“Section 171(1)”
The decision most relied on for Section 171(1) is Crystal Networks Pvt. Ltd. v. CIT (353 ITR 171), cited in 130 judgments on BharatTax.
Leading authorities on Section 171(1)
When an assessee furnishes sufficient evidence proving the identity, genuineness, and creditworthiness of loan or share application transactions under Section 68, the Assessing Officer cannot make an addition solely because summons issued to the creditors or subscribers were unserved or went uncomplied with. The inability of the tax authorities to secure the attendance or response of third parties does not automatically negate the evidence provided by the assessee.
Taxing provisions imposing new liabilities or affecting substantive rights are presumed to operate prospectively unless the statute expressly or necessarily implies retrospective application. Retrospective operation is generally not given if it impairs existing rights, creates new obligations, or imposes new liabilities, except for procedural matters.
Additions to income cannot be made solely based on a statement recorded under Section 132(4) during a search operation. Corroborative material or documentary evidence is essential to support any adverse decision against the assessee.
Investments made by a bank to maintain the Statutory Liquidity Ratio (SLR) mandated by the RBI, which yield tax-free interest, are not subject to disallowance under Section 14A. The mandatory nature of these investments requires their exclusion when computing disallowances.
A statement recorded during a search under section 132(4) cannot form the sole basis for assessment additions unless corroborated by incriminating material recovered during the search. Post-search inquiry statements are also not considered incriminating material.
An assessment order is not erroneous and prejudicial to the interests of the revenue if the Assessing Officer conducted an adequate inquiry, preventing the initiation of revision proceedings under Section 263.
The Commissioner is entitled to revise an assessment order under Section 263 when the Assessing Officer fails to make proper inquiries, particularly concerning the receipt of share application money, leading to an erroneous assessment prejudicial to the revenue's interest.
Interest earned by a co-operative society from investments made with a co-operative bank is eligible for deduction under section 80P(2)(d). Section 80P(4) is attracted only when the assessee itself is a co-operative bank.
