ITAT deleted addition u/s 68 on account of alleged bogus purchases; No material in possession of AO to establish the escapement of income except the information from the investigation wing and the statement of a person providing accommodation entries; AO cannot reopen the case without properly establishing himself that the income had actually escaped assessment irrespective of source of information; Reliance placed on co-ordinate bench ruling in Kishore Jerom Bhai Khaniya; AO had not made a case on how addition can be sustained, when Assessee had already declared the purchases as well as sales out of the same purchases in the books of account.

The Supreme Court upheld reopening of assessment for AY 07-08 and AY 08-09 holding that material gathered during survey prima facie revealed that income received by the assessee from the AOP was not exempt share of profit but taxable share of revenue which had escaped assessment; Referring to Calcutta Discount Co. Ltd. vs. ITO [41 ITR 191] and Phool Chand Bajrang Lal vs. ITO [203 ITR 456] the Court held that mere disclosure of a transaction in original assessment does not amount to true and full disclosure where later information exposes its real character; The Court found that the assessee had not highlighted that the declared AOP profit represented 35% of gross sale receipts and that no meaningful enquiry on Clause 7 of AOP agreement had occurred in original assessment thereby negating any plea of change of opinion.

SC held that assessee was entitled to claim deduction u/s 36(1)(iii) for interest paid on capital borrowed for the purpose of business; Provisions of Section 36(1)(iii) concerns itself with capital borrowed and not with other debts / liability; SC stated that the legislature has permitted allowance interest paid on capital borrowed for the purpose of business, and the capital, in this context, means money and not any other asset purchased on credit; Expression occurring in Section 36(1)(iii) is wider in scope than the expression occurring in Section 57(iii); As per SC, HC was incorrect to observe that the amount borrowed was utilised for the benefit of assessee's subsidiary company assessee's business; Reference made to SC ruling in Sharp Business System.

Madras HC quashed criminal proceedings initiated u/s 276CC due to lack of AO's jurisdiction who initiated prosecution and in absence of penalty proceedings under Section 271(f); Jurisdiction of assessee's case vested with ITO, Ward 17(1) Chennai whereas prosecution was initiated by Assistant Commissioner sans formal transfer order u/s 127; HC relied on SC judgment in K.C. Builders wherein it was held that criminal proceedings cannot survive without penalty proceedings being initiated.

Bombay HC upheld ITAT order wherein reassessment initiated beyond 4 years was quashed on change of opinion in absence of assessee's failure to disclose material facts during original assessment; HC distinguished Revenue's reliance on coordinate bench ruling in case Yuvraj vs. Union of India [315 ITR 84] and opined that in the said case there was a lack of application of mind, whereas in the present case, the ITAT order was well reasoned and based on correct application of law; AO had failed to demonstrate how the Assessee had failed to disclose material facts during the original assessment.

ITAT quashed penalty u/s 270A sans AO's failure to record satisfaction about under reporting of income during assessment proceedings u/s 143(3); ITAT relied on SC ruling in Jai Laxmi Rice Mills to hold that penalty proceedings under Section 270A could not be initiated sans recording of AO satisfaction; Requirement to record satisfaction u/s 270A(1) was mandatory and in absence of such satisfaction during the assessment process, the penalty proceedings were vitiated, as per ITAT.

Delhi HC set aside order rejecting assessee's application u/s 270AA income in absence of establishment of misrepresentation or suppression of facts; Assessee had voluntarily paid tax and interest within 30 days of demand and had acted transparently in disclosing all relevant material particulars; Facts did not indicate any misrepresentation or concealment of income, nor any mens-rea or contumacious conduct; HC opined that the application of penalty u/s 270A, as interpreted by AO was contrary to the spirit and intent of the statutory provisions; HC remarked that penalty provisions are deterrent in nature and should not be treated as a revenue source.

ITAT held assessee to be entitled to deduction u/s 54 though no deposit was made in capital gains account and a belated return u/s 139(4) was filed, however subject to verification that assessee had utilised the capital gains for purchase of new property before filing of the return of income; If sale consideration was utilised before the last date of filing of return u/s 139, even though return was filed u/s 139(4) being a belated return, the same was an allowable claim; Reliance placed on Jurisdictional HC ruling in Humayun Suleman Merchant.

Bombay HC quashed notice under Section 143(2) and Section 142(1) issued to RIL in the name of erstwhile non-existing companies beyond the time limit prescribed in the statute; Revenue contended coordinate bench judgment contained a "finding" regarding the necessity of assessee as the successor entity; HC held that such judgment did not contain any binding "findings" in the context of sections 150 or 153(6); Further, reliance was placed on ruling in Shell India Markets wherein it was established that if notice is issued to a non-existing entity due to merger, the notice and the assessment order would be invalid.

Chhattisgarh HC held that AO erred in making adjustment u/s 143(1)(a) for deduction under Section 36(1)(va) towards employees' contribution since as on the date of intimation order in January 2021, the said issue was a highly debatable issue, in view of the divergent views of various HCs; SC ruling in Checkmate Services Pvt. Ltd was dated October 2022; AO had no authority to make adjustments or adjudicate upon any debatable issues u/s 143(1)(a); HC deleted the disallowance of contribution towards ESI and EPF u/s 36(1)(va) read with Section 2(24)(x).

ITAT deleted the addition made towards alleged 'on-money' received by assessee which was based on the searched person's seized excel sheet data, which evidently had no nexus with the Assessee; Relying on Bombay HC judgment in Miss Lata Mangeshkar and Ahmedabad ITAT ruling in Pankaj Dahyabhai Patel (HUF), ITAT stated that where papers were not seized from house of the Assessee, nor was in his handwriting, the inference of on-money receipt based on such paper was not justified; ITAT also noted that no opportunity of cross examination was provided to assessee.

ITAT deleted addition u/s 68 on account of alleged bogus purchases; No material in possession of AO to establish the escapement of income except the information from the investigation wing and the statement of a person providing accommodation entries; AO cannot reopen the case without properly establishing himself that the income had actually escaped assessment irrespective of source of information; Reliance placed on co-ordinate bench ruling in Kishore Jerom Bhai Khaniya; AO had not made a case on how addition can be sustained, when Assessee had already declared the purchases as well as sales out of the same purchases in the books of account.