In the context of regular assessment proceedings, it has been held in Lalji Haridas vs. ITO 43 ITR 387 (SC) that even when there is no specific provision in the Act for protective assessment, the AO has power to make such a protective assessment under certain circumstances. This principle of law will apply to block assessment proceedings u/s 158BC & 158BD as well and the AO has the power to make a block assessment order on a protective basis

The Explanation to s.73 creates a fiction that the loss suffered by certain companies from the business of purchase & sale of shares shall be deemed to be speculation loss. The Explanation is not inconsistent with the object of introduction. The CBDT Circular dated 24.7.1976 cannot be treated as guide for interpretation of s. 73 when the provision is very clear and free from any ambiguity

S. 68 provides that if the assessee is not able to give satisfactory explanation as to the “nature and source” of a sum found credited in his books, the sum may be treated as the “undisclosed income” of the assessee. The initial burden is on the assessee to explain the “nature and source” of the credit and to do so, the assessee is required to prove (a) Identity of the shareholder; (b) Genuineness of transaction; and (c) credit worthiness of shareholders

No income accrues u/s 9(1)(i), 9(1)(vi) or 9(1)(vii) from use of satellite outside India to beam TV signals to India even if bulk of revenue arises due to viewers in India

Administrative expenditure relatable to the earning of tax-free income cannot be disallowed u/s 14A in the absence of a precise formula for proportionate disallowance until Rule 8D came into force

High Court has power to review its judgement u/s 260A

On merits, s. 32(1)(ii) allows depreciation in respect of know-how, patent, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature. The term “commercial rights” are such rights which are obtained for effectively carrying on business and commerce. “Commerce” is a wide term which encompasses many a facet. Accordingly, any right obtained for carrying on business with effectiveness comes within the sweep of meaning of “intangible asset”. Goodwill, being the positive reputation built by a person over a period of time is of “similar nature” as the other items enumerated in the definition of “intangible assets

Pursuant to the insertion of the concept of “block of assets” w.e.f. 1.04.1988, depreciation is allowable on the WDV of the “block of assets” and individual assets lose their identity upon introduction into the block. The department’s argument that user of each and every asset is essential is not acceptable because it would mean that the assessee has to maintain the details of each asset separately and this would frustrate the very purpose for which the amendment was brought about. The Revenue is not put to any loss by adopting such method because when the asset is sold, it results in taxable STCG

The argument of the Revenue that s. 80IA(9) mandates that the deduction u/s 80HHC has to be computed by reducing the amount of profits and gains allowed as deduction u/s 80IA(1) is not acceptable. S. 80IA(9) uses the words ‘shall not be allowed’ and not the words ‘shall not qualify’ or ‘shall not be allowed in computing deduction’. Accordingly, the restriction in s. 80IA(9) relates to the allowance of deduction and not computation of deduction. The manner of computation of deduction u/s 80HHC(1) is set out in s. 80HHC(3). S. 80IA(9) does not disturb the mechanism of computing the deduction provided u/s 80HHC (3). S. 80IA(9) comes into operation only at the stage of allowing the deduction computed u/s 80HHC so that the combined deduction u/s 80IA and 80HHC does not exceed the total profits of the business of the undertaking. S. 80IA(9) seeks to curtail allowance of deduction and not computability of deduction under any other provisions under heading ‘C’ of Chapter VIA

Though the two contracts were entered into on the same day and between the same parties, the department’s argument that they should be viewed as a composite contract is not sustainable because even assuming they should be read as one turnkey contract, offshore supplies are not taxable in India if the title passes outside India and payments are received in foreign exchange (Ishikawajima-Harima 288 ITR 408 (SC) followed; Ansaldo Energia SPA 310 ITR 237 (Mad) distinguished)