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
Click here to download the pdf versions of the Digest of case laws

S. 80IA : Industrial undertakings -Conversion of paddy into rice is a manufacturing activity-Entitle to deduction. [S. 80IB].

CIT v. Muthuramalingam Modern Rice Mill (2019) 263 Taxman 294 / 307 CTR 816/ 176 DTR 177(Mad.) (HC)

S. 80IA : Industrial undertakings–Infrastructure development- Agreement with a nodal agency established by State Government Deduction cannot be denied. [S. 80IA(4)]

CIT v. Ranjit Projects (P.) Ltd. (2019) 104 taxmann.com 391 / 263 Taxman 4 ( Guj.)(HC) Editorial: SLP of revenue is rejected ,CIT v. Ranjit Projects (P.) Ltd. (2019) 263 Taxman 3 (SC)

S. 80IA : Industrial undertakings-Gross or net-Net of interest excluding expenditure incurred in earning such interest income which should be excluded for purpose of deduction.

PCIT v. Gujarat Paghuthan Energy Corporation (P.) Ltd. (2019) 263 Taxman 255 (Guj.)(HC) Editorial : SLP of revenue is dismissed, PCIT v. Gujarat Paghuthan Energy Corporation (P.) Ltd. (2019) 263 Taxman 254 (SC)

S. 69A : Unexplained money–Search–Excess jewellery found which belongs to partners-Addition cannot be made in the assessment of firm. [S. 158BB]

Sri. Kavitha Jewellers v. DCIT (2019) 263 Taxman 185/ 309 CTR 82/ 177 DTR 100 (Mad.)(HC)

S. 69 : Unexplained investments–Statement on oath-Assets were not found-Merely on the basis of statement in the course of search no addition can be made. [S. 132(4)]

CIT v. Dilbagh Rai Arora. (2019) 263 Taxman 30/ 308 CTR 502/ 177 DTR 220 (All.)(HC)

S. 69 : Income form undisclosed-Bogus purchases-The CIT(A) is not justified in enhancing the assessment to disallow 100% of the bogus purchases-The only addition which can be made is to account for profit element embedded in the purchase transactions to factorize for profit earned by assessee against possible purchase of material in the grey market and undue benefit of VAT against such bogus purchases. [S. 251]

V. R. Enterprises v. ITO (Mum.)(Trib), www.itatonline.org

S. 62 : Transfer irrevocable for a specified period–Revocable after three years – Income arising by virtue of a revocable transfer of assets would be chargeable to tax as income of transferors and would be included in their total income- Trust cannot be taxed as an AOP at maximum marginal rate. [S.61(1), 62(2), 164]

CIT v. Tamilnadu Urban Development Fund. (2019) 263 Taxman 318/ 181 DTR 139/ 310 CTR 491 (Mad.)(HC).Editorial: SLP of revenue is dimissed , CIT v. Tamilnadu Urban Development Fund ( 2020) 269 Taxman 5 (SC)

S. 56 : Income from other Sources-Purchase of shares at Rs. 4 per shares when the market price was Rs. 140 per share-Failure to explain by credible evidence or any reason or no motive for tax evasion- Difference is held to be taxable as income. [S.56(2)(vii) (c)]

Radhika Roy v. DCIT ( 2019) 200 TTJ 665/ 73 ITR 239 / 180 DTR 329(Delhi)(Trib.), www.itatonline.org Dr. Prannoy Roy v. DCIT( 2019) 200 TTJ 665/ 73 ITR 239 (Delhi)(Trib.), www.itatonline.org

S. 41(1) : Profits chargeable to tax-Remission or cessation of trading liability-Cash credits-Liabilities doubted-Cannot be taxed u/s. 41(1) [S.68]

Dattatray Poultry Breeding Farm (P.) Ltd. v. ACIT (2019) 415 ITR 407/ 263 Taxman 324 (Guj.)(HC)

S. 37(1) : Business expenditure–Capital or revenue-Amount forfeited by seller upon failure to pay full instalments within stipulated time period would be capital expenditure.[S. 28(i)]

Nandkishor Motilal Shah. v. CIT (2019) 415 ITR 429/ 263 Taxman 36/ 179 DTR 170/ (2020) 314 CTR 663 (Bom.)(HC)