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. 35 : Scientific research–Weighted deduction-Research and Development-Expenditure on development of “Research and Development’ facility was allowable even though approval of concerned Ministry of Central Government was under consideration or awaited. [S. 35(2AB)]
CIT v. TVS Electronics Ltd. (2019) 419 ITR 187/ 263 Taxman 164 (Mad.)(HC)
S. 32 : Depreciation-Intangible asset-Non-compete fee-The expression “or any other business or commercial rights of similar nature” used in Explanation 3 to sub-section 32(1)(ii) is wide enough to include non-compete rights–Eligible for depreciation. [S.32(i(ii)]
PCIT v. Piramal Glass Ltd. (Bom.)(HC), www.itatonline.org
S. 32 : Depreciation-Additional depreciation-Revision of orders prejudicial to revenue-Tribunal allowed assessee’s claim for additional depreciation by following order of jurisdictional High Court – Revision is held to be not valid. [S. 263]
PCIT v .Jitendra J. Mehta (2019) 104 taxman.com 448 / 263 Taxman 6 (Bom.)(HC) Editorial: SLP of revenue is dismissed, PCIT v. Jitendra J. Mehta. (2019) 263 Taxman 5 (SC)
S. 28(i) : Business loss-Future and options loss-Client code modification- Repetitive client code modifications-Client code modifications are tainted with collusive action and manipulation– Loss is held to be bogus–Not allowable as business loss- Reassessment is also upheld. [S.133(6), 147, 148]
Time Media & Entertainment LLP v. ITO (Mum.)(Trib.), www.itatonline.org
S. 15 : Salaries–Provision made by a company for payment of managerial remuneration- Liable to be assessed as salary.
V. Ramakrishnan v. DCIT (2019) 263 Taxman 145 (Mad.)(HC)
S. 10(22) : Educational institution-Property was purchased in name of Secretary and Manager of Society for running a school- Profits of institution was being used for self aggrandizement-Denial of exemption is held to be justified. [S. 12AA]
Sree Chithra Educational Cultural And Film Society v. DIT (2019) 412 ITR 76 / 263 Taxman 93 (Ker.)(HC)
S. 271B : Penalty-Failure to get accounts audited-Illness of Director cannot be the reasonable cause for long delay in complying audit obligation – Levy of penalty is held to be justified. [S. 44AB, 273B]
Haldar Foods (P.) Ltd. v. ITO (2019) 176 ITD 496/ 200 TTJ 896 / 181 DTR 257(Amritsar) (Trib.)