“Section 66(1)”
The decision most relied on for Section 66(1) is Sree Meenakshi Mills Ltd. v. Commissioner of Income Tax (31 ITR 28), cited in 137 judgments on BharatTax.
Leading authorities on Section 66(1)
Expenditure incurred for commercial expediency, even without a direct or immediate benefit but indirectly facilitating business, is deductible as laid out wholly and exclusively for trade. The scope of reference jurisdiction under Section 66 is limited to questions of law, allowing challenges to Tribunal findings of fact only if they are perverse, unreasonable, or lack evidence.
Income tax law intends to avoid double taxation, and where an item is brought to tax in one form, appropriate relief or adjustment should be provided to prevent its taxation again in another form. This principle is applicable when considering government grants or subsidies included in income and their impact on the actual cost of assets for depreciation.
Income tax authorities cannot deduce the nature of a document from purported intention, go behind the document, consider the substance over form, or rewrite it merely to suit the revenue's purpose.
An amendment effective from October 1, 2014, regarding the time limit for passing orders under section 201(1) of the Income Tax Act is prospective in nature. Consequently, for orders to be passed under section 201(1) from April 1, 2010, the time limit is two years from the end of the financial year in which the TDS statement is filed.
A cash credit can be assessed even if the transaction was conducted through a cheque, as mere proof of identity or cheque payment is insufficient to establish the creditor's creditworthiness and the genuineness of the credit.
A High Court decision is binding on lower authorities. The issue of whether supply of drawings and designs, linked to plant and equipment sales, constitutes 'Business Profits' rather than 'Fees for Technical Services' under Section 9(1)(vii) and DTAA provisions should be considered in light of such precedent.
The Settlement Commission must hear applications where delay in disposal before March 31, 2008, is not attributable to the applicant. Section 245HA(1)(iv) is arbitrary and unreasonable if an applicant faces hardship due to the Settlement Commission's inability to dispose of applications by a specified date.
The onus of proving that the conditions for taxability are met is on the revenue. Specifically, the revenue must demonstrate an understatement of consideration, rather than requiring the assessee to prove a negative.
