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. 68 : Cash credits-Bogus capital gains from penny stocks-Mere allegation is not sufficient–No action from SBI–Capital gains cannot be assessed as cash credits. [S. 45]

Deepak Nagar v. DCIT (Delhi)(Trib.), www.itatonline.org

S. 68 : Cash credits–Non–Resident–I Not an ordinary resident -if the assessee is non–resident amount found deposited in a foreign bank is not taxable in India either u/s 68 or u/s 69 of the Act. Period of 182 days to be considered for calculating residential status of a person migrated to Foreign Country [S. 6(6), 69]

PCIT v. Binod Kumar Singh ( 2019) 178 DTR 49 / 264 Taxman 335/ 310 CTR 243 /( 2020) 423 ITR 175 (Bom.)(HC), www.itatonline.org

S. 56 : Income from other sources–Valuation-start-up-Assessee has the option under Rule 11UA(2) to determine the FMV by either the ‘DCF Method’ or the ‘NAV Method’-The AO has no jurisdiction to tinker with the valuation and to substitute his own value or to reject the valuation. [S. 56(2)(viib),,R.11UA(2)]

Cinestaan Entertainment P. Ltd. v. ITO ( 2019) 200 TTJ 459/ 180 DTR 65/ 177 ITD 809 (Delhi)(Trib.), www.itatonline.orgEditorial , Affirmed in PCIT v. Cinestaan Entertainment Pvt. Ltd. (2021) 433 ITR 82/ 199 DTR 345/ 320 CTR 381 (Delhi) (HC)

S. 43(5) : Speculative transaction-Non–banking financial company- Trading in shares and securities-Loss incurred as a result of trading in shares–cannot be set off against the business of futures and options as it did not constitute profits and gains of a speculative business. Statement by assessee before Assessing Officer that share trading was its sole business during the year – Bond by admission – Interpretation- Intention of legislature to be seen . [S. 73, 143 (3( ]

Snowtex Investment Ltd. v. PCIT (SC)(2019) 414 ITR 227/ 265 Taxman 3 / 308 CTR 665/ 178 DTR 89 (SC), www.itatonline.org.Editorial: Judgment from , PCIT v. Snowtex Investment Ltd ( 2017) 87 taxmann.com 356 ( Cal) (HC)

S. 40A(9) : Expenses or payments not deductible-Contributions to unapproved and unrecognized funds–Held to be allowable if they are genuine in nature. [ S.36(1) (iv), 36(1)(iva) 36(1)(v) ]

PCIT v. State Bank of India ( 2019) 181 DTR 275 / ( 2020) 420 ITR 376/314 CTR 542 (Bom.)(HC), www.itatonline.org

S. 271BA : Penalty-Failure to furnish reports-International transaction-Transfer pricing–Report was filed in the course of assessment proceedings–Failed to up load the form on e. portal – Ignorance or oversight–Bona fide mistake -Levy of penalty is held to be not justified. [S. 92CA(3), 92E, 273B]

Shree Ram Dass Rice & General Mills v. DCIT (2019) 176 ITD 748 (Chd.)(Trib.)

S. 271AAB : Penalty-Search initiated on or after 1st day of July 2012-Undisclosed income–Surrender of long term capital gain- income – Would not ipso facto be regarded as undisclosed income unless and until it is tested as per definition provided in Explanation to section 271AAB of the Act – Order of penalty is quashed. [S. 45, 132(4), 153A, 275]

Aparna Agrawal (Smt.) v. DCIT (2019) 176 ITD 753 (Jaipur) (Trib.)

S. 115JA : Book profit – Provision for wealth-tax could not be included for purposes of computation of book profit.

Aditya Medisales Ltd. v. DCIT (2019) 176 ITD 783 (Ahd.)(Trib.)

S. 80G : Donation–Paid through bank and receipt in the name of assessee-Held to be allowable as deduction.

Aditya Medisales Ltd. v. DCIT (2019) 176 ITD 783 (Ahd.)(Trib.)

S. 56 : Income from other sources – Excess share premium- second level subsidiary of a company in which public are substantially interested – Addition cannot be made. [S. 2(18), 2(24), 56(2)(viib), R. 11UA]

Apollo Sugar Clinics Ltd. v. DCIT (2019) 176 ITD 724 / 200 TTJ 875/ 182 DTR 142 (Hyd.)(Trib.)