S. 115JB : Book profit – Banking – Insurance – Electricity company- Are not company bound by provisions of Companies Act – (Pre amendment by Finance Act, 2012)-Provision is not applicable to a banking company , insurance & electricity cos- The mechanism provided for computing book profit in terms of S. 115JB(2) is wholly unworkable for a banking company- When the machinery provision fails, the charging section also fails-Provision is not applicable -The anomaly was removed by the Finance Act, 2012-However, the amendments are neither declaratory nor clarificatory but make substantive and significant legislative changes which are applicable prospectively.

S. 56 : Income from other sources – Fair Market Value-DCF method –Closely held company – The fact that the company is loss-making does not mean that shares cannot be allotted at premium. The DCF method is a recognised method though it is not an exact science & can never be done with arithmetic precision. The fact that future projections of various factors made by applying hindsight view cannot be matched with actual performance does not mean that the DCF method is not correct. [ S. 56(2)(viib), Rule 11UA. ]

S. 50C : Capital gains-Full value of consideration- Stamp valuation- AO is obliged to compute the capital gains by taking the valuation arrived at by the DVO in place of the actual consideration received by the assessee -The assessee is entitled to challenge the correctness of the DVO’s valuation before the CIT(A) and the Tribunal- The DVO has to be given an opportunity of hearing. [ S.45 ]

S. 251 : Appeal – Commissioner (Appeals) – Powers – CIT(A) is not empowered to dismiss appeal for non-prosecution and is obliged to dispose of appeal on merits by passing a speaking order. [S. 250]

S. 201 : Deduction at source-Failure to deduct or pay–Bonafide belief that as employees of State Government and were entitled to exemption of entire sum of unutilised leave encashment–Failure to deduct tax at source–Cannot be treated as assessee in default .[S.10(10AA(ii), 192, 201(1), 201(IA)]

S. 145 : Method of accounting-Low gross profit–Books of account cannot be rejected without pointing out any defects CIT(A) cannot enhance and reject the books of account which was not the subject matter of assessment. [S. 251]

S. 133A : Power of survey -Sworn statement–Addition cannot be made only on the basis of statement of managing director recorded u/s. 131 during survey, without any corroborative evidence. [S. 131, 132(4) ,143(3), Evidence Act, 1878, S. 18]

S. 68 : Cash credits–Advance received in earlier years-Addition cannot be made as cash credits.

S. 54B : Capital gains–Agricultural land-Land was used for agricultural purposes–Land classified as agricultural land Jowar crop was grown- Eligible exemption [S.2(14), 45]

S. 48 : Capital gains–Computation-Foreign Institutional Investor (FII)-Sale of shares of Indian subsidiary-legal/professional fees paid to lawyers/accounting firms- Allowable as deduction. [S.45, 48(1)]