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    Unexplained investment under section 69 fails when documentary evidence shows payment from a close relative's disclosed bank account.
    Criminal negligence in bus accident cases requires proof of rash or negligent driving, not mere passenger fall while alighting.
    Permanent establishment requirement under section 44BB: offshore supply receipts were not taxable absent proof of business presence in India.
    Registered sale deed completes transfer for capital gains; later payment disputes do not postpone taxability, subject to double-tax relief.
    Reassessment jurisdiction fails when final additions depart from recorded reopening reasons, causing consequential concealment penalty proceedings to ...
    TNMM benchmarked receivables need no separate notional interest adjustment; 80G and dividend tax refund issues were remanded.
    Agricultural land under section 2(14)(iii): rural character and revenue records kept the transfer outside capital gains tax.
    Bogus purchases limited to profit element where sales and supporting records were accepted; full disallowance deleted.
    Business receipts in bank deposits taxed at profit rate only, while remand-based consideration of new evidence complied with procedural rules.
    Procedural delay in Form 10-IC filing cannot deny section 115BAA concessional tax benefit when substantive eligibility is met.
    Seconded employee salary reimbursement is not fee for technical services where the Indian company controls, supervises, and bears cost.
    Transfer pricing comparables in auto components: Safe Harbour core and non-core definitions can guide FAR analysis under TNMM.
    Interlocutory reconsideration of resolution professional approval does not warrant appellate interference where rights remain undecided.
    Trade dress injunction modified for existing third-party stock, while empty cartons with the disputed packaging were ordered destroyed.
    Bail on co-accused statements: applicants not named in FIR, charge-sheet filed, and bail was granted.
    Transfer pricing for intra-group services cannot be fixed at nil where documentary evidence proves actual receipt of services.
    Seized cash retention beyond the statutory period requires a reasoned, communicated extension; later transfer cannot cure illegality.
    MAT loss computation and depreciation carry-forward turn on statutory figures, while intra-group services need fresh transfer pricing review.
    Personal hearing is mandatory in adverse GST adjudication; order quashed and matter remanded for fresh decision.
    Entity-level TNMM prevails over internal Cost Plus Method; reversal of provisions and TDS/TCS credit require verification.
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AI TextQuick Glance (AI)Headnote
Unexplained investment under section 69 fails when documentary evidence shows payment from a close relative's disclosed bank account.
A justice-oriented approach was applied to condone a 79-day delay in filing the first appeal, where the assessee showed bona fide cause, lack of independent income and dependence on tax consultants. On the merits, an addition as unexplained investment under section 69 was unsustainable because the assessee produced the sale deed, bank statements and payment trail showing direct remittance from the father's disclosed bank account to the seller. Once that primary onus was discharged, the burden shifted to the Revenue, which brought no adverse material; suspicion and the absence of a formal gift deed were insufficient to uphold the addition. The appeal was allowed and the addition was deleted.
AI TextQuick Glance (AI)Headnote
Criminal negligence in bus accident cases requires proof of rash or negligent driving, not mere passenger fall while alighting.
Moving a bus after passengers had alighted, on the conductor's signal, did not amount to rash or negligent driving under Sections 279 and 304A IPC on these facts. The conductor's evidence showed the bus was stationary, passengers got down, and the driver moved only after receiving instructions. The Court found no basis to infer criminal negligence merely because the deceased fell while descending from the bus, and held that the ingredients of the charged offences were not satisfied. The conviction and sentence were therefore unsustainable, and the appellant was entitled to acquittal.
AI TextQuick Glance (AI)Headnote
Permanent establishment requirement under section 44BB: offshore supply receipts were not taxable absent proof of business presence in India.
Offshore supply receipts were held not taxable on a presumptive basis under section 44BB because the Revenue failed to prove a fixed place or deemed permanent establishment in India. The Tribunal noted that the facts for the year were materially identical to the earlier year decided in the assessee's favour, and no fresh material had been brought to establish a permanent establishment. Applying the coordinate bench decision in the assessee's own case, it held that in the absence of a permanent establishment in India, section 44BB could not be used to bring the offshore supply receipts to tax, and the addition was deleted.
AI TextQuick Glance (AI)Headnote
Registered sale deed completes transfer for capital gains; later payment disputes do not postpone taxability, subject to double-tax relief.
Registered sale deeds transferring immovable property completed the transfer for capital gains purposes under section 45 read with section 2(47), so taxability arose in A.Y. 2014-15 on execution and registration of the conveyance. Alleged non-receipt of full consideration, dishonour of cheques, delayed payment, or continued possession did not defer tax incidence where the registered deeds were neither cancelled nor annulled. However, if the same capital gain had already been offered and assessed in A.Y. 2016-17, the Assessing Officer was required to verify that treatment and grant consequential relief to prevent double taxation.
AI TextQuick Glance (AI)Headnote
Reassessment jurisdiction fails when final additions depart from recorded reopening reasons, causing consequential concealment penalty proceedings to collapse.
