Case Studies for NOV 2019 : CA Final

Sr.NO Case Judgement by Head

1 CIT Vs. Saurashtra Cement Ltd (2010) SC Basic Concepts
2 CIT Vs. Alcatel Lucent Canada (2015) Delhi High Residence and
3 CIT vs Sunray Computers (P.) Ltd. [2011] Court
Karnataka scope of total
Residence and
scope of total
income

4 Ishikawajima-Harima Heavy Industries SC -

Ltd. v. DIT [2007]

5 CIT V. Vishakha Pattanam Port Trust Andhra Pradesh Aids to

8 Azadi bachao Andolan SC interpretaion
Aids to of
9 Hyosung Corp V. AAR Delhi High interpretaion
Advance Rulingof
Court

10 M. K Jain (AAR) AAR Advance Ruling

11 Ind Com V CIT Kalcalta HC NR Taxation

12 CIT V. Mutthut Financiers (2015) Delhi High Penulties

Court

13 Price water house coopers V. CIT (2010) SC Penulties

14 Relience petroproducts PVT LTD V. CIT SC Penulties
15 (2010)
CIT V. Harshvardhan Chemicacls and HC Penulties
16 minerals Ltd (2003)
CIT V Manibhai and Brothers GJ HC Penulties
17 CIT V. Omprakash Mittal SC Settlement
Commition

18 Supreme Agrofoods private Limited V Settlement Settlement

19 ITSC
Hindustan Aeronautics V. CIT (2000) Commision
SC Commition
Appeals and
20 Guru nanak Enterprises V. ITO SC Revison
Appeals and
21 CIT Vs ICICI Bank LTD Bombe HC Revison
Appeals and
22 CIT Vs Lark Chemicals Ltd. Bombe HC Revison
Appeals and
23 CIT V. Alagendran Finance limited SC Revison
Appeals and
24 Goetze India Ltd V. CIT SC Revison
Appeals and
Revison

25 CIT V. prithvi brokers and shareholders Bombe HC Appeals and

26 Polyflex India Pvt Ltd V. CIT (2002) SC Revison
Appeals and
27 Union of India V. J K sythetics (1993) SC Revison
Appeals and
28 Deepak Kumar Garg V. CIT MP HC Revison
Appeals and
29 CIT V. Automobil corporation of GOA GA HC Revison
Appeals and
30 National thermal power company LTD V. SC Revison
Appeals and
31 CIT
J N Sahni V ITAT - Revison
Appeals and
32 Sree Ayyanar Spinning and veaving mills - Revison
Appeals and
33 Ltd V CIT
Allan sons Ltd Vs. DCIT Bombe HC Revison
Appeals and
34 CIT V Krishna Capbox Pvt. Allahabad HC Revison
Appeals and
35 CIT V, Bharat general Reinsurance Ltd. Delhi High Revison
Assessment
36 Sanchit Software solutions pvt. Ltd. V. CIT Court
- Procedures
Assessment
Procedures

37 CIT V. Yamaha Motor India pvt. Ltd. Delhi High Assessment

38 Tapria tools Ltd. V. JCIT Court
SC Procedures
Assessment
39 CIT V. Amit Jain Delhi High Procedures
Assessment
Court Procedures

40 GKN drive shafts India Ltd. V ITO SC Assessment

Procedures
41 Kartar Singh V. CIT Punjab Assessment
42 CIT V. India Cements Ltd Hariyana
- HC Procedures
Assessment
43 ACIT V. Surashtra Kutch stock exchange SC Procedures
Assessment
44 CIT V. Sohana Wollen Mills Punjab Procedures
Assessment
45 CIT V. E Safeton and company Pvt. Ltd. Hariyana HC
Kalcalta HC Procedures
Assessment
46 (1989)
Ranbaxy V. CIT Delhi High Procedures
Assessment
47 lodhi Property Company Ltd. V. Under Court
Delhi High Procedures
Assessment
48 secretary
CIT V. A G (ITA II) Pvt. Ltd.
Granites Court
Madras HC Procedures
Assessment
49 CIT V. Thangamani Madras HC Procedures
Assessment
50 CIT V. Sun eingineering Pvt Ltd. SC Procedures
Assessment
51 ITC Ltd. CIT SC Procedures
TDS
52 Relience Industries LTD V. CIT (2015) Bombe HC TDS
53 Japan Airlines Company Ltd V. CIT SC TDS
54 Singapore Airlines V. CIT SC TDS
55 JJCIT V. Rolta India Ltd SC TDS
56 CIT V. Qatar Airways (2011) Bombe HC TDS
57 Shree Govinbhai Jethalal Nathvani GJ HC Charitable and
58 Charitable Trust
CIT V. Society for the promostion of SC trust
Charitable and
59 education adventure
DIT (Exmption) V. Bagri sports and
Foundation Delhi High trust
Charitable and
conservation of environment Court trust

