“Section 159(4)”
The decision most relied on for Section 159(4) is CIT v. Shivakami Co. (P.) Ltd. (159 ITR 71), cited in 133 judgments on BharatTax.
Leading authorities on Section 159(4)
The burden of proving an understatement of consideration or the receipt of 'on-money' lies solely with the Revenue, which must provide cogent evidence of actual receipt of higher consideration, beyond mere estimates or suspicion. Additions cannot be made based on assumptions like differences from circle rates without such evidence.
Section 271 of the Income-tax Act, being a penal provision, must be construed strictly and narrowly. The case also initially held that a clarificatory amendment was not retrospectively applicable, a view later reversed by a larger bench.
Following the amendment to Section 147 of the Income Tax Act in 1989, the Assessing Officer has broad powers to reopen assessments if they have reason to believe income has escaped assessment, even if the assessee made a full and true disclosure of material facts. This belief can be formed in any manner.
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.
Information from the Enforcement Directorate indicating inflated purchases can serve as a valid basis for issuing a notice under Section 148 of the Income Tax Act, initiating reassessment proceedings.
Income should be taxed only once in the hands of the rightful assessee; substantive assessments cannot be made simultaneously on multiple legal heirs.
An addition cannot be made under section 69C for unexplained expenditure if the on-money/unaccounted receipts have already been considered as revenue receipts, as this would constitute double addition.
The discount on the issue of ESOPs, calculated as the difference between the grant price and the market price of shares on the date of grant, is an allowable deduction under Section 37(1) of the Income Tax Act.
