“Section 245(3)”
The decision most relied on for Section 245(3) is CIT v. Metachem Industries (245 ITR 160), cited in 137 judgments on BharatTax.
Leading authorities on Section 245(3)
An assessee introducing cash credit or capital is not required to prove the ultimate source of funds of the creditor or investor once the identity, creditworthiness, and genuineness of the transaction with the immediate creditor/investor are established. The assessee's burden is discharged upon providing a satisfactory explanation and producing the person who deposited the amount.
The assessed income can be lower than the returned income. Authorities are required to assist assessees in correcting over-assessments, even if it means reducing the income below the returned figure.
Proceeds from the sale of scrap packing material are to be included in the total turnover for computing deduction under section 80HHC. However, the turnover should be restricted to receipts that have an element of profit.
The production of fresh evidence at the appellate stage before the Commissioner (Appeals) is strictly governed by the conditions and procedures laid down in Rule 46A of the Income-tax Rules.
A statement made by a partner during a search cannot be retracted by another partner without evidence of pressure or coercion by the revenue. Similarly, income surrendered via a declaration cannot be withdrawn later without a satisfactory explanation.
Profits and losses arising from foreign exchange fluctuations are part of export turnover and are includible in profits eligible for deduction under Section 10A/10B of the Income Tax Act. Service charges may not be considered operational income if they don't accrue out of the main business activity.
The purpose for which income is accumulated under section 11(2) must be specific and not general or routine. A failure to specify a clear purpose will result in the denial of exemption under sections 11 and 12.
The explicit mention of 'land or building' in a statute implies the exclusion of rights in land or building, based on the maxim 'Expressio Unius Est Exclusio Alterius'. Therefore, Section 50C of the Income Tax Act, 1961, which applies to land or building, cannot be extended to leasehold rights in land.
