Where any sum is found credited in the books of an assessee maintained for any previous year, and assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year.”
If the assessee is not able to give satisfactory explanation as to the “nature and source” of a sum found credited in his books, the sum may be treated as the “undisclosed income” of the assessee. The initial burden is on the assessee to explain the “nature and source” of the credit and to do so, the assessee is required to prove (a) Identity of the shareholder; (b) Genuineness of transaction; and (c) credit worthiness of shareholders; If the assessee has produced documents like PAN Card, bank account details or details from the bankers the onus shifts upon the AO and it is for him to reach the shareholders and the AO cannot burden the assessee merely on the ground that summons issued to the investors were returned back with the endorsement “not traceable”; There is an additional burden on the Department to show that even if share applicants did not have the means to make investment, the investment made by them actually emanated from the coffers of the assessee so as to enable it to be treated as the undisclosed income of the assessee. In the absence of such finding, addition cannot be made u/s 68 in the hands the assessee.
Delhi High Court in the case of Asia Satellite Telecommunications Co. Ltd. v. DIT held that the payments made for using capacity in a transponder for uplinking/down linking data do not constitute ‘royalty’ under the provisions of the Income-tax Act, 1961 (the Act). The High Court held that the customers did not make payments for the use of any process or equipment, since control over the process or equipment was with the taxpayer and not with the customers.
The assessee had filed a return of income on 28 November 2000 for assessment year 2001-01 and declared an income of Rs.89.75 crores. On 14 March 2002, the assessee filed a revised return of Rs.80.75 crores. The assessment proceedings commenced on 18 November 2002 with a notice under Section 143(2). The assessment order was passed on 31 March 2003 by which the Assessing Officer determined the income at Rs.97.09 crores under Section 115JA. TDS certificates amounting to Rs. 1,44,34,030/- were submitted during the course of the assessment proceedings. Interest has been allowed to th
Penalty under section 271(1)(c) – Leviability-Expenditure claimed by assessee disallowed by Tribunal-Concealment penalty cannot be imposed merely on the ground that Tribunal disallowed the expenditure claimed by the assessee.
For the purposes of section 115JB of the Act, the term gloss brought forward’ can only mean losses on the last day of the immediately preceding year and no other meaning can be given to it. In the case of CIT v. Sumi Motherson Innovative Engineerin
Method of Accounting regularly followed by the taxpayer which was accepted by the Tax Officer in past cannot be rejected in future years without expressing the dissatisfaction about the correctness or completeness of the accounts of the taxpayer Rec
“281B. Provisional attachment to protect revenue in certain cases. (1) Where, during the pendency of any proceeding for the assessment of any income or for the assessment or reassessment of any income which has escaped assessment, the Assessing Officer is of the opinion that for the purpose of protecting the interests of the revenue it is necessary so to do, he may, with the previous approval of the Chief Commissioner, Commissioner, Director General or Director , by order in writing, attach provisionally any property belonging to the assessee in the manner provided in the Second Schedule.
Sections 147, 148 – Constitution of India – Article 226 – Whether HC can exercise its jurisdiction under Article 226 pertaining to sufficiency of reasons for formation of the belief u/s 147 of the Income-tax Act. – Assessee’s appeal dismissed
The Assessee borrowed money from a sister concern at 18 per cent interest and purchased shares from another sister concern carrying a dividend at 4 per cent. The Revenue thought the device was colourable and disallowed the interest. Investment in sha
