For Departmental use only

ANDHRA PRADESH & TELANGANA

DECISION KIT
FOR
DEPARTMENTAL OFFICERS

A COMPILATION OF CASE LAWS

INCOME TAX DEPARTMENT

ANDHRA PRADESH & TELANGANA
2019
 Office of the
Pr. Chief Commissioner of Income Tax,
Andhra Pradesh & Telangana,
10th Floor, ‘C’ Block, Income Tax Towers,
[Link], Hyderabad – 500004.
Phone: 040-23237946 Fax: 040-23240403
N. SANKARAN, I.R.S. E-mail: [Link]@[Link]
Pr. Chief Commissioner of Income Tax

Foreword

I am glad to note that a ‘Decision Kit for Departmental

Officers’ is brought out for the use of the Officers of the
Department. This is compiled by Shri [Link], I.R.S.,
Commissioner of Income Tax, Hyderabad.

I would like to place on record my special appreciation for

the initiative taken by Shri [Link], Commissioner of Income
Tax, Hyderabad and the Members of the Editorial Committee
under the Chairmanship of Shri Atul Pranay, I.R.S., Chief
Commissioner of Income Tax, Hyderabad.

I hope this compilation book would serve as a ready

reference and handy tool to the Officers of the Department in
their core functions.

[ N. SANKARAN ]
Hyderabad Pr. Chief Commissioner of Income Tax,
Date: 26-08-2019 Andhra Pradesh & Telangana.

Copyright free material

 PREFACE

O Almighty! The Source of pleasure to the Sages,

Bestow upon me the opportunity to serve your lotus feet,
To befriend your devotees and to develop kindness
towards all creation
- Pothana, Bhagavathamu (Telugu)

As it is oft stated, necessity is the mother of

invention. This mundane compilation of case laws
is out come of my necessity to represent before the
Hon’ble ITAT. Our normal experience is that we come
across citations mostly not in favour of Revenue. This
compilation is aimed to bridge the gap and also act as
a ready reference for the officers of the Department.
Most of the decisions cited are in favour of Revenue or
material for consideration while framing assessments.
Attempt is made to include recent decisions. The
compilation is neither authoritative nor exhaustive and
there could be many decisions which are important but
do not find place in the compilation. The compilation is
meant only as a ready reference and would not provide
omnibus solutions.
The format of citations is mostly as adopted by
[Link] and due credit would go to them in this
regard. I would also like to state that the compilation
does not reflect the views of the Department and if
there are any errors, they are mine.
I am thankful to the Pr CCIT, Andhra Pradesh &
Telangana and CCIT, Hyderabad for readily accepting
the idea of circulation of this compilation. Also, I owe
my thanks to Shri Ramesh Singh, ITI, who typed part
of the compilation in the initial stages. Last but not the
least, I am indebted to my wife Smt Vijaya Lakshmi, who
provides constant silent support and allows me to work
through the nights.

Date: 24-08-2019
Hyderabad Y V S T Sai
 Gist / Important point for
S.N. Case Citation Section
consideration
1 G. Venkataswamy [1959] 35 ITR 594 2(13), 28 Characters of “Adventure in the
Naidu & Co (SC) nature of trade”: Even an isolated
and single transaction may be an
adventure in the nature of trade if

Section - 2
some of essential features of trade
are present in such a transaction.
The character of a transaction
depends on relevant facts and
circumstances and there is no
abstract rule, principle or test which
is universal

2 Gousia Begum [2012] 18 2(14), 45 Agricultural Land within 8 kms of

[Link] bigger municipality would not be
152 (Hyderabad)/ exempt u/s 2(14) merely because
[2012] 50 SOT 28 it is within the limits of a smaller
(Hyderabad)(URO) municipality adjacent to the bigger
municipality: Land situated in
Rajendra Nagar municipality would
not be agricultural land u/s 2(14)
merely because Rajendra Nagar is
not a notified municipality, when the
land is within 8 Kms of the municipal
limits of Hyderabad

3 Sarifabibi Mohmed [1993] 70 Taxman 2(14), 45 Supreme Court laid down various
Ibrahim 301 (SC)/[1993] 204 tests for determination of nature of
ITR 631 (SC)/[1993] land as agricultural or not
114 CTR 467 (SC)

4 D.S. Karunakar [2011] ITA Nos. 752 2(14), 45 Entry in revenue records is not
Reddy to 757/ Hyd/2011 conclusive proof of the fact that the
dated 30/11/2011 land is agricultural in the absence
of evidence that the land is put to
agricultural use

6 7
 Gist / Important point for
S.N. Case Citation Section
consideration
5 Andhra Networks [2015] 57 taxmann. 2(14), When assessee entered into
Ltd com 115 (Hyderabad 2(47), 45 consortium agreement, passed on
- Trib.)/[2015] 68 bundle of rights to the consortium
SOT 304 (Hyderabad and permitted mortgage, there is

Section - 2
- Trib.)/[2015] 167 transfer u/s 2(47)
TTJ 496 (Hyderabad
- Trib.)
6 Laxmidevi Ratani [2005] 147 Taxman 2(14), Giving up of right to claim specific
642 (Madhya 2(47), 45 performance by an assessee to get
Pradesh)/[2008] 296 conveyance of immovable property,
ITR 363 (Madhya in lieu of receiving consideration,
Pradesh)/[2005] 198 would result in extinguishment
CTR 336 (Madhya of right in property and it would
Pradesh) thereby attract rigour of section
2(14), read with section 2(47)

7 Bolla Ramaiah [1988] 39 Taxman 2(14), 45, The lands situated either within
345 (Andhra 47(viii) the Municipal limits or within 8
Pradesh)/[1988] 174 kilometers of a notified Municipality
ITR 154 (Andhra fall within the exception to
Pradesh)/[1988] exception and constitute Capital
74 CTR 64 (Andhra Assets even when they are
Pradesh) agricultural lands

8 Officer-in-Charge [1976] 105 ITR 133 2(14), Entry in revenue records is not
(Court of Wards) (SC) 2(ea) of conclusive proof: Mere fact that
(Begumpet Palace WT property was classified in revenue
case) records as agricultural land was not
conclusive and such entries could
raise only rebuttable presumption

9 Ahmed G.H. Ariff [1970] 76 ITR 471 2(14), “Property” is a term of the widest
(SC) 2(ea) of import and subject to any limitation
WT which the context may require, it
signifies every possible interest
which a person can clearly hold or
enjoy

8 9
 Gist / Important point for
S.N. Case Citation Section
consideration
10 Devineni Avinash [2018] 100 taxmann. 2(14), When the land was reflected as
com 75 (AP & 2(ea) of capital asset in the books of the
Telangana) WT Act assessee, merely because the
assessee entered into JDA with

Section - 2
a builder and no development
took place after execution of the
agreement, the land would be asset
u/s 2(ea) of WT Act

11 Jindal M. D . [1986] 28 Taxman 2(22)(e) Arranged transaction to be

509 (Calcutta)/ ignored: In view of Tribunal’s
[1987] 164 ITR 28 finding that said agreement was
(Calcutta)/[1987] 59 just an arranged affair, half of value
CTR 78 (Calcutta) of said iron rods was to be treated
as deemed dividend under section
2(22)(e) in hands of assessee

12 Tarulata Shyam [1977] 108 ITR 345 2(22(e) Provisions of deemed dividend are
(SC) invoked even if the advance or loan
is subsequently repaid in its entirety
during relevant previous year in
which it is taken

13 Star chemicals P Ltd. [1994] 72 Taxman 2(22)(e) Appropriation is part of

279 (Bombay)/ accumulated profit: Appropriations
[1993] 203 ITR 11 made to development rebate
(Bombay)/[1993] reserve account in accounts
114 CTR 185 of subsidiary company were
(Bombay) accumulated profits of said company
for purpose of determining amount
of dividend under section 2(22)(e) in
hands of assessee

14 Badiani P.K. [1976] 105 ITR 642 2(22)(e) Accumulated profits means profits
(SC) in the commercial sense and not
profits liable to tax as Income under
the Act, that is profits made in the
real and true sense of the term

10 11
 Gist / Important point for
S.N. Case Citation Section
consideration
15 Bajaj Auto Holdings [2005] 95 ITD 356 2(22)(e) The word ‘advance’ has wide
Ltd (Mumbai)/[2005] 96 connotations and it means any
TTJ 856 (Mumbai) money advanced to any person

Section - 2
16 Fidelity Business [2018] 95 2(22)(e) Buyback of shares at abnormal
Services India (P.) Ltd [Link] 253 price could be point of enquiry:
(Karnataka)/[2018] Where assessee bought back
257 Taxman 266 shares from its holding company
(Karnataka) at Mauritius at an abnormally
high price, Tribunal was perfectly
justified in directing an enquiry
into fair market value of shares of
assessee-company which could have
an implication of taxability under
section 2(22)(e)

17 National Travel [2018] 89 taxmann. 2(22)(e) Beneficial and not registered

Services com 332 (SC)/[2018] shareholder: To attract section
253 Taxman 243 2(22)(e), a ‘shareholder’ has only to
(SC)/[2018] 401 ITR be a person who is beneficial owner
154 (SC)/[2018] 300 of shares; he need not necessarily
CTR 582 (SC) be a registered shareholder; matter
referred to CJI

18 V.E.A. Annamalai [1956] AIR 1956 SC 2(22)(e) Intentions and circumstances are
Chettiar 12 important and not mere recitals in
document: Whether a transaction is
a transaction of loan or deposit does
not depend merely on the terms
of the document but has got to be
judged from the intention of the
parties and all the circumstances of
the case

12 13
 Gist / Important point for
S.N. Case Citation Section
consideration
19 Sunil Chopra [2011] 12 taxmann. 2(22)(e) Make Believe arrangement to be
com 496 (Delhi)/ ignored: It could not be believed
[2011] 201 Taxman that an agreement was executed on
316 (Delhi)/[2011] 18-9-2003 and payment was made,

Section - 2
242 CTR 498 (Delhi) but possession of property was to
be handed over after more than
five years, even though property
continued to be reflected in balance
sheet of assessee after two years of
agreement.

20 Meera & Co [1997] 91 Taxman 2(31) BOI: When several individuals

219 (SC)/[1997] 224 are found to have joined together
ITR 635 (SC)/[1997] for the purpose of making profit,
139 CTR 442 (SC) the group of individuals may be
conveniently described as ‘a body
of individuals’. The business was
inherited. But the fact that the
business had been continued by the
widow on her own behalf as well
as on behalf of the minor sons goes
to show that there is an organised
activity jointly carried on to produce
income.
21 Gowli Buddanna [1966] 60 ITR 293 2(31) Sole Surviving coparcener can
(SC) be HUF: the sole male surviving
coparcener of the Hindu joint family,
his widowed mother and sisters
constitute a Hindu undivided family
22 Thamma Venkata [1987] 168 ITR 760 2(31) Coparcenary: The essence of a
Subbamma (By Legal (SC) coparcenary under the Mitakshara
Representative) Vs school of Hindu law is community of
Thamma Rattamma interest and unity of possession. A
member of a joint Hindu family has
no definite share in the coparcener
property, but he has an undivided
interest in the property which is

14 15
 Gist / Important point for
S.N. Case Citation Section
consideration
liable to be enlarged by deaths and
diminished by births in the family.
An interest in the coparcenary
property accrues to a son from

Section - 2
the date of his birth. His interest
will be equal to that of his father.
An individual member of the joint
Hindu family has no definite share
in the coparcenary property. By an
alienation of his undivided interest
in the coparcenary property, a
coparcener cannot deprive the
other coparceners of their right to
the property.
23 Nitai Chandra [1917] 51 Ind Cas 2(47) Test for “Sale”: Sale is a transfer of
Naskar And Anr. vs 104 of Calcutta ownership in exchange for a price
Srimati Champaklata High Court dated 16 paid or promised or part paid and
Debi And Ors March, 1917 part promised. The true test is, what
is the intention of the parties to the
transaction. If the intention is that
title should pass immediately even
though the consideration has not
been paid, the title passes; that is,
the failure to pay the consideration
for a conveyance does not defeat
the conveyance, except where there
is an agreement that it should take
effect only if the consideration is
first paid
24 Carlton Hotel P Ltd [2017] 88 taxmann. 2(47), 45 Sham partnership: Where value
com 257 (Allahabad)/ of land contributed by assessee
[2017] 399 ITR 611 in stock of firm was much higher
(Allahabad) as against its negligible profit
sharing in firm, entire transaction
of contribution to partnership was
a sham, and an attempt to device a
method to avoid capital gain tax on
transfer of land to firm
16 17
 Gist / Important point for
S.N. Case Citation Section
consideration
25 Anarkali Sarabhai [1997] 90 Taxman 2(47), 45 Redemption of preference shares
509 (SC)/[1997] 224 amounts to ‘sale, exchange or
ITR 422 (SC)/[1997] relinquishment of asset’ within

Section - 2-4
138 CTR 253 (SC) meaning of section 2(47)(i)

26 Suraj Lamp & [2011] 14 taxmann. 2(47), 54 GPA/Sale agreement is not a valid
Industries P ltd. com 103 (SC)/[2011] of TP Act mode of transfer: Transactions
202 Taxman 607 of nature of General Power of
(SC)/[2012] 340 ITR Attorney Sales (‘GPA Sales’) or
1 (SC) Sale Agreement/General Power of
Attorney/Will transfers do not
convey title and do not amount to
transfer, nor can they be recognized
as valid mode of transfer of
immovable property

27 Ch. Atchaiah [1996] 84 Taxman 4(1) Right person has to be taxed:

630 (SC)/[1996] 218 Assessing Officer can and must tax
ITR 239 (SC)/[1996] that person alone who is liable to be
130 CTR 404 (SC) taxed according to law with respect
to a particular income and merely
because a wrong person is taxed
with respect to a particular income,
Assessing Officer is not precluded
from taxing right person with
respect to that income

28 Adity Birla Power [2011] 2011-TIOL- 4, 28 Collusive transaction: If assessee

Co Ltd 286-ITAT-MUM develops a new product line for
itself but sells the same to a sister
concern without any mark-up on
the ground that there was no taker
for such a product in the market, it
can still be said that it is a collusive
transaction to reduce tax liability

18 19
 Gist / Important point for
S.N. Case Citation Section
consideration
29 Wipro Ltd [2014] 50 4 Arrangement should be real: A
[Link] 421 tax payer is entitled to arrange his
(Karnataka)/[2014] affairs in a manner so as to keep
227 Taxman 244 his tax liability as low as possible

Section - 4
(Karnataka) (MAG) but arrangement should be real
and genuine and not a ‘sham’
or make-believe. SLP filed by
assessee pending before Supreme
Court in Civil Appeal No(s). 1169-
1170/2015.

30 Adityapur Industrial [2006] 153 Taxman 4 Industrial Area Development

Area Development 107 (SC)/[2006] 283 Authority is not covered under
Authority ITR 97 (SC)/[2006] Article 289: Exemption under
202 CTR 464 (SC) article 289(1) was not available to
assessee as it was a distinct legal
entity and its income could not be
said to be income of State so as to
be exempted from Union taxation

31 Bangalore Club [2013] 29 taxmann. 4 Interest on bank deposits not

com 29 (SC)/[2013] covered under Mutuality: Interest
212 Taxman 566 earned by assessee-club on fixed
(SC)/[2013] 350 ITR deposits from its member banks
509 (SC)/[2013] 255 would not be exempt from tax on
CTR 465 (SC) basis of doctrine of mutuality

32 N.V. Narendranath [1969] 74 ITR 190 4, 3 of WT Ancestral Property: When a

(SC) coparcener having wife, minor
daughters and no son receives his
share of joint family property on
partition, such property in hand of
coparcener belongs to his Hindu
Undivided Family

20 21
 Gist / Important point for
S.N. Case Citation Section
consideration
33 Andhra Pradesh [1984] 17 Taxman 4, Article No exemption to Instrumentality
State Civil Supplies 167 (Andhra 289 of State. PSU not covered under
Corporation Ltd Pradesh)/[1984] 148 Article 289: Exemption under article
ITR 497 (Andhra 289(1) is available only to a State

Section - 4
Pradesh)/[1984] 38 and not to an instrumentality of
CTR 376 (Andhra State. Even when no part of funds
Pradesh) of company would be employed in
purchase or in loans upon security
of company’s share and all income
of company would belong to price
equalisation/stabilisation fund of
state government and the company
would be wholly owned by State
government, income would not be
exempt.

34 Andhra Pradesh [1964] 52 ITR 524 4, Article No exemption to Instrumentality of

State Road Transport (SC) 289 State even if it wholly owned PSU
Corporation of State: Though the assessee is a
State Controlled Corporation, all the
relevant provisions of the
Road Transport Corporation Act,
1950 emphatically brought out
the separate personality of the
Corporation and proceeded on
the basis that the trading activity
was run by the corporation and the
profit and loss that would be made
as a result of the trading activity
would be the profit and loss of the
corporation. There is no provision in
the 1950 Act which has attempted
to lift the veil from the face of the
corporation and thereby enable the
shareholders to claim that despite
the form which the organisation has
taken, it is the shareholders who
run the trade and who can claim the
income coming from it as their own.

22 23
 Gist / Important point for
S.N. Case Citation Section
consideration
35 Shelly Products [2003] 129 Taxman 4, 143(3), No refund of tax paid on returned
271 (SC)/[2003] 261 244A income: If on failure or inability
ITR 367 (SC)/[2003] of authorities to frame a regular

Section - 4-6
181 CTR 564 (SC) assessment after earlier assessment
is set aside or nullified, tax
deposited by an assessee by way
of advance tax or self-assessment
tax, or tax deducted at source is not
liable to be refunded.

36 Keshav Mills Ltd [1953] 23 ITR 230 5 An amount cannot be “deemed to

(SC) be received” merely by the volition
or sweet will of an individual. The
“receipt” of income refers to the
first occasion when the recipient
gets the money under his own
control.

37 Makarand Gadre [2008] 21 SOT 454 6 Stress on ‘presence of the

(Hyderabad) assessee’ in India and not ‘absence’
from India: An individual who has
not been resident in India within
the meaning of section 6(1) for less
than 9 years out of 10 preceding
years, does not satisfy the statutory
criteria laid down for treating
the individual as ‘not ordinarily
resident’. An assessee, who is a
resident of India and goes abroad
and is not a resident in India for two
years during the preceding period
of 10 years, does not also satisfy
the said condition of not being a
resident of India for 9 out of 10
years. Moreover, the second limb of
section 6(6)(a ) describes that if an
individual has not been in India for
730 days or more, he shall be
treated as ‘not ordinarily resident’.

24 25
 Gist / Important point for
S.N. Case Citation Section
consideration
38 Maruti Udyog Ltd [2009] 34 SOT 480 9 Place of accrual: The statutory test
(Delhi)/[2010] 130 for determining the place of their
TTJ 66 (Delhi) accrual is not the place where the
services for which the payments are

Section - 9
being made, are rendered but the
place where the services are utilised
39 Steffen, Robertson [1997] 95 Taxman 9 Statutory test for place of accrual:
& Kirsten Consulting 598 (AAR)/[1998] Irrespective of place where
Engineers & 230 ITR 206 (AAR)/ services are rendered, amounts
Scientists [1998] 144 CTR 90 to be received by applicant should
AAR be deemed to accrue or arise in
India since a statutory test for
determining place of accrual of
income is place where service is
utilized
40 Ansaldo Energia SPA [2009] 178 Taxman 9 Business Connection and
57 (Madras)/ Composite Contracts: The term
[2009] 310 ITR 237 ‘business connection’ is too wide
(Madras)/[2009] 222 to admit any precise definition.
CTR 55 (Madras) It includes close, real, intimate
relationship and commonness of
interest between the non-resident
and the Indian person and where
there is control of management
or finances or substantial holding
of equity shares or sharing of
profits by the non-resident or the
Indian person, such requirement is
fulfilled. The fact that the contract
is composite is also favourable to
Revenue. ASPL being a mere facade,
existence of close relationship
between the foreign person and the
Indian operations is established as all
responsibility from the beginning to
the end rested on the assessee; that
there was an intimate, real and

26 27
 Gist / Important point for
S.N. Case Citation Section
consideration
continuous relationship with the
subsidiary company; and that the
price of the other contracts was

Section - 10
loaded on to contract No. I,

41 K. Lakshmanan & Co. [1999] 239 ITR 597 10(1) Marketable or fit for sale
SC, JT 1998 (8) SC agricultural produce: Even
424, (1998) 9 SCC though for the purpose of making
537 agricultural produce marketable
or fit for sale, some process may
have to be undertaken, it does not
contemplate the sale of an item or a
commodity which is different from
what is cultivated and processed.
Mulberry leaves cannot be sold in
the market and they can only be fed
to the silkworms. The agricultural
produce of the cultivator will be
mulberry leaves and by no stretch
of imagination can the silkworms,
and certainly not the silk cocoons be
agricultural produce

42 Dilip Kumar and Co [2018] CA No 3327 10, Strict Interpretation of exemption

and Others of 2007 of Supreme Chapter provisions and benefit of ambiguity
Court dated VIA to be in favour of Revenue:
30/07/2018 Exemption notification should be
interpreted strictly; the burden of
proving applicability would be on
the assessee to show that his case
comes within the parameters of
the exemption clause or exemption
notification. When there is
ambiguity in exemption notification
which is subject to strict
interpretation, the benefit of such
ambiguity cannot be claimed by
the subject/assessee and it must be
interpreted in favour of the revenue

28 29
 Gist / Important point for
S.N. Case Citation Section
consideration
43 P.H.I. Seeds (P.) Ltd [2018] 96 taxmann. 10(1), Contract farming without own
com 493 (Delhi - 2(1A) cultivation is not exempt: Where
Trib.)/[2018] 192 TTJ assessee entered into lease and

Section - 10
412 (Delhi - Trib.) service agreement with farmers for
cultivation of seeds on their own
land, since farmers had to ensure
watering, fertility
and suitability of land, mere
supervision by assessee without
carrying out basic
operation for cultivation of land
would give rise to business income
in hands of
assessee and not agricultural
income
44 Namdhari Seeds (P.) [2011] 16 taxmann. 10(1), Seed Production agreements with
Ltd com 83 (Karnataka)/ 2(1A) farmers: Where assessee-company,
[2011] 203 Taxman engaged in production of hybrid
565 (Karnataka)/ seeds, entered into agreement
[2012] 341 ITR 342 with farmers for production of
(Karnataka) open hybrid seeds on their land for
its own benefit income arising to
assessee from sale of hybrid seeds
grown by farmers would not be
agricultural income
45 Pioneer Overseas [2010] 37 SOT 404 10(1), R&D activity on hybrid seeds and
Corporation (Delhi)/[2010] 131 2(1A) leading to production of parent
TTJ 409 (Delhi) seeds is not exempt: Research
activity and sale of parent seeds
by assessee-company were inter-
linked, inter-lacing and inter-
dependent. Research activity
carried out by branch office in
India in course of developing and
producing hybrid breeder seeds
was to be considered for purpose of
determining income accruing

30 31
 Gist / Important point for
S.N. Case Citation Section
consideration
to assessee-company in India, and
quantum was to be ascertained
on basis of profit of head office

Section - 10
attributable to branch office in India.

46 Oxford University [2001] 115 Taxman 10(22) “Existing solely for educational
Press 69 (SC)/[2001] 247 purposes and not for purposes of
ITR 658 (SC)/[2001] profit”: The Legislature has made it
165 CTR 629 (SC) clear that it intends to exempt the
income of institutions established
solely for the educational purposes
and not for commercial activities.
Such a provision is meant to
encourage institutions (including
University) engaged in educational
activities and it is not intended
to benefit institutions engaged
in commercial activities with the
intention of earning profit.

47 American Hotel and [2007] 158 Taxman 10(23C) The amount generated by the
Lodging Association 146 (Delhi)/[2007] assessee in India was its income.
Educational Institute 289 ITR 46 (Delhi)/ Any income generated by it might be
[2006] 206 CTR 601 income generated for and on behalf
(Delhi) of the head office. Nevertheless
it was the income of the assessee.
The assessee’s contention, that the
third proviso to section 10(23C)(vi)
does not mention that the income
generated is required to be applied
in India and that, in fact, the words
‘in India’ are totally missing and the
revenue had unnecessarily imported
these into section 10(23C )(vi)
and the third proviso, could not be
accepted. The fact of the matter is
that exemption from payment of tax
is being granted in India. It would

32 33
 Gist / Important point for
S.N. Case Citation Section
consideration
appear irrational if exemption from
tax is granted in India, so that the
amount can be applied outside India

Section - 10
48 Valliammai Society [2010] 327 ITR 337 10(23C) Improper explanation of receipts
(Madras)/[2010] 232 (vi), 11 and cancellation of registration:
CTR 121 (Madras) Where receipts by petitioner were
not properly explained creating a
presumption that conduct of
petitioner-institution was not
worthy enough for purpose of
continuation of exemption. As long
as the petitioner failed to explain
to the satisfaction of the authority
that the presumption drawn by
the authority for deciding against
the petitioner was wrong or on
the basis of surmises, it was not
possible to accept the contention of
the petitioner that the petitioner-
society should be presumed to
be an institution existing solely
for educational purposes for the
purpose of conferring benefits
under section 10(23c)(vi).

49 Securities Exchange [2018] CA No: 10(38) Manipulative Synchronized

Board of India Vs 1969 of 2011 dated Trading: There is prior meeting of
Rakhi Trading Pvt 08/02/2018 of minds involving synchronization
Ltd Supreme Court of buy and sell order and not
negotiated deals as per the board’s
circular. The impugned transactions
are manipulative/deceptive device
to create a desired loss and/or
profit. Such synchronized trading
is violative of transparent norms of
trading in securities.

34 35
 Gist / Important point for
S.N. Case Citation Section
consideration
50 Bharat R. Agarwal [2019] ITA Nos.1650 10(38) PIL is a penny stock company
& 1651/PUN/15 of and the assessee obtained only
ITAT, Pune Bench accommodation entries in the garb

Section - 10
dated 04/01/2019 of short term gain from transfer
of shares of PIL, for which an
appropriate addition has rightly
been made
51 Pankaj Agarwal & [2018] ITA No.1413/ 10(38) SRK Industries (penny stock) -
Sons (HUF) CHNY/2018 of Cross-examination: Ld. AR could
ITAT, Chennai dated not successfully controvert any
06/12/2018 of the findings of the Ld. Revenue
Authorities before us which are
against the assessees. Instead
the [Link] has only come out with
the plea that the assessees were
not provided with opportunity
of cross-examining the witness,
the investigation report was not
furnished and proper opportunity
was not provided of being heard.
However we find that all these
arguments raised by the [Link]
before us were never alleged before
the [Link] Authorities when
the matter was before them. In this
situation we do not have any other
option but to confirm the orders
52 Sanjay Bimalchand [2018] 89 taxmann. 10(38) Abnormal returns in short term
Jain com 196 (Bombay) from penny stocks - Syncom &
Skyzoom: Where assessee had
purchased shares of penny stocks
companies at lesser amount and
within a year sold such shares at
much higher amount and assessee
had not tendered cogent evidence
to explain as to how shares in an
unknown company had jumped to

36 37
 Gist / Important point for
S.N. Case Citation Section
consideration
such higher amount in no time and
also failed to provide details of
person who purchased said shares,

Section - 10
said transactions were attempt to
hedge undisclosed income as Long
term Capital gain (Shares of Syncom
Marketing Pvt. Ltd. and of Skyzoom
Distributors Pvt. Ltd purchased
through Global Stock Securties
Ltd and sold through Ashish Stock
Broking Ltd. Both companies
merged with Khoobsoorat Ltd,
Kolakta)
53 M.K. Rajeshwari [2018] 99 taxmann. 10(38) Abnormal rise in share price,
com 339 (Bangalore meagre financial worth of penny
- Trib.) stock -MARL: Where assessee
claimed exemption under section
10(38) in respect of capital gain
arising from sale of shares, in view
of fact that financial worth of said
company was meagre and, moreover,
there was abnormal rise in price
of shares, it could be concluded
that assessee introduced her own
unaccounted money in garb of long
term capital gain and, thus, claim
raised by her was to be rejected
(Shares of MARL)
54 Bhoruka Engg. [2012] 20 10(38) Collusive transactions with sister
Industries Ltd [Link] 105 concern: Sale of land by sister
(Bangalore)/[2011] 9 concern (part of closely held group
ITR(T) 75 (Bangalore) of assessee) to assessee at nominal
value and within a year assessee sold
shares in the said sister concern to
third party. It was held that assessee
had evaded payment of tax on sale
of short-term capital asset of landed
property and, as such,

38 39
 Gist / Important point for
S.N. Case Citation Section
consideration
surplus arising on sale of shares was
to be treated as short-term capital
gains liable for taxation

Section - 10
55 Shamim Imtiaz [2019] ITA No. 1875 10(38) Important points for verification
Hingora & Others to 1878/PUN/2018 - Penny stock - Mishika Finance:
of ITAT, Pune Bench Shares of Mishika Finance
dated 01/03/2019 purchased and sold to Tohee
Trading & Agencies Pvt. Ltd, which
is delisted long ago. Remanded back
to CIT(A) for verification of (i) the
nature of the shares transactions;
(ii) make-believe nature of paper
work; (iii) Camouflage the bogus
nature; and, (iv) the relevance of
human probabilities etc
56 Udit Kalra [2019] ITA 10(38) Penny stock - Kappac Pharma Ltd
220/2019 & CM No. - Intriguing factor is though the
10774/2019 of Delhi company (Kappac Pharma Ltd) had
High Court dated meagre resources and reported
08/03/2019 consistent losses there was
astronomical growth of the value of
company’s shares and this naturally
excited the suspicions of the
Revenue. The company was even
directed by SEBI to be delisted from
the stock exchange. Addition made
by Revenue. Having regard to these
circumstances and principally on
the ground that the findings are
entirely of fact, it was held that no
substantial question of law arises.
57 Sanat Kumar [2019] ITA No.1881/ 10(38) Shares of Cressanda Solution Ltd
Del./2018 of ITAT, has been duly investigated by
Delhi dated Department of Revenue Intelligence
(DRI) and found that the same
is a bogus company engaged in

40 41
 Gist / Important point for
S.N. Case Citation Section
consideration
arranging for bogus LTCG. Trading
of shares suspended by BSE for

Section - 10-10B
certain period. Even balane sheet
of the company could not be
produced. Director of the company
confessed that one Deepak Patwari
is the operator. Amalgamated
with another company to hike the
share priced abormally. Addition
confirmed

58 Purviben Snehalbhai [2019] 101 taxmann. 10(38), Penny stock - Turbo Tech -
Panchhigar com 393 (Gujarat)/ 147 reopening upheld - Assessee filed
[2018] 409 ITR 124 return claiming exemption of LTCG
(Gujarat) from sale of shares of “T” company.
In view of fact that said return was
accepted under section 143(1)
without scrutiny, AO was justified in
initiating reassessment proceedings
on basis of information received
from Investigation Wing that
company ‘T’ was a shell company
and shares of said company were
basically used for providing bogus
claim of long-term or short-term
capital gain.

