“Section 8(4)”
The decision most relied on for Section 8(4) is CIT v. Calcutta Discount Co. Ltd. (91 ITR 8), cited in 236 judgments on BharatTax.
Leading authorities on Section 8(4)
Income cannot be assessed on purely notional figures or mere suspicion; it must be based on actual evidence and supporting material demonstrating its accrual or receipt by the assessee. Assessments made without such evidence are bad-in-law.
The elementary principle of natural justice requires that an assessee must have knowledge of all material intended to be used against them in assessment proceedings, along with a reasonable opportunity to meet or rebut such material, including the right to cross-examine witnesses.
Where excess stock is found during a search, the benefit of telescoping may be allowed if additions for unrecorded sales have already been sustained and there is no evidence of other income sources.
The 'wholesale cash price' for levying excise duty must be based on transactions at arm's length. Prices charged to special or favoured buyers due to extra-commercial considerations do not qualify as the wholesale cash price.
The eligibility for deductions under sections 80-IB and 80-IA, and related issues like the initial assessment year, demerger, and resulting company status, are significant considerations in the context of company restructuring and tax benefits.
When undisclosed income from 'on money' in property transactions is assessed under Section 158BC, the addition should be a reasonable profit earned on the unaccounted turnover, with an 8% profit rate considered reasonable by the ITAT.
The amendment made to Explanation 4 to Section 271(1)(c)(iii) with effect from 1st April 2003 is clarificatory and has retrospective effect, allowing for the levy of penalty under Section 271(1)(c) even in cases of loss returns.
A claim for deduction under sections like 80IC or 80IB can be allowed even if not made in the original return, provided the return was filed within the stipulated time. Such claims can be made subsequently, even before the appellate authority or during assessment proceedings.
