S.68: Cash credits –Strictures – Share capital and Compulsorily Convertible Debentures – Investment of Rs.55 crores by foreign investor companies incorporated in Mauritius and Cyprus – Assessee furnished investment-cum-collaboration agreement, details of foreign inward remittances, audited financial statements of investor companies and other supporting documents – TPO and FT&TR reports did not contain any adverse finding – CIT(A) and Tribunal recorded concurrent findings that investments were genuine and duly explained – Revenue failed to establish that findings were perverse –An Assessing Officer is required to objectively consider the assessee’s reply, pleas and documents, and ignoring such material amounts to a breach of principles of natural justice and procedural fairness – Addition was deleted- Order of Tribunal affirmed.[S.143(3), 260A.]

S.148: Reassessment – Notice issued in the name of non-existent amalgamating company – Amalgamation sanctioned by the Bombay High Court prior to issuance of notice under section 148 – Transferor company had ceased to exist in law – Jurisdictional notice issued against a non-existent entity was invalid – Subsequent participation by the successor company in reassessment proceedings could not confer jurisdiction on Assessing Officer – Defect was jurisdictional and not a mere mistake in description – Section 292B could not validate proceedings initiated against a non-existent person – Reassessment proceedings quashed. [S. 147, 151, 170, 292B.]

S.143(3): Assessment – Business income: Client Code Modification – Alleged shifting of losses through CCM – Mere modification of client code by broker could not establish that resultant loss was fictitious or arranged for tax purposes – Assessee not being a stock-broker could not independently undertake CCM – No material to establish that assessee instructed broker to modify client codes or that any pre-arranged understanding existed – No evidence of exchange of money, cash consideration, commission or other benefit – General investigation regarding misuse of CCM could not automatically be applied to assessee without assessee-specific corroborative material – Suspicion, however strong, could not take the place of evidence – Addition of Rs.1,06,40,281 deleted.[ S.28(i)]

S.56: Income from other sources – Immovable property – Redevelopment agreement – Permanent alternate accommodation allotted in lieu of surrender of tenancy rights – Redevelopment project incomplete and possession of alternate premises not handed over – Mere execution and registration of redevelopment agreement did not amount to receipt of immovable property – Assessee acquired only a contractual right to receive flat in future – Transaction supported by valuable consideration in the form of surrender of tenancy rights and could not be regarded as receipt of property without consideration – Section 56(2)(x) not applicable – Addition deleted.[ S. 56(2)(x) ]

S.56: Income from other sources – Purchase of immovable property below stamp duty value – Difference between actual consideration and stamp duty value – Assessee specifically disputed stamp duty valuation and requested reference to DVO – Property jointly purchased by assessee and his wife in specified shares – CIT(A) failed to refer valuation to DVO and confirmed entire difference in assessee’s hands merely because wife’s case had not been assessed – Entire difference could not be taxed in hands of assessee ignoring his specific ownership share – Matter restored to AO for reference to DVO and determination of taxable difference – Assessee’s appeal allowed for statistical purposes. [S. 50C(2)(x)(b)]

S.148: Reassessment – Validity of notice – Service of notice – Notice under section 148 affixed at an unrelated locked premises without establishing any connection of assessee with the premises – Departmental record itself indicated that assessee did not reside at the said address – Subsequent notices also returned with endorsement “LEFT” – Assessee objected to non-service before completion of assessment – Deemed service under section 292BB not applicable – Reassessment proceedings without valid service of jurisdictional notice under section 148 were invalid and assessment was quashed – Additions under sections 69C and 68 consequently deleted. [S. 68, 69C, 131, 144, 147, 282, 292BB, Rule 127.]

S. 69C: Unexplained expenditure -Unexplained expenditure – Bogus purchases – Sales accepted and books of account not rejected under section 145(3) –Furnished books of account, purchase invoices, payment details through banking channels and other supporting evidence – Addition based merely on non-response of suppliers to notices under section 133(6) and cancellation of GST registrations – Once corresponding sales were accepted, purchases could not be disbelieved or disallowed in entirety – Finding of Tribunal based on appreciation of evidence was a finding of fact – No substantial question of law arose – Revenue’s appeal dismissed. [S. 69A, 69C, 115BBE, 133(6), 145(3), 260A.]

Interest-tax Act, 1974

S. 2(7) : Interest-Subsidy received from RBI-Export Credit-Subsidy Scheme-Not interest-Not chargeable to tax. [S. 4, 260A, Reserve Bank of India Act, 1934(2 of 1934) S.42(IB)]

Direct Tax Vivad Se Vishwas Act, 2020
S. 3: Amount payable by declarant-Belated amendment of appeal memo after filing declaration under DTVSV Scheme was inadmissible-Amount payable by declarant-Case was treated as non-search case, amount payable under DTVSV Scheme was to be calculated at 100 per cent and not 125 per cent. [S.10(38), 45 68, 132, 271(1)(c), CBDT Circular No. 21 of 2020, Art. 226]

Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015]
S. 43: Penalty-Failure to furnish in return of income, an information or furnish inaccurate particulars about an asset-Non-disclosure of foreign investment in Schedule FA-Investment held in assessee’s name only for administrative convenience and disclosed by husband-Penalty deleted-Order of Tribunal affirmed. [S.260A]