S. 69B: Unexplained investment-Survey-Excess stock found during survey of business premises-Surrendered in return as business income-No independent source of investment shown-Business being sole source of income-Survey at business premises, no books impounded, no reasons recorded-Deeming provision not attracted-Excess stock taxable as business income. [S. 28, 115BBE, 133A]

S. 68: Cash credits-Search and seizure-Undisclosed income-Advances received through banking channels for land sale-Suppression means receipt of excess as own money outside banking channel-No correlation with specific sale-Not unaccounted sale-Addition deleted.-Advances from buyers-Addition based on book entries, not incriminating material-Confirmation, ledger, bank statements furnished-Identity/creditworthiness beyond dispute once sale deed registered-Non-filing of confirmation from few persons irrelevant-Addition deleted-Unaccounted sale consideration-Managing partner’s admission vs registered sale deed-Latter to prevail-Only profit element assessable, cost subsumed in closing stock-Commissioner (Appeals)’s findings upheld-Advances not linked to identifiable plot-Confirmation, ledger, PAN furnished-Addition based on book entries not incriminating material-Identical treatment required for similarly placed parties-Addition deleted-Addition based solely on partner’s statement admitting unaccounted income-Statement pertaining to partners, not assessee-No corroborating material-Addition not sustainable. [S. 132, 132(4)]

S. 68: Cash credits-Share capital and premium-Newly incorporated company, no business model-500-fold premium charged only on second lot issued 27 days after first lot at nil premium-Investors unverifiable, no source of funds, director not produced-Source of funds not established-Identity, creditworthiness and genuineness not substantiated-Addition as unexplained cash credit justified.

S. 45: Capital gains-Transfer of bundle of rights/obligations as investment to a partner-The compensation received for not initiating assured insurance business is a capital receipt and not chargeable to tax as capital gains.[S.4, 55(2)(a)]

S. 44B: Shipping business-Non-residents-Computation-Taxability in India-Presumptive tax-Business of operation of ships for international carriage-Goods and services tax collected as statutory levy and shown separately in invoice-Not part of gross receipts-Tribunal, in assessee’s own case for earlier years, consistently holding service tax excludable from gross receipts-GST not includible in computing income under section 44B-Addition deleted-Income offered to tax under section 44B read with section 90(2)-Section 115JB not applicable-Book profit computation deleted-DTAA-India-Hong Kong. [S. 90(2), 115JB(1), Expln. 4A,145A], Art.8]

S. 43B: Deductions on actual payment-Goods and services tax shown as unpaid as of the date of the audit report but paid before the due date for filing return of income-Goods and services tax not routed through profit and loss account-Section 43B not applicable. [S. 44AB]

S. 40(a)(ia): Amounts not deductible-Deduction at source-TDS on land purchase-Seller having offered consideration to tax-No disallowance in buyer’s hands-Non-deposit of TDS only precludes buyer’s credit. [S. 132(4), 201(1)]

S. 37(1) : Business expenditure-Expenditure on movie tickets provided to staff of clients for chairman’s film-Incurred for maintaining good relations with clients-Deduction allowable.

S. 36(1)(viii): Eligible business-Special reserve-Financial corporation engaged in long-term housing finance-Deduction applicable only to profits from long-term finance for construction or purchase of house for residential purpose-Interest income from loans of term under five years not to be excluded, being from core business-Loans for non-residential purpose not integral part of residential loans-Not eligible for deduction-Income must emanate from eligible undertaking with direct nexus-Surplus funds from housing finance business parked in approved Government securities yielding interest-Direct nexus with core business-Income “derived from” business-Eligible for deduction-Expenditure relating to income not includible in total income-Own funds in excess of investment for earning dividend-Interest cost not to be adjusted against dividend income-Administrative expenditure to be reallocated based on ratio of exempt-income-yielding investments to total average assets-Disallowance of expenditure relating to exempt income-Exemption on interest from tax-free bonds-Own funds in excess of investment-No disallowance warranted.[S. 10(33), 14A, R.8D]

S. 36(1)(va): Any sum received from employees-Deduction only on actual payment-Belated payment of employees’ contribution to provident fund and employees’ State insurance-Disallowance upheld. [S. 2(24)(x), 43B]