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. 37(1) : Business expenditure-Non-compete fees-Paid to individuals who had experience in business of consultancy for not to engage themselves in similar kind of business activities for a period of 3 years, such consideration was independent and not part of cost of acquisition of business, such fee was to be allowed as revenue expenditure.

Pricewaterhouse Coopers (P.) Ltd. v. ACIT (2021) 189 ITD 329 (Kol.)(Trib.)

S. 37(1) : Business expenditure-Foreign exchange loss-neither speculative loss within meaning of s.43(5), nor same was notional or contingent in nature, same being loss on foreign exchange derivatives allowed. [S.43 (5)]

Pricewaterhouse Coopers (P.) Ltd. v. ACIT (2021) 189 ITD 329 (Kol.)(Trib.)

S. 37(1) : Business expenditure-Factory shifting expenditure-Transportation expenditure from one site to another site, did not give any enduring benefit, same could not be treated as capital in nature.

Jayant Packaging (P.) Ltd. v. DCIT (2021) 189 ITD 321 (Chenni)(Trib.)

S. 37(1) : Business expenditure-Commission-AO failed to considered the letter submitted by recipient wherein confirmed that entire commission paid was for relevant assessment year, matter needs remanded for consideration. [S.254(1)]

Jaipur Boutique Carpet v. ITO (2021) 189 ITD 305 (Jaipur)(Trib.)

S. 37(1) : Business expenditure-Penal in nature-Contributed 15 per cent of sale proceeds to SPV account, these payment did not fall under category of penalty-Allowable as deduction. [Explanation 1 to section 37 (1)]

Muneer Enterprises v. ACIT (2021) 189 ITD 7/ 213 TTJ 361/ 205 DTR 241 (Bang.)(Trib.)

S. 36(1)(iii) : Interest on borrowed capital-Acquisition of capital asset is not an extension of existing business-Advance less than available free funds-Interest cannot be disallowed. [S. 37(1)]

Golf view Homes Ltd. v. ACIT (2021) 212 TTJ 472 / 88 ITR 423 / 207 DTR 199(Bang.)(Trib.)

S. 28(iv) : Business income-Value of any benefit or perquisites-Forfeiture of advance money-Benefit or perquisite arising from the business shall not be in monetary form-Not taxable-Amount would go to reduce the cost of property. [S. 51]

Archana Traders Pvt. Ltd. v. ITO (2021) 189 ITD 626 / 214 TTJ 231 / 206 DTR 393 (Bang.)(Trib.)

S. 28 (iv) : Business income-Grant received for specific purpose i.e., for procuring a capital asset, this receipt being in cash could not have been taxed u/s. 28(iv) [S.4]

Pricewaterhouse Coopers (P.) Ltd. v. ACIT (2021) 189 ITD 329 (Kol.)(Trib.)

S. 23 : Income from house property-Annual value-Unsold flat as stock in trade-buildings or land appurtenant thereto-Occupied by owners for the purpose of business-Excluded for the purpose of computing notional rent. [S. 22]

Kumar Properties and Real Estate (P.) Ltd. v. DCIT (2021) 190 ITD 212 / 87 ITR 169 (SN)/ 212 TTJ 227/ 202 DTR 425 (Pune)(Trib.)

S. 14A : Disallowance of expenditure-Exempt income-Disallowance is restricted to extent of exempt income. [R.8D]

Pricewaterhouse Coopers (P.) Ltd. v. ACIT (2021) 189 ITD 329 (Kol.)(Trib.)