Development agreements require legal possession or effective enjoyment for capital gains transfer; permissive possession and deferred consideration de...
Prolonged sterilisation of development rights supports capital-gains treatment, while business-income disallowances cannot govern capital-gains comput...
Additional evidence in transfer pricing dispute leads to fresh examination, while tax deductions, TDS credit, fee and refund interest require verifica...
Category II AIF pass-through taxation preserves non-business income character; investment receipts cannot be reclassified without applying recognised ...
Mutual fund maturity rules require proper rollover, redemption, disclosure, and due diligence; investor gains cannot excuse regulatory breaches or pen...
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The assessee borrowed loans from financial institutions at an interest rate of 12.75% and advanced loans to group companies or relatives at 12% interest rate. The assessee restricted the claim of interest expense u/s 57 to 12%, being the interest earned. The Principal Commissioner of Income Tax (PCIT) invoked revision u/s 263, disallowing the interest income, concluding the assessee failed to substantiate the nexus between the interest-bearing loans taken and advances made. The PCIT also held the Assessing Officer (AO) wrongly added unexplained cash credits to income without considering the assessee's submissions. The Income Tax Appellate Tribunal (ITAT) observed the assessee disclosed rental income correctly. Relying on the Supreme Court's decision in Malabar Industrial Co. Ltd., the ITAT held the PCIT failed to demonstrate the AO's order was erroneous due to inadequate inquiry. The AO conducted necessary inquiries and applied his mind. No prejudice was caused to the Revenue. The PCIT's order was unsustainable in law, and the assessee's appeal was allowed.
The assessee borrowed loans from financial institutions at an interest rate of 12.75% and advanced loans to group companies or relatives at 12% interest rate. The assessee restricted the claim of interest expense u/s 57 to 12%, being the interest earned. The Principal Commissioner of Income Tax (PCIT) invoked revision u/s 263, disallowing the interest income, concluding the assessee failed to substantiate the nexus between the interest-bearing loans taken and advances made. The PCIT also held the Assessing Officer (AO) wrongly added unexplained cash credits to income without considering the assessee's submissions. The Income Tax Appellate Tribunal (ITAT) observed the assessee disclosed rental income correctly. Relying on the Supreme Court's decision in Malabar Industrial Co. Ltd., the ITAT held the PCIT failed to demonstrate the AO's order was erroneous due to inadequate inquiry. The AO conducted necessary inquiries and applied his mind. No prejudice was caused to the Revenue. The PCIT's order was unsustainable in law, and the assessee's appeal was allowed.
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