Section 10(35) of the Income Tax Act
The decision most relied on for Section 10(35) is CIT v. Walfort Share & Stock Brokers (P.) Ltd. (326 ITR 1), cited in 543 of the 113 judgments on BharatTax that turn on this section.
Leading authorities on Section 10(35)
For attracting Section 14A disallowance, there must be a proximate cause relating the expenditure to actual tax-exempt income, and such disallowance is not automatic but requires positive material. Additionally, Section 94(7) on dividend stripping only ignores losses to the extent of dividend received for assessment years post-April 1, 2002, allowing the remaining loss.
A provision for doubtful debts cannot be added back while computing book profits under Section 115JB of the Income-tax Act for Minimum Alternate Tax (MAT) purposes.
An act that is otherwise valid in law cannot be treated as non-existent or invalid merely because of an underlying motive to reduce tax liability or a perceived economic detriment to national interest; legitimate tax planning is permissible.
Violation of investment mandates under Section 13(1)(d) of the Income Tax Act, 1961, for a charitable trust results in the complete denial of exemption under Section 11 of the Act.
A transfer pricing adjustment for corporate guarantees provided by an Indian entity to its Associated Enterprises (AEs) where no fees are charged can be estimated at approximately 0.20%. The arm's length principle applies to such intra-group corporate guarantee transactions.
Losses arising from the conversion of foreign currency or from foreign exchange forward contracts entered into for business transactions, such as hedging export proceeds, are considered revenue or trading losses and are deductible as business expenditure under Section 37(1). The amortization of premium paid on such foreign exchange contracts is also an allowable deduction.
For banks, the computation of bad debt allowance under sections 36(1)(vii) or 36(1)(viia) must be restricted to only incremental advances, rejecting broader interpretations by tax authorities.
The principle of succession dictates that all benefits under the Income Tax Act, including the carry forward and set-off of capital losses, due to an amalgamating company devolve upon the amalgamated company.
The satisfaction of the Assessing Officer regarding the accounts maintained by the appellant must be based on cogent reasons to invoke Rule 8D.
A coordinate bench decision in the assessee's own case for earlier assessment years is relevant to the current issue.
Judgments on Section 10(35)
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