“Section 254(3)”
The decision most relied on for Section 254(3) is National Thermal Power Co. Ltd. v. CIT (229 ITR 383), cited in 5,834 judgments on BharatTax.
Leading authorities on Section 254(3)
Appellate authorities can consider new claims and additional grounds if the relevant facts are already on record. The purpose of assessment is to correctly determine tax liability, allowing both parties to raise issues.
Foreign exchange fluctuations, whether gains or losses, are inextricably linked to the underlying business transaction and must be accounted for under the mercantile system. The Supreme Court also affirmed the standard accounting principle of valuing stock at cost or net realisable value, whichever is lower.
Non-consideration of a decision by a jurisdictional High Court or the Supreme Court constitutes a mistake apparent from the record. However, non-consideration of a non-jurisdictional High Court decision does not typically amount to such a mistake.
Payments for the use of equipment, such as satellite transponders, do not constitute 'royalty' under Section 9(1)(vi) of the Income-tax Act, 1961, or under applicable tax treaties, especially when there is no transfer of the right to use a process or underlying technology.
An assessee can make an additional claim for deduction or file a revised computation of income during assessment proceedings, even if a revised return of income has not been filed. Such additional claims or grounds can also be admitted at the appellate stage.
The Supreme Court holds that the issue of payment of excessive price on purchase of sugarcane by assesses is no longer res integra. The court elaborately dealt with this issue.
The Supreme Court restores the matter for ascertaining whether the difference between the fair market price and concessional price of sugar supplied by a cooperative sugar factory to its members should be added to its total income, considering relevant factors like state cooperative society directions.
The Supreme Court affirmed the doctrine of mutuality, holding that contributions received from and returned to members for a common purpose do not constitute taxable profits. However, income from transactions with non-members or interest earned from investments in external entities (like cooperative banks) may break the mutuality chain and be taxable under Section 56, falling outside the scope of Section 80P deductions.
