S. 14A : Disallowance of expenditure – Exempt income – Stock in trade – Controlling interest – Principle of apportionment – Only that expenditure which is “in relation to” earning dividends can be disallowed – AO has to record proper satisfaction on why the claim of the assessee as to the quantum of suo moto disallowance is not correct. [S. 36(1)(iii), Rule. 8D]

S. 11: Property held for charitable purposes – Application of income – Any excess expenditure incurred by the trust/charitable institution in earlier assessment year could be allowed to be set off against income of subsequent years. [S.11(1)(a)]

S. 9(1)(vii): Income deemed to accrue or arise in India – Fees for technical services – Validity challenged – Parliament’s power to legislate having extra – territorial effect.

S. 9(1)(i) : Income deemed to accrue or arise in India – Indirect transfers – Transfer of shares – Foreign company – Jurisdiction – Off shore transaction tax authorities in India has no jurisdiction to tax such share transfer – Tax planning vs Tax avoidance – Subsidiary and Holding company relationships – Other business considerations [ S. 2(14) 2(47), 5(2) 163 , 195 ]

S. 9(1)(i): Income deemed to accrue or arise in India – Business connection – Income attributable to permanent establishment – For applicability of article 5(1) of DTAA it should be an establishment through which business of an enterprise is wholly or partly carried on and further profits of foreign enterprise are taxable only where said enterprise carries on its ‘core business’ through PE – Project office in India cannot be construed as fixed place as no core activity took place from its office in India Deletion of addition by the High Court is affirmed – DTAA- India – Republic of Korea [ Art.5 (1), 7 ]

S. 5: Scope of total income – liaison office of the non-resident – A liaison office which is only carrying on such activity of a “preparatory or auxiliary” character is not a Permanent Establishment in terms of Article 5 of the Double taxation Avoidance Agreement – The deeming provisions in Sections 5 and 9 of the 1961 Act can have no bearing whatsoever- DTAA-India-UAE [S. 2(24) , 4 , 9(1)(i) ,90 , Art , 5 , 7 ]

S. 5: Scope of total Income – Accrual of income of discretionary trust – Income retained by the trustee cannot be brought tax in the assessment of beneficiary. [Wealth-tax Act, 1957, section 3]

Interpretation of taxing statutes – Binding precedent – Two conflicting decision of different High Court – Transfer of case – Jurisdictional High Court decision will be binding on the Assessing Officer .

Interpretation of taxing statutes – Binding precedent – Two conflicting decision of different High Court – Transfer of case – Jurisdictional High Court decision will be binding on the Assessing Officer .

S. 271(1)(c) : Penalty – Concealment – Disallowance of service tax -Nether debited to profit and loss account nor claimed as expenditure – levy of penalty is held to be not justified [ S.43B ]