Section 17 of the Income Tax Act
The decision most relied on for Section 17 is Lissie Medical Institutions v. CIT (348 ITR 344), cited in 164 of the 102 judgments on BharatTax that turn on this section.
Leading authorities on Section 17
The Kerala High Court held that charitable institutions claiming exemption under Section 11 are not entitled to claim depreciation on assets used for charitable purposes, taking a view contrary to most other High Courts.
When considering an application for condonation of delay, the court must examine whether the mistake causing the delay was bona fide or merely a device to cover an ulterior purpose, guiding the exercise of its discretion.
Compensation received for the extinction of a source of income, a profit-earning apparatus, or capital assets, or due to a breach of contract, constitutes a capital receipt not liable to tax. The determination depends on the specific facts of each case.
An assessee is entitled to exemption under Section 54 for long-term capital gains on a new residential house where a flat under construction is treated as 'construction' and not a purchase, allowing the benefit of the three-year completion period.
The Supreme Court holds that a purposive interpretation and harmonious construction must be applied to the provisions of the Income-tax Act. This approach is particularly important when considering claims for exemption from tax, to ensure the interpretation sub-serves the object and purpose of the law.
Payments received for the sterilization, destruction, or loss of a capital asset are considered capital receipts. This includes compensation for the extinguishment or sterilization of a profit-earning source.
Judgments on Section 17
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