Jurisdiction u/s S. 143(1)(a) and 143 (1A) is confined to making “prima facie” adjustments. When there are conflicting judgments on interpretation of Section 80-O, it is not permissible to make “prima facie” adjustments u/s 143(1)(a) and consequently additional tax u/s 143(1A) is not payable.

The AO has no jurisdiction u/s 115J of the Act to go behind the Profit & loss account of the assessee and to make adjustments therein beyond what is expressly provided in s. 115J. An assessee is entitled to provide for depreciation in its books at rates which are higher than the rates specified in Schedule XIV to the Companies Act.

Before dubbing the accounts to be complex or difficult to understand, there has to be a genuine and honest attempt on the part of the AO to understand accounts maintained by the assessee; appreciate the entries made therein and in the event of any doubt, seek explanation from the assessee. The opinion must be based on objective criteria and not on the basis of subjective satisfaction. Recourse to s. 142 (2A) cannot be had by the AO merely to shift his responsibility of scrutinizing the accounts of an assessee and pass on the buck to the special auditor.

U/s 6 (6), a person will become an ordinarily resident only if (a) he has been residing in nine out of ten preceding years; and (b) he has been in India for at least 730 days in the previous seven years;

The Tribunal deleted penalty on the finding that the assessee had been induced to offer undisclosed income on the assurance that penalty would not be levied. The frame of the question raised by the department in its appeal to the High Court did not challenge the perversity of the finding. However, the High Court still held that the finding was perverse. Held: the Tribunal is the final fact- finding authority and its decision on the facts can be gone into by the High Court only if a question has been referred to it which says that the finding of the Tribunal on facts is perverse, in the sense that it is such as could not reasonably have been arrived at on the material placed before the Tribunal. In the absence of such a question having been claimed, the High Court was obliged to accept the findings of fact arrived at by the Tribunal and then proceed to decide the question of law referred to it.

If the assessee has suffered a loss in one unit, the same has to be set-off against the profits of the undertaking eligible for deduction u/s 80IA etc and if the resultant figure is a loss, no deduction under Chapter VI-A is allowable;

Interest paid for purchase of land held allowable as a deduction as the fact that the income on sale of scrap obtained on demolition of buildings on the land was offered as business income showed that the assessee had bought …

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In the case of a chit fund following the ‘completed contract method of accounting’ and offering income at the end of the chit, held, approving the method: (i) Recognition/identification of income under the Act is attainable by several methods of …

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(i) A firm seeking to claim deduction of interest paid on capital from its partners has to first satisfy the requirements of s. 36(1)(iii) and thereafter the limits imposed by s. 40(b)(iv). The fact that the said capital is not …

Munjal Sales vs. CIT (Supreme Court) Read More »

In the context of s. 35 of the Excise Act, held (1) Where the statute confers on the authority concerned a limited power of condonation of delay or does not provide any such power, the authority has no power to condone delay beyond the prescribed period;