S. 54 : Capital gains-Investment in a residential house-Assessee constructing nursing home and residential house on land purchased from sale proceeds-Exemption not available in respect of entire land but only on portion of land on which residential house constructed and appurtenant thereto-Authorities failing to compute vacant land appurtenant to residential house-Assessing officer to consider all these aspects for purpose of computing exemption-Assessee entitled to benefit of indexation.[S. 45]

S. 54 : Capital gains-Profit on sale of property used for residence-No requirement that residential house should be constructed in a particular manner-Only requirement is residential use as against commercial use-Assessee constructing ground floor, first floor and second floor-Assessee keeping rights of ground floor and second floor with roof rights of first floor-Entitled to exemption. [S. 54F]

S. 50C : Capital gains-Full value of consideration-Stamp valuation-The payment of higher stamp duty by the vendee did not affect any rights of the assessee-Sale consideration disclosed jointly was far more than the value sought to be adopted for the purpose of stamp duty-Addition is deleted. [S. 45]

S. 48 : Capital gains-Cost of improvement of property-Merely making entries in books of account and producing deficient bills-Not sufficient to discharge initial burden of proof on assessee-Failing to establish genuineness of its claim–Claim is rejected. [S. 45]

S. 45 : Capital Gains-Alleged bogus long-term capital gains–Order giving effect to the order of Tribunal-Direction-AO wrongly considered deposits twice against sale of shares-AO has no jurisdiction to look into sale of other shares-Addition is deleted. [S. 254(1)]

S. 41(1) : Profits chargeable to tax-Remission or cessation of trading liability-No addition can be made if AO has not brought any evidence to show that liability has ceased to exist–No additions can be made unless liability has not been written off in books of accounts.[S. 145]

S. 40A(3) : Expenses or payments not deductible-Cash payments exceeding prescribed limits-Exceptions-Rule 6DD(k)-Payments during non-banking hours and at weekends for urgent hotel bookings and hotel staff refusing to accept cheque-AO has not considered the factual aspects -Matter remanded.[R. 6DD(k)]

S. 40(b)(ii) : Amounts not deductible–Partner–Remuneration-Partnership Deed mentioning maximum amount payable but payment to individual partner left undecided-Payments to be decided mutually between them- No disallowance made in preceding years-Principle of consistency applied. [S. 40(b)(v)]

S. 40(a)(i) : Amounts not deductible-Deduction at source-Non-resident– Fees for Technical Services–Commission agents providing services outside India-Commission payments to non-residents not be treated as income deemed to accrue or arise in India-No disallowance could be made.

S. 40(a)(i): Amounts not deductible-Deduction at source-Non-resident– Royalty-Payment for purchase of copyrighted software-Not royalty- ‘Royalty’ originally defined in double taxation avoidance agreement not amended-Assessee is not liable to deduct tax for payments made for purchase of off-the-shelf software. [S. 9(1)(vi), 195]