Section 69B of the Income Tax Act
The decision most relied on for Section 69B is CIT v. Gujarat State Road Transport Corpn (41 Taxmann.com 100), cited in 540 of the 612 judgments on BharatTax that turn on this section.
Leading authorities on Section 69B
Employees' contributions to provident fund or other welfare funds are deductible under section 36(1)(va) only if paid by the due date specified in the respective welfare fund enactments, and section 43B does not extend this period to the income tax return filing due date under section 139(1).
In cases of alleged bogus or unverifiable purchases, rather than disallowing the entire purchase value, a reasonable profit element or a proportionate percentage of the purchases should be added back to the assessee's income.
Income tax additions cannot be sustained merely on the basis of uncorroborated statements or allegations. The Revenue must bring on record sufficient material and allow the assessee to produce evidence to prove such additions.
Reassessment proceedings initiated mechanically or based solely on existing records without fresh material are invalid. Additions to income, especially for investments, require the Assessing Officer to conduct independent inquiry and establish adverse material beyond mere allegations.
The non-obstante clause of Section 153A overrides the strict procedures and jurisdictional limitations imposed on the Assessing Officer by Sections 147, 148, 149, and 151, making these provisions inapplicable to assessments initiated under Section 153A.
Proceedings become fatal if principles of natural justice are violated, such as when seized material is not provided to the assessee or cross-examination of a person whose statement the Assessing Officer relies upon is denied.
In cases of alleged bogus or hawala purchases where the existence of transactions is not entirely denied, only the profit element embedded in such purchases, and not the entire purchase price, can be added to the assessee's income. The focus is on determining a reasonable profit percentage for such additions.
Additions to income cannot be made solely based on "dumb documents" or vague loose papers seized during a search that merely indicate rates without specific corroborative material linking them to the assessee's unaccounted transactions. The presumption under Section 292C may not apply to such documents.
For an Assessing Officer to make a valid reference to the Departmental Valuation Officer for the estimation of the cost of construction, the books of accounts must first be rejected under Section 145(3) of the Income-tax Act.
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.
Judgments on Section 69B
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