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. 115JB : Book profit – Waiver of loan -Loss or depreciation – Reduction of lower of loss or depreciation of the past years is allowable even where the same did not appear in the books of the current years on being absorbed against the credits not otherwise liable to tax in the past years- Matter remanded to CIT(A) for on a short point that the aspect of the adjustments had not been delved upon. . [ S.32 , 72 ]
Windsor Machine Ltd v .DCIT ( 2020 ) 185 ITD 576/ 81 ITR 41 /(2021) 199 DTR 79 ( Mum) (Trib)
S. 36(1)(vii) :Bad debt – Inter corporate deposits in respect of purchase of vehicles and plant and machinery –Mere wrote off is sufficient –It is not necessary for the assessee to establish or prove that the debt has in fact become irrecoverable but it would be sufficient if the bad debt is written off as irrecoverable in the accounts of the assessee. [ S.28 (i) ]
PCIT v .Hybrid Financial Services Ltd ( Formerly known as Mafatlal Finance Ltd ) (2020) 426 ITR 358 /(2021) 276 Taxman 73 (Bom) (HC) www.itatonline.org
S. 28(iv) : Business income – Value of any benefit or perquisites – Converted in to money or not – Waiver of loan cannot be assessed as benefit or perquisites [ S.4 ]
Essar Shipping Ltd v .CIT (2020) 426 ITR 220 /192 DTR 449/ 273 Taxman 49/ 317 CTR 25 (Bom) (HC) www.itatonline .org
S. 147 : Reassessment – After the expiry of four years- Year of chargeability – Reassessment is held to be bad in law – No failure to disclose material facts .[ S. 45(1) , 45(2),143(3) ,143(1) , 148, Art .226 ]
J. S. & M. F. Builders v. A. K. Chauhan (2020) (2020) 426 ITR 460 /315 CTR 473/ 272 Taxman 349/ 191 DTR 19 (HC) www.itatonline .org
S.54F : Capital gains- Investment in a residential house –The usage of the property has to be considered-Several independent residential units in the same building have to be treated as one residential unit and there is no impediment to allowance of exemption u/s 54F(1) [ S.45 ]
Navin Jolly v. ITO (2020) 424 ITR 462 / 192 DTR 385/ 316 CTR 329 / 272 Taxman 348( Karn) (HC) www.itatonline .org
S. 40(a)(ia): Amounts not deductible – Deduction at source – The amendment to S. 40(a)(ia) by the Finance (No.2) Act, 2015 w.e.f. 01.04.2015, which restricts the disallowance for failure to deduct TDS to 30% of the expenditure instead of 100%, is curative in nature and should be applied retrospectively [ S.194H ]
Muradul Haque v. ITO ( 2020 ) 117 taxmann.com 251(Delhi (Trib) www.itatonline .org .
Principle of Natural Justice -Direct taxes – Important case laws .
CIT v Odeon Builders ( P ) Ltd ( 2019) 418 ITR 315 (SC)
Indian Evidence Act ,1872
S.3 : Natural Justice – Right of cross examination – Is integral part of Natural justice though not provided under the statute – Affidavit of own is not evidence with in meaning of S. 3 of the Evidence Act , 1872 .
Ayaaubkhan Noorkhan Pathan v. State of Maharashtra & Ors AIR 2013 SC 58/ (2013) 4 SCC 465
S. 143(3) : Assessment – Limited scrutiny cannot be taken for complete scrutiny unless the AO forms a reasonable view that there is a possibility of under assessment of income – Approval by the PCIT in a mechanical manner is not valid – S.292BB does not save the infirmity – Order is quashed as a nullity . [ S. 292BB ]
Dev Milk Foods Pvt. Ltd v .Dy.CIT (Delhi ) (Trib) www.itatonline .org
S. 271(1)(c) : Penalty – Concealment – Business expenditure – Full particulars were declared in the return – Merely because disallowance of expense , levy of penalty is held to be not justified on merit -Not sticking of inapplicable portion in the notice -In assessment order it was clearly mentioned that penalty proceedings u/s 271(1)(c) had been initiated separately for furnishing inaccurate particulars of income.- Penalty cannot be quashed only on technical ground not sticking of inapplicable portion in the notice [ S.37(1), 274 ]
Ventura Textiles Ltd v. CIT (2020) 426 ITR 478 / 315 CTR 729 /190 DTR 165/ 274 Taxman 144 ( Bom) (HC) www.itatonline .org