Category Archives: Income Tax

Petitioner permitted to amend e-filed writ petition challenging Section 147A without producing original papers.

By | July 7, 2026
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Petitioner permitted to amend e-filed writ petition challenging Section 147A without producing original papers. Issue Whether a petitioner can be permitted to amend an e-filed writ petition to challenge the constitutional validity (vires) of Section 147A without producing the untraceable original physical petition papers, and whether formal re-verification can be dispensed with. Facts The Background:… Read More »

Reassessment under Section 147 is valid if third-party seized material does not directly belong to assessee.

By | July 7, 2026
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Reassessment under Section 147 is valid if third-party seized material does not directly belong to assessee. Issue Whether the Assessing Officer can validly initiate reassessment proceedings under Section 147 based on independent investigation of third-party search data, where the seized material does not directly belong, pertain, or relate to the assessee, thereby rendering the special… Read More »

Trading additions are restricted to a profit percentage when corresponding sales are accepted as genuine.

By | July 7, 2026
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Trading additions are restricted to a profit percentage when corresponding sales are accepted as genuine. Trading additions are restricted to a profit percentage when corresponding sales are accepted as genuine. Issue Whether the revenue department is legally justified in seeking a full or enhanced addition for alleged bogus purchases under Section 69 when the corresponding… Read More »

Reassessment notice is quashed where reasons fail to establish a rational nexus with income escapement.

By | July 7, 2026
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Reassessment notice is quashed where reasons fail to establish a rational nexus with income escapement. Reassessment notice is quashed where reasons fail to establish a rational nexus with income escapement. Issue Whether a reassessment notice issued under Section 148 is legally sustainable when the Assessing Officer relies entirely on general penny-stock information from the Investigation… Read More »

Reopening assessment based on assumptions of business incoherence from high-value bank entries is impermissible.

By | July 7, 2026
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Reopening assessment based on assumptions of business incoherence from high-value bank entries is impermissible. Reopening assessment based on assumptions of business incoherence from high-value bank entries is impermissible. Issue Whether the revenue department can legally initiate reassessment proceedings under Section 148 based on assumptions that high-value bank transactions are incoherent with business activity, when all… Read More »

Telecom rulings favor assessee on TP adjustments, spectrum depreciation, and distributor discounts.

By | July 7, 2026
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Telecom rulings favor assessee on TP adjustments, spectrum depreciation, and distributor discounts. Issue Whether Transfer Pricing (TP) adjustments are sustainable when based on controlled comparables, lack adjustments for economic risks, or treat business-linked Advertisement, Marketing, and Promotion (AMP) expenses as a separate brand-promotion transaction. Whether a telecom operator can claim depreciation on 3G spectrum rights,… Read More »

Estimation of business income by applying a reasonable profit rate on turnover precludes separate additions for cash deposits under Section 69A.

By | July 7, 2026
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Estimation of business income by applying a reasonable profit rate on turnover precludes separate additions for cash deposits under Section 69A. Issue Whether the Assessing Officer is legally justified in estimating a hardware trading firm’s business income by applying a 2% net profit rate on its disclosed turnover when the assessee fails to produce its… Read More »

Disallowances for unverified TDS items are upheld while crystallized expenses and business write-offs are allowed.

By | July 7, 2026
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Disallowances for unverified TDS items are upheld while crystallized expenses and business write-offs are allowed. Issue Whether tax disallowances under Section 40(a)(ia) apply to unverified consultancy components and unconfirmed interest payments, and whether crystallized expenses, group-invoiced costs, routine electricity bills, written-off sundry balances, and business customer advances are deductible without attracting Section 68 or Section… Read More »

Disallowance stands upheld for unverified TDS components, but crystallized expenses and legitimate business write-offs are allowable.

By | July 7, 2026
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Disallowance stands upheld for unverified TDS components, but crystallized expenses and legitimate business write-offs are allowable. Issue Whether tax disallowance under Section 40(a)(ia) applies to unverified or unsupported consultancy components and interest payments where corresponding payees have not proved tax compliance. Whether business expenses that crystallized in the relevant year, expenses invoiced to group concerns,… Read More »

Cancellation under Section 12AA(3) for financial diversion is valid prospectively from the order date.

By | July 7, 2026
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Cancellation under Section 12AA(3) for financial diversion is valid prospectively from the order date. Issue Whether a Show Cause Notice detailing search and survey findings can be quashed as vague or lacking particulars. Whether incriminating materials, including cash and fund diversions to a Managing Trustee’s concerns, justify the cancellation of a trust’s charitable registration. Whether… Read More »