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. 92C : Transfer pricing–Arm’s length price–Comparable-Employee cost filter-Company which out sourced its work cannot be accepted as comparable–ITES services–Cannot be excluded merely because it did not make profit relevant assessment year.
PCIT v. Nomura Structured Finance Service (P) Ltd. (2020) 268 Taxman 173 (Bom.)(HC)
S. 69C : Unexplained expenditure–Bogus purchases– Accommodation entries-Restricting the disallowances at 5% of alleged bogus purchases is held to be justified–Entire purchases cannot be disallowed. [S. 37(1)n, 144]
PCIT v. Rishabhdev Tachnocable Ltd.(2020) 424 ITR 338 /187 DTR 473 (Bom.)(HC). www.itatonline.org
S. 68 : Cash credits–Loans from a person outside India–Failure to prove creditworthiness of creditor–Certain documents produced first time before High Court–Addition is held to be justified. [S. 260A]
Siddharth Export v. ACIT (2020) 268 Taxman 121 (Delhi)(HC)
S. 68 : Cash credits-Entries found in the books of account seized from premises–Failure to explain–Addition is held to be valid.
Balbir Chand Virmani v. CIT (2020) 268 Taxman 196 (P&H)(HC)
S. 68 : Cash credits–Share capital-Substantial part of share application money was received in earlier assessment years– Balance amount sufficient evidence was produced such as identity and genuineness-Deletion of addition is held to be valid.
PCIT v. Realvalue Realtors (P) Ltd (2020) 113 taxmann.com 62/ 269 Taxman 64 (Bom.)(HC)
S. 40A(2) : Expenses or payments not deductible–Excessive or unreasonable-Sub-contractors-Relatives of partners–20% of disallowance up held by the Tribunal is affirmed. [S. 37(1) ]
Akrati Promoters and Developers. V. DCIT (2020) 268 Taxman 83 (All.)(HC)
S. 37(1) : Business expenditure–Cheque issued–Realised in next assessment year–Cheque is not dishonoured but encashed, payment relates back to date of tendering of cheque and date of payment would be date of delivery of cheque-Allowable as deduction during previous year.
CIT v. Punalur Paper Mills Ltd. (2020) 268 Taxman 47 (Ker.)(HC)
S. 32 : Depreciation-Passive use of the assets-Unabsorbed depreciation-Business was stopped and assets were not in use for period of 24 years-Depreciation is neither allowable nor set off of carried forward of depreciation for previous year. [S. 32 (2), 72]
CIT v. Punalur Paper Mills Ltd. (2020) 268 Taxman 47 (Ker.)(HC)
S. 32 : Depreciation–Amalgamation-Receipt of the Auditors report subsequently-Directed to allow the depreciation on the basis of Auditor’s report.
CIT v. Poorvanchal Vidyut Vitran Nigam Ltd. (2020) 268 Taxman 132 (All.)(HC)