59 Regency Creations [2012] 27 taxmann. 10B STPI approval is not valid for
Ltd. com 322 (Delhi)/ exemption u/s 10B: Eligibility of a
[2012] 211 Taxman 100 per cent EOU for deduction
152 (Delhi)(MAG.)/ under section 10B is that it should
[2013] 353 ITR 326 be approved by Central Govt.
(Delhi)/[2013] 255 through appropriate authority
CTR 63 (Delhi) constituted under section 14 of
Industries (Development and
Regulation) Act; and if a 100 percent
EOU is only approved by Director,
STPI it would not be a valid approval

42 43
 Gist / Important point for
S.N. Case Citation Section
consideration
60 M.A. Namazie [1988] 38 Taxman 11 The Muslim Wakf Act had no impact
Endowment 126 (Madras)/[1988] on character of trust in question for
174 ITR 58 (Madras)/ purposes of the Act and, therefore,

Section - 11
[1988] 69 CTR 117 assessee would not be entitled to
(Madras) exemption under section 11

61 State Bank of India [1987] 32 Taxman 11 Income is to be applied for

619 (Bombay)/ charitable or religious purposes in
[1988] 169 ITR 298 India to claim exemption: For two
(Bombay)/[1987] 63 institutions for which the corpus
CTR 19 Bombay was held by the assessee, it was
difficult to accept that the condition
was satisfied particularly when
one institution was in India and the
other was outside India. Hence, the
dividend income was not exempt
under section 11(1)(a ).

62 Trustees of H.E.H. [2000] 111 Taxman 11 Objects outside India: Where all
The Nizam’s 228 (SC)/[2000] 243 objects and purposes of trust were
Pilgrimage Money ITR 676 (SC)/[2000] intended to be performed outside
Trust 160 CTR 242 (SC) India, neither resolution of trustees
nor civil court allowing trust income
to be utilised for charitable and
religious purposes within territory
of India, could alter that position,
and, therefore, assessee-trust could
not claim exemption under section
5(1)(i) of the WT Act

63 H.E.H. Nizam’s [1966] 1966 AIR 11 Trust for religious and charitable
Religious 1007, 1966 SCR (2) objects some within taxable
Endowment Trust 384 territories and some outside:
Exemption not available. Only
income from the property wholly
or in part held in trust actually
applied or set apart for application
for future spending on religious or
charitable purposes within the

44 45
 Gist / Important point for
S.N. Case Citation Section
consideration
taxable territories is exempted from
inclusion in the total income

Section - 11
64 India Brand Equity [2012] 23 taxmann. 11 Amount spent outside India
Foundation com 323 (Delhi)/ for participating in a fair held
[2012] 53 SOT 506 outside India cannot be treated as
(Delhi) application of income of trust for
purpose of section 11(1)(a)

65 National Association [2012] 21 taxmann. 11 Expenditure incurred by a

of Software and com 213 (Delhi)/ charitable trust outside India in
Services Companies [2012] 208 Taxman connection with certain activities
178 (Delhi)/[2012] organized abroad, cannot be
345 ITR 362 (Delhi)/ considered as application of income
[2012] 253 CTR 33 of trust in India for charitable
(Delhi) purposes

66 [Link] Foundation [2002] Writ Petition 11 Object should not be to make a

(civil) 317 of 1993 profit, inasmuch as education is
dated 31/10/2002 essentially charitable in nature:
Supreme Court Since the object of setting up
an educational institution is by
definition “charitable”, it is clear that
an educational institution
cannot charge such a fee as is not
required for the purpose of fulfilling
that object. To put it differently, in
the establishment of an educational
institution, the object should not
be to make a profit, inasmuch as
education is essentially charitable
in nature. There can, however,
be a reasonable revenue surplus,
which may be generated by
the educational institution for
the purpose of development of
education and expansion of the
institution (paragraph 57).

46 47
 Gist / Important point for
S.N. Case Citation Section
consideration
67 J.B. Education [2015] 55 taxmann. 11 Receipt of Unaccounted capitation
Society com 322 (Hyderabad fee: Where assessee-educational
- Trib.)/[2013] society received capitation fees

Section - 11
28 ITR(T) 284 in cash without recording same in
(Hyderabad - Trib.)/ books of account and moreover
[2014] 159 TTJ 236 it was carrying on activities in a
(Hyderabad - Trib.) commercial manner, assessee was
rightly denied exemption under
section 11

68 A.P. State Civil [2008] 21 SOT 481 11, 13 Section 11 is always subject
Supplies Corpn. Ltd (Hyderabad) to limitations and restrictions
provided u/s 13: Since assessee
corporation was a joint promoter,
investment made by corporation
with joint venture company cannot
have any other characteristic other
than investment in shares. There
was a clear violation of provisions of
section 13(1)(d) and assessee was
not entitled to exemption under
section 11

69 Action for Welfare [2003] 130 Taxman 11, 13 Violation of provisions of section
& Awakening in 82 (Andhra Pradesh)/ 13(1)(c)(ii), read with sections
Rural Environment [2003] 263 ITR 13 13(2)(b) and 13(3)(cc) - Diversion
(AWARE) (Andhra Pradesh)/ and misutilization of funds: Fixed
[2003] 183 CTR 631 deposits in name of assessee
(Andhra Pradesh) worth Rs. 16 lakhs were pledged as
security with bank enabling one R,
one of members of the assessee, to
avail loan. Transaction of purchase
of lands was routed through an AOP
in which all members were directors
and employees of assessee.
Assessee advanced an amount of Rs.
2 lakhs to AOP. Held that funds of
assessee were diverted and

48 49
 Gist / Important point for
S.N. Case Citation Section
consideration
misutilised and assessee not entitled
for exemption u/s 11

Section - 11-12A
70 Hyderabad Stock [2011] 10 11, 13 Benefit to Members and not for
Exchange Ltd [Link] general public: When a stock
132 (Hyderabad)/ exchange carries out any activity
[2011] 46 SOT 1 for sole benefit of its members
(Hyderabad) or ex-members or employees or
ex-employees or their dependants
and not for benefit of general
public which is distinguished from
class or community consisting
of its members, ex-members,
employees or ex-employees or their
dependants and connections, it
would not be entitled for exemption
under section 11
71 Vidyananda [2014] 47 taxmann. 11, 32 No depreciation when entire cost
Educational com 242 (Hyderabad of asset is claimed as application of
Society - Trib.)/[2014] 64 income for charitable purpose
SOT 176 (Hyderabad
- Trib.)(URO)
72 Allahabad [2007] 163 Taxman 12A No intimation to CIT on alteration
Agricultural Institute 67 (Allahabad)/ of objects: Where objects of trust
[2007] 291 ITR have been altered wholesome after
116 (Allahabad)/ grant of registration and intimation
[2007] 211 CTR 26 of alteration has not been given
(Allahabad) to Commissioner, registration,
which was granted on basis of a
particular representation, held out
by assessee, no longer survives
or holds good
73 Sri Dashmesh [2018] 100 12A Reasonable apprehension of CIT
Academy [Link] 373 about misuse: Where Commissioner
Trust (Chandigarh - Trib.)/ (Exemptions) had a valid and
[2019] 174 ITD 527 reasonable apprehension that in
(Chandigarh - Trib.) case of dissolution, properties of

50 51
 Gist / Important point for
S.N. Case Citation Section
consideration
trust created and constituted out
of 100 per cent grants given by

Section - 12A-12AA
Government, may be distributed
amongst private individual members
of trust, application of trust for
registration under section 12A had
been rightly rejected
74 Board of Control for [2012] 22 taxmann. 12A, 11, No automatic benefits under
Cricket in India com 29 (Mumbai)/ 13 sections 11 and 13 for altered
[2012] 19 ITR(T) objects unless said changes are
91 (Mumbai)/ vetted by Revenue authorities
[2012] 136 ITD 301
(Mumbai)
75 Gowri Ashram [2013] 36 taxmann. 12AA Trust for benefit of particular
com 15 (Madras)/ community: Where assessee-society
[2013] 217 Taxman was formed with an object to provide
97 (Madras)/ accommodation and facilities for
[2013] 356 ITR 328 performance of marriages and other
(Madras) auspicious functions to members of
a particular community, viz., Telugu
Beri Vysia Community, it could not
be regarded as society formed with a
charitable purpose within meaning of
section 2(15)
76 Jagannath Gupta [2019] 102 taxmann. 12AA Receipt of bogus donation: Where
Family Trust com 34 (SC)/[2019] registration of assessee trust under
262 Taxman 313 section 12AA was cancelled for
(SC)/[2019] 411 ITR receiving a bogus donation but High
235 (SC) Court by impugned order restored
registration holding that one bogus
donation would not establish that
activities of trust were not genuine,
it was held by Supreme Court that
the reason assigned by High Court
was erroneous and ran contrary to
plain language of section 12AA(3)

52 53
 Gist / Important point for
S.N. Case Citation Section
consideration
77 Sree Anjaneya [2016] 67 taxmann. 12AA Scope of verification at the time
Medical Trust com 230 (Kerala)/ of Registration: While granting
[2016] 239 Taxman registration to a trust, authority

Section - 12AA
229 (Kerala)/[2016] is empowered to examine only
382 ITR 399 (Kerala) genuineness of trust and its
activities and during assessment
only eligibility in terms of sections
10, 11 and 12 is to be verified as to
whether or not what was professed
was indeed in Deed of trust. SLP
against this decision is admitted
by Supreme Court as reported in
[2016] 74 [Link] 243 (SC)/
[2016] 243 Taxman 142 (SC)

78 Yamuna Expressway [2017] 81 taxmann. 12AA Industrial development by

Industrial com 208 (Allahabad) Statutory Body is activity of
Development general public utility: A statutory
Authority body, constituted for performing
functions of industrial development
in terms of section 6 of Uttar
Pradesh Industrial Development
Act, 1976, could be regarded as
carrying on activity of general
public utility and, thus, its claim for
registration under section 12AA

79 Norka Roots [2018] 89 taxmann. 12AA Only part of funds received from
com 181 (Kerala)/ Government used for charitable
[2018] 401 ITR 224 purpose and other income not
(Kerala) used: Where assessee-trust formed
for promotion of interest of non-
resident keralites received income
from certification, bank interest etc.
which was not spent for charitable
purpose, mere fact that a part of
funds received from Government

54 55
 Gist / Important point for
S.N. Case Citation Section
consideration
was utilised for charitable activities,
same would not make assessee
eligible for registration u/s 12AA

Section - 12AA
80 Savior Charitable [2013] 35 taxmann. 12AA Failure to furnish complete
Trust com 295 (Punjab & details regarding donors would
Haryana)/[2013] 216 result in denial of registration as a
Taxman 91 (Punjab & charitable trust
Haryana)(MAG.)
81 Self Employers [2000] 113 Taxman 12AA No charitable work and only
Service Society 703 (Kerala)/[2001] generation of income for members:
247 ITR 18 (Kerala)/ Petitioner-society had not done
[2000] 164 CTR 449 any charitable work during relevant
(Kerala) period and its activities were only
for purpose of generating income
for its members. In such a case,
rejection of application could hardly
be termed as illegal or arbitrary
82 Urban Development [2018] 93 12AA Pendency of appeal against instant
Authority [Link] 449 application seeking exemption
(Karnataka)/[2018] would not be basis to quash notices
256 Taxman 237 for reassessment of income of
(Karnataka) earlier years
83 Agarwal Sabha [2014] 45 taxmann. 12AA Benefit of only one community:
com 273 (Allahabad)/ Where dominant object underlying
[2014] 223 Taxman constitution of trust was for
353 (Allahabad)/ benefit of only Agarwal community,
[2014] 365 ITR application for registration under
244 (Allahabad)/ section 12AA should be dismissed
[2014] 271 CTR 704
(Allahabad)
84 A Y Broadcast [2012] 21 taxmann. 12AA Broadcasting is not eligible for
Foundation com 533 (Kerala)/ exemption: Where assessee was
[2012] 246 CTR 301 formed for production of television
(Kerala) and radio programmes for purpose
of telecasting and broadcasting,
such activities could not be held
56 57
 Gist / Important point for
S.N. Case Citation Section
consideration
as charitable purpose covered by
section 2(15)

Section - 12AA
85 A R Trust [2017] 86 taxmann. 12AA Satisfaction is that of
com 6 (Allahabad)/ Commissioner and not that of
[2017] 251 Taxman Tribunal: Tribunal has no jurisdiction
397 (Allahabad)/ in law to direct for registration
[2018] 402 ITR 161 of trust without there being
(Allahabad) satisfaction recorded by registering
authority as contemplated by
section 12AA
86 Sri Visa Vadnagar [2018] ITA No. 12AA For One Samaj only: The families of
Vanik Samaj 1699/H/2014 of ‘SAMAJ’ cannot be considered as
ITAT Hyderabad section of general public and they
dated 28/02/2018 are limited to particular group and
not for general public
87 Dawoodi Bohara [2014] 43 taxmann. 12AA Mixed objects to be tested on the
Jamat com 243 (SC)/[2014] touch stone of section 13: Where
222 Taxman 228 (SC) assessee trust is formed with both
(MAG)/[2014] 364 religious and charitable objects,
ITR 31 (SC)/[2014] in terms of section 13(1)(b), its
268 CTR 1 (SC) claim for registration under section
12AA can be denied only in a case
when such objects are carried out
for benefit of a particular religious
community or caste. The objects of
the trust exhibit the dual tenor of
religious and charitable purposes
and activities. Section 11 shelters
such trust with composite objects
to claim exemption from tax as a
religious and charitable trust subject
to provisions of section 13. where
the income of a trust is eligible for
exemption under section 11, the
eligibility for claiming exemption
ought to be tested on the touchstone
of the provisions of section 13

58 59
 Gist / Important point for
S.N. Case Citation Section
consideration
88 Tellicherry Minority [2014] 45 taxmann. 12AA Trust established for benefit of a
Welfare Trust com 395 (Kerala)/ particular religious minority to be

Section - 12AA-22
[2014] 223 Taxman denied registration
160 (Kerala)(MAG.)/
[2014] 364 ITR 472
(Kerala)
89 Maxopp Investment [2018] 91 taxmann. 14A Dominant purpose not relevant:
Ltd com 154 (SC)/[2018] Dominant purpose for which
254 Taxman 325 investment into shares is made by
(SC)/[2018] 402 ITR assessee may not be relevant as
640 (SC)/[2018] 301 section 14A applies irrespective
CTR 489 (SC) of whether shares are held to gain
control or as stock-in-trade

90 T.K. Ginarajan [2013] 36 taxmann. 16 Deduction not covered u/s 16 not

com 583 (SC)/[2013] permissible from incentive bonus:
217 Taxman 323 Assessee, a Development Officer of
(SC)/[2013] 356 ITR LIC, received incentive bonus prior
618 (SC)/[2013] 261 to 1-4-1989 and claimed deduction
CTR 121 (SC) of 40 per cent of same stating that
he had incurred expenditure to
extent of 40 per cent of incentive
bonus for canvassing business.
Assessee was entitled only for
permissible deductions under
section 16

91 Prodip [2012] 18 taxmann. 22 Assessee was a co-owner of

Kumar com 177 (Calcutta)/ property occupied by firm in which
Bothra [2012] 205 Taxman he was a partner. He cannot not
19 (Calcutta)/ avail exemption under section 22
[2011] 244 CTR 366
(Calcutta)

60 61
 Gist / Important point for
S.N. Case Citation Section
consideration
92 Avantor [2016] 66 taxmann. 28 Amount received on termination
Performance com 183 (Himachal of share purchase agreement:
Materials India Ltd Pradesh)/[2016] Compensation received in

Section - 28
237 Taxman 603 connection with termination of
(Himachal Pradesh)/ share purchase agreement to be
[2016] 383 ITR 685 taxed as revenue receipt
(Himachal Pradesh)/
[2016] 282 CTR 494
(Himachal Pradesh)
93 Gillanders Arbuthnot [1964] 53 ITR 283 28 Amount received on cancellation
& co Ltd (SC) of agency: Cancellation of contract
of agency did not affect profit-
making structure of assessee, nor
did it involve a loss of an enduring
trading asset. It merely deprived
assessee of a trading avenue, leaving
it free to devote its energies after
cancellation to carry on rest of
business, compensation in question
did not represent price paid for loss
of a capital asset

94 Ansal Properties & [2018] 98 taxmann. 28 and 45 Security deposit with no refund
Industries com 398 (Delhi)/ clause: Assessee claimed that
[2018] 259 Taxman consideration received from
103 (Delhi) transfer of property under
development agreement was only
security deposit which was to be
returned on completion of project
and it did not offer it for tax, since
there was no provision in agreement
enabling buyer to refund any part of
sale consideration and further buyer
treated amount paid to assessee as
stock-in-trade, addition on account
of amount of sale consideration
received by assessee was justified

62 63
 Gist / Important point for
S.N. Case Citation Section
consideration
95 R.L. Kasliwal [1994] 77 Taxman 28(iv) Residential premises of firm used
58 (Rajasthan)/ by Partner: When a firm allowed
[1994] 207 ITR use of residential premises to a

Section - 28
208 (Rajasthan)/ partner, the ITO can include the
[1994] 120 CTR 56 value of the perquisite in the income
(Rajasthan) of the assessee under section 28(iv)
of the Act if it arises from business
or profession. In the instant case,
benefit arose from the business
carried on by the firm.
96 Priyanka Chopra [2018] 89 taxmann. 28(iv) Receiving car on brand promotion
com 286 (Mumbai - though agreeement does not
Trib.)/[2018] 169 ITD provide for it: Assessee, a film
1 (Mumbai - Trib.)/ actress, had done promotional
[2018] 192 TTJ 343 activity on being brand ambassador
(Mumbai - Trib.) of NDTV Toyota Greenathon
campaign and had clearly promoted
brand Toyota. Receipt of Toyota
car as gift in this connection had
rightly been added in her hands as
perquisites under section 28(iv)
97 Soda Silicate & [1989] 46 Taxman 33 28(i) Loss from Chit: To run a chit fund
Chemical Works (Punjab & Haryana)/ was not assessee’s business. It
[1989] 179 ITR 588 secured a chit at a discount of
(Punjab & Haryana) Rs. 14,398 and in respect of this
amount it sought deduction while
computing its net assessable
income. Tribunal was right in law in
disallowing assessee’s claim
98 Poona [1965] 57 ITR 521 28 Income-tax is a tax on the real
Electric (SC) income: The profits arrived at on
Supply Co. Ltd commercial principles is to be taxed
subject to the provisions of the
Income-tax Act. There is a clear-cut
distinction between deductions
made for ascertaining the profits

64 65
 Gist / Important point for
S.N. Case Citation Section
consideration
and distributions made out of
profits. Another distinction that
shall be borne in mind is that

Section - 28
between the real and the statutory
profits, i.e., between the commercial
profits and statutory profits. The
latter are statutorily fixed for a
specified purpose.

99 Chennai Properties [2015] 56 taxmann. 28, 22 Letting out property is business

& Investments Ltd com 456 (SC)/[2015] income when the main object is to
231 Taxman 336 acquire properties: Where in terms
(SC)/[2015] 373 ITR of memorandum of association,
673 (SC)/[2015] 277 main object of assessee-company
CTR 185 (SC) was to acquire properties and earn
income by letting out same, said
income was to be brought to tax as
business income and not as income
from house property

100 S.C. Kothari [1971] 82 ITR 794 28(i), 73 Expenditure incurred in illegal
(SC) business cannot be allowed
as deduction from income of
legal business. Illegal and legal
businesses are separate for
taxation: If the business is illegal
neither the profits earned nor
the losses incurred would be
enforceable in law. But, that does
not take the profits out of the taxing
statute. But no set-off of loss from
illegal business could be allowed
under first proviso to section 24(1)
of 1922 Act against income from
valid speculative contracts

66 67
 Gist / Important point for
S.N. Case Citation Section
consideration
101 Arkema Peroxides [2013] 31 taxmann. 32 No depreciation on non-compete
India (P.) Ltd com 4 (Chennai - fee: Depreciation is not allowable
Trib.)/ [2012] 20 on non-compete fee paid as

Section - 32
ITR(T) 225 (Chennai- consideration to other party for
Trib.)/ [2013] 56 SOT giving up their right to carry on
64 (Chennai - Trib.) business for a period of five years
(URO)

102 Oriental Coal Co. Ltd [1994] 76 Taxman 32 Owner and user necessary to
240 (Calcutta)/ claim depreciation: Section 32(1)
[1994] 206 ITR lays down two conditions to be
682 (Calcutta)/ satisfied by an assessee before
[1994] 120 CTR 202 claiming any depreciation. These
(Calcutta) two conditions are, firstly, that the
plant and machinery must be owned
by the assessee and, secondly, the
plant and machinery must be used
for the purpose of business of the
assessee. A lock-out was an act
of the assessee in suspending the
business operations. The allowance
of depreciation may not depend on
the actual working of the machinery
but no depreciation is allowable
if the assets are not used at all for
the business of the assessee in the
relevant previous year.

103 Jiwaji Rao Sugar Co. [1969] 71 ITR 319 32 Actual use and not keeping ready
Ltd (Madhya Pradesh) for use: Depreciation should result
as a consequence of a machinery
being actually used or employed
in earning of income and it is not
material whether or not machinery
was kept ready to use so long as it
was not actually used in earning of
income

68 69
 Gist / Important point for
S.N. Case Citation Section
consideration
104 J.K. Transport [1998] 96 Taxman 32 Assets not to put to use: where
152 (Madhya examination of documents relating
Pradesh)/[1998] 231 to body-building of new trucks

Section - 32
ITR 798 (Madhya purchased by assessee showed
Pradesh)/[1998] 150 that they were not actually used in
CTR 264 (Madhya accounting year or part thereof, no
Pradesh) depreciation could be allowed on
such trucks

105 GVK Jaipur [2018] 100 taxmann. 32 Depreciation on public road is

Expressway Ltd com 95 (Raj.) admissible as building. SLP against
this decision was dismissed by
Supreme Court as reported in
[2018] 100 [Link] 96 (SC)/
[2018] 259 Taxman 429 (SC). It may
be mentioned that the position is
different now as amortization is
allowed as per Circular 9/2014

106 Peerless General [2016] 73 taxmann. 32 Unabsorbed depreciation

Finance & com 258 (SC) remaining as on 01-04-1997 can
Investment Co. Ltd be set off only against business
income from A.Y 1998-99: In view
of amendment made in sub-section
(2) of section 32 by Finance (No. 2)
Act, 1996, with effect from 1-4-
1997, unabsorbed depreciation as
on 1-4-1997 could be set off against
income from any head for immediate
assessment year following 1-4-
1997 and thereafter if there still
was any unabsorbed depreciation
same could be set off only against
business income for a period of eight
assessment years

107 Amin Machinery (P.) [2008] 114 ITD 32 When a company was incorporated
Ltd 413 (Ahmedabad)/ through conversion of a partnership
[2007] 111 TTJ 892 firm, carry forward of depreciation
(Ahmedabad) under section 32(2) could only be in

70 71
 Gist / Important point for
S.N. Case Citation Section
consideration
hands of partnership firm: The
law under section 78 envisages
succession of business, but

Section - 32
precludes the carry forward of
unabsorbed business loss, except
where the same is by way of
inheritance. A statutory devolution
cannot amount to inheritance,
which, by definition, can only be
to and by individuals. Another
essential feature of inheritance
is that it is purely a natural
phenomenon.

108 North Karnataka [2014] 51 taxmann. 32 No Depreciation on Toll Highway

Expressway Ltd com 214 (Bombay)/ to BOT operator: The assessee,
[2015] 228 Taxman infrastructure development
20 (Bombay)(MAG.)/ company constructed a road
[2015] 372 ITR on Build, Operate and Transfer
145 (Bombay)/ (BOT) basis on land owned by
[2014] 272 CTR 225 Government. Assessee is not
(Bombay) entitled to claim depreciation on toll
road so constructed and operated as
it is not the owner of the road.

109 West Gujarat [2017] 82taxmann. 32 No depreciation on toll roads which

Expressway Ltd com 224(Bombay)/ were not owned by assessee
[2017] 390 ITR 398
(Bombay)
110 Guzdar Kajora Coal [1972] 85 ITR 599 32 Fictitious price put to assets
Mines Ltd (SC) enables AO to ascertain correct
value: if circumstances exist showing
that fictitious price has been put on
assets or there is fraud or collusion
between vendor and vendee and
there has been inflation or deflation
of value for ulterior purposes, it is
open to income-tax authorities to

72 73
 Gist / Important point for
S.N. Case Citation Section
consideration
refuse to accept price mentioned in
deed or alleged by assessee and to
ascertain the actual original cost

Section - 32
111 United Breweries [2016] 76 taxmann. 32 No depreciation on goodwill
Ltd com 103 (Bangalore arising out of amalgamation: By
- Trib.) virtue of 5th proviso to section
32(1), assessee being amalgamated
company could not claim or be
allowed to claim depreciation
on assets acquired in scheme
of amalgamation more than
depreciation that was allowable to
amalgamating company

112 Kanaka [2018] 97 32 When no payment made for

Mahalakshmi [Link] 638 acquisition, there is no goodwill:
Cooperative Bank (Visakhapatnam - Assessee bank had not paid any
Ltd Trib.) consideration towards acquisition
of another bank and also had not
shown any depreciation towards
goodwill or commercial rights. In
such case, it could not be considered
that assessee had acquired goodwill
or commercial rights of said bank
and, thus, assessee would not be
eligible for depreciation on goodwill
under section 32

113 Toyo Engineering [2013] 33 taxmann. 32 No depreciation could be allowed

India Ltd com 560 (Mumbai on goodwill where very purchase
- Trib.)/[2012] 18 of goodwill was not proved by
ITR(T) 159 (Mumbai assessee
- Trib.)
114 Hoogly Mills Co. Ltd [2006] 157 Taxman 32 The gratuity liability taken over
347 (SC)/[2006] 287 by the assessee did not fall under
ITR 333 (SC)/[2006] any of those categories specified in
206 CTR 301 (SC) section 32. Hence, no depreciation

74 75
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S.N. Case Citation Section
consideration
could be claimed in respect of
the gratuity liability even if it was
regarded as capital expenditure.

Section - 32
The gratuity liability is neither
a building, machinery, plant or
furniture nor is an intangible asset
of the kind mentioned in section
32(1)(ii). Depreciation cannot be
allowed on land because that too
is not mentioned in section 32, the
assessee was not entitled to any
depreciation on the value of land in
respect of concern purchased by it.

115 Dharti Dredging & [2013] 31 taxmann. 32, 37 No depreciation if ownership not
Infrastructure Ltd. com 273 (Hyderabad Proven: Assessee was engaged
- Trib.)/[2013] in business of dredging. For
24 ITR(T) 538 assessment year 2008-09 it claimed
(Hyderabad - Trib.)/ depreciation on two dredgers
[2013] 57 SOT 31 stating that it had purchased same
(Hyderabad - Trib.) during financial year 2007-08. Since
record showed that assessee was
not owner of dredgers either wholly
or partly, it was not entitled to claim
depreciation

116 Excelex Biopolymers [2018] ITA No. 32(1)(ii) Depreciation not allowable on non-
Pvt Ltd 1110/Del/2013 of and 37 compete fee
ITAT, Delhi dated
01/03/2018
117 Sharp Business [2012] 27 taxmann. 32(1)(iii), No depreciation on non-compete
System com 50 (Delhi)/ 37 fee and also not allowable u/s 37
[2012] 211 Taxman as the same is capital expenditure:
576 (Delhi)/[2012] Amount paid as non-compete fee
254 CTR 233 (Delhi) does not qualify for depreciation
under section 32(1)(ii). Non-
compete fee paid by assessee to its
erstwhile partner as consideration

76 77
 Gist / Important point for
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consideration
for not setting up any business
of similar nature for a period of
seven years amounted to capital

Section - 35-36
expenditure and, thus, same was not
allowable under section 37(1)

118 Electronics Corpn. of [2012] 28 35(2AB) R&D expenditure which is

India Ltd [Link] approved by DSIR would only be
280 (Hyderabad)/ eligible for weighted deduction
[2014] 29 ITR(T)
637 (Hyderabad)/
[2013]140 ITD
221 (Hyderabad)/
[2013] 155 TTJ 748
(Hyderabad) [2012]
28 [Link]
280 (Hyderabad)/
[2014] 29 ITR(T) 637
(Hyderabad)/[2013]
119 HBL Nife Power [2012] 20 35D 35D not applicable when there is
Systems Ltd [Link] no public subscription: Where issue
120 (Hyderabad)/ of share capital was not for public
[2010] 134 TTJ 641 subscription and such shares were
(Hyderabad) issued for complying with SEBI
guidelines with regard to proportion
of promoters holding as against
total capital base, expenditure
incurred in connection with such
issue of shares was not eligible for
deduction under section 35D

120 Anita G [1999] 107 Taxman 36(1)(iii) Device to reduce tax liability:
99 (Andhra Pradesh) When entire set of transactions
was a device to reduce tax
liability of several taxable entities,
disallowance of interest on monies

78 79
 Gist / Important point for
S.N. Case Citation Section
consideration
borrowed by assessee from her
husband is justified and there is no
question of law.

