S. 260A : Appeal – High Court – Cross objection- Limitation-Limitation to file cross objections starts from date of service of notice of appeal – Plea by cross-objector that as no date of final hearing was mentioned in notice , there is no necessary to explain the delay of 94 days in filing the cross objection is held to be unsustainable – Application filed for condonation of delay was not pressed by the Counsel . [ Civil P.C. O. 41 , R. 22 , Limitation Act, 1963 , S. 5 ]

S. 254(1) : Appellate Tribunal – Duties- Bad debts-If the AO has failed to discharge his obligation to conduct a proper inquiry, it is the obligation of the ITAT to ensure that effective inquiry is carried out-The AO has not examined the crucial aspect whether the bad debts claimed by the assessee due to the NSEL scam constitutes a “speculative transaction” u/s 43(5) and whether Explanation to S. 73(1) applies. Matter remanded . [ S.36(1(iii), 43(5) , 73(1)]

S. 226 : Collection and recovery – Modes of recovery –Appeal- The AO is not justified in insisting on payment of 20% of the demand based on CBDT’s instruction dated 29.02.2016 during pendency of appeal before the CIT(A)- This approach may defeat & frustrate the right of the assessee to seek protection against collection and recovery pending appeal-Such can never be the mandate of law- CIT(A) is directed to hear the appeal expeditiously-Pendency of appeal the stay is granted . [ S. 220(6),246 ]

S. 90: Double taxation relief – If a non-resident assessee derives income from multiple sources in India, it is entitled to adopt the provisions of the Act for one source and the DTAA for the other source, whichever is more beneficial to it, even though the payer is common for both sources- Fees received by the assessee would be taxable under the Act as FTS (fees for technical services) under section 9(1)(vii) r.w.s. 115A(1)(b) @ 10% and not as business income and thus held that the maximum possible taxability in the hands of the assessee could not exceed 10%.- DTAA- India -Singapore. [S.90(2),115A(1)(b), Art.5(6) ]

S. 68: Cash credits- Share premium-The AO cannot assess the share premium as income on the ground that it is “excessive”. The share premium worked out in the Valuation Certificate is the minimum amount that can be collected by the assessee under RBI regulations- There is no bar on collecting higher amount as share premium-There are several factors that are taken into consideration while issuing the equity shares to shareholders/investors, such as Venture capital funds and Private Equity funds- The premium is determined between the parties on the basis of commercial considerations and cannot be questioned by the tax authorities-The AO is not entitled to sit on the arm chair of a businessman and regulate the manner of conducting business .

S. 139 : Return of income – Extension of due date- Levy of interest- CBDT is directed to consider the representation of the association and take decision on extension of date by another 15 days – Extension of due date for the purpose of Explanation 1 to S. 234A for waiver of interest and decide the same by passing speaking order preferable before 10 th October , 2018 .[ S. 119, 139(1), 234A ]

S. 251 : Appeal – Commissioner (Appeals) – Powers –Enhancement- Notional trading loss-Set –off against income under different head –Enhancement on the basis of annual report and statement enclosed to return cannot be considered as new source of income – Disallowance of notional trading loss by valuing shares at lesser amount without any basis and also set-off said loss against income under different head- Enhancement and disallowance is held to be justified . [ 73 ]

S. 197 : Deduction at source – Certificate for lower rate –When tax was deducted on the basis of certificate issued by the AO ie on handling and transport charges under S.194C and on, ware housing charges under S.194I, the ITO (TDS) was unjustified in holding assessee in default for short deduction of tax on grounds that assessee was liable to deduct TDS on entire amount under S.194I.[ s.194C, 194I, 201 ]

S. 145 : Method of accounting –Project completion method-Land owner-Project completion method consistently followed by the assessee cannot be rejected on the ground that the percentage completion method is followed by its developer . [ AS.7 ]

S. 153A : Assessment – Search- Set -off of brought forward loss- No incriminating material was found in course of search relating to those expenses, claim raised by assessee was to be allowed. [ S.132 ]