Volume 133 : Part 3 (Issue dated : 15-1-2026)
SUBJECT INDEX TO SHORT NOTES OF CURRENT CASES
Agricultural income --Assessee-proprietor, dealing in tractors, motorcycles and lubricants, filing return declaring agricultural income--Assessee claiming to have also cultivated his brother’s agricultural land--Assessing Officer, holding assessee’s dealership business disenabling him to cultivate his own agricultural land fully and, hence, also not his brother’s land, estimating agricultural income only of agricultural land owned by him and adding differential sum as income from other sources--Assessee failing to prove brother not declaring agricultural income in his return--Mere bald statement of no such claim without confirmation from brother insufficient to establish genuineness--Held, agricultural income proportionate to extent of assessee’s lands acceptable and differential sum treated as income from other sources in assessee’s hands--Income-tax Act, 1961, ss. 147, 148-- Manoj Kumar Agarwal v . Assessing Officer (Agra) . . . 39
Business income --Brokerage from land transactions--Mechanical application of 1 per cent. formula without corroborative evidence--No admission of brokerage in statement--Held, addition deleted--Income-tax Act, 1961, ss. 28, 132(4)-- Asst. CIT v. Rakeshkumar Mahendrakumar Shah (Ahmedabad) . . . 33
----Brokerage from land transactions--Clear admission in statement recorded at time of search--No contrary evidence--Receipt of brokerage admitted from both buyer and seller--Held, addition confirmed--Income-tax Act, 1961, ss. 28, 132(4)-- Asst. CIT v. Rakeshkumar Mahendrakumar Shah (Ahmedabad) . . . 33
Cash credits --Share capital and share premium--Burden of proof--Assessee in investment business--Assessee filing only name and address of investors without their confirmation and justification for paying huge premium--Neither resolution of such investment passed in board meeting of any investor nor acknowledgment of income-tax returns of some of them furnished--Mere reliance on data on MCA portal insufficient to prove identity of investors--Perusal of investors’ net worth vis-a-vis gross income showing net worth merely a balance-sheet item, insufficient to show liquidity for such huge investments--Out of eight parties, notices issued to five returned with remark “left/not known”, and no response from others--Assessee not furnishing latest addresses of these parties and all details furnished only by assessee, not investors--Preference shares issued to investors through off-market transactions and assessee failing to furnish information regarding investors or manner of share allotment before lower authorities and Tribunal--Held, identity and creditworthiness of share applicants and genuineness of transaction not established by assessee beyond doubt--Addition sustained--Income-tax Act, 1961, s. 68-- Sapphire Fintech P. Ltd. v. Deputy CIT (Mumbai) . . . 45
Income --Disallowance of expenditure relating to exempt income--Disallowance restricted to exempt income earned--If assessee already disallowed expenses to extent of exempt income, no further disallowance warranted--Income-tax Act, 1961, s. 14A--Income-tax Rules, 1962, r. 8D-- Sapphire Fintech P. Ltd. v. Deputy CIT (Mumbai) . . . 45
Reassessment --Conditions precedent--Reason to believe income has escaped assessment--Factors governing formation of belief--Reopening based solely on information of cash deposits without independent application of mind or correlation with return filed by assessee--Deposits in preceding year greater than deposits in year under consideration--No live link between material and formation of belief--Held, reopening invalid--Income-tax Act, 1961, ss. 69A, 147, 148-- Khazana Stores P. Ltd. v. ITO (Ahmedabad) . . . 36
