The High Court upheld denial of Section 10(38) exemption after concurrent findings established that the share transactions lacked genuineness. The Supreme Court later dismissed the SLP against the decision.
The Delhi High Court upheld the denial of Section 10(38) exemption after finding that the authorities had rightly treated the share transactions as bogus. The Court held that concurrent factual findings supported by evidence could not be interfered with in appeal.
Although the Scheme was sanctioned, the Tribunal clarified that the Income Tax Department remained free to investigate any tax implications arising from the arrangement. Appropriate action under tax laws was expressly kept open.
The High Court held that issuing a demand notice along with a draft assessment order violated the mandatory procedure under Section 144C. Since the assessment had effectively been completed at the draft stage, the reassessment orders were quashed.
The Court found that the ITAT wrongly held there was no business income despite the assessment record showing income under “Business and profession.” The finding was held to be perverse and the orders were set aside.
The ITAT Ahmedabad held that ad hoc disallowance of business expenditure cannot be sustained when audited books are accepted and no specific defects or bogus expenses are identified. The Tribunal deleted the entire 10% estimated addition.
Delhi ITAT held that an assessment initiated through Section 153C proceedings could not be completed under Section 143(3). The Tribunal ruled that the resulting jurisdictional defect rendered the assessment invalid.
The Delhi ITAT held that rejection of books under Section 145(3) was unjustified where the tax authorities failed to identify specific discrepancies. The Tribunal deleted the profit estimation-based addition and emphasized the need for concrete defects before rejecting accounts.
The Tribunal ruled that vague information and an excel sheet prepared by the Investigation Wing could not satisfy the statutory requirement of reason to believe under Section 147. It emphasized that reassessment powers cannot be exercised on mere suspicion. The notice issued under Section 148 was therefore quashed.
ITAT Mumbai noted that the excel sheets relied upon by the Revenue had not been established in accordance with legal requirements governing electronic evidence. Since the material lacked evidentiary support, the addition for Alleged On-Money Payment could not survive.
