Direct Taxes

1.     Jammu & Kashmir High Court in the case of Pr. CIT v. The Jammu Central Coop. Bank Ltd. in ITA No. 04, 13 and 14/2016 dated 18.04.2018

·         The provisions of Section 14A read with Rule 8D cannot be applied to any assessment year prior to Assessment Year 2008-09.


2.     Bombay High Court in the case of Pr. CIT v. Shodiman Investments Pvt. Ltd. in ITA No. 1297 of 2015 dated 16.04.2018

·         The Assessing Officer has merely issued a reopening notice on the basis of intimation regarding reopening notice from the DDIT (Inv.) This is clearly in breach of the settled position in law that reopening notice has to be issued by the Assessing Office on his own satisfaction and not on borrowed satisfaction.


3.     Madras High Court in the case of Agasthiya Granite P. Ltd. v. ACIT in ITA No. 450 of 2007 dated 16.04.2018

·         Where two views are possible and the income tax officer has taken one view with which the Commissioner of Income Tax does not agree, it cannot be treated as an erroneous order prejudicial to the interest of the Revenue, unless the view taken by the income tax officer is unsustainable in law.


4.     Bombay High Court in the case of Pr. CIT v. Veedhata Tower Pvt. Ltd. in ITA No. 819 of 2015 dated 17.04.2018

·         The assessee is not required to explain the "source of source" prior to insertion of the proviso to Section 68. If the assessee has discharged the primary onus placed upon it u/s 68 by filing confirmation letters, the Affidavits, the full address and PAN numbers of the creditors, the Revenue has to proceed against the persons whose source of funds are alleged to be not genuine.


5.     ITAT Mumbai in the case of Amod Shivlal Shah v. ACIT in ITA No. 795/Mum/2015 dated 23.02.2018

·         An admission of estimated income made during the course of survey has no evidentiary value and is not binding on the assessee. The income has to be assessed as per the return of income and books of accounts of the assessee.


6.     ITAT Delhi in the case of Deepak Mittal v. ACIT in ITA No. 4709/Del/2017 dated 23.03.2018

·         When AO has rejected the books of accounts of the assessee and has applied gross profit rate on suppressed sales, AO cannot make separate addition on account of unexplained investment, undisclosed income or addition by invoking the provisions of Section 40A(3) of the Act.


7.     ITAT Delhi in the case of Calance Software Pvt. Ltd. v. DCIT in ITA No. 4363/Del/2010 dated 23.03.2018

·         CBDT's Instruction No. 3/2003 is binding on the AO. Consequently, the ALP of international transactions where the quantum is less than Rs. 5 crores has to be determined by the AO and cannot be referred to the TPO. If such reference is made, it is invalid and the extended time for completing the assessment is not available to the AO. Therefore, the assessment is void as it is time-barred.


8.     ITAT Mumbai in the case of DCIT v. Alcon Biosciences P. Ltd. in ITA No. 1946/Mum/2016 dated 28.02.2018

·         The fact that a private limited company issued shares at an exorbitant premium is irrelevant if the assessee has proved the genuineness of the transaction. If the assessee has furnished necessary evidences to prove the identity of the share applicants and their PAN details, the department is free to proceed to reopen the individual assessments of the share applicants, but it cannot be regarded as undisclosed income of the assessee.

Posted on: 25-04-2018