Consequential penalty upon deletion of quantum additions - Penalty for non-compliance with statutory notices Consequential penalty upon deletion of quantum additions - Under-reported income and unexplained income penalties u/s 270A and section 271AAC(1) - HELD THAT: - A penalty founded solely on quantum additions cannot survive where those additions have been wholly deleted in consequential proceedings. As the revised assessment resulted in nil tax liability, there remained no under-reported ... ... ...

Assessment of income at 8% of the cash deposits - Fresh opportunity to substantiate estimated business income - HELD THAT: - Having regard to the assessee's request to substantiate the claim that the profit margin in the petroleum-product business was lower than that estimated, the Tribunal considered it appropriate, in the interests of justice, to restore the matter for fresh decision. The merits of the estimation were not adjudicated. [Paras 7] The matter was remitted to the Commissione... ... ...

Interest expenditure on overdraft against fixed deposits - Direct nexus under section 57(iii) - Allowability under section 57(iii) of interest paid on overdrafts secured against fixed deposits - HELD THAT: - The assessee failed to establish either the purpose for which the overdraft funds were utilised or a direct nexus between the interest expenditure and the interest income earned on fixed deposits. Interest paid on borrowings is deductible under section 57(iii) only where it bears the requisi... ... ...

Ceiling on disallowance of expenditure relating to exempt income u/s 14A - Prospective operation of the Finance Act, 2022 amendment to section 14A Disallowance of expenditure relating to exempt income u/s 14A read with rule 8D for AY 2018-19, where the assessee's suo motu disallowance equalled the exempt income - HELD THAT: - The amendment introduced by the Finance Act, 2022 was held to operate from AY 2022-23 and not retrospectively. Applying the settled principle that disallowance under... ... ...

Penalty u/s 270A(9) for misreporting of income - Political contribution deduction - Penalty for alleged misreporting arising from withdrawal of deduction claimed for a political contribution in the return filed pursuant to reassessment notice HELD THAT: - Penalty for misreporting requires both under-reported income and satisfaction of a specified circumstance of misreporting. Where the reassessment return withdrawing the political contribution deduction was accepted without any addition or va... ... ...

Penalty for delayed furnishing of the statement of financial transactions - Failure to examine statutory defence of reasonable cause before levy of penalty HELD THAT: - Though delayed furnishing of the statement may attract penalty, the mere fact of belated filing does not by itself conclude the inapplicability of the statutory defence of reasonable cause. Since the first appellate authority dismissed the appeal without adjudicating the grounds on merits and no explanation or supporting evide... ... ...

Unexplained cash credit - sale proceeds of shares - Explanation of nature and source of share-sale proceeds HELD THAT: - The share purchase agreement, demat records evidencing holding and transfer of the shares, foreign inward remittance certificate, annual return records and signed share certificate established the assessee's ownership of the shares and receipt of the consideration on their sale. The nature and source of the bank credit were thus explained, and the Revenue did not contro... ... ...

Turnover of Kachha Arhatia in commission transactions - Rejection of books of account on GST turnover mismatch - Profit estimation without supporting material Rejection of audited books and estimation of profit by treating the entire turnover disclosed in GSTR-9C, including agency sales effected for principals by a Kachha Aartia, as the assessee's own turnover - HELD THAT: - A Kachha Aartia's sales effected on behalf of principals do not constitute his turnover; only the gross commiss... ... ...

Applicability of the enhanced rate u/s 115BBE to additional income surrendered during survey for AY 2017-18 - Prospective v/s retrospective operation - HELD THAT: - The amendment enhancing the rate under section 115BBE to 60% took effect from 01-04-2017 and operates prospectively. For Financial Year 2016-17, the applicable law was that in force on 01-04-2016, prescribing the earlier rate of 30%; consequently, the enhanced rate could not be applied to the surrendered income. In S.M.I.L.E. Micr... ... ...

Tax deduction at source on interest paid to statutory corporations - CBDT circular cannot restrict statutory exemption notification Tax deduction at source on interest paid on mobilisation advances to the National Highways Authority of India, a corporation established under a Central Act - HELD THAT: - The notification issued under the statutory exception to tax deduction on interest covers every corporation established by a Central, State or Provincial Act. Since the National Highways Author... ... ...

