S. 68: Cash credits- Bogus Capital gains-Penny Stocks-Though the AO did not find any mistake in the documentation furnished by the assessee, there is need for finding of fact on (i) the nature of the shares transactions; (ii) make-believe nature of paper work; (iii) Camouflage the bogus nature; and, (iv) the relevance of human probabilities etc – Addition is confirmed as cash credits [S.10(38) 45]

S.37(1): Business expenditure – Diversion by overriding title -Sharing of profit-The AO has to take into account the manner in which the business works, the modalities and manner in which SAP/additional purchase price/final price are decided and determine what amount forms part of the profit -Whatever is the profit component is sharing of profit/distribution of profit and the rest is deductible as expenditure –question of law is answered partly in favour of the revenue and partly in favour of the assessee- Matter is remitted to the AO to undertake the exercise as stated in the judgement after giving an opportunity to the respective assesses. [ S.40A(2),Sugarcane ( Control) Order 1966 clauses , 3, 5A ]

S. 272A : Penalty — delay in filing statement of tax deducted at source — difficulties in initial stage of change from manual filing to electronic filing of returns – plausible explanation given – Levy of penalty is held to be not justified. [S. 200(3), 272A(2)(k), 273B]

S. 263 : Commissioner-Revision of orders prejudicial to revenue Revision-No specific query was raised by the AO regarding allowability of provision for gratuity and general reserve-Revision is held to be justified. [S. 40A(9)]

S. 263 : Commissioner-Revision of orders prejudicial to revenue-Delay of 565 days is condoned-Voluntary offer of income in revised return-Dropping of penalty proceedings-Commissioner cannot substitute his view in revision proceedings for assessing officer view for dropping penalty. [S. 254(1), 271(1)(c)]

S. 263 : Commissioner – Revision of orders prejudicial to revenue -Cash credits- Share capital- AO had made enquiry by seeking information from Switzerland Tax Authorities through proper channel of FT & TR division of CBDT, for exchange of information so as to verify identity, source of funds and creditworthiness of holding company and its promoters- Revision is held to be not justified. [S. 68]

S. 254(1) : Appellate Tribunal-Additional ground–validity of the assessment can be challenged at any time as it goes to the root of the matter and is a legal issue.

S. 254(1) : Appellate Tribunal—Duties-Additional ground- Validity of assessment is legal in nature–Admitted. [S. 153C]

S. 253 : Appellate Tribunal-Limitation-Delay of 285 days-No material prove bona fides attempts made in filing appeal, mere self-serving documents cannot condoned the huge delay-Appeal was dismissed. [S. 246A]

S. 246A : Appeal-Commissioner (Appeals)–Non filing of appeal in electronic form-Appeal cannot be dismissed on Technical grounds during changeover period.