CIT(E) Must Verify 5% Religious Spending Limit Before Denying 80G Approval on Objects. Issue Can the Commissioner (Exemptions) [CIT(E)] reject a trust’s application for Section 80G approval based solely on the wording of its objects appearing to be religious, or must the CIT(E) first conduct an inquiry and record a factual finding that the trust’s… Read More »

Reassessment for Bogus ITC Remanded as Subsequent GST Order Closed the Case. Issue Whether an Income Tax reassessment proceeding, initiated under Section 148A based on information from the DGGI alleging bogus Input Tax Credit (ITC), is sustainable after the GST department itself has passed an order “closing” the proceedings for that very same ITC issue.… Read More »

Addition for Carried-Forward Loan Invalid; Section 68 Applies Only to Current Year Credits. Issue Can the tax department make an addition under Section 68 of the Income-tax Act for an unsecured loan in the current assessment year, when the amount in question is merely the opening balance of a loan that was received and disclosed… Read More »

Section 54 Deduction is Based on Actual Investment, Not Joint Ownership Share Issue Whether an Assessing Officer (AO) can restrict a taxpayer’s capital gains exemption claim under Section 54 to 50% of the cost of a new property, merely on the ground that the property was purchased jointly with a relative, even if the taxpayer’s… Read More »

Expenditure on Dyes and Moulds is an Allowable Revenue Expense, Not Capital, Following Precedent. Issue Whether expenditure incurred by an automobile manufacturer on the purchase of dyes and moulds should be treated as a capital expenditure or an allowable revenue expenditure under Section 37(1). Facts The assessee-company, an automobile manufacturer, incurred expenditure on dyes and… Read More »

12AB Registration Restored as Cancellation Was Based on Unproven Capitation Fee Allegations. Issue Whether a charitable trust’s (society’s) registration under Section 12AB can be cancelled on the grounds of a “specified violation” (like collecting unaccounted capitation fees), based on loose documents and diaries seized during a search, when the trust provides plausible explanations for those… Read More »

HC Directs CIT(E) to Consider Final Registration on Merits, Citing New Condonation Powers Issue Whether the Commissioner (Exemptions) [CIT(E)] can reject an application for final registration under Section 12A on the grounds of a 54-day delay, especially when the delay was due to a bona fide error and a subsequent legislative amendment has empowered the… Read More »

CIT(A) Must Re-adjudicate Leave Encashment Claim in Light of New ₹25 Lakh Limit Notification. Issue Whether a taxpayer’s claim for leave encashment exemption, which was dismissed by the Commissioner (Appeals) [CIT(A)] based on the old statutory limit (₹3 lakhs), should be remanded for fresh adjudication after the CBDT issued a new notification enhancing the limit… Read More »

State Government Grants for Infrastructure are Promoter’s Capital Contribution, Not Taxable Income. Issue Whether grants received by a state-owned infrastructure undertaking from the State Government, for the specific purpose of infrastructure development, are taxable revenue receipts or are non-taxable capital contributions from a promoter. Facts The assessee, a wholly-owned undertaking of the Government of Maharashtra,… Read More »