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Engineering Analysis Centre Of ... vs The Commissioner Of Income Tax on 2 March, 2021

47. The nomenclature of a n item of e xpenditure or loss would not decide the actual nature of transaction. What the appellant is calling loss is actually in the nature of provisio n, for diminution in the value of stock/invento ry. Taxa tion is dependent upon the actual nature of transac tio n. What is the nomenclature given in the boo ks of accounts or how the entry has been passed cannot determine the taxability of the receipts or allow ability of the expe nditure . Taxa bility o f a receipt o r allowance o f a deduc tio n is dependent upon the actual nature of transac tio n. This position of law has bee n affirmed by Hon'ble S upreme Court In the case of Kedarnath lute Manufacturing Co . Ltd. vs CIT re por ted in [1971] 82 ITR 363 (SC).
Supreme Court of India Cites 167 - Cited by 1029 - R F Nariman - Full Document
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