Section - 36
121 Harrisons Malayalam [2012] 25 taxmann. 36(1)(iii) Disallowance is justified when
Ltd com 546 (Kerala)/ interest free loans are granted to
[2012] 210 Taxman subsidiaries out of interest bearing
115 (Kerala) loans taken from outside companies

122 Unifac Management [2018] 100 taxmann. 36(1)(va) Scope of section 43B and section
Services India Pvt com 244 (Madras)/ 36(1)(va) are different: In view of
Ltd [2019] 260 Taxman 36(1)(va), both contributions, viz.,
60 (Madras)/ ‘employees’ and ‘employers’ cannot
[2018] 409 ITR 225 be brought under same scope
(Madras) and ambit of section 43B to claim
deduction
123 Nasik Breeding & [2001] 77 ITD 581 36(1)(vi) 36(1)(vi) is applicable to animals
Research Farm Ltd (Pune) held as ‘capital assets’ and would be
inapplicable to birds
124 State Bank of Patiala [2005] 143 Taxman 36(1)(viia) Making of provision for bad and
196 (Punjab & doubtful debt in account books for
Haryana)/[2005] equal amount is necessary to claim
272 ITR 54 (Punjab & deduction u/s 36(1)(viia)
Haryana)/[2005] 198
CTR 407 (Punjab &
Haryana)
125 Southern [2010] 187 Taxman 36(1)(vii), Provisions as per directions
Technologies Ltd 346 (SC)/[2010] 320 37 of RBI have nothing to do for
ITR 577 (SC)/[2010] computation of liability under the
228 CTR 440 (SC) Income Tax Act. Provision barred
u/s 36(1)(iii) cannot be claimed u/s
37: NBFCs Prudential Norms as
per RBI directions deal only with
presentation of NPA provisions
in balance sheet of a NBFC and
they have nothing to do with
computation or taxability of

80 81
 Gist / Important point for
S.N. Case Citation Section
consideration
provisions for NPAs under Income-
tax Act. When provision for doubtful
debt is expressly excluded u/s 36(1)

Section - 37
(vii), such a provision cannot be
claimed as a deduction u/s on 37
even on basis of ‘real income theory’

126 Mamta Enterprises [2004] 135 Taxman 37 Compounding fee paid to

393 (Karnataka)/ Municipality for violation of
[2004] 266 ITR building plan not allowable as
356 (Karnataka)/ expenditure u/s 37: Claim for
[2004] 187 CTR 414 deduction made by assessee
(Karnataka) had to be considered in light of
Explanation to section 37(1) and
not with reference to provisions in
Corporation Act

127 Nahar Spinning Mills [2014] 49 taxmann. 37 Compounding fee paid to

Ltd com 565 (Punjab & Municipality for violation of
Haryana)/[2014] 226 building plan not allowable as
Taxman 364 (Punjab expenditure u/s 37: It is in the
& Haryana) nature of penalty

128 Maddi [1998] 96 Taxman 37 Expenditure incurred for FERA

Venkataraman & Co. 643 (SC)/[1998] 229 violation: Expenses tainted with
(P.) Ltd ITR 534 (SC)/[1998] illegality could not be allowed as
144 CTR 214 (SC) business expenditure.

129 Sushil Gupta [2019] 102 taxmann. 37 Fine for illegality in import: Fine
com 409 (Bombay)/ or penalty for redemption of goods
[2019] 262 Taxman for irregularities or illegalities
41 (Bombay)/ committed in process of importing
[2019] 411 ITR 678 goods is not an allowable deduction
(Bombay)
130 Haji Aziz and Abdul [1961] 41 ITR 350 37 Penalty for a breach of law can not
Shakoor Bros (SC) be said to be an amount wholly
and exclusively laid for purpose of
business

82 83
 Gist / Important point for
S.N. Case Citation Section
consideration
131 Garden Silk Weaving [1994] 74 Taxman 37 Penalty paid in importing goods
Factory 600 (Gujarat)/ in excess of licensed entitlement
[1994] 207 ITR 394 does not represent loss suffered

Section - 37
(Gujarat)/[1994] 122 in commercial transaction and not
CTR 43 (Gujarat) allowable as business expenditure

132 Mylan Laboratories [2014] 46 taxmann. 37 Depreciation cannot be allowed on

Ltd com 76 (Hyderabad non-compete fee (paragraph 52 of
- Trib.) the decision)

133 Rotork Controls [2009] 180 Taxman 37 For provision to be allowable there
India P Ltd 422 (SC)/[2009] 314 must be present obligation from
ITR 62 (SC)/[2009] past events: For a provision to
223 CTR 425 (SC) qualify for recognition, there must
be a present obligation arising from
past events, settlement of which is
expected to result in an outflow of
resources and in respect of which
a reliable estimate of amount of
obligation is possible

134 Aditya Birla Power [2010] 4 ITR(T) 658 37 Expenditure is developing business
Co Ltd (Mumbai) of associate concerns to be claimed
on pro rata basis: Expenditure on
developing business of associate
concerns shown as ‘advances
recoverable’ by assessee was to
be treated as work-in-progress; as
and when, and if a project did come
to a financial closure and revenue
was realised by assessee, necessary
expenditure would be allocated on a
pro rata basis depending on volume
of revenue and other financial
parameters

84 85
 Gist / Important point for
S.N. Case Citation Section
consideration
135 Madras Industrial [1997] 91 Taxman 37 Discount on debentures allowable
Investment 340 (SC)/[1997] 225 as an expenditure on proportionate
Corporation Ltd ITR 802 (SC)/[1997] basis spread over period for

Section - 37
139 CTR 555 (SC) which debentures would remain
outstanding

136 Indian Metal & [1964] 51 ITR 240 37 Claim for deduction in respect
Metallurgical (MAD.) of an anticipated, uncertain
Corporation or contingent liability is not
permissible.

137 Hyundai Motors [2015] 62 taxmann. 37 Expenditure on gift of cars to

India Ltd com 42 (Chennai - Police Department: Expenditure
Trib.) (TM)/[2015] not eligible expenditure u/s 37(1)
155 ITD 1 (Chennai as it was not incidental to carrying
- Trib.)(TM) (TRIB.)/ on business and there was no
[2016] 176 TTJ 456 commercial expediency
(Chennai - Trib.) (TM)
138 Singareni Colleries [1997] 90 Taxman 37 Expenditure on rehabilitation of
Company Ltd 185 (Andhra orphans in cyclone relief: Tribunal’s
Pradesh)/[1996] findings the expenditure is not only
221 ITR 48 (Andhra conceived as philanthropic measure
Pradesh) but also as a business proposition,
gave rise to a referable question of
law.

139 Aditya Minerals (P.) [1999] 106 Taxman 37 Lease payment to acquire mine is
Ltd. 337 (SC)/[1999] 239 capital expenditure even when the
ITR 817 (SC)/[1999] payment is on monthly basis
156 CTR 97 (SC)
140 Pingle Industries Ltd [1960] 40 ITR 67 37 Periodic payment for a contract to
(SC) excavate stones was neither rent
nor royalty but a lump sum payment
in installments for acquiring a
capital asset of enduring benefit

86 87
 Gist / Important point for
S.N. Case Citation Section
consideration
141 Chintalapudi [1964] 51 ITR 276 37 Payments to land owners for
Ranganayakulu (Andhra Pradesh) mining lease: Assessee, engaged
in business of extracting iron ore

Section - 37
and selling it, entered into mining
lease agreement with land-owners.
Payments made under that
agreement on account of right to
enter upon land, brokerage and
crop compensation to land owners
were not an allowable business
expenditure

142 R.B. Seth Moolchand [1972] 86 ITR 647 37 Prospecting licence fee paid for
Suganchand (SC) one year for initiating business is an
expenditure of capital nature

143 Nitrex Chemicals [2015] 62 taxmann. 37 Payment of non-compete fee

India Ltd com 284 (Delhi - resulted in enduring benefit to
Trib.) assessee and as it was capital in
nature, it could not be allowed as
revenue expenditure

144 GKN Driveline India [2017] 88 taxmann. 37 Payment made by assessee for
Ltd com 208 (Delhi)/ smooth transfer of factory as part
[2018] 252 Taxman of agreement for purchase of assets
297 (Delhi) and liabilities of a newly set up
factory was clearly for an enduring
benefit and not just towards non-
compete obligation. Hence, not
allowable as revenue expenditure

145 FFE Minerals India [2018] 98 taxmann. 37 Liquidated damages paid for delay
(P.) Ltd com 170 (Madras) in delivery of machinery did not
crystallize in relevant year and
hence not allowable, in view of fact
that there had been only discussions
and negotiations for arriving at
amount of liquidated damages

88 89
 Gist / Important point for
S.N. Case Citation Section
consideration
146 Micro Land Ltd [2012] 18 taxmann. 37 Deduction allowable only in respect
com 80 (Karnataka)/ of expenditure which is actually
[2012] 204 Taxman incurred or laid out in present and

Section - 37
174 (Karnataka) not an expenditure which is a future
(Mag.)/[2012] 347 contingent expenditure which way
ITR 613 (Karnataka) arise or may not

147 Thermax Babcock & [2001] 79 ITD 63 37 When liability under warranty
Wilcox Ltd (Pune) (TM)/[2001] clause in contract did not accrue
72 TTJ 827 (Pune) during relevant accounting years,
(TM) merely because provision had been
made as per accounting standards
or that it was in consonance with
established commercial principles, it
could not be allowed under Income-
tax law

148 Kanoria Chemicals & [1995] 78 Taxman 37 Expenditure incurred in connection

Industries Ltd 455 (Calcutta) with starting new project which
became abortive could not be
allowed as revenue expenditure

149 Brooke Bond India [1997] 91 Taxman 26 37 Expenditure on issue of shares

Ltd (SC)/[1997] 225 ITR to increase capital: Expenditure
798 (SC)/[1997] 140 incurred on issuing share to increase
CTR 598 (SC) its share capital by a company is in
the nature of capital expenditure as
it is directly related to expansion of
capital base, though it would help
in the business of the company and
may also help in the profit making

150 MIL controls Ltd. [2012] 20 taxmann. 37 Standard of Proof in case of related
com 813 (Kerala)/ company: If payee was a related
[2012] 206 Taxman company belonging to same group,
125 (Kerala)(MAG.)/ standard of proof required for
[2012] 340 ITR 190 allowing claim was more than what
(Kerala) was required in other cases

90 91
 Gist / Important point for
S.N. Case Citation Section
consideration
151 Andhra Pradesh [2014] 46 taxmann. 37, 4, Payment of privilege fee made by
Beverages com 91 (Hyderabad Article assessee, a wholesale distributor

Section - 37-40A
Corporation Ltd - Trib.) 289 of alcoholic products, to State
Government in terms of section 23A
of Excise Act, 1968, was merely an
application of income and, thus, it
could not be allowed as business
expenditure under section 37(1).
The corporation is also not State
under Article 289(1)

152 P V S Memorial [2015] 60 taxmann. 40(a)(ia) Deduction under a wrong provision

Hospital Ltd com 69 (Kerala)/ of law will not save an assessee from
[2015] 234 Taxman section 40(a)(ia). Payment made by
46 (Kerala)/[2016] assessee-hospital to other hospital
380 ITR284 (Kerala)/ for performing various professional
[2015] 280 CTR 511 services in assessee’s hospital would
(Kerala) be covered under section 194J

153 K. Venkataraju [2013] 34 40(a)(ia), Disallowance u/s 40(a)(ia )is

Vemagiri [Link] 92 144 independent of estimation of
(Visakhapatnam - income after rejection of books as
Trib.)/[2013] 58 SOT it is related to non-compliance of
33 (Visakhapatnam provisions of the Act
- Trib.)(URO)

154 Attar Singh Gurmukh [1991] 59 Taxman 11 40A(3) Expenditure includes all outgoings:
Singh (SC)/[1991] 191 ITR Section 40A(3), read with rule 6DD,
667 (SC)/[1991] 97 can not be said to be intended to
CTR 251 (SC) restrict business activities. The
word ‘expenditure’ is not defined
in the Act and it is a word of wide
import. Section 40A(3) refers to all
the outgoings.

92 93
 Gist / Important point for
S.N. Case Citation Section
consideration
155 Dattatray Poultry [2018] 95 41(1) Mere reflection of liability in books
Breeding Farm (P.) [Link] 130 of accounts without proof would
Ltd (Ahmedabad - Trib.)/ amount to cessation of liability:

Section - 41
[2018] 171 ITD 615 When outstanding sundry creditors
(Ahmedabad - Trib.) for are shown for several years
but assessee failed to produce
such creditors and furnish correct
address of all creditors, their
PAN numbers and confirmations,
Assessing Officer was justified in
holding that there was cessation
of liability and merely because
liabilities were shown in books of
account by assessee and not written
back, such liabilities could not be
held to be subsisting liability

156 Rama Steel Rolling [2013] 35 taxmann. 41(1) Payment shown as liability but
Mills & Gen Engg com 262 (Rajasthan) not paid due to dispute for long
works years: Assessee purchased goods
from one ‘T’ and did not pay due to
dispute. The amount was shown as
liability for years but not proved. It
is assessable as income of assessee
under section 41(1)

157 Gujtron Electronics [2017] 83 taxmann. 41(1) Deposits from customers lying
P Ltd. com 389 (Gujarat)/ unpaid for several years: Assessee
[2017] 249 Taxman company collected a huge sum of
443 (Gujarat)/ advance from its customers under
[2017] 39 7ITR 462 a sales promotion scheme and the
(Gujarat) scheme was terminated several
years ago but the advances were
shown as liability. As there was
absolutely no correspondence with
the customers with respect to the
deposits, there was cessation of
liability and the amount was to be
added as income.

94 95
 Gist / Important point for
S.N. Case Citation Section
consideration
158 T V Sundaram [1996] 88 Taxman 41(1), 28 Change of character from capital
Iyengar & Sos Ltd. 429 (SC)/[1996] 222 to revenue of a receipt due to
ITR 344 (SC)/[1996] limitation or statutory/contractual

Section - 41-43
136 CTR 444 (SC) right: An amount received in the
course of trading transaction, may
not be taxable in year
of receipt as being of capital
character but it changes its
character when it becomes
assessee’s own money because of
limitation or by any other statutory
or contractual right. In such a case,
the amount should be treated as
income of assessee.

159 Sabithamani V [2017] 79 taxmann. 43(1), 32 Transaction to reduce tax liability:

com 203 (Chennai - If old windmill was purchased at
Trib.)/[2017] 163 ITD enhanced price and the aggregate
478 (Chennai - Trib.) of depreciation claimed by previous
and present owners is much higher
than original cost, the purpose of
transfer was for reduction of tax
liability and hence, cost in hands of
assessee to be reduced.

160 S. Pathy, HUF [2006] 100 ITD 53 43(3), Horses are stock-in-trade in the
(Chennai)/[2006] 28(i) business of an assessee who is
105 TTJ 1043 carrying on activity of maintenance
(Chennai) of horses with object of earning
income by letting out and sale of
horses in a systematic and organized
manner over a period of time

161 Premier Industries [2018] 100 taxmann. 43(5) Hedging loss cannot be allowed
(India) Ltd com 337 (Indore - under proviso to section 43(5)
Trib.)/[2019] 174 ITD without proof: In the absence
415 (Indore - Trib.) of specific details to show that
assessee had entered into a contract
for hedging of forward trading of its

96 97
 Gist / Important point for
S.N. Case Citation Section
consideration
goods to guard against loss through
price fluctuation which might arise
from contracts for delivery of goods,

Section - 43-45
hedging loss arising from alleged
contracts did not fall under proviso
(a) of section 43(5)

162 L.G. Balakrishnan [2003] 129 Taxman 43(3) Birds being “livestock” cannot be
854 (Madras)/ treated as capital assets due to
[2002] 176 CTR 394 amendment of definition of “plant”
(Madras) u/s 43(3) w.e.f 01/04/1962 through
Finance Act, 1995 and they have to
be valued as part of stock-in-trade

163 Exide Industries Ltd SLP (Civil) No. 43B(f) SLP pending against the decision of
22889/2008 Calcutta High Court which struck
down section 43B(f). Supreme
Court directed that assessee would,
during the pendency of this Civil
Appeal, pay tax as if Section 43B(f) is
on the Statute Book but at the same
time it would be entitled to make a
claim in its returns.

164 Vikas Solvextracts [2018] 89 taxmann. 45(2) Section 45(2) would not apply
P Ltd com 197 (Kolkata - to transactions wherein land is
Trib.)/[2018] 168 ITD transferred to developer and
692 (Kolkata - Trib.)/ LTCG is offered on the gains on
[2018] 192 TTJ 591 sale of flats received: Assessee
(Kolkata - Trib.) transferred its land to a developer
for development of land into a
residential complex and let out
flats it got from developer and
offered rental income to tax. The
assessee subsequently, sold those
flats through developer and offered
consideration as long-term capital
gain. Therefore, it was not a case

98 99
 Gist / Important point for
S.N. Case Citation Section
consideration
where the land was after converting
it into stock-in-trade of business and

Section - 46A-55A
section 45(2) would not apply

165 RST, In re [2012] 19 taxmann. 46A Gains arising from buy-back of

com 215 (AAR - shares to be taxed u/s 46A r/w
NewDelhi)/[2012] section 48: Resort to section 45 is
206 Taxman 477 neither warranted nor is it exempt
(AAR - NewDelhi)/ in view of section 47(iv). Also, the
[2012] 348 ITR 368 amount received is subject to TDS
(AAR - NewDelhi)/
[2012] 249 CTR 113
(AAR - NewDelhi)
166 Saifee Jubiee High [2018] ITA No. 2301/ 50C, 11 Sale Price approved by Charity
School & Madressa Ahd/2014 With CO Commissioner is to be adopted in
Yusufiyan Society No. 298/Ahd/14 of case of a Trust governed by Public
ITAT, Ahmedabad Trust Act and 50C is not applicable:
dated 16/03/2018 In case of a Trust governed by Public
Trust Act, the sale price approved
by Charity Commissioner has to be
adopted in the sale deed and the
same is to be treated as the FMV
and section 50C would not apply

167 Daulatram [1990] 51 Taxman 55A AO is competent to make reference

248 (Andhra u/s 55 A to Valuation Officer to
Pradesh)/[1990] 181 ascertain cost of construction of a
ITR 119 (Andhra building and it is not right to say that
Pradesh)/[1990] 90 such a reference can be made only
CTR 152 (Andhra in respect of capital gains alone
Pradesh)
168 Jogat Mohan Kapur [1995] 82 Taxman 55A Application of consumer price
1 (Calcutta)/ index in reverse manner to compute
[1995] 211 ITR the value of land for earlier years
721 (Calcutta)/ to reopen WT assessments was
[1995] 125 CTR 428 irrational and acting on the basis of
(Calcutta) totally extraneous factor

100 101
 Gist / Important point for
S.N. Case Citation Section
consideration
169 Emil Webber [1978] 114 ITR 515 56 Perquisites not falling under
(Bombay) confirmed ‘business’ or ‘salary’ can be taxed
in [1993] 67 Taxman under head “Other Sources”.

Section - 56
532 (SC)/[1993] 200 Amount paid by way of tax on salary
ITR 483 (SC)/[1993] received by the assessee is income
110 CTR 257 (SC) of the assessee.

170 National Thermal [1988] 24 ITD 1 56 Interest on deposits received

Power (Delhi) (SB) during pre-commencement period
taxable u/s 56: Interest received on
short-term deposits during
construction period of setting up
of business constitutes income
from other sources and cannot be
deducted from cost of construction.
The question of funds being surplus
is not dependent upon the ultimate
utilisation of the funds. This is a
concept of the short run. The funds
are surplus in the sense when there
are funds in excess of the immediate
requirements. The source of
interest income earned from short
term deposits taken from scheduled
banks was the contract with the
banks to advance the money on
interest which was a conscious
decision taken by the assessee.
Apart from the accountancy
practice the question of taxability
of the income is an entirely
different issue and it depends on
the provisions of the income-tax
law. Interest on short-term bank
deposits is from an independent
source not directly related to the
construction work

102 103
 Gist / Important point for
S.N. Case Citation Section
consideration
171 Tuticorin Alkali [1997] 93 Taxman 56 Interest on deposits in pre-
Chemicals & 502 (SC)/[1997] 227 commencement period is taxable
Fertilizers Ltd. ITR 172 (SC)/[1997] u/s 56 and business loss cannot

Section - 56
141 CTR 387 (SC) be set-off: Interest earned on
short-term investment of funds
borrowed for setting-up of factory
during construction of factory
before commencement of business
has to be assessed as income from
other sources and it would not go
to reduce interest on borrowed
amount which would be capitalized.
Also, such interest income cannot
set off against loss of the company
172 Thermal Powertech [2017] 81 taxmann. 56 When assessee deposited unutilised
Corporation India com 168 (Hyderabad borrowed funds in short term fixed
Ltd. - Trib.)/[2017] 164 deposits during construction of
ITD 449 (Hyderabad power plant, interest earned on
- Trib.)/[2017] 188 those deposits was to be taxed as
TTJ 462 (Hyderabad income from other sources
- Trib.)
173 Rassi Cement Ltd. [1998] 100 Taxman 56 Interest earned by assessee on
568 (Andhra surplus funds deposited in
Pradesh)/[1998] 232 banks during installation of
ITR 554 (Andhra assessee-company had to be taken
Pradesh)/[1999] 153 as income from other sources and
CTR 140 (Andhra could not be treated as a part of
Pradesh) capital structure

174 Sponge Iron India [1993] 67 Taxman 56, 57 Interest on deposits earned in
Pvt. Ltd. 437 (Andhra pre-commencement period is not
Pradesh)/[1993] 201 business income and deduction
ITR 770 (Andhra for administrative expenses etc
Pradesh)/[1993] is also not permissible: When
111 CTR 67 (Andhra the assessee’s business has not
Pradesh) commenced, assessee’s interest
income could not be treated as
business income and

104 105
 Gist / Important point for
S.N. Case Citation Section
consideration
the assessee was not entitled to
the deduction of the administrative
expenses, exploration and mining

Section - 56
expenses from out of its interest
income
175 Consolidated Fibers [2005] 146 Taxman 56, 57 Interest from surplus funds out of
and Chemicals Ltd. 14 (Calcutta)/ share capital and borrowings kept
[2005] 273 ITR in short-term deposits was taxable
353 (Calcutta)/ as income from other sources
[2005] 195 CTR 605 during the period when the assessee
(Calcutta) did not commence business. The
purpose of the borrowing was for
the purpose of construction of
the project and the interest would
have been paid even if it would not
have been invested. Therefore, the
interest could not be said to have
been laid out or expended for the
purpose of earning the income,
particularly when the interest paid
was eligible for being capitalised,
the expenditure that had been
incurred being in the nature of
capital expenditure and would not
be within the purview of Section
57(iii)
176 Kakinada SEZ (P.) Ltd [2013] 31 taxmann. 56, 57 When loans taken for business
com 165 (Hyderabad purposes were invested in fixed
- Trib.)/[2013] 141 deposits, interest paid on borrowed
ITD 635 (Hyderabad funds cannot be deducted u/s
- Trib.) 57 from interest income on the
deposits
177 Jay Metal Industries [2017] 84 taxmann. 56, 22 In composite letting of building
P Ltd com 11 (Delhi)/ together with fixtures, furnitures
[2017] 249 Taxman etc, rental income was to be
450 (Delhi)/[2017] assessed as income from other
396 ITR 194 (Delhi) sources

106 107
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S.N. Case Citation Section
consideration
178 Sultan Brothers P [1964] 51 ITR 353 56, 22 In case of inseparable letting of
Ltd (SC) building, P&M and furniture, rental
income is taxable u/s 56

Section - 56-64
179 Autokast Ltd. [2001] 116 Taxman 56, 4 Interest on short term deposits
244 (SC)/[2001] 248 during construction period would
ITR 110 (SC)/[2001] not go to reduce overall cost of the
165 CTR 16 (SC) project .

180 J.B. Roy [2012] 26 taxmann. 57 Colourable activity of transferring

com 235 (Delhi)/ funds amongst group concerns
[2013] 212 Taxman and claiming interest on borrowed
591 (Delhi)/[2014] funds: Assessee, a director of
265 CTR 505 (Delhi) several companies of ‘S’ group,
borrowed money from some
companies of the group to buy
shares of some other companies
of the group. This activity involved
transfer of funds and interest was
paid on borrowed funds. As the
activity is colourable, the claim of
deduction of interest was rejected.

181 Trustees of H.E.H. [2001] 117 Taxman 57(iii) It was impermissible to allow
the Nizam’s 665 (Andhra expenditure incurred by way
Jewellery for Family Pradesh)/[2001] 250 of interest on such borrowal as
Trust ITR 632 (Andhra deduction under section 57(iii) from
Pradesh)/[2001] 170 interest earned on fixed deposits on
CTR 172 (Andhra whose security loan was taken
Pradesh)
182 Mohini Thapar [1972] 83 ITR 208 64 The assets transferred was the gift
(SC) of the cash amounts made by the
assessee to his wife. The transfers
were direct transfers. But those
assets, were invested either in
shares or otherwise. Hence, the
incomes realised either as dividends
from shares or as interest from

108 109
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S.N. Case Citation Section
consideration
deposits were income indirectly
received in respect of the transfer
of cash directly made. The income

Section - 68
derived by the assessee’s wife was
rightly included in the assessee’s
total income under section 16(13)
(a)( iii).

183 Yadu Hari Dalmia [1980] 4 Taxman 68 Addition on unproved expenditure

525 (Delhi)/[1980] could be made and sections 68 to
126 ITR 48 (Delhi)/ 69D are only clarificatory: Even
[1980] 17 CTR 234 otherwise an addition can be made
(Delhi) towards income from undisclosed
sources in respect, inter alia, of
amounts of expenditure which the
assessee is found to have actually
incurred but not satisfactorily
explained

184 V C Shukla Vs CBI [1998] 3 SCC 410 68 Regularly Kept book does not mean
that an entry must necessarily
be made in the book of account
at or about the time the related
transaction takes place so as to
enable the book to a pass the
test of ‘regularly kept’. But even
correct and authentic entries in
books of account cannot without
independent evidence of their
trustworthiness, fix a liability upon
a person

185 A. Govindarajulu [1958] 34 ITR 807 68 Section 68 casts liability on

Mudaliar (SC) assessee: The assessee has to prove
satisfactorily the source and nature
of certain amounts of cash received
during the accounting year and if
not, the ITO is entitled to draw the
inference that the receipts are of an

110 111
 Gist / Important point for
S.N. Case Citation Section
consideration
assessable nature. The decision also
indicates that there is no need for
the ITO to prove the source of the

Section - 68
receipts
186 Independent Media [2012] 25 taxmann. 68 AO is not under any duty to show
Pvt Ltd com 276 (Delhi)/ the source: For making addition
[2012] 210 Taxman under section 68, AO would not be
14 (Delhi)(MAG.) under any duty to further show or
establish that monies emanated
from coffers of assessee-company
187 Nova Promoters & [2012] 18 taxmann. 68 Value of Affidavits and whether
Finlease Pvt Ltd com 217 (Delhi)/ cross-examiantion is necessary
[2012] 206 Taxman for their rejection: In the face of
207 (Delhi)/[2012] overwhelming material on record
342 ITR 169 (Delhi)/ to negate the claim of genuineness
[2012] 252 CTR 187 of the transactions and to doubt
(Delhi) the veracity of the transactions,
affidavits need not be accepted
as reliable In such a case it cannot
be said that the affidavits can
be rejected only after cross
examination.
188 Seema Jain [2018] 96 taxmann. 68 Addition on loan stands when lender
com 307 (Delhi)/ company did not have tangible or
[2018] 257 Taxman intangible fixed assets, it declared
380 (Delhi)/[2018] a meagre income of few thousand
406 ITR 411 (Delhi) rupees and thus it was not in a
position to advance huge loan to
assessee
189 Selvi J Jayalalitha [2017] 78 taxmann. 68 Income Tax Returns are
com 161 (SC)/[2017] not conclusive proof of
392 ITR 97 (SC) creditworthiness: Income-tax
returns and orders would not
ipso facto either conclusively
prove or disprove the charge of
disproportionate assets and can at

112 113
 Gist / Important point for
S.N. Case Citation Section
consideration
best be pieces of evidence which
have to be evaluated along with
other materials on record

Section - 68
190 N.R. Portfolio (P.) Ltd [2014] 42 taxmann. 68 Evasive and Transient approach
com 339 (Delhi)/ before AO & Parameters for
[2014] 222 Taxman Creditworthiness and genuineness
157 (Delhi)(MAG)/ of Share money: Nature of
[2014] 264 CTR 258 relationship between parties, object,
(Delhi) terms and quantum of investment,
types of investor, creditworthiness
of recipient, etc. Assessee-company
adopted non-cooperative attitude
before Assessing Officer once
they came to know about directed
enquiry and investigation being
made. Evasive and transient
approach before Assessing Officer
was limpid and perspicuous and,
therefore, addition made in respect
of impugned amount was to be
upheld
191 K.I International [2017] ITA Nos 897 68 Features of shell companies
& 898/Mds/2017 of described: Based on replies and
ITAT, Chennai dated available data, all the companies
24/08/2017 involved are basically investment
companies existing only in paper,
no activity as such, practically no
fixed assets, filed their returns
showing meagre income and
lack creditworthiness. Further,
most of the companies received
share application money at a
huge premium to its face value or
shown sale of bogus investments
of unquoted equity shares,
the directors of above named
companies are also directors in

114 115
 Gist / Important point for
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consideration
many other companies where on
an average directorship is in 13
companies (130/10). The apparent

Section - 68
strength of returns of income filed
with RoC, Income Tax Department
and opening of bogus bank
accounts from bogus addresses and
subsequent transactions through
banking channels has emboldened
the entry operators and the
beneficiary entities to embark upon
such a complex, fraudulent and
fictitious process involving a huge
number of companies and other
entities. The subsequent retraction
by the operator is nothing but an
afterthought and more so, the entire
process is fictitious and fraudulent

192 Greenview [2003] 133 Taxman 68 Delay in retraction and allegation

Restaurant 432 (Gauhati)/ of coercion: From facts, it was clear
[2003] 263 ITR 169 that there was a delay on the part
(Gauhati)/[2003] 185 of the appellant and its partner in
CTR 651 (Gauhati) retracting the statements recorded.
No attempt was made on behalf of
the appellant to prove the allegation
of inducement, threat or coercion
through the witnesses. Having
regard to the materials on record,
the appellant had failed to establish
that the statements of its partner
had been recorded in the course of
the search by using coercion, threat
or inducement.

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consideration
193 Vinaylene Textile [2018] ITA No: 68 The background of bogus
Industries 3240/Mum/2017 of accommodation entry cannot be
ITAT, Mumbai dated ignored by putting on blinkers and

Section - 68
23/02/2018 only looking at the documents
being submitted.

194 Shaan Construction [2018] ITA No. 4520/ 68 Device to introduce unaccounted
P Ltd Del/ 2009 and 613/ money though shell companies:
Del/ 2013 dated The whole exercise carried out
28/03/2018 by the assessee is simply a devise
to introduce unaccounted money
through various shell companies
in the form of share capital at a
premium. The manner of issue
of the shares through these
companies, the manner of providing
confirmation on the letter pad,
the manner of maintaining the
annual accounts and the manner of
submitting the bank accounts on
the letter pad or on a computerized
print out to give it a semblance of
originality to defraud the revenue,
proves much more than what
is under challenge before us. It
shows the whole picture how
the accommodation entries are
routed through shell companies as
share capital to evade the taxes.
The whole facade created by
assessee shows the real purpose of
introducing the unaccounted money
of the assessee without payment of
taxes.

