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. 79 : Carry forward and set off losses – Change in share holdings – Companies which public are not substantial interested – Amalgamation – Scheme of amalgamation approved by the High Court – Held, such scheme approved in public interest and cannot be disturbed by the Department merely because assessee was not eligible for the same u/s 72A – Held, doctrine of acquiescence and estoppel applicable – Held, capital loss and business loss of amalgamating companies available to the amalgamated company [S. 72A]

Electrocast Sales India Ltd. v. Dy. CIT (2018) 64 ITR 14 (Kol.)(Trib.)

S. 74 : Losses – Capital loss– shares sold at meagre value – sale price disbelieved by AO and accordingly, capital loss disallowed – Held, AO did not point out any discrepancy in the sale consideration – Held, AO did not conduct any enquiry in the hands of the purchaser – Held, loss cannot be disallowed.

Electrocast Sales India Ltd. v. Dy. CIT (2018) 64 ITR 14 (Kol.)(Trib.)

S. 72 : Carry forward and set off of business losses – losses from non-speculation business can be set off against profit from speculation business . [S. 73]

Edel Commodities Ltd. v. Dy. CIT (2018) 194 TTJ 86 (Mum.)(Trib.)

S. 68 : Cash credits – Unsecured loans – Assessee furnished confirmation of account, copies of bank statement, acknowledgment of returns and financial statements of the creditors – Held no addition can be made.

Dy. CIT v. Torque Holdings LLP (2018) 66 ITR 63 (SN) (Ahd.)(Trib.)

S. 54F : Capital gains – Investment in a residential house – Exemption cannot be denied on the ground that residential building was used for business purpose [ S.54 ]

Dy. CIT v. Subramanian (A. M.) (2018) 63 ITR 24 (SN.) (Chennai) (Trib.)

S. 45 : Capital gains – business income – Trading in shares – Held, in earlier years the same was assessed as capital gains in scrutiny assessments – Held, period of holding and receipt of dividend were not decisive factors – Held, to be assessed as capital gains. [S.28(i)]

Eastman Industries Ltd. v. ACIT (2018) 63 ITR 181 (Delhi) (Trib.)

S. 44C : Non-residents – Head office expenditure – salary paid to expatriates who were stationed in India working exclusively for the business operations of the Indian PE of the assessee – Held allowance and that provision of S.44C is not applicable.

Dy. DIT (IT) v. Bank of Tokyo-Mitsubishi, UFG Ltd. (2018) 61 ITR 272 (Delhi)(Trib.)

S. 44BB : Mineral oils – Computation – Hiring of ships by Indian Companies used in connection with extraction of oil – Held, 44BB to prevail over section 44B, being more specific – Held, service tax being in the nature of a statutory payment cannot be included in the gross receipts for the purpose of computing the presumptive income u/s. 44BB [ S.44B ]

DIT (IT) v. Swiwar Offshore Pte. Ltd. (2018) 167 DTR 341 / 193 TTJ 951 (Mum.)(Trib.)

S. 40(a)(i) : Amounts not deductible – Deduction at source -Non-resident – Interest – Royalty – Fes for technical services – foreign agency commission – services rendered outside India – Held, no tax to be deducted at source – Held, no disallowance can be made. [S. 195]

Dy. CIT v. Sterling Ornament (P.) Ltd. (2018) 65 ITR 492 (Delhi)(Trib.)

S. 37(1) – Business expenditure –Commission to directors against personal guarantee – Matter remitted to the AO to verify whether as per the bank documentation, director eligible for commission.

Eastman Industries Ltd. v. ACIT (2018) 63 ITR 181 (Delhi) (Trib.)