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. 8IA : Industrial undertakings – Manufacture – Process of converting raw urad into urad dhal is a manufacturing activity – Entitle to deduction .

CIT v. S. Mahalakshmi (Smt) (2020) 274 Taxman 179 / 189 DTR 256 / 315 CTR 919 (Mad.)(HC)

S. 72 : Carry forward and set off of business losses -Unabsorbed depreciation -Can be set off against sum chargeable to tax as income u/s 68 of the Act – Provision of S.115BBE which barred set off of losses against income determined u/s 68 was effective from 1-4 -2017 and not applicable for the Assessment year 2006 -07 [ S. 32 , 68 71 ,115BBE ]

Shree Karthik Papers Ltd. v. Dy. CIT (2020) 273 Taxman 546 / 196 DTR 248 (Mad.)(HC)

S. 69B : Amounts of investments not fully disclosed in books of account – Set off of gross unaccounted payments on certain transactions against unaccounted receipts for computing undisclosed investment – Non recovery of cash paid cannot be allowed as deduction . [ S 37 (1),69C ]

CIT v. Manojbhai Bhupatrai Vadodaria (2020) 273 Taxman 220 / 317 CTR 278 / 194 DTR 201 (Guj.)(HC)

S. 69A : Unexplained money – Client code modification – Commodity broker – Statement was retracted – Deletion of addition is held to be justified [ S. 132 (4), 153A, 260A ]

PCIT v. Kunvarji Commodities Brokers (P.) Ltd. (2020) 274 Taxman 162 / 193 DTR 18 / (2021) 432 ITR 180 / 318 CTR 597 (Guj.)(HC)

S. 47(v) : Capital gains – Transaction not regarded as transfer – Subsidiary to holding company – 25% of share holding is held by nominee share holding of holding company – Exemption cannot be denied [ S.45 ]

CIT v. Shardlow India Ltd. (2020) 193 DTR 73 / 316 CTR 297 (Mad.)(HC)

S. 40A(3) : Expenses or payments not deductible – Cash payments exceeding prescribed limits – Bank account was attached – Disallowance of 20% is held to be not justified [ R.6DD(j)]

PCIT v. Sumukha Synthetics (2020) 275 Taxman 418 / 195 DTR 445 (Mad.)(HC)

S.40(a)(iib):Amounts not deductible- Royalty, licence, fee, etc. (Gallonage fee, licence fee and shop rental (kist)) -Disallowable – licence granted to assessee for retail trade could not be sustained – Surcharge on sales tax- Surcharge on sales tax or turnover tax paid by assessee-company was not a ‘fee or charge’ coming within sweep of section 40(a)(iib), thus, same could not be disallowed . [ S.37 (1) ]

Kerala State Beverages (Manufacturing and Marketing) Corporation Ltd. v. ACIT (2020) 274 Taxman 12 / 191 DTR 267 / 316 CTR 180 (Ker.)(HC

S. 40(a)(ia): Amounts not deductible – Deduction at source – Payment to contractor – Belated filing of form No 26Q- No disallowance could be made for failure to deduct tax at source [ S.194C (c)]

CIT v. Sri Parameswari Spinning Mills (P.) Ltd. (2020) 196 DTR 206 (Mad.)(HC)

S. 37(1) : Business expenditure –Capital or revenue – Expenditure of lease premises – Allowable as revenue expenditure .

CIT v. NCR Corporation (P.) Ltd. (2020) 274 Taxman 139 / 193 DTR 66 (Karn)(HC)

S.35: Scientific research – Directed the petitioner to make representation before the competent authority and the Competent was directed to consider the said application with in four weeks of receipt of the application [ Art .226 ]

Hawkins Cookers Ltd. v. UOI (2020) 273 Taxman 507 / 196 DTR 29 / 317 CTR 843 (Delhi)(HC)