S. 45: Capital gains-Joint Development Agreement-Co-owners-Matter remanded to determine the share of each co-owner and decide the taxability-Construction of house within specified period-Matter remanded to decide after considering the relevant documents. [S. 54]
S.43CB: Construction and service contracts-Percentage completion-Project completion method-Method of accounting-Construction Contracts-AS7-Real estate development, constructed residential flats on its own land,-Revenue was to be recognized only upon sale deed execution and possession transfer.[S. 145]
S.43B: Deductions on actual payment-Expenses not charged to P&L a/c-Transferred to work in progress-Disallowances cannot be made. [S. 145]
S. 41(1): Profits chargeable to tax-Remission or cessation of trading liability-Creditors shown as outstanding-Addition cannot be made on an ad hoc basis.
S. 40(a)(ia): Amounts not deductible-Deduction at source-Capitalised the expenditure-Neither are expenses debited to P&L a/c and nor deduction is claimed-Disallowances cannot be made.
S. 12AB: Procedure for fresh registration-Quoting a wrong provision-Order of CIT(E) refusing the registration was set aside. [S. 11, 12]
S. 37(1): Business expenditure-Travel and conveyance expenses-Ad-hoc disallowance of 20%-CIT(A) was justified in deleting the ad-hoc disallowances.
S. 36(1)(viia) :Bad debt-Provision for bad and doubtful debts-Schedule bank-Reserve and surplus account cannot be considered as provision for the purpose of allowing deduction-The amount credited to bad and doubtful reserve is not allowable as a deduction.
S. 36(1)(vii): Bad debt-Amount of unreconciled debtors written off-Allowable as bad debt. [S. 36(2)]
S. 32: Depreciation-Goodwill-Amalgamation-Purchase method-AS 14-Provisions of sixth proviso to s. 32(1), Expln. 7 to s. 43(1) and Expln. 2(b) to s. 43(6) has no applicability to the facts of the case-Amendment made vide Finance Act, 2021, in relation to the allowance of depreciation on goodwill is effective from 1st April, 2021 and is applicable to asst. yr. 2021-22 and subsequent assessment years-Entitled to claim depreciation on goodwill arising on account of amalgamation-Customer relationship or distribution network-existing in the books of the amalgamating company-Fair value of these assets was specifically computed by the independent valuer vide his valuation report-The AO is directed to grant depreciation on “customer relationship” and “distribution network” arising on account of amalgamation. [S. 32(1), 43(1)]