S. 10A : Free trade zone – Depreciation and other deductions –
-Neither any deduction claimed by assessee for Assessment Years prior to amendment nor exemption granted — Ten years’ relief allowed by later amendment in 2003 —Interpretation- Legislative intent – The intent of the Legislature while it made those amendments was not to curtail the relief to an assessee, who had not availed of double benefit- Matter remanded to Appellate Tribunal for reconsideration. [ S.10A(6) ]

S. 10(14) : Special allowance or benefit -Allowance received by employee to cover expenses incurred wholly in performance of duties —Extra payment to meet costs in Foreign location is not entitled to exemption. [ S.15, 17 , 192 ]

S. 9(1)(i): Income deemed to accrue or arise in India – Permanent Establishment -Global payment solutions facilitating use of electronic forms of Payment, ie by credit card, instead of cash and cheques -Banks and financial Institutions – There was a fixed place permanent establishment, service permanent establishment and dependent agent permanent establishment-On such attribution of income to the permanent establishment, the tax was required to be withheld at full applicable rate at which the non-resident is subjected to tax in India. Even automatic equipment like server can also create a permanent establishment and there was no requirement of human intervention- DTAA-India -Singapore [ Art. 5, 7, 12 ]

S. 4 : Charge of income-tax – Income or capital- Non-compete Amounts received by assessee under Non-Compete agreement constitute capital receipt- Revenue cannot ignore the specific terms of the agreements and render findings contrary thereto as regards the nature of the income received by the assessee- Form and substance of transaction-Substance of transaction to be considered. [ S.28(i) ]

S. 4 : Charge of income-tax -Income or capital — Incentive for sale of Sugar is a capital receipt and hence not chargeable to tax .

S. 35:Punishment of advocates for misconduct- Status of Legislator is member of House. Legislator cannot be styled as full time salaried employees – Merely drawing salary or allowances does not result in creation of relationship of employer and employee between government and legislators- Merely because Advocate is elected people’s representative , it does not amount to professional misconduct – In the absence of express provision in Act or Rules , Legislators cannot be debarred from practicing as Advocate [ S.49, Bar Council of India Rules , 1975 R.49, Art. 14, 32 ]

S. 21:Professional misconduct – Audit fee was not paid – Allegation that Chartered accountant carried out audit of three companies without intimating and obtaining no objection certificate from previous auditor – Chartered accountant is held of professional misconduct and reprimanded . [ S. 22 ]

S. 260A : Appeal – High Court – Cross objection- Limitation-Limitation to file cross objections starts from date of service of notice of appeal – Plea by cross-objector that as no date of final hearing was mentioned in notice , there is no necessary to explain the delay of 94 days in filing the cross objection is held to be unsustainable – Application filed for condonation of delay was not pressed by the Counsel . [ Civil P.C. O. 41 , R. 22 , Limitation Act, 1963 , S. 5 ]

S. 254(1) : Appellate Tribunal – Duties- Bad debts-If the AO has failed to discharge his obligation to conduct a proper inquiry, it is the obligation of the ITAT to ensure that effective inquiry is carried out-The AO has not examined the crucial aspect whether the bad debts claimed by the assessee due to the NSEL scam constitutes a “speculative transaction” u/s 43(5) and whether Explanation to S. 73(1) applies. Matter remanded . [ S.36(1(iii), 43(5) , 73(1)]

S. 226 : Collection and recovery – Modes of recovery –Appeal- The AO is not justified in insisting on payment of 20% of the demand based on CBDT’s instruction dated 29.02.2016 during pendency of appeal before the CIT(A)- This approach may defeat & frustrate the right of the assessee to seek protection against collection and recovery pending appeal-Such can never be the mandate of law- CIT(A) is directed to hear the appeal expeditiously-Pendency of appeal the stay is granted . [ S. 220(6),246 ]