“Section 63(2)”
The decision most relied on for Section 63(2) is Smt. Sarifabibi Mohmed Ibrahim v. CIT (204 ITR 631), cited in 197 judgments on BharatTax.
Leading authorities on Section 63(2)
The determinative test for whether land is agricultural land or a capital asset is its actual user for agricultural purposes, not merely ownership. An explicit intention to stop cultivation or convert the land to non-agricultural use can cause it to lose its agricultural character, making its sale proceeds chargeable to capital gains tax.
The requirement to file an audit report along with the return of income for claiming specified deductions, such as under Section 80J or 80-IA, is directory and not mandatory. Such an audit report can be filed at any time before the assessment is framed or completed under Section 143(1).
The question of whether an amount claimed as an expenditure was laid out wholly and exclusively for business purposes must be decided based on the facts and circumstances of each case. The Income-tax Officer retains the discretion to determine the deductibility of an expense, and the mere existence of an agreement or actual payment does not bind the officer to allow the deduction under Section 37.
The Assessing Officer cannot make a prima facie adjustment to the total income under Section 143(1)(a) if the adjustment involves a debatable issue.
A notice issued by an Assessing Officer without proper jurisdiction renders all subsequent proceedings void. The authority for issuing such a notice must be the Assessing Officer alone.
An assessee cannot be treated as an Association of Persons (AOP) if the beneficiaries have not come together with a common purpose of earning income.
A loan or advance received by an assessee cannot be treated as such for the relevant previous year if it was not advanced by the lender during that year, even if there was an opening credit balance.
The determination of Arm's Length Price (ALP) for international transactions involving debt requires consideration of both the amount on which interest should be charged and the arm's length rate for that interest. Guidelines are provided for computing the ALP of the international transaction of 'debt arising during the course of business.'
