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Posted on by editor
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DATE: April 17, 2017 (Date of pronouncement)
DATE: May 23, 2017 (Date of publication)
AY: 2011-12
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CITATION:
S. 68 Bogus share capital: (i) The AO cannot ignore the documentation produced by the assessee to show that the investors are genuine, (ii) A s. 132(4) statement cannot be relied upon if the assessee is not give right of cross-examination, (iii) Fact that the shareholders did not respond to s. 133(6) notices does not warrant an adverse inference, (iv) Fact that the shareholders have low income does not warrant adverse inference, (v) Assessee is not required to prove source of source

The AO doubted the genuineness of the transaction because notice u/s 133(6) could not be served upon the investors and that the assessee was directed to produce both the parties by 19.03.2014. The Ld. Counsel for the assessee however, referred to Paper Book page 157 which is the reply before the AO dated 24.03.2014 in which the assessee has provided correct and updated address of the entity as per MCA website. The AO instead of issuing fresh notice u/s 133(6) at the correct address of the investor companies merely relied upon the fact that the earlier letter under the above provision has returned unserved. Since the AO did not issue fresh notice at the correct address provided by the assessee and no coercive action has been taken for the production of investors, therefore, no adverse inference could be drawn against the assessee

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Posted on by editor
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DATE: August 24, 2016 (Date of pronouncement)
DATE: September 2, 2016 (Date of publication)
AY: 2009-10
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CITATION:
S. 37(1): Foreign exchange fluctuation loss arising consequent to restatement of current liabilities as per the year end rates in accordance with Accounting Standard-11 (AS-11) is allowable as a deduction

The accounting standard-11 provides that at each balance sheet date the outstanding foreign currency monetary items should be reported using the closing rates. It clarifies that that when the transaction is not settled in the same accounting period in which it had occurred then in all the intervening period till the transaction is settled, the exchange differences have to be duly accounted for

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Posted on by Brettlee
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DATE: May 20, 2016 (Date of pronouncement)
DATE: May 26, 2016 (Date of publication)
AY: 2007-08
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CITATION:
S. 147/ 148/ 153C: A case where the AO detects incriminating material in search has to be processed only u/s 153C and not u/s 147. A notice u/s 148 to assess such undisclosed income is void ab initio

Reassessment was initiated on the basis of incriminating material found in search of third party and the validity of the same was challenged by the assessee before the Learned CIT(Appeals) and the Learned CIT(Appeals) vitiated the proceedings. The same was questioned by the Revenue before the ITAT and the ITAT after discussing the cases of the parties and the relevant provisions in details has come to the conclusion that in the above situation, provisions of sec. 153C were applicable which excludes the application of sections 147 and 148 of the Act. The ITAT held the notice issued under sec. 148 and proceedings under sec. 147 as illegal and void ab initio. It was held that Assessing Officer having not followed procedure under sec. 153C, reassessment order was rightly quashed by the CIT(Appeals)

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Posted on by ananyakapoor
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DATE: March 30, 2016 (Date of pronouncement)
DATE: April 10, 2016 (Date of publication)
AY: -
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CITATION:
S. 147: Reopening in the absence of fresh material and merely on change of opinion is nor permissible

Assessee had made full and true disclosure during the original assessment proceedings. We are also of the view that reopening had been done merely on change of opinion in as much as that in the original assessment made u/s. 143(3) of the I.T. Act. We also find that AO has no fresh material to form his opinion regarding escapement of assessment and he has also not found any tangible material to record the reasons for reopening of the assessment of the assessee. It is a settled law that merely change of opinion is not permissible under the law

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Posted on by Brettlee
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DATE: February 19, 2016 (Date of pronouncement)
DATE: April 1, 2016 (Date of publication)
AY: 2009-10
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CITATION:
Whether subsequent decision of High Court reversing the view of the ITAT constitute mistake apparent from record

Non consideration of proposition of law laid down by the High Court is a mistake apparent from record

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