Penalty Justified if Firm failed to explain the source of cash credits in its partners’ capital accounts, Penalties Upheld for Concealment of Income, Understatement of Profit, and False Deduction Claims Key Issues and Decisions: I. Penalty for Unexplained Cash Credit: Issue: Whether the assessee firm, which failed to explain the source of cash credits in… Read More »
Deduction under Section 80IA Allowed for Captive Power Plant Profits; No Set-off of Past Losses Required Key Issues and Decisions: I. Eligibility of Captive Consumption Profits for Deduction: Issue: Whether profits derived from the captive consumption of electricity generated by a captive power plant are eligible for deduction under Section 80IA. Decision: The court held… Read More »
Cash Deposit During Demonetization Explained as Sales Proceeds; Addition Deleted Issue: Whether the Assessing Officer (AO) was justified in treating a cash deposit of Rs. 50 lakhs during demonetization as unexplained cash credit under Section 68 of the Income-tax Act, 1961, and rejecting the assessee’s book results under Section 145(3). Facts: The assessee deposited Rs.… Read More »
Addition of Share Application Money as Unexplained Cash Credit Deleted Issue: Whether the addition of share application money received by the assessee company as unexplained cash credit under Section 68 of the Income-tax Act, 1961, was justified. Facts: The assessee company received share application money with a premium of Rs. 10.5 crores from three parties.… Read More »
AO can not add difference between the sale consideration in the agreement to sell and the registered sale deed as unexplained cash receipt if No Evidence of Cash Receipt Clarifications on Capital Gains, Unexplained Income, and Cash Credits Key Issues and Decisions: I. Referral to DVO for Fair Market Value: Issue: Should the Commissioner (Appeals)… Read More »
Revision of Assessment Justified for Mechanical Acceptance of Bad Debts Provision Issue: Whether the Principal Commissioner was justified in invoking revisionary jurisdiction under Section 263 of the Income-tax Act, 1961, when the Assessing Officer mechanically accepted the assessee’s claim for deduction towards provision for doubtful debts for MAT purposes under Section 115JB, without proper examination.… Read More »
AO can not determine the sale consideration for capital gains based on statements alone, without any evidence to support Clarification on Capital Gains Computation, Income Characterization, and Business Expenditure Deductibility Key Issues and Decisions: I. Sale Consideration for Capital Gains: Issue: Whether the Assessing Officer (AO) can determine the sale consideration for capital gains based… Read More »
20 Important Income Tax Case Laws 14.02.2025 Section Case Law Title Brief Summary Citation Relevant Section and Act 1 MSN Pharmachem (P.) Ltd. v. Assistant Commissioner of Income-tax Trade advances and payments to group companies not considered deemed dividends. Click Here Section 2(22) Income Tax Act, 1961 2 Ashishbhai Jashwantbhai Desai HUF v. Income-tax Officer… Read More »
Offence under Section 276CC is the day after the due date for filing the return. Compounding Allowed for Belated Return Filing as “First Offence” Issues and Decisions: I. Timing of Offence under Section 276CC: Issue: When is an offense under Section 276CC (failure to furnish return of income) considered to be committed? Decision: The court… Read More »
Recovery of Tax Stayed Upon Deposit of 20% ; Reassessment Proceedings Challenged Issue: Whether the recovery of tax under reassessment proceedings can be stayed, and under what conditions, when the assessee challenges the validity of the reassessment notices and the assessment procedure. Facts: The assessee filed multiple writ petitions challenging reassessment notices for various assessment… Read More »