Black Money (Undisclosed Foreign Income and Assets) and Imposition of tax Act, 2015

S.10(1): Assessment – Penalty – Taking an overall view of the matter, the respondents could proceed pursuant to the notices dated December 20, 2017. However, no coercive measures could be taken against the assessees if the occasion so arose. [ S. 4(3), 59, Income -tax Act , 1961 S.131 ,148 ]

S. 45(3) : Capital gains – Transfer of capital asset to firm – Transfer of capital asset by Partner to Firm as capital contribution – Amount recorded in books of account of Firm deemed to be full value of consideration – One deeming provision cannot be extended by importing another deeming provision [S. 48 , 50C].

S.45: Capital gains — Long-term capital gains — Transfer of land — Reference to Valuation officer — FMV as proposed by AO to be adopted for purposes of computation of capital gains [ S.48, 49 ]

S. 40A(3) : Expenses or payments not deductible — Cash payments exceeding specified limit — Assessee taking different stands before AO and CIT(A) – General remark that payment made in cash due to business exigencies not acceptable — Disallowance is held to be justified

S. 37(1) : Business expenditure — Expenses prohibited by law — Grants — Assessee receiving grants on annual basis and grants used in accordance with directions of Government — AO allowing salary expenses in preceding year — AO should not have taken a different stand in current year — Salary paid to all old employees who worked for Assessee and expenses genuine — Expenses wholly and exclusively for purpose of business, hence expenses are deductible.

S.37(1): Business expenditure – adhoc addition on account of weight and rate difference – No evidence to establish basis of arriving the amount debited in P&L Account — Addition justified.

S. 32 : Depreciation — Cost of construction of office Block – Compensation paid for easement rights not accepted by Tribunal in earlier years — High Court admitting Assessee’s appeal against Tribunal not a reason to take a view in favour of Assessee — Assessee not entitled to depreciation.

S. 32 : Depreciation – Capital or Revenue expenditure — Expenditure on leasehold premises – Nature of expenditure to be examined before applying provision relating to ownership of asset

S. 28(i) Business Income — Benefit or amenity arising from business — Remission or cessation of trading liability — Assessee introducing gold left behind by his father into his business and showing trade liability in his name and in name of other family as a whole or individual legal heir — AO accepting purchase of gold and approving trading results — Not a case of Assessee introducing unaccounted or unexplained money into capital or of a trade liability ceasing to exist. [S.41(1) ]

S. 15 : Salaries — Director Of Company — Assessable on accrual basis and not on receipt basis — Even if higher salary proposed by employer Not approved By Central Government — AO to examine factually if what is claimed by employer as deduction has been offered to tax by Director.