60 CIT V. Mr. Doshi SC Clubbing

61 CIT V. Tollygunge Club limited SC Charitable and
62 CIT V. Shri Plot Swetamber Murti GJ HC trust
Charitable and
63 DCIT V. Dr. R L Khera Charitable trust Delhi High trust
Charitable and
64 Sind cooprative Society V ITO Court
Bombe HC trust
Cooprative
65 Kathiroor Service cooprative bank limited SC Society
Cooprative
66 V.
CITCIT
V. K and company Delhi High Society
Assessment of
67 Chennai Properties and investments Court
- Companies
Assessment of
68 limited
CIT V. Priya Village Road Shows limited. Delhi High Companies
Assessment of
69 Dalmia Jain and company V. CIT Court
SC Companies
Assessment of
70 CIT V. Kiccha Sugar Compant Limited Uttarakhand HC Companies
Assessment of
71 (2013)
CIT V. BHEL Delhi High Companies
Assessment of
72 DCIT V. Super tannery (INDIA LTD) Court
Allahabad HC Companies
Assessment of
73 McGaw - Ravidra Laboratories India Ltd - Companies
Assessment of
74 V.
CITCIT
V. (1994)
BSES Yamuna Powers LTD Delhi High Companies
Assessment of
75 Federal Bank Ltd. V. ACIT Court
Kerala HC Companies
Assessment of
76 Mascon technical Services Ltd. V. CIT Madras HC Companies
Assessment of
77 (2013)
India Cement Ltd. V. CIT SC Companies
Assessment of
78 Millenia Developers Pvt Ltd. V. DCIT Karnataka Companies
Assessment of
79 G G Dandekar Machine Works Ltd V. CIT Bombe HC Companies
Assessment of
80 (1993)
Hero Honda Motors Ltd. V. CIT Delhi High Companies
Assessment of
81 CIT V. General Insurance Corporation Court
SC Companies
Assessment of
(2006) Companies
82 N K India Rubber Company V. CIT (2003) Delhi High Assessment of
83 CIT V. Avery Cycle Ltd. Court
Punjab Companies
Assessment of
84 United Commercial Bank V. CIT Hariyana
SC HC Companies
Assessment of
85 N J Jose and Company Pvt. Ltd V. CIT Kerala HC Companies
Assessment of
86 CIT V. Gujrat Guardian Ltd. (2009) Delhi High Companies
Assessment of
87 Chowringhee Sales buro Pvt. Ltd. V. CIT Court
SC Companies
Assessment of
88 (1973)
CIT V. Thirumalaiswami Naidu and Sons SC Companies
Assessment of
89 CIT V. Anil Hardware Store HP HC Companies
Assessment of
90 CIT V. Great City Manufacturing Comany Allahabad HC Firms
Assessment of
91 Shakti Trading Company V. CIT SC Firms
Assessment of
92 Rameshwarlal Sanwarmal V. CIT (1980) SC Firms
Assessment of
93 CIT V. D V Gopinathan SC HUF
Assessment of
94 CIT. V Kribhco Delhi High Individual
Deduction from
95 Dassault Systeems K. K. Court
- total income
Deduction from
96 Liberty India V. CIT SC total income
Deduction from
97 CIT V. Canara work shop Pvt. Ltd. SC total income
Deduction from
98 English Electric Company Ltd V. CIT SC total income
Deduction from
99 CIT V. Steriling Foods SC total income
Deduction from
100 India Cine agencies V. DCIT SC total income
Deduction from
101 Pramod Mittal V. CIT Delhi High total incomeof
Aggregation
102 CIT V. Suwarnagiri Wire Insulations Pvt. Court
Karnataka income and Set
Aggregation of
Ltd of
income and Set
103 CIT V. Mahalaxmi Sugar mills Company SC Aggregation of
Ltd. of
income and Set
104 CIT V. Madhukant M Mehta SC Aggregation of
of
income and Set
of
 Issue
capital receipt or Income Chargeable to
Tax??
Software Embedded in Hardware =
Royalty
Softwareu/s 9(1)Embedded
NOT (vi) ?? in Hardware =
Royalty u/s 9(1) (vi) ??

Can external Material be used for

interpritation of law? be used for
Can external Material
interpritation of law?
If the application can be rejected on
the basis that proceedings are already
pending before ITA: (pending Hai Kya?)

Can application of AR be withdrawn.

