan (ESOP) constitutes an allowable business expenditure under Section 37(1) of the Income-tax Act, 1961. Facts: Assessment Years: 2012-13 and 2013-14. The assessee issued shares to employees at a discount under an… Read More »
Disallowance Under Section 36(1)(va) Upheld for Delayed PF/ESI Contributions; Auditor’s Observation Sufficient for Disallowance Issue I: Whether delayed payment of employees’ contributions towards Provident Fund (PF) and Employee’s State Insurance Corporation (ESI) beyond the due date stipulated in the respective Acts justifies disallowance under Section 36(1)(va) of the Income-tax Act, 1961. Facts I: The assessee-employer… Read More »
Reopening Notice for Depreciation on Goodwill Quashed; No Escapement of Income Issue 1: Whether a reopening notice under Section 148 of the Income-tax Act, 1961, is valid when it is based on the same issue that was decided in a previous assessment year, and the Assessing Officer (AO) failed to consider the effect of the… Read More »
Short-Term Capital Loss Disallowance Upheld; Sham Transaction for Tax Avoidance Issue: Whether a short-term capital loss claimed by the assessee on the sale of shares can be disallowed when the Assessing Officer (AO) concludes that the purchase and sale of shares was a sham transaction designed for tax avoidance. Facts: The assessee made a short-term… Read More »