Tag Archives: Principal Commissioner of Income-tax

No Disallowance Under Section 40(a)(ia) for Short Deduction and Section 14A Disallowance Inapplicable to Book Profits

By | August 1, 2026
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No Disallowance Under Section 40(a)(ia) for Short Deduction and Section 14A Disallowance Inapplicable to Book Profits Issue Whether deducting tax under a wrong TDS provision (Section 194C instead of Section 194I) triggers disallowance under Section 40(a)(ia), and whether disallowance under Section 14A read with Rule 8D can be added back while computing book profit under… Read More »

Write-Off of Expired Inventory and Bad Debts Allowable as Business Expenditure Based on Verified Evidence

By | August 1, 2026
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Write-Off of Expired Inventory and Bad Debts Allowable as Business Expenditure Based on Verified Evidence Issue Whether the write-off of expired finished goods inventory and bad debts supported by physical verification and independent accounting reports are allowable deductions under Sections 37(1) and 36 of the Income-tax Act, 1961. Facts The assessee claimed a deduction for… Read More »

High Court Rejects Section 10A/80IA(10) Additions Absent Finding of Extraordinary Counterparty Profits

By | August 1, 2026
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High Court Rejects Section 10A/80IA(10) Additions Absent Finding of Extraordinary Counterparty Profits Issue Whether additions under Section 10A(7) read with Section 80IA(10) can be sustained solely based on a transfer pricing margin comparison without establishing that transactions with counterparties yielded more than ordinary profits. Facts The assessee claimed deduction under Section 10A for the Assessment… Read More »

High Court Condones 1,797-Day Delay Caused by CA’s Inadvertent Error and Restores Tax Exemption Appeal

By | August 1, 2026
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High Court Condones 1,797-Day Delay Caused by CA’s Inadvertent Error and Restores Tax Exemption Appeal High Court Condones 1,797-Day Delay Caused by CA’s Inadvertent Error and Restores Tax Exemption Appeal Issue Whether an inordinate delay of 1,797 days in filing an appeal before the CIT(A) should be condoned and restored for hearing on merits when… Read More »

Disallowance Under Section 14A Cannot Be Added When Computing Book Profits Under Section 115JB

By | July 30, 2026
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Disallowance Under Section 14A Cannot Be Added When Computing Book Profits Under Section 115JB Disallowance Under Section 14A Cannot Be Added When Computing Book Profits Under Section 115JB Issue Whether expenses disallowed under Section 14A read with Rule 8D can be added back to compute book profits under Section 115JB under Explanation 1(f) of the… Read More »

Redemption Fine Paid for Goods Confiscated Due to Import Law Violations Is Not Allowable Expenditure

By | July 30, 2026
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Redemption Fine Paid for Goods Confiscated Due to Import Law Violations Is Not Allowable Expenditure Issue Whether a redemption fine paid for releasing goods confiscated due to a breach of import conditions is an allowable business expenditure under Section 37(1). Facts Context: The matter pertains to Assessment Year 1988-89 involving the allowability of a redemption… Read More »

Write-off of Expired Inventory and Bad Debts Supported by Evidence Is Allowable

By | July 30, 2026
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Write-off of Expired Inventory and Bad Debts Supported by Evidence Is Allowable Issue Whether the write-off of expired finished goods inventory under Section 37(1) is allowable as a business expenditure when supported by physical verification and destruction norms. Whether the write-off of bad debts under Section 36 is allowable when substantiated by debtor details, sale… Read More »

Section 10A Addition Is Invalid Without Material Proving Assessee’s Dealings Yielded More Than Ordinary Profits

By | July 30, 2026
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Section 10A Addition Is Invalid Without Material Proving Assessee’s Dealings Yielded More Than Ordinary Profits Issue Whether the Assessing Officer was justified in making additions under Section 10A(7) read with Section 80IA(10) merely because the assessee’s net profit margin (27.86%) was higher than the average profit margin of comparables (9.35%), without establishing that the dealings… Read More »

Delay in Filing Appeal Condoned as CA’s Procedural Error Constitutes Sufficient Cause

By | July 30, 2026
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Delay in Filing Appeal Condoned as CA’s Procedural Error Constitutes Sufficient Cause Issue Whether an inordinate delay of 1,797 days in filing an appeal before the CIT(A)/NFAC should be condoned and the matter restored for adjudication on merits when the delay was caused by an inadvertent error on the part of the tax consultant. Facts… Read More »

Section 263 Revision Is Invalid Where Restricting Bogus Purchase Addition To 12.5% Is Plausible

By | July 25, 2026
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Section 263 Revision Is Invalid Where Restricting Bogus Purchase Addition To 12.5% Is Plausible Issue Validity of Section 263 Revision on Plausible Disallowance Views: Whether the Principal Commissioner of Income Tax (PCIT) can invoke revision powers under Section 263 to demand a 100% addition under Section 69C (taxed under Section 115BBE) when the Assessing Officer… Read More »