S. 271(1)(c) : Penalty – Concealment – Business expenditure – Full particulars were declared in the return – Merely because disallowance of expense , levy of penalty is held to be not justified on merit -Not sticking of inapplicable portion in the notice -In assessment order it was clearly mentioned that penalty proceedings u/s 271(1)(c) had been initiated separately for furnishing inaccurate particulars of income.- Penalty cannot be quashed only on technical ground not sticking of inapplicable portion in the notice [ S.37(1), 274 ]

S. 260A : Appeal – High Court – Question of law – can be entertained by the High Court on the issue of jurisdiction even if the same was not raised before the Tribunal- The question relating to non-striking off of the inapplicable portion in the s. 271(1)(c) show-cause notice goes to the root of the lis & is a jurisdictional issue . [ S.271(1) (c ) 274 ]

S. 68 : Cash credits -Commission business- Accommodation entries – Failure to explain the source of deposits in the bank – Addition cannot be made as cash credits – Estimation of commission income by the Tribunal is held go be justified . [ S.132 ]

S. 80-O : Royalties – Foreign enterprises – services rendered in India and not the ‘services rendered from India -Merely having a contract with a foreign enterprise and mere earning foreign exchange does not ipso facto lead to the application of S. 80-O of the Act- Without any claim for expertise capable of being used abroad rather than in India, would not be entitled to deduction- The burden is on the assessee to prove eligibility to an incentive or exemption provision and it is subject to strict interpretation – Interpretation of taxing statutes – When there is ambiguity in exemption which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must be interpreted in favour of the revenue.