#Tax Appeal

The Calcutta High Court ruled that the first proviso to Section 36(1)(viia)(a) of the Income tax Act 1961 grants banks an option to claim additional provision for doubtful or loss assets, allowing cumulative deduction within statutory limits. This clarifies that the proviso is not an alternative to the main clause, benefitting banking assessees seeking higher tax deductions.

ITAT Jaipur held that Section 87A rebate is available on short-term capital gains under the new tax regime, directing AO to allow Rs 25,000 rebate. This lets STCG earners under the new regime claim the rebate, cutting their tax outflow.

CESTAT Chennai held electronic records inadmissible under Section 36B of the Central Excise Act for non-compliance, quashing a ₹4.08 crore duty demand and ₹2 crore penalty, stressing procedural compliance essential for digital evidence in tax disputes.

CESTAT ruled that a taxpayer may carry forward surplus service tax and set it off against liability in any later month or quarter, not just the immediate period prescribed by the revenue. This expands the relief available under Rule 6(4A) of the Service Tax Rules, giving businesses greater cash-flow flexibility. The decision applies to all service-tax payers with excess tax payments.

The ITAT ruled that an unsecured loan taken and fully repaid within the same financial year cannot be treated as unexplained income under Section 68, provided the assessee furnishes satisfactory documentary evidence. This prevents automatic tax additions on short-term loans and safeguards businesses from unwarranted tax liability.

Taxpayers whose total income does not exceed Rs 7 lakh can claim the Section 87A rebate even on short-term capital gains that attract the special 15 % rate under Section 111A. The Jaipur ITAT reversed the CIT(A)’s refusal, confirming that the rebate applies to the computed tax liability irrespective of the special-rate provision. This benefits individual investors with modest incomes who realise short-term gains.

Bank deposits, including current-account balances, are deemed ‘another capital asset’ under Section 11(1A) of the Income-Tax Act. This allows charitable trusts to claim full exemption on capital-gain income reinvested in such deposits, expanding the range of tax-free investment options for trusts.

CESTAT ruled that a bill containing the essential particulars prescribed under service tax law is sufficient to serve as a consignment note for Goods Transport Agency services. Consequently, the service tax demand and penalty imposed under the Finance Act, 1994 were set aside, relieving logistics providers of the tax liability.

The ITAT ruled that a reassessment order issued after a court-ordered stay is lifted falls outside the two-year limitation of Section 153(2), rendering the addition of Rs 18.16 crore invalid. This protects taxpayers from belated reassessments once a stay is removed.

The Jaipur ITAT approved condonation of a 1038-day filing delay and granted a complete exemption of Rs 9,95,670 leave encashment under Sec 10(10AA). Taxpayers with delayed appeals can thus retain full leave-encashment benefits when the tribunal condones the delay.

ITAT Delhi dismisses an appeal filed by a purported legal representative, ruling that mere claim of representation is insufficient without proof of succession or management of the deceased’s estate under Section 159. The appellant must satisfy statutory conditions or face departmental proceedings to proceed.

Allahabad HC rules that the limitation period for tax appeals begins from the date of actual communication of the order, not its issuance. The Revenue bears the burden of rebutting the dealer's claim with cogent evidence; absent such proof, the dealer's stated communication date stands. This reinforces procedural fairness in tax disputes and curtails arbitrary dismissal of appeals on technical grounds.

ITAT Delhi sets aside a ₹2.23 crore addition under Section 68, ruling that unexplained income additions cannot stand if an identical addition in the co-party’s case has been deleted. The decision reinforces consistency in tax adjudication and limits arbitrary additions based on demonetization-era cash deposits.

The Tribunal holds that once a resolution plan is approved under IBC, statutory dues not included are extinguished, and tax appeals must cease unless expressly permitted.