This Digest of case laws is prepared by KSA Legal and AIFTP from judgements reported in BCAJ, CTR, DTR, ITD, ITR, ITR (Trib), Chamber's Journal, SOT, Taxman, TTJ, BCAJ, ACAJ, www.itatonline.org and other journals
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S. 220 : Collection and recovery – Assessee deemed in default – Natural justice – Stay -Recovery – When an opportunity of personal audience is requested the law requires due consideration- Rejection of application without affording an opportunity of hearing is set aside- Directed the AO to pass speaking order after giving an opportunity of hearing . [ S.220(3), Art 14. ]

Manjula (Smt) v.ITO ( 2019) 178 DTR 361/ 309 CTR 287 ( Karn) (HC)

S. 132 : Search and seizure – Loan transaction is reflected in the books of account and return filed by the assesee- No material basis of which a reasonable person could have formed the opinion and lack of jurisdiction – Search action is held to be invalid [ Art. 226 ]

Lalhibhai Kanjibhai Mandalia v PCIT ( 2019) 180 DTR 49 (Guj) (HC)

S. 68 : Cash credits –Bogus Purchases – Name of supplier could not be traced – No justification for applying GP rate – Addition as unexplained cash credit is up held [ S.37(1) ,69C 145 ]

PCIT v. Wadhawan Designs ( 2019) 184 DTR 299 / (2020) 313 CTR 173 (Delhi ) (HC)

S.45(4) : Capital gains – Distribution of capital asset -Retirement- On retirement the amount received does not represent consideration in lieu of relinquishment of his interest in the partnership asset – Addition cannot be made in the assessment of the firm [ S.45 ]

National Company v. ACIT ( 2019) 178 DTR 305 (Mad) (HC)

S. 40(a)(ia): Amounts not deductible – Deduction at source – Second proviso to S. 40(a)(ia) of the Act inserted by Finance Act, 2012 is clarificatory and retrospective in nature – No disallowance can be made where the recipient of the amount has already discharged his tax liability therein .[ S. 40(a) ,139(1) ]

CIT v. Anand, S. M. (2019) 311 CTR 795 (Karn )(HC)

S. 12A : Registration –Trust or institution- Assessment was not pending before AO but before the Tribunal -Granting of registration for the AY. 2011-12 is held to be not valid. [ S. 11, 12 ]

CIT ( E ) v. Shiv Kumar Sumitra Devi Smarak Shikshan Sansthan ( 2019) 182 DTR 7 ( All) (HC)

S. 9(1)(vii):Income deemed to accrue or arise in India – Fees for technical services – Monies received towards arbitration costs and legal costs – Amount payable as per decree – Not liable to deduct tax at source -DTAA-India – Switzerland [S.190 , Art .22 Arbitration and Conciliation Act, 1996 S.48 ]

Xstrata Coal Marketing AG v. Dalmia Bharat (Cement) Ltd. (2019) 311 CTR 597/183 DTR 315 (Delhi)(HC)

S.2(14)(iii): Capital asset-Agricultural land- Capital gains- Agricultural lands and beyond 8 k.m., from the notified cities – Revenue records showing as agricultural lands- Department to prove that the entries in the revenue records and the patta were false or bogus- Entitle to exemption .[ S.45 ]

PCIT v. K. P. R. Developers Ltd. (2019) 311 CTR 832/ 183 DTR 406 / 274 Taxman 449(Mad.)(HC)

S. 147 : Reassessment –Bogus share capital- Parent company – Indian subsidiaries- Information from investigation wing – Credit worthiness of the investing company- Reassessment notice is held to be valid .[ S.68 , 148 ]

Experion Development Pvt. Ltd. v. ACIT ( 2020 ) 422 ITR 355/ 115 taxmann.com 338 (Delhi)(HC)

S. 143(3): Assessment – E-Assessment – Post demonetization-The AO should at least call for an explanation in writing before proceeding to conclude that the amount collected by the assessee was unusual- The AO could have come to a definite conclusion on facts after fully understanding the nature of business of the assessee-Order of AO is set aside and directed the AO is directed to dispose the matter with in sixty days of receipt of the order . [S.69A ,115BBE.]

Salem Sree Ramavilas Chit Company v. DCIT( 2020) 423 ITR 525/ 114 taxmann.com 492/ 273 Taxman 68/187 DTR 217/ 313 CTR 473 (Mad)(HC), www.itatonline.org . Editorial : Order set aside Dy. CIT v. Salem Sree Ramavilas Chit Co. P. Ltd. (2021)437 ITR 597 / 323 CTR 207(Mad) (HC) Dy. CIT v. Salem Sree Ramavilas Chit Co. P. Ltd. (2021)437 ITR 597 (Mad) (HC)