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Important Case Laws



The Gujarat High Court in Raaj Ratna Metal Industries Ltd vs. ACIT has held that if AO contests the audit objection but still reopens u/s 147 to comply with the audit objection, it means he has not applied his mind independently and the reopening is void

The Kolkata ITAT in Munshi Mini Rice Mill vs. ITO has held that failure to record detailed reasons in assessment order does is not required to justify s. 147 action. There is a statutory presumption that AO has applied his mind while passing assessment order

The Mumbai High Court in CIT vs. Reliance Infrastructure Ltd summoned the Senior officers of the department and passed strictures for ‘Irresponsible conduct’ of filing an appeal on a point which is admittedly covered against the department by a judgement of the Supreme Court

The Delhi ITAT in DCIT vs. Spaze Tower Pvt. Ltd has held that Expl 2 to S. 132B, though inserted w.e.f. 1.6.2013, is retrospective and seized cash cannot be adjusted against advance-tax liability


The Mumbai High Court in Vodafone India Services Pvt. Ltd vs. UOI has held that neither the capital receipts received by the Petitioner on issue of equity shares to its holding company, a non-resident entity, nor the alleged short-fall between the so called fair market price of its equity shares and the issue price of the equity shares can be considered as income within the meaning of the expression as defined under the Act.

The Hyderabad ITAT in DCIT vs. Owens Corning Industries (India) Pvt. Ltd has held that TPO cannot question commercial expediency of payment to AE. RBI approval to a transaction implies it is at arms’ length price.

The Hyderabad ITAT in Vijay Electricals Limited vs. ACIT has held that fraud in determination of LIBOR/ EURIBOR is no reason to discard it as ALP for Transfer Pricing purposes.


The Cochin ITAT in Geojit Investment Services Ltd vs. ACIT held that in applying Rule 8D(2)(ii) for purposes of s. 14A interest expenses directly attributable to tax exempt income as also directly attributable to taxable income, are required to be excluded from computation of common interest expenses to be allocated.

The Bangalore ITAT in Alliance Infrastructure Projects Pvt. Ltd vs. DCIT has held that S. 14A & Rule 8D disallowance cannot be made if there is no exempt income. Cheminvest Ltd. vs. ITO 121 ITD 318 (Ahd) (SB) is not good law.

The Delhi ITAT in Interglobe Enterprises Ltd vs. DCIT has held that no disallowance u/s 14A & Rule 8D can be made towards exempt income earned on strategic investments.

The Delhi High Court in CIT vs. Holcim India P. Ltd has held that S. 14A & Rule 8D disallowance cannot be made if there is no exempt income or if there is a possibility of the gains on transfer of the shares being taxable.


The Pune ITAT in The Solapur District Central Co-op. Bank Ltd vs. ACIT has held that interest on NPAs, even if credited to the Profit & loss account, is not chargeable to tax.

The Pune ITAT in The Nanded District Central Co-op. Bank Ltd vs. DCIT has held that grant given to safeguard the interests of depositors, though used for meeting SLR requirements of RBI relatable to its banking activity, is still capital in nature

The Karnataka High Court in CIT vs. McDowell & Co Ltd has held thatpremature payment of sales-tax deferral loan by paying an amount equal to the net present value of the deferred tax by which the entire liability to pay tax/loan stood discharged is not a “benefit” taxable u/s 41 (1)


The Mumbai ITAT in Times Guaranty Ltd vs. ACIT has held that wrong claim for depreciation by showing a finance or loan transaction as a lease transaction attracts penalty u/s 271(1)(c)

The Gujarat High Court in Shanti Enterprise vs. ACIT has held thatassessee’s claim for refund of penalty with interest u/s 275 (1A) cannot be defeated by inaction of revenue


The Mumbai High Court in CIT vs. N.G.C. Network (India) P. Ltd has held that advertisement expenditure incurred by agent to popularize the business of the channel run by the foreign principal is allowable as there is a direct business between the expenditure and the assessee’s business as agent. The fact that the foreign principals also benefited does not entail right to deny deduction under section 37(1).

The ITAT Kolkatta in Parmanand Tiwari vs. ITO has held that Rule 37BA (credit for TDS) inserted w.e.f. 01.04.2009 to mitigate hardship to taxpayers has to be treated as being retrospective in nature

The Bangalore ITAT in DCIT vs. India Advantage Fund-VII has explained the entire law on taxation of private specific/ discretionary trusts under revocable &
irrevocable transfers and AOPs.

The Mumbai ITAT in Araska Diamond Pvt. Ltd vs. ACIT has held that loss on foreign currency forward contracts by a manufacturer/ exporter is a “speculation loss” according to s. 43(5)(a) and not a “hedging loss”

The Cochin ITAT in Padinjarekara Agencies Pvt. Ltd vs. ACIT has held thatAO is entitled to tinker with P&L A/c u/s 115JB, if assessee’s claim is not permitted by accounting principles

The Delhi ITAT in ITO vs. Rakam Money Matters P. Ltd has explained thelaw regarding addition of share application money as unexplained credit u/s 68

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