“Section 16(2)”
The decision most relied on for Section 16(2) is Hero Cycles Pvt. Ltd. v. CIT (379 ITR 347), cited in 361 judgments on BharatTax.
Leading authorities on Section 16(2)
The Revenue cannot substitute its judgment for that of a businessman regarding the necessity or reasonableness of an expenditure. If an expense is incurred wholly and exclusively for business purposes, it is deductible, and the Revenue cannot question its commercial expediency.
Acquisitions under the Bangalore Development Authority Act, 1976 are distinct from the Land Acquisition Act, 1894, making Section 24(2) of the 2013 Act inapplicable to BDA Act acquisitions. A land acquisition does not lapse under the BDA Act even if the development scheme under Section 27 lapses, provided the land has already vested in the State Government under Section 16 of the Land Acquisition Act, 1894.
The Supreme Court in Pranay Sethi laid down the principles for determining 'future prospects' to be added to the income of a deceased person for calculating compensation under the Motor Vehicles Act. It also clarified principles of judicial discipline, including the binding nature of coordinate bench decisions and how to resolve conflicting Supreme Court judgments.
A charitable trust can claim depreciation on assets when computing the income applied for charitable or religious purposes under Section 11 of the Income Tax Act, for assessment years prior to the introduction of Section 11(6). The restriction on claiming depreciation, as introduced by Section 11(6), is prospective from AY 2015-16.
Amounts claimed on account of employees' contributions to Provident Fund (PF) and Employees' State Insurance (ESI), if deposited on or before the due date for filing the income-tax return, cannot be disallowed under Section 43B or Section 36(1)(va) of the Income Tax Act.
A Departmental Valuation Officer's (DVO) report, by itself, is not sufficient information to conclude understatement of consideration or make additions to income. The Revenue must discharge the burden of proving actual receipt of higher consideration, beyond merely relying on a DVO's opinion, especially in the absence of incriminating evidence.
The revenue authorities cannot exclude comparable companies from the final list if the Assessing Officer (AO)/Transfer Pricing Officer (TPO) had not rejected them, even if the revenue representative believes they do not pass the comparability test.
Interest received by an assessee under Section 28 of the Land Acquisition Act is not taxable.
