Direct Tax Knowledge Hub

Similarly, genuine business expenses directly related to land acquisition, even when supported by internal vouchers, should not be disallowed if they reflect standard industry practices and consistent accounting treatment..

If such adjustments are erroneously carried forward, they are liable to be set aside, and the assessee is entitled to relief..

Assessees should ensure that all such disclosures are clearly made in the return and supporting documents to avoid similar disputes..

The ITAT’s directive to remand the matter ensures that substantive justice prevails over form, and that procedural lapses do not override the legitimate rights of charitable entities seeking registration..

Accordingly, the additions made by the Assessing Officer were directed to be deleted, and the assessee’s appeal was allowed..

Therefore, for actionable purposes, it is imperative for both taxpayers and revenue authorities to ensure that jurisdictional requirements are strictly adhered to at the inception of assessment proceedings..

However, interest liability under section 201(1A) remains for the period of delay in deduction or payment, and the AO is required to recalculate this interest based on the relevant facts and dates..

The grounds of appeal are thus partly allowed..

The matter was remanded, with directions to afford the assessee and the concerned deponents a proper opportunity to present their case concerning the additional evidence..

This decision is actionable for cooperative societies, which should ensure to claim such deductions on interest income earned from cooperative banks in their tax filings, substantiating the cooperative status of the banks concerned..