1. Hasan Ali Khan vs. ITSC (Bombay High Court)

(i) The Chairman of the Settlement Commission has the power to constitute a Special Bench and he is not required to give reasons or produce the material in support thereof.

(ii) It is not as if the moment an application is made and there is compliance of the requirements of Section 245-D that the Commission is bound to entertain the application and allow it. The Commission has then to consider whether the application is invalid under Section 245-D(2C). The Settlement Commission can treat the application as invalid meaning thereby non – est if the Applicant has not made a true and full disclosure and further must disclose how the income has been derived. If on the material it arrives at a conclusion even prima facie that there was no true and full disclosure it has then the right to declare the application as invalid.

2. Krishna Lifestyle vs. UOI (Bombay High Court)

(i) While the arrears of the State have priority over private debts owed to ordinary or unsecured creditors, this priority does not extend over secured creditors (subject to statutory exception). The fact that the tax arrears are recoverable as arrears of land revenue makes no difference to this principle.

3. CIT vs. Nicholas Piramal (Bombay High Court)

As s. 192 requires the employer to deduct tax on the “estimated income” of the employee, the test is whether he acted in a bona fide and honest manner. Where the employer allowed the employees deduction under sections 10(5) and 10(14) only on the basis of declarations filed by the employees without verifying actual expenditure incurred by the employee & maintaining records thereof, it could still be regarded as having acted in a bona fide manner.

4. CIT vs. Saumya Leasing (Bombay High Court)

Deduction under section 80M can be claimed even in respect of the interim dividend declared for the succeeding financial year before the due date.

5. CIT vs. Silver Streak (Delhi High Court)

High Court deprecates the practice of the department in mechanically filing frivolous appeals. Observes that it causes inconvenience and wastes the time of the Court and results in sidelining of important issues. It accordingly imposes costs of Rs. 10,000 on the Revenue to discourage such filings.

See also: CIT vs. Amar Tea Ltd (Bombay High Court) & Pradeep Sangodkar vs. State

6. DCIT vs. Core Health Care (Supreme Court)

(i) Interest paid in respect of borrowings on capital assets not put to use in the concerned financial year are deductible under Section 36(1)(iii) of the Act;

(ii) Interest on all moneys borrowed for the purposes of business are deductible irrespective of whether the moneys are used for a revenue purpose or a capital purpose;

(iii) Explanation 8 to s. 43(1) has no application to s. 36(1)(iii);

(iv) The proviso to s. 36(1)(iii) operates prospectively;

(v) Challapalli Sugars 98 ITR 167 (SC) applies to a case where the business had not yet commenced.

Note: The judgement of the Full Bench in CIT vs. Vardhaman Polytex (P & H High Court) is impliedly overruled.

7. JCIT vs. United Phosphorus (Supreme Court)

The question as to whether the assessee had an option in law to claim partial depreciation in respect of any block of assets is remanded to the High Court to consider in the light of Mahendra Mills 243 ITR 56 (SC), the deletion of s. 34(1) and the insertion of Explanation 5 to s. 32 of the Act.

8. DCIT vs. Gujarat Alkalies (Supreme Court)

Commitment charges paid in respect of borrowed moneys are allowable as a deduction u/s 37(1) of the Act.

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