----Notice--Validity--Reopening of assessment based on assessee’s declaration in affidavit filed before Election Commission of India of his lability on unsecured loan--Assessing Officer holding Explanation 2(b) to section 147 applicable and income chargeable to tax escaping assessment--Assessing Officer, after obtaining approval, making addition on unsecured loan under section 68--Reasons vague, not stating whether unsecured loans received during year or its source--No tangible material with Assessing Officer to form belief of escapement of income from assessment to warrant reopening under section 147--Approval accorded in mechanical manner--Reopening of assessment for making fishing and roving enquiries impermissible in law--Assessee’s unsecured loan received in earlier year and carried forward to current year-- Explanation 2(b) to section 147 applicable only if assessment not earlier made for year sought to be reopened and inapplicable to relevant year where assessment already framed under section 143(3)--Statutory provision ignored by approving authority--Assessing Officer, in original scrutiny assessment proceedings, obtaining from assessee name and address of lenders, their confirmation, bank account, creditworthiness--Then choosing not to make any addition on unsecured loans--Held, reassessment on mere change of opinion, invalid--Income-tax Act, 1961, ss. 68, 147, 148, 151-- Manoj Kumar Agarwal v. Assessing Officer (Agra) . . . 39
----Scope of proceedings--Assessing Officer reopening assessment based on information regarding transactions in various immovable properties and scrips--Belief for escapement of income recorded by Assessing Officer only in respect of sale/purchase in various immovable properties--No specific belief for escapement on account of sale/purchase of scrips--Assessing Officer making additions on sale transaction and long-term capital gains as accommodation entry to income--Additions made by Assessing Officer on issue not part of reasons recorded--Held, reassessment illegal and beyond jurisdiction--Income-tax Act, 1961, ss. 147, 148-- Harshit Indravadan Talati v. Asst. CIT (Ahmedabad) . . . 43
Search and seizure --Statement recorded under section 132(4)--Reliance without corroborative material--Statement to be read as a whole--Held, additions based solely on statement not sustainable--Income-tax Act, 1961, s. 132(4)-- Asst. CIT v. Rakeshkumar Mahendrakumar Shah (Ahmedabad) . . . 33
Unexplained expenditure --Commission--Transaction of receipt of share application money treated as bogus and addition upheld under section 68--Addition made on account of commission payment at 5 per cent. under section 69C, justified--Income-tax Act, 1961, s. 69C-- Sapphire Fintech P. Ltd. v. Deputy CIT (Mumbai) . . . 45
Unexplained money --Business income--Cash, jewellery and foreign currency found during search--Amount already disclosed as land trading and GAP income--Absence of corroborative evidence of unexplained investment--Held, treatment as business income proper--Treatment as unexplained not sustainable--Income-tax Act, 1961, ss. 28, 69A, 69B, 115BBE, 132(4)-- Asst. CIT v. Rakeshkumar Mahendrakumar Shah (Ahmedabad) . . . 33
ITR (Trib) Volume 133 : Part 3 (Issue dated : 15-1-2026)
SUBJECT INDEX TO CASES REPORTED IN THIS PART
Appeal to Appellate Tribunal --Cross-objections--Delay--Condonation--Delay of 326 days in filing cross-objections--Delay owing to tax consultant’s advice not to litigate since Commissioner (Appeals) had granted relief to assessee--Assessee acting on Revenue’s appeal to support order of Commissioner (Appeals)--Issues raised of legal nature--No mala fide intention or delaying strategy involved--Rule 27 of Income-tax (Appellate Tribunal) Rules, 1963, empowering assessee to take such pleas even without raising cross-objection--Held, delay to be condoned and cross-objections to be allowed--Income-tax Act, 1961--Income-tax (Appellate Tribunal) Rules, 1963, r. 2-- Deputy CIT v. AB Alcobev P. Ltd. (Chandigarh) . . . 246
----Powers of Tribunal--Inherent power to entertain additional ground raised by respondent in appeal though not raised before Commissioner (Appeals)--Provided no new facts required to be brought on record--Income-tax (Appellate Tribunal) Rules, 1963, r. 27-- ITO v. Pranav Prafulchandra Vora (Ahmedabad) . . . 460
Assessment --Condition precedent--Notice--Not mandatory for successor Assessing Officer to issue fresh notice under section 143(2)--Held, assessment order valid--Income-tax Act, 1961, s. 143(2)-- Pralay Pradyotkanti Ghosh v. ITO (International Taxation) (Ahmedabad) . . . 375
----Eligible assessee--Time-limit for passing assessment order--Draft assessment order was passed to allow assessee to resolve issue--Assessee not filing any objections before Dispute Resolution Panel--Held, assessment order passed within time-limit stipulated in section 144C--Income-tax Act, 1961, ss. 144C, 153-- Pralay Pradyotkanti Ghosh v. ITO (International Taxation) (Ahmedabad) . . . 375
