Daily Archives: June 9, 2025

Reassessment of Unexplained Cash Deposits: AO to Apply Peak Credit Theory and Set Off Against Agricultural Income Issue: Whether, in a reassessment where an assessee with only agricultural income deposits substantial cash, the Assessing Officer (AO) should work out the peak negative cash balance by considering all cash transactions (including withdrawals and bearer cheques) and… Read More »

Cash Credits in Shell Company Not Taxable in its Hands if Ultimately Taxed in Beneficiary’s Hands Issue: Whether unexplained credits found in the accounts of a “shell company” (assessee) that was used as a conduit for routing accommodation entries to ultimate beneficiaries should be taxed in the hands of the shell company under Section 68… Read More »

I. Lump-Sum Addition for Unexplained Cash Deposits During Demonetization, Not to be a Precedent Issue: Whether a lump-sum addition for unexplained cash deposits made by an assessee during the demonetization period is justified, even when the assessee attempts to explain the source through cash withdrawals and increased cash sales due to a government directive, but… Read More »

Section 263 Revision Quashed: Lack of Reasonable Opportunity of Hearing for Assessee Issue: Whether an order passed by the Principal Commissioner (PCIT) invoking revisional proceedings under Section 263 of the Income-tax Act, 1961, on the ground that an addition made by the Assessing Officer (AO) under Section 68 (unexplained cash credit) was prejudicial to the… Read More »

Section 56(2)(x) Addition Deleted: 10% Tolerance Limit for Property Valuation Retrospectively Applicable, Difference Below Threshold Issue: Whether an addition can be made under Section 56(2)(x)(b)(B) of the Income-tax Act, 1961, when the difference between the actual sale consideration and the Fair Market Value (FMV) (as determined by stamp duty valuation) is less than 10%, and… Read More »

Disallowance Under Section 40(a)(i) by CPC to be Deleted When Scrutiny Assessment Accepted Assessee’s Contention Issue: Whether a disallowance made by the Centralized Processing Centre (CPC) under Section 40(a)(i) of the Income-tax Act, 1961, for non-deduction of tax at source on payments to a foreign company, should be deleted when the Assessing Officer (AO) in… Read More »