S. 54 : Capital gains-Profit on sale of property used for residence Capital Gain Account Scheme-Entire sale consideration was invested for purchasing new residential flat and said investment was within stipulated time limit-Eligible to claim deduction. [S. 54(4), 54F, 139]
S. 56 : Income from other sources-Gift-Capital or revenue-Consideration-Suit properties-Sum received by for giving up his rights to contest will could not be said to have been received without consideration and hence, could not have been brought to tax-Sum received is capital receipt cannot be taxed as capital gains. [S. 4, 45, 56(2)(vii)(a)]
S. 54B : Capital gains-Land used for agricultural purposes-Purchase of land-Failure to purchase the land in her name-Not eligible to claim exemption. [S. 45]
S. 45 : Capital gains-Conversion of asset into stock-in-trade-Land converted in to stock in trade-Capital gains was to be computed upto date of conversion into stock-in-trade and for period thereafter sales realization of stock-in-trade over fair market value of land was to be assessed as business income. [S. 28(i), 45(2)]
S. 45 : Capital gains-immovable property-Agreement to sell-transfer-Possession was not given-Not liable to capital gains tax. [S. 2(47)]
S. 43B : Deductions on actual payment-Provident Fund contributions-Employee’s share of contribution is made on or before due date for furnishing return of income under section 139(1), assessee would be entitled to claim deduction-Explanatory memorandum to Finance Act, 2021 proposing amendment in section 36(1)(va) as well as section 43B is applicable prospectively with effect from 1-4-2021. [S. 36(1)(va), 139]
S. 43B : Deductions on actual payment-Employees’ contribution of PF and ESI before due date of filing return-Entitled to deduction. [S. 36(1)(va), 139(1)]
S. 43(5) : Speculative transaction-Trading in derivatives-Hedging contract with its bankers to minimize possible fluctuation in foreign currency-Not speculation loss-Allowable as business or business expenditure. [S. 28(i), 37(1)]
S. 40A(3) : Expenses or payments not deductible-Cash payments exceeding prescribed limits-Payment was made by way of legal tender i.e. Indian currency, said payments were covered by exception contemplated in rule 6DD(b)-Disallowance is not valid [R.6DD(b)] and, therefore, same could not be disallowed under section 40A(3).
S. 40(a)(ii) : Amounts not deductible-Rates or tax-Education cess cannot be equated as tax or surcharge-Allowable as business.