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. 2(22)(e) : Deemed dividend- Loans to shareholder – Business of money lending – loan from two companies which were substantially involved in business of money lending- Addition cannot be made as deemed dividend. [S. 2(22)(e)(ii)]

Mohan Bhagwatprasad Agrawal v. ACIT (2019) 176 ITD 735 (Ahd.)(Trib.)

S. 263 : Commissioner-Revision of orders prejudicial to revenue- Stamp valuation–Accepting the claim as per agreement– Provision of S.50C is applicable-Revision is held to be valid. [S. 45, 50C]

Babulal S. Solanki v. ITO (2019) 176 ITD 642/ 181 DTR 25 (Ahd.)(Trib.)

S. 40A(2) : Expenses or payments not deductible–Excessive or unreasonable–Ad hoc disallowance of 50 % of rent–Held to be not justified.

Bhagwati Gases Ltd. v. DCIT (2019) 176 ITD 609 (Kol.)(Trib.)

S. 40(a)(ia) : Amounts not deductible-Deduction at source-Interest paid to resident–Failure to deduct tax at source-recipient has shown as income-Second proviso to section 40(a)(ia) inserted by Finance (No. 2) Act, 2004, with effect from 1-4-2005 is curative and has retrospective effect- No disallowances can be made. [S. 201]

Bhagwati Gases Ltd. v. DCIT (2019) 176 ITD 609 (Kol.)(Trib.)

S. 37(1) : Business expenditure–Capital or revenue–Replacement of spare parts of machinery -Held to be revenue expenditure.

Bhagwati Gases Ltd. v. DCIT (2019) 176 ITD 609 (Kol) (Trib.)

S. 36(1)(iii) : Interest on borrowed capital-Advance of security deposit – Substantial interest free funds–No disallowances can be made.

Bhagwati Gases Ltd. v. DCIT (2019) 176 ITD 609 (Kol.)(Trib.)

S. 32 : Depreciation-Unabsorbed depreciation-Carry forward and set off – Unabsorbed depreciation pertaining to assessment year 1997-98, was allowed to be carried forward and adjusted after lapse of 8 years. [S. 32(2)]

Bhagwati Gases Ltd. v. DCIT (2019) 176 ITD 609 (Kol.)(Trib.)

S. 28(i) : Business loss- Share transactions-Registered stock exchange-Prevailing market prices–STT paid-Produced contract rates, demat statements and bank statements-loss cannot be disallowed as bogus. [S. 68]

DCIT v. PRB Securities (P.) Ltd. (2019) 176 ITD 649 (Kol.)(Trib.)

S. 28(i) : Business loss–Advances not recoverable-Write off Advances given to suppliers for purchase of raw materials- Failure to produce evidence to show that the advances were paid in the ordinary course of business-Not allowable as business loss. [S. 36(1)(vii), 36(2)]

Bhagwati Gases Ltd. v. DCIT (2019) 176 ITD 609 (Kol.)(Trib.)

S. 12AA : Procedure for registration –Trust or institution- Old denomination notes was found during search on premises of assessee’s bank where management of assessee had effective control- Scholarship to several students and had produced several documents in support of said scholarship payments- Non-appearance of certain students for verification – Purchase of plot of land and built a school building – Registration cannot be denied. [S. 11, 12A, 13]

St. Wilfred Educational Society v. PCIT (2019) 176 ITD 675 //(2020) 190 DTR 281 / 204 TTJ 878 (Jaipur)(Trib.)