Research Team
130. S. 28(i) : Business loss – Marked- to-market Loss – On open equity tock future contracts – Forward contracts – Suffered on stock-In-Trade – Speculative transaction – Ascertained loss – Allowable as deduction – SLP of revenue is dismissed – Supreme Court – Special Leave Petition Dismissed. [S. 37(1), 43(5), 73]
Dismissing the appeal of the Revenue the High Court held that market loss of stock in trade as ascertained liability so long as it was not a case of speculative transaction and the loss incurred was of forward contract in the regular course of business, the loss incurred should be allowed as business loss and that the Tribunal was justified in holding that marked-to-market loss on open equity stock future contracts and marked- to-market loss on interest rate swaps was an ascertained loss and in upholding the valuation of marked-to-market loss on March 31 in respect of future contract held as closing stock-in-trade. ITAT has relied on United Commercial Bank v. CIT (1999) 8 SCC 338/ 106 taxman 601/ 240 ITR 355 (SC). Held, dismissing the SLP that considering the reasoning of both forums and the High Court judgment, there was no infirmity and no interference was called for.
PCIT v. DSP Merill Lynch Capital Ltd. (2023) 456 ITR 768/ 294 Taxman 161 / 333 CTR 569 (SC)
Editorial: PCIT v. DSP Merill Lynch Capital Ltd (2022) 142 taxmann.com 579 / (2023) 21 ITR-OL 710 (Bom)(HC), affirmed.
131. S. 68 : Cash credits – Long term capital gains – Penny stock – No adverse comment by stock exchange – Order of High Court is affirmed – SLP of Revenue is dismissed. [S. 10(38), 45, Art. 136]
The Assessing Officer disallowed exemption claimed by assessee under section 10(38) and made additions, alleging involvement in penny stock which were being misused for providing bogus accommodation of LTCG. Tribunal deleted the addition. On appeal High Court affirmed the order of the Tribunal on the ground that there was lack of adverse comments from stock exchange and officials of company involved in these transactions and no material relating to assessee was found in investigation wing report. SLP of revenue is dismissed. (AY. 2014-15)
PCIT v. Renu Aggarwal (Smt) (2023) 456 ITR 249 /294 Taxman 521 (SC)
Editorial: PCIT v. Renu Aggarwal (Smt) (2023) 153 taxmann..com 578 (All)(HC)
132. S. 68 : Cash credits – Bank deposit – Failure to prove the nature of the source – Order of High Court is affirmed – SLP of assessee dismissed. [Art. 136]
High Court held that that though the assessee had disclosed source of deposit but could not establish nature thereof. Three conditions required to be proved could not be proved, the addition was affirmed. SLP of assessee is dismissed.
Rupal jain (Mrs) v. CIT (2023) 454 ITR 813 / 294 Taxman 261 (SC)
Editorial : Affirmed, Rupal jain (Mrs) v. CIT (2023) 152 taxmann.com 345 (All)(HC)
133. S. 69A : Unexplained money – Losse papers – SLP is dismissed – Order of High Court is affirmed. [Art. 136]
Assessing Officer made additions in hands of assessee on basis of seized loose papers which revealed money transaction between assessee and others relating to a property. High Court dismissed the appeal of the assessee. SLP is dismissed. (AY.2007-08, 2008-09)
C. Ramakrishna v. Dy. CIT (2023) 456 ITR 253 / 294 Taxman 609 (SC)
Editorial : C. Ramakrishna v. Dy. CIT (2023) 154 taxmann.com 40 (Karn)(HC)
134. S. 80IC : Special category States – Industrial undertaking – Initial assessment year – Substantial expansion within period of ten years – Eligible deduction- Year of substantial expansion would be initial year for start of 100 Per Cent deduction. [S.80IC(8)(ix))]
The Tribunal held that the benefit of substantial expansion at 100 per cent deduction would not be granted to existing units where the assessee had already availed of full deduction at 100 per cent. in the earlier five years and the benefit of deduction at 25 per cent was available for the remaining period where the substantial expansion had taken place after January 7, 2003 and before April 1, 2012. High Court affirmed the order of the Tribunal On appeal the Court held that assessee having set up a new industry of a kind mentioned in section 80-IC(2) and availing exemption of 100 per cent tax under section 80-IC(3) (which was admissible for five years) could claim exemption at same rate of 100 per cent beyond period of five years if it carried out substantial expansion in its manufacturing unit in terms of section 80-IC(8)(ix) within period of ten years. Referred PCIT v. Aarham Softronics [2019] 261 Taxman 529/412 ITR 623 (SC), (AY.2011-12)
