“Section 112(6)”
The decision most relied on for Section 112(6) is 49 ITR 112 (SC) Sreelekh Banerjee v. CIT 1-10 2 (69 Taxmann.com 219), cited in 85 judgments on BharatTax.
Leading authorities on Section 112(6)
The core legal principle established in Sreelekh Banerjee v. CIT (1963) 49 ITR 112 (SC) relates to the burden of proof for explaining cash credits under the Income Tax Act.
A statute prescribing a procedure using negative language (e.g., 'in no other manner') imposes absolute requirements, and failure to comply will invalidate the entire proceeding.
An investment retains its capital nature even if its resale was foreseen and contemplated when made, and the possibility of enhanced values motivated the investment. The classification as a capital asset or stock-in-trade depends on factors like the assessee's intention, frequency of transactions, and acquisition funding.
A word, clause, or sentence from a court judgment, when taken out of context, does not represent a complete exposition of the law on a question that the judgment did not explicitly address.
An assessment is invalid if the Assessing Officer (AO) seeks only to ascertain the source of funds without forming a belief, based on tangible material, that income chargeable to tax has escaped assessment. A mere expression of doubt or a need for deeper scrutiny without any supporting evidence does not justify invoking reassessment powers.
The Assessing Officer (AO) has the power to disturb the valuation of shares provided by the assessee's chartered accountant, even if Rule 11UA(2) is followed. If the AO doubts the valuation report, they are not necessarily bound to refer the matter to the Valuation Officer and can adopt a different method to determine the fair market value.
The Assessing Officer's addition under section 68 is deleted if the Commissioner (Appeals) has thoroughly examined the facts and material on record and judicial pronouncements.
Reopening of assessment under Section 147 requires the Assessing Officer to have reason to believe that income has escaped assessment, which must be based on tangible material or information and not merely a change of opinion. Failure to disclose material facts by the assessee is also a ground for reassessment.
