S.68 IT Act | Whether Assessee Discharged Burden To Substantiate Identity & Genuineness Of Share Application Money Is 'Question Of Fact', Not Law: Gauhati HC
3 months 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 CIT reversing the additions made by it on the strength of alleged share application money received by the Assessee. A Division bench of Justices Lanusungkum Jamir and Kaushik Goswami held that whether the Assessee had discharged its burden is essentially a question of fact, which cannot be decided by the High Court under Section 260A. In fact, the first substantial question of law whether the learned Tribunal erred in law in holding that the assessee had discharged its burden of substantiation of the identity, creditworthiness and genuineness of the transaction involving receipt of share application money being essentially a question of fact is not a substantial question of law,” it said.

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History of this topic

'Entire Case Based On Records Already Considered During Scrutiny': Mumbai ITAT Quashes Reopening Of Assessment Against Shah Rukh Khan For AY 2012-13
2 weeks ago

'Entire Case Based On Records Already Considered During Scrutiny': Mumbai ITAT Quashes Reopening Of Assessment Against Shah Rukh Khan For AY 2012-13

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The Mumbai ITAT has quashed the reopening of assessment proceedings against the Assessee/ Appellant i.e., Shah Rukh Khan for AY 2012-13. The tribunal held that the reasons recorded while initiating the re-assessment, were completely silent as regards the allegation that income chargeable to tax has escaped assessment due to failure on the part of the assessee to disclose fully and …

'Entire Case Based On Records Already Considered During Scrutiny': Mumbai ITAT Quashes Reopening Of Assessment Against Shah Rukh Khan For AY 2012-13
2 weeks ago

'Entire Case Based On Records Already Considered During Scrutiny': Mumbai ITAT Quashes Reopening Of Assessment Against Shah Rukh Khan For AY 2012-13

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The Mumbai ITAT has quashed the reopening of assessment proceedings against the Assessee/ Appellant i.e., Shah Rukh Khan for AY 2012-13. The tribunal held that the reasons recorded while initiating the re-assessment, were completely silent as regards the allegation that income chargeable to tax has escaped assessment due to failure on the part of the assessee to disclose fully and …

[S. 148 IT Act] Mere Change Of Opinion By AO, No 'Reason To Beleive' Assessee Failed To Disclose Info: Tripura HC Quashes Reassment Notice
1 month, 2 weeks ago

[S. 148 IT Act] Mere Change Of Opinion By AO, No 'Reason To Beleive' Assessee Failed To Disclose Info: Tripura HC Quashes Reassment Notice

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The Tripura High Court recently invalidated a reassessment notice issued under Section 148 of the Income Tax Act, 1961. The court held the reassessment to be improper because it was based on already available data and thus it merely indicated that the Assessing Officer had had a change of opinion rather than a 'reason to believe' the assessee had hidden …

ITAT Cannot Decide On Grounds Not Addressed By Commissioner Of Income Tax (Appeals): Delhi High Court
2 months ago

ITAT Cannot Decide On Grounds Not Addressed By Commissioner Of Income Tax (Appeals): Delhi High Court

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The Delhi High Court recently said aside an order passed by the Income Tax Appellate Tribunal, deciding grounds that did not arise from the impugned order passed by the Commissioner of Income Tax. A division bench of Acting Chief Justice Vibhu Bakhru and Justice Tushar Rao Gedela observed, “The Assessee's challenge to the addition of ₹4,30,00,000/- under Section 68 of …

S.147 Of IT Act Doesn't Postulate Review Jurisdiction Such That Assessment Can Be Reviewed By AO Intending To Form Different Opinion: Bombay HC
2 months, 3 weeks ago

S.147 Of IT Act Doesn't Postulate Review Jurisdiction Such That Assessment Can Be Reviewed By AO Intending To Form Different Opinion: Bombay HC

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The Bombay High Court ruled that the materials which were already available before AO and which ultimately were considered in passing assessment order u/s 143, cannot form basis of reopening, on ground that such materials were ignored in finalizing assessment. The Division Bench of Justice G S Kulkarni and Justice Firdosh P Pooniwalla observed that AO cannot assume jurisdiction under …

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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3 months, 1 week 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 …

Assessing Officer Not Required To Examine Commercial Expediency Of Transaction When Evaluating Assessee's Explanation U/S 68 Of IT Act: Delhi HC
3 months, 3 weeks 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 …

Scrutiny Notice Was Issued In Amalgamating Company's Name Despite Dept Knowing Of Amalgamation: Calcutta HC Declines To Apply S.292B Of Income Tax Act
4 months ago

Scrutiny Notice Was Issued In Amalgamating Company's Name Despite Dept Knowing Of Amalgamation: Calcutta HC Declines To Apply S.292B Of Income Tax Act