118 119
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S.N. Case Citation Section
consideration
195 GS Tiwari & Co [2014] 41 taxmann. 68 Addition u/s 68 can be made
com 17 (Allahabad)/ apart from estimation of business
[2014] 220 Taxman income: In an appropriate case,

Section - 68
111 (Allahabad) Assessing Officer can make addition
(MAG.)/[2013] 357 in respect of both cash credits
ITR 651 (Allahabad) under section 68 as well as business
income estimated by him u/s 44AD
after rejecting unreliable books of
account maintained by assessee

196 Kale Khan [1963] 50 ITR 1 (SC) 68 Cash credits in question could be
Mohammad Hanif assessed to tax as income from
undisclosed sources in addition
to business income computed by
estimate

197 Maduri Rajaiahgari [1979] 120 ITR 294 68 When assessee fails to establish
Kistaiah (AP) that the unexplained cash credits
are referable to business income
separate addition u/s 68 is
warranted apart from estimation
of business income: Assessee’s
consistent plea was that cash credits
were genuine loans. No stand was
taken that unexplained cash credits
were referable to business income
which was determined on estimate
basis. In such a situation, addition of
unexplained cash credits as income
from other sources by ITO was valid

198 Mir Mazharuddin [2013] 35 taxmann. 68 Addition under section 68 is

com 541 (Hyderabad permissible where Assessing
- Trib.)/[2013] Officer estimated business income
22 ITR(T) 314
(Hyderabad - Trib.)/
[2013] 59 SOT 9
(Hyderabad - Trib.)
(URO)

120 121
 Gist / Important point for
S.N. Case Citation Section
consideration
199 Ametak Auto Ltd [2011] 12 taxmann. 68 Mere fact of following procedure
com 102 (Punjab & would not make deposits genuine:
Haryana)/[2011] 200 Mere fact that procedure under

Section - 68
Taxman 184 (Punjab Section 58A of the Companies Act
& Haryana)(MAG.)/ was followed, cannot be conclusive
[2011] 237 CTR 205 of genuineness of the deposits.
(Punjab & Haryana) The statutory procedure under
2010-TIOL-805-HC- the Companies Act is merely
P&H-IT intended to safeguard the interest
of the depositor. The Assessing
Officer gave due opportunity to
the assessee to prove identity and
creditworthiness of the depositors
as well as the genuineness of the
transaction. No effort was made
by the assessee to discharge the
burden statutorily placed on it in
that regard.

200 Ultra [2013] 40 taxmann. 68 Mere filing of IT returns and back

Modern com 458 (Delhi)/ account particulars would not be
Exports (P.) Ltd [2014] 220 Taxman enough, when the notices sent
165 (Delhi)(MAG.) by AO were returned unserved:
Notices sent by AO to share
applicants were returned unserved.
However, assessee still managed
to secure documents such as their
income tax returns as well as
bank account particulars, in such
circumstances, Assessing Officer
was justified in drawing adverse
inference and adding amount in
question to assessee’s taxable
income under section 68

122 123
 Gist / Important point for
S.N. Case Citation Section
consideration
201 Synergy Finlease (P.) [2019] 105 taxmann. 68 In view of fact that share applicant
Ltd com 208 (Delhi - companies had very meagre
Trib.)/[2019] 177 ITD income, they lack creditworthiness

Section - 68
160 (Delhi - Trib. for making huge investments
and genuineness of transactions
were also not established from
documentary evidences shown by
assessee. Addition under section
68 in respect of share capital was
justified

202 Frostair (P.) Ltd [2012] 26 taxmann. 68 When details furnished by assessee
com 11 (Delhi)/ about share applicants were
[2012] 210 Taxman incorrect, addition under section
221 (Delhi)(MAG.) 68 was proper: The Assessing
Officer went into great lengths to
verify the genuineness of these
transactions. He issued summons
to the share applicants and only
9 could be served; none actually
responded through their authorized
or principal officer. Even during
remand, 16 of the 18 notices to
the share applicants could not be
served. The Assessing Officer also
examined the bank accounts of the
share applicants from which the
share application amounts were
subscribed. He noticed a regularity,
a pattern, in the methodology of
infusing cash into the accounts, and
within a short while afterwards,
withdrawing sums to pay for the
shares. The PAN/GIR numbers of
the share applicants furnished by
the assessee were not found to be
correct, upon verification from the
concerned Income tax Officers

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 Gist / Important point for
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consideration
of the ward (s) in question. The
assessee was given opportunity
to produce the share applicants’

Section - 68
principal officers, but he did not do
so. The share applicants’ addresses
too were incorrect.

203 Novdaya Castle Pvt. [2014] 50 taxmann. 68 Certificate of incorporation, PAN,

Ltd. com 110 (Delhi)/ etc., are relevant for purpose
[2014] 226 Taxman of identification, but have their
190 (Delhi)(Mag.)/ limitation when there is evidence
[2014] 367 ITR 306 and material to show that
(Delhi) subscriber was a paper company
and not a genuine investor. in
case of private limited companies,
generally persons known to
directors or shareholders, directly
or indirectly, buy or subscribe to
shares and, therefore, an assessee
cannot simply furnish some details
and remain quiet when summons
issued to shareholders remain
un-served and uncomplied; their
reluctance and hiding may reflect
on genuineness of transaction and
creditworthiness of creditors. SLP
against the decision is dismissed by
Supreme Court as reported in 56
[Link] 18 (SC)

204 Raghava Reddy P V [1956] 29 ITR 942 68 Mere credit entry would not be
(AP) discharge of burden of proof cast
on the assessee. Otherwise a clever
assessee can always throw the
burden of proof on the income-
tax authorities by making a credit
entry in the name of a third party
either real or pseudonymous.

126 127
 Gist / Important point for
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consideration
205 P. Mohanakala [2007] 161 Taxman 68 Burden on the assessee to rebut
169 (SC)/[2007] 291 the evidence and inference of AO:
ITR 278 (SC)/[2007] It is true that even after rejecting

Section - 68
210 CTR 20 (SC) the explanation given by the
assessees if found unacceptable,
the crucial aspect whether on
the facts and circumstances of
the case it should be inferred the
sums credited in the books of the
assessees constituted income of
the previous year must receive the
consideration of the authorities
provided the assessees rebut the
evidence and the inference drawn
to reject the explanation offered as
unsatisfactory. The burden in this
regard was on the assessees. No
such attempt has been made before
any authority.
206 Cornerstone [2018] ITA No. 665/ 68 The Department is not remediless
Property Bang/2017 of ITAT, and is free to proceed to reopen
Investments P Ltd. Bangalore dated the individual assessment of such
09/02/2018 alleged bogus shareholders in
accordance with the law.
207 Dhanalaxmi Steel [1997] 93 Taxman 68 Finding of fact is to be based on
Re-rolling Mills 561 (Andhra cumulative effect of all facts and
Pradesh)/[1997] 228 normally cannot be disturbed:
ITR 780 (Andhra Section 68 does not stop at
Pradesh) advancing the explanation about
the nature and source of any sum
found credited in the books. The
Assessing Officer is also required to
be satisfied about the explanation
offered by the assessee. When
the law has given to the Assessing
Officer discretion and it is his
satisfaction upon which

128 129
 Gist / Important point for
S.N. Case Citation Section
consideration
genuineness has to be decided,
his inference on basis of facts.
Findings on question of pure fact

Section - 68
arrived at by the Tribunal are not
to be disturbed by the High Court
on reference unless it appears
that there was no evidence before
the Tribunal upon which they, as
reasonable men, could come to
the conclusion to which they had
come and that is so even though
the High Court would, on evidence,
have come to conclusion entirely
different from that of the Tribunal.
When a conclusion has been
reached on appreciation of facts,
whether that is sound or not, must
be determined not by considering
the weight to be attached to each
single fact in isolation, but by
assessing the cumulative effect of all
the facts in their setting as a whole.
208 Krishnaveni Ammal [1986] 158 ITR 826 68 If best evidence is not placed before
(Madras)/[1984] 38 Court, an adverse inference can be
CTR 331 (Madras) drawn as against person who ought
to have produced it. In case of non-
furnishing of documentary evidence
of corroborative value which is
within reach of assessee, judicial
body cannot act on such interested
testimony of assessee alone.

209 NDR Promoters Pvt. [2019] 102 taxmann. 68 Investor companies maintained by
Ltd. com 182 (Delhi)/ one person and paper companies: In
[2019] 261 Taxman respect of amount received as share
270 (Delhi)/[2019] capital from several companies,
410 ITR 379 (Delhi) in view of fact that all of these
companies were maintained by

130 131
 Gist / Important point for
S.N. Case Citation Section
consideration
one person who was engaged in
providing accommodation entries
through paper companies and all

Section - 68
such companies were located at
same address, impugned addition
was justified

210 Rasun Exports Pvt [2009] 68 Decision in case of Lovely Exports

Ltd ITA/1185/H/09 is not a binding precedent under
of ITAT, Hyderbad Article 141: The observations
dated 11 September, of Hon’ble Supreme Court while
2009 deciding the special leave petition
in the case of M/s Lovely Exports
(2009) (319 ITR 5 St.) cannot be
considered to be law decided which
has a binding precedence under
Article 141 of the Constitution of
India. Such observations are true on
the fact of the respective case and
cannot be applied across the board
even when the facts in other cases
are all together different. One has to
see the surrounding circumstances
while deciding the issue like this as
observed by the Supreme Court in
the case of Smt. Sumati Dayal Vs.
CIT (214 ITR 801) (SC) and CIT Vs.
Durga Prasad More (82 ITR 540)
(SC).

211 NRA Iron & Steel [2019] 103 taxmann. 68 Supreme Court laid down guidelines
Pvt. Ltd. com 48 (SC)/[2019] on manner of making additions u/s
262 Taxman 74 (SC)/ 68. Where assessee received share
[2019] 412 ITR 161 capital/premium, however there
(SC) was failure of assessee to establish
creditworthiness of investor
companies, Assessing Officer was
justified in passing assessment order

132 133
 Gist / Important point for
S.N. Case Citation Section
consideration
making additions under section 68
for share capital / premium received
by assessee company

Section - 68
212 R.B Mittal [2000] 112 Taxman 68 Where assessee had not discharged
480 (Andhra burden relating to capacity of
Pradesh)/[2000] 246 his creditors to advance money
ITR 283 (Andhra and genuineness of transaction
Pradesh)/[2001] 165 and Tribunal, after elaborate
CTR 366 (Andhra consideration of entire evidence,
Pradesh) held that loans claimed to have been
advanced by certain parties, were
not genuine, no question of law
could be said to arise from Tribunal’s
order

213 C. P. Adam [1976] 105 ITR 465 68 Cross Examination: When assessee
(KER.) made no attempts to produce
witnesses whom he wanted to
cross-examine, ITO could not be
said to have acted unreasonably or
in violation of principles of natural
justice

214 Durga Prasad More [1971] 82 ITR 540 68 Human Probability test: SC
(SC) upheld the decision of ITAT which
disbelieved the story, prima facie,
a fantastic story. It is a story that
does not accord with human
probabilities.

215 Sumati Dayal [1995] 80 Taxman 89 68 Human Probability test: The

(SC)/[1995] 214 ITR majority opinion after considering
801 (SC)/[1995] 125 surrounding circumstances
CTR 124 (SC) and applying the test of human
probabilities has rightly concluded
that the appellant’s claim about
the amount being her winning from
races is not genuine.

134 135
 Gist / Important point for
S.N. Case Citation Section
consideration
216 N. Tarika [2013] 40 taxmann. 68 False Evidence and PAN cannot
Property com 525 (Delhi) solely divulge the real identity:
Invest. (P.) Ltd Where false evidence had been

Section - 68
adduced by assessee to give
colour of genuineness to bogus
entries through bank accounts and
deposits which were mostly by cash,
Assessing Officer was justified in
making addition under section 68.
PANs are issued without de facto
verification, these cannot solely
divulge real identity of individual
SLP against the decision was
dismissed by Supreme Court as
reported in [2014] 51 [Link]
387 (SC)/[2014] 227 Taxman 373
(SC)
217 Pavankumar M [2017] 81 taxmann. 68 Facts of the case cannot be
Sanghvi com 308 (Ahmedabad considered in isolation with the
- Trib.)/[2017] ground realities. Modus operandi
59 ITR(T) 389 of shell companies explained: Loan
(Ahmedabad - Trib.)/ transactions would not become
[2017] 165 ITD 260 genuine merely because assessee
(Ahmedabad - Trib.)/ filed loan confirmations, copies of
[2017] 187 TTJ 32 ledger account and other supporting
[2018] (Ahmedabad evidences to justify transactions at
- Trib.) confirmed fag end of assessment proceedings.
by High Court The facts of the case cannot be
as reported in90 considered in isolation with the
[Link] 386 ground realties. It will, therefore,
(Gujarat)/[2018] 404
be useful to understand as to how
ITR 601 (Gujarat)/
the shell entities function, and then
[2018] 301 CTR 265
compare these characteristics with
(Gujarat) and SLP
the facts of the case and in the light
dismissed by Supreme
Court as reported in
of well settled legal principles. A
97 [Link] 398 shell entity is generally an entity
(SC) without any significant trading,

136 137
 Gist / Important point for
S.N. Case Citation Section
consideration
manufacturing or service activity, or
with high volume low margin
transactions- to give it colour of

Section - 68
a normal business entity, used
as a vehicle for various financial
manoeuvres. A shell entity, by
itself, is not an illegal entity
but it is their act of abatement
of, and being part of, financial
manoeuvring to legitimise illicit
monies and evade taxes, that takes
it actions beyond what is legally
permissible. These entities have
every semblance of a genuine
business- its legal ownership by
persons in existence, statutory
documentation as necessary
for a legitimate business and a
documentation trail as a legitimate
transaction would normally follow.
The only thing which sets it apart
from a genuine business entity is
lack of genuineness in its actual
operations. The operations carried
out by these entities, are only to
facilitate financial manoeuvring for
the benefit of its clients, or, with that
predominant underlying objective,
to give the colour of genuineness
to these entities. These shell
entities, which are routinely used
to launder unaccounted monies,
are a fact of life, and as much a part
of the underbelly of the financial
world, as many other evils. Even
a layman, much less a Member of
this specialized Tribunal, cannot be
oblivious of these ground realities

138 139
 Gist / Important point for
S.N. Case Citation Section
consideration
218 United Metal & Wire [2019] ITA No. 68 Praveen Agarwal group
Industries 7336/Mum/2016 of accommodation entries: Mere
ITAT, Mumbai dated receipt of loan through banking

Section - 68
01/03/2019 channel or furnishing confirmations
is not sufficient enough to discharge
the onus cast upon u/s 68, when the
parties himself admitted that they
are engaged in providing
accommodation entries.

219 Saanika Industries [2017] ITA No. 207/ 68 Accommodation entries from
Pvt. Ltd. Ahd/2016 of ITAT, Manohar Lal Nanglia group
Ahmedabad dated operators: Along with evidences,
02/03/2017 surrounding circumstances,
human probability and intentional
acts are also to be taken note
off while accepting the identity,
creditworthiness and genuineness
of the share applicants. Mere
reliance on PAN, IT returns, bank
statement and confirmations is
not enough when the financial
statement of these parties speak
in itself that they are paper
companies. If it has been genuine
transaction, the assessee could have
easily produced the new investors
who own substantial portion of
equity. The investors could have
come along with all the financial
documents and could have clarified
about their intention to make
investment in the equity shares
of the company because every
investor wants to earn income from
investment in the form of dividend
as well as expects appreciation in
the valuation of shares with the

140 141
 Gist / Important point for
S.N. Case Citation Section
consideration
growth of business. On the contrary,
there is complete failure to produce
proof of genuineness.

Section - 68
220 Sreelekha Banerjee [1963] 49 ITR 112 68 It is the assessee that has to
(SC) prove that an entry in the books
of accounts does not bear the
character of income. At that stage
the Department is required to
prove nothing: If there is an entry in
the account books of the assessee
which shows the receipt of a sum
on conversion of high denomination
notes tendered for conversion by
the assessee himself, it is necessary
for the assessee to establish, if
asked, what the source of that
money is and to prove that it does
not bear the nature of income. The
department is not at this stage
required to prove anything.

221 Devi Prasad [1969] 72 ITR 194 68 AO is not under burden to show
Vishwanath (SC) the source: When there is an
unexplained cash credit it is open
to ITO to hold that it is income of
assessee and no further burden lies
on ITO to show that income is from
any particular source. It is for the
assessee to prove that even if the
cash credit represents income it
is income from a source which has
already been taxed. There is nothing
in law which prevents the ITO in an
appropriate case in taxing both the
cash credit and the business income
estimated by him after rejecting
unreliable books of account

142 143
 Gist / Important point for
S.N. Case Citation Section
consideration
222 Divyashakti Granites [2013] ITA No. 367/ 68, 10B Exemption u/s 10B is not available
Ltd Hyd/2012 of ITAT, against additions u/s 68/69: The
Hyderabad dated assessee’s business is carrying on of

Section - 68-69
13/12/2013 export activities in granite slabs and
not dealing in unexplained credits.
Being so, the assessee is not entitled
for deduction u/s. 10B of the Act
on account of additions made u/s.
68/69 of the Act.
223 P. Rama Devi [2017] 88 taxmann. 69 Mere bank account copy would
com 818 (Hyderabad not indicate purchase of jewellery:
- Trib.)/[2017] merely because the assessee placed
54 ITR(T) 30 before the Assessing Officer a
(Hyderabad - Trib.) bank account copy, indicating the
payment to jewellers, it would not
indicate that it was only towards
purchase of gold jewellery. There
could be some other transaction
with the said jeweller other than
purchase of jewellery.
224 Surendra M. [2001] 76 ITD 121 69 Filing of additional evidence
Khandhar (Mumbai)/[2001] 71 obtained by the Department after
TTJ 366 (Mumbai) assessment is necessary to test the
veracity of the evidence filed before
ITAT: Before the AO, the assessee
did not produce any material
to prove that certain amounts
standing in seized bank accounts
did not belong to him and filed and
at the instance of Tribunal gave
particulars and details of persons
and concerns who, according to
assessee, were owner of those
accounts. Department sought to
produce additional evidence, which
was admittedly obtained after
assessment, to prove that those

144 145
 Gist / Important point for
S.N. Case Citation Section
consideration
amounts really belonged to
assessee. Additional evidence had
become necessary only in response

Section - 69A
to particulars of concerns furnished
by assessee and, to test veracity
of admission during search and
subsequent retraction. So far as the
working of the peak was concerned,
it was again for the assessee to
prove that the withdrawals were
not utilised for other expenses or
investments and were available for
making subsequent deposits in the
said bank accounts and benefit of
peak could be given only when the
recycling of funds was proved
225 K. Chinnathamban [2007] 162 Taxman 69A Burden of Proof - The onus of
459 (SC)/[2007] 292 proving the source of deposit
ITR 682 (SC)/[2007] primarily rests on the person in
211 CTR 86 (SC) whose name the deposit appears in
various banks
226 M.L. Sachdeva [2014] 45 taxmann. 69A Attempt to create capital through
com 224 (Punjab & bogus claim of sale of Jewellery:
Haryana)/[2014] 224 The addition was upheld because
Taxman 170 (Punjab the make believe story of the
& Haryana)(MAG.) assessee was not plausible on
following factors: (i) Late Walaya
Ram Sachdeva (assessee is his L/R)
kept his beloved jewellery for 50
years and just before his death
travelled 1000 Kms to sell the same
to an young man of 22 years without
disclosing this fact to any one; (ii)
The buyer also died and how the
assessee came into the possession
of his affidavit is not clear; (iii) The
alleged concern of the buyer was

146 147
 Gist / Important point for
S.N. Case Citation Section
consideration
not at the given address (iv) The
valuer who claims to have seen
the jewellery and issued valuation

Section - 69A
certificate did not maintain any
record and even the certificate is
not serially numbered and (v) all the
documents including sale invoices
and affidavits were apparently
concocted because the assessee
might be expecting enquiry by
Department and (vi) it appears to be
the handiwork of an entry operator.
The High Court stated that the story
does not appeal to it as a plausible
one and it is of the that it is an
attempt to create capital without
paying any tax and it is not a genuine
claim.
227 Pooja Ajmani [2019] 106 taxmann. 69A Documents submitted as evidences
com 65 (Delhi - to prove the genuineness of
Trib.)/[2019] 177 ITD transaction are themselves found to
127 (Delhi - Trib.) serve as smokescreen to cover up
the true nature of the transactions
in the facts and circumstances of the
case as it is revealed that purchase
and sale of shares are arranged
transactions to create bogus profit
in the garb of tax exempt long-
terra capital gain by well organised
network of entry providers with the
sole motive to sell such entries to
enable the beneficiary to account
for the undisclosed income for a
consideration or commission. The
share transactions leading to long-
term capital gains by the assessee
are sham transaction entered into
for the purpose of evading tax.

148 149
 Gist / Important point for
S.N. Case Citation Section
consideration
228 Sanjay Oilcake [2009] 316 ITR 274 69C Sellers not traceable: Additions
Industries (Guj) were made on account of inflated
purchase price as alleged sellers

Section - 69C
were not traceable. Though
payments had been made by
account-payee cheques, entire
amounts so deposited had been
withdrawn by bearer cheques. In
such case, addition was justified

229 Bright future gems [2017] 88 taxmann. 69C Mere Vouchers or import export
com 476 (Rajasthan)/ challans of customs clearance
[2017] 392 ITR 580 not enough: Merely vouchers or
(Rajasthan) import export challans or challans
of customs clearance would not
prove physical delivery of material.
Assessee failed to produce foreign
seller and also to explain purchases
and day-to-day quantitative tally
of goods consumed. Purchase were
rightly treated to be bogus

230 Narender Kumar [2015] 55 taxmann. 69C Tribunal cannot delete addition
Gupta com 371 (Punjab & u/s 69C and estimate the income:
Haryana) Where Assessing Officer made
addition to assessee’s income under
section 69C in respect of bogus
purchases, in view of failure of
assessee to even prove existence
of suppliers, Tribunal could not
delete impugned addition and direct
Assessing Officer to assess income
at net profit rate of 6 per cent

231 VBC Jewellery [2019] ITA/2304 and 69C Cheques issued for purchases and
2305/ Chny/18 of cash received back: Unverified
ITAT, Chennai dated purchases had to be added back to
29/01/2019 income when it had been admitted
in the statements recorded by

150 151
 Gist / Important point for
S.N. Case Citation Section
consideration
the investigation wing, Mumbai
that cheques were issued by the
beneficiary parties against the

Section - 69C
bogus sale bills issued by the
benami concerns of Bhanwarlal
Jain and Rajesh Bhanwarlal
Jain. Subsequently, cash was
returned back to these beneficiary
parties through Angadias after
deducting commission of the same
by Bhanwarlal Jain and Rajesh
Bhanwarlal Jain. Since the onus in
the instant case, squarely lay on the
assessee to prove the genuineness
of purchase of diamonds said to
have been made from M/s. Sun Diam
was not proved

232 N.K. Industries Ltd. [2016] 72 taxmann. 69C In case of bogus purchases, the
com 289 (Gujarat)/ entire amount has to be added:
[2017] 292 CTR 354 Taxing only 25% of these bogus
(Gujarat) claim goes against the principles of
Sections 68 and 69C of the Income
Tax Act. The entire purchases shown
on the basis of fictitious invoices
have been debited in the trading
account since the transaction has
been found to be bogus. SLP against
this decision was dismissed by
Supreme Court as reported in 84
[Link] 195 (SC)

233 Nitin Rasiklal [2019] ITA/2304 69C Description of Shell Entities: This
Sanghavi and 2305/Ahd/17 is a case where Rajendra Jain
of ITAT, Ahmedabad Group of operators are involved.
dated 08/03/2019 A shell entity is generally an entity
without any significant trading,
manufacturing or service activity, or
with high volume low margin

152 153
 Gist / Important point for
S.N. Case Citation Section
consideration
transactions to give it colour of
a normal business entity, used
as a vehicle for various financial

Section - 69C
manoeuvres. A shell entity, by
itself, is not an illegal entity
but it is their act of abatement
of, and being part of, financial
manoeuvring to legitimise illicit
monies and evade taxes, that takes
it actions beyond what is legally
permissible. These entities have
every semblance of a genuine
business- its legal ownership by
persons in existence, statutory
documentation as necessary
for a legitimate business and a
documentation trail as a legitimate
transaction would normally follow.
The only thing which sets it apart
from a genuine business entity is
lack of genuineness in its actual
operations. The operations carried
out by these entities, are only to
facilitate financial manoeuvring for
the benefit of its clients, or, with that
predominant underlying objective,
to give the colour of genuineness
to these entities. These shell
entities, which are routinely used
to launder unaccounted monies,
are a fact of life, and as much a part
of the underbelly of the financial
world, as many other evils. Even
a layman, much less a Member of
this specialized Tribunal, cannot be
oblivious of these ground realities.

154 155
 Gist / Important point for
S.N. Case Citation Section
consideration
234 Pradeep Kumar [2019] 101 taxmann. 69C Low GP and absence of stock
Biyani com 130 (Guj.) register: Apart from confessional
statement of assessee’s brother,it

Section - 69C
is noted that gross profit declared
by assessee was much lesser than
profit in said line of business. Also,
the assessee had failed to provide
stock register despite several
opportunities. Addition u/s 69C is
justified. SLP against the decision
dismissed by Supreme Court in 101
[Link] 131 (SC)

235 Shanti Swarup Jain [2015] 55 taxmann. 69C Alleged seller admits that he was
com 378 (Allahabad)/ running dummy business: The
[2015] 230 Taxman assessee-firm, engaged in business
533 (Allahabad) of zips for shoes etc, showed
certain purchases made from ‘G’
Enterprises. The proprietor of ‘G’
Enterprises admitted that he was
running a dummy business. Addition
u/s 69C was justified.

236 Kalyani Medical [2017] 80taxmann. 69C On failure of assessee to prove cash
Stores com 158(Calcutta)/ purchases by producing purchase
[2016] 386 ITR 387 bills and stock register, said amount
(Calcutta) was to be added to assessee’s
income as income from undisclosed
sources

237 Soman Sum Citi [2017] ITA/2960/ 69C Right of cross examination is not
Mum/16 of ITAT absolute in the instant case as the
Mumbai dated primary onus is not discharged by
23/10/2017 the assessee. No prejudice is caused
to the assessee by non granting of
opportunity of cross examination by
the authorities below

156 157
 Gist / Important point for
S.N. Case Citation Section
consideration
238 Sun Steel Industries [2018] ITA/531/ 69C Mere proof of existence is not
P Ltd Kol/16 of ITAT, enough. Actual rendering of
Kolakata dated service is to be proved by showing

Section - 69C
19/02/2018 that the sub-contractors had the
necessary expertise and capacity:
Even though the existence of these
companies are proved beyond
doubt, with proper paper work
carried out, the assessee had not
proved the actual rendering of
services. Admittedly, all the alleged
sub-contractors were only trading in
shares and investment companies.
The assessee was not able to prove
with cogent material as to whether
these companies possess necessary
expertise and infrastructure to
render the foundation services to
the assessee. More importantly
these services were alleged to have
been rendered in Shillong whereas,
these parties are located in Kolkata.
From the perusal of their balance
sheet, it is evident that they do
not have any branch in Shillong or
any other infrastructure to render
foundation services/specialized
services to the assessee. Their profit
and loss account contains payment
of labour charges to the tune Rs
80000/- to Rs 90000/- and payment
of salary of Rs. 6 lacs approximately.
Hence, it is proved beyond doubt
that those parties had not rendered
any services to the assessee even by
way of outsourcing of the said jobs
to outsiders who are stationed in
Shillong. All the six companies had

158 159
 Gist / Important point for
S.N. Case Citation Section
consideration
similar types of income and similarly
types of expenses reflected in

Section - 69C-80I
their profit and loss account. None
of the companies have sufficient
fixed assets to prove the existence
of necessary infrastructure for
rendering such technical services.
From the aforesaid facts, it is made
very clear that these parties had
merely acted as a conduit to reduce
the profits of the assessee company
and show meager income in their
returns and claim refund of TDS.

239 Vijay Jain [2019] 107 taxmann. 69, 68 – A statement is to be believed as a

com 313 (Madhya 69D whole and not in piecemeal as one
Pradesh) part suits to the assessee and other
part does not suits to the assessee:
The findings of Revenue are based
on the agreement of purchase
of land and asper statement by
another person. Revenue did not
commit any error on relying his
statement.

240 Abhinandan [2015] 63 taxmann. 72 Contrived loss through colourable

Investment Ltd com 263 (Delhi)/ device: Contrived loss claimed by
[2016] 282 CTR 466 the assessee through colourable
(Delhi) device of renunciation of rights is
not allowable

241 Gem India Mfg Co [2001] 117 Taxman 80I Though the raw and uncut diamond
368 (SC)/[2001] 249 was subjected to a process of cutting
ITR 307 (SC)/[2002] and polishing which yielded polished
172 CTR 615 (SC) diamond, but that is not to say that
the polished diamond was a new
article or thing which was the result
of manufacture or production.