NR Umpire / refree

Penulty 271 D : cash loan received by

firm from its partners u/s 269SS

deduction Wrongly claimed

deduction Wrongly claimed
deduction Wrongly claimed
Interest not shown in original return.
Revised return Suo Motu. Can 271(1C)
Assessee claimed that oder of
settlement of commission was final and
any fresh analysis would amount to
sitting in judgement of an earlier
decision. Is he correct:

Can Settlement Commition deal with

the
Whenmatter
264 /which comes
154 route tobe
can thetaken.?
light in
139 (1) non Compolience: When can
prosecution proceeding
Should the time happen?
limit under u/s 263 to
be reckoned from the date from
Should the time limit under u/s 263 theto
assessment
be reckoned order
from or
thereassessment
date from theto
Should the time limit under u/s 263
order?
assessment
be order or reassessment
Canreckoned from
additional
order? claimthebedate
madefrom the
before
assessment
AO? order or reassessment
order?

Can additional claim be made before

Appellant
Allowance/Authority?
Deduction allowed in past,
recoverd in PY.
Allowance/ Deduction Will it be considered
allowed as
in past,
income?
recoverd Just because
in PY.toWill high
it be in court
consideredhas
HC has Power
passed order.becausereview not an as
income?Just
inhererant power high
to review court has
review
HC has Power
passed order. to review in not an
earlier
inhererantoders passed
power on merit
toentertain
review review
If ITAT has powerto matter
earlier
not oders
raised passed
before on
CIT(A) merit
Does ITAT have inhetrent power to
reiew it own order?
Is a rectification order u/s 254 after 4
Can
years ITAT
from amend
the it order
date of u/su/s 254
oder: (2)
possible
whether notice issued 148 after 4 by
ITAT?
Years from the end invokeof AY is263
valid solely
Can Commissioner merely
on
non the ground
discussion that subsequent
of enquiry by AO in the
Errounous
tribunal andInclusion of Income
other court decisions
assessment Order?
show that
Assesse hadthe deduction
sought was his div
to exclude
excessively
income andallowed?
longterm CG from sale of
shatre u/s 10 but by mistake omitted to
exclude them, Assessee tried RR (but
time limited expired), then filed for
rectification u/s 154, AO rejected. Is he
correct to do so?
discarded Asset , AO disallows dep. Is
he correct.
Whether the treatment given in Books
of A/c could
assessee usedbewrong
a factor which
head will
of income.
deprive the assessee from
Ao penulised. Is he correct?claiming
entire expendiure as a deduction ?

Whats the procedure to follow by

Company and AO in case of
Reassessment u/s 148
ITAT Redirected AO to re examine
certain disallowances,
Rectification of Assessment AO foundorder u/s
evidence
154 on proving
account of Income
subsequent escape, Can
Rectification
he start include of Assessment
the same in order u/s
the current
judgement
154 on of SCof
account subsequent
assessment??
When can order under 263 be passed?
judgement of SC
Rectification of Assessment order u/s
154 on account
Wherther the AO ofcan
subsequent
new finding of
judgement
escaped of SC
Can SBDT condone the already
income in the delay? issused
notice?
Income ofered under one head can it
be reassessed
Illegale income,under Would another head by
it be taxable?
way of rectification u/s 154 ?
Reassessment u/s 147, Can the Ao
extend jurisdiction
Tips collected to reopening
and distributed to or
reconsidering
employees the whole assessment?
Can penultyby becompany,
justified evenis TDSif needed
the
to be
assesseededucted
has by
paid Company?
the frequisit tax on
Air line treating Landing and parking
its own
charges before any
as contratual nitice?
services (194C),
Air line treating Landing and parking
AO :
charges194I? Is he correct
MAT wasasapplicable.
contratualCompanyservices (194C),
say
AO
other: 194I? Is
provisionshe correct
like advance tax,
Extra earning by Agent -treated as
interest
additional ETC, wont be applicable.
commission Is AO
Whether
correct? an application: for AO grant
says TDS
of
194H
approvalapplicable: Is he correct?
Appication done, no response form on
u/s 80G(5) can be rejected
the ground thatoftrust
commissioner Incomehas Taxfailed to in
with apply
6M
Donation
85 % of toincome
its Corpus of charitable
for another trust
(Form
out end of the month
of permissible accumulation of in which
purpose?
application wasyears,
done)upto 15% u/s
income of past
11(1)(a), Can AO invoke explanation to
sec 11(2) and add back the donation.

