S. 68: Cash credits – Long-term capital gains on sale of shares –Penny stocks- Sunrise Asian Ltd. (formerly Santoshima Tradelinks Ltd.) Exemption cannot be denied merely on suspicion – Purchase and sale through banking channels, demat account and recognised stock exchange – In absence of evidence connecting assessee with alleged accommodation entries, addition under section 68 not sustainable.[ S. 10 (38), 45, 69C ]

S.80IA: Industrial undertakings – Enterprises engaged in infrastructure development -Initial assessment year – Assessee entitled to choose first year for claiming deduction – Earlier years’ unabsorbed depreciation already absorbed cannot be notionally brought forward-CBDT Circular No. 1/2016 [ S.80IA(2), 80IA(5), 119, 260A ]

S. 4: Charge of income-tax -Capital or revenue receipt – Pre-commencement receipts – Income earned during trial runs and sale of scrap before installation of project – Receipts inextricably connected with setting up of project – Capital receipts – Not taxable.[ S. 28(i), 80IA, 145 , 260A ]

S.144C. Assessment – Eligible assessee – Non-resident – Draft assessment order mandatory – Failure to issue draft order before passing final assessment order renders assessment void ab initio- Best judgment assessment – Return filed and notices substantially complied with – Invocation of section 144 invalid – Jurisdiction – Non-resident assessee – Assessment completed by officer lacking jurisdiction – Objection not barred by section 124(3) in faceless assessment proceedings- Reassessment – Addition based on erroneous information in Form 26AS – Assessee explaining duplicate reporting and source of investment – Assessment completed without considering evidence – Order quashed without remand. [S. 56 , 69, 124(3), 144,144C(1), 144C(15)(b)(ii), 147, 148A(b), 148A(d), Art. 226 ]

S. 36(1)(vii): Bad debts – Write off – Mere provision not allowable after 1-4-1989 – However, where the assessee debits the amount to the Profit & Loss Account, correspondingly reduces the debtor/sundry debtors account and, due to pendency of recovery litigation, does not formally close the individual debtor’s ledger account, there is an effective write-off and deduction cannot be denied. [S. 41(4)) ]

S. 271(1)(c): Penalty -Concealment-Concealment or furnishing inaccurate particulars -Failure to specify exact charge -Penalty not sustainable. [. 68]

S. 271(1)(c) : Penalty -Concealment-Not specifying the Charge-Cash deposits treated as unexplained under section 68 for want of documentary evidence -Explanation found bona fide -Penalty order not specifying applicable limb -Penalty was deleted.[S.274]

S. 270A: Penalty for under-reporting and misreporting of income-Bona fide belief regarding taxability -Reasonable cause-Voluntary offer of income during assessment/reassessment -Penalty not leviable. (S. 271(1)(c))]

S. 270A: Penalty for underreporting and misreporting of income -Non-specification of limb under section 270A-No penalty u/s 270A is leviable.[S.270A(9), 274]

S. 268A: Appeal -Instructions-Circulars -Monetary limits-Departmental appeal -Low tax effect -CBDT Circular No. 9 of 2024 -Exception relating to bogus penny stock transactions not applicable where assessee claimed business loss and not short-term capital loss -Revenue’s appeal dismissed. (S.28(i), 45, 68, 143(3), 147, 148, 153A, 253)