Capital gains --Long-term capital gains--Business income--Reduction in shareholding after notice by custodian dated 8-6-1992--Income from sale of shares of two companies shown as long-term capital gains--Assessing Officer treated reduction in shareholding as profits and gains from business on ground assessee failed to prove asset was capital asset--Assessee alone decides whether asset held as capital asset or stock-in-trade--Held, income from sale of shares to be computed as long-term capital gains--Income-tax Act, 1961, s. 45--Central Board of Direct Taxes Circular No. 6 of 2016, dated 29-2-2016-- Growmore Research and Assets Management Ltd. v. Deputy CIT (Mumbai) . . . 387
----Profit on sale of shares--Finding that shares were sold in preceding year and capital gains considered by Tribunal that year--Held, profits taxed in preceding year cannot be taxed in current year--Income-tax Act, 1961, s. 45--Central Board of Direct Taxes Circular No. 6 of 2016, dated 29-2-2016-- Growmore Research and Assets Management Ltd. v. Deputy CIT (Mumbai) . . . 387
----Reference to Departmental Valuation Officer--Amended section 142A(1) allowing reference to Valuation Officer to estimate value, including fair market value of any asset, property or investment, and submit report to Assessing Officer for assessment purpose--Specific reference to section 69A or section 69B no longer applicable with effect from 1-10-2014--Income-tax Act, 1961, s. 142A(1)-- Bimla Devi Agrawal v. Assessing Officer (Kolkata) . . . 226
----Reference to Departmental Valuation Officer--Assessee’s return selected for limited scrutiny to verify capital gains on sale of properties--Assessee objecting to value determined by Stamp Duty Valuation Officer--Departmental Valuation Officer, on reference, valuing properties at higher consideration--Assessing Officer computing capital gains at higher consideration on assessee’s non-compliance--Assessee objecting to adoption of value based on valuation report and reference to Departmental Valuation Officer under wrong provisions--Held, no specific mention of section whereunder valuation made by Assessing Officer in assessment order--Assessing Officer having power to refer any property for assessment or reassessment to Valuation Officer under section 142A(1) as amended by Finance (No. 2) Act, 2014--Section 155(15) not applicable as reference made for valuation and not to any appellate forum--Finding of Commissioner (Appeals) that determination of “fair market value” finding of fact upheld--No reason to interfere with order of Commissioner (Appeals)--Income-tax Act, 1961, ss. 142A(1), 155(15)-- Bimla Devi Agrawal v. Assessing Officer (Kolkata) . . . 226
----Reference to Departmental Valuation Officer--Limitation--Extension of limitation--Section 153(1), amended with effect from 1-10-2014, read with clause (v) of Explanation 1 to section 153, applicable for purpose of limitation for relevant assessment year--Period from date of reference till date of receipt of valuation report to be excluded for computation of limitation--Assessment otherwise barred by limitation on 31-12-2019, extending into covid-19 period--Limitations further extended by virtue of Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, and Supreme Court order--Held, assessment order passed on 6-4-2021 not barred by limitation--Order of Commissioner (Appeals) not to be interfered with--Income-tax Act, 1961, s. 153(1)-- Bimla Devi Agrawal v. Assessing Officer (Kolkata) . . . 226
----Transfer, when takes place--Assessee being owner of agricultural land, entering into agreement for development and construction but agreement rendered void owing to restrictions on transfer of agricultural land--Possession taken back by assessee, and development and construction executed by assessee--Remaining land shown as fixed asset and amount outstanding to builder shown as liability--Matter referred to arbitration and land transferred to developer against amount outstanding pursuant to arbitral award during assessment year--Revenue accepted land in possession of assessee and liability shown in balance-sheet since financial year 2005-06--Held, discharged liability was considered price for land and thus capital gains arose in year of actual transfer--Income-tax Act, 1961, s. 45-- Deputy CIT v. Sunil Kumar Sood (Chandigarh) . . . 440
