Claim That Investment In Shares Was A Capital Account Transaction, Non-Application Of Mind By AO: Delhi High Court Quashes Reassessment Notice
1 year, 10 months ago

Claim That Investment In Shares Was A Capital Account Transaction, Non-Application Of Mind By AO: Delhi High Court Quashes Reassessment Notice

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The Delhi High Court has quashed the reassessment notice as the AO failed to apply his mind as to whether an investment in shares was a capital account transaction.The division bench of Justice Rajiv Shakdher and Justice Tara Vitasta Ganju has observed that the principal allegation against the assessee is that it purchased shares of an Indian company and that this led to the escapement of. The Delhi High Court has quashed the reassessment notice as the AO failed to apply his mind as to whether an investment in shares was a capital account transaction. The division bench of Justice Rajiv Shakdher and Justice Tara Vitasta Ganju has observed that the principal allegation against the assessee is that it purchased shares of an Indian company and that this led to the escapement of income chargeable to tax. The AO will, inter alia, deal with the petitioner’s contention that the transaction in issue is a capital account transaction and that no income whatsoever chargeable to tax accrues or arises in India.

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S.68 IT Act | Whether Assessee Discharged Burden To Substantiate Identity & Genuineness Of Share Application Money Is 'Question Of Fact', Not Law: Gauhati HC
5 days ago

S.68 IT Act | Whether Assessee Discharged Burden To Substantiate Identity & Genuineness Of Share Application Money Is 'Question Of Fact', Not Law: Gauhati HC

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The Gauhati High Court refused to entertain an appeal with respect to genuineness of credit received by an assessee from share application money, holding that the same would require it to venture into factual matrix of the case which is beyond its jurisdiction under Section 260A of the Income Tax Act, 1961. The appeal was preferred by the Revenue, following …

Assessee Can Confine Settlement Under Direct Tax Vivad Se Vishwas Act To Disputes Which Were Subject Matter Of Its Appeal: Delhi HC
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1 week, 4 days ago

Assessee Can Confine Settlement Under Direct Tax Vivad Se Vishwas Act To Disputes Which Were Subject Matter Of Its Appeal: Delhi HC

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The Delhi High Court has held that under the Direct Tax Vivad Se Vishwas Act, 2020, an Assessee is entitled to confine the settlement of disputes which were subject matter of its appeal, and exclude the disputes which were subject matter of the Revenue's appeal for the same assessment year. It thus allowed a real estate company's plea against the …

[Income Tax Act] Placing Funds In One Account Before Transferring It To Another Does Not Attract S. 69A: Allahabad High Court
2 weeks, 3 days ago

[Income Tax Act] Placing Funds In One Account Before Transferring It To Another Does Not Attract S. 69A: Allahabad High Court

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The Allahabad High Court has upheld the finding of the Income Tax Appellate Tribunal and Commissioner of Income Tax that when an agreement between parties specifies a direct transfer of money, doing so indirectly by keeping the funds in a distinct account before sending them to the final account, does not place the money under the definition of 'unexplained money' …

Assessing Officer Not Required To Examine Commercial Expediency Of Transaction When Evaluating Assessee's Explanation U/S 68 Of IT Act: Delhi HC
1 month ago

Assessing Officer Not Required To Examine Commercial Expediency Of Transaction When Evaluating Assessee's Explanation U/S 68 Of IT Act: Delhi HC

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The Delhi High Court has made it clear that once an assessee offers explanation about nature and source of a credit transaction standing in its books, the burden of proof to show that such explanation is unsatisfactory shifts on the Assessing Officer.A division bench of Justices Vibhu Bakhru and Swarana Kanta Sharma further held that in evaluating the transaction so …

Can't Fault AO's Estimation Of Undisclosed Deposits In Foreign Bank When Assessee Fails To Produce Account Statement: Delhi HC
1 month ago

Can't Fault AO's Estimation Of Undisclosed Deposits In Foreign Bank When Assessee Fails To Produce Account Statement: Delhi HC

