S. 194C : Deduction at source–Contractors-The by-product allowed to be retained by the miller can notbe regarded as consideration ‘paid’ in kind by the procurement agency- Not liable to deduct tax at source. [S. 195]

S. 151 : Reassessment-Sanction for issue of notice-If the AO issues the notice for reopening the assessment before obtaining the sanction of the CIT, the reopening is void ab initio-The fact that the sanction was given just one day after the issue of notice makes no difference. [S. 147, 148]

S. 147 : Reassessment–Intimation-The AO cannot reopen on the basis of info received from DIT (Inv.) that a particular entity has entered into suspicious transactions without linking it to the assessee having indulged in activity which could give rise to reason to believe that income has escaped assessment- Such reopening amounts to a fishing inquiry- The AO has to apply his mind to the information received by him from the DDIT (Inv.) and cannot act on on borrowed satisfaction. [S. 143(1), 148]

S. 147 : Reassessment–Audit-A report of the Revenue audit party is merely information and opinion- It is not new or fresh or tangible material-If the reassessment notice is solely based on an audit opinion, it means it is issued on change of opinion which is not permissible. [S. 148]

S. 145 : Method of accounting-Accrual of income-Sale of prepaid mobile cards-Matching concept & principles of Revenue Recognition as per Accounting Standards (AS-9, AS-22)-Amount received on sale of prepaid cards to the extent of unutilized talk time did not accrue as income in the year of sale. [S. 4, 5, AS. 9, AS. 22]

S. 143(3) : Assessment-Survey -Bogus expenditure- Statement- Retraction-A statement recorded u/s.133A under fear / coercion cannot be relied upon by the AO if it is not corroborated by documentary evidence- The assessee is entitled to retract such statement. The AO is bound to give the assessee an opportunity to controvert evidence and cross examine the evidence on which the department places its reliance-A failure in providing the same can result in the order being a nullity–Income is estimated on the basis of gross profit. [S. 133A]

S. 69A : Unexplained money–Discretionary Trust-Black money-If the assessee is a discretionary beneficiary of the HSBC Bank Account and is not the owner, addition u/s. 69A cannot be sustained-In the case of a discretionary trust, the income of the trust cannot be added in the hands of the beneficiary. The trustees are the representative assessees who are liable to be taxed for the income of the trust. [S. 5, 6 , 133A, 147]

S. 68 : Cash credits-Black Money in HSBC Bank Account (i) Non-residents are not required to disclose their foreign bank accounts and assets to Indian income-tax authorities (ii) The assessee cannot be asked to prove the negative that the credits found in HSBC Bank is not sourced out of income derived from India (iii) the Govt / legislature never intended to tax foreign accounts of non residents (iv) mere holding of an account outside India does not have led to the conclusion that the amount is tax evaded. [S. 5, 69A ]

S. 68 : Cash credits-Share premium-If the overwhelming evidence in the form of audited accounts, ROC Form 2 & ROC Form 20B shows the ‘nature’ of receipt to be share premium, it has to be taken to be so-If the Department wants to contend that what is apparent is not real, the onus is on it to prove that it was the assessee’s own money which was routed through a third party. S. 68 does not (before & after the 2012 amendment) envisage the valuation of share premium- Consequently, the AO has no jurisdiction to determine whether the share premium is reasonable or not.

S. 56 : Income from other sources-S. 56(2)(vii), is a counter evasion mechanism to prevent money laundering of unaccounted income & does not apply to bona fide business transaction done out of business exigency. The difference between alleged fair market value of share and the subscribed value of shares cannot be assessed as income u/s. 56(2)(vii)(c). [S. 56 (2)(vii)(c)]