S. 45: Capital gains- Long term capital loss – A reduction of capital results in an “extinguishment of rights” in the shares and constitutes a “transfer‟- The fact that the percentage of shareholding remains unchanged even after the reduction is irrelevant. The loss arising from the cancellation of shares is entitled to indexation and is allowable as a long-term capital loss.[ S. 2(22)(d),2(47),10(34) ,48,49(2),115A, 1150 ]

S. 43B : Certain deductions on actual payment – The credit of Excise Duty earned under MODVAT scheme is not sum payable by the assessee by way of tax, duty, cess – unutilised credit under MODVAT scheme does not qualify for deduction – Sales tax paid by the appellant was debited to a separate account titled ‘Sales Tax recoverable account’ and is liable for disallowance .[S. 145 ]

S. 69C : Unexplained expenditure – Bogus purchases – Accommodation entries – Restricting the disallowances at 5% of alleged bogus purchases is held to be justified – Entire purchases cannot be disallowed . [ S. 37(1),144 ]

S. 263 : Commissioner – Revision of orders prejudicial to revenue – Provision for expenses – Revision is held to be not valid [ S.37(1) ]

S. 251 : Appeal – Commissioner (Appeals) – Powers – Enhancement – CIT (A) cannot enhance a new source of income to tax which was not considered by assessee. [ S.68, 147, 251(2), 263 ]

S. 234B : Interest – Advance tax – Book profit – Retrospective amendment to provision of S. 115JB- Not liable to pay interest .[ S.115JB ]

S. 115JB : Book profit – Liabilities of gratuity and leave encashment -Notes appended to accounts- Should be adjusted while computing book profit- Adjustment in respect of prior period items comprising of impact of lease rent equalization and gratuity expenses of earlier years should be made, while computing book profit- Exempt income – Disallowance is not considered while computing book profit- Dividend income is exempt ,should be excluded in computing book profit .[ S. 10(34 )14A, 145 , R.8D AS. 15 ]

S. 115JB : Book profit – Sales tax subsidy- Capital in nature – A receipt exempt from tax under Income tax law, cannot be considered for purpose of computation of book profit- Sales tax subsidy received by assessee being capital in nature is to be reduced from book profit [ S.4, 28(i) ]

S. 92B : Transfer pricing – Safe Harbour Rules (5 per cent variation) – No TP adjustment could be made where arm’s length value of transactions as computed by TPO was within permitted range of variation of +/- 5 per cent of actual value of transaction. [ S.92C ]

S. 73 : Losses in speculation business – Business in trading in shares – Business loss -Delivery based transactions – Derivates transactions in futures and options segment- Explanation to section 73 does not differentiate between ‘delivery based transactions’ and ‘derivative transactions in F&O segment’ and same applies to entire business of purchase and sale of shares, whether such trading is delivery based or non-delivery based and, whether there is profit or loss from such business .[ S.28(i) ]