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 – lease rent – lease rent expenditure was recognized on straight-lining basis, which led to creation of additional lease rental liability in relevant assessment year, would be deductible – Incremental liability on account of lease rental equalization provided for pursuant to adoption of AS-19 having accrued during relevant previous year was allowable deduction in computing income for said year, notwithstanding that such liability may relate to earlier years.[ S.145, AS -19 ]
Bata India Ltd. v. DCIT (2020) 180 ITD 464 (Kol) (Trib.)
S. 37(1) : Business expenditure – fine/penalty levied upon it by European commission for violating European union competition laws by way of accepting non-compete settlement amount from a European company- Payment could not be disallowed as per Explanation 1 to S. 37(1) of the Act – Allowability of claim as business loss- Matter remanded for verification . [ . General Clauses Act ,1897 , S .3(38) , Indian Evidence Act , 1872 , S. 57(1) , Art . 13 ]
Mylan Laboratories Ltd. v. DCIT (2020) 180 ITD 558/ 187 DTR 259/ 204 TTJ 426 (Hyd) (Trib.)
S.32 :Depreciation- Factory building- Depreciation was allowable on cost of river bank embankment and renovation thereof.
Bata India Ltd. v. DCIT (2020) 180 ITD 464 (Kol) (Trib.)
S. 32: Depreciation- Good will- Amalgamation- Purchase, consideration paid in excess of net value of assets and liabilities of amalgamating company was to be treated as goodwill- Entitle to depreciation .
Mylan Laboratories Ltd. v. DCIT (2020) 180 ITD 558 / 187 DTR 259/ 204 TTJ 426(Hyd) (Trib.)
S. 28(i) : Business income – Income from other sources- Interest income on fixed deposits – Extending guarantee to Government authorities -Assessable as income from business and not as income from other sources .[ S.56 ]
ACIT v. JSW Steel Ltd. (2020) 180 ITD 505 (Mum) (Trib.)
S. 14A : Disallowance of expenditure – Exempt income – Disallowance cannot exceed exempt income- Average of investments which have yielded exempt income is to be considered for computation of S. 14A disallowance. .[ R.8D ]
Mylan Laboratories Ltd. v. DCIT (2020) 180 ITD 558/ 187 DTR 259/ 204 TTJ 426 (Hyd) (Trib.)
S. 12AA : Procedure for registration –Trust or institution-Contract with unrelated party for achieving purpose of charitable object – Denial of exemption is not justified – Withdrawal of registration is held to be not valid- Registration granted earlier under S. 12A is restored. [ S.2(15) 11 , 12A,13(3) ]
Devki Devi Foundation. v. DIT (2020) 180 ITD 417 (Delhi) (Trib.)
S. 4 : Charge of income-tax – Subsidy – Sales tax exemption, subsidy was to be treated as capital receipt. [ S. 28 (i) ]
ACIT v. JSW Steel Ltd. (2020) 180 ITD 505 (Mum) (Trib.)
S. 57 : Income from other sources-Deductions–Co-Operative Housing Society-Administrative expenses are allowable against the interest on fixed deposit. [S.56]
Maharashtra Police Mega City Co-Operative Society Ltd. v ITO (Pune) (Trib.) (2020) CTCJ-Feb-P.122
S. 56 : Income from other sources–Registration of agreement– Consideration received preceding year and possession was also taken–Amended provision is not applicable–No addition can be made taking in to value of difference between value on the date of registration and actual consideration. [S. 45, 56(2)(vii)(b)]
Bairang Naredi v. ITO (Ranchi) (Trib.) (2020) CTCJ-Feb-P.121