Cash credits --Burden of proof--Unsecured loans--Assessee filing income-tax returns, scrutiny assessment orders, audited balance-sheets, profit and loss accounts and tax audit reports of lenders and confirmations for transactions--Loans brought to tax as cash credits on ground lenders’ income was too low to permit such huge advances--Finding that authorities had not disputed that amounts lent to assessee were duly reflected in financial statement of creditors--All transactions made through proper banking channels--Finding that lenders had made cash deposits out of available cash balances--No adverse comments given by tax auditor of lenders in their tax audit reports--No adverse inference on these lendings in assessments of lenders--Held, assessee had proved identity and creditworthiness of investors and genuineness of transactions--Source of source need not be proved for unsecured loan under provision as existing in assessment year in question--Addition under section 68 unsustainable--Income-tax Act, 1961, ss. 68, 143(3)-- Ganga Cotton and Allied Industries Ltd. v. ITO (Delhi) . . . 412
Charitable purposes --Registration--Grant of registration under section 12AA--Scope of inquiry--Society engaged in promoting science and technology through training, workshops and awareness programmes financed by Government grants--Commissioner (Exemptions) rejecting application for diversion of grants to balance-sheet instead of income and expenditure account, for wrong claim of exemption under section 10(23C)(iiiad) in earlier years, and for activities not constituting “education” per section 2(15)--For purposes of registration, Commissioner to examine whether objects charitable and activities genuine--Manner of application of income or past taxability of grants irrelevant--Assessee’s objects in memorandum of purely educational nature--Promotion of science and technology awareness part of educational advancement in modern society--Besides classroom teaching, education includes systematic dissemination of knowledge--Held, wrong claim of exemption in earlier years not ground to reject present registration as registration depends on objects and proposed activities, not past assessments--Department’s grant of provisional registration under section 12A and approval under section 12AB for subsequent years establishing acceptance of assessee’s activities as charitable and educational--Order rejecting registration under section 12AA unsustainable--Commissioner (Exemptions) to grant registration under section 12AA effective from date of application--Income-tax Act, 1961, ss. 2(15), 10(23C)(iiiad), 12A, 12AA, 12AB-- Indian Resource and Development Association v. CIT (Exemptions) (Chandigarh) . . . 433
Income from other sources --Consideration for shares exceeding fair market value--Fair market value--Determination--Assessee entitled to substantiate fair market value to satisfaction of Assessing Officer based on any rational basis--Assessee holding 100 per cent. shares in overseas subsidiary--Issuing shares at premium--Assessee entitled to suitably modify net asset value as long as net asset value capable of being substituted by some proof or competent evidence--Assessee producing valuation report and market valuation of hotel in Switzerland in German currency--Held, method adopted for reworking of subsidiary company by applying discounted cash flow method or any known method permissible--Income-tax Act, 1961, s. 56(2)(viib)--Income-tax Rules, 1962, r. 11UA(1)(c)-- Leela Tourism and Heritage P. Ltd. v. Asst. CIT (Delhi) . . . 452
Income from undisclosed sources --Assessment--Penalty in search cases--Assessee charitable trust running educational institution--Receipt of voluntary contribution and capitation fees--Search initiated much after Taxation Laws (Second Amendment) Bill, 2016 receiving Presidential assent on 15-12-2016--Thereafter Assessing Officer powerless to issue notice under section 271AAB(1)--Assessing Officer erred in recording satisfaction that penalty proceedings initiated separately--His consequent issue of show-cause notice to assessee striking at root of his jurisdiction--Commissioner (Appeals) not addressing question challenging Assessing Officer’s jurisdiction to invoke penalty under sub-section (1), instead of sub-section (1A), of section 271AAB--Assessing Officer also not specifying limb of charge of penalty between clauses (a) and (b) of section 271AAB(1A)--Consequences