Category Archives: Income Tax

Only Embedded Profit Counts for Extended Reassessment Limits, Rendering Third-Party Reassessment Invalid Without Cross-Examination

By | August 21, 2026
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Only Embedded Profit Counts for Extended Reassessment Limits, Rendering Third-Party Reassessment Invalid Without Cross-Examination Issue Whether reassessment notices issued under Section 148 beyond the three-year limit based on third-party seized data (“Sanjeev Tally”) are valid when the estimated escaped income (embedded profit element) is below Rs. 50 lakhs per assessment year. Whether third-party digital records… Read More »

Customary household savings, gifts, and past family cash inflows explain cash found during search, invalidating Section 69A addition.

By | August 21, 2026
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Customary household savings, gifts, and past family cash inflows explain cash found during search, invalidating Section 69A addition. Issue Whether cash of Rs. 8.87 lakhs attributed to a senior citizen mother and minor children can be added as unexplained money under Section 69A when supported by customary household savings, traditional gifts, and documented past cash… Read More »

Repayment of unsecured loans prior to assessment completion proves genuineness, rendering Section 68 addition and interest disallowance unsustainable.

By | August 21, 2026
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Repayment of unsecured loans prior to assessment completion proves genuineness, rendering Section 68 addition and interest disallowance unsustainable. Issue Whether an addition under Section 68 toward unexplained cash credits and consequential interest disallowance can be sustained when the unsecured loans received from lenders were fully repaid prior to the completion of the assessment. Facts Assessee,… Read More »

Pr. CIT cannot invoke Section 263 revision without conducting independent enquiry or proving assessment order erroneous.

By | August 21, 2026
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Pr. CIT cannot invoke Section 263 revision without conducting independent enquiry or proving assessment order erroneous. Issue Whether a revision order passed under Section 263 by the Pr. CIT can be sustained when the Assessing Officer (AO) had already verified the issues during assessment and the Pr. CIT failed to conduct an independent enquiry or… Read More »

Provision for discount created using a scientific method and fully discharged in subsequent years is allowable business expenditure.

By | August 21, 2026
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Provision for discount created using a scientific method and fully discharged in subsequent years is allowable business expenditure. Provision for discount created using a scientific method and fully discharged in subsequent years is allowable business expenditure. Issue Whether a provision for discount created on a scientific basis and subsequently fully discharged constitutes an allowable business… Read More »

Reassessment based on previously examined bank records without new tangible material constitutes impermissible change of opinion.

By | August 21, 2026
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Reassessment based on previously examined bank records without new tangible material constitutes impermissible change of opinion. Issue Whether an assessment completed under Section 143(3) can be reopened under Section 147 to examine bank credits and gross receipts that were already scrutinized, in the absence of any new tangible material. Facts Assessee’s return for AY 2012-13… Read More »

Transfer pricing benchmarking requires strict functional, product, and asset comparability while honoring binding administrative directives.

By | August 21, 2026
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Transfer pricing benchmarking requires strict functional, product, and asset comparability while honoring binding administrative directives. Issue Whether transfer pricing adjustments, selection/exclusion of comparable entities, computation of operating margins, allocation of working capital, choice of benchmarking methods (TNMM vs. CUP vs. Berry Ratio), and disallowance of expatriate salaries can be sustained when facing functional dissimilarities, non-binding… Read More »

Estimation of gross profit within industry range and disallowance of reasonable interest on unsecured loans are unsustainable without identifying specific defects in audited accounts.

By | August 21, 2026
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Estimation of gross profit within industry range and disallowance of reasonable interest on unsecured loans are unsustainable without identifying specific defects in audited accounts. Estimation of gross profit within industry range and disallowance of reasonable interest on unsecured loans are unsustainable without identifying specific defects in audited accounts. Issue Whether the Assessing Officer can reject… Read More »

Contributions to Leave Encashment Fund, pre-AY 2015-16 CSR expenses, and disputed accrued rentals are allowable business deductions for Major Port Authority.

By | August 21, 2026
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Contributions to Leave Encashment Fund, pre-AY 2015-16 CSR expenses, and disputed accrued rentals are allowable business deductions for Major Port Authority. Issue Whether contributions to an insurer-managed leave encashment fund, pre-AY 2015-16 CSR expenses under binding guidelines, staff welfare payments misclassified as donations, disputed unrecovered estate rentals, and higher depreciation on port structures are allowable… Read More »

Transfer Pricing Adjustments Restricted, Foreign Travel Disallowance Quashed, And Carbon Credit Sale Held Capital Receipt

By | August 20, 2026
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Transfer Pricing Adjustments Restricted, Foreign Travel Disallowance Quashed, And Carbon Credit Sale Held Capital Receipt Transfer Pricing Adjustments Restricted, Foreign Travel Disallowance Quashed, And Carbon Credit Sale Held Capital Receipt Issue Whether transfer pricing adjustments for corporate guarantee fees and interest rates should be restricted based on precedents from the assessee’s own case. Whether an… Read More »