The decision reiterates that when books of account, sales, and inventory are accepted, purchase disallowances cannot be made mechanically. Suspicion cannot replace proof in tax proceedings.
The decision underscores that ignoring audited disclosures, ledgers, and salary records violates principles of natural justice. Once actual payment is proved, gratuity deduction must be allowed.
The Tribunal held that once the assessee proves identity, genuineness, and source through documents and bank records, the burden shifts to the Revenue. Without rebuttal of evidence, addition under Section 68 cannot survive.
It was ruled that deciding appeals based on facts of another year is a serious legal error. The matter was sent back for reconsideration on correct facts.
It was held that documented capital contributions supported by affidavits, bank records, and land evidence are explained credits. Assessing authorities cannot disregard undisputed financial capacity.
While reopening of assessment was sustained due to bank deposit information, the cash addition was deleted on merits. Proper explanation of source defeats Section 69A.
It was ruled that interest for late filing of the original return can be computed based on tax determined in search-related assessment. Timely filing after notice does not negate earlier delay.
The issue was whether penalty could be imposed for disallowance arising from a disclosed change in lease rent accounting. The Tribunal held that a bona fide, disclosed and debatable claim cannot attract penalty under section 271(1)(c).
Restoring the Assessing Officer’s findings, the Tribunal ruled that excessive salary to related directors can be disallowed when it substitutes dividend distribution. Reasonableness must be judged against comparable market remuneration.
The Tribunal examined the validity of reopening and multiple expense disallowances. While relief was granted on cash payments and reimbursed interest, statutory interest on taxes was held to be non-deductible.
