“Section 2(26)”
The decision most relied on for Section 2(26) is Hindustan Steel Ltd. v. State of Orissa (83 ITR 26), cited in 502 judgments on BharatTax.
Leading authorities on Section 2(26)
An order imposing penalty for failure to carry out a statutory obligation results from quasi-criminal proceedings. Penalty is not ordinarily imposed unless the party acted deliberately in defiance of law, was guilty of contumacious or dishonest conduct, or acted in conscious disregard of their obligation.
Income is taxable only when it represents real income, not notional income. It accrues only when there is a vested right to receive it, typically upon the occurrence of a transfer or event, rather than merely on a time basis.
Revenue expenditure incurred after a business is set up and ready to commence, but before its actual commencement, is allowable as a deduction even if no income is earned in that period. The previous year for a business begins from the date it is set up.
The definition of 'business' is of wide import, encompassing any trade, commerce, manufacture, or adventure in the nature of trade. Even a single and isolated transaction can constitute an 'adventure in the nature of trade' if it bears the clear indicia of trade, and no fixed formula can be evolved to determine the character of such isolated transactions.
Depreciation is allowable on goodwill acquired through the slump sale of a business. When an assessee claims depreciation on the enhanced cost of an asset supported by a registered valuer's report, tax authorities must produce countervailing evidence, such as a departmental valuation report, to challenge it, rather than simply disregarding the expert opinion.
Even if statutory language appears merely enabling, courts infer a duty to exercise such power when it aids a citizen's right. Public authorities cannot decline to act when circumstances warrant help, nor can they act to a person's detriment without justification.
Low profits alone, or minor defects such as the non-maintenance of a stock register, do not justify the rejection of regularly maintained books of account under Section 145, nor do they permit additions to income without proving specific errors.
Once an assessment is reopened for a valid reason under Section 148(2), the Assessing Officer can bring to tax any escaped income that comes to their notice during the reassessment, even if it was not the original basis for reopening.
