S. 11 : Property held for charitable purposes – “advancement of objects of general public utility”- Income from organizing of Davis Cup up to the limit prescribed as per the second proviso to section 2(15), which for the assessment year under consideration is Rs. 25 lacs, will be treated as income from ‘charitable purposes’ and the assessee will be entitled to claim the exemption u/s 11 of the Act up to that extent in respect of the said income along with other income, if any, from the non-business activity of the assessee. However, the income over and above amount for Rs. 25 lacs from the business activity i.e. from the exploitation of its right to hold Davis Cup will be treated as ‘business income’ of the assessee and will be liable to include in its total income. The assessing officer, therefore, is directed to bifurcate the income from commercial activity and non-commercial activity and assess the income of the assessee as directed above. With the above observations, the appeal of the assessee is treated as partly allowed. [ S.2(15), 10(23C), 13 ]

Interpretation of taxing statues- Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification. When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must be interpreted in favour of the revenue. The ratio in Sun Export Corporation ,Bombay v. Collector of Customs Bombay ( 1997) 6 SCC 564 is not correct and all the decisions which took similar view as in Sun Export Case stands overruled.

S. 219 :Credit for advance tax –Succession of business – Receipt on account of Mobilisation advance under work order when assessee was partnership — Succession by Company — Credit should be given to the assessee in subsequent year whenever receipt or part of receipt recognised as income by Company.

S. 153A : Assessment – Search-Undisclosed income- Without any incriminating material found in the course of search additions cannot be made –Deduction of claim u/s 80IB(10) which was allowed in the regular assessment proceedings cannot be disallowed .[ S.80IB(10) ]

S. 145 : Method of accounting – Works contract -Genuineness of expenditure was not in doubt – First year of business – Rejection of books of account is held to be not valid – Income declared of 7.44% is held to be justified .

S.145: Method of accounting –Without pointing out any specific defects in the books of account , rejection of books of account and estimating higher income is not justified .

S. 143(3) : Assessment – Amalgamation- Assessment in name of Company not in existence having amalgamated with another is liable to be cancelled as nullity being bad in law . [ S.263 ]

S.142(2A): Inquiry before assessment– Special audit– Complexity of accounts not shown —Special audit made only to overcome limitation — Order for special audit is held to be not justified .

S.92B: Transfer pricing- International transactions — Investment in share capital of subsidiaries outside India — Advancing towards investment and for expansion of business out of interest free funds — No interest can be charged — Not in nature of international transaction-Transfer pricing provisions is not applicable — Adjustment is not required .[ S.92C ]

S. 72 : Carry forward and set off of business losses -Assessment Order for earlier year pending in appeal — Assessing officer to pass consequential order with regard to set off of brought forward losses keeping in mind outcome of appeal .