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. 45 : Capital gains-Transfer–Conversion-AOP converted in to a company limited by shares-New company never remained in existence simultaneously–Not liable to capital gain tax. [S.2(47)]

ACIT v. Escorts Heart Institute & Research Centre. (2019) 178 ITD 362 (Delhi)(Trib.)

S. 45 : Capital gains-Sale of shares-investigation wing report- Shares were dematerialized and sales had been routed from de-mat account and consideration had been received through banking channels- Addition cannot be made as cash credits. [S. 10(38), 68]

Karuna Garg. (Smt.) v. ITO (2019) 178 ITD 823 (Delhi)(Trib.)

S. 40A(2) : Expenses or payments not deductible–Excessive or unreasonable–Payment of interest at 15% to HUF-Payment made to related parties-AO has not established that the payment was excessive and unreasonable-Addition is held to be not valid.

Motilal Laxmichand Sanghavi v. ACIT (2019) 178 ITD 710 (Mum.) (Trib.)

S. 37(1) : Business expenditure–Business came to halt–Dormant-Expenditure in respect of rent, professional charges, audit fees, property tax, etc., was incurred by assessee for purpose of maintaining its legal status and for disposing its assets-Held to be allowable.

Hirsh Bracelet India (P.) Ltd. v. ACIT (2019) 178 ITD 601 (Bang.) (Trib.)

S. 37(1) : Business expenditure-Motor car and telephone expenses–Failure to maintain log book-Ad-hoc disallowance of 10% of expenses is held to be justified.

Motilal Laxmichand Sanghavi v. ACIT (2019) 178 ITD 710 (Mum.) (Trib.)

S. 36(1)(va) : Any sum received from employees–Deposited EPF and ESI contribution late but before due date of filing return-Entitle to deduction- Binding precedent-When decision of jurisdictional High Court is available on issue -Non jurisdictional High Court cannot be followed. [S.139(1), Art.227].

Gilco Exports Ltd. v. ACIT (2019) 178 ITD 865 / (2020) 204 TTJ 218 (Chd.)(Trib.)

S. 36(1)(va) : Any sum received from employees–Failure to deposit entire amount towards employees contribution on account of PF and ESI with concerned department on or before due date prescribed under relevant statutes- Not entitle to deduction. [S.2(24)(x), 139(1)]

Eagle Trans Shipping & Logistics (India) (P.) Ltd. v. ACIT (2019) 178 ITD 849 (Delhi)(Trib.)

S. 11 : Property held for charitable purposes-Accumulation of income –Merger with another society–Revenue failed to bring any evidence on record to establish accumulation of profit-Order of the AO is set aside.[S. 10(21)]

ACIT v. Escorts Heart Institute & Research Centre (2019) 178 ITD 362 (Delhi)(Trib.)

S. 11 : Property held for charitable purposes-Failure to file return- Return is filed in pursuance of notice u/s.148–Entitle to exemption as applicable to charitable Trust-Failure to produce evidence in support of its claim of electricity expenses-Such amount had to be excluded while considering application of income-S.40(a)(ia), 40A(3) and S. 43B falls in Chapter IV-D which are applicable for computing profits and gains of business or profession and Chapter IV-D is not applicable in respect of charitable trust or institution whose income is to be computed under S 11 and 12 falling under Chapter-III. S. 37(1), Explanation is not applicable to charitable trust. Capital expenditure is to be allowed as application of income. [S. 12, 37(1), 40(a)(ia), 40A(3), 43B, 139, 139(4A), 147, 148]

United Educational Society v. JCIT (2019) 74 ITR 11 / 178 ITD 716/ 202 TTJ 928/( 2020) 188 DTR 153 (Delhi)(Trib.)

S. 10(23C) : Educational institution-Non-disposal of assessee’s application within prescribed time period of twelve months, would not result in deemed approval under said section. [S. 10(23C)(vi), 254)(1)]

Indian Institute of Banking & Finance v. CIT (2019) 178 ITD 833/( 2020) 186 DTR 108/ 203 TTJ 820 (Mum.)(Trib.)