Reassessment under section 147 cannot survive where the completed assessment departs from the recorded reasons that formed the jurisdictional basis for reopening. Additions made on a different footing render the reassessment unsustainable and liable to be quashed. Penalty proceedings under section 271(1)(c) that are wholly consequential on additions in such reassessment cannot independently continue once the reassessment is annulled; the associated penalty is therefore set aside.
AI TextQuick Glance (AI)Headnote
TNMM benchmarked receivables need no separate notional interest adjustment; 80G and dividend tax refund issues were remanded.
Where international transactions are benchmarked under TNMM and a working capital adjustment has already been granted, delayed receivables are ordinarily subsumed in the arm's length analysis and do not warrant a separate notional interest adjustment absent an independent financing arrangement; the transfer pricing addition was deleted. Deduction under section 80G is not barred merely because a donation is made as part of CSR expenditure, but eligibility and compliance with statutory conditions, including recipient approval, required fresh verification and the issue was remanded. The claim for refund of excess dividend distribution tax also required fresh adjudication because it had not been examined by the lower authorities.
AI TextQuick Glance (AI)Headnote
Agricultural land under section 2(14)(iii): rural character and revenue records kept the transfer outside capital gains tax.
Agricultural land remains outside the definition of "capital asset" under section 2(14)(iii) where the statutory geographical and municipal criteria show it to be rural agricultural land. Actual agricultural income or intensive personal cultivation is not a under that provision, and their absence does not by itself convert the land into a taxable capital asset. Revenue records, 7/12 extracts, non-conversion to non-agricultural use, location beyond municipal limits, and contemporaneous cultivation entries are relevant in determining character. On those principles, the transfer was treated as outside capital gains tax.
AI TextQuick Glance (AI)Headnote
Bogus purchases limited to profit element where sales and supporting records were accepted; full disallowance deleted.
Alleged bogus purchases from accommodation entry providers were not sustained in full where sales were accepted and the assessee produced purchase records, stock details, delivery challans and banking evidence. As the supplier genuineness was not conclusively established but actual purchases could not be rejected outright, the tribunal held that grey market purchases were possible and only the profit element embedded in the purchases was taxable. The addition was therefore restricted to 10% of the alleged bogus purchases and the balance disallowance was deleted, granting partial relief to the assessee.
AI TextQuick Glance (AI)Headnote
Business receipts in bank deposits taxed at profit rate only, while remand-based consideration of new evidence complied with procedural rules.
Cash deposits in a transport commission agent's bank account were treated as business receipts routed through banking channels, so only the profit element, estimated at 5 per cent, was taxed rather than the full amount as unexplained income under section 68. The appellate authority's consideration of additional evidence was upheld because a remand report was specifically called for and furnished before the material was examined, so Rule 46A was not breached. The Revenue's challenge to the restricted addition and the procedural objection both failed, and the estimated taxation of the receipts was sustained.
AI TextQuick Glance (AI)Headnote
Procedural delay in Form 10-IC filing cannot deny section 115BAA concessional tax benefit when substantive eligibility is met.
Delay in filing Form 10-IC was treated as a procedural lapse that could not defeat the concessional regime under section 115BAA where the assessee had already opted for the regime in the return of income and otherwise met the substantive conditions. The Tribunal applied beneficial interpretation and followed coordinate bench rulings to hold that procedural non-compliance should not deny a statutory benefit when eligibility is undisputed. The delay was treated as a curable irregularity, and the assessee was entitled to section 115BAA relief; denial of concessional taxation solely because the form was filed late was unsustainable.
AI TextQuick Glance (AI)Headnote
Seconded employee salary reimbursement is not fee for technical services where the Indian company controls, supervises, and bears cost.
Reimbursement of salary cost for seconded employees was not fee for technical services where the secondment agreement showed the employees were released by the foreign entity, integrated into the Indian company, and worked solely under its control, direction and supervision. The Indian company bore the salary cost, could evaluate, discipline and terminate the secondees, and the reimbursement was made on a cost-to-cost basis without markup. On these facts, the relationship during secondment was treated as employer and employee with the Indian company, so the payment was salary reimbursement rather than consideration for technical services. The Tribunal therefore held that the amount could not be taxed as fee for technical services and the addition was deleted.
AI TextQuick Glance (AI)Headnote
Transfer pricing comparables in auto components: Safe Harbour core and non-core definitions can guide FAR analysis under TNMM.
In transfer pricing comparability for auto-component manufacturing, the Safe Harbour definitions of core and non-core auto components may be used as a guiding reference in FAR analysis even where the assessee has not opted into the Safe Harbour regime. The core versus non-core distinction is treated as relevant to product character, pricing dynamics, and functional differences under TNMM. On comparables, helmet manufacturers, a railway-locomotive products manufacturer, and a two-wheeler/commercial vehicle manufacturer are described as functionally dissimilar to a shock-absorber manufacturer, while a plastic auto-components manufacturer was rejected for failing the related-party transactions filter. The text states that such dissimilar or filter-failing comparables are to be excluded.
AI TextQuick Glance (AI)Headnote
Interlocutory reconsideration of resolution professional approval does not warrant appellate interference where rights remain undecided.
