“Section 42(2)”
The decision most relied on for Section 42(2) is CIT v. N.R. Portfolio (P.) Ltd. (42 Taxmann.com 339), cited in 252 judgments on BharatTax.
Leading authorities on Section 42(2)
For cash credit additions under Section 68, establishing the 'identity' of a creditor requires more than just producing PAN or assessment particulars; it necessitates demonstrating their actual business operations, place of work, staff, and public recognition. This rigorous standard ensures the assessee proves the identity, creditworthiness, and genuineness of the transaction.
An assessee can file a revised computation of income during ongoing assessment proceedings, even after the time limit for filing a revised return under section 139(5) has expired. This revised computation can be submitted without filing a revised return.
A CBDT notification issued under section 90(3) of the Income-tax Act is clarificatory in nature and effective from April 1, 2004, the date section 90(3) was introduced.
Penalty can be regarded as an additional tax imposed due to dishonest or contumacious conduct. Therefore, a fee levied under Section 234E to deter late filing of TDS statements can be considered penal in nature and treated as an additional tax.
Sums already disclosed as income, such as cash sales deposited in a bank, cannot be taxed again under Section 68 or 69A, as this would amount to impermissible double taxation.
An Assessing Officer is not justified in rejecting a claim for exemption under section 11 of the Income-tax Act. The ITAT has also held that an opportunity of being heard need not be afforded under section 139(9) in certain circumstances.
A receipt is only income if it falls within the definition of income under section 2(24) of the Income-tax Act; otherwise, its character remains unchanged. The nature of a receipt, particularly whether it is a trading receipt, is determined by the terms of the agreement between the parties, not by its nomenclature.
Activities of a general public utility are not hit by the proviso to section 2(15) if they are purely incidental or subservient to the main objective and not a mask for prohibited activities. Income earned from regulatory functions for public good, such as license fees, cannot be considered as consideration for rendering services to trade, business, or commerce, especially if there is no profit motive.
