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. 54F : Capital gains- Investment in a residential house–Property was co-jointly owned in name of wife–Could not be treated as absolute owner–Exemption cannot be denied. [S. 45]
Ashok G. Chauhan. v. ACIT (2019) 176 ITD 717/ 200 TTJ 659/180 DTR 94 (Mum.)(Trib.)
S. 40A(2) : Expenses or payments not deductible–Excessive or unreasonable-Interest paid for outstanding credit balance-No interest was charged from debtors- Interest paid could not be disallowed.
Aditya Medisales Ltd. v. DCIT (2019) 176 ITD 783 (Ahd.)(Trib.)
S. 37(1) : Business expenditure-Discounts to customers who purchases the medicine from C& F agents-Direct bearing on potential turnover of company-expense would fall within expression wholly and exclusively for purpose of business- Allowable as business expenditure.
Aditya Medisales Ltd. v. DCIT (2019) 176 ITD 783 (Ahd.)(Trib.)
S. 14A : Disallowance of expenditure-Exempt income-Difference between value of actual investment and value as on balance sheet is not dividend income- Addition cannot be made. [R. 8D]
Apollo Sugar Clinics Ltd. v. DCIT (2019) 176 ITD 724/ 200 TTJ 875 182 DTR 142 TR 142 (Hyd.) (Trib.)
S. 14A : Disallowance of expenditure-Exempt income-Interest free funds available-Presumption that interest free funds for investments yielding tax free income in preference to borrowed funds-Disallowance of expenditure cannot exceed exempt income. [R. 8D]
Aditya Medisales Ltd. v. DCIT (2019) 176 ITD 783 (Ahd.)(Trib.)
S. 11 : Property held for charitable purposes–Application of income-Capital gains-Sale of bonds and debentures- Failure to disclose investment made by way of purchase of mutual fund- Deduction is not allowable from capital gains–Accumulation of income- Failure to file any details with regard to availability of funds for making investment in modes specified under section 11(5), claim could not be allowed. [S. 11(5), 45]
Nandlal Tolani Charitable Trust. (2019) 176 ITD 769 / 181 DTR 97 (Mum.) (Trib.)
S. 11 : Property held for charitable purposes-Application of income -Income from house property – Rental income derived from Trust -No Standard deduction at 30 percent is not allowable–Repairs and maintenance expenses incurred on trust property being meant for objects of charitable trust is to be allowed in computing income of the Trust as application of income. [S. 24(a)]
Nandlal Tolani Charitable Trust. (2019) 176 ITD 769/ 181 DTR 97 (Mum.) (Trib.)
S. 2(22)(e) : Deemed dividend- Loans to shareholder – Business of money lending – loan from two companies which were substantially involved in business of money lending- Addition cannot be made as deemed dividend. [S. 2(22)(e)(ii)]
Mohan Bhagwatprasad Agrawal v. ACIT (2019) 176 ITD 735 (Ahd.)(Trib.)
S. 263 : Commissioner-Revision of orders prejudicial to revenue- Stamp valuation–Accepting the claim as per agreement– Provision of S.50C is applicable-Revision is held to be valid. [S. 45, 50C]
Babulal S. Solanki v. ITO (2019) 176 ITD 642/ 181 DTR 25 (Ahd.)(Trib.)
S. 40A(2) : Expenses or payments not deductible–Excessive or unreasonable–Ad hoc disallowance of 50 % of rent–Held to be not justified.
Bhagwati Gases Ltd. v. DCIT (2019) 176 ITD 609 (Kol.)(Trib.)