“Section 10(32)”
The decision most relied on for Section 10(32) is Vijaya Bank v. CIT (323 ITR 166), cited in 392 judgments on BharatTax.
Leading authorities on Section 10(32)
A provision for bad and doubtful debts debited to the profit and loss account and reduced from advances on the balance sheet constitutes a write-off for deduction purposes. This is true even if individual debtor accounts are not closed.
A provision for doubtful debts cannot be added back while computing book profits under Section 115JB of the Income-tax Act for Minimum Alternate Tax (MAT) purposes.
A charitable trust is allowed to claim depreciation on its assets for computing its income, even if the capital expenditure incurred on acquiring those assets was treated as an application of income in the year of acquisition.
The Supreme Court established the foundational test for distinguishing between capital and revenue expenditure, holding that the aim and object of the expenditure and whether it brings into existence an asset or an advantage of an enduring nature determines its character, irrespective of the payment method. An advantage lasting five years or more can be considered enduring.
Income is considered agricultural income, exempt under Section 10(1), only if the land undergoes a measure of cultivation involving basic primary operations prior to germination and subsequent post-germination activities requiring human skill and labour.
An educational institution is eligible for exemption under Section 10(23C)(vi) if it exists solely for educational purposes, even if it generates incidental profits. The mere existence of profit does not disqualify an institution from exemption.
The heads of income specified in the Income Tax Act are mutually exclusive, requiring any item of income to be charged and computed solely under its specific statutory head, with Section 56 (Income from Other Sources) serving as a residuary provision.
Educational institutions are not commercial activities, and collecting fees for betterment and growth does not automatically disqualify them from being considered educational. Fees collected for value-added courses, training, or hostel facilities can be eligible for exemption under Section 11 if applied towards the institution's infrastructure.
