S. 28(iv): Business income – Waiver of loan – Remission or cessation of trading liability – S. 28(iv) does not apply if the receipts are in the nature of cash or money; but will apply if the benefits are received in some other form – Loan waiver amounts to benefit/ receipt in the form of cash – Held, waiver of loan cannot be assessed u/s 28(iv) of the Act.

S. 41(1) : Profits chargeable to tax – Remission or cessation of trading liability – Waiver of loan – Section 41(1) apply to a trading liability; in respect of which either an allowance or deduction is claimed by the assessee –Loan is not a trading liability and no deduction is claimed in respect of the interest expense – Held, no addition can be made u/s 41(1) of the Act in respect of waiver of loan. [S. 4, 36(1)(iii), 28(iv)]

S. 28(i) : Business income -Professional fees – Cash method of accounting – Outstanding fee of professional work done by assessee, who kept his accounts on cash basis, after close of his profession was not taxable either under head of professional income or under residuary head of income- Income which is chargeable under a particular head cannot be taxed under the residuary head [ S. 2 (45) 4, 5 , 14 ,56 ,145 and of the Indian Income- tax Act , 1922, S.2(15), 3, 4, 5, 10, 12 ]

.S.28(i): Business income – Adventure in nature-of-trade – Division of land into plots and sale to various purchasers – Test to be applied for considering the nature of trade [S.2(13), Indian Income-tax 1922, S. 10(1)]

S. 22: Income from house property-Business income-The objects clause is not determinative- Income earned from sub-licenses is required to be taxed under the head “Income from House Property”. [S. 27(iii)(b),28(i), 269UA(f)]

S. 14A : Disallowance of expenditure – Exempt income – Stock in trade – Controlling interest – Principle of apportionment – Only that expenditure which is “in relation to” earning dividends can be disallowed – AO has to record proper satisfaction on why the claim of the assessee as to the quantum of suo moto disallowance is not correct. [S. 36(1)(iii), Rule. 8D]

S. 11: Property held for charitable purposes – Application of income – Any excess expenditure incurred by the trust/charitable institution in earlier assessment year could be allowed to be set off against income of subsequent years. [S.11(1)(a)]

S. 9(1)(vii): Income deemed to accrue or arise in India – Fees for technical services – Validity challenged – Parliament’s power to legislate having extra – territorial effect.

S. 9(1)(i) : Income deemed to accrue or arise in India – Indirect transfers – Transfer of shares – Foreign company – Jurisdiction – Off shore transaction tax authorities in India has no jurisdiction to tax such share transfer – Tax planning vs Tax avoidance – Subsidiary and Holding company relationships – Other business considerations [ S. 2(14) 2(47), 5(2) 163 , 195 ]

S. 9(1)(i): Income deemed to accrue or arise in India – Business connection – Income attributable to permanent establishment – For applicability of article 5(1) of DTAA it should be an establishment through which business of an enterprise is wholly or partly carried on and further profits of foreign enterprise are taxable only where said enterprise carries on its ‘core business’ through PE – Project office in India cannot be construed as fixed place as no core activity took place from its office in India Deletion of addition by the High Court is affirmed – DTAA- India – Republic of Korea [ Art.5 (1), 7 ]

S. 5: Scope of total income – liaison office of the non-resident – A liaison office which is only carrying on such activity of a “preparatory or auxiliary” character is not a Permanent Establishment in terms of Article 5 of the Double taxation Avoidance Agreement – The deeming provisions in Sections 5 and 9 of the 1961 Act can have no bearing whatsoever- DTAA-India-UAE [S. 2(24) , 4 , 9(1)(i) ,90 , Art , 5 , 7 ]