Tejpal Chaudhary v. CIT (2023) 456 ITR 360 / 294 Taxman 523 (SC)
Friends Alloys v. CIT (2023) 456 ITR 360 (SC)
FTC Overseas v. CBDT (2023) 456 ITR 360 (SC)
Editorial: Tejpal Chaudhary v. CIT (2023) 151 taxmann.com 554 (P&H)(HC)
135. S.147: Reassessment – After the expiry of four years – Amount payable to sundry creditors – Cessation of liability – No new information – SLP of Revenue is dismissed. [S. 41(1), 148, Art. 226]
A notice was issued under section 148 on ground that genuineness of amount payable to sundry creditors which was pending for long period was not ascertained during original assessment and should have been treated as cessation of liability in terms of section 41(1) and to ought to be added to assessee’s income. On writ the Court held that the Assessing Officer sought to reopen assessment proceedings based on same material facts which were present before him during original proceedings and there was not even a whisper of any additional information. Re assessment based on mere change of opinion is not permissible in view of proviso to section 147 of the Act. On appeal by Revenue SLP of revenue is dismissed. (AY. 2015-16)
ACIT v. Meer Gems (2023) 459 ITR 1 / 294 Taxman 606 (SC)
Editorial : Refer, Meer Gems v. ACIT (2022) 446 ITR 754/ 287 Taxman 689 (Bom.)(HC)
136. S. 153A: Assessment – Search – Cash credits – No incriminating material found during the course of search – Order of High Court dismissing the appeal of the Revenue is affirmed – Appeal of Revenue is dismissed. [S. 68, Art. 136]
Dismissing the appeal of the Revenue the Court held that the assessment framed under section 153A of the Act in the case of the assessee without any incriminating material found during the course of search and seizure action is bad in law. Followed PCIT v. Abhisar Buildwell P. Ltd (2023) 454 ITR 212(SC) (AY. 2006-07)
PCIT v. S. S. Con Build Pvt. Ltd. [2023] 455 ITR 506 (SC)
Editorial : Order of Delhi High Court in PCIT v. S. S. Con Build Pvt. Ltd. PCIT v. S. S. Con Build Pvt. Ltd (Delhi)(HC) (ITA No. 57 of 2022 dt March 22, 2022)
137. S. 153A: Assessment – Search – No incriminating material was found – Completed/abated assessment – Assessment not permissible – Order of High Court dismissing the appeal of the Revenue is affirm – SLP of Revenue is dismissed [S. 132, Art. 136]
Hon’ble Supreme Court upheld the order of the Hon’ble Bombay High Court wherein it had held that in the absence of any incriminating material found during search and seizure action carried on under section 132 of the Act, additions under section 153A for completed assessment could not be made. Followed PCIT v. Abhisar Buildwell P. Ltd (2023) 454 ITR 212(SC)
PCIT v. Saroj Sudhir Kothari [2023] 455 ITR 379 (SC)
Editorial : CIT v. Saroj Sudhir Kothari (Bom)(HC) (ITA No. 689 of 2019 dt April 19, 2022), is affirmed.
138. S. 153A: Assessment – Search – No incriminating material was found – Share capital – Investor companies had ample funds to make investment in share capital – Opportunity of cross examination was not provided – SLP of Revenue is dismissed.[S. 68, Art. 136]
Court held that dismissed the appeal of the Revenue on the ground that no incriminating material was found and the investor companies had ample funds to make investment in share capital. Court also held that opportunity of cross examination was not provided. Court also held that since issue was covered by judgment of Supreme Court in PCIT v. Abhisar Buildwell (P.) Ltd. [2023] 149 taxmann.com 399/293 Taxman 141/454 ITR 212 (SC) (AY. 2008-09 to 2011-12)
PCIT v. Jay Ace Technologies Ltd. (2023) 294 Taxman 602 (SC)
Editorial : PCIT v. JPM Tools Ltd (2023) 154 taxmann.com 44 (Delhi)(HC)
139. S. 153C : Assessment – Income of any other person – Search – Share capital – Cash credits – Bogus accommodation entries – No incriminating material brought on record – SLP of Revenue is dismissed. [S.68, 132, 153A]
The High Court dismissed the Department’s appeal, holding that no incriminating material had been brought on record by the Assessing Officer to sustain the additions on the merits, that the genuineness of the share capital and there was no live link between the seized material and the additions made, and that therefore, the assumption of jurisdiction was erroneous. SLP of Revenue dismissed. Followed PCIT v. Abhisar Buildwell P. Ltd (2023) 454 ITR 212 (SC) (AY.2010-11 to 2012-13)
PCIT (C) v. Panchmukhi Management Services Pvt. Ltd. (2023)456 ITR 358/294 Taxman 423 (SC)
Editorial : PCIT v. Panchmukhi Management Services Pvt. Ltd. (2023) 456 ITR 332 / 153 taxmann.com 297 (Delhi)(HC)