Category Archives: Income Tax

Reassessment Under Section 147 Based on Search Material Is Void as Section 153C Provisions Apply Exclusively

By | August 11, 2026
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Reassessment Under Section 147 Based on Search Material Is Void as Section 153C Provisions Apply Exclusively Reassessment Under Section 147 Based on Search Material Is Void as Section 153C Provisions Apply Exclusively Issue Whether the Assessing Officer has jurisdiction to initiate reassessment proceedings under Section 147/148 based on material seized during a Section 132 search… Read More »

LTCG Exemption and Commission Additions for Penny Stocks Cannot Stand Without Direct Evidence Against Assessee

By | August 11, 2026
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LTCG Exemption and Commission Additions for Penny Stocks Cannot Stand Without Direct Evidence Against Assessee Issue Whether the Assessing Officer is justified in treating long-term capital gains (LTCG) from share sales as unexplained cash credit under Section 68 and adding 3% estimated commission under Section 69C based solely on generic Investigation Wing reports regarding penny… Read More »

No Additions Can Be Made Under Section 153A in Unabated Search Assessments Without Incriminating Material

By | August 11, 2026
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No Additions Can Be Made Under Section 153A in Unabated Search Assessments Without Incriminating Material Issue Whether the Assessing Officer is legally justified in making an addition under Section 68 in a search assessment completed under Section 153A for an unabated/completed assessment year, in the absence of any incriminating material seized during the Section 132… Read More »

Cash Deposits by Bank Mitra and Accounted Rent Are Non-Taxable; Penalty Applies Once Per Default Category

By | August 11, 2026
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Cash Deposits by Bank Mitra and Accounted Rent Are Non-Taxable; Penalty Applies Once Per Default Category Issue Whether cash deposits in the bank account of a “Bank Mitra” representing customer transactions can be added as unexplained money under Section 69A, whether an ad hoc addition for rental income already accounted for is sustainable, and whether… Read More »

Corporate Guarantee Settlement Liability Crystallized in Previous Year 1997-98 Is Deductible Business Expenditure Under Section 37(1)

By | August 11, 2026
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Corporate Guarantee Settlement Liability Crystallized in Previous Year 1997-98 Is Deductible Business Expenditure Under Section 37(1) Issue Whether the liability of ₹3.50 crores incurred by the assessee-company pursuant to a corporate guarantee settlement crystallized in the previous year 1997-98, making it an allowable business expenditure under Section 37(1) for the Assessment Year 1998-99. Facts Corporate… Read More »

Ad Ad Hoc Disallowance of Purchases and Business Expenses Is Unsustainable Without Independent Verification or Defect in Books

By | August 11, 2026
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Ad Ad Hoc Disallowance of Purchases and Business Expenses Is Unsustainable Without Independent Verification or Defect in Books Issue Whether the Assessing Officer is justified in making an ad hoc disallowance of 50% of purchases under Section 69C and ad hoc disallowances of labor/salary and business expenses under Section 37(1), without conducting independent inquiries, issuing… Read More »

Irrecoverable VAT/CST Refunds and Valid Debt Write-Offs Are Allowable Deductions Under Income-Tax Act

By | August 11, 2026
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Irrecoverable VAT/CST Refunds and Valid Debt Write-Offs Are Allowable Deductions Under Income-Tax Act Issue Whether write-offs of irrecoverable VAT/CST refunds and trade debts with proper accounting entries constitute allowable deductions under Sections 28/37(1) or 36(1)(vii), and whether Section 14A interest disallowance applies when own interest-free funds exceed investments. Facts Issue I (Write-off of VAT/CST Refund):… Read More »

Absence of Express Irrevocability Clause Cannot Justify Rejection of Section 80G Approval

By | August 11, 2026
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Absence of Express Irrevocability Clause Cannot Justify Rejection of Section 80G Approval Issue Whether the CIT(E) can reject an application for regular approval under Section 80G/12AB on the ground that the trust deed lacks an express irrevocability or dissolution clause, and whether selecting “Yes” to the irrevocability question in Form 10AB constitutes furnishing false or… Read More »

Condonation of Delay in Filing Form 10 Must Be Allowed for First-Time E-Filing Oversights

By | August 11, 2026
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Condonation of Delay in Filing Form 10 Must Be Allowed for First-Time E-Filing Oversights Condonation of Delay in Filing Form 10 Must Be Allowed for First-Time E-Filing Oversights Issue Whether the CIT (Exemptions) erred in rejecting the assessee-trust’s application under Section 119(2)(b) for condonation of delay in filing Form 10, thereby denying exemption under Section… Read More »

Share Premium Valuations Under Rule 11UA and Bona Fide Service Payments Are Non-Taxable Business Expenses

By | August 11, 2026
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Share Premium Valuations Under Rule 11UA and Bona Fide Service Payments Are Non-Taxable Business Expenses Issue Whether tax authorities can reject a DCF valuation carried out under Rule 11UA for CCPS issued under Section 56(2)(viib), whether conversion of earlier CCPS into equity or unevidenced management fee reversals trigger additions, and whether service payments with assured… Read More »