S. 14A : Disallowance of expenditure-Exempt income–Not recording of satisfaction-No disallowance can be made. [R. 8D]

S. 12AA : Procedure for registration–Trust or institution-Registration granted is required to be continued till nature of its activities change-Registration cannot be cancelled on mere fact that the trust earned commercial lease rent exceeding Rs. 25 lakhs. [S. 2(15), 12A]

S. 11 : Property held for charitable purposes-Income from house property-Deductions-Trust would be entitled for deduction-Accumulation of income–Matter remanded. [S. 2(45), 11(3), 24]

S. 11 : Property held for charitable purposes–Educational activities-Activities like holding conferences on industrial safety programmes, public talks, seminars, workshops, etc. on ongoing basis to inculcate industrial safety measures would also be bracketed in league of educational activities-Entitle to exemption. [S.2(15), 12A]

S. 9(1)(i) : Income deemed to accrue or arise in India-Business connection–Liaison office–Involved in preparatory and auxiliary activities but also involved in ascertaining customer requirements, price negotiations obtaining of purchase orders etc–Constituted PE in India and profit attribution has to be done-DTAA-India-Singapore. [S. 92, Art. 5]

S. 2(22)(e) : Deemed dividend-In balance sheet of ‘K’ Ltd, amount in question was not shown as loan to assessee-addition is deleted.

S. 2(1A) : Agricultural income-Income from mushroom spawn grown in nursery qualifies as agricultural income-Eligible for exemption-Issue restored to file of AO to determine whether spawn was actually grown by assessee-Reassessment is held to be valid. [S. 10(1)]

S. 271AB : Penalty–in search case-Assessee not person subjected to search-Penalty proceedings against assessee not sustainable. [S. 132(4)]

S. 271AAA : Penalty-Search initiated on or after 1st June, 2007- AO must establish there was undisclosed income-Estimated income not undisclosed income-No specific finding in respect of any specific seized material or undisclosed income detected as a result of search-Penalty is not leviable. [S. 132]

S. 271(1)(c) : Penalty–Concealment-Notice–No specific charge and limb under which penalty proposed–Concealment of income or inaccurate particulars of income–Notice void ab intio. [S. 274]