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. 14A : Disallowance of expenditure – Exempt income -Restriction off disallowance by Appellate Authorities to 0.5 Per Cent. of average investment income irrespective of whether such exempt income was received during relevant assessment year — Justified- Prior period income and expenses net off – Held to be justified [S.4, 145 , R.8D ]

PCIT (LTU) v. Mahanagar Telephone Nigam Ltd. (2021) 431 ITR 541 (Delhi) (HC)

S. 14A : Disallowance of expenditure – Exempt income -Recording of satisfaction is mandatory –[ R.8D ]

PCIT v. Gujarat Fluorochemicals Ltd. (2021) 431 ITR 160 (Guj) (HC)

S. 14A : Disallowance of expenditure – Exempt income -Disallowance Cannot exceed exempt income .[ R.8D ]

PCIT v. Envestor Ventures Ltd. (2021) 431 ITR 221 / 278 Taxman 377(Mad)(HC)

S. 14A : Disallowance of expenditure – Exempt -No exempt income — Disallowance is not justified. [ R.8D ]

Biocon Ltd v. Dy. CIT(2021) 431 ITR 326 / 202 DTR 364/ 278 Taxman 121 / 321 CTR 452 (Karn)(HC)

S. 10B: Export oriented undertakings – Entire sale proceeds must be received in convertible foreign exchange within stipulated time or should have opened bank account as per the provision of the Act – Part of sale proceeds adjusted against import of raw material — Not entitled to deduction in respect of such part [ S.10B(3)]

Nuovafil Infotech Pvt. Ltd. v. ITO (2021) 431 ITR 313/ 279 Taxman 142 / 198 DTR 1 /( 2022) 325 CTR 652(Mad) (HC)

S. 10A : Free trade zone – Shifting of undertaking to another place with approval of authorities — Not a case of splitting up or reconstruction of business —Entitled to exemption.[ S.10B(2)(ii) ]

CIT v. S. R. A. Systems Ltd. (2021) 431 ITR 294/199 DTR 57/ 320 CTR 511/ 280 Taxman 164 (Mad)(HC)

S.10(22): Educational institution- Derived from – Deemed income assessed as cash credits whether entitle to exemption – Appeal dismissed due to low tax effect – Question left open [ S. 2( 24), 68 ]

DIT (E) v . Raunaq Education Foundation (2021) 431 ITR 52 199 DTR 344/ 319 CTR 660/ 278 Taxman 186 (SC)

S.10(22): Educational institution- Derived from – Deemed income assessed as cash credits whether entitle to exemption – Appeal dismissed due to low tax effect – Question left open [ S. 2( 24), 68 ]

DIT (E) v . Raunaq Education Foundation (2021) 431 ITR 52 199 DTR 344/ 319 CTR 660/ 278 Taxman 186(SC)

S. 9(1)(vii):Income deemed to accrue or arise in India – Fees for technical services -Non-Resident -Employees not found to stay in India for more than six months — Income not liable to tax in India — Apportionment of expenses – DTAA- India – Japan [ Art , 5, 7, 12 ]

Toshiba Corporation, In Re (2021) 431 ITR 414 (AAR)

S. 9(1)(vii):Income deemed to accrue or arise in India – Fees for technical services – Company providing advisory and consultancy services infield of real estate -Not having permanent establishment in India — Receipts not taxable as business income- DTAA- India- United Kingdom [ Art. 7, 13 ]

DTZ Debenham Tie Leung, In Re (2021) 431 ITR 626 (AAR)