differing based on limb of charge--Such failure seriously prejudicing assessee’s defence against charge and antithetical to fair hearing guaranteed by section 274 and Constitution of India--Issue of penalty notice under sub-section (1) bad in law--Commissioner (Appeals) erred in dismissing assessee’s legal ground challenging jurisdiction of Assessing Officer in issuing notice under above section not in force for assessee’s case--Assessing Officer’s failure disentitling him to levy of penalty--Entire penalty proceeding right from issue of notice to imposition of penalty showing non-application of mind and arbitrariness of Assessing Officer--Held, penalty order to be quashed--Income-tax Act, 1961, ss. 132, 271AAB, 274-- St. Joseph’s Educational Trust v. Deputy CIT (Chennai) . . . 328
Loss --Depreciation--Carry forward and set off--Amalgamation of companies--Assessee showing carried forward losses of sick company amalgamated with assessee-company--Assessing Officer disallowing--Writ petition dismissed by single judge--Appeal before Division Bench pending--No reasonable opportunity of being heard to assessee--Held, assessment restored to Assessing Officer for completion pursuant to decision of Division Bench--Income-tax Act, 1961, s. 72A-- Bharat Technologies Auto-Components Ltd. v. ITO (Chennai) . . . 397
Non-resident --Taxability in India--Assessee employed on foreign ship for external inspection of oil rig structures beyond territorial waters but within exclusive economic zone--Assessee’s duties performed on a foreign ship not covered by Notification No. G. S. R. 304(E)--Services were not rendered in India--Held, Salary income from services outside India, exempt--Income-tax Act, 1961, ss. 2(25A), 5(2)(b), 9(1)(ii)-- Pralay Pradyotkanti Ghosh v. ITO (International Taxation) (Ahmedabad) . . . 375
Penalty --Under-reporting or misreporting of income--Assessee charitable trust running educational institution--Receipt of voluntary contribution--Notice not specifying limb of section 270A under which penalty initiated--Penalty notice not revealing whether charge constituting under-reporting of income or misreporting of income--Faults having different consequences--Assessing Officer duty-bound to put assessee on proper notice regarding fault it should defend against--Omnibus notice resulting in assessee being unfairly treated, defeating fair hearing guaranteed under section 274--Held, show-cause notice, being vague, levy of penalty void ab initio--Income-tax Act, 1961, ss. 270A, 274-- St. Joseph’s Educational Trust v. Deputy CIT (Chennai) . . . 328
----Under-reporting or misreporting of income--Two separate charges--Assessing Officer failing to identify specific charge or default for levying penalty--Assessing Officer levying penalty for “under-reporting and under-reporting as a consequence of misreporting” of income--Different consequences for levying of penalty, rendering notices issued to be void ab initio--Held, penalty levied without specifying exact default committed by assessee not sustainable--Income-tax Act, 1961, s. 270A-- Snehalkumar Bhogilal Trivedi v. National Faceless Appeal Centre, Assessment Unit (Ahmedabad) . . . 407
Presumptive taxation --Unexplained money--Cash deposits in bank during demonetisation period--On ground of no business activity from 1-4-2016 to 1-11-2016, Assessing Officer holding cash credits to be from undisclosed sources, chargeable to tax under section 115BBE--Assessing Officer failing to pinpoint charging section for proposed addition--Section 115BBE concerned with determination of tax in special cases--Assessing Officer erring in invoking section 115BBE without fixing addition under charging provision--Held, entire addition to be deleted--Income-tax Act, 1961, ss. 44AD, 115BBE-- Pradeep Tyagi HUF v. ITO (Delhi) . . . 424
Search and seizure --Assessment in search cases--Approval of prescribed authority--Should indicate application of mind--Approval granted mechanically in a single day for more than 100 assessments of different assessees given along with seized material of each case running totally to over 1,000 pages--Practically impossible for Additional Commissioner to apply his mind to entire material in one day--Held, assessment order unsustainable--Income-tax Act, 1961, ss. 132, 153D-- Deputy CIT v. AB Alcobev P. Ltd. (Chandigarh) . . . 246