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The Calcutta High Court has refused to apply Section 292B of the Income Tax Act, 1961 to a scrutiny notice issued in an amalgamating company's name, despite the Assessing Officer being aware about the company's amalgamation. Sivagnanam and Justice Hiranmay Bhattacharyya noted that “the fact of amalgamation was well within the knowledge of the assessing officer.” It thus dismissed the …

Factual Examination Of Dispute Regarding 'Addition' Of Unexplained Cash Credit U/S 68 Of IT Act Is Beyond Scope Of Appeal U/S 260A: Calcutta HC
4 months ago

Factual Examination Of Dispute Regarding 'Addition' Of Unexplained Cash Credit U/S 68 Of IT Act Is Beyond Scope Of Appeal U/S 260A: Calcutta HC

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The Calcutta High Court has held that it cannot indulge in factual examination of the material produced or not produced by an assessee-company to explain the share capital and premium received by it, in an appeal filed under Section 260A of the Income Tax Act. Sivagnanam and Justice Hiranmay Bhattacharyya thus refused to interfere with an ITAT order which deleted …

High Court Rejects Income Tax Appeal, Finds No Escapement of Rs. 3.25 Crore
5 months ago

High Court Rejects Income Tax Appeal, Finds No Escapement of Rs. 3.25 Crore

Live Law  

The Gujarat High Court has ruled that there cannot be any income escapement by the assessee if there is no unexplained amount in the bank statement on record. The court observed that the reason given by the assessing officer for alleged escapement of Rs.3,25,00,000/- is not sustainable since there is no unexplained amount in the bank statement on record since …

AO Can't Draw An Adverse Inference For Mere Non-Response From Directors To Notices: Calcutta High Court
10 months, 1 week ago

AO Can't Draw An Adverse Inference For Mere Non-Response From Directors To Notices: Calcutta High Court

Live Law  

The Calcutta High Court, while deciding whether the addition made under Section 68 of the Income Tax Act, 1961, was justified or not, held that only because the directors failed to respond to the notices issued, the Assessing Officer could draw an adverse inference.The bench of Chief Justice T.S. The Calcutta High Court, while deciding whether the addition made under …

I-T Authority Fails To Consider Reason For Difference In Sale Consideration & Stamp Duty: Mumbai ITAT Deletes Penalty Levied U/s 270A For Under-Reporting Of Income
10 months, 2 weeks ago

I-T Authority Fails To Consider Reason For Difference In Sale Consideration & Stamp Duty: Mumbai ITAT Deletes Penalty Levied U/s 270A For Under-Reporting Of Income

Live Law  

Noting that neither the Assessing Officer nor the CIT have taken into consideration the explanation offered by the Assessee during the assessment proceedings in relation to the difference in the sale consideration and the stamp duty valuation of immovable property, the Mumbai ITAT deleted the penalty levied u/s 270A of the Income tax Act for under-reporting of income. Accordingly, the …

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

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

Live Law  

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
10 months, 3 weeks ago

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

Live Law  

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 …

Accepting Submissions Of Assessee Cannot Be Said As Faulty If Assessment Was Made By National E-Assessment Centre: Indore ITAT Quashes Sec 263 Order
1 year ago

Accepting Submissions Of Assessee Cannot Be Said As Faulty If Assessment Was Made By National E-Assessment Centre: Indore ITAT Quashes Sec 263 Order

Live Law  

While holding the revision-order passed by PCIT as invalid, the Indore ITAT recently clarified that I-T authorities cannot punish the assessee by merely saying that the payee has not filed income-tax return. The Bench of Vijay Pal Rao and B.M Biyani observed that “the action of AO in accepting the replies/ submissions of assessee cannot not lack bona fides and …

Penalty Imposed U/s 271A On Wrongful Consideration Of Facts Merits To Be Deleted: Jaipur ITAT
1 year ago

Penalty Imposed U/s 271A On Wrongful Consideration Of Facts Merits To Be Deleted: Jaipur ITAT

Live Law  

On finding that the CIT has not rebutted the contention that the assessee was dealing in share investment and not in the business activities, the Jaipur ITAT deleted the penalty imposed u/s 271A of the Income Tax Act. The Bench comprising of Sandep Gosain and Dr. M. L. Meena observed that, “when the assessee has filed a return on account …

AO Must Make Independent Enquiry To Verify Veracity Of Identity, Genuineness & Credit-Worthiness Of Lenders Before Making Addition U/s 68: Kolkata ITAT
1 year ago

AO Must Make Independent Enquiry To Verify Veracity Of Identity, Genuineness & Credit-Worthiness Of Lenders Before Making Addition U/s 68: Kolkata ITAT

