July 2023
- Assessment Validity Amalgamation of companies Fact of amalgamation intimated to Income-tax authorities Notice and order of assessment in the name of company which had ceased to exist Not valid.
- Income Capital or revenue receipt Interest Funds received for project from capital subsidy, debt and equity Funds placed with banks during period of construction of project Interest earned thereon capital in nature.
- Industrial undertaking Special deduction under section 80-IB Condition precedent Manufacture of article Making of poultry feed amounts to manufacture Assessee entitled to special deduction under section 80-IB.
- Offences and prosecution Sanction for prosecution Failure to deposit tax deducted at source Failure due to inadvertence of assessees official Assessee depositing tax deducted at source with interest though after delay Effect of Circular issued by CBDT Prosecution orders quashed.
- Search and seizure Assessment in search cases Effect of insertion of section 153D by Finance Act, 2007 CBDT circular dated 12th March, 2008 and Manual of Office Procedure laying down the condition of approval of draft order of Commissioner Circular and Manual binding on Income-tax authorities Approval granted without application of mind Order of assessment Not valid.
- Search and Seizure Assessment of third person Income-tax survey Statement of assessee during survey not conclusive evidence Author of diary based on which addition made had expired on date of search and entries not used in case of person against whom search conducted Addition as unexplained investment in assessees case Erroneous and unsustainable.
- Search and seizure Assessment in search cases General principles No incriminating material found during search Assessment completed on date of search No additions can be made in assessment pursuant to search
- Section 68 Where deposit had been made from cash balance available in the books of accounts, and the AO had not rejected the books of accounts, there was no question of treating the same as unexplained cash deposit and hence, its addition made to the assessees income was not justified
- Section 69 read with section 44AD Where the assessee furnished bank statements for relevant assessment year which showed that there were deposits and withdrawals of almost equal amounts from the bank account of assessee and the AO failed to give any findings regarding said withdrawals, then the assessee deserved to get benefit of telescoping and addition of entire deposits as unexplained was unjustified.
- Section 32 read with section 263 Where the subsidiary of the assessee company was amalgamated with it by following the purchase method, then the excess consideration paid by the assessee amalgamated company over and above the net-asset value of transferor/amalgamating company was to be treated as goodwill arising on amalgamation and same could be amortised in books of accounts of transferee company and was eligible for depreciation under section 32 (1).
- Section 263 Revision - interest under section 244A on excess refund - where two views are possible Order cannot be stated to be erroneous or prejudicial to interest of revenue.
- Section 147 r.w.s 148 - Reopening of assessment Based on TPO report - Reference to the Transfer Pricing Officer to determine Arms Length Price cannot be initiated, in the absence of any proceeding pending before the AO - Reference for determination of Arms Length Price cannot precede the initiation of assessment proceedings.
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