160 161
 Gist / Important point for
S.N. Case Citation Section
consideration
242 Annapurna Builders [2011] ITA No: 1177/ 80IA(4) Income from letting out of units
Hyd/2011 of ITAT, Industrial Park is business income
Hyderabad dated

Section - 80IA
10/10/2011
243 Janapriya Properties [2012] ITA No: 1577 80IA(4) Income from letting out of units
Pvt Ltd & 1594/Hyd/2012 Industrial Park is business income
of ITAT, Hyderabad
dated 18/06/2012
244 Ultratech Cement [2017] 81 taxmann. 80IA Additional ground claiming
Ltd. com 74 (Bombay)/ deduction u/s 80-IA is not
[2018] 408 ITR permissible when necessary
500 (Bombay)/ evidence that assessee was entitled
[2017] 298 CTR 437 to the claim was not on record and
(Bombay) assessee had no reason to satisfy
appellate authority that the ground
was bona fide and could not have
been raised earlier for good reasons

245 Plastiblends India [2017] 86 taxmann. 80IA 80IA is a self contained code in
Pvt Ltd com 137 (SC)/[2017] itself. 80-IA not only contains
251 Taxman 188 substantive but procedural
(SC)/[2017] 398 ITR provisions for computation of
568 (SC)/[2017] 298 special deduction.
CTR 281 (SC)
246 Synco Industries Ltd [2008] 168 Taxman 80IA If GTI is ‘nil’ after adjustment of
224 (SC)/[2008] 299 losses of earlier years, no deduction
ITR 444 (SC)/[2008] under Chapter VIA: Non obstante
215 CTR 385 (SC) clause appearing in section 80-I(6)
is applicable only to quantum of
deduction, whereas gross total
income under section 80B(5), which
is also referred to in section 80-
I(1), is required to be computed in
manner provided under Act which
presupposes that gross total income
shall be arrived at after adjusting

162 163
 Gist / Important point for
S.N. Case Citation Section
consideration
losses of other division against
profits derived from an industrial
undertaking

Section - 80IA
247 Micro Labs Ltd [2015] 64 taxmann. 80IA, Simultaneous deduction u/s
com 199 (SC)/[2016] 80HHC 80IA/80IB and 80HHC on
237 Taxman 74 (SC)/ same profits: Division bench of
[2016] 380 ITR 1 Supreme Court referred matter
(SC)/[2016] 283 CTR to larger bench as there was
9 (SC) difference of opinion as to whether
assessee could claim simultaneous
deductions under section 80-IA/ 80-
IB and 80HHC on same profits
248 EBR Enterprises [2019] 107 taxmann. 80IA, 80IB Filing of claim in return of income
com 220 (Bombay)/ filed before due date is necessary
[2019] 415 ITR 139 to claim deduction u/s 80IA/80IB:
(Bombay) Sub-section (5) of section 80A
mandates that if the assessee fails
to make a claim in his return of
income for any deduction under
the provisions specified therein,
the same would not be granted to
the assessee. This condition for
restriction is not relatable to the
Assessing Officer or the Income Tax
Authority. This condition attaches
to the claim of the assessee and has
to be implemented by the Assessing
Officer, Commissioner or the
Appellate Tribunal as the case may
be. Even the High Court in exercise
of Writ Jurisdiction under article
226 of the Constitution of India
would not issue directions contrary
to statutory provisions. (Comments:
It may be mentioned here that 80AC
also mandates filing of return before
due date specified u/s 139(1))

164 165
 Gist / Important point for
S.N. Case Citation Section
consideration
249 Jai Steel (India) [2013] 36 taxmann. 80IA, 132 No claim can be made for
Jodhpur com 523 (Rajasthan)/ deduction u/s 80IA for the first

Section - 80IA-80IB
[2013] 219 Taxman time in search assessment: The
223 (Rajasthan)/ proceedings under section 153A
[2013] 259 CTR 281 are analogous to proceedings under
(Rajasthan) section 147 to the extent that those
proceedings are for the benefit of
the revenue and not of the assessee.
The assessee cannot be permitted
to convert the reassessment
proceedings as his appeal or revision
in disguise and seek relief in respect
of items not earlier claimed in the
original return.

250 Hindustan Mint & [2010] 1 ITR(T) 433 80IB, Deduction under sections 80HHC
Agro Products (P.) (Delhi) 80HHC and 80-IB cannot be allowed on
Ltd gross total income separately

251 Liberty India [2009] 183 Taxman 80IB Analysing the concept of remission
349 (SC)/[2009] 317 of duty drawback and DEPB,
ITR 218 (SC)/[2009] it is evident that the remission
225 CTR 233 (SC) of duty is on account of the
statutory/policy provisions in the
Customs Act/Scheme(s) framed
by the Government of India. In
the circumstances, the profits
derived by way of such incentives
do not fall within the expression
“profits derived from industrial
undertaking” in section 80-IB.

252 Fortuna Foundation [2017] 81 taxmann. 80IB(10) Approval to housing project is

Engineers & com 189 (Allahabad)/ not applicable to plots available
Consultants (P.) Ltd [2017] 297 CTR 409 after date of approval. Completion
(Allahabad) certificate is a must for claiming
deduction: Completion certificate
was filed on 21-10-2009. No
evidence has been brought on

166 167
 Gist / Important point for
S.N. Case Citation Section
consideration
record to show that project was
completed on or before 31-3-2008

Section - 80IB-80P
or that officials of the Development
Authority made inspection
of construction and verified
completion of project. Application
was submitted by the assessee on
27-3-2008 in the name of a dead
person. The application was non est
in law
253 Sainath Estates P [2013] 32 taxmann. 80IB(10) Claim of deduction 80-IB(10) is not
Ltd. com 7 (Hyderabad allowable when the assessee did
- Trib.)/[2013] not furnish completion certificate
26 ITR(T) 155 issued by local authority certifying
(Hyderabad - Trib.)/ completion of housing project
[2013] 142 ITD 370
(Hyderabad - Trib.)/
[2013] 155 TTJ 39
(Hyderabad - Trib.)
254 Global Reality [2015] 62 taxmann. 80IB(10) Completion certificate issued after
com 204 (Madhya cut-off date mentioning that the
Pradesh)/[2015] project was completed before
234 Taxman 677 the cut-off date is not acceptable:
(Madhya Pradesh)/ Completion certificate of housing
[2015] 379 ITR 107 project of assessee was issued after
(Madhya Pradesh)/ cut off date by Local Authority but
[2015] 280 CTR 558 mentioned date of completion of
(Madhya Pradesh) project before cut off date, same
could not fulfil condition specified
in section 80-IB (10) (a) read with
explanation (ii) thereunder.
255 Citizen Cooperative [2017] 84 taxmann. 80P The assessee society was engaged in
Society Ltd com 114 (SC)/[2017] activity of finance business and was
250 Taxman 78 (SC)/ also engaged in activity of granting
[2017] 397 ITR 1 (SC)/ loans to general public as well, it
[2017] 297 CTR 225 could not be termed as co-operative
(SC)

168 169
 Gist / Important point for
S.N. Case Citation Section
consideration
society meant only for its members
and providing credit facilities to
its members. The assessee is not

Section - 92C
entitled to deduction under section
80P. Review Petition on the order of
SC dismissed as reported in [2017]
88 [Link] 279 (SC)/[2018]
252 Taxman 374 (SC)/[2018] 301
CTR 396 (SC).
256 Nestle India Ltd [2011] 11 taxmann. 92C It is within power of IT authorities
com 106 (Delhi)/ to examine reasonableness and
[2011] 199 Taxman genuineness of any payment,
321 (Delhi)(MAG.)/ viz., royalty etc., even if assessee
[2011] 337 ITR 103 has obtained permission from
(Delhi) RBI regarding same. RBI is only
concerned with the foreign
exchange and, therefore, would look
into the matter from that point of
view
257 Nuance [2017] 88 taxmann. 92C Transaction of receivables from AE
Transcription com 321 (Bengaluru is international transaction
Services India (P.) Ltd – Trib.)
258 [Link] (P.) [2017] 82 taxmann. 92C Exclusion of two comparables
Ltd com 139 (Delhi - sought for by assessee in second
Trib.)/[2017] 58 round of proceeding before Tribunal
ITR(T) 208 (Delhi - after 11 years of filing return, was
Trib.)/[2017] 187 TTJ unjustified
331 (Delhi - Trib.)
259 L.G. Electronics India [2013] 29 taxmann. 92C TP adjustment in relation to
(P.) Ltd com 300 (Delhi - advertisement, marketing and sales
Trib.) (SB)/[2013] 22 promotion expenses incurred by
ITR(T) 1 (Delhi - Trib.) assessee for creating or improving
(SB)/[2013] 140 ITD marketing intangible for and on
41 (Delhi - Trib.) (SB)/ behalf of foreign AE is permissible
[2013] 152 TTJ 273
(Delhi - Trib.) (SB)

170 171
 Gist / Important point for
S.N. Case Citation Section
consideration
260 Claas India (P.) Ltd [2015] 62 taxmann. 92C Adjustment on capacity utilization
com 173 (Delhi - has to be made in profit margin
Trib.) of comparables and not that of

Section - 92C
assessee: In case of differences
between comparables and assessee,
then effect of such differences
should be ironed out by making
suitable adjustment to operating
profit margin of comparables and
not that of assessee.

261 Cheil India (P.) Ltd [2014] 46 taxmann. 92C When there were delays in receiving
com 90 (Delhi - Trib.) substantial payments from AEs,
DRP taking strength from safe
harbour rule, rightly directed
Assessing Officer/TPO that interest
was to be computed on basis of
SBI base rate as on 30 June of
relevant previous year plus 150
basis point

262 Aztec Software & [2007] 162 Taxman 92C AO need not demonstrate prima-
Technology Services 119 (Bangalore) facie that there is tax avoidance
Ltd (SB)/[2007] 107 before making reference to TPO.
ITD 141 (Bangalore) AO not required record his opinion/
(SB)/[2007] 15 SOT reason before seeking previous
49 (Bangalore) (SB)/ approval of CIT to make reference
[2007] 109 TTJ 892 to TPO
(Bangalore) (SB)
263 Advice America [2018] 94 taxmann. 92C Developing software products for
Software com 179 (Bangalore clients would also be in the nature
Development Centre – Trib.) of rendering software developing
(P) Ltd. services. The fact that the assessee
mainly caters to SWD services in
banking industry cannot be the
basis to hold that another company
which is into 3 clusters is not
functionally comparable. Persistent

172 173
 Gist / Important point for
S.N. Case Citation Section
consideration
Systems Ltd and L&T Infotech
Services were held to be
comparables in SWD sector

Section - 92C
264 FIS Global Business [2018] 94 taxmann. 92C High or low turnover is not a
India P. Ltd. com 314 (Delhi – criteria for excluding an otherwise
Trib.) comparable company

265 Thyssenkrupp [2013] 33 taxmann. 92C Provision for doubtful debts cannot
Industries India (P) com 107 (Mumbai be considered as operating cost
Ltd. - Trib.)/[2013] 25
ITR(T) 243 (Mumbai -
Trib.)/[2013] 154 TTJ
689 (Mumbai - Trib.)
266 Knorr-Bremse India [2015] 63 taxmann. 92C A transaction is at an arm’s length
P Ltd. com 186 (Punjab & price or not is not dependent on
Haryana)/[2016] 236 whether transaction results in
Taxman 318 (Punjab an increase in assessee’s profit.
& Haryana)/[2016] Several transactions between ‘two
380 ITR 307 (Punjab or more’ AEs can form a single
& Haryana)/[2016] composite transaction if they are
282 CTR 44 (Punjab closely linked transactions
& Haryana)
267 SAP Labs India Pvt. [2018] 92 taxmann. 92C Turnover cannot be relevant
Lt com 412 (Bengaluru criteria to decide comparability
– Trib.) unless it is demonstrated that
turnover has got an impact on
profitability of a concern

268 General Motors [2013] 37 92C For analysing international

India P Ltd. [Link] 403 transactions, less complex party to
(Ahmedabad - Trib.)/ controlled transactions should be
[2013] 27 ITR(T) 373 tested party, in respect of which
(Ahmedabad - Trib.)/ more reliabled data is available.
[2014] 146 ITD 559
(Ahmedabad - Trib.)

174 175
 Gist / Important point for
S.N. Case Citation Section
consideration
269 Patni computer [2013] 33 taxmann. 92C Loss suffered by assessee by
Systems Ltd. com 3 (Bombay)/ allowing excess period of credit to
[2013] 215 Taxman AE without charging interest would

Section - 92C
108 (Bombay) be part of international transaction,
in view of amendment to section
92(b)(1) with effect from 1-4-2002

270 Sony India Pvt. Ltd. [2006] 157 Taxman 92C There is no requirement on AO
125 (Delhi)/[2007] to first form a considered opinion
288 ITR 52 (Delhi)/ in a manner indicated in section
[2006] 206 CTR 157 92C(3) before reference to TPO.
(Delhi) It will suffice if Assessing Officer
forms a prima facie opinion that it
is necessary and expedient to make
such a reference. One possible
reason for absence of such a
requirement of formation of a prior
considered opinion by Assessing
Officer is that TPO is expected to
perform same exercise.

271 GE Money Financial [2016] 69 taxmann. 92C For determining arm’s length
Servies P Ltd. com 420 (Delhi - price, tested party should be least
Trib.)/[2016] 179 TTJ complex of transacting parties
588 (Delhi - Trib.) for which data is available for
comparability analysis

272 Prolifics Corpn Ltd. [2015] 55 taxmann. 92C Transaction of providing corporate
com 226 (Hyderabad guarantee involves service
- Trib.)/[2015] 68 rendered to AE and, therefore,
SOT 104 (Hyderabad provisions of transfer pricing can
- Trib.)(URO) be invoked in respect of such a
transaction

273 Societe Generate [2016] 69 taxmann. 92C Turnover cannot be relevant

Global Solution com 336 (Bangalore criteria in a service sector where
Centre Pvt. Ltd. Trib) fixed overheads are nominal and
the cost of service is in direct
proportion to the services rendered

176 177
 Gist / Important point for
S.N. Case Citation Section
consideration
274 Nivea India P Ltd. [2017] 85 taxmann. 92C Whole intent and purpose of
com 260 (Mumbai - transfer pricing provision is
Trib.)/[2017] 189 TTJ first to select most appropriate

Section - 92C
422 (Mumbai - Trib.) comparable/tested party and
thereafter, by applying most
appropriate method to determine
arm’s length price(ALP). If overseas
AE was least complex entity, the
same can be taken as a tested party

275 AT & T Global [2017] 86 taxmann. 92C ALP of payments for support
Network Services com 158 (Delhi – services of AE to the assessee in
(India) (P) Ltd. Trib.) rendering high-speed internet
services to the clients could not be
taken as ‘nil’. In order to determine
ALP of royalty payment for use of
brand name of AE, terms of licence
agreement and period during which
royalty was paid need to be looked
into

276 Carlyle India [2019] 104 taxmann. 92C Filter like employee cost filter
Advisors com 332 (Mumbai – cannot be applied only to one or
Trib.) two companies but to entire set
of companies in search process.
Otherwise, it is bound to lead to
distorted results

277 Toyota Kirloskar [2014] 52 taxmann. 92C If royalty was exclusively towards
Auto Parts (P) Ltd. com 171 (Bangalore use of know-how in manufacturing
- Trib.)/[2015] 152 process undertaken by assessee and
ITD 148 (Bangalore was not in any way interlinked with
- Trib.) other international transactions,
arm’s length price of such royalty
could be determined independently

178 179
 Gist / Important point for
S.N. Case Citation Section
consideration
278 Sutherland [2017] 77 taxmann. 92C A foreign company can be taken as
Healthcare Solutions com 352 (ITAT Hyd) a tested party provided assessee
Ltd makes sure that necessary relevant

Section - 92C
information about tested party
and sufficient data in relation to
comparables is furnished to tax
administration

279 Scancafe Digital [2017] ITA No. 502/ 92C Turnover cannot be relevant
Solutions P Ltd Bang/2015 of ITAT, criteria in a service sector where
Bangalore dated fixed overheads are nominal and
12/04/2017 the cost of service is in direct
proportion to the services rendered
(paragraph 17 of the decision).

280 Mylan Laboratories [2015] 63 taxmann. 92C Transaction of providing corporate

Ltd. com 179 (Hyderabad guarantee involves service rendered
- Trib.)/[2015] to AE and, therefore, provisions of
155 ITD 1123 transfer pricing can be invoked in
(Hyderabad -Trib.) respect of such a transaction

281 Price Water House [2016] 76 taxmann. 92C Section 92CA(1) does not require
com 221 (Calcutta)/ Assessing Officer to first come to
[2017] 245 Taxman a definite finding that there is an
1 (Calcutta)/ ‘international transaction’ within
[2017] 390 ITR meaning of section 92B before
356 (Calcutta)/ referring matter to TPO
[2017] 291 CTR 121
(Calcutta)
282 Mercedes Benz [2018] 95 taxmann. 92C As there was no internal CUP which
Research & com 134 (Bengaluru could be relied on in order to accept
Development India – Trib) CUP method, analysis undertaken
P ltd. by assessee was not only faulty, but
devoid of any data and, thus, TNMM
was most appropriate method.
Persistent Systems Ltd is held to be
comparable in SDS sector

180 181
 Gist / Important point for
S.N. Case Citation Section
consideration
283 Dresser – Rand India [2011] 13 taxmann. 92C In evaluating ALP of a service, it
(P) Ltd. com 82 (Mumbai)/ is wholly irrelevant as to whether
[2012] 13 ITR(T) 422 assessee benefits from it or not; real

Section - 92C
(Mumbai)/[2012] 53 question is as to whether price of
SOT173 (Mumbai)/ this service is what an independent
[2011] 141 TTJ 385 enterprise would have paid for same
(Mumbai)
284 Cargill India Pvt Ltd [2018] 89 taxmann. 92C Margin of different activities
com 446 (Delhi – have to be separately calculated
Trib.) and compared with margin of
comparable enterprises having
similar functions and risk profile

285 Zaheer Mauritius [2014] 47 taxmann. 92C A Compulsorily Convertible

com 247 (Delhi)/ Debenture indisputably
[2015] 230 Taxman creates and recognizes the
342 (Delhi)/[2014] existence of a debt and till it is
270 CTR 244 (Delhi) discharged, either by payment or by
conversion,
the debenture would essentially
represent a debt

286 Chryscapital [2015] 56 taxmann. 92C Comparables discharging broadly

Investment Advisors com 417 (Delhi)/ similar functions cannot be excluded
(India) P Ltd. [2015] 232 Taxman merely on the basis of high profits
20 (Delhi)/[2015] or turnover, unless material
376 ITR 183 (Delhi)/ differences on account of the said
[2015] 277 CTR 137 factors is established
(Delhi)
287 Television Eighteen [2013] 37 taxmann. 92C When assessee, a media company
India Ltd com 143 (Delhi - being a marketing agent of a
Trib.)/[2014] 146 ITD channel, also undertook channel
326 (Delhi - Trib.) promotion activities, a mark up was
required to be added for rendering
such specific services

182 183
 Gist / Important point for
S.N. Case Citation Section
consideration
288 TVS Motor Company [2017] 77 taxmann. 92C When assessee incurred AMP
Ltd com 105 (Chennai - expenses abroad for brand
Trib.) promotion of its AE, since legal and

Section - 92C
economic ownership of said brand
was exploited by AE, expenses in
question had to be reimbursed along
with certain markup
289 Kirby Business [2014] 52 taxmann. 92C In a cost sharing exercise in
Systems India Ltd com 409 (Hyderabad implementing ERP systems in group
- Trib.) which involved services by assessee
company, mark up was warranted
under TP provisions
290 DRHL India Service [2019] 102 taxmann. 92C Claims of franchise commission to
(P) Ltd. com 334 (Bengaluru holding company without proof
- Trib.) to establish nature of services
rendered by said company would
lead to addition on account of
shortfall in ALP
291 Volvo India (P) Ltd. [2018] 89 taxmann. 92C When assessee failed to show
com 79 (Bengaluru evidence in support of rendering of
– Trib.) management services by AE, TPO
was justified in determining ALP at
nil
292 Professional [2017] 79 taxmann. 92C The outstanding receivables from
Access Software com 25 (Chennai - AE is financial result of international
Development (P.) Ltd Trib.) transactions concluded by the
assessee and therefore, the
income effect arising, if any, to that
outstanding receivables is very
much relevant aspect of ALP.
293 Bechtel India Pvt. [2017] 85 taxmann. 92C Interest on delayed realization
Ltd. com 121 (Delhi - of receivables is a separate
Trib.) international Transaction. It has
nothing to do with operations of
assessee-company involving debt
free funds

184 185
 Gist / Important point for
S.N. Case Citation Section
consideration
294 Logix Microsystems [2010] 8 ITR(T) 92C Outstanding receivables was
Ltd. 525 (Bangalore)/ financial result of international
[2010] 42 SOT transaction with AE and income

Section - 92C
525 (Bangalore)/ effect arising, if any, to that
[2010] 136 TTJ 366 outstanding receivables was very
(Bangalore) much a relevant aspect of ALP

295 Techbooks [2015] 63 taxmann. 92C Delay over and above the normal
International P Ltd. com 114 (Delhi Trib) period of realization in an
uncontrolled situation, should
be considered as a separate
international transaction in terms of
clause (c) of Explanation to section
92B

296 JCB India Ltd [2016] 69 taxmann. 92C Payment of royalty is an

com 383 (Delhi - independent transaction and
Trib.) applying TNMM on entity level
could not be accepted. ALP to be
determined separately under CUP
method. Where assessee-company
paid royalty to its AE for use of
technology of a machine belonging
to AE, TPO was required to simply
determine ALP of international
transaction of ‘payment of royalty’
unconcerned with fact, if any
benefit accrued to deductibility of
said amount under section 37(1)
assessee and thereafter, it was for
Assessing Officer to decide

297 Saipem India [2017] 81 taxmann. 92C Idle capacity adjustment is not
Projects Ltd com 180 (Chennai - possible when assessee is unable to
Trib.) prove that idle capacity in service
industry was not an across industry
feature or demonstrate its capacity
hours working using a reliable
method

186 187
 Gist / Important point for
S.N. Case Citation Section
consideration
298 UCB India (P.) Ltd [2009] 121 ITD 131 92C CUP method is most direct method
(Mumbai)/[2009] 30 for determining arm’s length price
SOT 95 (Mumbai)/ and under this method, price at

Section - 92C
[2009] 124 TTJ 289 which controlled transaction
(Mumbai) is carried out is compared to
price obtained in comparable
uncontrolled transaction

299 Cargill Foods India [2015] 57 taxmann. 92C If it is possible to identify and
Ltd com 330 (Pune - locate a comparable uncontrolled
Trib.)/[2015] 69 transaction, CUP method would
SOT 40 (Pune - Trib.) be most reliable measure of arm’s
(URO) length price in relation to tested
international transaction

300 Qualcomm India (P.) [2013] 37 taxmann. 92C Fluctuation in operating margin per
Ltd com 17 (Delhi - se cannot be exception as carved out
Trib.)/[2013] 144 ITD in proviso to rule 10(B)(4) for using
448 (Delhi - Trib.)/ multi year data in specific situation
[2013] 155 TTJ 23
(Delhi - Trib.)
301 ADP (P.) Ltd [2011] 10 92C Data of subsequent period cannot
[Link] be considered for comparison while
160 (Hyderabad)/ determining arm’s length price
[2012] 15 ITR(T)
203 (Hyderabad)/
[2011] 45 SOT
172 (Hyderabad)/
[2012] 144 TTJ 520
(Hyderabad)
302 Gemplus India (P.) [2010] 3 taxmann. 92C It was very imperative on part
Ltd com 755 (Bangalore of assessee to establish before
- Trib.) TPO that payments were made
commensurate to volume and
quality of services and such costs
were comparable. In case no details
were available on record in respect

188 189
 Gist / Important point for
S.N. Case Citation Section
consideration
of nature of services rendered by
AE, adjustment to ALP is called for

Section - 92C-92CA
303 Microsoft India [2018] 97 taxmann. 92C Under Parent Subsidiary
(R&D) (P.) Ltd com 360 (Delhi - Agreement, assessee acted as
Trib.) a R&D service provider and
parent Microsoft-USA supplied
related intangibles and ownership
right on outcome of research,
vested with Microsoft-USA. In such
case. assessee was a contract R&D
service provider to Microsoft-USA

304 Sara Lee TTK Ltd [2016] 76 taxmann. 92C RBI approval in respect of rate
com 74 (Mumbai - of royalty paid to AE is not
Trib.)/[2016] 182 TTJ determinative of ALP and it cannot
122 (Mumbai - Trib.) be considered to be a valid CUP

305 Headstrong Services [2016] 66 taxmann. 92C In computing ALP, it is

India (P) Ltd com 185 (Delhi - impermissible to substitute actual
Trib.)/[2016] 158 ITD profit earned by assessee from
717 (Delhi - Trib.)/ an international transaction with
[2016] 176 TTJ 665 any other profit base, i.e., either by
(Delhi - Trib.) considering actual profits for earlier
years or by taking into account
projected profits of subsequent
years

306 Cushman and [2014] 46 taxmann. 92CA, 37 Jurisdictions of Assessing Officer

Wakefield (India) com 317 (Delhi)/ under section 37 and TPO under
Pvt. Ltd. [2014] 367 ITR 730 section 92CA are distinct and
(Delhi)/[2014] 269 therefore, a referral made by
CTR 16 (Delhi) Assessing Officer to TPO for limited
purpose of determining ALP does
not take away power of Assessing
Officer to determine as to whether
payment made by assessee to its AE
for services rendered was basically
an expenditure incurred for purpose

190 191
 Gist / Important point for
S.N. Case Citation Section
consideration
of business so as to allow same
under section 37(1)

Section - 94A-132
307 T. Rajkumar [2016] 68 taxmann. 94A Section 94A is constitutional;
com 182 (Madras)/ notification issued under section
[2016] 239 Taxman 94A notifying cyprus was also
283 (Madras)/ constitutionally valid and cyprus
[2016] 383 ITR 385 was notified under section 94A
(Madras)/[2016] 286
CTR 28 (Madras)
308 Bidhu Bhusan Sarkar [1967] 63 ITR 278 127 An order of transfer can be
(SC) validly made even if there be
no proceedings pending for
assessment of tax and the purpose
of the transfer may simply be
that all future proceedings are to
take place before the officer to
whom the case of the assessee is
transferred.
309 Pooran Mal [1974] 93 ITR 505 132 Even assuming that the search and
(SC) seizure were in contravention of
the provisions of section 132, still
the material seized was liable to
be used subject to law before the
income-tax authorities against the
person from whose custody it was
seized
310 Narayan [1960] AIR 1960 SC 132(4) An admission is the best evidence
Bhagwantrao Gosavi 100 that an opposite party can rely upon
Balajiwale v. Gopal and though not conclusive, yet could
Vinayak Gosavi be decisive of the matter unless
successfully withdrawn or proved
erroneous
311 Avadh Kishore Das v. [1979] AIR 1979 SC 132(4) Evidentiary admissions are not
Ram Gopal 861 conclusive proof of the facts
admitted and may be explained or
shown to be wrong, but they

192 193
 Gist / Important point for
S.N. Case Citation Section
consideration
do raise an estoppel and shift the
burden of proof on to the person
making them

Section - 132
312 Hotel Kiran [2002] 82 ITD 453 132(4) When statement under section
(Pune)/[2002] 77 TTJ 132(4) was voluntarily made
87 (Pune) and there was no coercion or
threat whatsoever and contents
of statement were clear and
unambiguous, same would be
binding on assessee even if it was
subsequently retracted

313 Kermex Micro [2014] 47 taxmann. 132(4), When addition to assessee’s income
Systems (India) Ltd com 375 (Andhra 143(3) was on the basis of voluntary
Pradesh)/[2015] 230 statement made by managing
Taxman 168 (Andhra director of company that certain
Pradesh)/[2014] amount represented unexplained
362 ITR 13 (Andhra expenditure and assessee had
Pradesh) not made any attempt to explain
before Commissioner (Appeals)
suggesting not to accept admission
of its managing director, addition
could not have been deleted
addition merely on basis of lawyer’s
argument that aforesaid admission
was recorded under mistaken belief
of fact and law

314 Kishor Kumar B [2014] 52 taxmann. 132(4), Where assessee himself stated
com 449 (Madras)/ 153A about his undisclosed income in
[2015] 229 Taxman sworn statement recorded during
614 (Madras)/ search, addition could be made
[2015] 273 CTR 468 on basis of admission without
(Madras) scrutinizing documents. SLP
against the decision is dismissed
by Supreme Court as reported in
[2015] 62 [Link] 215 (SC)/
[2015] 234 Taxman 771 (SC)

194 195
 Gist / Important point for
S.N. Case Citation Section
consideration
315 Surendra M. [2010] 321 ITR 132(4A), Where Xerox copy of document
Khandhar 254 (Bombay)/ 292C seized from assessee was not denied

Section - 132-136
[2009] 224 CTR 409 the same showed advancement
(Bombay) of certain sums to one ‘C’ and two
signatories of said document were
also not denied by assessee and
as the document was seized from
assessee’s control, presumption
under section 132(4A) and 292C
was clearly applicable
316 Karnataka Bank Ltd [2002] 123 Taxman 133(6) It is not necessary that any inquiry
219 (SC)/[2002] 255 should have commenced with the
ITR 508 (SC)/[2002] issuance of notice or otherwise
175 CTR 405 (SC) before section 133(6) could have
been invoked. It is with the view to
collect information that power is
given under section 133(6) to issue
notice, inter alia, requiring a banking
company to furnish information in
respect of such points or matters as
may be useful or relevant.
317 Lalji Haridas Vs State [1964] 52 ITR 423 136 When the ITO exercises his powers
of Maharasthra (SC) under section 37(1), (2) and (3) of
1922 Act the proceedings held
by him are judicial proceedings.
Therefore, the false statement
alleged to have been made by
respondent No. 2 was made by
him during the course of a judicial
proceeding within the meaning
of section 193 of the Indian Penal
Code. There can be little doubt
that if a person offers an insult to
a public servant sitting in a judicial
proceeding, or causes interruption
to him while he is so sitting at any
stage of the judicial proceeding,

196 197
 Gist / Important point for
S.N. Case Citation Section
consideration
the complaint has to proceed from
the public servant himself. Section
190 of Code of Criminal Procedure

Section - 139
requires that the magistrate to
whom a complaint has been made
should take cognizance of the said
complaint.

318 Orissa Rural Housing [2012] 17 taxmann. 139 Assessee cannot revise return of
Development Corpn com 186 (Orissa)/ income by way of filing a revised
Ltd [2012] 204 Taxman statement of income after filing
673 (Orissa)/ original return other than by
[2012] 343 ITR 316 way of filing revised return as
(Orissa)/[2012] 247 contemplated under section 139(5)
CTR 137 (Orissa)
319 Nanjappa Textiles [1983] 15 Taxman 139 No assessee can be expected to
309 (Madras)/ file a return before the ITO and
[1985] 153 ITR 109 ultimately tell him that the return
(Madras) must be ignored except in cases
where the ITO has lost his power to
act on it. There is no warrant in the
statute for encouraging an assessee
to indulge in this kind of fun of filing
within a statutory period a return
duly followed by a statement that
the ITO cannot act on it

320 Dhampur Sugar Mills [1973] 90 ITR 236 139 When an assessee files a revised
Ltd. (Allahabad) returns, he in fact admits that the
original return field by him was not
correct or complete and substitutes
the same by a revised return which
according to him is correct and
complete. Effective return for
purposes of assessment is return
which is ultimately filed by an
assessee on basis of which he wants
his income to be assessed

198 199
 Gist / Important point for
S.N. Case Citation Section
consideration
321 Amit Basu [2017] 87 taxmann. 139 In case, where on Commissioner
com 314 (Rajasthan)/ (Appeals)’s rejection of claim

Section - 139-143
[2018] 252 Taxman under section 10BA, assessee filed
341 (Rajasthan) revised return, when in pending
appeal, Tribunal allowed said claim,
assessee can not withdraw the
revised return

322 U.P. Rajya Vidyut [1993] 202 ITR 139, 144 Return is defective when filed on
Utpadan Nigam Ltd 93 (Allahabad)/ the basis of provisional P&L Account
[1993] 114 CTR 115 and tax audit report and without
(Allahabad) statutory audit. As it is not a case of
escapement, scrutiny proceedings
to be completed u/s 142 and 144
and not u/s 148

323 Maruti Suzuki (India) [2019] 107 taxmann. 143(2) Substantive Illegality: Issuance of
Ltd com 375 (SC) jurisdictional notice and assessment
order thereafter passed in name
of non-existing company is a
substantive illegality and not mere
procedural infirmity. Assessment
would not be valid

324 Gurjargravures P [1978] 111 ITR 1 143(3) If, an item of income noticed by the
Ltd. (SC) ITO but not examined by him from
the point of view of its taxability
or nontaxability cannot be said
to have been considered by him,
it is not possible to hold that the
ITO examining a portion of the
profits from the point of view of its
taxability only, should be deemed to
have also considered the question of
its non-taxability.

