“Section 55(2)(1)”
The decision most relied on for Section 55(2)(1) is Khatau Junkar Ltd. v. K S Pathania (196 ITR 55), cited in 103 judgments on BharatTax.
Leading authorities on Section 55(2)(1)
A claim made by an assessee which requires further inquiry cannot be disallowed under section 143(1)(a)(iii) without giving the assessee an opportunity to be heard and submit supporting proof. The phrase 'prima facie inadmissible' means the claim is not admissible on the face of it and does not require further inquiry for disallowance.
Expenditure on application software, which enhances business efficiency and requires a computer system to function, constitutes revenue expenditure rather than acquisition of a capital asset, even if it provides an enduring benefit.
A taxing statute must be strictly construed: the subject is not to be taxed unless the charging provision clearly and explicitly imposes the obligation, without room for intendment or implication. There is no equity about a tax, and nothing is to be read into or implied within the language used.
Receipt of a non-compete fee, even if it does not alter the assessee's business structure, impairs the carrying on of their activity, constituting a loss of a source of income.
Income from the sale of immovable property, including any 'on-money' component, is taxable only when the sale is complete, marked by the execution and registration of the sale deed and/or transfer of possession to the buyer.
Expenditure incurred towards the purchase of shares is a capital expenditure and therefore, interest expenditure incurred on such purchases is not eligible for deduction under Section 36(1)(iii) of the Income Tax Act.
Where an expense is incurred for the purpose of acquiring a capital asset, and that asset is subsequently sold, the expenditure must be considered as part of the cost of acquisition of that asset for the purpose of calculating capital gains. This is because the expense forms an integral part of the cost of acquiring the asset, not an expenditure of revenue nature.
Transferable Development Rights (TDR), generated by a change in zoning laws and transferred, do not result in capital gains as they lack an ascertainable cost of acquisition. Gains from the transfer of such rights are not taxable.
