“Section 2(24)(4)”
The decision most relied on for Section 2(24)(4) is CIT v. Ponni Sugars & Chemicals Ltd. (306 ITR 392), cited in 577 judgments on BharatTax.
Leading authorities on Section 2(24)(4)
The "Purpose Test" determines whether an incentive or subsidy is a capital or revenue receipt for income tax purposes. If the incentive's purpose is to enable an assessee to set up a new industry or make investments in capital assets, it is a capital receipt and not taxable.
Tax can only be levied or collected by authority of law, as mandated by Article 265 of the Constitution; consequently, any tax collected contrary to law must be refunded.
The Supreme Court establishes a principle of statutory interpretation that terms like 'assistance' can be construed expansively to include a 'reward', a principle leveraged in income tax cases to determine if receipts such as excise duty exemptions are taxable income or non-taxable capital receipts.
Additions to income based solely on a third party's statement are invalid, particularly when the assessee is not given an opportunity to cross-examine that third party.
For comparability analysis in transfer pricing, giant companies with significantly higher turnover and brand value cannot be compared with small-sized companies, and such companies should be excluded from the comparable set.
If the Revenue accepts the Tribunal's decision for earlier years without challenge, it cannot assail the same decision in subsequent years, provided the facts are similar.
No penalty can be imposed when there is no loss of revenue, and the only issue concerns the year of taxability of income.
Courts cannot substitute their own views for those of the Directorate of Enforcement when assessing whether actions were taken arbitrarily or without jurisdiction. The court must consider the substance of the matter, not just the form.
