Estimated Gross Profit Additions From Stock Shortages Do Not Attract Penalty Under Section 271AAB Issue Whether an estimated addition to gross profit, computed by applying a profit rate to an inferred stock shortage found during a search, constitutes “undisclosed income” under the Explanation to Section 271AAB to justify levying a penalty. Facts Assessee & Search… Read More »
Disallowance of Interest and Cash Credit Addition on Partners’ Capital Held Unsustainable Due to Sufficient Interest-Free Funds and Accounting Misconception Issue Whether a disallowance under section 36(1)(iii) for notional interest on interest-free advances is sustainable when the assessee’s non-interest-bearing funds significantly exceed the advances, and the Assessing Officer fails to establish a direct nexus with… Read More »
Surrendered Advances in Seized Diary Lacking Specific Details Do Not Constitute Undisclosed Income Under Section 271AAB Issue Whether an amount surrendered under Section 132(4) based on vague diary notings of advances constitutes “undisclosed income” under the Explanation to Section 271AAB to attract a 10% penalty when no corresponding undisclosed asset, money, or corroborative evidence was… Read More »
Interest Paid On Related-Party Loans Cannot Be Disallowed By Netting Trade Advances Or Adding Notional Interest Issue Netting of Loan and Current Accounts under Section 40A(2): Whether the Assessing Officer (AO) can disallow interest paid on an unsecured loan from a related party by netting it against a trade advance/current account, without proving that the… Read More »
TDS Credit Cannot Be Denied To Assessee When Deducted And Deposited Under Their PAN Issue Whether an assessee, acting as a Kaccha Arahtia/commission agent, is entitled to full credit of TDS deducted under Section 194Q by purchasers and deposited into the Government Treasury under their PAN, even if the corresponding gross turnover was not taxable… Read More »
Assessing Officer of Other Person Must Independently Record Satisfaction Before Overcoming Section 153C Sunset Clause Assessing Officer of Other Person Must Independently Record Satisfaction Before Overcoming Section 153C Sunset Clause Issue Whether a Section 153C assessment is legally valid when the Assessing Officer (AO) of the assessee blindly reproduces a forwarding letter from the searched… Read More »
CIT(E) cannot reject trust registration renewal over past amendments; matters remanded for verification. Issue Whether the CIT(E) is justified in rejecting a trust’s Section 12A registration renewal application based on non-registration under a State Trust Act, historical object amendments, and financial advances when these details were already on record during its previous 2021 re-registration. Whether… Read More »
Bona fide mistake by elderly taxpayer in using simplified ITR form exempts them from Black Money Act non-disclosure penalties. Issue Whether a harsh penalty under Section 43 of the Black Money Act, 2015 can be sustained for the non-disclosure of foreign bank accounts against an 80-year-old taxpayer who mistakenly used ITR-1 (Sahaj), paid full taxes… Read More »
Bona fide belief of a salaried employee exempts them from harsh Black Money Act non-disclosure penalties. Bona fide belief of a salaried employee exempts them from harsh Black Money Act non-disclosure penalties. Issue Whether a penalty of ₹10 lakh under Section 42 read with Section 46 of the Black Money Act, 2015 can be sustained… Read More »