S. 37(1) : Business expenditure -Warranty provision- Following consistent method in creating similar warranty provision year after year, no ad hoc addition could be made. stores and spares expenses pertained to normal repairs and maintenance of manufacturing facility and salary, wages and staff welfare were related to normal business expenditure, no ad hoc disallowance could be made. [ S.145 ]

S. 11 : Property held for charitable purposes – Providing technical and managerial services to common people through IT for efficient functioning in government departments and it was charging service fee in addition to statutory fee levied by government and assessee could enhance its fees, since assessee’s activities were not charitable. [ S.2(15) , 12AA ]

S. 5 : Scope of total income – Accounting Standard 9 -Accrual- Since agreement was valid for a period of five years and assessee had to carry on certain activities throughout period of five years by taking participation into management of business affairs of Vibes clinic among other responsibilities, assessee was justified in deferring income over a period of five years. [ S.145 ]

S. 151 : Reassessment – Sanction for issue of notice – If the CIT merely states “Yes, I am satisfied” while granting sanction to the reopening, it means that the sanction is merely mechanical and he has not applied independent mind. There is not an iota of material on record as to what documents he had perused and what were the reasons for his being satisfied to accord the sanction to initiate the reopening of assessment- Order was quashed and held to be void ab-initio .[ S.147, 148 ]

S.147: Reassessment-After the expiry of four years-If there is nothing in the recorded reasons to suggest that the income chargeable to tax which has escaped assessment is Rs. one lakh or more, the notice issued u/s 148 of the Act beyond four years of the end of the relevant assessment year is invalid [ S.148 ]

S. 50C : Capital gains-Full value of consideration- stamp valuation-Provision being a deeming provision and applies only to the transfer of land or building. It does not apply to the transfer of “booking rights” and to right to purchase flats in a building [ S.45 ]

S. 48 : Capital gains – Computation -Portfolio Management Scheme (PMS) fees paid by the assessee to the PMS Manager neither falls under the category of transfer fees nor cost of acquisition/improvement. Consequently it is not deductible while computing capital gains from sale of the shares [ S.45 ]

S. 23 : Income from house property – Annual value – Stock in trade –Unsold flats which are held by a builder as stock in trade cannot be brought to tax under the head ‘income from house property’. They are only assessable as business profits when sold. [ S.22 ]

S. 263 : Commissioner – Revision of orders prejudicial to revenue –Change in share holding of more than 51 %-Holding company of assessee, had transferred its shareholding in assessee-company to another company which was again its subsidiary company – On facts, even after transfer of shares by assessee’s ultimate holding company to another subsidiary, beneficial ownership of assessee-company –Revision is not held to be valid and provisions of S. 79 would not apply [ S. 79 ]

S. 199 : Deduction at source – Credit for tax deducted – Credit for tax deducted at source has to be given in assessment year in which income has actually been assessed/offered to tax and not in year of deduction itself.