The dispute concerned denial of exemption on the ground of alleged business activity. The Tribunal held that once registration under Section 12AA stood restored, exemption under Sections 11 and 12 could not be denied.
The decision limits tax exposure by holding that unexplained cash deposits during demonetization should be assessed on an estimated profit basis when business records are accepted.
Relying on precedents including rulings of the Delhi High Court, the Tribunal held that extrapolation across years is impermissible. The addition was struck down as being based on assumption rather than evidence.
The Tribunal held that once business receipts are taxed on an estimated basis, separate additions for payments and assets from the same receipts are impermissible. Only a net-profit estimation was sustained, deleting multiple cascading additions.
The tribunal accepted that allotment confers enforceable capital rights capable of transfer. The ruling clarifies that proceeds from such transfers must be assessed under capital gains, not deemed income.
The Tribunal held that disallowance of interest for non-deduction of TDS cannot be automatic when paid to an NBFC. The Assessing Officer must first verify whether the payee has offered the income to tax.
Levy of interest under sections 234B and 234C on income arising from an APA. Interest was deleted as APA income crystallises only on signing, making advance-tax estimation impossible.
The Tribunal reiterated that procedural delays in uploading Form 10B should not defeat substantive tax exemptions available to charitable trusts. Denial of Section 11 relief merely due to late filing was held to be unjustified where charitable activities were undisputed.
The dispute involved taxing unexplained increases in partners capital in the firms assessment. The Tribunal affirmed that such additions, if any, can only be examined in the hands of partners and not the partnership firm.
The case addressed whether exemption could be disallowed through prima facie adjustment under section 143(1). The Tribunal held such denial impermissible and ordered fresh consideration.
