“Section 91(1)”
The decision most relied on for Section 91(1) is Pullangode Rubber Produce Co. Ltd. v. State of Kerala (91 ITR 18), cited in 666 judgments on BharatTax.
Leading authorities on Section 91(1)
Admissions, whether made through entries in account books or statements, are important pieces of evidence but are not conclusive. An assessee has the right to demonstrate that an admission made by them is incorrect or can be retracted.
Income cannot be assessed on purely notional figures or mere suspicion; it must be based on actual evidence and supporting material demonstrating its accrual or receipt by the assessee. Assessments made without such evidence are bad-in-law.
Income from shares and securities held by banks as stock-in-trade constitutes business income, hence Section 14A disallowance is not attracted. Further, any disallowance under Section 14A cannot exceed the actual amount of exempt income earned by the assessee during the year.
The revenue cannot question the commercial expediency or wisdom of an expenditure incurred by a businessman, as the businessman is the best judge of their own business interests. The department's role is limited to verifying if the expenditure was genuinely incurred and was wholly and exclusively for business purposes.
Procedural law serves as an aid to justice, not an obstruction, and should not ordinarily be construed as mandatory; it is subservient to substantive justice.
An institution carrying out charitable objects, such as education or advancement of general public utility, does not lose its Section 11 exemption merely by collecting fees for activities like campus placements or educational guidance, as this does not constitute carrying on a business.
The Supreme Court held that discount on the issue of debentures is a deductible expenditure that can be spread proportionately over the period for which the debentures remain outstanding, rather than being claimed entirely in the year of issue. This treatment acknowledges the enduring benefit derived from the funds raised through debentures.
Section 43B does not apply to electricity duty collected by an assessee under the Electricity Duty Act, as such amounts are not 'sums payable by the assessee by way of tax or duty'. The decision also clarifies the applicability and calculation of book profits under Section 115JB.
