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. 36(1)(iii) :Interest on borrowed capital – Borrowings for expansion of business, interest was held to be allowable as deduction-Amendment to S.36,with effect From 1-4-2004 is prospective and not retrospective.[ S. 37(1) ]

CIT v. Modern Threads (I) Ltd. (2018) 400 ITR 381 (Raj) (HC) CIT v. Modern Syntex (2018) 400 ITR 381 (Raj) (HC)

S. 36(1)(iii):Interest on borrowed capital — Interest free advances out of surplus funds hence interest was held to be allowable .

PCIT v.Sahjanand Laser Technology Ltd. (2018) 401 ITR 478 (Guj) (HC)

S. 36(1)(iii) :Interest on borrowed capital – Advance to subsidiaries- Presumption is that the advance was from the interest free generated or available with the company- Disallowance of interest was held to be not valid .

CIT v. Reliance Industries Ltd ( 2018) 161 DTR 420/ ( 2019) 410 ITR 468 ( Bom) (HC)Editorial: Affirmed, CIT v. Reliance Industries Ltd ( 2019) 410 ITR 466 /175 DTR 1/ 307 CTR 121 (SC)

S.36(1)(iii): Interest on borrowed capital -Firm- Exempt income -Capital assets received in form of shares in names of partners and not firm — Failure to establish shares forming part of capital account of firm —Disallowance was held to be justified [ S. 14A , 263 ]

Shiva Auto Mobiles (Auto Division) v. CIT (2018) 402 ITR 427 (All) (HC)

S. 35E :Expenditure on prospecting – Minerals –Amortisation- 10% of expenses was held to be allowable .

Mahanadi Coalfields Ltd. v. DCIT (2018) 61 ITR 585 (Ctk) (Trib)

S. 35D : Amortisation of preliminary expenses – No disallowances can be made as there was no material to show that the business income of shipping division was offered on basis of tonnage tax scheme [ S. 37(1) ]

ACIT v. Chambal Fertilisers And Chemicals Limited. (2018) 61 ITR 33 (Jaipur) (Trib)

S. 35 : Scientific research – Approval of competent authority is mandatory to claim weighted deduction [ S. 35(2AB)]

PCP Chemicals (P.) Ltd. v. ITO (2018) 168 ITD 26 (Mum) (Trib.)

S. 32: Depreciation — Gym equipment installed in premises of assessee’s Managing Director was held to be allowable .[ S. 2(11) ]

ACIT v. Claridges Hotels Pvt. Ltd. (20180 61 ITR 135 (Delhi) (Trib)

S. 32: Depreciation — Depreciation cannot be disallowed on motor car only on the reason that cars were parked on promoter’s premises .

ACIT v. Claridges Hotels Pvt. Ltd. (20180 61 ITR 135 (Delhi) (Trib)

S. 32: Depreciation — Catalyst is entitle to depreciation.

ACIT v. Chambal Fertilisers And Chemicals Limited. (2018) 61 ITR 33 (Jaipur) (Trib)