Income Tax: Some important pronouncements by Hon'ble Supreme Court in 2024

Latest Hon'ble Supreme Court judicial pronouncements on Income Tax 

In 2024, the Supreme Court of India delivered several important judgments related to income tax, which have implications for businesses, taxpayers, and the interpretation of tax laws. 

1. SC dismissed SLP against HC's ruling that notice issued in name of non-existing Co. was untenable

[2024] 158 taxmann.com 242 (SC) Deputy Commissioner of Income-tax v. Sterlite Technologies Ltd.

SLP was to be dismissed against impugned order of High Court wherein it was held that where notice under section 148, assessment order as also penalty notice and demand notice had been issued in name of a non-existing entity despite having been informed to AO about factum of amalgamation of said entity with assessee-company, assessment order and notices impugned were untenable in law.

2. Section 68 of the Income-tax Act, 1961 - 

[2024] 159 taxmann.com 184 (SC) Assistant Commissioner of Income-tax v. SABH Infrastructure Ltd.

Section 68 of the Income-tax Act, 1961 - Cash credit (Share application money) - Assessment year 2008-09 - High Court by impugned order held that where during assessment proceedings assessee had disclosed all relevant information regarding companies from which it had received share application money and Assessing Officer had not doubted such transaction, mere statement of an entry operator that companies in question were 'paper companies', by itself was insufficient to reopen assessment, unless Assessing Officer had further information that those companies were non-existent after making further inquiries into matter - Whether SLP filed by revenue against said impugned order was to be dismissed - Held, yes [In favour of assessee]

3. Section 68: Opportunity for Cross Examine.

[2023] 157 taxmann.com 193 (SC), Principal commissioner of Income-tax v. Hadoti Punj Vikas Ltd.

SLP dismissed against impugned High Court's order that where AO made an addition under section 68 solely on the basis of information received from Investigation Wing that lenders from whom assessee-company acquired loans were indulged in bogus accommodation entries, since assessee was not granted an opportunity to cross-examine persons whose statements were recorded during the investigation, impugned addition made on basis of such investigation which was not privy to assessee were to be deleted.

4. Reopening on the basis of Audit Party's opinion is unjustified.

[2024] 165 taxmann.com 455 (SC) Assistant Commissioner of Income-tax v. Adani Power Maharashtra Ltd.

SLP dismissed against High Court ruling that where Assessing Officer had no subjective satisfaction while issuing notice of reopening and reopening on part of Assessing Officer was essentially on audit party opinion and not on basis of his own conviction, reopening of assessment was not justified

5.  Reopening under section 147 is not justifiable: when all details are submitted.

[2024] 164 taxmann.com 547 (SC) Income-tax Officer v. Jagdish Kumar Vitthalbhai Patel

SLP dismissed against order passed by High Court that where assessment was sought to be reopened in case of assessee on ground that share of assessee in connection with sale of property did not match with transaction shown by assessee, however, in response to notice issued under section 142(1), all particulars had been furnished by assessee at time of finalizing assessment stating that source of income was partnership share income and assessee had also shown income from short term capital gain, reopening of assessment by invoking proviso to section 147 was not justified

6. SLP dismissed against notice under section 148A.

[2024] 164 taxmann.com 381 (SC), Renu Singh v. Principal Commissioner of Income-tax.

SLP dismissed against order of High Court that where assessee, a proprietary concern, engaged in trade of iron and steel, received notice under section 148A alleging irregularities in financial transactions, said notice could not be challenged by way of writ petition as assessee had efficacious remedy available under Income-tax Act.

7. Revenue Expenditure u/s 37(1)

[2024] 164 taxmann.com 304 (SC) Principal Commissioner of Income-tax/CIT(A) v. Adadyn Technologies (P.) Ltd. 

SLP dismissed against order of High Court that where assessee-company incurred expenditure on development of a software for advertisement but due to rapid change in technology, said application became obsolete and assessee abandoned further development of said software, said expenditure incurred by assessee was to be allowed as revenue expenditure.

8. Subsidy: Capital or Revenue

[2024] 159 taxmann.com 152 (SC) Principal Commissioner of Income-tax v. Sunbeam Auto (P.) Ltd.

Sales tax subsidy received by assessee-company would be treated as a capital receipt and not revenue receipt.

9. Section 68 of the Income-tax Act, 1961 

[2024] 161 taxmann.com 81 (SC) Principal Commissioner of Income-tax v. Nandkishor Hulaschand Jalan

Section 68 of the Income-tax Act, 1961 - Cash credit (Others) - Assessee was confronted with purchases made from various creditors and it submitted that there were large number of debtors who did not make payment due to which he could not gather sufficient funds to pay to creditors - Assessing Officer being of opinion that all these creditors were merely book entries, made addition of entire amount to assessee's income - Commissioner (Appeals) and Tribunal restricted addition to profit element of 25 per cent - High Court upheld said order - Whether SLP filed against said order of High Court was to be dismissed - Held, yes [In favour of assessee]