Assessee in default for non-deduction of tax on foreign-leg Leave Fare Concession reimbursement - Effect of binding interim judicial directions on tax-deduction obligation Liability of the bank as an assessee in default for non-deduction of tax on Leave Fare Concession reimbursements involving a foreign travel leg during the operation of interim judicial directions - HELD THAT: - The substantive taxability of the reimbursement was distinct from the bank's liability as a deductor. During t... ... ...

Appellate adjudication on merits - Failure to adjudicate appeal on merits - Dismissal of the appeal from the rectification order without adjudicating the addition for cash deposits on merits HELD THAT: - The assessee's request to treat the earlier appeal as null and void was conditional upon its merger with the appeal from the rectification order and adjudication of the addition on merits in the latter appeal. The earlier appeal was dismissed without such merger, while the appeal from the... ... ...

Revisionary jurisdiction u/s 263 - erroneous and prejudicial assessment - Lack of enquiry and inadequate enquiry - Business expenditure after transfer of stock to LLP - Capital loss on sale of rented investment property - cost of improvement - Fixed-asset adjustments - internal transfer between branches Revisionary jurisdiction u/s 263 - lack of enquiry - Administrative and finance expenses after transfer of stock to LLP - Validity of revision for alleged failure to examine administrative and... ... ...

Concessional corporate tax rate for domestic companies - continuing effect of valid option - Statutory eligibility conditions for concessional corporate tax rate Entitlement to the concessional tax rate for A.Y. 2023-24 where the option under section 115BAB had been validly exercised in A.Y. 2020-21 but no income or tax was computed under that provision in the initial year - HELD THAT: - An option exercised in the prescribed manner for the first eligible assessment year applies to subsequent ... ... ...

Leave-encashment exemption on retirement - enhanced prescribed limit Entitlement of a retired State Bank employee to exemption for leave encashment under section 10(10AA) within the enhanced prescribed limit - HELD THAT: - The controversy was held covered by coordinate-bench decisions Govardhan Deepchand Bhambhani [2025 (7) TMI 1812 - ITAT AHMEDABAD] and Mohdhussain Gulamhussain Qureshi[2026 (4) TMI 1870 - ITAT AHMEDABAD] applying the CBDT notification enhancing the prescribed ceiling for exe... ... ...

Royalty and technical-fee benchmarking - guidance value of unilateral advance pricing agreement - Related-party manufacturing transactions - omission from specified domestic transaction regime Arm's length price of royalty and technical-fee payments - Unilateral advance pricing agreement as benchmarking guidance - Arm's length price of royalty and technical-fee payments to the associated enterprise in the light of a unilateral advance pricing agreement - HELD THAT: - Following the coo... ... ...

Penalty for under-reporting of income under MAT assessment - Book-profit assessment and tax evasion - Penalty for omission to add provision for tax while computing book profit under the MAT provisions, where tax was ultimately assessed on book profit HELD THAT: - The omission in computing book profit was inadvertent and the provision was added while processing the return. As the assessment and tax liability were ultimately determined under the book-profit provisions, the adjustment under the ... ... ...

Deduction u/s 80P(2)(d) for interest from co-operative banks - Business-income deduction u/s 80P(2)(a)(i) for deposits with nationalised banks Deduction u/s 80P(2)(d) for interest from co-operative banks - Entitlement of a credit co-operative society to deduction u/s 80P(2)(d) for interest earned on deposits with co-operative banks - HELD THAT: - Interest derived by a co-operative society from investments with another registered co-operative society qualifies for deduction u/s 80P(2)(d). The ... ... ...

Section 14A with Rule 8D disallowance - investments yielding dividend income - Computation of disallowance u/s 14A read with rule 8D where only some investments yielded dividend income during the relevant year HELD THAT: - Following the jurisdictional High Court case M/S. SHALIMAR PELLET FEEDS LTD. [2022 (2) TMI 1209 - CALCUTTA HIGH COURT], the machinery computation under rule 8D is confined to shares which actually yielded dividend income in the year under consideration and cannot be applied... ... ...

Reassessment u/ss 143 and 147 - not best judgment assessment - Estimation of business profits where books of account are unavailable Validity of reassessment of an LPG-cylinder distributor where the books of account were unavailable and the profit-and-loss accounts disclosed disproportionate variations in expenditure - HELD THAT: - The assessment orders were not best judgment assessments under Section 144, but were issued under the combined ambit of Sections 143 and 147. Where the books of ac... ... ...