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, and other journals
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S. 69C: Unexplained expenditure – Bogus purchases-100% disallowance is confirmed-The right of cross-examination is not absolute. No prejudice is caused to the assessee by non granting of cross examination if the assessee has not discharged the primary onus. The fact that purchase bills are produced and payment is made through banking channels is not sufficient if the other evidence is lacking.

Soman Sun Citi v. JCIT (Mum)(Trib) ,

S. 68:Cash credits- Share capital- Mere submission of name & address, Balance Sheet & bank statement of the subscribers is not sufficient to discharge the onus. The assessee has to justify the allotment of shares to outsiders at exorbitant premium with cogent material and not bald statements. Addition is held to be justified. [S.56(2)(viib) , 2(24)(xvi) ]

Pratik Syntex Private Ltd. V. ITO( 2018) 64 ITR 77 (SN) (Mum)(Trib) ,

S.40(a)(ia):Amounts not deductible – Deduction at source- Recipient has filed belated return hence conditions not satisfied – Liable to deduct tax at source-Liable to pay tax with interest [ S.201(1)]

Academy Of Medical Sciences v. CIT (2018) 403 ITR 74 / 254 Taxman 419/ 170 DTR 388/ 305 CTR 659 (Ker) (HC)

S. 10 (23C): Educational institution- Merely because surplus profit earned in educational activities did not automatically presuppose a business activity that invalidated the exemption as long as surplus was utilised for charitable purposes . [ S.2(15), 10(23C)(via),11(4A) ]

DIT v. Delhi Public School Society. (2018) 403 ITR 49 / 165 DTR 257/ 255 Taxman 78/ 305 CTR 500 (Delhi) (HC).Editorial: SLP of revenue is dismissed , DIT ( E ) v. Delhi Public Schools Society (2018) 259 Taxman 404/( 2019) 260 Taxman 88 ( SC)

S.2(22)(e ): Deemed dividend- Loan to shareholder — Finding that loan was not trading transaction therefore assessable as deemed dividend .

CIT v. Prasidh Leasing Ltd. (2018) 403 ITR 129 / 301 CTR 526 /163 DTR 475 /254 Taxman 142 (Delhi) (HC)

S. 92C : Transfer pricing – Arm’s length price –It would be impossible to find comparable with all similarities including the similarity of turnover- A functionally similar company cannot be excluded as comparable only on ground that company had a higher turnover .

CIT v Same Deutz-Fahr India (P) Ltd. (2018) 405 ITR 345/163 DTR 456 /301 CTR 591/ 253 Taxman 32 (Mad) (HC)

S. 80IB(10) : Housing projects- Project containing commercial units to the extent permitted by rules and regulation is allowable as deduction. Tribunal is justified in allowing partial deduction only in respect of building completed.

CIT v. Makwana Brothers & Co. (HWP) (2018) 161 DTR 289 (Bom) (HC)

S. 80IB(10) : Housing projects -Commencement of construction before 1-10-1998- If either the development or the construction starts before the specified date, the benefit of deduction is not allowable . [ S.80IA(5)]

CIT v Shipra Estate Ltd. (2018) 162 DTR 332 /301 CTR 34 (All) (HC)

S. 68 : Cash credits -Share application – The assessees has filed balance sheet confirmation etc, addition cannot be made merely on suspicion , if AO has any doubt he should make enquiry with lenders bank etc .

CIT v Russian Technology Centre Pvt. Ltd. (2018) 300 CTR 501 (Delhi)(HC) PCIT v. Claridges Hotels ( P) Ltd ( 2018) 300 CTR 501 ( Delhi) (HC)

S. 37 (1) : Business expenditure – Provision for deficiency in service – Ascertained liability – Profits chargeable to tax – Remission or cessation -Addition cannot be made. [ S.145 ]

CIT v Narinderjit Singh (2018) 161 DTR 200 / 300 CTR 217 (Delhi)(HC)