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-Pharmaceutical company-Freebies to doctors-Gifts as product reminders, travel facilities of doctors, conference of doctors or similar freebies to medical practitioners or their professional associations would not be hit by Explanation 1 to section 37(1).

Medley Pharmaceuticals Ltd. v. DCIT (2020) 184 ITD 8 /207 TTJ 143 (Mum.)(Trib.)

S. 37(1) : Business expenditure-Repairs of machinery and replacement of some of its parts-Allowable as business expenditure. [S. 32]

DCIT v. Gulshan Chemicals Ltd. (2020) 184 ITD 71 / 208 TTJ 153 / (2021) 197 DTR 274 (Delhi)(Trib.)

S. 36(1)(vii) : Bad debt-Amount written off in the books of account-Allowable as deduction. [S. 36(2)]

Firemenich Aromatics (I) (P) Ltd. v. ACIT (2020) 184 ITD 43 (Mum.)(Trib.)

S. 36(1)(iii) : Interest on borrowed capital-Borrowed funds used for giving interest free loan to sister concerns-Interest disallowable., interest on funds diverted for non-business purpose was to be disallowed.

Global Tech Park (P.) Ltd. v. ACIT (2020) 184 ITD 673 (Bang.) (Trib.)

S. 36(1)(ii) : Bonus or commission-Salary-Director-Shareholder Directors were given commission for promoting and increasing sale-Part of salary allowable as deduction. [S. 15]

Dy.CIT v. Abro Technologies (P.) Ltd. (2020) 184 ITD 82 (Delhi)(Trib.)

S. 35 : Scientific research-Facility is recognised by prescribed authority, in-house R & D-role of-Assessing Officer is to allow expenditure incurred on in-house R&D facility as weighted deduction-in computing 90 days limitation period as provided under Rule 34(5) for pronouncing order, period of Covid-19 pandemic lockdown was to be excluded. [S.35(2AB, S.255]

Omni Active Health Technologies Ltd. v. ACIT (2020) 184 ITD 714 (Mum.)(Trib.)

S. 28(iv) : Business income-Value of any benefit or perquisites-Converted in to money or not-Premature payment of deferred sales tax at Net Present Value of certain amount against total liability-capital receipt-Not assessable as business income.

Mahindra & Mahindra Ltd. v. ACIT (2020) 184 ITD 621 (Mum.)(Trib.)

S. 28(i) : Business loss-Speculation business-Contract cancellation charges-Part and parcel of regular export business-Loss cannot be disallowed as speculative loss. [S. 73]

DCIT v. DML Exim (P.) Ltd. (2020) 184 ITD 432 (Rajkot)(Trib.)

S. 28(i) : Business loss-Forfeiture of advance-Allowable as business loss having direct nexus with operation of business and is incidental to business. [S. 36(1)(vii), 36(2)]

DCIT v. DML Exim (P.) Ltd. (2020) 184 ITD 432 (Rajkot)(Trib.)

S. 28(i) : Business loss-Foreign exchange fluctuation loss-Matter remanded-Bad debt-Advances written off was not allowable as bad debt, same would not ipso facto jeopardize assessee’s claim for deduction of same as business loss-Matter remanded. [S.36(1)(vii), 36(2), 37(1)]

Futura Polyster Ltd. v. ITO (2020) 184 ITD 158 /( 2021) 213 TTJ 625 (Mum.)(Trib.)