Live Law  

Finding that the AO without examining any of the documents, simply made the addition u/s 68 on account of failure of assessee to produce share subscribers, the Kolkata ITAT held that AO cannot take adverse inference without pointing out discrepancies or insufficiency in the evidences and without examining statement of the directors of the subscriber companies. As per the brief …

Sec 68 Can Be Invoked Only If Taxpayer Fails To Explain Amount Found Credited In Its Books: Mumbai ITAT
1 year, 1 month ago

Sec 68 Can Be Invoked Only If Taxpayer Fails To Explain Amount Found Credited In Its Books: Mumbai ITAT

Live Law  

The Mumbai ITAT upheld the CIT's order to delete the addition made u/s 68 of the Income Tax Act, 1961 finding no unexplained cash credit in the books of assessee. The Bench of Pavan Kumar Gadale and Prashant Maharishi observed that, “It is not disputed that the assessee has not received any share application money in the financial year 2011-12 …

S.148 Income Tax| For Assumption Of Jurisdiction Satisfaction Needs To Be Bonafide, No Need To Record “Reason To Believe”: Allahabad High Court
1 year, 1 month ago

S.148 Income Tax| For Assumption Of Jurisdiction Satisfaction Needs To Be Bonafide, No Need To Record “Reason To Believe”: Allahabad High Court

Live Law  

The Allahabad High Court has held that under the new law, it is not necessary for the assessing authority to record “reasons to believe”. The Court held that the assessing authorities are only required to record bonafide satisfaction regarding escapement of income for assuming jurisdiction under the Income Tax Act, 1961. A bonafide satisfaction reached as to escapement of income …

Investments Made Through Banking Channels Can't Be Disbelieved, Onus On Revenue To Prove Otherwise: Allahabad HC
1 year, 3 months 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 …

Additions Can’t Be Made In Absence Of Incriminating Material: ITAT Deletes Income Tax Addition
1 year, 9 months ago

Additions Can’t Be Made In Absence Of Incriminating Material: ITAT Deletes Income Tax Addition

Live Law  

The Mumbai Bench of the Income Tax Appellate Tribunal has held that the additions could not have been made in the absence of any incriminating material.The bench of Kavitha Rajagopal and B.R. Baskaran observed that the additions made by the Assessing Officer under Section 68 of the Act towards the sale of shares and also estimated. The Mumbai Bench of …

Without Corroborating Evidence, Addition Can’t Be Made On The Basis Of A Declaration Made U/s 132(4) Of The Income Tax Act: ITAT
1 year, 10 months ago

Without Corroborating Evidence, Addition Can’t Be Made On The Basis Of A Declaration Made U/s 132(4) Of The Income Tax Act: ITAT

Live Law  

The Guwahati Bench of the Income Tax Appellate Tribunal has held that without corroborating evidence, an addition ought not to be made on the basis of a declaration made under Section 132 of the Income Tax Act.The bench of Rajpal Yadav and Manish Borad has observed that apart from the disclosure statement, no other document is being referred to. The …

Appearance Of AR Not Enough For Presuming Service On Assessee Under S. 292BB Of ITA: Orissa High Court
2 years ago

Appearance Of AR Not Enough For Presuming Service On Assessee Under S. 292BB Of ITA: Orissa High Court

Live Law  

The Orissa High Court has deprecated the Income Tax Authority who, despite being informed that the assessee was in judicial custody, failed to serve a notice upon him through the Superintendent of the concerned jail, in the proceedings initiated against the assessee under Section 263 of the Income Tax Act, 1961. The Court further ruled that appearance of the authorized …

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

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

Live Law  

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 …

Tax Cases Weekly Round-Up: 04 December To 10 December 2022
2 years, 3 months 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 Monthly Round-Up: November, 2022
2 years, 3 months ago

Tax Cases Monthly Round-Up: November, 2022

Live Law  

Indirect Taxes Supreme Court Case Title: OCL India Limited vs State of Orissa Citation: 2022 LiveLaw 911 The Supreme Court upheld States' power to impose entry tax from Industrial Township/Areas. Bombay High Court Case Title: Asit C. Mehta Financial Services Limited versus The Customs Excise and Service Tax Appellate Tribunal The Bombay High Court has ruled that the time limit …

Section 260A IT Act -Appeal Only Lies Before High Court Within Whose Jurisdiction The Assessing Officer Is Situated: Supreme Court
2 years, 3 months ago

Section 260A IT Act -Appeal Only Lies Before High Court Within Whose Jurisdiction The Assessing Officer Is Situated: Supreme Court

