S. 45 : Capital gains-Transfer–Conversion-AOP converted in to a company limited by shares-New company never remained in existence simultaneously–Not liable to capital gain tax. [S.2(47)]

S. 45 : Capital gains-Sale of shares-investigation wing report- Shares were dematerialized and sales had been routed from de-mat account and consideration had been received through banking channels- Addition cannot be made as cash credits. [S. 10(38), 68]

S. 40A(2) : Expenses or payments not deductible–Excessive or unreasonable–Payment of interest at 15% to HUF-Payment made to related parties-AO has not established that the payment was excessive and unreasonable-Addition is held to be not valid.

S. 37(1) : Business expenditure–Business came to halt–Dormant-Expenditure in respect of rent, professional charges, audit fees, property tax, etc., was incurred by assessee for purpose of maintaining its legal status and for disposing its assets-Held to be allowable.

S. 37(1) : Business expenditure-Motor car and telephone expenses–Failure to maintain log book-Ad-hoc disallowance of 10% of expenses is held to be justified.

S. 36(1)(va) : Any sum received from employees–Deposited EPF and ESI contribution late but before due date of filing return-Entitle to deduction- Binding precedent-When decision of jurisdictional High Court is available on issue -Non jurisdictional High Court cannot be followed. [S.139(1), Art.227].

S. 36(1)(va) : Any sum received from employees–Failure to deposit entire amount towards employees contribution on account of PF and ESI with concerned department on or before due date prescribed under relevant statutes- Not entitle to deduction. [S.2(24)(x), 139(1)]

S. 11 : Property held for charitable purposes-Accumulation of income –Merger with another society–Revenue failed to bring any evidence on record to establish accumulation of profit-Order of the AO is set aside.[S. 10(21)]

S. 11 : Property held for charitable purposes-Failure to file return- Return is filed in pursuance of notice u/s.148–Entitle to exemption as applicable to charitable Trust-Failure to produce evidence in support of its claim of electricity expenses-Such amount had to be excluded while considering application of income-S.40(a)(ia), 40A(3) and S. 43B falls in Chapter IV-D which are applicable for computing profits and gains of business or profession and Chapter IV-D is not applicable in respect of charitable trust or institution whose income is to be computed under S 11 and 12 falling under Chapter-III. S. 37(1), Explanation is not applicable to charitable trust. Capital expenditure is to be allowed as application of income. [S. 12, 37(1), 40(a)(ia), 40A(3), 43B, 139, 139(4A), 147, 148]

S. 10(23C) : Educational institution-Non-disposal of assessee’s application within prescribed time period of twelve months, would not result in deemed approval under said section. [S. 10(23C)(vi), 254)(1)]