“Section 114(2)”
The decision most relied on for Section 114(2) is Shankar Industries v. CIT (114 ITR 689), cited in 117 judgments on BharatTax.
Leading authorities on Section 114(2)
To explain cash credits in books under Section 68, the assessee must prove the identity of the creditor, their capacity to advance the money, and the genuineness of the transaction. Failure to establish these three elements results in the addition being upheld.
The assessee has the burden to prove whether shares are held as investments or as stock-in-trade. This requires the assessee to produce evidence from their records clearly distinguishing between shares held for investment and those held as stock-in-trade.
Interest income earned by a co-operative bank from the investment of its surplus funds, including those statutorily required to be placed in approved securities, is attributable to its banking business and qualifies for deduction under Section 80P(2)(a)(i).
Property held as stock-in-trade is not assessable under the head 'Income from House Property' (Section 23). An Assessing Officer's decision not to tax such income, when supported by inquiry, typically cannot be considered erroneous and prejudicial under Section 263.
An assessee has the option to choose between the provisions of the Income-tax Act and a Double Taxation Avoidance Agreement (DTAA) in any given year, and the non-election of DTAA benefits in one year does not prevent claiming them in subsequent years.
Institutions established for specific purposes are not considered 'local authorities' for the purpose of Section 10(20) of the Income Tax Act.
The presumption of truth of contents of seized books under section 132(4A) of the Income-tax Act is a factual presumption that can be rebutted and is discretionary, not mandatory.
The determination of Arm's Length Price (ALP) for international transactions involving debt requires consideration of both the amount on which interest should be charged and the arm's length rate for that interest. Guidelines are provided for computing the ALP of the international transaction of 'debt arising during the course of business.'