200 201
 Gist / Important point for
S.N. Case Citation Section
consideration
325 M. Pirai Choodi [2012] 20 taxmann. 143(3) Order passed without opportunity:
com 733 (SC)/[2011] High Court should not have set
334 ITR 262 (SC)/ aside the entire assessment order.

Section - 143
[2011] 245 CTR 233 At the highest, the High Court
(SC) should have directed the Assessing
Officer to grant an opportunity to
the assessee to cross-examine the
concerned witness.

326 Binod Kumar [2018] 94 taxmann. 143(3), Two sets of financial statements:
Agarwala com 422 (Calcutta)/ 43B The contention that to suit a
[2018] 257 Taxman person’s purposes before one
58 (Calcutta)/ authority or the other, different
[2019] 411 ITR pictures as to the financial position
493 (Calcutta)/ of such person or any entity under
[2018] 303 CTR 406 the control of such person may be
(Calcutta) presented is not acceptable. This
is a question larger than any legal
issue under the Income Tax Act
and is a matter of public policy. It
is inconceivable that a person may
approach a bank by inflating the
value of his assets and a few months
down the line he can deflate the
value of the assets, so to say, while
queuing up to pay tax. When the
assessee presented the financial
position of the assessee as in the
balance sheet of July 18, 2005, the
assessee could no longer resile from
such position. It was then open
to the Assessing Officer and the
income tax authorities to pin the
assessee down on the basis of the
assessee’s representation contained
in the earlier balance sheet.

202 203
 Gist / Important point for
S.N. Case Citation Section
consideration
327 Harmukhrai [1927] 3 ITC 198 144 Persons who deliberately make
Dulichand (Calcutta) default in producing their accounts
when asked to do so under clause

Section - 144
(4) of section 22 should treated
as defaulters and ITO should
make assessment to best of his
judgment. It is idle and absurd for
person who has books of account
and deliberately withholds them
to complain of not being treated in
judicial manner

328 Standard Mercantile [1985] 23 Taxman 144 Since best judgment assessment
Co 452 (Patna)/[1986] could not be a wild assessment,
157 ITR 139 (Patna)/ the authorities had no option but
[1985] 49 CTR 139 to proceed substantially on the
(Patna) materials supplied by the assessee.
The department had to act under
a handicap. The handicap of the
department could not be used in
favour of the assessee.

329 Kachwala Gems [2007] 158 Taxman 144 Estimation of GP by rejecting

71 (SC)/[2007] 288 books is permissible when assessee
ITR 10 (SC)/[2006] had not maintained and kept any
206 CTR 585 (SC) quantitative details/stock register
for goods traded in by it, there was
no evidence on record or document
to verify basis of valuation of closing
stock shown by assessee and the
GP rate declared by assessee during
assessment year did not match
result declared by assessee itself in
previous assessment years

330 Rayala Corpn. (P.) Ltd [1996] 87 Taxman 8 144 ITAT cannot consider additional
(Madras)/[1995] 215 evidence filed before it determined
ITR 883 (Madras) whether ITO has committed any
error in his judgment under section

204 205
 Gist / Important point for
S.N. Case Citation Section
consideration
144. The issue can be decided only
on basis of material gathered by
him and not on basis of materials

Section - 144
that are latter produced by assessee
before appellate authorities.

331 H.M. Esufali H.M. [1973] 90 ITR 271 144 In a case of established
Abdulali (SC)/1973 AIR concealment, estimation can be
2266/1973 SCR made for the entire period based
(3)1005 on evidence for part period: It was
open to the Sales Tax Officer to infer
that the assessee had large-scale
dealings outside his accounts, in
case where initially, the assessee
disowned seized bill book and the
entries therein but later admitted
that the bill book was his and also
the dealing outside the books for
19 days. It is obvious that he was
maintaining false accounts to evade
payment of sales-tax. In such a
situation, it was not possible for
the Sales Tax Officer to find out
precisely the turnover suppressed.
He could only make an estimate
of the suppressed turnover on the
basis of the material before him. So
long as the estimate made by him
is not arbitrary and has nexus with
facts discovered, the same cannot
be questioned. In the very nature of
things the estimate made may be an
overestimate or an underestimate.
But, that is no ground for interfering
with his ‘best judgment’.

206 207
 Gist / Important point for
S.N. Case Citation Section
consideration
332 Dr. S. Surendranath [2000] 72 ITD 144 In a case where a regular pattern
Reddy 205 (Hyderabad)/ of suppression is established,

Section - 144-145
[2000] 68 TTJ 384 lawful presumption is that there
(Hyderabad) is suppression for whole of
assessment year but subject to
adjustment of special factors

333 Chowringhee Sales [1973] 87 ITR 542 145 As the amount of sales tax was
Bureau (SC) received by the appellant in its
character as an auctioneer, the
amount should be held to form part
of its trading or business receipts.

334 Coimbatore Spinning [1974]95 ITR 375 145 Cognizance to illegal practice
& Weaving Co (Mad) and sub-standard morality is not
permissible: On the contention of
the assessee that Tribunal should
have taken judicial notice of the
practice followed by the business
houses of declaring larger stocks
to the banks purely for the purpose
of getting higher loans or overdraft
facilities, the Hon’ble High Court
was not convinced that any such
practice is shown to exist or that
it has been recognised in the
commercial circles or by courts.
Even assuming that such a practice
exists the Tribunal was not expected
to take judicial notice of such sub-
standard morality on the part of the
assessee so as to enable them to go
back on their own sworn statements
given to the banks as to the stocks
held and hypothecated by them to
the banks. In a case like this where
the assessee is confronted with his
own sworn statements which show
a different state of affairs than the

208 209
 Gist / Important point for
S.N. Case Citation Section
consideration
one shown in his own books of
account, heavy burden lies on the

Section - 145-147
assessee to disprove the statements
filed before Bank.
335 British Paints India [1991] 54 Taxman 145 AO is not bound to accept the
Ltd 499 (SC)/[1991] 188 system of account regularly
ITR 44 (SC)/[1991] employed by the assessee even
91 CTR 108 (SC) when the correctness of the same
was not questioned in the past. It
is not only the right but the duty of
the Assessing Officer to consider
whether or not the books disclose
the true state of accounts and the
correct income can be deduced
therefrom.
336 Kedarnath Jute Mfg. [1971] 82 ITR 363 145, 37 Existence or absence of entries
Co. Ltd (SC) in the books of account is not
decisive or conclusive in claiming
a deduction. Whether a deduction
is allowable or not depends on the
relevant provision of law.
337 Nickunj Eximp [2014] 48 taxmann. 147 Tangible material from Survey:
Enterprises (P.) Ltd com 20 (Bombay)/ When there is specific information
[2015] 229 Taxman found in a survey that the assessee
99 (Bombay)/ recorded bogus purchases,
[2014] 270 CTR 494 completed assessment can be
(Bombay) reopened even after expiry of four
years from the end of relevant
assessment year based on bogus
invoices issued by supplier.
338 Peass Industrial [2016] 76 taxmann. 147 Tangible information from
Engineers (P.) Ltd com 106 (Gujarat) Investigation Wing: If tangible
material in form of specific
information received by
Investigation Wing that assessee
had been beneficiary of bogus
transactions is available, notice for
reassessment is justified
210 211
 Gist / Important point for
S.N. Case Citation Section
consideration
339 Greater Mohali [2018] 93 taxmann. 147 True and full disclosure: When
Area Development com 441 (Punjab & there was information that
Authority Haryana) the assessee received external

Section - 147
development charges from Land
Developers, Colonizers, Builders
etc, reopening of assessment evn
after expiry of four years from end
of relevant assessment year is valid
because the assessee showed the
amounts as liability in balance sheet
instead of offering the income to tax
and there was no proper disclosure
of material facts and the original
assessment was completed in
ignorance of the facts

340 Innovative Foods Ltd [2018] 96 taxmann. 147 Change of opinion: When the AO
com 250 (Kerala)/ neither discussed nor there was
[2018] 409 ITR 415 any opinion with respect to issues
(Kerala) related to prior period depreciation
claimed during relevant assessment
year and prepayment premium of
loan to becapitalized, reassessment
proceedings initiated in respect of
these issues was not mere change of
opinion

341 Instant Holdings Ltd [2014] 44 taxmann. 147 No opinion: When the AO had not
com 386 (Mumbai - formed any opinion in the original
Trib.)/[2013] 151 TTJ assessment about transaction
137 (Mumbai - Trib.) of purchase or sale of shares
or resultant loss or head under
which same should be assessed
and accepted returned income,
reopening of assessment is justified

212 213
 Gist / Important point for
S.N. Case Citation Section
consideration
342 OPG Metals & Finsec [2014] 41 taxmann. 147 Fresh Material: If information
Ltd com 21 (Delhi)/ regarding all transactions was
[2014] 225 Taxman not subject matter of earlier

Section - 147
108 (Delhi)(MAG.)/ reassessment and details provided
[2013] 358 ITR 144 fresh material; second reassessment
(Delhi) notice was not based upon mere
change of opinion
343 Tivoli Investment [2014] 49 taxmann. 147 True and full disclosure: If
and Trading Co. (P.) com 479 (Mumbai - assessment was made adopting
Ltd Trib.)/[2014] 150 ITD a rental value and then the AO
659 (Mumbai - Trib.)/ noticed that for earlier years, the
[2015] 168 TTJ 651 assessment was done at higher
(Mumbai - Trib.) value after including interest
free deposit and the rental value
increased in the intervening period,
initiation of reassessment is valid.
344 Usha International [2015] 56 taxmann. 147 Audit Objections: Communication
Ltd com 157 (Delhi - of existence of law or factual
Trib.)/[2015] 153 ITD inconsistencies by internal
558 (Delhi - Trib.)/ audit party, does not operate
[2015] 68 SOT 141 as a hindrance in initiation of
(Delhi - Trib.)(URO)/ re-assessment proceedings
[2015] 170 TTJ 197 but Initiation of re-assessment
(Delhi - Trib.) proceedings on basis of an
interpretation
to provisions of law by audit party is
forbidden
345 Vipan Khanna [2002] 122 Taxman 1 147 Reassessment proceedings
(Punjab & Haryana)/ are open only qua items of
[2002] 255 ITR 220 underassessment and finality of
(Punjab & Haryana) assessment proceedings on other
issues remains unchanged
346 Sukhlal Ice & Cold [1993] 199 ITR 129 147 Validity of second notice u/s 148,
Storage Co (Allahabad) when first notice was illegal: When
first notice u/s 148 was held to be
illegal and without jurisdiction

214 215
 Gist / Important point for
S.N. Case Citation Section
consideration
subsequent notice issued under
section 147 by setting out necessary
reasons and removing defects

Section - 147
would be valid

347 Govindaraju N [2015] 60 147 After initiation of reassessment

[Link] proceedings, the earlier assessment
333 (Karnataka)/ order would be deemed to have
[2015] 233 Taxman been set aside and the AO has the
376 (Karnataka)/ power to pass fresh assessment
[2015] 377 ITR order with regard to the entire
243 (Karnataka)/ income which has escaped
[2015] 280 CTR 316 assessment and levy tax on the
(Karnataka) entire income

348 Narayanappa S [1967] 63 ITR 219 147 Adequacy or sufficiency of reasons

(SC) is not justiciable: When the ITO
has reasonable belief that there
was non-discourse of material fact
which has bearing on the question
of under assessment, it is not for the
Court to investigate whether the
grounds were adequate or whether
the reasons were sufficient

349 Phool Chand Bajrang [1993] 69 Taxman 147 Jurisdiction u/s 147: ITO acquires
Lal 627 (SC)/[1993] 203 jurisdiction to reopen assessment
ITR 456 (SC)/[1993] under section 147(a) read with
113 CTR 436 (SC) section 148 only if on the basis
of specific, reliable and relevant
information coming to his
possession subsequently, he has
reasons, which he must record, to
believe that by reason of omission
or failure on the part of the assessee
to make a true and full disclosure of
all material facts necessary for his
assessment during the concluded
assessment proceedings, any part of

216 217
 Gist / Important point for
S.N. Case Citation Section
consideration
his income, profit or gains
chargeable to income-tax has
escaped assessment. He may

Section - 147
start reassessment proceedings
either because some fresh facts
come to light which were not
previously disclosed or some
information with regard to the facts
previously disclosed comes into his
possession which tends to expose
the untruthfulness of those facts.
In such situations, it is not a case
of mere change of opinion or the
drawing of a different inference
from the same facts as were earlier
available but acting on fresh
information. Since, the belief is that
of the ITO, the sufficiency of reasons
for forming the belief, is not for the
Court to judge but it is open to an
assessee to establish that there in
fact existed no belief or that the
belief was not at all a bona fide one
or was based on vague, irrelevant
and nonspecific information.

350 Sun Engineering [1992] 64 Taxman 147 Reopening of assessment cannot be

works P Ltd 442 (SC)/[1992] 198 for the benefit of the assessee
ITR 297 (SC)/[1992]
107 CTR 209 (SC)
351 Choksi Vachharaj [2016] 76 taxmann. 147 Information from Investigation
Makanji & Co com 17 (Gujarat)/ wing about bogus purchases from
[2016] 243 Taxman entry operators: A completed
465 (Gujarat) reassessment can be reopened in
case of a manufacturer of diamond
ornaments, when information about
accommodation entries provided by
entry operators regarding fake

218 219
 Gist / Important point for
S.N. Case Citation Section
consideration
purchases of raw diamonds made
by assessee was received from
Investigation Wing

Section - 147
352 Dayanidhi Maran [2018] 98 taxmann. 147 Non-communication of reasons
com 202 (Madras) in notice u/s 148: When the
reassessment notice is based on
preliminary information, non-
quoting of reasons in the notice
u/s 148 would not vitiate the
reassessment proceedings and filing
of Writ was premature

353 Chettinad [1993] 200 ITR 320 147 Reassessment proceedings u/s
Corporation P Ltd (SC) 147 are open only qua items of
underassessment

354 New Delhi Television [2017] 84 taxmann. 147 Prima facie belief that own
Ltd com 136 (Delhi)/ unaccounted money is introduced
[2018] 405 ITR 132 through sham transactions: When
(Delhi)/[2017] 298 assessee received through its
CTR 230 (Delhi) subsidiary in a sham transaction
of issue of Step UP Coupon Bonds
and created a complex structure of
various subsidiaries abroad, AO was
justified in reopening assessment by
forming a prima facie opinion that
amount so received represented
assessee’s own unaccounted money

355 Kantamani Venkata [1967] 63 ITR 638 147 The notice issued by the Income-
Narayana and Sons (SC) tax Officer did not specifically refer
to. section 34(1)(a) of the Income-
tax Act: it did not set out the clause
under, which it was issued. But on
that account the proceeding under
section 34 is not vitiated.

220 221
 Gist / Important point for
S.N. Case Citation Section
consideration
356 Vicky Rajesh Jhaveri [2016] 76 taxmann. 147, Information on share transactions
com 96 (Gujarat)/ 10(38) in sale of a fake company:
[2016] 243 Taxman Reopening was justified when

Section - 147
573 (Gujarat)/ details are available and verification
[2017] 396 ITR 265 of accommodation entries was done
(Gujarat)/[2017] 293 in share transaction in respect of
CTR 291 (Gujarat) sale of share of a fake company. SLP
against this decision is dismissed
as reported in [2016] 76 taxmann.
com 97 (SC)/[2016] 243 Taxman
515 (SC)

357 Pushpak Bullion Pvt [2017] 88 taxmann. 147, 68 In a case where return was
Ltd com 603 (Gujarat) processed under section 143(1) and
thereafter during search on group
of accommodation entry operators,
it was found that assessee took
accommodation entries of bogus
share capital from that group,
reopening of the assessment was
justified

358 Gujarat Ambuja [2017] 86 taxmann. 147, 69C Mere reflection of purchases in
Exports Ltd. com 69 (Gujarat)/ books and return of income is no
[2017] 250 Taxman disclosure: When purchases made
482 (Gujarat) by assessee from a proprietary
concern were bogus and entries
were in nature of accommodation
entries, merely because assessee
had disclosed such entries in
return filed and also showed such
purchases in books of accounts
would hardly be sufficient to
advance arguments of full and true
disclosure by assessee

222 223
 Gist / Important point for
S.N. Case Citation Section
consideration
359 Vijaykumar Datla Dr [1996] 58 ITD 339 147, Initiation of reassessment is valid in
(Hyderabad) 142(1) a case where the assessee failed to

Section - 147-148
file return suo motu and the AO did
not issue notice u/s 142(1) during
the relevant assessment year

360 Rajesh Jhaveri Stock [2017] 88 taxmann. 147, Intimation under section 143(1)(a)
Brokers Pvt Ltd com 603 (Gujarat)/ 143(1) cannot be treated to be an order of
[2017] 394 ITR 65 assessment. Notice for reopening
(Gujarat) had been issued in the case of
assessment which was not framed
after scrutiny. The Assessing Officer
would have considerable latitude
in issuing notice for reopening
and if it was found that he had
tangible material to form a belief
that income chargeable to tax had
escaped assessment, it would not
be appropriate to strike down the
notice.

361 Nova Promoters & [2012] 18 taxmann. 148 Prima facie belief of AO is enough
Finlease Pvt Ltd com 217 (Delhi)/ that income escaped assessment is
[2012] 206 Taxman enough at the stage of reopening
207 (Delhi)/[2012] and merits of the matter are not
342 ITR 169 (Delhi)/ relevant
[2012] 252 CTR 187
(Delhi)
362 Abhishek Jain [2018] 94 taxmann. 148 Jurisdiction of an Assessing Officer
com 355 (Delhi) cannot be called in question by
an assessee after expiry of one
month from date on which he was
served with a notice for reopening
assessment under section 148 In
terms of section 124(3)(b)

224 225
 Gist / Important point for
S.N. Case Citation Section
consideration
363 Home Finders [2018] 93 taxmann. 148 Non-disposal of objections of the
Housing Pvt Ltd com 371 (Madras)/ assessee by the AO through a

Section - 148-153A
[2018] 404 ITR 611 speaking order (Non-compliance of
(Madras)/[2018] 303 direction of Supreme Court in GKN
CTR 269 (Madras) Driveshafts (India) Ltd. v. Income
Tax Officer [2002] 125 Taxman 963)
would not make the reassessment
proceedings ab initio void. SLP
against this decision was dismissed
by Supreme Court as reported in
[2018] 94 [Link] 84 (SC)/
[2018] 256 Taxman 59 (SC)
364 Dhir G.G Dr [2017] 80 taxmann. 153A Relevance of cash book filed after
com 198 (Allahabad)/ one year to explain seized cash:
[2017] 247 Taxman Cash seized from large number of
121 (Allahabad)/ bank lockers in name of assessee
[2017] 394 ITR and his family members and after
164 (Allahabad)/ one year, the assessee for first time
[2017] 295 CTR 291 produced a computer printed cash
(Allahabad) book relating to his professional
income. The sources of income were
meagre and even production of cash
book in course of block assessment
proceedings was a case of poor
afterthought
365 Elegant Homes Pvt [2002] 124 Taxman 153A Unexplained credits in regular cash
Ltd 819 (Rajasthan)/ book seized during search: Regular
[2003] 259 ITR cash book seized during a search
232 (Rajasthan)/ and seizure operation revealed cash
[2002] 177 CTR 261 credits in names of various parties.
(Rajasthan) Assessee did not file return till date
of search and even after search
did not disclose such amount and
showed income as nil. Assessee also
failed to prove genuineness of cash
credits. Cash credits in question had
to be treated as undisclosed income

226 227
 Gist / Important point for
S.N. Case Citation Section
consideration
366 Gopal Lal Bhadruka [2012] 27 taxmann. 153A Assessing Officer can take into
com 167 (Andhra consideration material other than

Section - 153A-153C
Pradesh)/[2012] 346 what was available during search
ITR 106 (Andhra operation for making an assessment
Pradesh)/[2012] of undisclosed income of assessee
253 CTR 80 (Andhra u/s section 153A/153C
Pradesh)
367 St. Francis Clay [2016] 70 taxmann. 153A Neither under section 132 or
Décor Tiles com 234 (Kerala)/ under section 153A, phraseology
[2016] 240 Taxman ‘incriminating’ is used by
168 (Kerala)/ Parliament: Any material unearthed
[2016] 385 ITR 624 during search or any statement
(Kerala)/[2016] 287 made during course of search by
CTR 187 (Kerala) assessee is a valuable piece of
evidence in order to invoke section
153A
368 N.K. Proteins Ltd. [2004] 4 SOT 479 153C, What the ITO can assess in regular
(Ahmedabad)/ 143(3) assessment can also be assessed in
[2004] 83 TTJ 904 block assessment (paragraph 56).
(Ahmedabad) The block assessment of undisclosed
income and its being charged to a
higher rate of tax prescribed, was
independent of the pending regular
assessments and it operated in a
different field from the assessment
of undisclosed income which was
not and would not have been
disclosed for the purposes of the
Act. Undisclosed income, by this
chapter, is classified separately
for the purposes of assessment
and is required to be worked out
in the manner prescribed therein
and treated to a higher rate of
tax. This process did not disturb
the assessments already made, of
the previous years, and was only
intended to sniff out what had

228 229
 Gist / Important point for
S.N. Case Citation Section
consideration
remained hidden and would not
have been disclosed by the assessee.

Section - 153A-153C
Therefore, there is no overlap
in the nature of the assessment
made under chapter of undisclosed
income and the regular assessment
made under Section 143(3) of the
Act

369 Dayawanti [2016] 75 taxmann. 153A, Value of Statements recorded

com 308 (Delhi)/ 132(4), during Search: Statements recorded
[2017] 245 Taxman 145 during search operations could
293 (Delhi)/[2017] be relied upon to make addition
390 ITR 496 (Delhi)/ to assessee’s income. Where
[2016] 290 CTR 361 inferences drawn in respect of
(Delhi) undeclared income of assessee
were premised on materials found
as well as statements recorded
by assessee’s son in course of
search operations and assessee
had not been able to show as
to how estimation made by
Assessing Officer was arbitrary or
unreasonable, additions so made by
Assessing Officer by rejecting books
of account was justified

370 Lal Chand Jaiswal [2013] 40 taxmann. 153A, Extrapolation to whole year
com 372 (Allahabad)/ 144, 132 based on seized entries for few
[2014] 221 Taxman days: Where documents seized
53 (Allahabad) represented entries for few days,
(MAG.) estimation of net profit is not to be
restricted only to those few days; it
is to be made on basis of turnover
for whole year

230 231
 Gist / Important point for
S.N. Case Citation Section
consideration
371 Rajnik & Co [2001] 117 Taxman 153A, Extrapolation to whole year
675 (Andhra 144, 132 based on seized entries for few

Section - 153A-153C
Pradesh)/[2001] 251 days: When there was abundant
ITR 561 (Andhra material on record not only in the
Pradesh)/[2001] 171 form of loose slips/sheets showing
CTR 117 (Andhra the suppressed turnover relating
Pradesh) to the day-to-day suppressions
but also by way of admission in the
sworn statement of a partner of
the firm, showing that the day-
to-day suppressions were carried
on throughout the assessment
years for the entire block period,
estimation was justifiable

372 Keerthi Housing Pvt [2013] 2013-TIOL- 153A, AO need not confine to seized
Ltd 201-ITAT-HYD 153C material: While completing
assessment u/s 153C of the Act,
the Assessing Officer will not be
confined to the seized materials only
but can consider all the material as
may be available before him.

373 Ajay Kumar Sharma [2002] 124 Taxman 153A, In search assessment, entries in
814 (Rajasthan)/ 153C regular books can be taxed: Merely
[2003] 259 ITR because some entries are shown in
240 (Rajasthan)/ regular books of account, that does
[2002] 177 CTR 539 not prohibit Assessing Officer to
(Rajasthan) tax that amount in block period, if
that amount has not been taxed in
regular assessment

374 Gopakumar E N [2016] 75 taxmann. 153A Additions can be made in

com 215 (Kerala)/ assessment u/s 153A even without
[2017] 244 Taxman any incriminating material against
21 (Kerala)/[2017] assessee in search u/s 132
390 ITR 131
(Kerala)/[2017] 293
CTR 450 (Kerala)

232 233
 Gist / Important point for
S.N. Case Citation Section
consideration
375 Anil Kumar Bhatia [2012] 24 taxmann. 153A, Assessing Officer is empowered to
com 98 (Delhi)/ 153C reopen those proceedings under

Section - 153A-153C
[2012] 211 Taxman section 153A without any fetters
453 (Delhi)/[2013] and reassess total income taking
352 ITR 493 (Delhi) note of undisclosed income, if any,
unearthed during search

376 Continental [2015] 64 taxmann. 153A, SLP granted against High Court’s
Warehousing com 34 (SC)/[2015] 153C ruling that no addition can be made
Corporation (Nhava 235 Taxman 568 (SC) in respect of assessments which
Sheva) Ltd. have become final if no incriminating
material is found during search or
during 153A proceeding

377 P. Sasikumar [2016] 73 taxmann. 153A Assessee has to file return for
com 173 (Kerala)/ specified period of six years u/s
[2016] 387 ITR 8 153A even if no documents are
(Kerala)/[2016] 290 unearthed, nor any statement was
CTR 456 (Kerala) made by assessee during course of
search u/s 132 or any material is
received

378 Bharat Ginning & [2013] 32 153C For proceeding u/s 153C, it is
Pressing Factory [Link] 322 not necessary that the books of
(Ahmedabad - Trib.)/ account should be incriminating.
[2013] 60 SOT 93 Separate satisfaction not required
(Ahmedabad - Trib.) when AO is same for both persons:
(URO)/[2013] 155 When books of account of the
TTJ 343 (Ahmedabad assessee firm were seized from the
- Trib.) place of the partner of the firm, the
AO is fully empowered to initiate
proceeding under section 153C
against the firm. When the AO of
the both the firm and partner are
same, separate satisfaction is not
required to be recorded.

234 235
 Gist / Important point for
S.N. Case Citation Section
consideration
379 Rajesh Sunderdas [2016] 76 taxmann. 153C If AO of the searched person
Vaswani com 311 (Gujarat) recorded that ledger of assessee
was found during search evidencing

Section - 153C
payments in cash and cheque, prima
facie material exists to suggest
satisfaction u/s 153C

380 Instronics Ltd [2017] 82 taxmann. 153C When satisfaction was recorded
com 357 (Delhi) by the AO of the searched person
that certain seized documents
belong to the assessee, no separate
satisfaction is required in the file
of the assessee when the AO is the
same for both parties

381 V.H. Yahiya [2015] 56 taxmann. 153C When search at premises of a

com 169 (Kerala)/ person revealed undisclosed
[2015] 231 Taxman income of assessee, notice issued/s
43 (Kerala)/[2014] 158BD to the assessee being “any
369 ITR 194 other person” was a proper notice.
(Kerala)/[2015] 281
CTR 102 (Kerala)
382 Panchajanyam [2012] 20 taxmann. 153C Validity of an assessment is not
Management com 584 (Kerala)/ affected by reason of the Assessing
Agencies and [2011] 333 ITR 281 Officer’s failure to record his
Services (Kerala)/[2011] 239 satisfaction under section 158BD,
CTR 424 (Kerala) which is only for the purpose of
transferring the file and once the
file is transferred, the transferring
officer become functus officio and
the jurisdiction for all purposes is
transferred to the officer to whom
file is transferred and who has
jurisdiction to assess the assessee,
about whom details are obtained
in the course of search of another
assessee.

236 237
 Gist / Important point for
S.N. Case Citation Section
consideration
383 RRJ Securities Ltd. [2017] 79 taxmann. 153C SLP granted against High Court’s
com 115 (SC) ruling that since the hard disk

Section - 153C-154
containing working papers
belonging to assessee seized from
the premises of his Chartered
Accountant did not contain any
incriminating material, proceedings
u/s 153C against assessee are not
valid.
384 Hindustan Lever Ltd [2019] 104 taxmann. 154 When the binding precedent
com 215 (Calcutta) that blending of tea leaves was
not manufacturing or production
activity was not applied and
deduction was wrongly allowed u/s
80I, there is error apparent on face
or record in the assessment order
and the same can be rectified u/s
154
385 Hind Wire Industries [1995] 80 Taxman 79 154 Further rectification of a
Ltd (SC)/[1995] 212 ITR rectification: The word ‘order’ in
639 (SC)/[1995] 124 the expression ‘from the date of
CTR 219 (SC) the order sought to be amended’
in section 154(7) as it stood at
the relevant assessment year had
not been qualified in any way and
it did not necessarily mean the
original order. It could be any order
including the amended or rectified
order.
386 Rastriya Ispat Nigam [2016] 74 taxmann. 154, In a case of issue of notice u/s
Ltd com 112 (Andhra 143(3), 154, subsequent to completion
Pradesh)/[2015] 377 147 of assessment u/s 143(3) and
ITR 420 (Andhra subsequent reassessment u/s
Pradesh) 154, limitation for issuing notice
u/s 154 would start from date of
reassessment order as doctrine of
merger would apply

238 239
 Gist / Important point for
S.N. Case Citation Section
consideration
387 JRD Stock Brokers [2015] 63 taxmann. 158BFA When the assessee admitted in

Section - 158BFA-185
(P) Ltd. com 143 (Delhi)/ the course of search that part of
[2015] 375 ITR 600 the sum claimed to be received
(Delhi)/[2015] 276 from share business included
CTR 362 (Delhi) accommodation entries, levy of
penalty was justified. SLP against
the decision was dismissed by
Supreme Court as reported in
[2017] 79 [Link] 184 (SC)

388 Alex Cherian [2009] 185 Taxman 179 When concerned authority
308 (Kerala)/[2010] recorded a finding about
320 ITR 49 (Kerala) satisfaction of basic ingredients
prescribed u/s 179 after referring
to available facts, Writ against the
order has no merit.

