Income Tax : This guide explains when penalties can be imposed under various provisions of the Income-tax Act, 1961. It also outlines the appli...
Income Tax : This guide explains how unexplained cash credits under Section 68 and related provisions can attract steep taxation under Section ...
Income Tax : Income without satisfactory explanation is taxed at a special high rate under Section 115BBE. The provisions place strict liabilit...
Income Tax : Courts have clarified that purchases cannot be disallowed without proper evidence. Genuine transactions supported by documents can...
Income Tax : ITAT held that section 69 cannot be invoked where purchases are duly recorded in books and paid through banking channels, making t...
Income Tax : The ITAT Mumbai held that Section 69C cannot be invoked where expenditure is duly recorded in the books and its source is fully ex...
Income Tax : ITAT Guwahati held that additions could not be sustained where the transactions related to a separate partnership firm with a diff...
Income Tax : The ITAT held that an untested third-party statement, without supporting evidence or cross-examination, cannot form the sole basis...
Income Tax : ITAT Ahmedabad held that repayment of the entire loan with TDS-compliant interest payments undermined the allegation that the loan...
Income Tax : ITAT Chennai held that loose sheets and estimates alone cannot justify an addition under Section 69B without independent corrobora...
Income Tax : CBDT has instructed tax officers to uniformly apply Sections 68 to 69D and Section 115BBE after a C&AG audit found inconsistencies...
The Income Tax Appellate Tribunal (ITAT), Pune, in Mahendra Prakash Pawar Vs ITO, deleted an addition of ₹21.69 lakh made under Section 69C for unexplained credit card payments. The court accepted the assessee’s explanation that cash deposits came from his brother’s transportation business for fuel purchases.
Tribunal held that when sales are accepted and supported by evidence, entire purchases cannot be disallowed. Only the profit element can be added, restricting disallowance to ₹8,075 as per Bombay High Court’s ruling in Mohammad Haji Adam & Co.
ITAT Pune held that reopening based on old investigation data was invalid where transactions were already verified under Section 153A. The Tribunal found the penny stock gains genuine as supported by Demat, bank, and STT records.
ITAT Jaipur held that gain not realized during the year under consideration cannot be taxed under the head capital gain or as income under the head profit and gains of business or profession by valuing unsold scrips at market value.
The central issue was the validity of a reassessment that led to additions for bogus purchases and unexplained cash. The ITAT confirmed the entire reassessment was void because the AO failed to issue the mandatory notice under S 143(2), affirming the deletion of all additions.
Delhi ITAT deleted a 69C unexplained expenditure addition for alleged bogus purchases, ruling that when corresponding sales are accepted and payments made via banking channels, the purchase cannot be disallowed without tangible proof of manipulation.
ITAT Delhi set aside a non-speaking order by CIT(A) in a ₹34.82 lakh bogus purchase case, directing de novo adjudication and allowing cross-examination on alleged accommodation entries.
This ruling clarifies that cash deposits during the demonetization period cannot be taxed as unexplained money under Section 68 when they are fully reflected in the business’s accepted books and sales. The ITAT emphasized that the AO failed to reject the books of account under Section 145(3) before making the addition, thereby deleting the entire demand.
The Delhi ITAT sustained a Rs.42.98 lakh addition for unexplained expenditure found in a seized diary, ruling that the entries proved a sufficient nexus to the assessee under Section 292C. However, the Tribunal provided partial relief by directing the lower tax rate under the pre-amendment Section 115BBE to be applied for AY 2015-16.
The ITAT ruled that the PCIT wrongly invoked Section 263 by relying on unverified external information (e.g., SEBI data and license suspension claims) to label purchases as bogus, without providing this information to the assessee for rebuttal. The tribunal deleted the revisionary order, confirming that the PCIT acted illegally by presuming facts and ignoring the documentary proof of purchase genuineness.
