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. 80IB(10) : Housing projects- Allotment of more than one unit to members of same family-Allottees Later removing partitions and combining two flats into one-No breach of condition that each unit should not be of more than 1000 Sq. Ft. — Entitled to deduction.

PCIT v. Kores India Ltd. (2019) 414 ITR 47/ (2020) 274 Taxman 337 (Bom.) (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. 64 : Clubbing of income-Minor child-Guardian of minor is representative assesse-Income of minor assessable in hands of guardian. [S. 2(7), 2(31), 160(1)(ii), 148]

R. P. Sarathy v. JCIT (2019) 414 ITR 161/ 263 taxman 149/ 177 DTR 33 /308 CTR 247(Mad.) (HC) CIT v. Minor M. Pranuthi (2019) 414 ITR 161/177 DTR 33 / 308 CTR 247(Mad.)(HC)

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. 54B : Capital gains-Land used for agricultural purposes-No agricultural activities in preceding two years of transfer –Denial of exemption is held to be valid. [S. 45]

Rajiv Dass. v. CIT (OSD) (2019) 414 ITR 37/ 103 taxmann.com 192 / 264 Taxman 40 (Mag.) /307 CTR 429 (Delhi)(HC)

S. 37(1) : Business Expenditure—Capital or revenue—Repair- Lease premises-Expenditure on construction and renovation of premises taken on Lease—Held to be capital expenditure. [S. 32 (IA)]

CIT v. Viswams. (2019) 414 ITR 148/ 179 DTR 25/ 263 Taxman 497 / 310 CTR 228 (Mad.)(HC) CIT v. RM K. Viswanatha Pillai and sons (2019) 414 ITR 148 (Mad.)(HC) CIT v. Aremaky (2019) 414 ITR 148 (Mad.) (HC) CIT v. Kjah Enterprises P. Ltd. (2019) 414 ITR 148 (Mad.)(HC) CIT v. K. Sivakuar (2019) 414 ITR 148 (Mad.)(HC) CIT v. K.V. Nellaiyappan (2019) 414 ITR 148 (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. 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. 14A : Disallowance of expenditure-Exempt income–Disallowance cannot be made when there is no income exempt from tax. [R. 8D]

PCIT v. Caraf Builders and Constructions Pvt. Ltd. (2019) 414 ITR 122 / 261 Taxman 47 (Delhi) (HC) Editorail: SLP of revenue is dismissed, PCIT v. Caraf Builders and Constructions Pvt. Ltd. ( 2020) 268 Taxman 317 (SC)

S. 260A : Appeal – High Court –Without admitting the appeal and framing any question of law and dismissing it is not in conformity with the mandatory procedure –High Court is directed to hear the appeal following the mandatory procedure. [ S.260A(2) ( C ), 260A(3) ]

Ryatar Sahakari Sakkarre Karkhane Niyamit v .ACIT ( 2019) 308 CTR 507/ 264 Taxman 77 (SC) Editorial: From the judgement, Ryatar Sahakari Sakkarre Karkhane Niyamit v .ACIT ( 2016) 383 ITR 562 /287 CTR 649/ 137 DTR 383 ( Karn) (HC)