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Prior notice before disposal of seized gold determines valuation at release, while confiscation appeals delay conditional payment.
Disposal of seized gold without statutory prior notice to its owner under Section 150(1) makes the applicable valuation, if confiscation proceedings ultimately favour the owner, the fair market value on the date release is directed rather than the historical sale proceeds. A pending departmental appeal against non-confiscation leaves abatement and confiscation merits for appellate determination. Immediate disbursement of the gold's value against bank guarantees is not available while that appeal remains unresolved; expedited appellate determination and subsequent conditional payment govern release.
Interim protection against operational suspension granted where the suspension appeared unjustified and the regulatory inquiry timeline was not followed.
Interim protection against suspension of operations was considered warranted pending a contemplated inquiry because a strong prima facie case for relief existed. The suspension appeared prima facie unjustified, and the prescribed timeline under Regulation 11(3) appeared not to have been followed. The appeal was admitted on substantial questions of law, with a stay on the suspension order and consequential public notice pending inquiry. The pending inquiry was directed to proceed without influence from the impugned appellate order.
Section 153C satisfaction requirements, look-back limits and pecuniary thresholds determine validity of search assessments under income-tax law.
Section 153C applies "belongs to" only to seized money, bullion, jewellery and other valuable articles or things; seized documents and books require satisfaction that they "pertain to" or "relate to" the other person. Using "belongs to" for documents fails the jurisdictional requirement under strict construction of taxing statutes. The ten-assessment-year period, computed under Explanation 1 to Section 153A from the end of AY 2024-25, excludes AY 2014-15 where notice was issued on 16 May 2023. For AY 2017-18, the sole addition fell below the applicable pecuniary threshold.
Reassessment based on recorded reasons fails when additions concern unrelated amounts rather than transactions that triggered reopening.
Reassessment under Sections 147 and 148 cannot be sustained where the transactions cited in the recorded reasons yield no addition and the assessment instead makes Section 69 additions on distinct, unrelated amounts. The recorded information concerned specified deposits, a payment to a non-resident, and a reportable account statement, while the Section 69 additions did not arise from those matters. Because no addition was made on the recorded grounds, the reopening lacked legal sustainability and was quashed in favour of the assessee.
Provision reversal adjustments preserve business-expense deductions, while education cess remains barred and Rule 8D requires exempt income.
Tax-computation reversals of expense and litigation provisions previously added back may neutralise income credited on reversal and preserve deductions for actual business expenditure, provided the provisions and prior-year treatment are separately identifiable and no double deduction or non-business element arises. Education cess falls within the non-deductible tax, surcharge and cess bar under Explanation 3 to section 40(a)(ii), including its retrospective operation from 1 April 2005. Section 14A read with Rule 8D does not permit an expenditure disallowance solely because investments are held when no exempt income is earned in the relevant year.
Single recognised school requires aggregation of all educational-section receipts, limiting exemption while preserving normal tax deductions.
Exemption under section 10(23C)(iiiad) cannot be rejected merely because section 11 was selected in the return or Form 10BB was not furnished, where the educational activity and receipts are already disclosed and the audit-report requirement does not apply. Pre-primary, primary and secondary sections within one statutorily recognised school constitute a single educational institution; their receipts must be aggregated, making the exemption unavailable where the prescribed threshold is exceeded. Denial of exemption requires taxable income to be computed under normal provisions after admissible revenue expenditure, depreciation and statutory allowances, while application of income and capital expenditure are not automatically deductible.
Under-reported income penalties require statutory computation and do not apply where disclosed income is accepted without variation.
Penalty for under-reported income under section 270A requires determination of under-reported income under section 270A(3) after the relevant threshold is met, followed by consideration of the exclusion for bona fide explanations and full disclosure under section 270A(6)(a). Where a return is first filed under section 148, the prescribed computation compares assessed income with the maximum amount not chargeable to tax; the entire assessed income cannot be treated mechanically as under-reported. Acceptance of disclosed income without variation, supported explanation of property investment, and tax deduction at source may establish bona fides and full disclosure, excluding the income from penalty.