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The Delhi High Court has made it clear that it cannot fault the estimation of an Assessing Officer regarding the quantum of deposits made by an assessee in an undisclosed foreign bank, when the latter himself fails to produce the account statement. We find it difficult to accept that any interference with the estimation of the deposit made in the …

Mistake On Part Of AO Resulting In Under Assessment Of Income No Ground To Re-Open Assessment U/S 147 Of Income Tax Act: Delhi HC
1 month, 1 week ago

Mistake On Part Of AO Resulting In Under Assessment Of Income No Ground To Re-Open Assessment U/S 147 Of Income Tax Act: Delhi HC

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The Delhi High Court has made it clear that once scrutiny assessment is held under Section 143 of the Income Tax Act but due to a mistake of the Assessing Officer there is under assessment of income, reopening assessment under Section 147 of the Income Tax Act, 1961 is not permissible. At the outset, the High Court observed that escapement …

AO Can't Disregard ITAT's Direction To Re-examine Issue By Referring To CBDT Circular: Delhi High Court
4 months, 3 weeks ago

AO Can't Disregard ITAT's Direction To Re-examine Issue By Referring To CBDT Circular: Delhi High Court

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The Delhi High Court has held that the assessing officer cannot disregard the direction of the Income Tax Appellate Tribunal to re-examine the issue by referring to the circular issued by the Central Board of Direct Taxes.The bench of Justice Yashwant Varma and Justice Ravinder Dudeja has observed that since the additional grounds had come to be accepted by the …

Long Term Capital Gain On Sale Of Shares By Mauritius Company Is Not Liable To Be Taxed In India: ITAT
4 months, 3 weeks ago

Long Term Capital Gain On Sale Of Shares By Mauritius Company Is Not Liable To Be Taxed In India: ITAT

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The Delhi Bench of Income Tax Appellate Tribunal has held that long-term capital gain on sale of shares by Mauritius Company is not liable to be taxed in India.The bench of Vikas Awasthy and Naveen Chandra has observed that the assessee had claimed long-term capital gains arising from the sale of shares as exempt from tax in light of Article …

Direct Tax Cases Weekly Round-Up: 5 To 11 May 2024
7 months, 1 week ago

Direct Tax Cases Weekly Round-Up: 5 To 11 May 2024

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Supreme Court Case Name- All India Bank Officers' Confederation Vs The Regional Manager, Central Bank Of India & Others Citation : 2024 LiveLaw 352 A Division bench of the Supreme Court comprising of Justice Sanjiv Khanna and Justice Dipankar Datta while deciding a Civil Appeal in the case of All India Bank Officers' Confederation Vs The Regional Manager, Central Bank …

Assessee Has Not Benefited From Round-Tripping Of Share Transactions; Mumbai ITAT Deletes Addition U/s 68
7 months, 3 weeks ago

Assessee Has Not Benefited From Round-Tripping Of Share Transactions; Mumbai ITAT Deletes Addition U/s 68

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On finding that the assessee has issued share application money and subsequently allotted shares which shows that the transactions are genuine and there is no material brought on record by tax authorities that the assessee has benefited from round-tripping, the Mumbai ITAT deleted the addition made u/s 68 of the Income Tax Act, 1961. The Bench of the ITAT comprising …

Assessee's Failure To Establish Genuineness Of Transaction With Cogent And Credible Evidence, Calcutta High Court Upholds Addition
7 months, 4 weeks ago

Assessee's Failure To Establish Genuineness Of Transaction With Cogent And Credible Evidence, Calcutta High Court Upholds Addition

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The Calcutta High Court has held that merely proving the identity of the investors does not discharge the onus on the assessee if the capacity or credit worthiness has not been established.The bench of Chief Justice T.S. The Calcutta High Court has held that merely proving the identity of the investors does not discharge the onus on the assessee if …

Direct Tax Cases Weekly Round-Up: 7 April To 13 April 2024
8 months, 1 week ago

Direct Tax Cases Weekly Round-Up: 7 April To 13 April 2024

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Delhi High Court Case Title: Agra Portfolio Pvt. Case Title: Saksham Commodities Limited Versus Income Tax Officer The Delhi High Court has held that a reopening or abatement would be triggered only upon the discovery of material that is likely to “have a bearing on the determination of the total income” and would have to be examined bearing in mind …

