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. 41(1) : Profits chargeable to tax – Remission or cessation of trading liability -Sundry creditors – Produced details of court cases at Kuwait and correspondences with its overseas buyers/agents its efforts for making recovery to justify that these payments were still due from customers albeit same was produced before tribunal for first time—No justification in confirming additions.

Pyramid Consulting Engineers Pvt. Ltd. v. DCIT (2018) 195 TTJ 229/( 2019) 176 DTR 302 (Mum.)(Trib.)

S. 40(a)(ia) : Amounts not deductible-Deduction at source -Short deduction of deduction at source–No disallowance can be made. [S.194C, 194J, S. 201]

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

S. 40(a)(i) : Amounts not deductible-Deduction at source-Non-resident -Marketing expenses—Payment made by assessee to foreign entities towards marketing and sale support services were not chargeable to tax in India and assessee was right in law in not deducting any tax thereon – DTAA-India –USA. [S. 195, Art .24(1)]

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

S. 37(1) : Business expenditure-Preliminary and preoperative expenses-Branch office at UAE-Existing business in UAE- Disallowance of expenditure is held to be not justified.

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

S. 37(1) : Business expenditure–Rural development expenses–Held to be allowable as business expenditure-Leave encashment scheme -Held to be allowable.

Rajasthan State Mines & Minerals Ltd. v. ACIT (2018) 196 TTJ 768/(2019) 174 DTR 383 (Jaipur)(Trib.)

S. 37(1) : Business expenditure-Expenditure incurred by assessee for providing training to persons through Apparel Training & Development Centre in form of assistance of Rs. 2,000/- per trainee was in category of corporate social responsibility (CSR) was held not allowable unless and until expenditure was incurred wholly and exclusively for purpose of business of assessee.

Rajasthan State Industrial Development & Investment Corp. Ltd. (2018) 195 TTJ 35 (Jaipur) (Trib.)

S. 37(1) : Business expenditure -Designing and exhibition of player outfits —Held to be revenue expenditure.

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

S. 37(1) : Business expenditure -Security charges—visits of actors, celebrities and VIPs was part of strategic planning by assessee for generating higher revenues—Held to be allowable business expenditure.

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

S. 37(1) : Business expenditure–Coaching services–Held to be allowable as business expenditure.

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

S. 37(1) : Business expenditure -Security services for stadium—Payment of Rs. 75 lac was made by assessee to Kolkata Police Welfare fund, not by its choice, but as per directions of CAB who was responsible to arrange for security in stadium at time of staging of matches by assessee –Held to be allowable business expenditure.

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