ITAT deleted addition noting that opportunity to cross examine the witness on whose statement reliance was placed, was not given by AO; AO had not confronted the Assessee with any material found during the course of search; There was no specific mention of the Assessee in the statement recorded during the course of the search which formed the sole basis for AO to make addition; AO failed to bring any evidence on record to prove the payment of ‘on money’; SC decision in Andaman Timber Industries relied upon.

ITAT set aside intimation order u/s 143(1) noting that AO/CPC did not give prior intimation of adjustment to the assessee first; ITAT rejected Revenue’s contention that requirement of giving intimation to an Assessee under the first proviso to Section 143(1) can be disregarded when the facts are apparent; Filing of Form 3CFA was required to avail a concessional 10% tax rate under Section 115BBF of the Act which was not done within prescribed time by the assessee; Assessee contended that absence of intimation as u/s 143(1)(a) prevented assessee from filing the form in prescribed time; ITAT noted that Revenue also provided no reasons for adjustment u/s 143(1).

ITAT deleted disallowance of disputed contractual service tax liability (between assessee and its landlord) on renting of commercial properties relating to prior years which was settled in the present year; Said liability was settled for payment in the present year and a 50% of the said amount was paid/ settled in the same year; No provision was made in prior years since matter was sub-judice before the High Court; Disputed contractual liability held to be admissible as expense in the year in which it was settled with the parties; Separately, ITAT deleted disallowance of entertainment tax subsidy by accepting Assessee’s treatment of the same as capital receipt.

Bombay High Court affirmed appellate orders deleting addition on account of undisclosed foreign bank balance; Assessee being an NRI having made money in a foreign country cannot be called upon to pay income tax on that money in India unless it satisfied the test of taxability; Based on information received from French Government regarding deposits made by the Assessee in its account with HSBC, Geneva, Revenue reopened Assessee’s case and made addition of Rs.6.13 Cr being rupee equivalent of peak credit of USD 13,62,441 in that account; Bank account was opened in 1997 and the Assessee was non-resident since 1979 till date.

Addition on account of bogus purchases u/s 69C deleted by ITAT, holding that the transactions were duly recorded in the books of accounts, stock register and declared in VAT returns along with payment through banking channels; Assessee on the basis of Investigation Wing report was subjected to reassessment alleging bogus purchases of Rs. 39.36 Cr through shell companies; General investigation reports or suspicions cannot override direct documentary evidence; ITAT held that rejection of books u/s 145(3) requires specific defects demonstrating that true profits cannot be deduced, which were absent in the present case.

High Court set aside reassessment proceedings including notice u/s 148 and order i/s 148A(d) as time barred relying on Ashish Agarwal and Rajeev Bansal; Impugned order dated July 30, 2022 issued u/s 148A(d) would be invalid notice as the said notice was issued after June 16, 2022 (i.e. beyond the ‘surviving time’) in light of SC judgment in Ashish Agarwal; Order u/s 148A(d) was issued on July 30, 2022, however, considering the period of limitation from the date of issuance of notice u/s 148 read with TOLA upto June 30, 2021, the limitation for issuance of notice u/s 148 applying the SC judgment in Ashish Agarwal as well as Rajeev Bansal, would be June 16, 2022; Therefore impugned order and notice dated 30.07.2022 were quashed.

Madras HC held that assessee was entitled to balance 50% of additional depreciation in the current AY 2007-08 in respect of the assets acquired in previous year and which were put to use for less than 180 days; As per HC, since additional depreciation is given to encourage purchase of new plant and machinery, as found in the Memorandum, the advantage of granting additional depreciation should be extended without any discrimination; If an assessee is entitled to additional depreciation, such benefit cannot be deprived partially on the ground that the machine was not put to use for more than 180 days in a particular year.

ITAT set aside revision order u/s 263 observing that the AO had conducted a detailed enquiry and also verified the documents w.r.t. LTCG on the redemption of the units of equity oriented mutual funds; when the order is not an erroneous one, it cannot be concluded that the same is prejudicial to the interest of the revenue; In response to the notice issued of PCIT, assessee had furnished its reply along with various statements and justified the AO’s order, but the PCIT had failed to mention anything about the annexures filed by the Assessee; There was no infirmity in the order passed by the AO u/s 143(3).

Addition u/s 68 held to be unsustainable where no credit entry is established in Assessee’s books and addition is based solely on uncorroborated third-party information; Neither the AO nor CIT(A) identified any specific entry in books of accounts evidencing credit of unexplained income; Initial burden to prove the existence of a credit entry lies with the AO, and unless this foundational fact is established, the Assessee cannot be compelled to explain the nature and source of a non-existent credit; Suspicion, however strong, cannot take the place of proof, remarked ITAT.

ITAT deleted addition sustained by CIT(A) to the extent of 2.73% of the alleged bogus sales transaction holding the same as unjustified; Once the sales were accepted as part of turnover and the assessee had already offered profit thereon, there was no legal basis to estimate further profit unless the books were rejected and suppression of income was demonstrated; Once the credit was disclosed as sales and duly reflected in the books, the same cannot again be treated as unexplained cash credit, particularly when the books of account were not rejected and no specific defects in trading results were pointed out.

ITAT upheld disallowance u/s 43B on employee liabilities such as bonus, leave encashment, etc transferred in slump sale without actual payment before due date u/s 139(1); ITAT rejected assessee’s argument that transferring liabilities to transferee entity in a slump sale amounted to payment of liability noting that the statute does not recognize any concept of “deemed payment” for the purpose of claiming deduction u/s 43B; Crucial test u/s 43B is whether the Assessee itself made the payment within the prescribed time and in the present case, the Assessee failed to establish that the liabilities were actually paid.