“Section 123(2)(a)”
The decision most relied on for Section 123(2)(a) is Capital Bus Service Pvt. Ltd. v. CIT (123 ITR 404), cited in 91 judgments on BharatTax.
Leading authorities on Section 123(2)(a)
Depreciation under section 32 is allowable even if an asset is not actively used, provided it is kept in a condition of readiness or is put ready for use, as this amounts to passive user.
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.
Interest expenditure cannot be disallowed under Section 14A read with Rule 8D when the assessee possesses sufficient interest-free funds to cover investments that yield exempt income, even if mixed funds are utilized.
An integrated business engaged in captive consumption derives profits or value from its internal activities, even when intermediate products are not sold externally. The principle that a person cannot make profits out of himself does not apply to deny profits from such internal operations for tax or cess purposes.
The Commissioner of Income Tax (CIT) cannot direct the Assessing Officer (AO) to initiate penalty proceedings under Section 271(1)(c) in exercise of revisional power under Section 263 of the Act, if the AO had not initiated such proceedings in the assessment order.
Failure to follow the prescribed procedure can invalidate an assessment. The definition of 'Assessing Officer' and the applicability of Section 143(2) to Chapter XIV-B proceedings are key considerations in assessment validity.
The Commissioner cannot direct the Assessing Officer to initiate penalty proceedings under Section 271(1)(c) if the Assessing Officer did not initiate them in the assessment order, when exercising revisional powers under Section 263.
Amounts referred to under section 40(a)(ia) of the Income-tax Act, 1961, are not deductible in computing income chargeable under the head 'Profits and gains of business or profession'.
