Monthly Archives: April 2026

Manual Scrutiny Selecting Cases Contrary to CBDT Instructions Renders the Entire Assessment Void. The Dispute: Manual Scrutiny vs. Jurisdictional Authority The Conflict: The assessee declared an income of ₹16.77 crores. The case was selected for Compulsory Manual Scrutiny specifically under CBDT Instruction No. 5/2017. The Revenue’s Action: Initially, the AO made no additions. However, the… Read More »

Cash Deposits Explained by Third-Party Confirmations Cannot Be Taxed as Unexplained Income. The Dispute: Agreement Value vs. Actual Cash Receipt The Conflict: During the 2016 demonetisation period, the assessee deposited cash into her bank account. The Assessee’s Stance: The cash was part of the sale proceeds of an immovable property. While the registered agreement stated… Read More »

Loans from Regulated NBFCs with Proven Net Worth Cannot Be Treated as Bogus Cash Credits. The Core Dispute: Regulated NBFC vs. “Shell Company” Allegations The Revenue’s Allegation: The Assessing Officer (AO) made additions under Section 68 (now Section 102), claiming the loans were “accommodation entries.” The AO’s suspicions were based on: The lender being a… Read More »

The Revenue cannot make a “protective addition” permanent without first determining the actual owner of the income. The Dispute The assessee sold a property registered in his wife’s name, offered the capital gains in his own return, and claimed the Section 54F exemption (reinvestment in a residential house). The AO’s Error: The Assessing Officer made… Read More »

TP Interest on Receivables Benchmarked at LIBOR+200bps; WCA Mandatory Under TNMM. I. Transfer Pricing: Comparability & Adjustments 1. Functional Differences (Business Support Services) The Verdict: A company that sells packaged software/technology solutions is not a valid comparable for an assessee providing routine Business Support Services (BSS). Logic: Products/Software have different risk profiles and profit drivers… Read More »