income form the trust,was to be

accumulated
Amount whichuntil majority
collcted and of his 3
earmarked
Sons.
only AOthe
for wants to club
purpose of the income of
Can the
trust withEEOI PY be set of inis
local
(loss)ofofParent
income
charity,
it a taxable
next yearEEOI income
SIOE of company?
(profit)
Can the (loss) of PY be set of in
next
TrasferyearfeesSIOE (profit)by Coop So. For
received
incoming
Can AO ask andof out going members,
information of time
Would
deposit it be
for liable
the to tax in society
cooprative the hands of
u/sbe
Will
Coop the
So. interest on funds kept as BG
133(6)
PGBP orwhen
IOS?nowould
proceedings are
Rental
pending? income it be taxble under
PGBP, in hands of
Can the expenditure PFR unit holder?
be
considered
Legal fees to defend title toinfactory
as revenue exp existing
business?
premises
Employeesis contribution
it a revenue expenditure?
to PF
Provision for revison of wages: Allowed
/Commision
Disallowed? paid to recovery agents for
realisation of debt
Peripfherals such as printers, scaners,
servers : Are they
EPBAX, Mobile entitled
phones areto higher
not dep
entitled
rate
to which
Dep rate is applicable to Computer?
expense on of Computer.
issue of shares. SEBI did
not approve the issue.
Is nature of expenditure incured for
raising a loanbe: isallowed
can Penulty it depndent on the
as expenditure
nature
if of purpose
it is named as of the loan.?
Embezalment in compounding
bank fees?
Travelling expenditure if MD's wife.
Bonus Shares issue; no fresh inflow of
funds, Can legal expense be claimed as
expenses?
Close Relative's (Not Employee) MBA
course fee and hostel
Gift to dealers, Allowed?? fee, Allowable??
Loss arising due to diminution in value
of
Wheninvestment-
MAT andIsexemption
it allowable deduction
under 54EC
when it
alllowed?? is shows under investments in
Pre Payment
the balance sheet premium for
restrructuring
Treatment of Refund debt: isof it allowed
sales tax (GST)
expenditure?
Refund of sale tax passed on to
customer
Remuneration is it allowed
is not fixedas deduction?
but manner
of
Can AO invoke 40A (2)(a) inPartnership
quantifing is specified in case of
deed.
salary? AO contended that such
On dissolutionnot
remuneration of firm ValuationIsof
deductable. he
Stock
right. at NRV?
whether advancement of loan by
company
loan on Term to registered
Deposit can shareholder
the interest
could
be setbeof treated
against as
theloan or advance
ineterest to
received
Divident
HUF which income
was wasthe
not notregistered
included in
on
totalterm
incomedeposit?
of Cooprative society
shareholder
Royalty income.but was beneficial
Whether book owner
on
of the
Advance shares
computer programming
Whether duty draw back shall form
would
part ofbe considered
eligible as work ofthe
undertaking literary
Can
or loss of non
scientific eligible unit for
nature. be set of
purpose
against of deduction u/sunit80IB
Can lossprofit
of non ofeligible
eligible unit be set of
against
Whether profit
dutyofdraw eligible
backunitshall form
part of eligible undertaking
Held that cutting of jumbo rolls for the
of
purpose
photographic of deduction
films intou/s 80IB
marketable
Can assessee set of his/its loss against
sizes
the would constitute manufacture?
Can profit
(held earned
that) by another
assessee??
Set of loss not claimed by asseessee in
his return.continued
Business Is AO responsible
by legal hairto by
determine the true figure
forming a firm can c/f losses be set of?of total
income
 Held that
Liquidated damages received on delayed supply of plant and machinery are directly and
intimately linked
Consideration forwith the procurement
software of capital
which is embedded in asset.
the hardware supplied to customer did
not amount to royalty under section 9 (1)(vi) which
it was held that the assessee’s transaction for purchaseis the software was
of software thatan
was loaded on
independent
transaction, payment made for it amounted to royalty under section 9(1)(vi)

Held that despite the deeming fiction in section 9, for any such income to be taxable in India,
there must be sufficient territorial nexus between such income and the territory of India. It
further held that for establishing such territorial nexus, the services have to be rendered in India
as well as utilized in India. This interpretation was not in accordance with the legislative intent
that the situs of rendering service in India is not relevant as long as the services are utilized in
India
Therefore, to remove doubts regarding the source rule, an Explanation was inserted with
retrospective efect from 1st June, 1976. However, the Karnataka High Cour t, in its judgment in
the case of Jindal Thermal Power Company Ltd. v. DCIT (TDS) [2009] 182 Taxman 252 (Kar.), has
held that the Explanation, in its present form, does not do away with the requirement of
rendering of services in India
for any income to be deemed to accrue or arise to a non-resident under section 9. It has been
held that on a plain reading of the Explanation