Direct Tax Cases Weekly Round-Up: 31 March To 6 April 2024
8 months, 2 weeks ago

Direct Tax Cases Weekly Round-Up: 31 March To 6 April 2024

Live Law  

Delhi High Court Case Title: Valley Iron & Steel Co.Ltd Versus PCIT The Delhi High Court has held that income tax additions made towards unsubstantiated share capital are eligible for deduction under Section 80-IC of the Income Tax Act. Case Title: Senapati Santaji Ghorpade Sugar Factory Versus Assistant Commissioner of Income Tax The Bombay High Court has held that retrospective …

Direct Tax Cases Monthly Round Up: March 2024
8 months, 3 weeks ago

Direct Tax Cases Monthly Round Up: March 2024

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Delhi High Court Case Title: PCIT Versus M/S Clix Finance India Pvt. Patna High Court Case Title: Purnendu Shekhar Sinha Versus The Union Of India LL Citation: 2024 LiveLaw 23 The Patna High Court has held that differentiation between government employees and other employees for leave encashment exemption is neither discriminatory nor violative of Article 14 of the Constitution of …

Direct Tax Cases Weekly Round-Up: 17 To 23 March 2024
9 months ago

Direct Tax Cases Weekly Round-Up: 17 To 23 March 2024

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Delhi High Court Case Title: National Association Of Software And Services Companies Versus Deputy Commissioner Of Income Tax Circle 2 The Delhi High Court has held that a 20% pre-deposit demand is not a precondition for consideration of a stay application during the pendency of the first appeal. Case Title: The Salem Urban Co-operative Bank limited Versus The Income Tax …

Trading Income From Sale Of Scrips Can't Be Conferred As 'Unaccounted Income' If Trading Activity Is Not Disputed At Any Time: Ahmedabad ITAT
9 months, 1 week ago

Trading Income From Sale Of Scrips Can't Be Conferred As 'Unaccounted Income' If Trading Activity Is Not Disputed At Any Time: Ahmedabad ITAT

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On finding that AO as well as the CIT was not right in making/confirming the addition on account of unaccounted business income, the Ahmedabad ITAT deleted the addition made by AO under the Income Tax Act, 1961. In response to the said notice, the assessee did not file the required details as mentioned in the assessment order, but the assessee …

Taxpayer Can't Be Penalised For Failure To Get Its Books Of Accounts Audited If There Exists Reasonable Cause For Such Failure: Jaipur ITAT
9 months, 1 week ago

Taxpayer Can't Be Penalised For Failure To Get Its Books Of Accounts Audited If There Exists Reasonable Cause For Such Failure: Jaipur ITAT

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While allowing the appeal against the order passed u/s 271B of the Income tax Act, the Jaipur ITAT held that provision of section 273B gives power to the taxing authority not to impose the penalty if the assessee proves that there was a reasonable cause for failure to get the books of accounts audited and directed the AO to delete …

Compensation Received Under Mutual Agreement For Non-Renewal Of Contract Can't Form Basis Of Addition U/s 28(Ii)(E): Delhi ITAT
9 months, 1 week ago

Compensation Received Under Mutual Agreement For Non-Renewal Of Contract Can't Form Basis Of Addition U/s 28(Ii)(E): Delhi ITAT

Live Law  

While clarifying the difference between profession and business, the Delhi ITAT reiterated that compensation received under mutual agreement for non-renewal of contract cannot form basis of addition u/s 28 of the Income Tax Act, 1961 The Bench of the ITAT comprising of Yogesh Kumar U.S and N.K. Billaiya reiterated while considering the decision of Supreme Court in the case of …

Careless Attitude Of AO: Kolkata ITAT Deletes Addition Made Without Examining Nature Of Expenditure
10 months, 2 weeks ago

Careless Attitude Of AO: Kolkata ITAT Deletes Addition Made Without Examining Nature Of Expenditure

Live Law  

On finding that expenses were incurred for the business purposes during the course of business, for which assessee has submitted all basic details which was not cross verified by the AO, the Kolkata ITAT deleted the addition made by AO. The Member of the ITAT comprising Rajpal Yadav and Girish Agrawal observed that “the inquiry at the end of the …

