“Section 3(55)”
The decision most relied on for Section 3(55) is CIT v. B.C. Srinivasa Setty (128 ITR 294), cited in 628 judgments on BharatTax.
Leading authorities on Section 3(55)
When the cost of acquisition of a capital asset cannot be determined, the computation mechanism for capital gains fails, and thus no capital gains can be charged. This establishes a broader principle that a charging section cannot operate in the absence of specific machinery provisions for computation.
The interest rate for benchmarking foreign currency loans advanced to Associated Enterprises should be the market-determined rate applicable to the currency of the loan, such as LIBOR for US Dollar loans, rather than a domestic lending rate like the Indian PLR.
Interest income earned by a co-operative society from temporary deposits with other banks, when such deposits are made from its business funds, qualifies as business income eligible for deduction under Section 80P(2)(a)(i) and not as income from other sources.
An organization qualifies as having a charitable purpose if its primary object is the advancement of general public utility, even if its members receive incidental benefits. The existence of incidental non-charitable objects does not negate its charitable status.
Surrender of tenancy rights is a transfer of a capital asset, and the consideration received is a capital receipt subject to capital gains tax. If the cost of acquisition cannot be determined, the transfer of such an asset was not taxable under capital gains prior to the amendment of Section 55(2) in 1995.
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.
When a taxpayer's sole source of income is from the letting out of properties, such rental income is to be assessed under the head 'Income from House Property'.
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.
