“Section 127(4)”
The decision most relied on for Section 127(4) is CIT v. NHK Japan Broadcasting Corporation (305 ITR 137), cited in 96 judgments on BharatTax.
Leading authorities on Section 127(4)
When no specific statutory period of limitation exists, proceedings under Section 201(1) and 201(1A) of the Income-tax Act, particularly for payments to non-residents, must be initiated within a reasonable period of four years. This limitation also applies to consequential penalty proceedings under Section 271C.
Statements made during a search under section 132(4), even if retracted, can be used to prove bogus purchases.
Income of a charitable trust, other than from a business undertaking covered by Section 11(4), is determined based on its books of account. Payments of income tax and wealth tax by the trust are considered an application of income for charitable purposes under Section 11.
The law applicable to an assessment year is the law in force during that assessment year, unless the statute provides otherwise expressly or by necessary implication. Amendments to tax laws are generally prospective.
Additions to income based solely on a third party's statement are invalid, particularly when the assessee is not given an opportunity to cross-examine that third party.
The Income Tax Department should not expend significant time and energy on tax-neutral issues that do not affect the overall tax collection, particularly when determining the year of taxability of income where tax rates remain constant.
When the valuation of closing stock is adjusted to include CENVAT or Modvat credit under Section 145A, a corresponding adjustment must also be made to the opening stock.
When the Assessing Officer revalues the closing stock, the opening stock must also be revalued on the same basis to ensure consistency in the method of accounting and proper computation of business income.
