Section 199 of the Income Tax Act

The decision most relied on for Section 199 is CIT v. Bokaro Steel Ltd. (236 ITR 315), cited in 370 of the 535 judgments on BharatTax that turn on this section.

Leading authorities on Section 199

CIT v. Bokaro Steel Ltd.
236 ITR 315 · 1999 · Supreme Court
370
citing judgments

Interest earned during the pre-commencement period of a project, on advances made to contractors or on unutilized borrowed funds, if inextricably linked to the setting up of the plant, constitutes a capital receipt. Such interest is not taxable as income but can be reduced from the capital work-in-progress.

CIT v. Sitaldas Tirathdas
41 ITR 367 · 1961 · Supreme Court
146
citing judgments

Income is diverted by an overriding charge, and thus not taxable, when it never truly accrues to the assessee due to a prior obligation. Conversely, income that first accrues to the assessee and is then applied to discharge an obligation out of that income is taxable.

CIT v. Calcutta Discount Co. Ltd.
39 ITR 706 · 1960 · High Court
103
citing judgments

The law does not oblige a trader to make maximum profit out of his trading transactions. Profits charged to tax must be in accordance with law and not amount to taxing notional income.

CIT v. Goslino Mario
241 ITR 314 · 2000 · High Court
101
citing judgments

Tax assessments must be made according to the law in existence during the relevant assessment year. A new statutory explanation or amendment, even if effective retrospectively, does not apply to pending assessments of prior years if it takes away the vested rights of the assessees.

HT Media Ltd. v. Pr. Commissioner of Income Tax
85 Taxmann.com 113 · 2017 · High Court
69
citing judgments

The Assessing Officer must record objective satisfaction, based on objective analysis and cogent reasons, before invoking Section 14A and applying Rule 8D for disallowing expenditure related to exempt income. Furthermore, disallowance under Section 14A applies only to investments that have actually yielded exempt income during the relevant assessment year.

J.K. (Bom.) Limited v. CBDT and Another
118 ITR 312 · 1979 · High Court
50
citing judgments

The case elucidates the meaning of 'management services', detailing its components and considering whether such services qualify as 'technical services' for income tax purposes, particularly in relation to fees for technical services.

CIT v. Bhooratnam & Co.
357 ITR 396 · 2013 · High Court
48
citing judgments

An assessee is entitled to credit for TDS even if the certificate is issued in the name of a joint venture or related party, provided the income to which the TDS relates is offered by the assessee. This principle emphasizes looking at the substance of the transaction over strict adherence to the name on the TDS certificate.

CIT v. Jagatjit Industries Ltd.
339 ITR 382 · 2011 · High Court
45
citing judgments

An assessee's consistently followed accounting method, if previously accepted by the Department, cannot be rejected by the tax authorities unless they establish that it distorts the true profits. The doctrine of consistency applies.

PCIT v. New Delhi Television Ltd.
398 ITR 57 · 2017 · High Court
42
citing judgments

Expenditure on Employees Stock Options Plan (ESOP) compensation is an ascertained liability and is allowable as revenue expenditure.

Yashpal Sahni v. ACIT
293 ITR 539 · 2007 · High Court
38
citing judgments

Once tax has been deducted at source (TDS), the bar of section 205 applies, preventing the deductee from being asked to pay the tax again, even if the deductor fails to deposit the tax or issue TDS certificates.

Judgments on Section 199

Finmechanics India P.Ltd, Mumbai vs. ITO 8(1)(4), Mumbai

In the result, the assessee’s appeal is partly allowed

ITA 4847/MUM/2015[2011-12]Status: DisposedITAT Mumbai04 Dec 2015AY 2011-12

Bench: Shri Sanjay Arora, Am आयकर अपील सं./I.T.A. No. 4847/Mum/2015 ("नधा"रण वष" / Assessment Year: 2011-12) Fin Mechanics India P. Ltd. Ito-8(1)(4), बनाम/ A-406, The Capital, Aaykar Bhawan, M. K. Road, Bandra Kurla Complex, Bandra (E), Mumbai-400 020 Vs. Mumbai-400 051 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. Aabcf 3599 D (अपीलाथ" /Appellant) (""यथ" / Respondent) : अपीलाथ" क" ओर से / Appellant By : Shri Rajesh Kothari ""यथ" क" ओर से/Respondent By : Shri B. S. Bist सुनवाई क" तार"ख / : 01.12.2015 Date Of Hearing : 04.12.2015 Date Of Order आदेश / O R D E R Per Sanjay Arora, A. M.: This Is An Appeal By The Assessee Directed Against The Order By The Commissioner Of Income Tax (Appeals)-16, Mumbai (‘Cit(A)’ For Short) Dated 07.1.2015, Dismissing The Assessee’S Appeal Contesting Its Assessment U/S.143(3) Of The Income Tax Act, 1961 (‘The Act’ Hereinafter) For The Assessment Year (A.Y.) 2011- 12 Vide Order Dated 26.12.2013. 2. The Appeal Raises Two Grounds, Which We Shall Take Up In Seriatim. The Brief Facts In Relation To The First Ground Are That The Assessing Officer (A.O.) Observed The 2 Fin Mechanics India P. Ltd. Vs. Ito Assessee, A Company In The Business Of Information Technology Services, To Have Not Deducted Tax At Source (Tds) On Professional Fees Properly (I.E., To The Extent Of Rs.4,136/-), Even As Reflected In The Tax Audit Report (Tar) Itself. While The Tax Deduction For Rs.3,861/- Was In The Following Year, I.E., The Previous Year Relevant To A.Y. 2012-13, That For Rs.275/- Was Not Deducted At All. The Same Being Deductible U/S.194J, Prescribing The Rate Of Deduction Of Tax At Source At 10%, He Accordingly Effected Disallowance U/S. 40(A)(Ia) At Rs.41,360/-. The Same Came To Be Confirmed For The Same Reasons, So That, Aggrieved, The Assessee Is In Second Appeal.

For Appellant: Shri Rajesh KothariFor Respondent: Shri B. S. Bist
Section 143(3)Section 194JSection 40