“Section 10(7)”
The decision most relied on for Section 10(7) is CIT v. Walfort Share & Stock Brokers (P.) Ltd. (326 ITR 1), cited in 543 judgments on BharatTax.
Leading authorities on Section 10(7)
For attracting Section 14A disallowance, there must be a proximate cause relating the expenditure to actual tax-exempt income, and such disallowance is not automatic but requires positive material. Additionally, Section 94(7) on dividend stripping only ignores losses to the extent of dividend received for assessment years post-April 1, 2002, allowing the remaining loss.
A statute prescribing a procedure using negative language (e.g., 'in no other manner') imposes absolute requirements, and failure to comply will invalidate the entire proceeding.
A payment of bonus or commission is allowable as a business deduction under Section 36(1)(ii) unless it constitutes a distribution of profits or dividends, thereby distinguishing payments genuinely for services from those merely intended to escape taxation.
If the income attributable to a Permanent Establishment (PE) in India is less than the remuneration paid to a dependent agent, the assessment is extinguished and no further computation of income is required.
An Assessing Officer cannot reduce eligible profits under section 80-IA(10) read with section 10B(7) based on an arm's length price determined by the Transfer Pricing Officer without demonstrating how that price was determined.
Income tax proceedings initiated against a corporate debtor under section 148 for assessment years prior to the approval of a resolution plan under the Insolvency and Bankruptcy Code (IBC) are invalid, as the IBC aims to provide certainty by extinguishing all claims not part of the resolution plan.
Disallowance of expenditure under Section 14A requires a proximate cause establishing the relationship between the expenditure and the exempt income. The expenditure must have a real, dominant, and immediate relationship with income not forming part of the total income.
The court examines a transaction involving the purchase and sale of UTI units with a short holding period, highlighting the cum-dividend purchase in relation to a booking closing date.
