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. 56 : Income from other sources–Shares at premium-Valuation of shares–FMV of shares was estimated after considering intangible assets like goodwill, know-how, patents, copyrights, trademarks, licences, franchises, etc-Re valuation of shares by the AO is held to be not justified. [S. 52(viib)]

Lalithaa Jewellery Mart (P.) Ltd. v. ACIT (2019) 178 ITD 503 / 73 ITR 532/ 182 DTR 337 / 201 TTJ 1123 (Chennai)(Trib.)

S. 54F : Capital gains-Investment in residential house-Purchase– Constructed in phased manner and payments was linked to stage of construction, it is a purchase and not construction of new asset-Exemption is allowable. [S. 45]

Kapil Kumar Agarwal v. DCIT (2019) 178 ITD 255 / 72 ITR 353 (Delhi)(Trib.)

S. 37(1) : Business expenditure-Parking fees–Ad hoc disallowance of 20% disallowance–Books of account not rejected– Disallowance is held to be not valid. [S. 143(3)]

DCIT v. ATC Realtors (P.) Ltd. (2019) 178 ITD 293/ 184 DTR 1 (Guwahati)(Trib.)

S. 37(1) : Business expenses-Provision-Provision for expense was based on scientific and reasonable basis and the liability to incur the same was certain, deduction is allowable.

ACIT v. CEC Soma CICI JV (2019) 72 ITR 570 (Bang.) (Trib.)

S. 37(1) : Business expenditure-Festival expenditure–Books of account not rejected-Disallowance of 25% of festival expenses cannot be disallow when books of accounts were duly audited and no discrepancy was found. [S. 145]

ACIT v. HAL Offshore Ltd. (2019) 178 ITD 272 / 202 TTJ 308/( 2020) 185 DTR 392(Delhi)(Trib.)

S. 36(1)(iii) : Interest on borrowed capital–Rental premium equivalent to 3 months monthly rent-lease rent–Excessive or un reasonable-Matter remanded to AO for reconsideration. [S. 40A(2), Tamil Nadu Buildings (Lease and Rent Control) Act, 1960.]

Lalithaa Jewellery Mart (P.) Ltd. v. ACIT (2019) 178 ITD 503 / 73 ITR 532/ 182 DTR 337 / 201 TTJ 1123 (Chennai)(Trib.)

S. 32 : Depreciation-Set-off of unabsorbed depreciation against its current year income from house property and income from other sources. [S. 22,32 (2), 56]

DCIT v. Regency Property Investments (P.) Ltd. (2019) 179 ITD 584 (Mum.)(Trib.)

S. 28(i) : Business income-Charge of income-tax–Mutuality– Commercial concern–Principle of mutuality is not applicable-Income is chargeable as business income. [S. 4]

Yum! Restaurants Marketing (P.) Ltd. v. ITO (2019) 179 ITD 480/(2020) 190 DTR 84/ 205 TTJ 124(Delhi)(Trib.)

S. 28(i) : Business income-Letting out shopping mall/business centres by providing host of services/facilities/amenities– Income derived assessable as business income and not as income from house property. [S. 22]

DCIT v. ATC Realtors (P.) Ltd. (2019) 178 ITD 293/184 DTR 1 (Guwahati) (Trib.)

S. 11 : Property held for charitable purposes-Educational institution-Income received from sale of property – Application for application of income was not made – Denial of exemption is held to be justified. [S. 11(2)]

Universal Education Foundation v. ADIT (2019) 178 ITD 446 / 202 TTJ 233/ 183 DTR 462(Mum.)(Trib.)