#Tax / Corporate & Commercial Disputes

The ITAT Nagpur has ruled that a penalty imposed under Section 271AAC(1) cannot stand if the quantum assessment order on which it is based has been set aside by the High Court. This clarifies that penalty proceedings are ancillary to the validity of the assessment itself, protecting taxpayers from punitive action rooted in legally untenable additions. The ruling impacts all assessees facing similar penalty triggers post-reassessment cancellation.

ITAT Bangalore rules that GST refunds are not taxable if the assessee follows the exclusive accounting method, bypassing the profit & loss account. The decision reinforces that consistent accounting practices prevail over revenue adjustments, impacting tax assessments for businesses claiming refunds.

ITAT Delhi rules that disallowance under Section 40A(2)(b) cannot be sustained without concrete evidence of excess payment, even if detailed bills are absent. The ruling underscores that genuineness of business expenditure must be established before invoking tax disallowance, impacting corporate tax assessments involving related-party transactions.

ITAT Delhi rules that Long Term Capital Gains exemption under Section 10(38) cannot be denied without concrete evidence linking the assessee to bogus transactions. The tribunal set aside additions made solely on departmental investigations, reinforcing the need for direct proof in tax disputes.

ITAT Kolkata rules that prior period expenses crystallising in the current assessment year are deductible under the mercantile system if evidence of crystallisation is furnished. The ruling clarifies that disallowance is unwarranted where the liability becomes certain during the year, impacting tax assessments for businesses with deferred liabilities.

The ITAT Delhi has ruled that an investigation wing’s report identifying a company as bogus is insufficient to sustain additions under Sections 68 and 69C unless corroborated by independent, verifiable evidence such as bank trails, stock records, or third-party confirmations. This reinforces the burden of proof on the Revenue and protects taxpayers from speculative assessments based solely on departmental assertions.

ITAT Bangalore sets aside a ₹32.69 crore disallowance under Section 40(a) for failure to specify the exact TDS provision violated. The ruling mandates procedural clarity, requiring tax authorities to identify the precise legal basis for disallowance before penalizing assessees.

ITAT Ahmedabad rules that unexplained cash deposits under Section 69 IT Act cannot be taxed in full without evidence linking the assessee to beneficial ownership. The tribunal directed reassessment based on peak balance and permissible commission income, narrowing the scope of tax additions for accommodation entries.