“Section 194(2)”
The decision most relied on for Section 194(2) is CIT v. Devi Prasad Vishwanath Prasad (72 ITR 194), cited in 272 judgments on BharatTax.
Leading authorities on Section 194(2)
If there is an unexplained cash credit, the Assessing Officer can treat it as the assessee's income, even when the income is finalized on an estimation basis, without proving its specific source. The onus then shifts to the assessee to prove that the income represented by the cash credit has already been taxed.
Income derived from letting out property is classified as business income only if the letting activity constitutes a business from a businessman's perspective, rather than mere exploitation of property by an owner. The company's object clause is not the sole determinative factor in this assessment.
Section 14A(2) and (3) read with Rule 8D are constitutionally valid. Rule 8D applies prospectively from Assessment Year 2008-09, and for prior assessment years, the Assessing Officer must determine the expenditure related to exempt income under Section 14A(1) using a reasonable basis.
Income from sources not falling under any other head of income under Section 14 of the Income Tax Act is taxed under the residuary head 'income from other sources'. If income cannot be taxed under Section 45 (capital gains), it cannot be taxed at all.
Interest income earned by a co-operative bank from statutory investments or mandatory deposits, which are essential for conducting its banking business, qualifies as business income and is exempt under Section 80P(2)(a)(i) of the Income-tax Act.
An assessment framed by the Assessing Officer in the name of a defunct transferor company is valid if the assessee failed to intimate the AO about the merger or amalgamation.
If an assessee company's main business object is to acquire and rent out properties, the rental income derived is taxable as 'Profits and gains of business or profession', rather than 'Income from house property', as the nature of the activity constitutes a business.
Service tax paid to the Government of India is not 'on account of' the provision of services for mineral oil exploration and production, and thus does not form part of the aggregate taxable amount under Section 44BB(2)(a) and (b).
