Section 2(7A) of the Income Tax Act
The decision most relied on for Section 2(7A) is CIT v. Mahalaxmi Glass Works (P) Ltd. (318 ITR 116), cited in 64 of the 56 judgments on BharatTax that turn on this section.
Leading authorities on Section 2(7A)
When the valuation of closing stock is adjusted to include CENVAT or Modvat credit under Section 145A, a corresponding adjustment must also be made to the opening stock.
When the Assessing Officer revalues the closing stock, the opening stock must also be revalued on the same basis to ensure consistency in the method of accounting and proper computation of business income.
Expenditure incurred by a company to maintain its status as a company, rather than for earning specific income like dividends, cannot be allocated for disallowance under Section 14A.
An assessment order passed without a valid order of transfer under Section 120(4)(b) of the Income Tax Act, 1961, is void and without jurisdiction.
An assessment order passed by an officer not authorized under Section 127, or without proper authorization, is void. The Additional Commissioner is an Assessing Officer only if directed under Section 2(7A) read with other relevant provisions.
An assessment is invalid if it is made without a valid notice issued by the Assessing Officer with the correct jurisdiction. Jurisdiction assumed solely based on PAN data may not be valid.
A credit under the MODVAT scheme is considered equivalent to tax paid, meaning it can be treated as such in accounting.
The authorization of a search is distinct from the initiation of a search. A search is initiated only when it has actually commenced or begun.
The residential status of an assessee is determined by the control and management of its affairs during the previous year in which the income arises. Objections regarding the place of assessment cannot be raised in an appeal against the assessment order under the Income Tax Act.
