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. 37(1) : Business expenditure–Capital or revenue-Franchise fee- For participation in league–Held to be revenue expenditure- When no match of IPL Season-2 was played till 31.03.2009, no expenditure in respect of Franchise fee accrued at all during year under consideration—Thus, it could not be held as revenue expenditure in hands of assessee during year under consideration [S. 145]

Knight Riders Sports Pvt. Ltd. v. ACIT (2017) 51 CCH 591 / (2018) 193 TTJ 313 (Mum.)(Trib.)

S. 36(1)(iii) : Interest on borrowed capital-Advance to group concerns out of its own funds–Commercial needs-Disallowance of interest is held to be not justified.

Scrabble Entertainment Ltd. v. ACIT (2018) 169 DTR 51 / 193 TTJ 418 (Mum.) (Trib.)

S. 35DD : Amortisation of expenditure–Amalgamation–Demerger- Travelling expenses incurred wholly and exclusively for purpose of scheme of demerger is entitled for deduction.

Onprocess Technology India Pvt. Ltd. v. DCIT (2018) 195 TTJ 292/(2019) 179 DTR 299 (Kol.)(Trib.)

S. 28(i) : Business income–Income from house property- ware housing-Exploitation of commercial assets–Assessable as business income. [S. 22]

Nutan Warehousing Company Pvt. Ltd. v. Dy.CIT (2018) 170 DTR 377 / 195 TTJ 919 (Pune)(Trib.)

S. 14A : Disallowance of expenditure – Exempt income – Sub-section (2) of section 14A does not authorize or empower AO to apply prescribed method irrespective of nature of claim made by assessee, AO has to first consider correctness of claim of assessee having regard to accounts of assessee. [R. 8D]

Morgan Stanley Investment Management (P) LTD. v. DCIT(2017) 160 DTR 19/ ( 2018) 191 TTJ 365 (Mum.) (Trib.)

S. 11 : Property held for charitable purposes–Education-Accumulation- Section 11(1B) is not applicable where the assessee-society accumulated its income under section 11(2). [S.12AA]

ACIT v. Scientific and Educational Advancement Society (2018) 196 TTJ 740/( 2019) 174 DTR 266 (Delhi)(Trib.)

S. 10A : Free trade zone – Trail production-Commercial production- Trial production was different from commercial production and benefit of exemption provision was allowable from date of commercial production- Exemption is available for the AY.2010-11. [S. 10B]

North Shore Technologies (P) Ltd . v. ITO (2018) 161 DTR 233 62 ITR 294 / 192 TTJ 629 (Delhi)(Trib.)

S. 271AAA : Penalty-Search initiated on or after 1st June, 2007– Failure to specify and substantiate manner in which undisclosed income was derived rather embarked upon mercy plea that he was making surrender to buy peace of mind and avoid litigation-levy of penalty is held to be justified. [S. 153A]

Narsi Iron & Steel (P.) Ltd. v. DCIT (2019) 175 ITD 213 / 177 DTR 420/ 199 TTJ 656 (Delhi)(Trib.)

S. 271(1)(c) : Penalty-Concealment–Debatable issue-Merely because the addition is confirmed levy of penalty is not justified- Deletion of penalty on the sole ground that the High Court has admitted the Appeal and framed substantial questions of law, it cannot be said that the entire issue is debatable one and under no circumstances, penalty could be imposed.

PCIT v. Rasiklal M. Parikh (Bom.)(HC), www.itatonline.org

S. 263 : Commissioner-Revision of orders prejudicial to revenue– Ex-servicemen Corporation-Registered under Companies Act as any other company- Not entitle to exemption–Revision is held to be valid–On merit also it was held that not entitle the exemption u/s 10(26BBB] [S.10(26BBB)].

Uttarakhand Purv Sainik Kalyan Nigam Ltd. v. ACIT (2019) 175 ITD 107/ 177 DTR 433 / 199 TTJ 649 (Delhi)(Trib.)