SUMMARY OF DIRECT TAX CASE LAWS

Issue
Can power subsidy recd. by the assessee from the state Govt., year after year, on the basis of actual power consumption be treated as a capital receipt?

Decision
The high court held that the power subsidy recd. by the assessee from the SG on the basis of actual power consumption has to be treated as a trading receipt & not as a capital receipt.

Issue
Can remuneration paid to working partner as per the partnership deed be considered as unreasonable & excessive for attracting disallowance u/s 40A (2) (a) even though the same is within the statutory limits prescribed u/s 40 (b) (v)?

Decision
The high court held that remuneration paid to working partners within the limits specified u/s 40(b)(v) CANNOT be disallowed  by invoking the provision of sec.40A(2)(a).