389 H. Ebrahim [2009] 185 Taxman 179 It is not necessary that all three
11 (Karnataka)/ ingredients, viz., gross neglect,
[2011] 332 ITR misfeasance and breach of duty
122 (Karnataka)/ are to be satisfied for invocation
[2009] 227 CTR 646 section 179
(Karnataka)

390 N. Surya Prakash [2015] ITA No. 1579/ 179 Order of the AO passed u/s 179(1)
Rao HYD/2014 of ITAT, is not appealable
Hyderabad dated
31/03/2015
391 Biharilal Jaiswal [1996] 84 Taxman 185 Despite prohibition under law,
236 (SC)/[1996] 217 any agreement to the contrary
ITR 746 (SC)/[1996] to transfer, sub-let or enter
130 CTR 143 (SC) partnership with respect to the
privilege/ business under the said
licence is unlawful and void. In this
case the law was Excise law

240 241
 Gist / Important point for
S.N. Case Citation Section
consideration
392 Eli Lilly & Co. (India) [2009] 178 Taxman 192, 9(1) Where home salary/special
(P.) Ltd 505 (SC)/[2009] 312 (ii) allowance payment made by foreign

Section - 192-194J
ITR 225 (SC)/[2009] company abroad is for rendition
223 CTR 20 (SC) of services in India and no work is
found to have been performed for
foreign company, such payment
would certainly come under section
192(1), read with section 9(1)(ii)

393 Noida Commercial [2015] 64 taxmann. 194A Co-operative society engaged in

Co Op Bank Ltd. com 158 (Delhi - banking business has to deduct
Trib.) TDS on payment of interest to
its members if amount exceeds
prescribed limit

394 Bhagani Nivedita [2003] 87 ITD 569 194A Co-operative bank has to deduct
Sah. Bank Ltd (PUNE)(SMC) TDS on payment of interest to
its members on time deposits if
amount exceeds the prescribed
limit

395 Saraswat Co Op [2015] 54 taxmann. 194A, 201 Where assessee co-operative

Bank Ltd com 297 (Panaji Trib) bank had made interest payments
in excess of Rs. 10,000 on term
deposits to its depositors, assessee
would be liable to deduct TDS on
said payment

396 United Breweries [2015] 194J Brand fee is subject to TDS u/s 194J
Ltd TaxPub(DT) 3258 as Royalty
(Visakhapatnam-
Trib)/(2015) 066 (II)
ITCL 0455/(2015)
155 ITD 0482/
(2016) 175 TTJ
0470/ (2016) 131
DTR 0127

242 243
 Gist / Important point for
S.N. Case Citation Section
consideration
397 Transmission Corpn. [1999] 105 Taxman 195 There was no substance in the
of A.P. Ltd 742 (SC)/[1999] 239 contention of the appellant that

Section - 195-201
ITR 587 (SC)/[1999] the expression ‘any other sum
155 CTR 489 (SC) chargeable under the provisions
of the Act’ would not include cases
where any sum payable to the
non-resident is a trading receipt
which may or may not include
‘pure income’. The language of
section 195(1) for deduction of
income-tax by the payee is clear
and unambiguous and casts an
obligation to deduct appropriate tax
at the rates in force.

398 Pushpa Vijoy [2012] 19 taxmann. 199 Assessee is entitled to credit

com 157 (Kerala)/ for tax as per TDS certificates
[2012] 206 Taxman only in the year in which the
22 (Kerala)/[2012] corresponding income is assessed
247 CTR 575 to tax
(Kerala)
399 Rahee Jhajharia E to [2017] ITA No. 199 Credit for TDS can be granted
E JV 1848/Kol/2017 of only in the year in which the
ITAT, Kolkata dated corresponding receipt is assessed
21/12/2017 to tax

400 Surendra S. Gupta [2018] 93 taxmann. 199 Credit for TDS has to be given in
com 456 (Mumbai - assessment year in which income
Trib.)/[2018] 170 ITD has actually been assessed/offered
732 (Mumbai - Trib.) to tax and not in year of deduction
itself

401 Kingfisher Airlines [2014] 49 taxmann. 201 When the assessee deducts TDS
Ltd com 49 (Karnataka) on salaries but does not deposit
in Government Account within
prescribed time, AO was justified in
declaring the assessee as a defaulter

244 245
 Gist / Important point for
S.N. Case Citation Section
consideration
u/s 201. The power to declare an
assessee as defaulter is with the AO

Section - 201-221
and not with the DGIT(Systems)

402 Reliance Industries [2015] 59 taxmann. 201, 221 Obligation to deduct and pay tax
Ltd com 259 (Bombay)/ upon assessee is unconditional
[2015] 233 Taxman and financial stringency would not
307 (Bombay)/ justify deducting tax from amount
[2015] 377 ITR 74 paid to payee and not paying it to
(Bombay)/[2015] revenue. Proviso to section 201(1),
279 CTR 128 which bars imposition of penalty
(Bombay) under section 221 unless Assessing
Officer is satisfied that failure to
deduct and pay tax was without
good and sufficient reasons, would
have no application where assessee
had deducted tax but fails to pay

403 Aayush NRI LEPL [2017] 87 201(1A) Levy of interest under section
Health Care (P.) Ltd [Link] 83 201(1A) is automatic and
(Visakhapatnam - mandatory
Trib.)/[2017] 167 ITD
432 (Visakhapatnam
- Trib.)/[2018]
191 TTJ 1003
(Visakhapatnam -
Trib.)
404 Nawab Mir Barkat [1988] 36 Taxman 220(2) On issue of notice u/s 148, the
Ali Khan Bahadur 133 (Andhra original assessment order will
Pradesh)/[1988] not become void and non est.
172 ITR 13 (Andhra Consequently, interest under
Pradesh)/[1988] 73 section 220(2) has to be levied from
CTR 170 (Andhra date of original assessment order
Pradesh) to date of reassessment order.

246 247
 Gist / Important point for
S.N. Case Citation Section
consideration
405 Emaar MGF Land Ltd [2014] 46 taxmann. 226(3)(vi) When there is facial invalidity or
com 151 (Delhi)/ falsity in assertion of the garnishee

Section - 226-245D
[2014] 365 ITR 293 with respect to its liability to
(Delhi)/[2014] 269 the assessee, AO can scrutinize
CTR 217 (Delhi) the statement of the garnishee
to ascertain whether it is false
and take proceeding to another
direction, if it is false

406 Rajesh Kourani [2017] 83 taxmann. 234E Section 234E is a charging provision
com 137 (Gujarat)/ and fee prescribed therein could be
[2017] 249 Taxman levied even without a machinery
402 (Gujarat)/ provision (section 200A) for
[2017] 297 CTR 502 computation of fee
(Gujarat)
407 Om Prakash Jakhotia [2019] 107 taxmann. 245D When an assessee files an
com 283 (Delhi)/ application u/s 245C declaring
[2019] 414 ITR 176 income lower than the amount
(Delhi) declared as undisclosed income
in search proceedings, in view of
fact that assessee failed to prove
that loan entries were genuine and
his statement recorded in course
of search proceedings was under
coercion, it has to be treated that
he did not approach Settlement
Commission with clean hands and,
thus, impugned order passed under
section 245D(1) allowing assessee’s
application to be proceeded with,
was to be set aside

408 Emta Coal Ltd [2017] 86 taxmann. 245D Settlement Commission can use
com 65 (Calcutta)/ best judgment in computing figure
[2017] 250 Taxman for settlement, but it has to explain
527 (Calcutta)/ manner in which best judgment
[2017] 398 ITR 1 figure was arrived at
(Calcutta)

248 249
 Gist / Important point for
S.N. Case Citation Section
consideration
409 Ajmera Housing [2010] 193 Taxman 245D Scheme of Chapter XIX - A does not
Corpn 193 (SC)/[2010] 326 permit revision of income disclosed

Section - 245D-251
ITR 642 (SC)/[2010] by assessee in application u/s
234 CTR 118 (SC) 245C(1) as ‘full and true disclosure’
of income, which had
not been previously disclosed
being is a pre-condition for a valid
application. This woud amount to
withdrawal of old application and
filing of new application which is not
permissible u/s 245C(3). By revising
the application the assessee would
be achieving something indirectly
what he cannot otherwise achieve
directly. A natural corollary is
that determination of income by
the Settlement Commission has
necessarily to be with reference
to the income disclosed in the
application filed by assessee

410 Jyotendrasinhji v. S.I. [1993] 68 Taxman 59 245I Order of Settlement Commission is

Tripathi (SC)/[1993] 201 ITR conclusive. The only ground upon
611 (SC)/[1993] 111 which either High Court under
CTR 370 (SC) article 226 or Supreme Court under
article 32 or 136 can interfere is
when such order is contrary to
provisions of Act

411 Nirbheram Deluram [1997] 91 Taxman 251 Appellate power of CIT(A) is not
181 (SC)/[1997] 224 confined to matters considered
ITR 610 (SC)/[1997] by AO. Additions made by AAC
139 CTR 484 (SC) on account of items (in this case
unexplained hundi loans) which
were not considered by AO would
be justified

250 251
 Gist / Important point for
S.N. Case Citation Section
consideration
412 Shivangi Steel Pvt. [2014] 42 taxmann. 251, 254 Rule 29 - Admission of Additional
Ltd. com 393 (Agra - Evidence: Inspite of large number
Trib.)/[2014] 147 ITD of adjournments, if the assessee did

Section - 251
166 (Agra - Trib.)/ not produce any document or made
[2014] 164 TTJ 134 any submissions (oral or written)
(Agra - Trib.) with regard to grounds, exparte
order passed by CIT(A) is valid. In
such a case, the plea for admission
of additional evidence was liable to
be rejected by ITAT

413 Welspun India Ltd. [2019] 104 taxmann. 251, 69C Cross Examination: In a case
com 267 (Mumbai addition was made on bogus
- Trib.)/[2019] 69 purchases (of mobile hand sets)
ITR(T) 617 (Mumbai based on information from State
- Trib.) VAT Department that assessee
received accommodation entries,
the addition cannot be deleted
on the mere ground that cross-
examination of persons whose
statements were recorded by VAT
department was not offered to the
assessee

414 Arvinder Singh [2017] 79 taxmann. 251, 254, When reason for extraordinary
com 332 (Delhi)/ 260A delay of 1271 days in filing appeal
[2016] 380 ITR 179 was not convincing, delay cannot
(Delhi) be condoned

415 Jute Corporation of [1990] 53 Taxman 85 251, 254 An appellate authority has all the
India (SC)/[1991] 187 ITR powers which the original authority
688 (SC)/[1990] 88 may have in deciding the question
CTR 66 (SC) before it subject to the restrictions
or limitation, if any, prescribed by
the statutory provisions

416 Kanpur Coal [1964] 53 ITR 225 251, 254 CIT(A) has plenary powers in
Syndicate (SC) disposing of an appeal and scope of
his power is conterminous with that

252 253
 Gist / Important point for
S.N. Case Citation Section
consideration
of AO. He can do what AO can do
and also direct the AO to do what
he has failed to do

Section - 251
417 Kapoorchand [1981] 7 Taxman 6 251, 254 Appellate authority has the
Shrimal (SC)/[1981] 131 ITR jurisdiction as well as the duty to
451 (SC)/[1981] 24 correct all errors in the proceedings
CTR 345 (SC) under appeal and to issue, if
necessary, appropriate directions
to the authority against whose
decision the appeal is preferred to
dispose of the whole or any part of
the matter afresh unless forbidden
from doing so by the Statute.

418 Sama Surya Prakash [2013] 35 251, 254 Merely because AO drifted from
[Link] 206 his main observations to estimate
(Visakhapatnam - expenditure on ad-hoc basis,
Trib.) Commissioner (Appeals) cannot
allow the expenditure

419 KMC Constructions [2013] 36 taxmann. 251, 254 If consequential orders passed
Ltd com 416 (Hyderabad by Assessing Officer are de
- Trib.) hors directions of Tribunal,
remedy for assessee lies in fresh
proceeding commencing with such
consequential orders and not in
proceedings that culminated with
order of Tribunal

420 Gurjargravures P [1978] 111 ITR 1 251, 254 When neither any claim for
Ltd. (SC) exemption was made before ITO,
nor was there any material on
record supporting such claim, the
Tribunal was not competent to hold
that AAC should have entertained
the question of relief claimed by the
assessee.

254 255
 Gist / Important point for
S.N. Case Citation Section
consideration
421 Sandip M. Patel [2012] 22 253(4) An independent legal issue is
[Link] 288 beyond scope of adjudication
(Ahmedabad)/ through cross objection under

Section - 253
[2012] 137 ITD section 253(4). When validity of
104 (Ahmedabad)/ invocation of section 153C not
[2012] 150 TTJ 338 a ground raised in appeal, the
(Ahmedabad) assessee cannot raise the ground in
Revenue’s appeal by invoking rule
27 or otherwise

422 Bathina Technologies [2913] ITA Nos. 1272 253 In case of a public limited company
(India) Ltd & 1273/Hyd/2012 extraordinary delay in filing appeal
dated 03/01/2013 cannot be condone merely on the
ground that the MD was sick: The
assessee is a public limited company
managed by a Board of
Directors and the activities are not
controlled by a single person. Even
if it is presumed that the Managing
Director is sick, the other directors
were not prevented in filing appeal.
The assessee being a public limited
company is to hold board meetings
and AGM and is required to file
various returns before ROC, Income
Tax, Commercial Tax, ESI and PF.
Careful consideration of the facts
indicates that the assessee has not
come with clean hands and its action
cannot be said to be bona-fide. Thus
it is guilty of suppressive vari.

423 Esha Bhattacharjee [2013] 5 CTC 547 253 Supreme Court laid down detailed
v. Managing Supreme Court guidelines on condonation of delay
Committee of
Raghunathpur, Nafar
Academy

256 257
 Gist / Important point for
S.N. Case Citation Section
consideration
424 Ajmeer Sherriff & Co [2015] 61 taxmann. 253 Delay not condoned for reasons that
com 301 (Madras)/ (i) allegation regarding ill-health
[2015] 234 Taxman of managing partner and multiple

Section - 253
168 (Madras)/[2015] medical complications was bereft
375 ITR 15 (Madras) of details and every day’s delay
had not been explained, (ii) even if
one of partners was not well, other
partners could have taken steps to
file appeal in time and (iii) assessee
exhibited gross negligence/
procrastinating attitude

425 J.B. Advani & Co. (P.) [1969] 72 ITR 395 253 As application filed was completely
Ltd (SC) barren of any explanation for
delay, which had to be properly and
satisfactorily explained, order of
Commissioner was affirmed.

426 Shankar Appayya [1998] II (1998) ACC 253(4), Supporting the decree is not
Govakar vs 575 Karnataka High 254, 260A creating a situation of two
Nurudappa Basappa Court conflicting decrees: To support
Mali And Ors means, an act to maintain something
in itself and not an act to dislodge
that thing. A finality is attached to
the decree against which no appeal
is filed. A challenge to a finding on
the basis of which the decree has
been passed without filing of any
appeal or cross-objection may have
the effect not of supporting the
decree, but allowing a person, who
has been negligent in the conduct of
his case by neither filing the appeal
nor cross-objection with limitation,
to challenge the decree indirectly
on the pretence of supporting the
decree. This will have the effect of
nullifying the provisions of

258 259
 Gist / Important point for
S.N. Case Citation Section
consideration
limitation, which is not the intention
of the framers of law (paragraphs 16

Section - 253-254
and 18 of the decision)
427 Vama Apparels [2019] 102 taxmann. 253 Negligence of employee cannot
(India) P Ltd. com 398 (Bombay) be a cause for long delay: When
an extraordinary delay (of 507
days) is sought to be condoned on
the ground that ex-employee of
assessee who received
order of Tribunal put it in his drawer
and left company without informing
anybody and it was only about a
month before filing of instant appeal
when his substitute new employee
found papers from drawer,it was
held that there was no sufficient
explanation for delay
428 Amarnath Reddy [2010] 126 ITD 253, 37(1) Tribunal is not precluded from
113 (Chennai)/ considering a point arising out of
[2010] 132 TTJ 377 an appeal merely because such a
(Chennai) TM case point had not been raised or urged
by either party at earlier stage of
proceeding
429 Godavari Devi Saraf [1978] 113 ITR 589 254 A Tribunal constituted under
(Bom) a Statute has no jurisdiction
to go into the question of
constitutionality of the provisions
of the Statute
430 N.R. Portfolio (P.) Ltd [2019] 103 taxmann. 254 Forum Shopping not permissible:
com 17 (Delhi) Assessee did not challenge order
of ITAT either through appeal or
through cross-objection. When High
Court allowed revenue’s appeal,
it was not open to the assessee to
seek rectification of Tribunal’s order
in appeal preferred by revenue

260 261
 Gist / Important point for
S.N. Case Citation Section
consideration
contending that since rejection of
its cross-objection about validity
of re-assessment notice was

Section - 254
not on merits, Tribunal ought to
consider that ground and revive
cross-objections. Tribunal entirely
mis-appreciated its jurisdiction
of correcting apparent mistake.
Strictures were passed by High
Court in this case.

431 Bharat Biotech [2014] 48 taxmann. 254 When Revenue filed appeal and
International Ltd com 49 (Hyderabad there was no appeal or cross
- Trib.)/[2014] objection by assessee but raised
33 ITR(T) 191 an issued applicability of legal
(Hyderabad - Trib.)/ provision (section 25(3)), Tribunal
[2014] 151 ITD 747 was bound to give findings on
(Hyderabad - Trib.)/ applicability of the said provision so
[2015] 169 TTJ 148 as to prevent miscarriage of justice
(Hyderabad - Trib.) and to ensure substantial justice in
relation to subject matter of appeal

432 Samsung Electronics [2016] CS(OS) 254 Extraordinary indulgence not to be

Company Ltd vs Mr. 1602/2006 dated granted to a party: The Court has
Gyanji Choudhary 07/09/2016 of already given enough indulgence
Bombay High Court to the plaintiffs. The counsel for
the plaintiffs forgets that in the
present days of Right to Information
Act, the happenings, proceedings
and the pendency of cases in the
Court are there for all to demand
and see. The issue of long delays in
disposal of cases is today in public
eye and is eroding the faith in the
legal system of the country and
which erosion can lead to disastrous
consequences.

262 263
 Gist / Important point for
S.N. Case Citation Section
consideration
433 Ravinder Kaur Vs. [2003] 8 SCC 289 254 Raising a frivolous dispute to abuse
Ashok Kumar the process of Court: When a
frivolous dispute (in regard to the

Section - 254
description or identity or boundary
of the suit schedule property)
is made as a bogey to delay the
eviction by the abuse of the process
of court, Courts of law should be
careful enough to see through such
diabolical plans of the judgment
debtors to deny the decree holders
the fruits of the decree obtained
by them. Any error on the part of
the judicial forum would encourage
frivolous and cantankerous
litigations causing large delay and
bringing bad name to the judicial
system.

434 Showa Corporation [2018] 90 taxmann. 254 Departmental representative or

com 349 (Delhi) assessee should not take repeated
adjournments on dates of hearing
of case

435 Dharti Dredging & [2013] 38 taxmann. 254 In garb of an application for
Infrastructure Ltd com 85 (Hyderabad rectification under section 254(2),
- Trib.) assessee cannot be permitted to
reopen and re-argue whole matter

436 Deepak Chhabra [2006] 154 Taxman 254 Judgment against a dead person is
215 (Delhi)/[2006] a nullity.
203 CTR 102 (Delhi)
437 Amba Bai & Others [2001] Appeal (civil) 254 When appellant died during
Vs Gopal & Others 4156 of 1998 dated pendency of the appeal, and his
8 May, 2001 of legal heirs did not take any steps to
Supreme Court prosecute the Appeal, the decree
passed by the First Appellate Court
is deemed to be final

264 265
 Gist / Important point for
S.N. Case Citation Section
consideration
438 Ballarpur Industries [2019] 104 taxmann. 254 As Tribunal is the last Court of
Ltd com 394 (SC) appeal on facts, its finding on
question of fact is of significance. If

Section - 254
Tribunal did not correctly appreciate
the reasoning of AO/CIT(A) in
drawing respective conclusions, the
matter has to be remitted back to
Tribunal for fresh adjudication
439 Sunderji Lalji Bheda- [2012] MA No.282/ 254 Rule 27 - It was open to a
HUFSunderji Lalji Mum/2012 In ITA respondent in appeal who had
Bheda-HUF No.2900/Mum/2010 not filed cross objection with
of ITAT, Mumbai regard to the portion of the order
dated 28/09/2012 which had gone against him to
urge in opposition to the appeal a
contention which if accepted by the
court would have necessitated the
total dismissal of the appeal, but
the order in so far as it was against
him would stand. He may support
the order on any ground decided
against him. The respondent
would be entitled to raise a new
ground, provided it is a ground of
law and does not necessitate any
other evidence to be recorded, the
nature of which would not only be a
defence to the appeal itself, but may
also affect the validity of the
entire assessment proceedings. If
the ground succeeds, the only result
would be that the appeal would fail.
440 Hazarimal Nagji & [1962] 46 ITR 1168 254 The powers of the Appellate
Co (Bombay) Tribunal are similar to the powers
of the appellate court under the
CPC. If a respondent only wants to
maintain the decree of the lower
court which is in his favour, he

266 267
 Gist / Important point for
S.N. Case Citation Section
consideration
is entitled to support it on fresh
grounds and the appellate court
also will have jurisdiction to permit

Section - 254
him to do so, provided that the fresh
grounds which he wants to urge do
not require a further investigation
into facts which are not already on
record

441 R.S.S. Shanmugam [1974] 95 ITR 109 254 Tribunal can straightaway reject
Pillai & Sons (Madras) additional evidence which is not
quite relevant or not necessary for
proper disposal of appeal

442 UOP LLC [2007] 108 ITD 186 254 There is no bar for revenue to
(Delhi)/[2007] 12 produce any additional evidence
SOT 499 (Delhi)/ suo motu before Tribunal under
[2007] 110 TTJ 619 Rule 29
(Delhi)
443 Hukumchand Mills [1967] 63 ITR 232 254 Rules 12 and 27 are not
Ltd (SC) exhaustive of powers of Tribunal
and are merely procedural in
character which do not control or
circumscribe power of Tribunal
under the Act. In an appeal filed
by the assessee, it is open for
the Department to support the
findings of CIT(A) on any of the
grounds decided against it. ITAT can
consider alternate plea of Revenue
at any stage of appeal.

444 Brooke Bond India [1991] 59 Taxman 82 254 Tribunal was right in not admitting
Ltd (Cal) assessee’s additional ground as
the claim was never made before
lower authorities and it involved
extensive factual inquiry

268 269
 Gist / Important point for
S.N. Case Citation Section
consideration
445 Begum Noor Banu [1993] 69 Taxman 254 Tribunal has no jurisdiction to
565 (Andhra grant relief on consideration of an
Pradesh)/[1993] 204 additional ground raised before it

Section - 254
ITR 166 (Andhra by assessee for first time when the
Pradesh)/[1993] 115 ground was related to an item of
CTR 448 (Andhra assessment which was not disputed
Pradesh) at any earlier stage
446 S. Nelliappan [1967] 66 ITR 722 254 Tribunal has power to grant leave
(SC) to urge grounds not set forth in
memorandum of appeal, and in
deciding appeal Tribunal is not
restricted to grounds set forth in
memorandum of appeal or taken by
leave of Tribunal
447 L. Chandra Kumar (1997) 3 SCC 261 (7 254 Tribunals shall not entertain any
judge bench) question regarding the vires of their
own parent statutes following the
settled principle that a Tribunal
which is a creature of an Act
cannot declare that very Act to be
unconstitutional (paragraph 94 of
the decision).
448 Mahalakshmi Textile [1967] 66 ITR 710 254 There is no restriction on the
Mills Ltd (SC) Tribunal to limit to determination
of questions raised before the
departmental authorities. All
questions whether of law or of fact
which relate to the assessment of
the assessee may be raised before
the Tribunal.
449 B.R. Bamasi [1972] 83 ITR 223 254 Rule – 27: An assessee would be
(Bombay) entitled to raise a new ground in an
appeal filed by Department before
Tribunal provided it is a ground of
law and does not necessitate any
other evidence to be recorded,

270 271
 Gist / Important point for
S.N. Case Citation Section
consideration
nature of which would not only
be a defence to appeal itself, but
may also affect validity of entire

Section - 254
assessment proceedings. However,
if the ground succeeds, only result
would be that appeal would fail and
Tribunal has no power to disturb
or to set aside order in favour of
Department against which appeal
had been filed inasmuch as of
assessee having not himself taken
any proceedings to challenge order
in appeal, Tribunal could not set
aside order appealed against.

450 Andisamy Chettiar [2015] CA 254 Rule 29 of ITAT Rules - The words
14055/2015 “or for any other substantial
(Supreme Court) cause” must be read with the word
dated 08/12/2015 “requires”, which is set out at the
commencement of the provision, so
that it is only where, for any other
substantial cause, the appellate
court requires additional evidence,
that this rule would apply as noticed
by the Privy Council in Kessowji
Issue v. G.I.P. Rly. [ILR (1907-08) 31
Bom 381]

451 Ram Prasad Sharma [1979] 2 Taxman 254 In a case of failure of assesseeto
469 (Allahabad)/ produce evidence before the ITO
[1979] 119 ITR 867 despite repeated opportunities, the
(Allahabad) appellate authorities were justified
in refusing to allow production of
fresh evidence at the appellate
stage and therefore they did not
act arbitrarily or capriciously

272 273
 Gist / Important point for
S.N. Case Citation Section
consideration
452 Kanniappan [2017] 79 taxmann. 254 Mere fact that evidence sought
Murugadoss com 244 (Chennai - to be produced is vital does not
Trib.)/[2017] 164 ITD amount to a substantial cause

Section - 254
260 (Chennai - Trib.) for admission at appellate stage,
especially when evidence was
available to party at initial stage
and was not produced by him

453 A K Babu Khan [1976] 102 ITR 757 254 Rule 29 of ITAT Rules - a party
(Andhra Pradesh) guilty of remissness and gross
negligence is not entitled to adduce
additional evidence when he did
not file evidence earlier even after
ample opportunity

454 K. Venkataramaiah [1963] 1963 AIR 254 Substantial Cause: The appellate
Vs. A Seetharama 1526, 1964 SCR (2) court has power to allow additional
Reddy & Others 35 evidence not only if it requires such
evidence “to enable it to pronounce
judgment” but also for “any other
substantial cause.” There may be
cases where even though the
court finds that it is able to
pronounce judgment on the state
of the record as it is and so it
cannot strictly say that it requires
additional evidence “to enable it
to pronounce judgment,” it still
considers that in the interest of
justice something which remains
obscure should be filled up so that
it can pronounce its judgment in a
more satisfactory manner.

455 Ram Siromani [2019] 102 taxmann. 254, 251, Reason that Counsel of appellant
Tripathi com 329 (SC) 143 was out of station could not be
a ground to allow request for
adjournment

274 275
 Gist / Important point for
S.N. Case Citation Section
consideration
456 Ganjikunta Kishore [2017] M.A. No. 85/ 254(2) An order of the Tribunal reaches
Babu (HUF) Hyd/2016 in ITA finality the moment it is passed. It
No. 839/Hyd/2015 cannot be touched thereafter.

Section - 254
of ITAT, Hyderabad The scope of section 254(2) is
dated 28/02/2017 limited and confined only to rectify
mistakes which are apparent
from record like clerical errors,
grammatical or arithmetical
mistakes or mistakes of like nature,
which can be detected without any
necessity to re-argue the matter or
to reappraise the facts

457 Ideal Engineers [2001] 118 Taxman 254(2) No Review by Tribunal of its orders:
915 (Andhra When Tribunal rejected earlier two
Pradesh)/[2001] 251 petitions of assessee on merits,
ITR 743 (Andhra impugned order amounted to
Pradesh)/[2001] 171 reviewing its earlier order, which
CTR 471 (Andhra is beyond the scope of powers
Pradesh) of Tribunal and the rectification
order under section 254(2) was
unsustainable

458 Sri Mathuradasji [2011] 13 taxmann. 254(2) Application u/s 254(2) cannot be
Ayodhyabai Rathi com 50 (Hyderabad)/ filed even when the order of ITAT is
Charitable Trust [2011] 47 SOT 501 on basis of a wrong conclusion. It is
(Hyderabad) always endeavour of Tribunal that
while passing order it considers
all arguments as well as written
synopsis submitted by parties

459 R. W. Promotions (P.) [2015] 60 taxmann. 254(2) Power of ITAT u/s 254(2) can be
Ltd com 58 (Bombay)/ invoked by assessee/Revenue
[2015] 233 Taxman even when the order of Tribunal is
125 (Bombay)/ challenged before High Court u/s
[2015] 376 ITR 260A
126 (Bombay)/
[2015] 277 CTR 401
(Bombay)

276 277
 Gist / Important point for
S.N. Case Citation Section
consideration
460 Srinivas Sashidhar [2017] 88 taxmann. 254(2) Section 254(2) refers to period of
Chaganty com 883 (Hyderabad limitation reckoning from end of
- Trib.)/[2017] month in which order is ‘passed’ and

Section - 254
59 ITR(T) 100 not from ‘date of receipt of order
(Hyderabad - Trib.)
461 Madireddy Venkat [2013] 38 taxmann. 254(2) Power to rectify a mistake under
Reddy com 60 (Hyderabad section 254(2) cannot be used for
- Trib.) recalling entire order

462 Vertex Homes (P.) [2014] 42 taxmann. 254(2) Power to rectify a mistake under
Ltd com 445 (Hyderabad section 254(2) cannot be used for
- Trib.) recalling entire order as it would
amount to review which is beyond
scope of power of ITAT

463 Ecom Gill Coffee [2012] 23 254(2A) Tribunal cannot extend interim
Trading (P.) Ltd [Link] order of stay beyond statutory
235 (Karnataka)/ period of 365 days
[2012] 209 Taxman
190 (Karnataka)/
[2014] 362 ITR
204 (Karnataka)/
[2012] 252 CTR 281
(Karnataka)
464 Maruti Suzuki (India) [2014] 44 taxmann. 254(2A) In view of third proviso to section
Ltd com 166 (Delhi) 254(2A), Tribunal cannot extend
stay beyond period of 365 days
from date of first order of stay and
the remedy for the assessee in such
a case is the form Writ before High
Court

465 Assistant Collector [1985] 1985 AIR 254(2A) Where matters of public revenue
of Central Excise Vs 330, 1985 SCR (2) are concerned, it is of utmost
Dunlop India Ltd 190 importance that interim orders are
not to be granted merely because
prima facie case has been shown.

