S.64: Clubbing of income – Clubbing of the share of ‘income’ of wife and minor children – Income include loss- Loss can be clubbed and carried forward like income – Though equity and taxation are often strangers, attempts should be made that these do not remain always so and if a construction results in equity rather than in in-justice, then such construction should be preferred to the literal construction if strict literal construction leads to an absurd result i.e. result not intended to be subserved by the object of the legislation found out in the manner indicated before, and if another construction is possible apart from strict literal construction then that construction should be preferred to the strict literal construction- The scheme of the Act has to be considered in holistic manner which in this case is, to counteract, the effect of the transfer of assets so far as computation of income of the assessee is concerned .[S. 70 , 71 , 72 , Income tax Act, 1922 , S. 16(3) 24(2) ]

S.52(2): Consideration for transfer of cases of under statement -Additions cannot be made on presumptions- Capital gains- Where the consideration for the transfer is under-stated or in other words, the assessee has actually received a larger consideration for the transfer than what is declared in the instrument of transfer and it would have no application in case of a bonafide transaction where the full value of the consideration for the transfer is correctly declared by the assessee- Burden is on revenue to prove that under consideration is received by the assessee. – Task of interpretation of a statutory enactment is not a mechanical task and it is more than a mere reading of mathematical formulae where the plain literal interpretation of a statutory provision produces a manifestly absurd and unjust result which could never have been intended by the legislature, the court may modify the language used by the legislature or even ‘do some violence’ to it, so as to achieve the obvious intention of the legislature and produce a rational construction [ S.45 ]

S. 50 : Capital gains-Depreciable assets-Capital asset in respect of which depreciation has been obtained, option of substituting fair market value on prescribed date is not available to such a person- Assessee has enjoyed depreciation allowance,therefore his cost of acquisition shall have to be determined as provided in section 50 [S. 32,41(2), 43(6) , 45, 48. 49, 55(2(i)]

S. 253 : Appellate Tribunal – Monetary limits – CBDT Circular – Information received from DIT(Investigation) being an internal wing of Income Tax department cannot be treated as an external source and hence not covered by exception to Circular – Circular No 17/ 2029 dt 8 -8 -2019 ( 2019) 416 ITR 106 (St) – Circular No 23/2019 dt 16 -9- 2019 ( 2019) 417 ITR 4 (St) applies only to capital gains on penny stocks and not to share application money [ S.45 , 68 ]

S. 145: Method of accounting – On money – Project competition method – unaccounted cash receipts as found recorded in the seized documents. The Assessee followed project completion method of accounting and offered it to tax in the year of completion of project. [ S. 4 , 5 ]

S. 45(3) : Capital gains – Transfer of capital asset to firm – AOP – I Introduction of development rights by way of capital contribution- Even though a transfer but it is not a sale because there neither any receipt nor any accrual of any consideration- Provisions of section 50C of the Act could not be applied to sale development rights – When there is inconsistency in special provision and general provision – Special provision will prevail .[ S.50C ]

S. 50 : Capital gains–Slump sale- Deemed” short term capital gains -Undertaking is sold as a running business with all assets and liabilities for a slump price, no part of the consideration can be attributed to depreciable assets-If the undertaking is held for more than three years, it constitutes a “long-term capital asset” and the gains are assessable as a long-term capital gain- Sale of entire business as running concern which qualifies to be long term capital asset is different from sale of one or more block of assets used in business as such. Assessee’s treatment of offering the gains as long term capital gains with consequential benefits under section 48(2) upheld . [S. 45, 48,50(2), 50B]

45(5) : Capital gains – Compulsory acquisition of land – Accrual – Enhanced compensation – Interest – Taxable in the year of receipt and not to be spread over – Individual v. Association of Persons [S. 2(31), Land Acquisition Act, 1894, S. 28]

S.45 : Capital gains- Income from other Sources – A receipt that is capital in nature cannot be assessed under the head income from other source- Tenancy right is a capital asset the surrender of which would attract capital gains – Amount is not taxable under capital gains as cost of acquisition of tenancy right is indeterminate [ S 10(3) 14, 48 ,56 ]

S. 45: Capital gains – Goodwill — Initially generated goodwill — cannot be regarded as ‘Asset’ – Transfer does not give rise to capital gains tax [S. 2(14), 2(47), 48, 49, 50 , 55]