Investment In Shares In Indian Subsidiary 'Capital Account Transaction', Not Income: Delhi High Court
11 months, 2 weeks ago

Investment In Shares In Indian Subsidiary 'Capital Account Transaction', Not Income: Delhi High Court

Live Law  

The Delhi High Court has held that investment in shares by a company in its Indian subsidiary is a “capital account transaction” which does not give rise to any income. Placing reliance on the earlier decision of Delhi High Court in Nestle SA v. Assistant Commissioner of Income Tax, the bench comprising of Acting Chief Justice Manmohan and Justice Mini …

Investments Made Through Banking Channels Can't Be Disbelieved, Onus On Revenue To Prove Otherwise: Allahabad HC
1 year ago

Investments Made Through Banking Channels Can't Be Disbelieved, Onus On Revenue To Prove Otherwise: Allahabad HC

Live Law  

Recently, the Allahabad High Court held that investments made through banking channels and show in regular returns cannot be disbelieved unless proven otherwise by the department. The bench comprising of Justice Saumitra Dayal Singh and Justice Shiv Shanker Prasad held there was “no room” to disbelieve investments made in the assesee company if they have been made through banking channels …

Delhi High Court Quashes Income Tax Notice Issued Prior To Date Of Approval Of Resolution Plan
1 year ago

Delhi High Court Quashes Income Tax Notice Issued Prior To Date Of Approval Of Resolution Plan

Live Law  

The Delhi High Court has quashed the income tax notices and orders issued prior to the date of approval of the resolution plan.The bench of Justice Rajiv Shakdher and Justice Girish Kathpalia has observed the notices and orders pertaining to the income tax claims of the respondents or department pertaining to the period much prior to the date of approval …

Wrongful Application Of Foreign Contribution By Trust Not In Accordance With Trust’s Objective: Delhi High Court Upholds Reassessment
1 year, 1 month ago

Wrongful Application Of Foreign Contribution By Trust Not In Accordance With Trust’s Objective: Delhi High Court Upholds Reassessment

Live Law  

The Delhi High Court has upheld the reassessment proceedings against a trust for wrongful application of foreign contribution, which was against the objective of the trust.The bench of Chief Justice Satish Chandra Sharma and Justice Tushar Rao Gedela has observed that the AO based its opinion on tangible and concrete information in the form of the petitioner’s trust deed and …

Re-Opening Is Not Permissible As It Falls Within The Purview Of A ‘Change Of Opinion’: Bombay High Court
1 year, 1 month ago

Re-Opening Is Not Permissible As It Falls Within The Purview Of A ‘Change Of Opinion’: Bombay High Court

Live Law  

The Bombay High Court has held that re-opening is not permissible as it clearly falls within the purview of a ‘change of opinion’ which is impermissible in law.The bench of Justice K. R. Shriram and Justice Neela Gokhale have observed that the basis on which the AO issued notice alleging that there was "information" that suggests escapement of income was …

[Section 220 Income Tax Act] Cannot Escape Payment Of Interest Merely Due To Wrong PAN Number In Order: Madras High Court
1 year, 2 months ago

[Section 220 Income Tax Act] Cannot Escape Payment Of Interest Merely Due To Wrong PAN Number In Order: Madras High Court

Live Law  

The Madras High Court recently observed that PAN particulars are only one of the modes to identify an individual and merely because a wrong PAN number was given in the order by the Adjudicating officer of SEBI, a person could not escape payment of interest. Justice N Seshasayee observed that when the penalty itself was paid, the petitioner could not …

Capital Gains Can’t Be Added As Unexplained Cash Credit For Sale Of Penny Stock: Bombay High Court
1 year, 4 months ago

Capital Gains Can’t Be Added As Unexplained Cash Credit For Sale Of Penny Stock: Bombay High Court

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The Bombay High Court held that capital gains cannot be added as unexplained cash credit for the sale of penny stock.The bench of Justice K.R. The Bombay High Court held that capital gains cannot be added as unexplained cash credit for the sale of penny stock. Shriram and Justice Firdosh P. Pooniwalla has observed that since the shares were purchased …

