Private Trust Exemptions and Erroneous Advance Tax Receipts (AY 2022-23) I. Trust Beneficiary Exception for Relatives (Section 56(2)(x)) The assessee, a private trust, received a settlement of shares from its settlor. Under Section 56(2)(x), gifts of shares are generally taxable, but an exception exists for property received by a trust created solely for the benefit… Read More »
No Remission or Cessation of Liability on Loan Assignment to ARC 1. The Core Dispute: Loan Assignment vs. Loan Waiver The Assessing Officer (AO) observed that the assessee’s loan was transferred from the original lender to an Asset Reconstruction Company (ARC) at a “discounted value.” The AO interpreted this discount—the difference between the total outstanding… Read More »
Case Analysis: Retrospective Disallowance of Employees’ PF/ESI Contributions (AY 2018-19 to 2019-20) 1. The Core Dispute: Section 36(1)(va) vs. Section 43B The assessee delayed the deposit of employees’ contributions to the Provident Fund (PF) and Employee State Insurance (ESI). While these deposits were made after the statutory due dates (e.g., the 15th of the following… Read More »
Depreciation on Goodwill in a Slump Sale (AY 2020-21) 1. The Core Dispute: Valuation vs. Commercial Reality The assessee-company acquired a manufacturing unit as a going concern through a slump sale. The acquisition price exceeded the value of individual tangible assets, and the difference was recorded as goodwill. Assessing Officer’s View: The AO disallowed the… Read More »
IMPORTANT INCOME TAX CASE LAWS 05.02.2026 Relevant Act Section Case Law Title Brief Summary Citation PBPT Act, 1988 Section 2(9)(A) DCIT (BPU-2) Mumbai v. Surge Ahead Solutions Pvt. Ltd. [Non-Application of Mind] Benami allegations failed where the Initiating Officer (IO) attached closed bank accounts and relied on regulatory suspicion without identifying the original benami property… Read More »
Invalidation of Section 153C Proceedings Based on Search Date and Satisfaction Note (AY 2018-19 to 2020-21) I. Deemed Date of Search and Applicability of Section 153C In search-and-seizure cases, Section 153C allows the Revenue to assess a person other than the one originally searched. However, a specific legal fiction exists regarding the timing. The Conflict:… Read More »
Bar Against Direct Tax Demand When TDS is Deducted but Not Deposited 1. The Core Dispute: The “Kingfisher Pilot” Predicament The case involved employees (primarily pilots) of Kingfisher Airlines who received salaries after the deduction of Tax Deducted at Source (TDS). While the employer issued Form 16 (TDS certificates), it failed to deposit the collected… Read More »
Stamp Duty Adjustments to WDV and CSR Deductions u/s 80G (AY 2020-21) I. Section 50C Deeming Fiction vs. Written Down Value (WDV) The assessee sold an office property that was part of a “block of assets” (Buildings). The Assessing Officer (AO) attempted to reduce the WDV of that block by the Stamp Duty Value (SDV)… Read More »
Interest Deductibility Nexus and the “Ceiling” on Section 14A Disallowances (AY 2018-19) I. Interest on Borrowed Capital: The “Nexus” Requirement (Section 36(1)(iii)) The assessee, a wholesale trading company, refinanced its original share investment loans by issuing redeemable non-convertible debentures and taking short-term loans. It claimed the interest paid on these fresh borrowings as a business… Read More »
Source of Consideration vs. Registered Title in Benami Transactions 1. The Core Dispute: Financial Capacity and Source of Funds The Initiating Officer (IO) challenged the lawfulness of a land purchase made by Appellant No. 1 for ₹50 lakhs. While the sale deed was registered in his name, an investigation by the Income Tax Department revealed… Read More »