HC used external material i.e extrensic material (international articles) to come to

conclusion forpublished
Used cahiers matter regarding internalnational
by International treaty.
Fiscal Asso. Netherlands.
1. If pendancy is there u/s 245r(2) : if mere notice is given then it wont be construed as
matter to be pending.
2. If pendancy is there u/s 142(1) along with Questionior : Pending

Yes with in 30 Day form, Date of application As per Sec 235 Q (3)
The same sec
Payments does
to NR not stop
Umpire AAR
refree dotonot
accept,
comeifu/s
cercumstance demands
115BBA as they so.Sport person/
are not
NR Sports Asso therefore TDS wont be deducted u/s 194E

269ss wont be violated when money is exchaned between partners and partnership firm
though they are separate assessee if source of money is not under dounbt, transaction is
bonafied and not to avoid tax.

Wrong claim wont mean that Particulars of income is concealed or inacurate particulars
has
Wrongbeen furnished.
claim wont mean that Particulars of income is concealed or inacurate particulars
has been furnished.
Claim debetable or arguable cant be said that the assesse has Particulars of income that
is
NO. if found out by AO in particulars
concealed or inacurate Aseessmenthas been
then yes.furnished.
No as full and true disclosure was not made. SC can Suo Motu withdraw the order or
Revenue Department do the same.

Yes .
When matter is pending with higher authority for one issue, FOR the other issue:
u/s 154
Below can
3K: Nobe applied. proceeding
Prosecution
where the subject matter of revision was not the same as the the subject matter of
reassessment the period
where the subject matterofoflimitation would
revision was notcommence
the same asfrom
the the
the date of original
subject matter of
assessment
reassessment and
thenot the form
period of the reassessment.
limitation would commence from the date of original
where the subject matter of revision was not the same as the the subject matter of
assessment
reassessment and not the form the reassessment.
Assessee cant the
makeperiod
claimofbefore
limitation wouldwise
AO other commence from athe
than by filing datereturn.
revise of original
(AO = RR)
assessment and not the form the reassessment.

ITAT : Can additional claim be made before Appellant Authority? Yes at his discrition.
NO.
Where
NO. the statutory levy is discharged by the assessee and deduction is allowed
therefore,
Taxability subsequently
U/s 41(1) amount is refunded. In such case Sec 41(1) would apply. And it
Heldbe
will that refer 260Awould
(7) arise only if the assessee has obtainted refund pursuent to
decisionconsidered
of court as income.
Order passed by HC u/s 260A (7) can be reviewed.
YES. Because power of ITAT is not confined to matter raised in CIT(A) only
Review : No
Amend : YES (aperent
if application mistakeison
for rectification the face)
made with in 6 months form the end of the month in
what
which cant
orderbe done
by ITAT directly
was cant
passed be done
then: YESindirectly.
No, If as assesee has has provided all material facts, Fully and truly.
Here
Yes, NOOOO
No, If as assesee has has not provided all material facts, Fully and truly.
NO
It wa incumbent on the Income Tax Departmnet to find out whether the particular
income
NO. AO was assessible.
should It was held
rectify. Provided that assessee
application can file appeal
for rectification against
is done oder of AO
in prescribed u/s
time
246A
limit. to Commissioner

Held put used interpreted such that once put to use in any PY it will be held that its put
to
No.use,
As provided the block
the assessee madecontinues in relevant
actual payment PY
and cource of action adopted by assessee
(also
was this
in discarded
line with asset
provision was
of not
the sold,
act a it
merewas physically
diferent availavble)
treatment in books of A/c would
NO.
not hamper the assessee.

