CA Deepak Aggarwal - Page 2

S.80IB-Subsidies for reimbursement of production cost are business income

CIT Vs M/s Meghalaya Steels Ltd. (Supreme Court of India)

The Supreme Court held In the case of CIT vs. M/s Meghalaya Steels Ltd. that the Calcutta High Court in Merino Ply & Chemicals Ltd. v. CIT, 209 ITR 508 [1994], held that transport subsidies were inseparably connected with the business carried on by the assessee....

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S.24(b) Co-owners with unspecified shares entitled to equal interest deduction

Priya Mahajan Vs Commissioner of Income Tax (Appeals) (Punjab and Haryana High Court)

Since the individual shares were not specified in the sale deed and the house property as well as the housing loan is to be taken as jointly by all the co-owners, the logical conclusion is that everyone had equal share in the property and the assessee was entitled to 1/4th deduction, i.e. 25% of the entire interest. ...

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S.40A(3) No disallowance for genuine & bonafide cash transactions

ITO Vs M/s Pranay Towers (ITAT Delhi)

It is crystal clear that the terms of Section 40A(3) are not absolute and that the genuine and bonafide transactions are not taken out of the sweep and it is open to the assessee to furnish to the satisfaction of the AO, the circumstances under which the payment in the manner prescribed u/s 40A(3) was not practicable or would have caused ...

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Arbitrary higher profit rate on unaccounted sale not permitted

Mohd Tehseen Vs ITO (ITAT Delhi)

ITAT held that the rate of profit @15% on estimated unaccounted sale is an arbitrary rate without any comparable cases. The best comparison is also available of the business of the assessee himself wherein he has shown net profit at the rate of 6%....

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Casual workers covered in employee under ESI Act 1948- SC

Royal Western India Turf Club Ltd. Vs E.S.I. Corporation & Ors. (Supreme Court of India)

A person who is employed for wages in the factory or establishment, on any work of, or incidental or preliminary to or connected with the work is covered. The definition brings various types of employees within its purview....

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Sec.14A-No disallowance where No exempt income

M/s Krishna Knitwear Technologies Ltd. Vs DCIT (ITAT Mumbai)

Section 14A contains the expression ‘in relation to income which does not form part of the total income’. The said decision cannot be used in the reverse to contend that even if no income has been received, the expenditure incurred can be disallowed u/s 14A....

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MAT not payable on Capital receipts on forfeiture of share warrants

DCIT Vs M/s. Binani Industries Ltd. (ITAT Kolkata)

ITAT held that it is not in dispute that the receipt representing forfeiture of share warrants is only a capital receipt & not chargeable to tax. However, the same has been duly credited in the profit and loss account as an extraordinary item....

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ESIC Act 1948 Power to reduce imprisonment not extended to fine: SC

Employees State Insurance Corporation Vs A.K. Abdul Samad & Anr. (Supreme Court of India)

SC held that object of creating offence and penalty under the Employees’ State Insurance Act, 1948 is clearly to create deterrence against violation of provisions of the act which are beneficial for the employees....

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MAT credit to be calculated after surcharge and Cess

M/s Virtusa (India) Pvt. Ltd. Vs DCIT (ITAT Hyderabad)

As per sec.115JB (2A), the tax credit shall be the difference of tax paid for any AY under 115JB(1) and the amount of tax payable on his total income computed in accordance with the other provisions of this Act....

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S. 80IA: Option to claim deduction post business commencement

CIT Vs M/s. G.R.T. Jewellers (India) Pvt. Ltd. (Madras High Court)

As per CBDT Circular No.1/ 2016 dated 15.2.2016, it is clear that the assessee has option to claim deduction in subsequent years i.e. he can choose initial assessment year for claiming deduction even post commencement of business....

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September 2021