The ITAT ruled that seized parallel Tally data, reflecting higher sales and income, constitutes reliable incriminating material, validating assessments made under Section 153A. The tribunal sustained additions for higher gross profit and unexplained credits after the taxpayer failed to disprove the parallel records’ accuracy, reinforcing the presumption under Section 292C.
The ITAT ruled that CSR expenditure, though disallowed as a business expense, qualifies for deduction under Section 80G if paid to approved entities. The Tribunal directed the AO to verify the donations and allow the 80G claim, rejecting the argument that a mandatory statutory expense cannot be a donation.
Tribunal confirms that notices under section 148 post-March 2022 must be issued by Faceless Assessing Officers, rendering JAO-issued notices void.
The Revenue argued that interest income from an Associated Enterprise (AE) should be taxed at the Maximum Marginal Rate MMR by invoking Article 12(6) of the DTAA} (PE exclusion). The Tribunal upheld the 15% DTAA rate, confirming that since the assessee has no PE in India, the exclusionary clause 12(6) does not apply, and the interest is a debt-claim under Article 12(4).
The Supreme Court restored the ITAT’s order, ruling that a temporary lull in business due to the absence of a contract does not constitute cessation if the intention and efforts to continue (like correspondence and bidding) exist. The decision allows the non-resident company to claim business expenditure under Section 37(1) and set-off unabsorbed depreciation under Section 32(2).
The ITAT set aside the CIT(A)’s order which had wrongly confirmed a 37% surcharge on a Discretionary Trust with low income, relying on a precedent later clarified by the Tribunal. The ruling establishes that levying the highest 37% surcharge rate on MMR trusts, without considering the income slabs, leads to legal absurdity and is incorrect.
The ITAT partly allowed the Revenue’s appeal, upholding the Section 147 reopening as the notice was issued within the four-year limit because the assessee hadn’t filed a return. However, the Tribunal confirmed the deletion of the Section 50C capital gains addition, ruling that the AO is bound by the DVO’s accepted valuation after making a reference.
The case confirms that the CBDT’s Section 151A notification makes the NFAC/NPAC the sole authority for issuing Section 148 reassessment notices after March 29, 2022.4 The ITAT ruled that the local AO lacked the legal authority, rendering the entire reassessment process and order non est.
The ITAT held that alleged on-money based on an unverified photocopy of a sale agreement could not be added to income, emphasizing that a registered sale deed is the primary document. Furthermore, payments made in the next financial year cannot be taxed in the current Assessment Year, leading to a significant deletion of the unexplained investment addition.
The ITAT held that a reference to the Departmental Valuation Officer (DVO) under Section 50C(2) is mandatory when the taxpayer objects to the stamp duty valuation of the property sold. The Tribunal set aside the addition of short-term capital gains, ruling that the AO erred by directly adopting the jantri value without obtaining a DVO report, and remanded the matter for re-adjudication.