Judgement of Case give rules of guidence and act as a binding precedent were notice u/s
148 of reassessment is given. Priciples/ procedure.
NO. He needs to finsh the fresh assessment 1st. And then he can start reassessment u/s
147. i.e IEASubsequent SC decision against assessee, Law was amended rectrospectively.
NO, Held,
Rectification
YES ,Held Mistakecant be doneas a result of subsequent intepretation of law by SC is error
arising
apperent
unsustainbale from/record and therefore
Erroneous rectification
+ prejudicial can betomade.
to the interest reveue.
YES ,Held Mistake arising as a result of subsequent Change of law in retraspective efect
is
NO,error
even apperent
thoughtfrom record"AND
the words and therefore
ALSO" used rectification
in sec 147can arebe
of made.
wide amplitude. The
reasons
YES were not in writing u/s 148
NO.
YES, the primary function of income tax act is to bring various incomes into tax net, tax
authorities
NO. Unless are the not
newconcerned with the legality
isseu or reagitation of such
is related to theincome.
escaped income for which
notice
0 u/s 148 is given.
YES.
NO. The payment made is not merely for the land but multiple combined services
NO. The payment made is not merely for the land but multiple combined services
YES, int u/s 234B 234C would be aplicable.
NO,Diference between published price and the minimum fixed commercial price of the
tickeets
NO. The cantscope beoftaken as additional
enquiry u/s 80G cantspecial
includecommission.
the Q as to whether at the close of PY the
1. Company
donee trust had
will grated
actually permission
be able to to sell
apply tickets
85 % of at
itslower
income than
forthe
thepulished price.
charitable purposes.
Results
2. Air in company
line Deemed registration.
wont have no information about the exact rate at which the ticket
This can be determined only at the close of the AY.
was ultimatly
AO cant invoke.sold
AsAS11 THE AGENTS
(3)(d) HADare
restriction BEEN notGIVEN DISCRITION
applicable TO SELL THE
to accumulation uptoTICKET
15%. AT
ANT RATE BETWEEN MINIMUM FIXED COMMERCIAL PRICE AND THE PUBLISHED PRICE.
3. Therefore the extra income earned by agent would be taxable in the hands of him, but
TDS would be applicable only on the published price.

AO is wrong, in view of deferment of benefit beyond period of minority of assessee's

three sons, provisions
NO. Surcharge of clubbing
being impressed u/san
with 64obligation
(1) (5) hasinnonature
application.
of trust of being applied to
locale charity was diverted before it reached hands of assessee,
Deficit arising to trust out of excess of exp over income (EEOI), should hencebenotset
includable
of againstin
the hands
surplus of Assessee.
income of income
derived over
from Expproperty
trust (SIOE) ofshould
next year
be computed on commercial principles
therefore the expeses incured in earlier
NO. As it doest have taint of commerciality, trade years should be adjusted
or business. Coopin subsequent year. or
So. Is not a trade
professional
Yes, providedorg. therefore
he has Sec 28 (3)ofisPCIT.
taken approval not applicable.
PGBP,as Interest on funds placed as margin for bank guaranty is received is inextricably
linked
Yes. to the business of assessee.
YES. If project Feasibility report is done for the new project is in respect of same business
then
Yes asthough it is business
its for the for expansion it is to be treated as revenue expenditure.
Employees contribution to PF shall be a allowed as deduction if same is deposited on or
before
Allowed. theAsdue datebased
it was u/s 139(1)
on based past experience, report of diferent pay commisions,
union demand
Allowable expense and other relevant factors
Shall be considered asCapital expenditure,: if debited in P&L then Add back (just given
that its capitalised
Yes. When : do nothing)
its an integral part of computer system.
Any expenditure done for project which is not reelated to the existing business where
No. Addwas
project backabandund
wrong Dep. Less the
without correct
creating one.assset.
a new
Share issue expenses will be added back if thhe issue is has not materialised.
NO. It irrelevant and will always be revenue Expenditure
No. law relating to penulty is well settled and in no crecumstance it can be allowed
Deductable. As its incidental to the business.
Allowable expense, as its commercially expedient and business consideration.
Yes.
NO
Yes, Was done in business interest and to promote sales and goodwill of the business.
Held that investments 'Held for trading' and 'available for sale' categories shall be
considered
Not allowedasfor SITcomputation
of the bank of. There
book for Allowable.
profit.
Pre Payment premium for restrructuring debt is deductable as business expenditure on
actual payment.
Held that it will be taxable as deemed income.
Yes: If actually passed i.e payment is done. HAHA
No. As per CBDT circular No. 739 25/03/1996.Salary To be allowed as deduction: It either
Remuneration
No. He can onlyshould check:be1.specified or manner
Working partner of quantifing
mentioned should
in deed? be specifieddeed
2. Partnership in
Partnership
provids deed.
forif payment ofdiscontinued
remuneration. 3. Within limitsto
ofValue
40b(v)at NRV. (now not relevent
Held that firm is not then not needed
as ICDS now been implemented from 01/04/2017
If Both registered shareholder AND beneficial owner of the Which mandates irrespective
shares then of
advancement of
continiuance
load would be value
deededat NRV)
as dividend.
NO.
Held that no disallowance can be made u/s 14A in respect of income on which deduction
is allowed u/s 80P
Yes.
AO has erred in making sec 14A disallowance on income for which deduction u/s 80P is
NO. Draw back receipts are on account of statutory provisions and do not form part of
claimed.
net profit.
while compution deduction of eligible undertaking the loss incured by other non eligible
undertaking
while compution should not be set
deduction of of.
eligible undertaking the loss incured by other non eligible
undertaking should not be set of.
Held that sell of import entitlement and duty drawback would not be eligible u/s 80IB as
they
Yes. could not be considered as income derived by industrial undertaking.
Loss incured by an assessee can't be set of against the profit earned by another
assessee.
Unabsorbed Firm and individual
depreciation areeligible
of the two diferent assessees.
business u/s 80-IA(4) can be set of against the
income from other non eligible business
Yes. AO is not mere a tax gatherer. Provided return is filed as per sec 139 (1)
Yes.
Additional Information/ Relevant Section
-
Depends on what treatment (benefit/ no benefit)
treaty gives.

