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DATE: February 11, 2020 (Date of pronouncement)
DATE: June 23, 2020 (Date of publication)
AY: 2001-02, 2003-04
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CITATION:
S. 36(1)(vii)/ 36(2): Write-off of inter corporate deposits and advances given for purchase of vehicles or plant and machinery is allowable as a bad debt. There is no requirement under the Act that the bad debt has to accrue out of income under the same head i.e 'income from business or profession' to be eligible for deduction. All that is required is that the debt in question must be written off by the assessee in its books of accounts as irrecoverable

It is a settled position in law that after 1.4.1989, it is not necessary for the assessee to establish or prove that the debt has in fact become irrecoverable but it would be sufficient if the bad debt is written off as irrecoverable in the accounts of the assessee. This is because, as held by this Court, decision to treat a debt as a bad debt is a commercial or business decision of the assessee. Recording of a debt as a bad debt in his books of accounts by the assessee prima facie establishes that it is a bad debt. If the Assessing Officer disputes that the onus would be on him to prove otherwise

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DATE: June 12, 2020 (Date of pronouncement)
DATE: June 22, 2020 (Date of publication)
AY: 1992-93, 1993-94, 1994-95, 1995-96
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S. 45/ 147: Capital gains are chargeable to tax when individual flats are sold and not when the land is transferred to the co-operative society formed by the flat purchasers. The flat purchasers, by purchasing the flats, had certainly acquired a right or interest in the proportionate share of the land but its realisation is deferred till formation of the co-operative society by the owners of the flats and eventual transfer of the entire property to the co-operative society

According to the Assessing Officer, assessee had erred in offering to tax ‘capital gains’ in the year when the individual flats were sold whereas such ‘capital gains’ could be assessed to tax only when the land is trasferred to the co-operative society formed by the flat purchasers. If the assessee had offered to tax as ‘capital gains’ in the assessment years under consideration which should have been offered to tax in the subsequent years, it is beyond comprehension as to how a belief can be formed that income chargeable to tax for the assessment year under consideration had escaped assessment. That apart, the flat purchasers by purchasing the flats had certainly acquired a right or interest in the proportionate share of the land but its realisation is deferred till formation of the co-operative society by the owners of the flats and eventual transfer of the entire property to the co-operative society

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DATE: June 12, 2020 (Date of pronouncement)
DATE: June 13, 2020 (Date of publication)
AY: 2003-04
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S. 260A/ 271(1)(c): (i) An appeal u/s 260-A can be entertained by the High Court on the issue of jurisdiction even if the same was not raised before the Tribunal (ii) the question relating to non-striking off of the inapplicable portion in the s. 271(1)(c) show-cause notice goes to the root of the lis & is a jurisdictional issue (iii) it would be too technical and pedantic to take the view that because in the printed notice the inapplicable portion was not struck off, the order of penalty should be set aside even though in the assessment order it was clearly mentioned that penalty proceedings u/s 271(1)(c) had been initiated separately for furnishing inaccurate particulars of income, (iv) Penalty cannot be imposed for alleged breach of one limb of s. 271(1)(c) of the Act while proceedings were initiated for breach of the other limb of s. 271(1)(c). This vitiates the order of penalty, (v) Threat of penalty cannot become a gag and / or haunt an assessee for making a claim which may be erroneous or wrong (All judgements referred)

Concealment of particulars of income was not the charge against the appellant, the charge being furnishing inaccurate particulars of income. As discussed above, it is trite that penalty cannot be imposed for alleged breach of one limb of Section 271(1)(c) of the Act while penalty proceedings were initiated for breach of the other limb of Section 271(1)(c). This has certainly vitiated the order of penalty.

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DATE: June 12, 2020 (Date of pronouncement)
DATE: June 13, 2020 (Date of publication)
AY: 2003-04
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S. 68 Bogus Cash Credits: In the case of an assessee engaged in providing 'accommodation entries', the entire deposits cannot be assessed as unexplained cash credits. Only the commission (0.15%) earned in providing the accommodation entries can be assessed as income (PCIT vs. NRA Iron and Steel (2019) 103 Taxmann.com 48 (SC) distinguished)

In so far the decision of the Supreme Court in NRA Iron and Steel Pvt. Ltd. (supra) is concerned, the same is not attracted in the present case in as much as facts of the present case are clearly distinguishable. Unlike the present case, the assessee in NRA Iron and Steel Pvt. Ltd. (supra) claimed the cash credits as its income. However, it was found that the creditors had meagre or nil income which did not justify investment of such huge sums of money in the assessee. The field enquiry conducted by the Assessing Officer revealed that in several cases the investor companies were non-existent. Thus, it was held that the assessee had failed to discharge the onus which lay on it to establish the identity of the investor companies and the credit worthiness of the investor companies. In such circumstances, the entire transaction was found to be bogus. But as already discussed in the preceding paragraphs, assessee never claimed the cash credits as its income. It admitted its business was to provide accommodation entries. In return for the cash credits it used to issue cheques to the customers / beneficiaries for slightly lesser amounts, the balance being its commission. Moreover, the cash credits had been accounted for in the respective assessment of the beneficiaries.

