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. 14A : Disallowance of expenditure – Exempt income – Investments Not generating any exempt income – Disallowance of interest on borrowed funds utilized for making investments cannot be made [R.8D ]
ACIT v. Amartara P. Ltd. (2020) 78 ITR 46 (SN) (Mum)(Trib)
S. 92C : Transfer pricing – Arm’s length price – The OECD guidelines recognise that barring exceptional cases, the tax administration should not disregard the actual transaction or substitute other transactions for them- The examination of a controlled transaction should ordinarily be based on the transaction as it has been actually undertaken and structured by the associated enterprises- adoption of TNMM as the Most Appropriate Method of arriving at ALP cannot be termed as perverse or contrary to the evidence on record.- Difference of opinion as to the appropriateness of one or the other method cannot be gone into in an appeal [ S.92CA ,260A ]
PCIT v. Gulbrandsen Chemicals Pvt .Ltd ( 2020 ) 119 taxmann.com 52 ( Guj) (HC) www.itatonline.org
S. 276CC : Offences and prosecutions – Failure to furnish return of income – Finding that delay was not willful – Conviction is held to be not valid . [ S.132 , 153A ]
ACIT v. V. K. Gupta (2020) 424 ITR 602/ 187 DTR 30/ 313 CTR 249 ( Delhi ) (HC)
S. 276C : Offences and prosecutions – Wilful attempt to evade tax –
Compounding of offences —Compounding fees to be computed on basis of tax evaded and not income sought to be evaded [ S. 132 , 271 , 276(1) 278 278B ]
Mehta Laboratories v. P CIT (2020) 424 ITR 405/ 271 Taxman 135 (Guj) (HC)
S.276C: Offences and prosecutions – Wilful attempt to evade tax False statement in verification — Abetment of false return — Limitation —Limitation inapplicable to prosecution for certain Economic Offences — Prosecution of Members of Parliament and Legislative Assemblies – — Transfer of case for Trial to Designated Court — No prejudice caused to assesses- Prosecution based on materials recovered in search and not launched based only on statements of third parties — Prosecution valid – Prosecution not barred by limitation [S. 132, 148, 277, 278, 280A 280B Economic Offences (Inapplicability Of Limitation) Act, 1974 , Code Of Criminal Procedure, 1973, S.6(1), 26 ,200 397 ]
Srinidhi Karti Chidambaram v. Dy .DCIT (2020) 424 ITR 30/ 193 DTR 217/ 316 CTR 502 (Mad) (HC) Karti P. Chidambaram v. Dy. DCIT(Inv) (2020)424 ITR 30/193 DTR 217/ 316 CTR 502 (Mad) (HC)
S. 271B :Penalty- Failure to get accounts audited – Audit conducted under provisions of Co-Operative Societies Act — No Report by Accountant — Levy of penalty justified . [ S.44AB, 273B ]
Peroorkkada Service Co-Operative Bank Ltd. v ITO (2020)424 ITR 422 / 270 Taxman 55(Ker) (HC)
S. 271(1)(c) : Penalty – Concealment- Survey – Before due date of filing of return- Amount disclosed in the return- Return accepted without additions- Levy of penalty is held to be not valid [ S.132, 133A ,139(1) ]
PCIT v. Yamunaji Corporation (2020) 424 ITR 369 (Guj) (HC)
S. 271(1)(c) : Penalty – Concealment -Capital or revenue- Claim for deduction disallowed – Penalty cannot be levied .
PCIT v. CLP Power India Pvt. Ltd. (2020) 424 ITR 98 (Guj)(HC) )
S. 260A : Appeal – High Court – Delay of 3345 days – Abetment of appeal due to death of the assesse – Delay was not explained – Application for condonation of delay was rejected and appeal was dismissed as abated [ S.220(2A) ]
CIT v. V. M. Varghese a d Another (2020) 424 ITR 561 (Ker)(HC)
S.260A: Appeal to High Court -Rule of consistency — Taxability of profits of overseas branches of assessee — Earlier year order of Appellate Tribunal was accepted- Precluded from raising point for later year – Appellate Tribunal – Powers – Subsidy – Capital or revenue – New issues can be raised first time before the Appellate Tribunal on the basis of material already on the record .[ S. 4, 254(1)
PCIT v. Grasim Industries Ltd. (2020) 424 ITR 236 (Bom)(HC)