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-Loan to sister concern from non –interest bearing funds–No disallowance can be made.

CIT v. Harrisons Malayalam Ltd. (2019) 414 ITR 344 / 183 DTR 302/ 266 Taxman 414/ 311 CTR 802(Ker.)(HC)

S. 14A : Disallowance of expenditure-Exempt income–Satisfaction-AO cannot disallow the expenditure far in excess of what has been disallowed, without demonstrating how the working of the assessee is wrong. [R. 8D]

CIT v. DSP Adiko Holdings Pvt. Ltd. (2019) 414 ITR 555 (Bom.) (HC) CIT v. DSP HMK Holdings P. Ltd (2019) 414 ITR 555 (Bom.)(HC)

S. 12AA : Procedure for registration–Trust or institution-Cancellation of registration cannot be done retrospective effect- Education- Amounts spent on construction of buildings and acquisition of Television channel for educational purposes-Entitle to exemption-Depreciation is allowable–Proviso inserted w.e.f. 1-4 .2015 is not retrospective–High Court has the power to set aside the order of Settlement Commission which i.e. erroneous. [S. 11, 12AA(3), 245D(4), Art. 226.]

Indian Medical Trust v. CIT (2019) 414 ITR 296/ 265 Taxman 473/ 311 CTR 19/182 DTR 252 (Raj.)(HC)

S. 11 : Property held for charitable purposes–Depreciation is allowable–Amount transferred to private university–Exemption cannot be denied–Expenditure on foreign travel for purpose of Trust- Held to be allowable. [S. 12AA, 13, 32]

CIT(E) v. Mahima Shiksha Samiti (2019) 414 ITR 673 (Raj.)(HC)

S. 5 : Scope of total income-Accrual-Real income theory-Bad debt -Mercantile system of accounting-Bill raised for premature termination of contract-Contracting company not accepting Bill- Income did not accrue–Another bill of which a small part is received after four years–Claim as bad debt is to be accepted. [S. 36(1)(vii)]

CIT v. Bechtel International Inc. (2019) 414 ITR 558 / ( 2020) 113 taxmmann.com 514 / 192 DTR 422(Bom.)(HC)

S. 4 : Charge of income-tax–Capital or revenue-Grant in aide– Disbursement of salaries and flood relief-Protect the functioning of the assessee-Held to be capital receipt. [S. 28(i)]

PCIT v. State Fisheries Development Corporation Ltd. (2019) 414 ITR 443 (Cal)(HC) Editorial: PCIT v. State Fisheries Development Corporation Ltd. ( 2019) 411 ITR 4 (St)

S. 2(24) : Income–Collection of value added tax on behalf of the State Government–Excess over expenditure deposited in State Treasury–Not assessable as income. [S. 2(24(i), 12A]

CIT v. H. P. Excise and Taxation Technical Service Agency. (2019) 414 ITR 539 (HP) (HC) Editorial: SLP of revenue is dismissed CIT v. H. P. Excise and Taxation Technical Service Agency. (2019) 414 ITR 7 (St) (SC)

Prohibition of Benami Property Transactions Act , 1988.
S.3: Prohibition of benami transactions- The Benami Amendment Act, 2016, amending the Benami Act, 1988, comes into force on 01.11.2016 and does not have retrospective effect. [S. 2((9), 5,8 / Art . 226 , 227 ]

Nikharika Jain v. UOI (2019) 107 taxman .com 272 (Raj)(HC), www.itatonline.org

S. 254(1) : Appellate Tribunal -Low tax effect Appeals- Less than 50 lakhs – Applies to all pending appeals- 628 Departmental appeals are dismissed . [ S.253 ] .

ITO v. Dinesh Madhavlal Patel (2019) 108 taxmnn.com 211 / 181 DTR 9 (Ahd)(Trib), www.itatonline.org

S. 197 : Deduction at source – Certificate for lower rate –Quasi judicial – Must be supported by valid and cogent reasons- Orders passed by a statutory authority under “dictation” of a superior officer or anyone else is bad in law .[ R.28AA ]

Bently Nevada LLC v. ITO ( 2019) 267 Taxman 333/ 183 DTR 257/ 311 CTR 677(Delhi)(HC),www.itatonline.org