Foreign tax credit claims survive delayed prescribed-form filing where treaty entitlement and foreign tax payment remain undisputed.
Foreign tax credit remains available where payment of foreign tax and the corresponding credit claim are undisputed, notwithstanding delayed furnishing of Form 67. The Form 67 requirement under Rule 128(9) operates as a directory procedural condition and does not prescribe forfeiture of a treaty-based credit entitlement. Consistency with the established approach requires that procedural delay alone not defeat foreign tax credit; the credit claim should therefore be allowed.
Make-available requirement limits taxation of offshore supplies and routine administrative support as fees for included services.
Article 12(4) of the India-USA DTAA confines fees for included services to technical or consultancy services that make technical knowledge, experience, skill, know-how, or a process available for the recipient's independent use. Identified offshore goods supplies, without separate service, software, or know-how charges, are distinguished from technical or included services. Routine visa, relocation, sales, finance, accounting, payroll, and HR support similarly do not meet the make-available requirement. Appellate jurisdiction may entertain additional claims and evidence needed for substantial justice despite no revised return, while income reversals based on settlements and credit notes remain subject to factual verification under the real income doctrine.
Lower-deduction certificates do not remove advance-tax liability or interest on income exceeding the certified estimate.
Rectification under Section 154 may address an omission to levy mandatory Section 234B interest where the statutory conditions are satisfied and the omission is an apparent mistake rather than a debatable issue. A lower-deduction certificate under Section 197 authorises deduction at a reduced rate only for the projected income it covers; it does not change the recipient's obligation to revise current-income estimates and pay advance tax on income exceeding that estimate or subsequently recharacterised. Where legally deductible tax was not deducted from such excess income, the recipient bears the resulting advance-tax shortfall and Section 234B interest. The interest amount requires lawful verification, computation, and an adequate hearing.
Duplicate taxation of recorded futures and options profit cannot be sustained under unexplained cash credit rules.
Recorded futures and options profit included in the profit and loss account and offered as business income cannot be assessed again as an unexplained cash credit under Section 68, because that would create a duplicate addition. If such profit were characterised under Section 68, its prior inclusion as regular business income would require a corresponding exclusion. The restriction in Section 115BBE(2) on deductions, allowances and loss set-off applied prospectively from 1 April 2017 and did not govern Assessment Year 2015-16. The Section 68 addition was therefore unsustainable and liable to deletion.
Superseded assessment appeals become infructuous, while fresh assessments preserve independent challenges to additions on merits.
Setting aside an assessment in revision and directing a fresh assessment renders the original assessment non-operative. An appeal founded solely on that superseded assessment becomes infructuous because it lacks a surviving basis, and parallel consideration could create conflicting findings or overlapping consequences. The fresh assessment is separately appealable and creates an independent cause of action. The assessee may therefore raise factual and legal challenges to additions, including the alleged cash-receipts addition, only in appellate proceedings concerning the operative fresh assessment, where the merits must be determined independently.
Resolution plan extinguishment prevents reassessment from reviving pre-resolution tax liabilities, requiring annulment of the resulting tax demand.
Approved resolution plans bind all stakeholders, including government authorities, and extinguish statutory dues for pre-cut-off periods where not provided for in the plan. Tax liabilities for assessment year 2014-15 fell within the plan's extinguished period. Reassessment under the Income-tax Act cannot revive such pre-resolution claims, because later quantification through an assessment order does not create a new enforceable liability. The reassessment order was therefore annulled and the consequential tax demand quashed.
Bank investment valuation losses and standard-asset debt provisions qualify for tax deductions under sector-specific accounting and statutory rules.
Mark-to-market depreciation on a bank's available-for-sale securities, valued at lower of cost or market value under prudential guidelines, is deductible where the bank-specific securities accounting framework applies; a general mark-to-market clarification does not displace that framework. Eligible banks may deduct provisions for bad and doubtful debts within statutory limits without restricting eligibility to advances already classified as bad or doubtful. Provisions on standard assets representing anticipated credit-risk losses may therefore qualify. Minor filing delay may be condoned where sufficient cause is shown, applying a liberal approach that advances substantial justice.
