“Section 31(1)”
The decision most relied on for Section 31(1) is Ghanashyam Mishra And Sons. v. Edelweiss Asset Reconstruction (126 Taxmann.com 132), cited in 192 judgments on BharatTax.
Leading authorities on Section 31(1)
Once a resolution plan is approved under Section 31(1) of the IBC, claims not included in the plan are extinguished and cannot be pursued. This applies to statutory dues owed to the government and other authorities.
Expenditure incurred for commercial expediency, even without a direct or immediate benefit but indirectly facilitating business, is deductible as laid out wholly and exclusively for trade. The scope of reference jurisdiction under Section 66 is limited to questions of law, allowing challenges to Tribunal findings of fact only if they are perverse, unreasonable, or lack evidence.
The rule of consistency requires that in the absence of any change in material facts or law, a different view or decision on an issue cannot be adopted for subsequent assessment years, thus ensuring uniformity in tax assessments.
The phrase 'prejudicial to the interests of the Revenue' under the Income Tax Act includes instances where there is a loss of tax.
The Assessing Officer is bound by the rule of consistency and cannot take a contrary or different stand on an issue in a subsequent assessment year if the factual position remains identical to previous years where a deduction was allowed.
Interest received as income on delayed payment of compensation under Sections 28 or 31 of the Land Acquisition Act is a taxable revenue receipt, chargeable to income tax under the head 'income from other sources'.
Interest paid on money borrowed for acquiring machinery is deductible under Section 36(1)(iii) even if the machinery is not put to use in the year of borrowing. This principle applies to the 'for the purpose of business' test for borrowed capital.
Expenditure qualifies as 'current repairs' if it maintains existing machinery without replacement, creates no new asset, restores functional efficiency without increasing capacity, and is not an independent unit. Conversely, the cost of replacing machinery, especially independent units, constitutes capital expenditure.
