“Section 4(5)”
The decision most relied on for Section 4(5) is Co-operative Bank Ltd. v. CIT (384 ITR 490), cited in 631 judgments on BharatTax.
Leading authorities on Section 4(5)
Co-operative banks are not fundamentally different from co-operative societies, entitling them to claim deductions under Section 80P of the Income Tax Act, 1961, including for interest income treated as business income.
Payments by Indian residents to non-resident foreign software suppliers for software are considered royalty, constituting income deemed to accrue in India under section 9(1)(v), thereby requiring tax deduction at source under section 195.
When computing the deduction available under Section 10A of the Income-tax Act, communication expenses must be excluded from the total turnover for the purpose of calculating the eligible relief.
Taxing statutes must be interpreted strictly, assuming that the law-making authority does not commit a mistake or make an omission. There is no room for purposive interpretation under direct tax laws.
Disallowance under Section 14A of the Income Tax Act, 1961, cannot exceed the actual tax-exempt income earned by the assessee during the relevant year. If no tax-exempt income is earned, no disallowance under Section 14A is warranted.
Disallowance under Section 14A applies only when exempt income is actually received or receivable during the relevant previous year. The provision does not trigger merely upon incurring expenditure if no exempt income materialized in that year.
Sections 4 and 5 of the Income Tax Act, which define total income and chargeability, are subject to Section 90, meaning that Double Taxation Avoidance Agreements (DTAAs) override the Act's provisions in case of a conflict.
Interest earned from the temporary parking of borrowed funds specifically intended for project development, prior to the commencement of business, constitutes a capital receipt inextricably linked to the project and is not taxable as 'income from other sources'.
