Reopening of Assessment Invalid: Income Already Taxed on Substantive Basis in Another Assessment Year Issue: Whether an Assessing Officer (AO) can validly reopen an assessment under Sections 147 and 148 of the Income-tax Act, 1961, for an earlier assessment year (e.g., AY 2008-09) on the ground of unexplained moneys (Section 69A), when the same alleged… Read More »
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 »
I. Employee Contributions to PF/ESI Disallowed if Deposited Beyond Statutory Due Dates, Even if Before ITR Due Date Issue: Whether employees’ contributions to EPF and ESI, if deposited beyond the due dates prescribed under the respective provident fund and ESI statutes, are allowable as a deduction under Section 36(1)(va) of the Income-tax Act, 1961, even… 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 »
I. Assessment Beyond Limited Scrutiny Scope is Invalid, Order Set Aside Issue: Whether an Assessing Officer (AO) can expand the scope of a “limited scrutiny” assessment to include issues not originally identified for examination (specifically, recharacterizing share transactions as an adventure in the nature of trade and disallowing capital loss), thereby exceeding jurisdiction, contrary to… Read More »
I. Reassessment Notice in Name of Non-Existent Amalgamated Company is Null and Void Issue: Whether a notice issued under Section 148 of the Income-tax Act, 1961, for reopening a completed assessment (under Section 143(3)) in the name of an erstwhile company that has amalgamated with another entity, is valid, especially when the department was already… Read More »