Section 10(20) of the Income Tax Act

Section 43B(f) of the Income-tax Act is unconstitutional and arbitrary. Leave encashment is a trading liability and not subject to the restrictions of Section 43B(f), thus allowable as a business deduction under Section 37(1).

The High Court explains the scope and conditions for exercising revisional power under Section 263, emphasizing that an assessment order can be revised only if it is both erroneous and prejudicial to the interest of the revenue.

The income of a charitable trust, particularly income from property held under trust, for the purpose of claiming exemption under Section 11, must be computed in a normal commercial manner, without strict reference to the computation provisions for different heads of income like Section 14 or Section 24(a). This approach ensures that the income available for application or accumulation is assessed on commercial principles.

The provision for leave encashment is allowable as a deduction only on an actual payment basis under Section 43B(f) of the Income Tax Act, 1961. The Supreme Court upheld the constitutional validity of Section 43B(f).

This case is cited for the principle that a decision not founded on reasons, rendered without argument, or sub silentio, does not constitute a binding declaration of law or ratio decidendi under Article 141 of the Constitution.

Deduction for leave encashment is allowable only on an actual payment basis, not on a provision basis, as the Supreme Court upheld the constitutional validity of Section 43B(f) of the Income-tax Act.

A state road transport corporation, though state-owned, is a separate legal entity from the State. Its income is distinct from the income of the State and is not exempt from income tax under Article 289 of the Constitution of India.

Section 139(4) of the Income-tax Act, which allows for filing a belated return, acts as a proviso to Section 139(1). Consequently, the time limit for depositing amounts or utilizing funds to claim exemptions, such as under Section 54, extends up to the due date for filing a return under Section 139(4).

A return of income filed within the period allowed under Section 139(4) is valid for claiming exemptions and deductions, including those under Sections 54, 54F, and 80AC. However, depositing the unutilized capital gains in the Capital Gains Account Scheme is a statutory and mandatory requirement for claiming exemption under Section 54F.

Penalty under Section 271C for failure to deduct tax at source is not leviable unless contumacious conduct on the part of the assessee is established. Where such conduct is not proven, the High Court upholds the deletion of the penalty.