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DATE: March 26, 2020 (Date of pronouncement)
DATE: March 28, 2020 (Date of publication)
AY: -
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Corona Virus Lockdown Crisis: All interim orders operating till today and are not already continued by some other courts / authority including this court shall remain in force till 30.04.2020 subject to liberty to parties to move for vacation of interim orders only in extreme urgent cases. Thus, all interim orders passed by this High Court at Mumbai, Aurangabad, Nagpur and Panaji as also all courts/ Tribunal and authorities subordinate over which it has power of superintendence expiring before 30.04.2020, shall continue to operate till then. It is clarifed that such interim orders which are not granted for limited duration and therefore, are to operate till further orders, shall remain unaffected by this order (Similar orders are passed by the Delhi & Karnataka High Courts)

we fnd it appropriate to continue all interim orders which are operating till today and are not already continued by some other courts / authority including this court and the same shall remain in force till 30.04.2020, subject to liberty to parties to move for vacation of interim orders only in extreme urgent cases. Thus, all interim orders passed by this High Court at Mumbai, Aurangabad, Nagpur and Panaji as also all courts/ Tribunal and authorities subordinate over which it has power of superintendence expiring before 30.04.2020, shall continue to operate till then. It is clarifed that such interim orders which are not granted for limited duration and therefore, are to operate till further orders, shall remain unaffected by this order

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DATE: January 31, 2020 (Date of pronouncement)
DATE: February 22, 2020 (Date of publication)
AY: 1999-00
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S. 254(2): The Writ Petition to challenge the ITAT's order dismissing the MA does not appear to be bonafide. In the garb of the MA, the Petitioner sought review of the final order passed by the Tribunal and for rehearing of the appeal which is not permissible in law. Costs of Rs. 10,000 imposed on the Petitioner

In the instant case, what we notice is that not only was there no mistake apparent from the record but in the garb of the Misc. Application, petitioner had sought for review of the final order passed by the Tribunal and for rehearing of the appeal which is not permissible in law. In our view, Writ Petition does not appear to be bonafide

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DATE: February 10, 2020 (Date of pronouncement)
DATE: February 15, 2020 (Date of publication)
AY: 2010-11
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S. 68 Bogus Purchases: Though the assessee has not proved the genuineness of the purchases and sales, yet if the AO has accepted the sales, the entire purchases cannot be disallowed. Only the profit element embedded in purchases would be subjected to tax and not the entire amount (Bholanath Polyfab 355 ITR 290 (Guj) followed, Kaveri Rice Mills 157 Taxman 376 (All) & La Medica 250 ITR 575 (Del) referred)

Having found that the purchases corresponded to sales which were reflected in the returns of the assessee in sales tax proceedings and in addition, were also recorded in the books of accounts with payments made through account payee cheques, the purchases were accepted by the two appellate authorities and following judicial dictum decided to add the profit percentage on such purchases to the income of the assessee. While the CIT (A) had assessed profit at 2% which was added to the income of the assessee, Tribunal made further addition of 3% profit, thereby protecting the interest of the Revenue

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DATE: February 5, 2020 (Date of pronouncement)
DATE: February 8, 2020 (Date of publication)
AY: 2008-09
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CITATION:
S. 153A: Once the assessment gets abated, the original return filed u/s 139(1) is replaced by the return filed u/s 153A. It is open to both parties, i.e. the assessee and revenue, to make claims for allowance or disallowance. The assessee is entitled to lodge a new claim for deduction etc. which remained to be claimed in his earlier/ regular return of income (Continental Warehousing Corporation 374 ITR 645 (Bom) referred)

In view of the second proviso to Section 153A(1) of the said Act, once assessment gets abated, it is open for the assessee to lodge a new claim in a proceeding under Section 153A(1) which was not claimed in his regular return of income, because assessment was never made/finalised in the case of the assessee in such a situation

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DATE: January 29, 2020 (Date of pronouncement)
DATE: February 5, 2020 (Date of publication)
AY: 2010-11
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CITATION:
S. 68 Bogus share capital: The identity of the investors were not in doubt. The assessee had furnished PAN, copies of the income tax returns of the investors as well as copy of the bank accounts in which the share application money was deposited in order to prove genuineness of the transactions. In so far credit worthiness of the creditors were concerned, the bank accounts of the investors showed that they had funds to make payments for share application money. The assessee was not required to prove source of the source. Nonetheless, the inquiries through the investigation wing of the department at Kolkata proved source of the source (PCIT vs. NRA Iron & Steel 412 ITR 161 (SC) distinguished)

In NRA Iron & Steel (P) Ltd (supra), the Assessing Officer had made independent and detailed inquiry including survey of the investor companies. The field report revealed that the shareholders were either non-existent or lacked credit-worthiness. It is in these circumstances, Supreme Court held that the onus to establish identity of the investor companies was not discharged by the assessee. The aforesaid decision is, therefore, clearly distinguishable on facts of the present case

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DATE: January 30, 2020 (Date of pronouncement)
DATE: February 5, 2020 (Date of publication)
AY: 2007-08
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CITATION:
S. 254(1): This manner of disposing appeals by the Tribunal is not expected of it and cannot stand to the scrutiny of law and justice. The Tribunal cannot refer to decisions on its own without giving the litigant an opportunity to distinguish it. This results in a breach of the principles of natural justice. It also cannot omit to deal with the decisions relied upon by the litigant. Not dealing with the cited decisions leads to the order being bad as an order without reasons

The basic grievance of the Appellant is that the impugned order of the Tribunal has been passed in breach of principles of natural justice. This for two reasons, one the decisions relied upon by the Tribunal of its own (not cited at the bar) in the impugned order were not brought to the notice of the Appellant at any time, before the passing of the impugned order. This resulted in order adverse to the Appellant without the Appellant having an opportunity to address the Tribunal on the inapplicability of the decisions to the facts of this case. Thus, in effect an order without hearing

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