Click here for List of all cases of Income Tax

Total - 2757

Income Tax - Reassessment – sole and entire basis of re-opening the assessment is the additions made in A.Y. 1998-99 and 2001-02, no other reason given by AO - Since the tribunal has already deleted the additions in respect of the A.Y. 1998-99 and 2001-02, the very basis for continuing any further with the re-assessment proceedings does not survive any more - no specific allegation with regard to the A.Y 1999-2000 regarding suppression of sale figures – proceedings u/s 147 and notice u/s 148 are quashed

Income Tax - Partition of a HUF - revenue contention that business of smaller HUF cannot be treated to be that of bigger HUF only on the basis of family arrangement, is acceptable - Tribunal was not correct in holding that the business income pertaining to the sales and manufacture of rice and other grain etc. was assessable in the hands of the bigger HUF and not in the hands of the smaller HUF

Income Tax - Penalty u/s 271(1)(c) - explanation of assessee was not found to be false & therefore, it was not a case covered by Explanation I(A) of Section 271(1) of the Act as it stood in 1977-78 - Revenue could not show as to what relevant material was not disclosed by the assessee which it ought to have disclosed and how and in what manner it could say that the explanation offered by the assessee was not bona fide – therefore, tribunal was justified in holding that no penalty u/s 271(1)(c) was leviable

Income Tax - Whether Tribunal was justified in law in holding that in the case of cash credits in the assessee's books in the names of close relatives, the burden of proof is on the assessee u/s 68 to establish the nature and source of the amount – held that in such cases, the assessee under section 68 has to prove three conditions, viz. (1) the identity of the creditor, (2) the "capacity" of such creditor to advance the amount, and (3) the genuineness of the transaction - reference is answered, as above

Income Tax - ITAT annulled the assessment - transfer of jurisdiction from Income Tax Officer, Ward-I (2) to Ward-I (3) - assessee had not challenged the jurisdiction of the subsequent assessing officer within one month of the receipt of notice u/s 143(2)/142(1) as required u/s 124(3) – Tribunal was not justified in annulling the assessment mere on the ground that the assessing officer completing the assessment did not had the jurisdiction over the case- Revenues’ appeal is allowed by way of remand

Income Tax - In view of amendment in Section 143 (1A) amended retrospectively, proceeding u/s 154 initiated to demand additional tax - Appellant submits that no additional tax can be levied where the assessed income is at loss and therefore, by subsequent amendment, the liability cannot be fixed - law has been clarified by the Parliament by making a retrospective amendment in the statute – held that appellant cannot take benefit of the ratio laid down by SC in Hindustan Electro Graphites Ltd.

Income Tax - Whether Tribunal was correct in law in upholding the order of CIT(A) canceling the interest charged u/s 215 - Tribunal set aside the levy of interest only on the ground that opportunity of hearing was not given to the assessee. It is not disputed that the said provision is mandatory and interest is in the nature of compensation and is leviable if advance tax paid was less than 75% of the assessed tax – therefore, question is answered in favour of revenue and against the assessee.

Income Tax - Assessee claimed deduction in respect of income from duty drawback u/s 80IB, on sale of replenishment licence and currency fluctuation - claim was disallowed by ITAT on the ground that the said income was not income derived from business undertaking - similar claim for deduction u/s 80 HHC was also disallowed - view taken by the Tribunal is justified and it is in accordance with the view already taken by SC in CIT v. Sterling Foods. and judgment of this Court in Liberty India v. CIT

Income Tax - Assessee is a Government undertaking - AO created a demand, on the allegation that the assessee failed to make deductions at source in respect of payments made towards transportation and other charges - Tribunal rightly set aside the same on the ground that the payments made were not on behalf of the assessee but were part of cost of procurement of wheat and thus, provision for deduction at source was not applicable – no substantial question of law arises – revenue’s appeal is dismissed

Income Tax - Violation of provisions of section 44AB - assessee filed his return as proprietor of two concerns but audit report was filed in respect of one concern. The Assessing Officer levied penalty under Section 271B - finding recorded by the Tribunal that non-filing of audit report was for bona fide reasons being pure finding of fact, we are unable to hold that any substantial question of law arises - appeal by revenue is dismissed - ITAT has not erred in deleting the penalty

Income Tax - Revised return was rejected by AO on ground that assessee has changed the method of accounting - revised return was within the prescribed time - assessee has only made correction by bringing closing stock in consonance with the principle, on which opening stock was valued, so that the income can be correctly arrived at - CIT (A) &ITAT were right in directing AO to re-compute the income by adopting value of closing stock at cost or market price whichever is lower – revenue’s appeal dismissed

Income Tax - Penalty u/s 271E - repayment of cash loan in violation of Section 269T - assessee did not act deliberately in defiance of law and his conduct was not dishonest, neither he acted in conscious disregard of its obligation, since the transactions were genuine and entered due to business exigency - this breach was a venial breach and flows from a bonafide belief. Therefore, the assessee was not liable to the penalties

Income Tax - Search and seizure – assessee claimed sale of jewellery as source of income, which was alleged to be un-disclosed income - AO did not accept the explanation of the assessee - I.T.A.T. holding that assessee had discharged his onus of explaining genuineness of the sale of jewellery to M/s RKE - finding of the Tribunal is a finding of fact based on appreciation of evidence and material on record – revenue’s appeal is dismissed

Income Tax - Addition made on account of Modvat Credit - assessee had not utilized the credit for payment of excise duty or adjusted the amount against the purchase - merely because Modvat credit is an irreversible credit available to the manufacturers upon purchase of duty paid raw material, it would not amount to income which is liable to be taxed under the Income Tax Act – tribunal was right in deleting the additions made on above ground

Income Tax - Block assessment - search – documents recovered showing certain payments made by assessee to M and some jewellery found – dismissing the appeal of revenue, held that there was no doubt that M was closed down several years ago and the documents could not e attributed to the block period – Tribunal rightly accepted the fact that assessee received gifts from friends and relatives - no substantial question of law arises for consideration

Income Tax - Assessee claimed deduction towards commission and Export Market Development allowance. The Assessing Officer disallowed the same under section 37(3A) – Tribunal is right in law in holding that the expenses on account of commission and Export Market Development Allowance are not to be taken into account for the purpose of dis-allowance under sections 37(3A) - question referred is answered against the revenue and in favour of the assessee

Income Tax - Foreign law firms, even though working as solicitors for multinational corporations with operations in India, will pay tax only in those countries where they give legal advice and not in India - Services which are to be taxed must be both "rendered in India'' and "utilized in India'' for them to fall under the income tax bracket.

Income Tax - Books of account maintained by the assessee did not correctly reflect the transactions of business and were inconsistent with the note book and diary seized - Having regard to the transactions found out side the books of account, the assessment was made on the basis of estimate - In such a situation some amount of guess work could not be ruled out – therefore, ITAT was justified in confirming/upholding the additions made by CIT (A)

Income Tax - During assessment proceedings it was noticed that gross turnover of assessee exceeded Rs. 40 lakhs, but assessee has not get its accounts audited - Tribunal has recorded a finding of fact that, the assessee under a bona fide belief did not get its accounts audited from the chartered accountant or from the inspector of co-operative societies because the sales turnover of the assessee were less than Rs. 40 lakhs – hence penalty was rightly cancelled by ITAT

Income Tax - Share application money - existence of the applicants - genuineness of the transaction – additions - Held that additional burden was on the Revenue to show that even if the share applicant did not have the means to make the investment, the investment made by them (share applicant) actually emanated from the coffers of the Assessee so as to enable it to be treated as the undisclosed income of the Assessee – hence revenue’s appeal is dismissed