----Assessment in search cases--Search of third-party--Condition precedent--Satisfaction note--Assessing Officer of searched person to record satisfaction that incriminating material found during search pertained to assessee, whose income had escaped assessment--Material collected from third-party premises not reckonable without following due procedure under section 153C--Held, addition not sustainable--Income-tax Act, 1961, ss. 132, 153A, 153C-- Deputy CIT v. AB Alcobev P. Ltd. (Chandigarh) . . . 246
----Assessment in search cases--Search of third-party--Undisclosed income--Assessee involved in real estate development of commercial nature--Allegation of unaccounted receipts over and above stated price--Third-party statements not referring to assessee or to material pertaining to assessee--Statement of general nature, not indicative of assessee’s sale of units at prices higher than that shown in sale deed--Order of Commissioner (Appeals) examining every detail of sales made by assessee analytically--Held, no interference called for--Income-tax Act, 1961, s. 132, 132(4)-- Deputy CIT v. AB Alcobev P. Ltd. (Chandigarh) . . . 246
----Assessment in search cases--Warrant of authorisation--Validity--Whether or not search conducted--Initiation of search prerequisite for issue of notice for assessment--Warrant of authorisation not made on assessee’s registered address--No notice under section 153A can follow--Warrant in name of assessee’s director and third-party company--No panchnama drawn in assessee’s name--No search executed on assessee--Held, assessment proceedings void ab initio and consequent assessment orders to be quashed--Income-tax Act, 1961, ss. 132, 153A-- Deputy CIT v. AB Alcobev P. Ltd. (Chandigarh) . . . 246
----Assessment of third person--Conditions precedent--Satisfaction note to be recorded “within reasonable time” by Assessing Officer of person searched--Satisfaction note recorded after one year not within reasonable time--Invalid assumption of jurisdiction--Held, assessment set aside--Income-tax Act, 1961, ss. 132, 153A, 153C--Central Board of Direct Taxes Circular No. 24 of 2015 (F. No. 279/Misc./140/2015/ITJ, dated 31-12-2015)-- ITO v. Pranav Prafulchandra Vora (Ahmedabad) . . . 460
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
S. 68 --Reassessment-- Ultra Modern Exports P. Ltd. v. ITO (Delhi) . . . 646
----Search and seizure-- Ashok Parshad Gupta v. Deputy CIT (Delhi) . . . 670
S. 69 --Search and seizure-- Ashok Parshad Gupta v. Deputy CIT (Delhi) . . . 670
S. 69A --Search and seizure-- Ashok Parshad Gupta v. Deputy CIT (Delhi) . . . 670
S. 69B --Search and seizure-- Ashok Parshad Gupta v. Deputy CIT (Delhi) . . . 670
S. 69C --Search and seizure-- Ashok Parshad Gupta v. Deputy CIT (Delhi) . . . 670
S. 69D --Search and seizure-- Ashok Parshad Gupta v. Deputy CIT (Delhi) . . . 670
S. 92CA(3) --International transactions-- Otis Elevator Co. (India) Ltd. v. Assessment Unit, Income-tax Department (Mumbai) . . . 628
S. 115BBE --Search and seizure-- Ashok Parshad Gupta v. Deputy CIT (Delhi) . . . 670
S. 132 --Search and seizure-- Ashok Parshad Gupta v. Deputy CIT (Delhi) . . . 670
----Search and seizure-- Deputy CIT v. Smt. Kamla Prabha (Jaipur) . . . 477
S. 143 --Assessment-- Deputy CIT v. Kkalpana Industries India Ltd. (Kolkata) . . . 562
S. 144B --Assessment-- Deputy CIT v. Kkalpana Industries India Ltd. (Kolkata) . . . 562
S. 147 --Reassessment-- Ultra Modern Exports P. Ltd. v. ITO (Delhi) . . . 646
S. 148 --Reassessment-- Ultra Modern Exports P. Ltd. v. ITO (Delhi) . . . 646
S. 153 --Assessment-- Deputy CIT v. Kkalpana Industries India Ltd. (Kolkata) . . . 562
S. 153A --Search and seizure-- Ashok Parshad Gupta v. Deputy CIT (Delhi) . . . 670
----Search and seizure-- Deputy CIT v. Smt. Kamla Prabha (Jaipur) . . . 477
S. 153C --Search and seizure-- Deputy CIT v. Smt. Kamla Prabha (Jaipur) . . . 477
S. 234B --Search and seizure-- Ashok Parshad Gupta v. Deputy CIT (Delhi) . . . 670
S. 250 --Appeal to Commissioner (Appeals)-- Deputy CIT v. Kkalpana Industries India Ltd. (Kolkata) . . . 562
S. 253 --Appeal to Appellate Tribunal-- Deputy CIT v. Kkalpana Industries India Ltd. (Kolkata) . . . 562
S. 263 --Revision-- Beam Global Spirits and Wine (India) P. Ltd. v. Pr. CIT (Delhi) . . . 608
Maharashtra Co-operative Societies Act, 1960 :
S. 79A --Income-- Asst. CIT v. Shree Tatyasaheb Kore Warana Sahakari Sakhar Karkhana Ltd. (Pune) . . . 697