“Section 20(2)(a)”
The decision most relied on for Section 20(2)(a) is General Motors India (P.) Ltd. v. Dy. CIT (25 Taxmann.com 364), cited in 46 judgments on BharatTax.
Leading authorities on Section 20(2)(a)
Section 44AB (tax audit) does not apply where the assessee is not engaged in a business or profession and consequently has no income under the head 'profits and gains from business or profession'.
Books of account include electronic records and are maintained to provide credible financial data for tax returns and to determine income. Penalty under section 271B for not getting accounts audited is applicable only when accounts are maintained, whereas section 271A applies if no accounts are maintained at all.
Expenditure that is incurred for the protection of a running business without generating a new asset is deductible as a business expense. Such expenditure does not result in an enduring benefit of a capital nature.
Institutions established for specific purposes are not considered 'local authorities' for the purpose of Section 10(20) of the Income Tax Act.
Disallowance of expenses under section 40(a)(ia) cannot be made based on a subsequent change in law if tax was deducted at rates prevalent at the time of deduction, following established judicial pronouncements.
The scope and amplitude of Section 10(23C)(vi) of the Income-tax Act and its applicable provisos, rules, and forms are the subject of examination in relation to applications for approval.
When an assessee follows the mercantile system of accounting, a statutory liability is incurred and becomes deductible at the time it is raised or accrued, irrespective of whether a dispute is raised later. An appellate authority admitting additional evidence must record reasons and provide an opportunity for the Assessing Officer to respond.
An undertaking's income qualifies for deduction under section 80-IB of the Income-tax Act if it is eligible under section 80-IA(ia).
