Co-operative society's mandatory reserve and share capital fixed deposits with banks-interest treated as business income under 80P(2)(a)(iii) deductio...
Income tax reassessment reopening after four years on investigation tip, without s.147 proviso disclosure failure, struck down as borrowed satisfactio...
Section 68 was held inapplicable to an addition computed by reducing actual interest on unsecured loans to a benchmark 12% and treating the differential as unexplained income. The tribunal found no fresh credit entry or unidentified creditor; lenders were known, payments routed through banking channels, and the dispute concerned reasonableness of interest - an allowability issue, not an unexplained cash credit. The Assessing Officer's substitution of a benchmark rate and mechanical addition was unsustainable. The correct remedial route is assessment of disallowable interest by adjusting capitalised interest into work in progress and recomputing taxable income. Addition under section 68 deleted and appeal allowed.
Section 68 was held inapplicable to an addition computed by reducing actual interest on unsecured loans to a benchmark 12% and treating the differential as unexplained income. The tribunal found no fresh credit entry or unidentified creditor; lenders were known, payments routed through banking channels, and the dispute concerned reasonableness of interest - an allowability issue, not an unexplained cash credit. The Assessing Officer's substitution of a benchmark rate and mechanical addition was unsustainable. The correct remedial route is assessment of disallowable interest by adjusting capitalised interest into work in progress and recomputing taxable income. Addition under section 68 deleted and appeal allowed.
Note: It is a system-generated summary and is for quick reference only.
TaxTMI 
TaxTMI 
of 4817 
Join Channel 
