S. 92C : Transfer pricing–Purhase of equity shares at value in excess of FMV is capital transation and does not give raise to any income Taxability under Transfer Pricing provisions of shares purchased at value in excess of FMV-As the transaction of purchase of equity shares is a capital transaction and does not give rise to any income, the transfer pricing provisions do not apply. Chapter X is a machinery provision- It can only be invoked to bring to tax any income arising from an international transaction. It is necessary for the revenue to show that income does arise from the international transaction. S. 2(24)(xvi) & 56(2)(viib) are prospective. [S.2(24)(xvi); 56(2)(viib), 92B]

S. 92C : Transfer pricing–Purchase and sale of shares-TPO was not justified in treting the transaction as loan and charging interest on notional basis–Corporate guarantee–Tribunal is justified in restricting the addition at 1 %of gurantee commission as against addition of at 5% of commission by the TPO. [S. 92B]

S. 80-IC : New Industrial undertaking–Special category States- Initial assessment year -An assessee availing exemption of 100% tax on setting up of a new industry, which is admissible for 5 years, and either on the expiry of 5 years or thereafter (but within 10 years) from the date when these assessees started availing exemption, they carried out substantial expansion of its industry would become ‘initial assessment year’, and from that assessment year, assessee shall been entitled to 100 per cent deductions from that year.

S. 73 : Losses in speculation business-Commodity trading–Off market transaction-The AO cannot treat losses from off market commodity transactions as bogus and inadmissible in the eyes of the law if the transactions through the broker are duly recorded in the books of the assessee-The fact that the broker was expelled from the commodity exchange cannot be the criteria to hold the transaction as bogus.

S. 47(vii) : Capital gains-Business income-Income from other sources -Transfer by a share holder in a scheme of amalgamation- Increse in general reserve on transaction related to the composite Scheme of Arrangement and Amalgamation-An anti-abuse provisions which applies only to cases of bogus capital building and money laundering- It does not apply to an amalgamation where shares are allotted at alleged undervaluation-.Increase in general reserves due to recording of assets of amalgamating company at FMV not give rise to any real income to the assessee-It is capital in nature- Amendment to s. 47(vii) by FA 2012 w.e.f 1-4 -2003 is clarificatory and retrospective- Addition is held to be not valid. [S. 28(iv); 56(2)(viia)]

S. 45 : Capital gains-Penny Stocks-Capital gains cannot be treated as bogus solely on the basis that the price of the shares has risen manifold and the reason for astronomical rise is not related to any fundamentals of market-If the transactions are duly proved by trading from stock exchange and the documentation is proper, the gains cannot be assessed as unexplained credit or as unexplained money. [S. 10 (38), 68, 69]

S. 37(1) : Business expenditure-Expenditure incurred for any purpose which is an offence or which is prohibited by law- Custom redemption fine is held to be not allowable as deduction, in view of explanation I to S.37(1) of the Act. [S. 69C]

S. 36(1)(iii) : Interest on borrowed capital-Investment in sister concern- Sufficient interest free loans–Deletion of addition is held to be justified.

S. 23 : Income from house property–Annual letting value–Stock in trade-The annual letting value (ALV) of unsold units of properties lying as stock in trade is not assessable as income under the head income from house property. [S. 5, 22, 23(4)]

S. 263 : Commissioner-Revision of orders prejudicial to revenue -Transfer pricing officer-Transfer pricing risk parameter, fell under para 3.2 of circular dated 10-3-2016 which required reference to TPO by Assessing Officer mandatorily – Revision is held to be justified. [S. 92CA]