S. 9(1)(i): Income deemed to accrue or arise in India-Business connection-Permanent Establishment-Attribution of Profits-Once transactions between the foreign enterprise and its Indian affiliate are accepted at Arm’s Length, no further attribution of profits is warranted, even assuming the existence of a Dependent Agent PE. (Articles 5(4), 5(5), 7 of India-USA DTAA [S.90, 92CA, Art. 5(4), 5(5), 7]

S. 2(22)(e) : Deemed dividend-Loan-More than 10% shares only on the first day of the previous year, and after transferring a substantial number of shares, its shareholding fell below 10% and continued below the 10% threshold for the remainder of the year-Addition as deemed dividend was deleted. [S. 2(22)(e), Expln. 3(b)]

S. 68 : Cash credits-Unexplained money-Cash deposits claimed as sale of scrap to unorganised dealers, accounted as “direct income”-No buyers’ details, tax collected at source information or Form 27EQ filed-Explanation unsupported-Matter remanded for fresh verification-Reassessment-Notice-Addition deleted by Commissioner (Appeals) on technical ground of non-mention in show-cause notice-Assessing Officer had in fact discussed issue and afforded opportunity-Matter remanded for fresh verification [S. 69, 69A, 115BBE, 147 , 148 , 206C]

S. 263: Commissioner-Revision of orders prejudicial to revenue-Search and seizure-Seized documents showing unaccounted loan/investment transactions with repayments through billing account and large cash payments-Assessment made without proper enquiry-Assessing Officer taxing only commission instead of undisclosed income-Revision upheld. [S. 68, 69, 69A, 132, 153A]

S. 92C: Transfer pricing-Arm’s length price-Avoidance of tax-International transaction-Specified domestic transaction-Loan to associated enterprise in Bahrain-Benchmarking using US/European data inappropriate-Bahrain Central Bank’s prime lending rate reflects arm’s length rate-Upward adjustment unsustainable-Business expenditure-Disallowance-Payment for product certification services-Not fees for technical services-No tax deductible at source-Disallowance deleted.-Withholding liability arises only when income taxable in recipient’s hands-Royalty payable only on activation by end-user-Provision for royalty rightly allowed. [S.9(1)(vii) 40(a)(ia(195 R.10B]

S. 271D : Penalty-Acceptance of loans/deposits otherwise than by crossed cheque-Assessee claiming bank account used by others for demand drafts towards liquor licence applications-Affidavits of depositors stereotyped, not clarifying position at time of repayment-Matter remanded for fresh verification. [S. 269SS, 269T, 271E]

S. 263: Commissioner-Revision of orders prejudicial to revenue–Assessing Officer failing to consider applicability of minimum alternate tax provisions to assessee-company-Incorrect assumption of facts and incorrect application of law-Revision justified-Book profits-Exclusion from minimum alternate tax-No specific exemption for company under voluntary liquidation-Provisions of company law regarding preparation of accounts not relevant-ITR-6 pro forma recognising liquidation cannot override the Act-Section 115JB clearly applicable-Provisions of minimum alternate tax clearly applicable-Revision justified-Assessee-company undergoing voluntary liquidation citing impossibility of preparing statement of profit and loss-Held, profits and losses determinable under any system of accounts followed, enabling computation of minimum alternate tax.[S.115JB, Companies Act , 1956 , S. 551 , Companies Act , 2013, S. 348]

S. 263: Commissioner-Revision of orders prejudicial to revenue–Notice and order issued in name of erstwhile company but mentioning factum of amalgamation in cause title-Not invalid-Nothing to establish that issues on which revision exercised were examined by Assessing Officer during assessment-Duty cast on Assessing Officer to examine issues not performed-Order of Principal Commissioner setting aside assessment order-Proper. [S. 14A, 40(a)(i), 143(3)]

S. 9(1)(i): Income deemed to accrue or arise in India-Business connection-Non-resident-Permanent establishment-Assessee acquiring group in May 2016, falling in financial year relevant to assessment year 2017-18-No transaction or business connection between assessee and Indian entity during relevant assessment year 2016-17, prior to date of acquisition-Indian entity not associated enterprise at relevant time-No agency permanent establishment-Assessment of attributed profits quashed-DTAA-India-USA. [art. 5(4)]

S. 143(2) : Assessment –Notice-Limitation-To be reckoned from date of filing of original return and not from date of curing of defects-Return filed under section 139(1) within time-Defect notice under section 139(9) subsequently cured-Notice under section 143(2) issued beyond time-limit reckoned from date of original return-Assessment without jurisdiction-Quashed. [S. 139(1), 139(9)]