Section 263 Revision Quashed: ITAT Restores Assessment Order on Multi-Issue Dispute I. Club Expenses: Business Networking vs. Personal Use The PCIT alleged that club membership fees (₹40.23 lakhs) were personal in nature and allowed without proper enquiry. The Ruling: The Tribunal held that corporate memberships for employees are essential for business networking. Since the invoices… Read More »

Section 50C Deeming Fiction: Limited Beneficial Interests vs. Land & Building The Issue Whether the deeming provisions of Section 50C—which substitute the actual sale consideration with the Stamp Duty Value (SDV)—can be invoked when an assessee transfers an undivided share in a family trust property that represents only a “life interest” or “beneficial interest.” The… Read More »

I. Interest Disallowance: Capitalization Restricted to “Put to Use” Period The Issue Whether the Assessing Officer (AO) was justified in making a massive interest disallowance of ₹9.54 crores under Section 36(1)(iii) on the grounds that short-term loans were diverted for long-term investments without proving commercial expediency. The Facts The Claim: The assessee, a major trader… Read More »

Landmark Ruling on IDS 2016, Faceless Jurisdiction, and Tax Rates I. Tangible Material vs. Jurisdictional Validity The Issue Whether a failed IDS declaration in Form 1 can trigger a reopening of assessment for AY 2017-18 and if the Jurisdictional Assessing Officer (JAO) still holds the power to issue such notices. The Facts The Declaration: The… Read More »

Mandatory Draft Order: Procedural Safeguards in Remanded Transfer Pricing Cases The Issue Whether the Assessing Officer (AO) is legally bound to issue a fresh draft assessment order when a case is remanded by the Principal Commissioner (PCIT) for a de novo (fresh) assessment, especially if a draft order was already issued in the original round… Read More »

Employee Safe from Double Taxation: TDS Credit Must Be Granted Despite Employer’s Default The Issue Whether the Income Tax Department can raise a tax demand against an employee or deny TDS credit if the employer has deducted the tax from the salary but failed to deposit it into the Central Government’s account. The Facts The… Read More »

Testing Assets Not a Business Benefit: ITAT Deletes Section 28(iv) Addition   The Issue Whether high-value equipment (₹3.86 crores) received free of cost from a foreign parent company (AE) solely for testing and calibration of software—and which is subsequently returned or destroyed—can be taxed as a “business benefit” under Section 28(iv). The Decision Not a… Read More »

Portal Glitches & Natural Justice: Restoring Regular Registration for Charitable Trusts I. Portal Limitations Cannot Deny Regular Registration (Section 12AB) The Issue Whether an existing trust is entitled to regular registration (5 years) even if technical glitches on the Income Tax portal forced them to select the wrong sub-clause (Provisional Registration) during filing. The Facts… Read More »

Counting Days for NRI Status & Retracted Statements under Search I. Counting “Stay in India”: Arrival Date Must Be Excluded The Issue Whether the “day of arrival” in India should be included or excluded when calculating the 182-day threshold for determining an individual’s residential status under Section 6. The Facts The Profile: The assessee was… Read More »