Section 18 of the Income Tax Act
The decision most relied on for Section 18 is Shivsagar Veg Restaurant v. ACIT (317 ITR 433), cited in 202 of the 67 judgments on BharatTax that turn on this section.
Leading authorities on Section 18
Orders that are inordinately delayed are liable to be recalled and heard afresh, and the Appellate Tribunal President should frame guidelines for timely disposal of appeals.
Amortization of premium on purchase of government securities is allowable as a deduction if it is in line with RBI's prudential norms and the assessee follows a consistent accounting system.
Interest on securities becomes due and receivable only upon maturity and cannot be taxed prior to maturity. The entitlement to interest arises only at that point.
Cooperative banks are eligible to claim deduction under both limbs of Section 36(1)(viia) for all types of loans and advances extended by their rural branches.
Section 68 of the Income Tax Act, 1961 does not apply to credit balances brought forward from previous years, as it pertains to fresh credits received during the relevant financial year.
Interest on securities is taxable only on specified dates when it becomes due for payment, not on an accrual basis, especially after the deletion of Section 18 of the Income-tax Act, 1961.
