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. 45 : Capital gains–Business income-Profit on sale of investment is assessable as capital gains. [S. 10(38), 28(i)]

PCIT v. Haryana State Industrial and Infrastructure Development Corporation Ltd. (2019) 414 ITR 632/ 183 DTR 244 / 311 CTR 603/108 taxmann.com 540/ 266 Taxman 9 (Mag) (P&H) (HC)

S. 45 : Capital loss-Loss on sale of shade tree–Capital loss allowed to be carried forward.

CIT v. Harrisons Malayalam Ltd. (2019) 414 ITR 344/ 183 DTR 302 / 266 Taxman 414/ 311 CTR 802(Ker.)(HC)

S. 40(a)(ia) : Amounts not deductible-Deduction at source- Rejection of Books of account-Estimation of profit @ 8% of turnover—No disallowance can be made u/s. 40 of the Act. [S. 145(3)]

ACIT v. Salauddin. (2019) 414 ITR 335 (Pat.)(HC)

S. 36(1)(iii) : Interest on borrowed capital-Loan to sister concern from non –interest bearing funds–No disallowance can be made.

CIT v. Harrisons Malayalam Ltd. (2019) 414 ITR 344 / 183 DTR 302/ 266 Taxman 414/ 311 CTR 802(Ker.)(HC)

S. 14A : Disallowance of expenditure-Exempt income–Satisfaction-AO cannot disallow the expenditure far in excess of what has been disallowed, without demonstrating how the working of the assessee is wrong. [R. 8D]

CIT v. DSP Adiko Holdings Pvt. Ltd. (2019) 414 ITR 555 (Bom.) (HC) CIT v. DSP HMK Holdings P. Ltd (2019) 414 ITR 555 (Bom.)(HC)

S. 12AA : Procedure for registration–Trust or institution-Cancellation of registration cannot be done retrospective effect- Education- Amounts spent on construction of buildings and acquisition of Television channel for educational purposes-Entitle to exemption-Depreciation is allowable–Proviso inserted w.e.f. 1-4 .2015 is not retrospective–High Court has the power to set aside the order of Settlement Commission which i.e. erroneous. [S. 11, 12AA(3), 245D(4), Art. 226.]

Indian Medical Trust v. CIT (2019) 414 ITR 296/ 265 Taxman 473/ 311 CTR 19/182 DTR 252 (Raj.)(HC)

S. 11 : Property held for charitable purposes–Depreciation is allowable–Amount transferred to private university–Exemption cannot be denied–Expenditure on foreign travel for purpose of Trust- Held to be allowable. [S. 12AA, 13, 32]

CIT(E) v. Mahima Shiksha Samiti (2019) 414 ITR 673 (Raj.)(HC)

S. 5 : Scope of total income-Accrual-Real income theory-Bad debt -Mercantile system of accounting-Bill raised for premature termination of contract-Contracting company not accepting Bill- Income did not accrue–Another bill of which a small part is received after four years–Claim as bad debt is to be accepted. [S. 36(1)(vii)]

CIT v. Bechtel International Inc. (2019) 414 ITR 558 / ( 2020) 113 taxmmann.com 514 / 192 DTR 422(Bom.)(HC)

S. 4 : Charge of income-tax–Capital or revenue-Grant in aide– Disbursement of salaries and flood relief-Protect the functioning of the assessee-Held to be capital receipt. [S. 28(i)]

PCIT v. State Fisheries Development Corporation Ltd. (2019) 414 ITR 443 (Cal)(HC) Editorial: PCIT v. State Fisheries Development Corporation Ltd. ( 2019) 411 ITR 4 (St)

S. 2(24) : Income–Collection of value added tax on behalf of the State Government–Excess over expenditure deposited in State Treasury–Not assessable as income. [S. 2(24(i), 12A]

CIT v. H. P. Excise and Taxation Technical Service Agency. (2019) 414 ITR 539 (HP) (HC) Editorial: SLP of revenue is dismissed CIT v. H. P. Excise and Taxation Technical Service Agency. (2019) 414 ITR 7 (St) (SC)