Live Law  

The Supreme Court reiterated that an appeal under Section 260A of the Income Tax Act against orders of Income Tax Appellate Tribunal lies only before the High Court within whose territorial jurisdiction the assessing officer is located.As per Section 260A of IT Act, an appeal shall lie to the High Court from every order passed in appeal by the Appellate …

Failure Of Assessee To Explain Identity And Creditworthiness Of Creditors And Genuineness Of Transaction: ITAT Sustains Addition
2 years, 6 months ago

Failure Of Assessee To Explain Identity And Creditworthiness Of Creditors And Genuineness Of Transaction: ITAT Sustains Addition

Live Law  

The Allahabad Bench of the Income Tax Appellate Tribunal has sustained the addition as the assessee failed to explain the identity and creditworthiness of the creditors and the genuineness of the transaction. The AO made additions to the income of the assessee towards unexplained deposits and cash credits. The assessee filed a second appeal with the tribunal, and the tribunal …

Twin Conditions In Section 10B (8) Income Tax Act Has To Be Fulfilled To Claim Exemption Relief: Supreme Court
2 years, 8 months ago

Twin Conditions In Section 10B (8) Income Tax Act Has To Be Fulfilled To Claim Exemption Relief: Supreme Court

Live Law  

For claiming the benefit under Section 10B of the Income Tax Act, the twin conditions of furnishing a declaration before the assessing officer and that too before the due date of filing the original return of income under section 139 are to be satisfied and both are mandatorily to be complied with, the Supreme Court observed in a judgment delivered …

Reassessment Proceedings Can't Be Initiated On Same Set Of Facts Available: ITAT
2 years, 8 months ago

Reassessment Proceedings Can't Be Initiated On Same Set Of Facts Available: ITAT

Live Law  

The Mumbai Bench of the Income Tax Appellate Tribunal has held that the reassessment proceedings cannot be initiated by applying a fresh application of mind to the same set of facts available at the time of the original scrutiny assessment proceedings. The Assessing Officer issued the notice under section 148 of the Income Tax Act, initiating the reassessment proceedings in …

ITAT Upholds Addition On Account Of Manipulation And Rigging Of Shares Via Penny Stock Company
2 years, 8 months ago

ITAT Upholds Addition On Account Of Manipulation And Rigging Of Shares Via Penny Stock Company

Live Law  

The Delhi Bench of the Income Tax Appellate Tribunal, consisting of Saktijit Dey, has upheld the addition on the grounds that there was an astronomical increase in the price of the shares due to price manipulation and rigging. The assessee's income tax return was chosen for examination to determine the genuineness of the long-term capital gain offered and claimed exempt …

Onus To Prove Identity, Creditworthiness And Genuineness Of Transaction Lies On Assessee: Pune ITAT
2 years, 9 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 …

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

ITAT Upholds CIT(A) Order Confirming Addl Rs. 4.99 Lakh As Unexplained Cash In Muthoot Group MD’s Bank Accounts [Read Order]
7 years, 4 months ago

ITAT Upholds CIT(A) Order Confirming Addl Rs. 4.99 Lakh As Unexplained Cash In Muthoot Group MD’s Bank Accounts [Read Order]

Live Law  

In George Alexander vs The Assistant Commissioner of Income-Tax, the Income Tax Appellate Tribunal has dismissed an appeal filed by the assessee, managing director of the Muthoot Group, against the order of the Commissioner of Income Tax ). However, the CIT rejected the contentions of the assessee and found that the AO, during the course of working out the unaccounted …

Waiver Of Interest To Be Treated As Income In Hands Of Assessee: Says SC In An Amalgamation Matter [Read Judgment]
7 years, 11 months ago

Waiver Of Interest To Be Treated As Income In Hands Of Assessee: Says SC In An Amalgamation Matter [Read Judgment]

Live Law  

When the assessee is allowed the benefit of the accumulated losses, while computing those loses, the income which accrued to it had to be adjusted and only thereafter net losses could have been allowed to be set off by the assessee company, said the Bench.Supreme Court of India in M/s McDowell v. CIT Karnataka held that to ascertain the actual …

Waiver Of Interest To Be Treated As Income In Hands Of Assessee: Says SC In An Amalgamation Matter [Read Judgment]
7 years, 11 months ago

Waiver Of Interest To Be Treated As Income In Hands Of Assessee: Says SC In An Amalgamation Matter [Read Judgment]

Live Law  

When the assessee is allowed the benefit of the accumulated losses, while computing those loses, the income which accrued to it had to be adjusted and only thereafter net losses could have been allowed to be set off by the assessee company, said the Bench.Supreme Court of India in M/s McDowell v. CIT Karnataka held that to ascertain the actual …

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