S. 43B : Deduction only on actual payment-Rectification of mistakes-Gratuity amount incorrectly claimed under wrong schedule in return-Not reflected in tax audit report-Centralised Processing Centre disallowing claim under section 143(1)-Assessee filing revised tax audit report-Genuine claim could not be denied-CBDT Circular-Income of assessee should not be over-assessed-Legitimate deduction not to be denied merely because of a mistake made by assessee. [S. 143(1), 154]

S. 43B : Deduction only on actual payment-Unpaid interest on loan from World Bank-Section 43B(d), (da), (e) covering only interest payable to specific financial institutions, non-banking financial companies, scheduled banks or co-operative banks-World Bank or State Government loans not included-Disallowance deleted-Deduction only on actual payment-Statutory liability-Electricity duty collected from consumers but not remitted to Government-Assessee merely a conduit between consumer and Government-No independent liability-Disallowance rightly deleted.[S.43B(a), 43B(d), 43B(da), 43B(e)]

S. 28(i): Business loss-Assessee a share trader and investor-Losses from share transactions including listed securities-Assessing Officer disallowing claim treating shares as penny stocks-Assessee transacting huge volumes of shares-Addition made on basis of preconceived idea after general investigation of investigating authority-Order set aside and addition quashed. [S. 45, 69]

S. 11: Property held for charitable purposes-Exemption-Capital gains-Sale proceeds reinvested in fixed deposit with scheduled bank-Deemed acquisition of new capital asset-Assessee eligible for exemption on capital gains-Interest earned on fixed deposits retained in bank account and applied for charitable purposes-Qualifies for exemption. [S. 11(5), 11(IA)]

S. 9(1)(vi) : Income deemed to accrue or arise in India-Royalty-Double Taxation Avoidance Agreement not affected by amendments in Act-Assessee entitled to advantage of provisions under Agreement-Assessee a non-resident telecommunication operator providing international carriage and connectivity services in Sri Lanka-Interconnect user charges not royalty-Not taxable in India-DTAA-India-Sri Lanka.[S. 9(1)(vi), Explns. 2, 5, 6, 147 , arts. 7, 12]

S. 45: Capital gains – Income from other sources – Transfer of Development Rights — Compensation received under a redevelopment agreement is assessable as Capital Gains and not as Income from Other Sources. Exemption under section 54EC is allowable. [ S. 2(14), 2(47), 54EC, 56, 50C & 147)

S. 80IB: Industrial undertakings – Special category States –
– Research & Development (R&D) expenditure – Allocation of R&D expenses to eligible manufacturing units – No allocation permissible in the absence of direct nexus between R&D activity and eligible units – Revenue’s appeal dismissed. [S. 35(2AB), 80IC , 260A)

S.147: Reassessment – After the expiry of four years – Reference to DVO – Fair Market Value as on 1-4-1981 – Amendment to section 55A(a) prospective – Reassessment invalid- The Court left open the question regarding the validity of a notice issued in the name of a deceased person. [S. 45, 48, 55A, 148, Art . 226 ]

S. 263: Commissioner-Revision of orders prejudicial to revenue-Lack of proper enquiry-Short-term capital loss on sale of shares-FIFO method-The issue was examined by the AO during the assessment proceedings, who had taken a correct view –CRS expenditure-Revision order was quashed-Exempt income-Revision order was affirmed.[S. 14A, 80G]

S. 263: Commissioner-Revision of orders prejudicial to revenue-Lack of proper enquiry-Assessment order passed by the AO without examining the claim by conducting relevant enquiries which ought to have been carried out-Revision order was affirmed. [S.54]