“Section 31(4)”
The decision most relied on for Section 31(4) is Ramnath & Co. v. CIT (116 Taxmann.com 885), cited in 30 judgments on BharatTax.
Leading authorities on Section 31(4)
Beneficial provisions in tax law should be interpreted strictly, with the burden of proof on the assessee. Ambiguous beneficial provisions are interpreted in favour of the Revenue.
The valuation of unsold stock at the close of an accounting period is a necessary part of determining trading results and does not constitute a source of profit. Its purpose is to balance the cost of goods purchased against the closing inventory to reflect actual realized profit or loss from trading.
The Settlement Commission must hear applications where delay in disposal before March 31, 2008, is not attributable to the applicant. Section 245HA(1)(iv) is arbitrary and unreasonable if an applicant faces hardship due to the Settlement Commission's inability to dispose of applications by a specified date.
Additions for undisclosed income on account of inflated purchase price can only be made for the period to which documents found during a search are related, not for the entire block period.
Expenditure on rent, repairs, insurance, and maintenance of guest houses is allowable under Sections 30 and 31 of the Income Tax Act, even if Section 37(4) (or 37(3) as cited in the passages) restricts disallowances for such expenses.
