Tax Laws : Leading Decisions on Tax Laws on Important Issues of Taxation

Tax Laws : Leading Decisions on Tax Laws on Important Issues of Taxation

1. PCIT v. Hespera Reality Pvt Ltd [2024] GCtR 3281 (Delhi) has held that the import of proviso to S.10 (38) of Income-tax Act, 1961 is that notwithstanding that LTCG are excluded from the total income of an assessee under Section 10(38) of the IT Act, 1961 the same are required to be taken into account in computing a book profit and income tax payable under Section 115JB of the Act.

2. It has been held in PCIT v. Facor Power Ltd [2016] GCtR 6441 (Delhi) that "for an income to be classified as income under the head “profit and gains of business or profession” it would have to be an activity which is in some manner or form connected with business. The word “business” is of wide import which would also include all such activities which coalesce into setting up of the business."

3. It has been held in Indian Oil Panipat Power Consortium Ltd v. Income Tax Officer [2009] GCtR 6442 (Delhi) that when funds in the form of share capital were infused for a specific purpose of acquiring land and the development of infrastructure then the interest earned on funds primarily brought for infusion in the business could not have been classified as income from other sources.

4. In case of CIT v. Madhya Bharat Energy Corpn Ltd [2011] GCtR 6443 (Delhi), it was held that the interest earned by the assessee on FDs was assessable as "income from other sources‟ and any set off of the same cannot be given to the assessee as pre-operative expenses.