criteria of rendering services in India and

the utilization of the service in India laid down by the
Supreme Court in its judgment in the case of
Ishikawajima- Harima Heavy Industries Ltd. (supra)
remains untouched and unafected by the
Explanation.

-
Protocalls, preamble, Precedure etc.

Provisio 1 Sec 245R(2): ITA Shall not allow the

application when Q is pending before ITAT,ITA or any
court

Sec 235 Q (3)

u/s 115BBA and 194E

U/s 269SS :

concealed or inacurate particulars has been

furnished. Penulty
concealed can be imposed.
or inacurate (Taxhas
particulars evaded
been to 3
furnished.
concealed or inacurate particulars has been to 3
Penulty can be imposed. (Tax evaded
furnished. Penulty
concealed can be imposed.
or inacurate (Taxhas
particulars evaded
been to 3
furnished. Penulty can be imposed. (Tax evaded to 3
 245 C: Full and true disclosure of income to SC
245 D(6):
every order passed u/s 245 D(4) should provide that
the settlement would become void if subsequently its
found that is has been obtained by fraud or
misrepresendation of facts.
If settlement order obtained by fraud or
misrepresendation of facts , SC can Suo Motu
withdraw the order or Revenue Department do the
same.

obtained
U/s 276 CC : Evasion tax >by25L
it. : Regouraouse
245 D(5) : "Consider"
impresionment thr
U/S 264 : (6m material
CIT :to 7years)
Total brought
Meger on record
plus fine.
Evasion tax < 25L : Impresionment
u/s 154 : Partial Merger (3m to
2years) plus fine
Provided that : Total tax that - would have been evaded
it the failuare had not been discovered as reduced by
advance tax and TDS - is greater than 3K.
-

-
41(1) : Allowance/ Deduction allowed in past recoverd
in: Allowance/
Power
41(1) PY
towill be deemed
review not antoinhererant
inDeduction be incomein
allowed u/h
pastPGBP
power. Should
recoverd
be confered
in PY will be deemed to bebyincome
law. u/h PGBP
260A (7) : power of readdmission or restoration of
aapeal. (but it is not a power - to review earlier oders
passed on merit)
-
Sec 254+(2)
Sec 147 = Reason to beileve income escaped + 148
Sec 254 (2) - withtoin1536 months
followed.form the end of the
month in with order by ITAT
Provided assesee has has not provided was passed
all material
facts, Fully and truly.
Sec 149 : Time Limit toSec send263Notice 4 year (normal)
u/s 246A Appealable orders b4 commissioner (A)

Sec 154 (refer time limit part)

Sec 43 (6) : WDV Definition:

Moneys payable (Sale value) to be deducted from
block of asset to arrive at WDV in case of sale of
discarded- assest.

271 (1C): AO is satisfied that Particulars of income is

concealed or inacurate particulars has been
furnished. Penulty can be imposed. (Tax evaded to 3
times of the amount of tax sought to be evaded)

Refer page 3.5 of fasttrack notes

 -
Write both, (40,41) go with saurashtra as ICAI loves it
Write both (40,41) go with saurashtra as ICAI loves it
Sec 263
Write both (40,43) go with 43 as ICAI loves it
Sec 147
SEC 119 (2B): Power of CBDT: can grand reilfe to
avoide genuine hardship
Sec 154 (refer record )
-
Sec 148
-
Sec 221 (1)
jari assessee ne paise bharle tari penulty lagelach.
Sec 194 and Sec 194C
SEC 207 and
Sec 194 Advance Tax : AT is to be paid on Total income
Sec 194C
(Relevant sec 208-209),
115JB(1) MAT : BP of Company is considered as total
80
194HG : Donation
income. Thereforeof would
would bebe covered
deductable, it does not
u/s 207
deal with assessment of the trust whose income is
not liable to be included in the computation os
Sec 12 AA
taxable income.

