Section 2(42A) of the Income Tax Act
The decision most relied on for Section 2(42A) is CIT v. Manjula J. Shah (355 ITR 474), cited in 113 of the 193 judgments on BharatTax that turn on this section.
Leading authorities on Section 2(42A)
For capital assets acquired by gift or will, the indexed cost of acquisition under Section 48 is computed with reference to the year the previous owner first held the asset. The period of holding for determining if an asset is long-term also includes the previous owner's holding period, as per Section 2(42A).
A tax provision is retrospective only if legislative intent is explicit or if it is purely clarificatory and does not alter existing law. Provisions framed 'for the removal of doubts' are not presumed to be retrospective if they change the law as it stood.
A statute prescribing a procedure using negative language (e.g., 'in no other manner') imposes absolute requirements, and failure to comply will invalidate the entire proceeding.
A word, clause, or sentence from a court judgment, when taken out of context, does not represent a complete exposition of the law on a question that the judgment did not explicitly address.
An integrated business engaged in captive consumption derives profits or value from its internal activities, even when intermediate products are not sold externally. The principle that a person cannot make profits out of himself does not apply to deny profits from such internal operations for tax or cess purposes.
Where an assessee discharges a future liability at its present value, it does not result in a "benefit" accruing to the assessee, and therefore, Section 41(1) of the Income Tax Act, 1961, is not applicable.
Income accrues to an assessee when they acquire a right to receive it, even if it has not yet been actually received or quantified. A debt is created once liability is established, and its future quantification does not make it contingent.
Interest received under section 244A is taxable in the year of receipt, even if the proceedings under section 143(1)(a) are subject to finality later, and any reduction in interest due to subsequent assessment proceedings under section 143(3) does not leave the assessee without remedy.
The transfer of property does not necessarily occur upon registration; the true test is the intention of the parties and whether there are any conditions precedent like payment of consideration or delivery of the deed.
When an assessee discharges the present value of a future obligation, it does not constitute a 'benefit' accruing to the assessee, thus Section 41(1) of the Income Tax Act is not applicable.
