S. 192 : Deduction at source – Salary -Contributions to unrecognised Provident Fund is not eligible for deduction u/s 80C. Interest accrued to Employees contribution to unrecognised Provident Fund is taxable as income from other sources and liable for deduction of tax at source [ S.2(38) 80C, 201(1) 201(IA) ]

S.147: Reassessment —Merely on the basis of statement recorded by investigation wing and cross examination was not provided- Reopening assessment on borrowed satisfaction rather than his own satisfaction – Reassessment is held to be invalid [ S.148 ]

S.147: Reassessment-After the expiry of four years- Bogus share capital- Statement was retracted -No allegation of failure on part of assessee to disclose material facts-Reasons recorded without independent application of mind – Reassessment is held to be in valid [ S.148 ]

S.143(3): Assessment – Income from undisclosed sources — Survey – Surrendered during survey and assessee retracting statement — Onus is on AO to investigate further and establish additions made on basis of surrender- Addition of Rs 1,42,778 on account of gross profit was confirmed. [ S.133A ]

S. 92C : Transfer pricing – Arm’s length price -Management group cost – Some services received from associated enterprises and the applicability of the benefit test could not be countenanced -International transactions should be bench marked separately – Comparable uncontrolled price method most appropriate method – For determination of management group cost, matter was remitted to the AO for a fresh determination of the arm’s length price .

S. 92C : Transfer pricing – Arm’s length price —Margins of assessee with its associated enterprises is higher than margins of assessee with third parties hence no adjustment on account of Arm’s length price is warranted. International Transactions of information technology services availed of to be aggregated with other Transactions and to be benchmarked applying internal transactional net margin method. Order of TPO in taking value of International transactions of information technology services availed at nil was to be reversed and the adjustment made was to be deleted .

S. 81C : Undertakings – Special category states – Manufacture of vibration testing system for the defence, aerospace and automobile industries-Merely on the basis of report of the inspector without giving an opportunity to challenge the same such a report cannot be used as evidence against the assessee – Matter remanded to the AO to re -decide in accordance with law.

S. 56 : Income from other sources -Receipt of shares without adequate consideration or for inadequate consideration — Assessee Filing Reply Before Assessing Officer supported by documentary evidence with certificate of Chartered Accountant and report of registered Valuer — AO was directed to decide issue a fresh [ S.56(2) viib)]

S. 50C : Capital gains – Full value of consideration – Stamp valuation -Property was tenanted and Court cases were pending , certain portion to be taken over by authority for road widening -Objections of the assessee was not dealt with authorities – Addition on account of difference in stamp valuation and sale deed is held to be not valid .[ S.45 ]

S. 40A(2): Expenses or payments not deductible – Excessive or unreasonable -Payment of interest on unsecured loans at rates between 15 % an 18% can not be held to be excessive.