Sec 11 (A) permits accumulation of income upto 15%

with out any additional condition
11 (2) : permits accumulation of income with
permission.
11(3)(d): Restricts the donation of amount
accumulated in excess of 15% to another trust.
Sec 64 (1)(5) : Total income of an assessee shall
include income which arises from asets transferred,
otherwise than for adequate considersion to he
extend
- to which the income from such asset is for the
immediate or defered benefit of the minor children.
-
Principle
- of mutuality
Sec 28 (3) ,income derived by trade, profesion or
similar asso. From specific sevices performed for its
Sec 133(6)shall
members : be treated as business income.
Sec
- 115 UA (3) rental incomeshall be taxable as
income of unit holder. Furher income distributed by
REIT shall be deemed to be of the same nature and
-
same proportion in the hands of unit holder.
-
-
-
-
-
-
-
-
-
Sec 37
-
-
-
-

Sec 54 EC
Sec 282A : Pre Payment premium for restrructuring
debt is in the
Sec 41(1) : nature of interest.
Sec 36(1)(iii):Provides for Deduction of interest paid
in
Secrespect
40b (v)of capital borrowed for the purpose of
business
Sec 40b (v)
Sec 43(b) : Interest is allowable asa deduction on
ACTUAL payment.
Sec 2(22)(e)

Sec 80 P:
Sec 80 QQB :Deduction on Royalty income of literary
Sec
work14A: Expenditure incured in relation to income
Sec
not 80IB:
includable in total income. E.g Dividend

Sec 80 IB

Sec 70(1) : Loss from one source of income could be

set
Sec of
72 against loss from another source of income
under
CBDT the same head of income.
Sec 78circular
(2) : B/fNo 14(XL-35
Business 1955)
losses AObetoset
can assist taxthe
of by
payer in every reasonable way.
same assessee. When received from other person;
only in case of inheretance.
 Sr.NO Case Judgement by Head Issue
1 CIT Vs. Saurashtra Cement Ltd (2010) SC Basic Concepts capital receipt
2 CIT Vs. Alcatel Lucent Canada (2015) Delhi High Residence and or Income
Software
3 CIT vs Sunray Computers (P.) Ltd. [2011] Court
Karnataka scope of total
Residence and Embedded
Software NOT in
scope of total Embedded in
income Hardware =
Royalty u/s
9(1) (vi) ??

4 Ishikawajima-Harima Heavy Industries SC

Ltd. v. DIT [2007]
 Question
Company received liquidated damages 25 lacs from supplier for failure to supply plant
and machinery
Whether within stipulated
the consideration time.of software which is embedded in hardware would
for supply
be deemed as royalty.?
Where assessee having purchased software and hardware from two diferent non-
resident companies, integrated them for manufacture and supply of telecommunication
equipments,
 Held that Refer
Liquidated damages received on delayed supply of plant and machinery are directly and 2
intimately linked
Consideration forwith the procurement
software of capital
which is embedded in asset.
the hardware supplied to customer did
not amount to royalty under section 9 (1)(vi) which
it was held that the assessee’s transaction for purchaseis the software was
of software thatan
was loaded on
independent
transaction, payment made for it amounted to royalty under section 9(1)(vi)

Held that despite the deeming fiction in section 9, for any such income to be taxable in India,
there must be sufficient territorial nexus between such income and the territory of India. It
further held that for establishing such territorial nexus, the services have to be rendered in India
as well as utilized in India. This interpretation was not in accordance with the legislative intent
that the situs of rendering service in India is not relevant as long as the services are utilized in
India
Therefore, to remove doubts regarding the source rule, an Explanation was inserted with
retrospective efect from 1st June, 1976. However, the Karnataka High Cour t, in its judgment in
the case of Jindal Thermal Power Company Ltd. v. DCIT (TDS) [2009] 182 Taxman 252 (Kar.), has
held that the Explanation, in its present form, does not do away with the requirement of
rendering of services in India
for any income to be deemed to accrue or arise to a non-resident under section 9. It has been
held that on a plain reading of the Explanation, the
Note
-
Depends on what treatment (benefit/ no benefit)
treaty gives.

criteria of rendering services in India and

the utilization of the service in India laid down by the
Supreme Court in its judgment in the case of
Ishikawajima- Harima Heavy Industries Ltd. (supra)
remains untouched and unafected by the
Explanation.
 Sec
9
9(1)(vii)
9(1)(vi)
Description
With retrospective efect from 1st June 1976: Income of a non resident
shall be deemed
Fees for TechnicaltoServices
accrue or arise in India2in respect of interest, royalty and fees for
– Explanation
Fees for technical
Explanation 4 services means any consideration (including any lump sum consideration) for
For the removal of doubts, it is hereby clarified that the transfer of all or any