Director Proves Lack Of Control On Financial Affairs: Bombay High Court Quashes Income Tax Recovery
1 year, 6 months ago

Director Proves Lack Of Control On Financial Affairs: Bombay High Court Quashes Income Tax Recovery

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The Bombay High Court has quashed the income tax recovery against the Director of a company on the grounds that the Director has sufficiently discharged the burden cast upon him in terms of Section 179 of the Income Tax Act.The bench of Justice K.R. The Bombay High Court has quashed the income tax recovery against the Director of a company …

Tax Cases Weekly Round-Up: 04 December To 10 December 2022
2 years ago

Tax Cases Weekly Round-Up: 04 December To 10 December 2022

Live Law  

Supreme Court Case Title: State of Jharkhand and others Versus Linde India Limited and Another The Supreme Court has held that the main function of oxygen in manufacturing steel is to reduce the carbon content; therefore, it can be considered a refining agent but not a raw material, so the concessional rate of sales tax is not available on oxygen. …

Tax Cases Weekly Round-Up: 13 November To 19 November 2022
2 years, 1 month ago

Tax Cases Weekly Round-Up: 13 November To 19 November 2022

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Supreme Court Sec.194H Income Tax Act Attracted For 'Supplementary Commission' Earned By Travel Agents ; Airlines Liable To Deduct TDS : Supreme Court Case Title: Singapore Airlines Ltd. vs C.I.T., Delhi Citation: 2022 LiveLaw 959 The Supreme Court held that Section 194H of the Income Tax Act is attracted in the case of Supplementary Commission amounts earned by the travel …

Reassessment Notice Based On Error Resulting From Oversight Of AO Is Not Valid: Delhi High Court
2 years, 1 month ago

Reassessment Notice Based On Error Resulting From Oversight Of AO Is Not Valid: Delhi High Court

Live Law  

The Delhi High Court has held that the reassessment notice based on an error resulting from the oversight of the assessing officer is not valid.The division bench of Justice Vibhu Bakhru and Justice Amit Mahajan has relied on the decision of the Supreme Court in the case of Gemini Leather Stores v. Income Tax Officer, in which it was held …

Reassessment Notice Can't Be Challenged If Assessee Failed To Submit Crypto Currency Account Transactions: Rajasthan High Court
2 years, 3 months ago

Reassessment Notice Can't Be Challenged If Assessee Failed To Submit Crypto Currency Account Transactions: Rajasthan High Court

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The Rajasthan High Court has held that the reassessment notice cannot be challenged if the assessee failed to submit crypto currency account transactions to the income tax department. A notice under Section 148A was issued to the petitioner stating that information received suggests that income chargeable to tax for the assessment year 2018-19 has escaped assessment. The Assessing Officer was …

Purchase Of New House Without NOC From AO Within 2 years: ITAT Allows Capital Gain Exemption
2 years, 4 months ago

Purchase Of New House Without NOC From AO Within 2 years: ITAT Allows Capital Gain Exemption

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The Income Tax Appellate Tribunal, Delhi Bench has held that the capital gain exemption is allowable even when the amount invested in a capital gain account is utilised for the purchase of a new house without a NOC from AO within 2 years. The assessee has derived income from house property, capital gains, and income from other sources. The AO …

Delhi High Court Quashes Assessment Order For Not Giving Opportunity To File Objection To SCN
2 years, 6 months ago

Delhi High Court Quashes Assessment Order For Not Giving Opportunity To File Objection To SCN

Live Law  

The Delhi High Court bench of Justice Manmohan and Justice Dinesh Kumar Sharma has quashed the assessment order as the assessee was not given an opportunity to file an objection to the show cause notice. The petitioner/assessee has challenged the reassessment notices for the assessment years 2014-15 and 2015-16 as well as the assessment orders passed under Section 147 read …

AO Failed To Consider Genuine Purchases And Sales Entered In The Books Of Account: Himachal Pradesh High Court Deletes Addition
2 years, 6 months ago

