INCOME TAX
Mere Doubts On Cash Utilisation Insufficient For Section 69A Additions: ITAT Mumbai
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) on 23 January, held that that additions under Section 69A cannot be made merely on doubts about utilisation, if the source of cash withdrawals is from disclosed bank accounts. A Bench of Judicial Member Sandeep Gosain and Accountant Member Om Prakash Kant dismissed three appeals filed by the Revenue against FA Construction (the taxpayer) and upheld the orders of the Commissioner of Income-tax (Appeals) deleting...
Supreme Court To Examine If PF, ESI Deposits Late Under Welfare Laws but Paid Before IT Return Are Deductible
The Supreme Court has recently said that it will examine a long-standing dispute under the Income Tax Act on whether employees' provident fund and ESI contributions, deposited late under labour welfare laws, can still be allowed as deductions if paid before the income tax return due date. A Bench of Justice J.B. Pardiwala and Justice Sandeep Mehta, while hearing a petition filed by Woodland (Aero Club) Private Limited, noted that High Courts across the country have taken conflicting views on...
'Reason To Believe' Not Required To Inspect Seized Jewellery Under Income Tax Act: Calcutta High Court
The Calcutta High Court on 28 January dismissed a writ petition challenging inspection notices issued by the Income Tax Department for jewellery and bullion seized during a search operation, holding that the revenue authorities are not required to disclose the information or reasons that prompted the inspection, so long as it is undertaken for purposes permitted under the Income Tax Act (IT Act), 1961. Justice Om Narayan Rai delivered the ruling while examining a challenge to notices issued...
ITAT Mumbai Upholds Revision Order Against Bajaj Auto For Prejudicial Assessment Order Against Revenue
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) on 23 January dismissed an appeal filed by Bajaj Auto Limited and upheld a revisionary order issued by the Principal Commissioner of Income-tax (PCIT) under Section 263 of the Income Tax Act. A Bench comprising Judicial Member Narender Kumar Choudhry and Accountant Member Om Prakash Kant agreed with the PCTI that the original assessment, completed on 27 May 2022, was erroneous and prejudicial to the interests of the Revenue, as the...
Tax Additions For Unsecured Loans Unsustainable Where Lender Creditworthiness Is Proven: ITAT Mumbai
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) on 23 January held that additions under Section 68 of the Income Tax Act relating to unsecured loans are unsustainable where the lenders had been accepted as genuine in earlier assessment years and the transactions were supported by proper banking records. Section 68 of the Income Tax Act allows the tax authorities to treat sums credited in a taxpayer's books as unexplained income if the identity and creditworthiness of the lender and...
ITAT Bench Can't Sit Over Its President's Order Transferring Cases: Delhi High Court Restores Sahara Appeals
The Delhi High Court has set aside a series of orders passed by the Income Tax Appellate Tribunal (ITAT), Delhi Bench, which had dismissed long-pending tax appeals of the Sahara Group on the ground of lack of territorial jurisdiction, despite the matters having been administratively transferred to Delhi nearly two decades ago.A Division Bench of Justices Dinesh Mehta and Vinod Kumar held that once the President of the ITAT exercises his administrative powers to transfer appeals from one Bench to...
Tax Recovery Officer Can't Void Third-Party Mortgages: Madras High Court In Sree Gokulam Chit's Case
The Madras High Court has recently set aside an income tax recovery order that had declared a mortgage created in favour of Sree Gokulam Chit and Finance, a chit fund part of the Gokulam Group, as void from the outset. Justice Senthilkumar Ramamoorthy held that the Income Tax Department can recover its dues by selling an attached property, but the Tax Recovery Officer cannot decide the validity of a transfer in favour of a third party. The court said the recovery framework does not permit such...
Delhi High Court Says Impermissible Foreign Tax Reference Can't Extend Limitation For Search Assessments
The Delhi High Court has ruled that the Income Tax Department cannot extend the time limit for completing search assessments merely by making a reference to a foreign tax authority if the information sought is not permissible under the applicable tax treaty. Dismissing a batch of appeals filed by the Revenue, a Division Bench of Justices Dinesh Mehta and Vinod Kumar upheld the Income Tax Appellate Tribunal's finding that assessment orders passed for Assessment Years 2011–12 to 2017–18 were...
Supreme Court Issues Notice In Appeal Against Order Quashing IT Assessments On Entities Merged Into Reliance Industries
The Supreme Court on Tuesday issued notice on an appeal filed by the Revenue challenging a Bombay High Court ruling that had quashed income tax assessments against Reliance Polyethylene Ltd. and Reliance Polypropylene Ltd. following their merger with Reliance Industries Ltd. A Bench of Justice Pamidighantam Sri Narasimha and Justice Vijay Bishnoi called for a response from Reliance Industries Ltd. and directed that the matter be listed for further hearing after completion of pleadings. The...
Dormant Partner Cannot Face Criminal Liability Without Proof Of Control Over Firm: Madras High Court
The Madras High Court has held that a dormant partner cannot be fastened with criminal liability in the absence of specific allegations showing that she was in charge of or responsible for the conduct of the firm's business. A Bench of Justice Sunder Mohan was considering criminal revision petitions filed by a firm, its managing partner, and another partner, challenging the trial court's order that had refused to discharge them from criminal proceedings initiated under the Prohibition of Benami...
Following Earlier Rulings, ITAT Delhi Holds Air France Income Not Taxable Under India–France DTAA
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has recently held that Air France's income from technical handling services, interest on operational funds, and commission from domestic airlines was not taxable in India for the assessment years 2017–18 and 2018–19. The tribunal followed its earlier rulings and noted that there was no change in facts. The receipts were held to be covered under Article 8 of the India–France tax treaty. A coram of Judicial Member Vimal Kumar and...
ITAT Delhi Deletes ₹30.7 Lakh Tax, Accepts Marriage 'Sagan' As Source Of Demonetisation-Era Deposits
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) on 22 January held that cash deposits during the demonetisation period representing marriage 'sagan' (gifts from friends and relatives) cannot be treated as unexplained income while deleting an addition of Rs. 30.7 lakh made against an individual assessee. The order was passed by Vice President Mahavir Singh, in an appeal against an order of the National Faceless Appeal Centre dated 3 July 3 2025. The assessee had filed his...