“Section 25(1)”
The decision most relied on for Section 25(1) is Vijay Proteins Ltd. v. Asst. CIT (58 ITD 428), cited in 430 judgments on BharatTax.
Leading authorities on Section 25(1)
Where purchases are found to be non-genuine or fictitious, a reasonable disallowance of 25% of such purchases or the peak credit, whichever is higher, can be made. This is applied to address unexplained expenditure under Section 69C when actual goods are likely procured from the grey market.
Penalty under Section 271(1)(c) is not automatically imposed upon an assessee's failure to contest a quantum addition or if two views are possible; the Assessing Officer must prove the charge of concealment or inaccurate particulars. Furthermore, an Assessing Officer can disallow a claim during assessment if it is patently false on examination of facts.
An assessment under section 153A of the Income-tax Act is not solely restricted to the evidence found during the search; the Assessing Officer can also consider other post-search material or information available that relates to the search evidence.
Rights acquired under a concession agreement for highway construction, which generate revenue through toll collections, constitute an 'intangible asset' under section 32(1)(ii) of the Income-tax Act, 1961, eligible for depreciation, typically at 25%. This includes claiming depreciation on the opening Written Down Value (WDV) for such highway projects.
Prior to the jurisdictional High Court's decision in CIT v. Samsung Electronics Co. Ltd. on October 15, 2011, the purchase of off-the-shelf software was not subject to TDS, and therefore, no disallowance under Section 40(a)(i) or 40(a)(ia) could be made.
When a return is filed or deemed filed in response to a Section 148 reassessment notice, issuing a notice under Section 143(2) is mandatory if the Assessing Officer finds issues needing explanation; failure to do so renders the assessment invalid.
Payment of commission to doctors for referring patients to diagnostic centers or providing gifts, freebies, or hospitality to medical practitioners by pharmaceutical companies is against public policy and cannot be allowed as a business expenditure under Section 37(1). Demanding such benefits is unethical on the part of doctors, and paying them is equally unethical on the part of companies.
The exemption for income accumulated under section 11(1)(a) (presently 15%) is absolute, and section 11(2) does not restrict its operation or require such accumulated income to be invested in specified securities. Investment requirements under section 11(2) apply only to accumulation beyond this absolute exemption limit.
