“Section 127(1)”
The decision most relied on for Section 127(1) is CIT v. Gem Plus Jewellery India Ltd. (330 ITR 175), cited in 207 judgments on BharatTax.
Leading authorities on Section 127(1)
Disallowances made under various sections, such as for PF/ESIC contributions, result in an increase in business profits, and these enhanced profits are eligible for deduction under Sections 10A and 10AA. Similarly, gains from foreign exchange fluctuations directly linked to export sales are also eligible for deduction under Section 10A.
The Delhi High Court affirms that additions made by the Assessing Officer in assessment proceedings under Section 153A are valid when such additions are based on incriminating material found during a search. The decision did not address the validity of additions in the absence of incriminating material.
Appeals before the Income Tax Appellate Tribunal (ITAT) must be filed before the bench with territorial jurisdiction over the Assessing Officer's location or the assessee's principal place of business.
Passing a final assessment order under Section 143(3) directly, without first issuing a draft assessment order under Section 144C(1) for an eligible assessee, constitutes a fundamental jurisdictional defect. This defect cannot be cured by a subsequent corrigendum, especially if issued beyond the prescribed period of limitation.
When an assessee has sufficient interest-free own funds available to make interest-free advances or investments, it is presumed that such advances or investments are made from these interest-free funds, thereby preventing the disallowance of interest expenditure under Section 36(1)(iii).
When no specific statutory period of limitation exists, proceedings under Section 201(1) and 201(1A) of the Income-tax Act, particularly for payments to non-residents, must be initiated within a reasonable period of four years. This limitation also applies to consequential penalty proceedings under Section 271C.
Recording a valid satisfaction note by the Assessing Officer of the searched person is mandatory to initiate proceedings under Section 153C against another person whose material was seized. Without this satisfaction note, the Section 153C proceedings are invalid and vitiated by law.
An assessee cannot challenge the jurisdiction of the Assessing Officer if an objection is not filed within the prescribed one-month period from the date of receiving a notice. Failure to raise a timely objection under Section 124 before the AO waives the right to dispute jurisdiction later.
