.S. 45: Capital gains – Conversion of proprietary business into firm – Amounts to transfer of interest in property to other partners – No consideration received – No capital gains tax [S. 2(47), 48]

45: Capital asset- Personal effects – Capital gains- Sovereigns and silver coins which were customarily used for puja purposes and other ritual purposes could not be designated as effects meant for personal use [ S.2(14) , Indian Income-Tax Act, 1922 , S. 2(4A), 12B]

S. 45: Capital gains –Transfer – Extinguishment of rights – Not limited to transfer – Extends to extinguishment of rights independent of or otherwise than on account of transfer. [S. 2 (47) (ii), 47(ii) , 47(vii), 49(2), Companies Act , 1956 , S 391(2) , 394 ]

S. 44AB: Audit of accounts – Only Chartered Accountants can audit accounts of business of an assessee – Income Tax Practitioners do not have the same expertise – Section does not violate Article 14 and 19 of the Constitution of India – Constitutionally validity of provision upheld [S. 288(2), Constitution of India, 1950: Art. 14 , 19]

S. 43B : Certain deductions on actual payment-Tax, duty, cess or fee-Proviso clarifying that sums paid after accounting year but before due date for submission of return deductible is to be treated as retrospective. [ S. 43B ]

S. 41(2) : Profits chargeable to tax – Balancing charge – Slump sale – Business as going concern – Gain is liable to tax u/s 41(2) on itemized basis if slump price is determined on valuation of each asset/liability – Body of individuals – Where firm has sold its business as a going concern, surplus arising out of transaction has to be assessed in status of BOI and not as a firm . [ S. 2(31)(iv) , 2(31)(v), 2(42C ) 4, 45 , 50B ]

S. 40(a)(ia): Amounts not deductible – Failure to deduct tax at source – Payment exceeding Rs. 20,000 to each truck owners – Contract with a cement factory for transporting cement – Payment made to truck operator/owner amounts to payment made to a sub-contractor – Disallowance is not limited only to amount outstanding and this provision equally applies in relation to expenses that had already been incurred and paid by assessee- S. 40(a)(ia) as introduced by Finance (No.2) Act, 2004 with effect from 01.04.2005 is applicable to and from assessment year 2005-06 – Amendment by Finance Act 2014 is prospective – Disallowance held to be justified [S. 40A(3) , 194C]

S. 37(1): Business expenditure — Capital or revenue – Loan taken on mortgage of fixed assets — Amount spent towards stamps, registration fees, lawyer’s fees, etc. for availing loan – Loan neither an asset nor any business advantage nor any enduring benefit to the assessee – Nature of expenditure incurred in raising a loan not dependent upon nature and purpose of loan – Allowable business expenditure. [Indian Income-tax Act, 1922, 10(2)(xv) ]

S. 37(1): Business expenditure – Termination of services of directors and employees to facilitate take over – Retrenchment compensation an allowable deduction — “Wholly and exclusively” does not mean “necessarily” — Benefit to third party irrelevant [Indian Income-Tax Act, 1922 S. 10(2)(xv)]

S. 37(1): Business expenditure – Foreign exchange fluctuation loss as on the balance sheet – Allowable as an expenditure. [S. 43A, 145]