AO Failed To Consider Genuine Purchases And Sales Entered In The Books Of Account: Himachal Pradesh High Court Deletes Addition

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The Himachal Pradesh High Court bench of Justice Sabina and Justice Satyen Vaidya has deleted the addition on the grounds that the Assessing Officer has failed to consider genuine purchases and sales entered in the books of account. The Assessing Officer had prepared the trading account, the gross profit of the assessee came out against the sales, and, as a …

Onus To Prove Identity, Creditworthiness And Genuineness Of Transaction Lies On Assessee: Pune ITAT
2 years, 6 months ago

Onus To Prove Identity, Creditworthiness And Genuineness Of Transaction Lies On Assessee: Pune ITAT

Live Law  

The Pune Bench of the Income Tax Appellate Tribunal, consisting of Partha Artha Sarathi Chaudhury and Inturi Rama Rao, has ruled that the onus to prove identity, creditworthiness, and genuineness of a transaction lies with the assessee. In the course of assessment proceedings, the assessee furnished affidavits of the shareholders supporting the share capital and copies of bank accounts of …

No Opportunity Of Personal Hearing Granted To Taxpayer: Delhi High Court Quashes Assessment Order
2 years, 7 months ago

No Opportunity Of Personal Hearing Granted To Taxpayer: Delhi High Court Quashes Assessment Order

Live Law  

The Delhi High Court bench of Justice Rajiv Shakdher and Justice Talwant Singh has quashed the assessment order as an opportunity of personal hearing was not granted to the taxpayer. The AO passed the assessment order without granting an opportunity to the petitioner to have a personal hearing in the matter. The court quashed the assessment order dated 07.06.2021, as …

Non Consideration Of Detailed Reply To Show Cause Notice Submitted After Stipulated Time, Delhi High Court Quashes Reassessment Order
2 years, 7 months ago

Non Consideration Of Detailed Reply To Show Cause Notice Submitted After Stipulated Time, Delhi High Court Quashes Reassessment Order

Live Law  

The Delhi High Court bench of Justice Manmohan and Justice Dinesh Kumar Sharma has quashed the reassessment order, alleging income of more than Rupees one lakh crore having escaped assessment on the grounds of violation of natural justice. The petitioner/assessee has submitted that the order under Section 148A of the Income Tax Act was passed without considering the replies filed …

LTCG On Penny Stock Transaction Cannot Be Denied Exemption In Absence Of Incriminating Material: ITAT Mumbai
2 years, 9 months ago

LTCG On Penny Stock Transaction Cannot Be Denied Exemption In Absence Of Incriminating Material: ITAT Mumbai

Live Law  

The Mumbai Bench of ITAT, consisting of members Rahul Chaudhary and Shamim Yahya, has ruled that long term capital gains arising from a penny stock transaction cannot be denied exemption under the Income Tax Act, 1961 on the ground that the said transaction is bogus and pre-arranged in the absence of any incriminating material. The AO therefore had made additions …

Non Production Of Persons Despite Summons Leads To Inference Of Routing Own Money : ITAT Delhi
2 years, 9 months ago

Non Production Of Persons Despite Summons Leads To Inference Of Routing Own Money : ITAT Delhi

Live Law  

The Delhi Bench of ITAT, consisting of members G.S. Pannu and K. Narsimha Chary, has ruled that an Assessing Officer has the power to verify transactions beyond the paperwork submitted by the Assessee under Section 68 of the Income Tax Act, 1961. The Assessing Officer had disallowed expenses and made additions to Assessee's income under Section 68 of Income Tax …

Delhi High Court: Findings Of Fact Recorded By ITAT Not Perverse, Cannot Be Interfered Under Section 260A
2 years, 9 months ago

Delhi High Court: Findings Of Fact Recorded By ITAT Not Perverse, Cannot Be Interfered Under Section 260A

Live Law  

The Delhi High Court has ruled that in an appeal to the High Court under Section 260A of the Income Tax Act, 1961 there can be no interference with the finding of fact if it involves re-appreciation of the evidence. The counsel for the CIT before the Delhi High Court submitted that the ITAT had not considered the fact that …

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