The High Court held that once the assessee failed to explain the source, addition was justified only to the extent of cash actually seized. It ruled that the AO cannot arbitrarily add a higher amount than the proven seized sum.
The court examined whether buy-back of shares below fair market value attracts Section 56(2)(x). It held that buy-back leads to extinguishment of shares, not acquisition of property, making the provision inapplicable.
The Court held that the notice issued after six years from the relevant assessment year was barred by limitation. The reassessment proceedings were set aside.
The Court held that an SCN uploaded in the Additional Notices Tab without effective visibility denied the assessee a fair hearing, leading to the quashing of the demand order.
The case examined whether interest earned on temporarily parked funds is taxable. The court held that funds earmarked for asset acquisition are not surplus, and interest must be treated as capital receipt.
The court examined whether interest on FDRs could be taxed as other income. It held that where funds are linked to a project, the interest retains its project nexus and is not separately taxable.
The court examined whether interest on share capital parked temporarily could be taxed. It held that where funds are directly linked to project setup, the interest is a capital receipt and not taxable as other income.
The judgment confirms that income from offshore equipment supply is not taxable where transactions occur outside India. The liaison office was also held not to create a taxable presence. The case highlights limits of tax jurisdiction over cross-border supplies.
The Court set aside Section 148 notices after finding no tangible evidence supporting the existence of a Permanent Establishment. The ruling highlights the need for concrete material in reassessment.
Delhi High Court held that challenge to reassessment proceedings initiated under Income Tax Act failed as Court cannot act as an AO and call such documents which otherwise can be done by AO. Accordingly, petition dismissed.