Mutual-fund redemptions are not share alienations, while treaty relief requires scrutiny of commercial substance and alleged abuse.
Equity-oriented mutual-fund units are legally distinct from shares; their redemption therefore falls outside gains from alienation of shares under Article 13(3A) and may receive residual treatment under Article 13(4), subject to treaty entitlement. A Tax Residence Certificate satisfies an eligibility condition but does not conclusively establish entitlement where statutory anti-abuse rules apply. Revenue must identify and establish treaty abuse before invoking substance over form. Treaty relief and Article 27A require factual scrutiny of control, decision-making, regulatory compliance and commercial substance, with an effective opportunity to respond to adverse material.
Treaty allocation of capital gains prevents India taxing US-company share transfers and standard software receipts
India-Ireland DTAA provisions on software receipts and capital gains prevent Indian taxation where standard software and related support do not constitute royalty or fees for technical services. Article 13(5) covers only shares of a company resident in a contracting State; transfer of shares in a US company holding an Indian subsidiary instead falls within Article 13(6), allocating taxation to Ireland. Domestic definitions of transfer and the indirect-transfer deeming rule cannot enlarge treaty taxing rights absent genuine ambiguity or express incorporation. Domestic law may be consulted only to resolve treaty ambiguity; no treaty abuse or Multilateral Instrument application arises.
Revision jurisdiction fails where exemption follows adequate enquiry despite delayed audit reporting and later condonation rejection.
Revisionary jurisdiction requires an assessment order to be both erroneous and prejudicial to Revenue interests. Exemption for charitable purposes may remain supportable where the required audit report is furnished before reassessment is completed and the Assessing Officer has undertaken enquiries through scrutiny notices and supporting records. A legally plausible view reached after enquiry cannot be displaced merely because the revisional authority prefers another view. Subsequent rejection of condonation for delayed filing does not retrospectively make the assessment unsustainable. Where no complete lack of enquiry or identified factual or legal error exists, revision is not justified.
Cost-of-acquisition proof determines capital-gains liability when ledgers alone cannot substantiate the cost of shares sold.
Capital gains computation requires the taxpayer to substantiate the cost of acquisition for the specific shares sold. Ledger extracts and accounting reconciliations, without transfer forms, share certificates, acquisition records, sale agreements, valuation details, or a scrip-wise reconciliation, do not establish that cost. Where sale consideration is undisputed but acquisition cost is unproved, the consideration cannot be treated as mere recovery of cost and may be assessed as long-term capital gain. Purchasers' identity or creditworthiness is irrelevant where the addition rests on failure to prove acquisition cost rather than unexplained credits.
Trademark assignment consideration is capital gains, not royalty, where ownership transfers absolutely without payments tied to use or profits.
Consideration received for an absolute and perpetual assignment of Indian trademark rights is treated as consideration for alienation of intellectual property, rather than royalty for use or the right to use the marks. Transfer of all rights, title, goodwill, registration, use and enforcement rights, coupled with extinction of the transferor's Indian rights, establishes ownership transfer despite territorial or product-related covenants. Fixed consideration not linked to future profits, productivity or use does not fall within the Protocol exception. Under the India-Switzerland DTAA, resulting gains fall within Article 13(6) and are taxable only in the transferor's State of residence, Switzerland.
Unexplained investment additions require proof of actual excess consideration, not merely a higher share valuation.
Section 69B permits a deeming fiction for unexplained investment only when evidence establishes that actual investment exceeded the amount recorded in the books. A higher fair market value determined by a valuation report, without proof of payment beyond the contracted and recorded price, does not meet that burden. Valuation based on treating franchise fees as capital assets is defective where they are revenue expenditure, and the royalty-relief method is unsuitable where the brand cannot be sublicensed. Section 56(2)(viia) operates prospectively from 1 June 2010 and is inapplicable to an earlier assessment year. These principles supported deletion of the Section 69B addition.