Directions requiring the Committee of Creditors to reconsider approval of an insolvency resolution professional, without finally determining the appellant's entitlement to continue in office, were treated as interlocutory and precautionary. Because the Committee of Creditors had not yet taken a final decision on approval under the Insolvency and Bankruptcy Code, 2016, the orders did not conclusively adjudicate rights or cause final prejudice. On that basis, the appellate tribunal stated that the orders did not call for interference at that stage.
AI TextQuick Glance (AI)Headnote
Trade dress injunction modified for existing third-party stock, while empty cartons with the disputed packaging were ordered destroyed.
Temporary injunction in a trade dress dispute was varied only to the limited extent of allowing sale of existing stock already held by distributors, franchisees and retailers, because the goods were no longer in the appellant's custody and no post-injunction production was shown; the stock had to be marketed in packaging that was not red or otherwise similar to the respondent's packaging. The restraint remained in force for empty cartons bearing the impugned trade dress, as they were capable of continued misuse, and their destruction and non-use were directed.
AI TextQuick Glance (AI)Headnote
Bail on co-accused statements: applicants not named in FIR, charge-sheet filed, and bail was granted.
Bail was granted in a cheating, forgery and conspiracy matter where the applicants were not named in the FIR and the prosecution chiefly relied on statements of co-accused. The Court noted the evidentiary controversy around such statements at the bail stage, including the distinction between witness statements and statements attributed to an accused, and considered the filed charge-sheet, the nature of the offence, the collected material, alleged complicity, punishment severity and overall circumstances. On that assessment, the applicants were held entitled to bail and their applications were allowed.
AI TextQuick Glance (AI)Headnote
Transfer pricing for intra-group services cannot be fixed at nil where documentary evidence proves actual receipt of services.
Contemporaneous documentary evidence of actual receipt and use of intra-group services prevented the arm's length price from being fixed at nil on a mere subjective view of benefit, and the transfer pricing adjustment was deleted. Once the services were accepted as rendered, the consequential disallowance under section 37(1) also could not survive and was deleted. On the refund issue, the claim for short grant of interest under section 244A required verification of the computation, and the Assessing Officer was directed to examine the claim and grant statutory interest in accordance with law.
AI TextQuick Glance (AI)Headnote
Seized cash retention beyond the statutory period requires a reasoned, communicated extension; later transfer cannot cure illegality.
Retention of seized cash beyond six months was impermissible because the customs authority did not pass a reasoned extension order in writing and communicate it before expiry, so the statutory requirement under section 110(2) was not met and the cash became returnable. The later transfer of the cash to Income Tax authorities after expiry did not cure the unlawful retention, because the petitioners' right to return had already accrued. Costs were also warranted for the authorities' conduct during the writ proceedings, though the deterrent costs were reduced on the basis of the assurance given.
AI TextQuick Glance (AI)Headnote
MAT loss computation and depreciation carry-forward turn on statutory figures, while intra-group services need fresh transfer pricing review.
For MAT computation under section 115JB, carried-forward losses and unabsorbed depreciation were to be recomputed on the correct figures, and prior book adjustments against capital reserves did not reduce their availability; the revised figures were accepted. On transfer pricing for intra-group services, the arm's length price determination required fresh examination of the evidence and additional material, and the adjustment was remanded for reconsideration after hearing the assessee. On unabsorbed depreciation relating to periods before assessment year 2002-03, binding precedent was applied to hold that the amount could be carried forward and set off beyond the earlier eight-year limit, leaving the Revenue's objection rejected.
AI TextQuick Glance (AI)Headnote
Personal hearing is mandatory in adverse GST adjudication; order quashed and matter remanded for fresh decision.
The Allahabad HC treated personal hearing as a mandatory component of fair GST adjudication where an adverse order is contemplated. It noted that the assessee was asked to file replies on several dates, but no separate or effective hearing was granted before the Section 73 order. Applying Section 75(4) of the U.P. GST Act, the Court held that the absence of a valid hearing rendered the adjudication unsustainable on merits. The impugned order was quashed, and the matter was remanded for fresh adjudication after granting the taxpayer an opportunity of hearing.
AI TextQuick Glance (AI)Headnote
Entity-level TNMM prevails over internal Cost Plus Method; reversal of provisions and TDS/TCS credit require verification.
Entity-level TNMM was preferred over an internal Cost Plus Method where the assessee's functional profile and facts remained unchanged and its own earlier years had accepted TNMM; the transfer pricing adjustment was therefore deleted, reflecting the need to follow consistent precedent on identical facts. An intimation adjustment on reversal of provisions was treated as requiring verification because the provisions had already been disallowed on creation and could not be taxed again without checking for double taxation; the matter was remanded for limited factual examination. Short grant of TDS/TCS credit was also held to be verification-based, with credit to be allowed after examination of Form 26AS/AIS and supporting records.

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2021 (11) TMI 376 - AT - Income Tax

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Tribunal upholds capitalization of NTPC project expenses, citing consistency with prior judgments.
The Tribunal dismissed the Revenue's appeal, upholding the Ld. CIT(A)'s decision to allow expenses related to the NTPC project to be capitalized. The ... Summary

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Acts Income Tax