The answer to the question whether the waiver of a loan is taxable as income or not depends on the purpose for which the loan was taken. If the loan was taken for acquiring a capital asset, the waiver thereof would not amount to any income exigible to tax u/s 28(iv) or 41(1). On the other hand, if the loan was taken for a trading purpose and was treated as such from the very beginning in the books of account, its waiver would result in income more so when it was transferred to the P&L A/c in view of Sundaram Iyengar 222 ITR 344 (SC)

If an assessment happens to be an under-assessment or a mistaken order, the course open to the AO is either to rectify the mistake u/s 154 or to make a reassessment u/s 147. While, it is correct, as held in EID Parry 216 ITR 489 (Mad), that the AO has to choose between the two and cannot initiate both proceedings at the same time, the principle of constructive res judicata made applicable by the Madras High Court that the AO having initiated rectification proceedings u/s 154 should stick to the same only and cannot drop that and proceed u/s 147 is not acceptable. The fact that the AO invoked s. 154 and dropped it does not affect the validity of re-assessment u/s 147

Circular dated 15.5.2008 laying down monetary limit controls the filing of the appeals and not their hearing. Appeals filed as per applicable limit at the time of filing cannot be governed by circular applicable at the time of hearing. The object of the Circular u/s 268A is only to govern monetary limit for filing of the appeals. There is no scope for reading the circular as being applicable to pending appeals

The Proviso to s. 14A which gives protection to the assessee with respect to AY 2001-02 & earlier years was inserted w.e.f. 11.5.2001. As the order of the CIT u/s 263 was passed earlier on 29.12.99, the protection under the Proviso is not available

U/s 144C(1) the AO has to pass a draft assessment order in the case of an “eligible assessee” which is defined in s. 144C(15)(i) to mean any person in whose case the variation from returned income arises as a consequence of the order of the TPO u/s 92CA(3). As no transfer pricing adjustments had been made by te TPO, the assessee was not an “eligible assessee” and the AO had no jurisdiction to pass the draft assessment order

The assessees’ contention that export profit has to be computed with reference to the P&L A/c prepared under the Companies Act is not acceptable because there is no such provision in s.80HHC to determine export profit with reference to P&L A/c. Clause (iv) of s. 115JB (2) provides that the “amount of profit eligible for deduction u/s 80HHC as computed u/s 80HHC (3)” has to be deducted in computing the book profits. Accordingly, only the deduction u/s 80HHC as computed under the normal provisions is allowable