S. 36(1)(iii) : Interest on borrowed capital-Advance to subsidiary-investment made for acquiring controlling interest in associate concern-Commercial expediency-Allowable as deduction. [S. 37 (1)]

S. 32 : Depreciation-Intangible asset-Non-compete agreement-Right in personam-Not an intangible asset-Depreciation not allowable on non-compete fees.[S. 32(1)(ii)]

S. 28(i) : Business income-Capital gains-Two provisions operate in distinct and independent fields-Mere receipt not sufficient to attract charge Commercial realisability required-Shares received on amalgamation-Shares held as stock-in-trade Nature of stock-in-trade wholly different from investment-No exception contemplated in case of business assets-Shares received on amalgamation-Shares held as stock-in-trade-Profit taxable as business profits-Burden on department to establish and Tribunal to apply the principles to evidence on record-Charge attracted only upon allotment of new shares-Not on appointed date or date of court sanction. [S. 2(1B), 2(14), 2(47), 28, 45(1), 47(vii) Art. 136]

S. 14A : Disallowance of expenditure-Exempt income-Disallowance is not attracted where there is no income exempt from tax-Disallowance is restricted to the extent of exempt income-Finance Bill, 2022, declaring that amendment to take effect from 1-4-2022 and accordingly applies in relation to assessment year 2022-2023 and subsequent assessment years-Order of Tribunal affirmed. [R.8D]

S. 11 : Property held for charitable purposes-Tribunal affirmed and applied proviso to section 2(15) to disentitle exemption under sections 11 and 12-Expenditure exceeded donations and no retention of income, but deficit of seven per cent-Proviso to section 2(15) not attracted and denial of exemption unsustainable.[S. 2(15), 12AA]

S. 69: Unexplained investments – Unexplained jewellery- Search – Considering the assessee’s age, social status, occupation, family background and customary gifts received on various occasions, the Tribunal held the possession of 48.9 gms to be reasonable. Diamond and precious-stone-studded jewellery cannot be excluded from the benefit of CBDT Instruction No. 1916 merely because it contains diamonds or precious stones. Accordingly, the entire addition of Rs.3,86,186/- was deleted – Enhanced rate of 60% – Search conducted on 26-07-2016 – Amendment by Taxation Laws (Second Amendment) Act, 2016 – Enhanced rate applicable prospectively – Not applicable where search was conducted prior to 15-12-2016. [ S. 69A , 115BBE , 132 ]

S. 254(1): Appellate Tribunal- Powers- Award cost – Additional evidence – Conditional remand before the Assessing Officer -Demonetisation- Unexplained cash deposits, unsecured loans, sundry creditors and agricultural income – The assessee should, within one month from the date of the order, plant 500 trees and furnish documentary evidence thereof, or deposit the requisite cost with the NGO. [ S. 68 , 143(3) ]

S. 151: Reassessment – Sanction for issue of notice -Validity of unsigned approval- The approval under section 151 dated 30-3-2021 was unsigned, the Assessing Officer had no valid jurisdiction to issue the notice under section 148; consequently, the notice under section 148 and all consequential proceedings were quashed- The Court also held that section 292BC, being applicable retrospectively from 1-4-2021, had no application to the approval granted on 30-3-2021. [ S. 148 , 282A(2), 292BC , Art . 226 ]

S.142(2A): Inquiry before assessment-Special audit-Mandatory statutory procedure not followed-Assessment void ab initio.[S. 142(2C), 143(3) 145(3)]

S. 115BAB: Tax on new manufacturing domestic companies-Concessional tax rate-Manufacturing company-Option once exercised continues for subsequent years-Adjustment under section 143(1) not permissible without opportunity of hearing. [S.143(1)]