278 279
 Gist / Important point for
S.N. Case Citation Section
consideration
More is required. The balance of
convenience must be clearly in
favour of the making of an interim

Section - 254
order and there should not be the
slightest indication of a likelihood
of prejudice to the public interest.

466 Kumar Cotton Mills [2005] 2005 254(2A) Stay beyond 365 days can be
(P.) Ltd [Link] 752 granted by Tribunal but we should
(SC)/[2005] 180 ELT not be understood as holding
434 (SC) that any latitude in given to the
Tribunal to extend the period of
stay except on good cause and
only if the Tribunal is satisfied that
the matter could not be heard and
disposed of by reason of the fault
of the Tribunal for reasons not
attributable to the assessee

467 Pepsi Foods (P.) Ltd [2015] 57 taxmann. 254(2A) Where delay in disposing of appeal
com 337 (Delhi)/ is not attributable to assessee,
[2015] 232 Taxman Tribunal has power to grant
78 (Delhi)/[2015] extension of stay beyond 365 days
376 ITR 87 (Delhi)/ in deserving cases. SLP against the
[2015] 277 CTR 470 decision dismissed by Supreme
(Delhi) Court as reported in [2017] 79
[Link] 251 (SC)/[2017] 246
Taxman 223 (SC) as infructuous as
the main case itself was decided by
ITAT but the question of law was
kept open

468 Comverse Network [2019] 103 taxmann. 254(2A) SLP filed against decision of High
Systems India (P.) Ltd com 314 (SC)/[2019] Court was dismissed as infructuous
262 Taxman 99 (SC) as main case was already decided
by ITAT. (In its decision, High Court
concluded that wherever appeal
could not be decided by Tribunal

280 281
 Gist / Important point for
S.N. Case Citation Section
consideration
due to pressure of pendency of
cases and delay in disposal of appeal

Section - 254-260A
was not attributable to assessee
in any manner, interim protection
of stay could continue beyond 365
days in deserving cases)

469 Doshi Accounting [2019] 101 taxmann. 254(2A) While Hon’ble Courts have read
services P Ltd com 62 (Ahmedabad down the provisions of Section
- Trib.)(SB)/ 254(2A) extending the scope of
[2019] 175 ITD 1 stay beyond one year, on account
(Ahmedabad - Trib.) of ground realities about delay
(SB) in disposal of appeals without
the fault of the assessee, this fact
does not belittle or overshadow
unambiguous intent of legislature
for expeditious hearing in such cases

470 New Jehangir Vakil [1959] 37 ITR 11 260A High Court has to confine itself to
Mills Ltd (SC) the questions of law arising out of
the order of ITAT: It is not open to
High Court to raise new question
and to require Tribunal to entertain
fresh line of enquiry, hear parties
in regard to same and record fresh
finding of fact which would enable
either assessee or Revenue to
advance a case which had never
been made by it before Income-tax
authorities or Tribunal and which,
therefore, could not be said to arise
out of order of Tribunal

471 Softbrands India Pvt. [2018] 94 260A, 92C Picking of comparables for TP
Ltd. [Link] Adjustments, applying of filters, etc.,
426 (Karnataka)/ do not give rise to any substantial
[2018] 406 ITR 513 question of law requiring
(Karnataka) interference under section 260A

282 283
 Gist / Important point for
S.N. Case Citation Section
consideration
472 TIBCO Software [2019] 101 taxmann. 260A, 92C Transfer Pricing particularly with
India P ltd. com 296 (Bombay)/ regard to exclusion and inclusion of

Section - 260A-263
[2018] 409 ITR 576 certain comparables to determine
(Bombay) Arm’s Length Price (ALP) would not
necessarily give rise to purely legal
questions or substantial questions
of law

473 Spinacom India (P.) [2018] 97 taxmann. 260A, 254 Time period for filing an appeal
Ltd com 516 (SC)/[2018] under section 260A does not get
258 Taxman 128 (SC) suspended on account of pendency
of an application before Tribunal
under section 254(2)

474 Sirpur Paper Mills [1970] 77 ITR 6 (SC) 263 The power conferred by section 25
Ltd (of WT Act) is not administrative:
it is quasi-judicial. The expression
“may make such inquiry and pass
such order thereon” does not
confer any absolute discretion on
the Commissioner. In exercise of
the power the Commissioner must
bring to bear an unbiased mind,
consider impartially the objections
raised by the aggrieved party, and
decide the dispute according to
procedure consistent with the
principles of natural justice; he
cannot permit his judgment to be
influenced by matters not disclosed
to the assessee, nor by dictation of
another authority.

475 Puja Synthetics Pvt [2018] ITA. No. 263 Where the AO shuts his eyes and
Ltd 440/JP/2017 of the PCIT discovers the glaring
ITAT, Jaipur dated discrepancies leading to non-
09/03/2018 satisfaction of cardinal test of
identity, creditworthiness and
genuineness of the transactions

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consideration
during the course of his examination
of records, there is no infirmity
or illegality in him exercising his

Section - 263
revisionary jurisdiction u/s 263
of the Act. (This is a case where
information was received from
Investigation Wing that the
assessee company has taken
accommodation entries from
Praveen Jain, an entry operator).
476 Kumar Rajaram [2016] 67 taxmann. 263 Role of AO: Unlike the Civil Court
com 110 (Chennai - which is neutral in giving a decision
Trib.)/[2016] 157 ITD on the basis of evidence produced
772 (Chennai - Trib.)/ before it, the role of an AO is not
[2016] 178 TTJ 168 only that of an adjudicator but also
(Chennai - Trib.) of an investigator. He cannot remain
passive in the face of a return, which
is apparently in order but calls for
further enquiry. He must discharge
both the roles effectively. The
arbitrariness in decision-making
would always need correction
regardless of whether it causes
prejudice to an assessee or to the
State Exchequer. While making an
assessment, the ITO has a varied
role to play. He is the investigator,
prosecutor as well as adjudicator.
His duty to act fairly requires that
when he enquires into a substantial
matter like the present one, he must
record a finding on the relevant
issue giving, howsoever briefly, his
reasons therefor. If the Assessing
Officers are allowed to make
assessments in an arbitrary manner,
as has been done in the instant case,
the administration

286 287
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consideration
of revenue is bound to suffer. If
without discussing the nature of
the transaction and materials on

Section - 263
record, the Assessing Officer has
made certain addition to the income
of the assessee, the same would
be considered erroneous by any
appellate authority as being violative
of the principles of natural justice
which require that the authority
must indicate the reasons for an
adverse order. There is no reason
why the same view should not be
taken when an order is against the
interests of the revenue. As a matter
of fact such orders are prejudicial
to the interests of both the parties,
because even the assessee is
deprived of the benefit of a positive
finding in his favour, though he may
have sufficiently established his
case.
477 Varanasi Khanta Rao [2015] 59 taxmann. 263 Once Commissioner has got power
com 175 (Andhra to point out errors which have
Pradesh)/[2015] 234 effect on revenue, Tribunal cannot
Taxman 454 (Andhra sit as an appellate authority on
Pradesh)/[2015] 377 said order of Commissioner passed
ITR 602 (Andhra under section 263
Pradesh)
478 Venus Woollen Mills, [2019] 105 taxmann. 263 Note by AO that books were
Ludhiana com 287 (Punjab & verified without actually checking
Haryana)/[2019] 412 correctness of books: When AO
ITR 188 (Punjab & did not apply mind to correctness
Haryana) of books of account but made
a note that books of account
were produced and test checked
revisional order passed u/s 263 was
upheld
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 Gist / Important point for
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consideration
479 Amitabh Bachchan [2016] 69 taxmann. 263 What is required u/s 263 is an
com 170 (SC)/[2016] opportunity of hearing to the
240 Taxman 221 assessee. There is no specific

Section - 263
(SC)/[2016] 384 ITR requirement for issue of a
200 (SC)/[2016] 286 mandatory show cause notice
CTR 113 (SC) affecting the initiation of the
exercise in the absence thereof
or requiring the Commissioner
to confine himself to the terms
of the notice and foreclosing
consideration of any other issue or
question of fact.

480 Dawjee Dadabhoy [1957] 31 ITR 872 263 Prejudicial to the interests of the
& Co (cal) Revenue: The words are not defined
but but it must mean that the orders
or assessment challenged are such
as are not in accordance with law,
in consequence whereof the lawful
revenue due to the State has not
been realized or cannot be realised.
It can mean nothing else.

481 Virbhadra Singh [2017] 86 taxmann. 263 When the AO accepted the revised
(HUF) com 113 (Himachal returned income and completed
Pradesh)/[2017] the assessment without any inquiry,
251 Taxman 150 Commissioner was well within his
(Himachal Pradesh)/ power under section 263 to direct
[2018] 400 ITR 530 fresh assessment
(Himachal Pradesh)/
[2017] 298 CTR 393
(Himachal Pradesh)
482 Shoreline Hotel (P) [2018] 98 taxmann. 263, 69C Where on basis of information
Ltd. com 234 (Bombay) received from Sales Tax authorities,
Assessing Officer found that
assessee was beneficiary of bogus
purchase bills and assessee could
not produce any material purchased

290 291
 Gist / Important point for
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consideration
by it nor it could ensure presence
of supplier, Assessing Officer was

Section - 264-271
unjustified in limiting addition under
section 69C on basis of GP ratio

483 Orissa Rural Housing [2012] 17 taxmann. 264, 246A Remedy available to an assessee
Development Corpn com 186 (Orissa)/ under section 264 is an alternative
Ltd [2012] 204 Taxman remedy, who does not want to
673 (Orissa)/ avail remedy by way of appeal
[2012] 343 ITR 316 and assessee is not permitted
(Orissa)/[2012] 247 to pursue both remedies either
CTR 137 (Orissa) simultaneously or one after another

484 S. V. Angidi Chettiar [1962] 44 ITR 739 271(1)(c) Satisfaction before conclusion of
(SC) the assessment proceeding under
the Act, and not the issue of a
notice or initiation of any step for
imposing penalty is a condition for
the exercise of the jurisdiction.

485 Madhusudanan K P [2001] 118 Taxman 271(1)(c) By virtue of the notice under section
324 (SC)/[2001] 251 271 the assessee is put to notice
ITR 99 (SC)/[2001] that if he does not prove that his
169 CTR 489 (SC) failure to return his correct income
was not due to fraud or neglect, he
shall be deemed to have concealed
the particulars of his income or
furnished inaccurate particulars
thereof and, consequently, be
liable to the penalty. There is no
need for specific invocation of the
Explanation to section 271 while
issuing the notice

486 Sheraton apparels [2002] 123 Taxman 271(1)(c) Diaries seized during search
238 (Bombay)/ cannot be regarded as books of
[2002] 256 ITR 20 account maintained by assessee as
(Bombay)/[2002] contemplated under Explanation
175 CTR 651 5 to section 271(1)(c) for recording
(Bombay) source of income

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consideration
487 Earthmoving [2017] 84 taxmann. 271(1)(c) Mere non-ticking of the relevant
Equipment Service com 51 (Mumbai - clause in notice would not
Corporation Trib.)/[2017] 166 ITD invalidate the penalty proceedings:

Section - 271
113 (Mumbai - Trib.)/ The penalty was initiated for
[2017] 187 TTJ 233 furnishing of inaccurate particulars
(Mumbai - Trib.) but in the notice, the relevant
clause has not been ticked off.
However, from the quantum order it
is seen that the AO clearly initiated
the penalty proceedings, after
due deliberation, for furnishing of
inaccurate particulars which shows
due application of mind qua penalty
proceedings. Section 292B comes to
the rescue of the revenue in such a
case as in substance and effect the
notice was in conformity with the
intent and purpose of the act.
488 Sundaram Finance [2018] 93 taxmann. 271(1)(c) Plea that the notice was defective
Ltd com 250 (Madras)/ because the ground on which
[2018] 403 ITR 407 penalty proceedings are initiated
(Madras) is not evident from the notice:
After recording a finding that the
relevant columns are marked, the
Hon’ble Court held the assessee
had at no earlier point of time
raised the plea that on account of a
defect in the notice, they were put
to prejudice. All violations will not
result in nullifying the orders passed
by statutory authorities. If the case
of the assessee is that they have
been put to prejudice and principles
of natural justice were violated on
account of not being able to submit
an effective reply, it would be a
different matter. This was never the
plea of the assessee either before

294 295
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consideration
the Assessing Officer or before the
first Appellate Authority or before
the Tribunal or before this Court

Section - 271
when the Tax Case Appeals were
filed and it was only after 10 years,
when the appeals were listed for
final hearing, this issue is sought to
be raised. Thus on facts, it could be
safely concluded that even assuming
that there was defect in the notice,
it had caused no prejudice to the
assessee and the assessee clearly
understood what was the purport
and import of notice issued under
Section 274 r/w, Section 271 of the
Act. Principles of natural justice
cannot be read in abstract and the
assessee, being a limited company,
having wide network in various
financial services, should definitely
be precluded from raising such
a plea at this belated stage. By
claiming depreciation on machinery
which either did not exist or was
never supplied, the assessee had
not only concealed particulars of
its income, but had also furnished
inaccurate particulars of income.
SLP against this decision was
dismissed by Supreme Court as
reported in [2018] 99 [Link]
152 (SC)/[2018] 259 Taxman 220
(SC).
489 MAK Data (P) Ltd. [2013] 38 taxmann. 271(1)(c) Voluntary disclosure does not
com 448 (SC)/[2013] release assessee from mischief of
358 ITR 593 (SC)/ penal proceedings under section
[2013] 263 CTR 1 271(1)(c)
(SC)

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consideration
490 Vandana Gupta [2018] 92 taxmann. 271(1)(c) Mere voluntary offer of a sum
com 229 (Delhi) during survey in absence of any
explanation for source of income,

Section - 271
invites concealment penalty when
original return was silent about
said sum

491 Ajay Jain [2013] 32 taxmann. 271(1)(c) Where surrender is only after
com 270 (Delhi - detection of concealment by AO,
Trib.)/[2013] 21 there is failure on part of the
ITR(T) 41 (Delhi assessee to discharge initial onus
- Trib.)/[2013] 57 laid down penalty is confirmed
SOT 64 (Delhi - Trib.)
(URO)
492 Kaushalya [1994] 75 Taxman 271(1)(c) Rules of natural justice cannot
549 (Bombay)/ be imprisoned in any straight-
[1995] 216 ITR 660 jacket formula. For sustaining a
(Bombay) complaint for failure of principles
of natural justice on the ground of
absence of opportunity, it has to
be established that prejudice was
caused to the concerned person by
procedure followed. The issuance
of notice is an administrative
device for informing the assessee
about proposal to levy penalty
in order to enable him to explain
as to why it should not be done.
Mere mistake in the language
used or mere non-striking off of
inaccurate portion could not by
itself invalidate the notice. Entire
factual background would fall for
consideration in the matter and no
one aspect would be decisive.

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consideration
493 Madhusudhanan K P [2002] 125 Taxman 271(1)(c) Explanation of assessee for
265 (Kerala)/ purpose of avoidance of penalty

Section - 271-281
[2000] 246 ITR 218 must be an acceptable explanation
(Kerala)/[2001] 165 and it should not be a fantastic or
CTR 353 (Kerala) fanciful one

494 Dharamendra Textile [2008] 174 Taxman 271(1)(c) The Explanations appended to
Processors 571 (SC)/[2008] 306 section 271(1)(c) entirely indicate
ITR 277 (SC)/[2008] the element of strict liability on
219 CTR 617 (SC) the assessee for concealment or
for giving inaccurate particulars
of income while filing return. The
penalty under that provision is a
civil liability. Willful concealment
is not an essential ingredient for
attracting civil liability, as is the
case in the matter of prosecution.
It is a well-settled principle, in
law, that the Court cannot read
anything into a statutory provision
or a stipulated condition which is
plain and unambiguous. A statute
is an edict of the Legislature. The
language employed in a statute
is the determinative factor of the
legislative intent.

495 Palki Investments & [2016] 71 taxmann. 271(1)(c), Reflecting a non-existent liability as
Trading co P Ltd. com 322 (Bombay)/ 41(1) an existing liability and not offering
[2016] 288 CTR 473 same to tax amounted to furnishing
(Bombay) inaccurate particulars of income

496 Shriya Bhupal [2018] 95 taxmann. 281 Petitioner’s contention that revenue
com 230 (Andhra should go to Civil Court to get a
Pradesh) declaration in terms of section
281(1) was not borne out of scheme.
The entire burden to show that the
transfer falls within the two clauses
of the proviso to sub-section (1) of

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 Gist / Important point for
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consideration
Section 281 is upon the assessee.
It is up to the assessee under the

Section - 282-292B
amended provision, to go to the Civil
Court and establish that his case
falls under the proviso.

497 Premium Capital [2006] 151 Taxman 282, 254 Irregular service of notice: Assesse
Market & Investment 194 (Madhya cannot raise the plea of irregular
Ltd. Pradesh)/[2005] 275 service for the first time before ITAT
ITR 260 (Madhya that too through additional ground,
Pradesh)/[2005] 198 after participating in proceedings,
CTR 680 (Madhya contesting issue on merits but not
Pradesh) raising any objection on invalidity or
illegality or irregularity of service of
said notice by affixture either before
AO or the CIT(A)

498 Uday Shankar Triyar [2005] 1 SCC 75 292B Non-compliance with any
procedural requirement relating
to a pleading, memorandum of
appeal or application or petition for
relief should not entail automatic
dismissal or rejection, unless
the relevant statute or rule so
mandates. Procedural defects and
irregularities which are curable
should not be allowed to defeat
substantive rights or to cause
injustice. Procedure, a hand-maiden
to justice, should never be made a
tool to deny justice or perpetuate
injustice, by any oppressive or
punitive use

499 B.N. Bhattacharya [1978] 112 ITR 423 292B In a case where proper and
(Calcutta) substantial efforts were made
to find the person and serve the
notice, it could not be said that the
notice is not served properly.

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consideration
In the instant case, that notices for
the subsequent years and previous
years had been served by registered

Section - 292B
post and these had been accepted.
The process server stated that he
went on two different dates at two
different places but he could not
find the respondent nor get any
information about the time and
place where the respondent could
be found.

500 Sudev Inudstries Ltd [2018] 94 taxmann. 292B, 148 Improper service of notice:
com 373 (Delhi)/ Assessee challenged validity of
[2018] 256 Taxman reassessment proceeding on ground
317 (Delhi)/[2018] that service of notice by Inspector
405 ITR 325 (Delhi) at factory premises on security
guard was not proper service under
provisions of section 282(2). The
plea of improper service of notice
was raised for first time before
Tribunal, where as one of the
directors of the assessee appeared
before the AO in response to notice
issued under section 148. It was
held that section 292B would
apply to the case and assessment
proceedings could not be regarded
as invalid for want of proper service
of notice. SLP against this decision is
dismissed as reported in [2018] 99
[Link] 109 (SC)

501 Sinkaram Chettiar [2018] I.T.A. Nos.368 292B, Defective service of notice: When
-373/ Coch/ 2017 271(1)(c) the issue that notice u/s 274 is
dated 02/08/2018 defective was not at all raised by
the assessee on an earlier occasion
and the assessee has duly appeared
before the lower authorities

304 305
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consideration
and participated in the penalty

Section - 292B-292BB
proceedings, the assessee cannot
have any grievance before ITAT on
this issue

502 Syamal Baran [2011] 11 taxmann. 292B, Section 271 no where mandates
Mondal com 236 (Calcutta)/ 271(1)(c) that recording of satisfaction about
[2011] 200 Taxman concealment of assessee’s income
107 (Calcutta)/ must be in specific terms and words.
[2011] 244 CTR 631 Satisfaction of Assessing Officer
(Calcutta) must reflect from order either
with expressed words recorded by
Assessing Officer himself or by his
overt act and action

503 Laxman Das [2019] 108 taxmann. 292BB If the assessee had participated in
Khandelwal com 183 (SC) the proceedings, by way of legal
fiction, notice would be deemed to
be valid even if there be infractions
as detailed in said Section. The
scope of the provision is to make
service of notice having certain
infirmities to be proper and valid if
there was requisite participation on
part of the assessee. It is, however,
to be noted that the Section does
not save complete absence of
notice. For Section 292BB to apply,
the notice must have emanated
from the department. It is only the
infirmities in the manner of service
of notice that the Section seeks to
cure. The Section is not intended
to cure complete absence of notice
itself.

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S.N. Case Citation Section
consideration
504 Akashdeep Vs [2019] 105 taxmann. 2(9), 24 Prohibition of Benami Properties
Manpreet Estates com 187 (PBPTA – Act: Onus of proving a benami
LLP, Mum AT) transaction rests on shoulders of
I.O. who is making charge and such

GENERAL
burden has to be strictly discharged
based on legal evidence
505 Ahmedabad [1963] 48 ITR 154 Amend- Amendment to take effect from the
Manufacturing and (SC) ment, ret- date on which it comes into force:
Calico Printing Co. rospective The date on which the amendment
Ltd effect comes into force is the date of the
commencement of the amendment.
Under ordinary circumstances, an
Act does not have retrospective
operation. But this rule is not
unalterable. The legislature may
affect substantial rights by enacting
laws which are expressly
retrospective or by using language
which has that necessary result.
When this happens the provisions
thus made retrospective, expressly
or by necessary intendment,
operate from a date earlier than
the date of commencement and
affect rights which, but for such
operation, would have continued
undisturbed
506 Roshan Di Hatti [1977] 107 ITR 938 Burden of The onus of proving the source of a
(SC) Proof sum of money found to have been
received by an assessee is on him.
If he disputes the liability for tax,
it is for him to show either that the
receipt was not income or that if it
was, it was exempt from taxation
under the provisions of the Act.
In the absence of such proof, the
revenue is entitled to treat it as

308 309
 Gist / Important point for
S.N. Case Citation Section
consideration
taxable income. where the nature
and source of a receipt whether it
be of money or of other property,
cannot be satisfactorily explained

GENERAL
by the assessee, it is open to the
revenue to hold that it is the income
of the assessee and no further
burden lies on the revenue to show
that income is from any particular
source.

507 Syed Abdulkhader vs [1979] 1979 AIR Document A document will be considered
Rami Reddy & Ors 553, 1979 SCC (2) as a whole for interpretation of
601 particular words or directions. An
ordinary authority given in one part
of the instrument will not be cut
down because there are ambiguous
and uncertain expressions
elsewhere.

508 Baban Singh Vs [1966] 1967 AIR 68, False The definition of the offence of
Jagdish Singh 1966 SCR (3) 552 Evidence giving false evidence applies to
the affidavits. When the appellants
made declarations in their affidavits
which were tendered in the High
Court to be taken into consideration
they intended the statements
to appear in evidence, and so
appearing, to cause the court to
entertain an erroneous opinion
regarding the compromise Their
offence came within the words of ss.
191/192 of Indian Penal Code and
479-A of CrPC

310 311
 Gist / Important point for
S.N. Case Citation Section
consideration
509 Om Prakash Mittal [2005] 143 Taxman Fraud and If revenue has material to show that
373 (SC)/[2005] 273 Misrepre- order was obtained by fraud or
ITR 326 (SC)/[2005] sentation misrepresentation of facts, it
194 CTR 97 (SC) to obtain certainly can move the authority

GENERAL
decision passing the order (in this case
Settlement Commission) for
decision on that issue and it
cannot be called by any stretch of
imagination to be review of earlier
judgement or subsequent Bench
sitting in appeal over earlier Bench’s
decision

510 American Hotel and [2007] 158 Taxman Interpre- When the object of provision is to
Lodging Association 146 (Delhi)/[2007] tation plug in leakage and prevent evasion
Educational Institute 289 ITR 46 (Delhi)/ of tax, a construction which would
[2006] 206 CTR 601 defeat and obliterate it from the
(Delhi) statute book should be eschewed.
If two constructions are possible,
then the one that would preserve
its workability and efficacy is to be
preferred to one which will render
it otiose. The courts will have to
reject that construction which will
defeat the plain intention of the
Legislature, even though there
may be some inexactitude in the
language used.

511 Ravi Agrawal Vs [2019] 101 taxmann. Judicial Court cannot give a direction
Union of India com 70 (SC) Power to Parliament to amend or
make a statutory provision in a
specified manner; Court can only
determine, in exercise of its power
of judicial review, as to whether
such a provision passes muster of
Constitutional Scheme. UOI to
have a relook into this provision by
taking into consideration all the,

312 313
 Gist / Important point for
S.N. Case Citation Section
consideration
aspects including those highlighted
by the Court in the judgment, and
explore the possibility of making
suitable amendments.

GENERAL
512 Andhra Cements Co. [1998] 101 Taxman Law Act as it stands amended on the
Ltd 559 (Andhra applicable first day of April of any financial
Pradesh)/[1998] 232 for A.Y year must apply to the assessment,
ITR 364 (Andhra and any amendments in the Act
Pradesh)/[1999] 152 which come into force after the
CTR 270 (Andhra first day of April of a financial year,
Pradesh) would not apply to the assessment
for that year, even if the assessment
is actually made after the
amendments come into force.

513 Karimtharuvi Tea [1966] 60 ITR 262 Law Income-tax Act, as it stands
Estate Ltd (SC) applicable amended on the first day of April
for A.Y of any financial year must apply to
the assessments of that year. Any
amendments in the Act which come
into, force after the first day of April
of a financial year, would not apply
to the assessment for that year,
even if the assessment is actually
made after the amendments come
into force.

514 Rama Shanker [2005] 144 Taxman Law Law as stands on first day of
917 (Allahabad)/ applicable assessment year is applicable
[2005] 277 ITR 69 for A.Y unless and until any amendment
(Allahabad) made in Act or notification issued
therein is specifically made
applicable from an anterior date

515 State of [1992] 194 ITR 434 Precedent Precedent is a judicial decision
Punjab v. Surinder (SC) which contains in itself a principle.
Kumar A decision is available as precedent
only if it decides a question of law

314 315
 Gist / Important point for
S.N. Case Citation Section
consideration
516 Ambika Prasad [1980] AIR 1980 SC Precedent Every new discovery or
Mishra v. State of U.P 1762 argumentative novelty cannot
undo or compel reconsideration of
a binding precedent. In this view,

GENERAL
other submissions sparkling with
creative ingenuity and presented
with high-pressure advocacy,
cannot persuade us to reopen what
was laid down for the guidance of
the nation as a solemn proposition
by the epic fundamental rights case

517 Assistant Collector [1985] 1985 AIR Precedent In the hierarchical system of Courts
Central Excise Vs 330, 1985 SCR (2) which exists in our country it is
Dunlop India Ltd 190 necessary for each lower tier,
including the High Courts to accept
loyally the decisions of the higher
tiers. The better wisdom of the
Court below must yield to the
higher wisdom of the Court above.
The label per incuriam is relevant
only to the right of an appellate
court to decline to follow one of
its own previous decisions, not to
its right to disregard a decision of
a higher appellate court or to the
right of a judge of the High Court to
disregard a decision of the Supreme
Court

518 Godavari Devi Saraf [1978] 113 ITR 589 Precedent An Authority like Tribunal acting
(Bom) anywhere in country has to respect
law laid down by High Court,
though of different State, so long as
there is no contrary decision of any
other High Court on that point.

316 317
 Gist / Important point for
S.N. Case Citation Section
consideration
519 Prashanti Medical [2019] 107 taxmann. Prom- Constitutional validity of any
Services & Research com 382 (SC) issory provision and especially taxing
Foundation Estoppel provision cannot be struck down
on a plea based on equity or/and

GENERAL
hardship to taxpayers. A plea of
promissory estoppel is not available
to an assessee against the exercise
of legislative power and nor any
vested right accrues to an assessee
in the matter of grant of any tax
concession taxing provision cannot
be struck down on a plea based on
equity or/and hardship to taxpayers.
A plea of promissory estoppel is not
available to an assessee against the
exercise of legislative power and
nor any vested right accrues to an
assessee in the matter of grant of
any tax concession

520 Fibre Boards (P.) Ltd [2015] 62 taxmann. Repeal/ ‘repeal’ can be through ‘omission’
com 135 (SC)/[2015] Omission also and section 24 of the General
376 ITR 596 (SC)/ Clauses Act applies in such cases
[2015] 279 CTR 89 and the ‘omitted’ provision would
(SC) continue

521 Venkateswara [1999] 103 Taxman Repeal/ It is a very well recognized rule
Hatcheries (P.) Ltd 503 (SC)/[1999] 237 Omission of interpretation of statutes that
ITR 174 (SC)/[1999] where a provision of an Act is
153 CTR 105 (SC) omitted by an Act and the said
Act simultaneously re-enacts a
new provision which substantially
covers the field occupied by the
repealed provision with certain
modification, in that event such re-
enactment is regarded having force
continuously and the modification
or changes are treated as

318 319
 Gist / Important point for
S.N. Case Citation Section
consideration
amendment coming into force
with effect from the date of
enforcement of re-enacted
provision.

GENERAL
522 Raja Bahadur [1961] 41 ITR 685 Res There is no such thing as res
Visheshwara Singh (SC) Judicata judicata in income-tax matters.
523 Distributors [1985] 22 Taxman 49 Reversal There may be circumstances where
(Baroda) (P.) Ltd (SC)/[1985] 155 ITR of own public interest demands that the
120 (SC)/[1985] 47 decision previous decision be reviewed and
CTR 349 (SC) reconsidered. The doctrine of stare
decisis should not deter the Court
from overruling an earlier decision,
if it is satisfied that such decision is
manifestly wrong or proceeds upon
a mistaken assumption in regard to
the existence or continuance of a
statutory provision or is contrary to
another decision of the Court.
524 Badridas Kothari vs [1967] AIR 1967 Cal Wager - Wager is not an enforceable
Meghraj Kothari 25 Section 30 contract: where the circumstances
– Indian as to contracts for sale, purchase,
Contract and delivery of goods are such as to
Act warrant the legal inference that the
parties never intended any actual
transfer but only to pay or receive
differences, the contracts must be
deemed to be by way of wager. A
wager is not enforceable u/s 30 of
the Indian Contract Act

320 321
NOTE
 INCOME TAX DEPARTMENT
ANDHRA PRADESH & TELANGANA