S. 80IC: Special category States –Initial year- The fact that the assessee has earlier availed deduction u/s 80IA & 80IB is of no concern because deduction u/s 80IC is available from the “initial year” i.e. the year of completion of substantial expansion. The inclusion of period for the deduction availed u/s 80IA & 80IB, for the purpose of counting ten years, is provided in sub-section (6) of S. 80IC and it is limited to those industrial undertakings or enterprises which are set-up in the North-Eastern Region. [ S. 80IA,80IB ]

S. 80IA :Industrial undertakings – Independent unit- Merely because the both units have a common excise registration , common electricity and water connection, exemption as separate unit cannot be denied .

S. 45 : Capital gains – Gift- Notional addition -Transfer of shares in a Public Ltd Co was doubted as there was no proper documentation- Revenue challenged the genuineness of Transaction-Matter was set aside for ascertain the genuineness of the Transaction and decide according to law . [ S.2(47),47(iii), 56(2)(viia) ]

S. 40A(3) :Expenses or payments not deductible – Cash payments exceeding prescribed limits – No disallowance can be made for cash payments if the transaction is genuine and the identity of the payee is known. Rule 6DD is not exhaustive. The fact that the transaction does not fall with Rule 6DD does not mean that a disallowance has to be per force made. [ R.6DD ]

S. 23 : Income from house property – Annual value – Assessee has the option to claim as self occupied property which is more beneficial – Though the option was exercised while filing the return the assessee which can changed in appellate proceedings before CIT (A ) if it is beneficial to assessee. [ S.22 ]

S. 5 : Scope of total income – Non-resident — Employees of Indian company sent on assignments – Employees residents of those countries and liable to tax on their worldwide income in those countries for period of their assignment income did not accrue in India and not chargeable to tax in India — Indian Company is not liable to deduct tax on salaries paid in India — Once employees returned and became residents Indian Company can give credit for taxes deducted during deputation outside India – Indian company is not liable to deduct tax on split pay and perquisites received in India but accrued outside India. DTAA- India – USA [ S. 2(45) 4, 5(2) 9(1)(ii), 15, 90, 192 , Art.4(1) , 25 ]

S. 281 : Certain transfers to be void – Transfer of property by legal heirs of original assessee — Tax recovery officer has no power to declare transfer is void- Department was granted liberty to file a civil suit to declare the sale transaction and sale deed executed in favour of the petitioner, null and void. [ S.222, 226 ]

S.271(1)( c):Penalty — Concealment of income — Depreciation -Notice did not show nature of default – Assessee had understood purport and import of notice- Levy of penalty is held to be valid .[ S. 32 , 274 ]

S. 263 : Commissioner – Revision of orders prejudicial to revenue- Exclusion of the deduction allowed u/s 80IB while quantifying the deduction u/s 80HHC – Two views possible – Revision was held to be not valid . [ S.80HH ]

S. 221 : Collection and recovery – Assessee deemed in default -Pendency of appeal before CIT(A) -Attachment of bank account and recovery of amount -Recovery of the amount was held to be without following the due process of law -Stay was granted and directed the revenue 85 percent of tax recovered [ S. 156 ]