Addition under Section 68 for unsecured loans from financially sound entities is legally unsustainable. Issue Whether additions made under Section 68 of the Income-tax Act, 1961 (corresponding to Section 102 of the Income-tax Act, 2025) as unexplained cash credits on account of unsecured loans received by the assessee-company are legally sustainable, where the lenders established… Read More »
Mismatch Between Service Tax and Income Tax Records Due to Accounting Methods Cannot Justify Addition Issue Whether an Assessing Officer can make an addition for alleged suppressed turnover based solely on a mismatch between service tax returns and income tax returns, when the assessee consistently follows the Percentage of Completion Method (POCM) under Section 145.… Read More »
Ad hoc Disallowances, Form 26AS Additions, and Cessation Triggers Deleted; Flood Relief Expenses Remanded for Assessment Issue Whether ad hoc expense disallowances, section 40(a)(ia) penalties for non-compliance with section 194C(7), section 41(1) additions on outstanding trade advances, section 26AS interest adjustments without accrual, high repair expenses on leased property, infrastructure sharing payments, and section 43B… Read More »
Assessment Order Passed Without Granting Adequate Time to Reply Set Aside for Breach of Natural Justice Assessment Order Passed Without Granting Adequate Time to Reply Set Aside for Breach of Natural Justice Issue Whether an assessment order passed under Section 143 within five days of issuing a show-cause notice—without granting the assessee’s request for reasonable… Read More »
No TDS Applies to Cost Reimbursements Where Tax Was Deducted at Source Initially No TDS Applies to Cost Reimbursements Where Tax Was Deducted at Source Initially Issues TDS on Reimbursement of Apportioned Expenses: Whether Section 40(a)(ia) applies to payments made by an assessee to an association towards reimbursement of its share of legal expenses where… Read More »
Section 14A does not apply to non-income receipts governed by the doctrine of mutuality. Issue Whether Section 14A of the Income-tax Act, 1961 applies to interest receipts from head office/overseas branches that fall outside the definition of ‘income’ under Sections 2(24) and 4 due to the doctrine of mutuality. Facts The assessee, a foreign bank… Read More »
Rental income applied to charitable objects and reasonable CEO remuneration do not forfeit trust exemption. Issue Rental Income & Commercial Activity: Whether a charitable trust forfeits exemption under Sections 11 and 12 when it earns substantial rental income by leasing trust property, where such leasing is empowered by the trust deed and the receipts are… Read More »
Section 153C assessments are quashed because satisfaction notes recorded post-April 1, 2021, render proceedings non-est and time-barred. Issue Whether the assessment orders passed under Section 153C for AY 2015-16, 2016-17, and 2017-18 are legally sustainable when the mandatory satisfaction note was recorded on October 11, 2022 (Financial Year 2022-23), shifting the statutory block period and… Read More »
Valid Advance Pricing Agreements bind the Revenue, precluding alternative business expenditure disallowances under Section 37(1). Issue Whether the tax department can alternatively disallow an expenditure under Section 37(1) of the Income-tax Act after the underlying international transaction has already been covered, verified, and accepted under a binding Advance Pricing Agreement (APA) under Section 92CC. Facts… Read More »
Reassessment Initiated Beyond Three Years Without Tangible Material Indicating Escapement of Fifty Lakhs or More Is Void Issue Whether a reassessment notice issued under Section 148 for the Assessment Year 2015-16 is legally sustainable if it is issued beyond the standard three-year limitation period from the end of the relevant assessment year without any material… Read More »