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. 40(a)(ia) : Amounts not deductible-Deduction at source-Freight charges-Non-resident ship owner-Not liable to deduct tax at source. [S. 172, 194C]

ITO v. Bajaj Herbals (P.) Ltd. (2021) 191 ITD 41 (Ahb.)(Trib.)

S. 40(a)(ia) : Amounts not deductible-Deduction at source-Rent paid-chartered accountant certifying that recipient of impugned receipt had included said receipt in their gross income and had paid tax thereon-Disallowance is held to be not valid. [S. 194I]

Surat District Co-op. Milk Producer’s Union Ltd. v. DCIT (2021) 191 ITD 612 (Surat)(Trib.)

S. 40(a)(i) : Amounts not deductible-Deduction at source-Aircrafts-Supplementary rent in respect of cross border lease agreements-Exempt from tax-No disallowance can be made for failure to deduct tax at source-Shipping, inland waterways transport and air-transport-In respect of agreement executed after 1-4-2007 as per articles 12 and 8 of DTAA between India and Ireland, profits derived by an enterprise of contracting State from rental of aircrafts were taxable only in State of residence of lessor-DTAA-India-Ireland. [S. 9(1)(i), 10(15A), 195, Art. 8, 12]

InterGlobe Aviation Ltd. (IndiGo) v. ACIT (2021) 191 ITD 1 (/(2022)) 195 ITR 586/ 216 TTJ 265/ 211 DTR 233SB) (Delhi)(Trib.)

S. 37(1) : Business expenditure-Business of real estate developer-Setting up of business-Acquired land in the year 2007-No business income-Expenses allowable as deduction-Interest earned from bank deposits-Assessable as income from other sources and not as business income. [S. 28(i), 56]

Bengal Shriram Hitech City (P.) Ltd. v. ACIT (2021) 191 ITD 466 / 86 ITR 719 (Bang.)(Trib.)

S. 37(1) : Business expenditure-Funds borrowed for setting up a thermal plant-Interest expenses till date of commissioning of power production i.e., prior to use of assets, was to be capitalized to cost of asset-Interest expenses incurred after commencement of power production-Allowable as revenue expenditure. [S.43 (1)].

ACIT v. India Power Corporation Ltd. (2021) 191 ITD 250 (Kol.)(Trib.)

S. 37(1) : Business expenditure-Expansion of existing business-Capital or revenue-New project of starting a hotel chain-Allowable as revenue expenditure.

ITO v. Blue Coast Infrastructure Development Ltd. (2021) 191 ITD 643 / 90 ITR 294 / 213 TTJ 28 (UO) (Chd.)(Trib.)

S. 37(1) : Business expenditure-Professional choreographer-Office-cum residence-Electricity-Service charges-Compensation and electricity paid to society in respect of portion of residence used as office-Allowable as business expenditure.

ACIT v. Farah Khan (Ms.) (2021) 191 ITD 633 (Mum.)(Trib.)

S. 37(1) : Business expenditure-Rents-Proportionate disallowance of lease rentals-Held to be not valid-Supplementary Rent (SR) paid to lessors-Not reimbursement-Allowable as deduction.

InterGlobe Aviation Ltd. (IndiGo) v. ACIT (2021) 191 ITD 1 /(2022) 195 ITR 586/ 216 TTJ 265/ 211 DTR 233(SB) (Delhi)(Trib.)

S. 36(1)(va) : Any sum received from employees-Provident fund Employee’s contribution-Deposited before due date of filing of return-No disallowance can be made-Adjustment proposed by centralized processing centre was not sustainable. [S. 139(1), 143(1)]

Maksat Technologies (P.) Ltd. v. DCIT (2021) 191 ITD 175 (Delhi) (Trib.)

S. 36(I)(v) : Contribution approved gratuity fund-Approval of Commissioner-Non-approval of scheme after more than 14 years-Contribution made cannot be disallowed. [S. 40(a)(ia)]

Tata Securities Limited v. DCIT (2021) 191 ITD 1 (Mum.)(Trib.)