This Digest of case laws is prepared by KSA Legal and AIFTP from judgements reported in BCAJ, CTR, DTR, ITD, ITR, ITR (Trib), Chamber's Journal, SOT, Taxman, TTJ, BCAJ, ACAJ, www.itatonline.org and other journals
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S. 142(2A) : Inquiry before assessment-Special audit-Voluminous material seized during Search-Bogus claims-If two or three queries out of forty five queries unwarranted, entire order giving directions could not be treated as nullity-Directions neither arbitrary, illegal nor beyond scope of provision. [Rule 14A, Form 6B]

Dishman Carbogen Amcis Ltd. v. ACIT (2022) 443 ITR 227 / 212 DTR 127 / 325 CTR 707 / 285 Taxman 192 (SC) Dishman Infrastructure Ltd. v. ACIT (2022) 443 ITR 227 / 212 DTR 127 / 325 CTR 707 / 285 Taxman 192 (SC) Editorial : Decision in Dishman Infrastructure Ltd v. ACIT (2021) 437 ITR 487(Guj)(HC) affirmed.

S. 132A : Powers-Requisition of books of account-Cash undisclosed seized by Excise Authorities-Deposited with Judicial Magistrate-Order giving only part of cash to Income-Tax Authorities-Not valid. [S. 131, Code of Criminal Procedure, 1973, S. 451]

UOI v. State of Kerala (2022) 443 ITR 117 / 285 Taxman 677/ 215 DTR 407/ 215 DTR 407/ 327 CTR 467 (Ker.)(HC).

S. 132 : Search and seizure-Deputy Commissioner to issue Directions to Assessing Officer-Direction is valid-Cash seized-Voluntary sworn statement unsubstantiated by evidence by third person claiming ownership not sufficient-Addition of amount as undisclosed income of assessee-Justified. [S. 69A, 132(4A)(i), 144A, 153A, 292C, Art. 226]

Durai Murugan Kathir Anand v. Add. CIT (2022) 443 ITR 423 / 213 DTR 137 / 326 CTR 394 (Mad.)(HC)

S. 80IB(10) : Housing projects-Transactions entered into with buyers of flats before introduction of clauses (e) and (f) of section 80IB(10)-Eligible for deduction-Amendment with effect from April 1, 2010 has no application for AY. 2010-2011.

CIT v. Mandavi Builders (2022) 443 ITR 235 / 284 Taxman 371 (SC)

S. 44 : Insurance business-Life insurance Business-Section 44 read with Rule 2 of Part A of First Schedule is applicable and not Rule 5 of Part B.

PCIT v. PNB Metlife India Insurance Company Ltd. (2022) 443 ITR 415 / 209 DTR 383 / 324 CTR 506 (Karn.)(HC)

S. 43B : Deductions on actual payment-Interest-The payment of interest had been made by issue of fully paid up shares to ICICI-Ltd-Disallowance of interest is not justified. [S. 260A]

CIT v. Core Emballage Ltd. (2022) 443 ITR 157/ 215 DTR 313/ 327 CTR 327 (Guj.)(HC)

S. 37(1) : Business expenditure-Fines-Penalty-Not compensatory in nature-Not allowable as deduction. [Kerala General Sales tax Act, 1963, S. 45A]

PTL Enterprises Ltd. v. Dy. CIT (2022) 443 ITR 260 / 326 CTR 858 / 286 Taxman 564 (SC) Editorial : Decision in PTL Enterprises Ltd. v. Dy.CIT (2021) 439 ITR 365 / (2022) 212 DTR 404 / 326 CTR 282/ 286 Taxman 169 (Ker.)(HC) affirmed.

S. 37(1) : Business expenditure-Capital or revenue-Leasing business-Foreign currency loan-Finance Indian enterprises in acquisition of Plant, Machinery and equipment-Enterprises In Acquisition of Plant, Machinery And Equipment-Loss due to fluctuation in foreign exchange rates-Allowable as revenue expenditure. [S. 32, R.115]

Wipro Finance Ltd. v. CIT (2022) 443 ITR 250 / 212 DTR 269/287 Taxman 155 (SC) Editorial: Decision in CIT v. Wipro Finance Ltd. (2010) 325 ITR 672 (Kran.)(HC) reversed.

S. 37(1) : Business expenditure-Capital or revenue-Leasing business-Foreign currency loan-Finance Indian enterprises in acquisition of Plant, Machinery and equipment-Enterprises In Acquisition of Plant, Machinery And Equipment-Loss due to fluctuation in foreign exchange rates-Allowable as revenue expenditure. [S. 32, R.115]

Wipro Finance Ltd. v. CIT (2022) 443 ITR 250 / 212 DTR 269 (SC) Editorial : Decision in CIT v. Wipro Finance Ltd. (2010) 325 ITR 672 (Kran.)(HC) reversed.

S. 28(i) : Business income-Income from lease-Exploitation of property and not exploitation of business assets-Assessable as income from other sources-Quality loss-No business carried on-Not allowable as deduction. [S. 2(14), 56]

PTL Enterprises Ltd. v. Dy. CIT (2022) 443 ITR 260 / 326 CTR 858 / 286 Taxman 564 (SC) Editorial: Decision in PTL Enterprises Ltd. v Dy. CIT (2021) 439 ITR 365/(2022) 212 DTR 404 / 326 CTR 282/ 286 Taxman 169 (Ker)(HC) affirmed.