S. 40(a)(i) : Amounts not deductible – Deduction at source -Non-resident – Royalty – Fes for technical services – Income deemed to accrue or arise in India-Affiliation fee-One time payment to US. company, which did not provide for transfer of technology cannot be assessed as royalty –Not liable to deduct tax at source -No disallowance can be made – DTAA-India- USA [ S.9(1)(vi) ,195 ,Art .12 ]

S.37(1):Business expenditure- Capital or revenue- Depreciation-One time consolidated fee paid to holding company –Held to be capital in nature – Depreciation is allowable . [ S.32(1)(ii) ]

S.37(1): Business expenditure -Capital or revenue- Annual licence fee payable on the basis of turnover achieved is held to be allowable as revenue expenditure .

S. 28(iv) : Business income – Value of any benefit or perquisites – Converted in to money or not -Purchase of shares of a non-related company at a price less than fair value as it was a loss making concern cannot be assessed as benefit or perquisites . [ S.2(24 ) ]

S. 2(22)(e):Deemed dividend-Non -Holding cumulative preference shares with fixed rate of dividend- Advance of loan cannot be assessed as deemed dividend .

S. 143(3) : Assessment – Assessment has to be framed as per provisions -Instruction No. 13 of 2006 would not override the provisions-Revised return claiming refund of tax deduction at source- Assessment order as framed by the Assessing Officer is contrary to the provisions of law and beyond the jurisdiction of the Assessing Officer as the notice u/s 143(2) of the Act is beyond the time prescribed under the law and is illegal. Accordingly, the assessment is quashed. The Assessing Officer is directed to allow the refund with interest as per law. [ S.119,143(2) ]

S. 254(2A):Appellate Tribunal –Stay- Arrest for recovery of arrears- It is a question of confinement of a person in jail due to non-payment of tax dues. Since the recovery of outstanding dues has been stayed except deposit of specified amount, the TRO is ordered to arrange for release of the assessee immediately on deposit of said amount. Income Tax Authorities are directed to promptly do the necessary formalities including issue of release warrant to the Jail officials on compliance of the directions of the Tribunal.

S. 254(2):Appellate Tribunal-Rectification of mistake apparent from the record –Limitation-Delay of 4 months and 10 days -Though the Tribunal has no power u/s 254(2) to condone delay in filing the MA, the High Court has power under Articles 226 and 227 of the Constitution of India to do substantial justice by condoning the delay. Injustice was done to the assessee because the Tribunal did not follow the binding judgement in CIT v. Manjunatha Cotton and Ginning Factory ( 2013) 359 ITR 565 ( Karn) (HC) on the issue of levy of penalty u/s 271(1)(c). Accordingly, the delay in fling the MA deserves to be condoned [ S.271(1)( c ) ]

S. 222 : Collection and recovery – Certificate to Tax Recovery Officer Income-tax dues, being in the nature of Crown debts, do not take precedence even over secured creditors, who are private persons. Given S. 238 of the Insolvency and Bankruptcy Code, 2016, the Code will override anything inconsistent contained in any other enactment, including the Income-tax Act [Insolvency and Bankruptcy Code, 2016 S. 238 ]

S. 245BA : Settlement Commission – Chairman – Power -Jurisdiction- These Petitions have been filed challenging a somewhat curious and unforeseen development. We do not know in what circumstances the Chairman flew down to Mumbai and invited the members for discussion in relation to some cases or related issues. It would be highly risky if such discussions in relation to judicial orders and judicial matters are held in a close-door meeting or in the privacy of the chambers of the members of the Settlement Commission. There is a uncalled for interference in judicial proceedings and none including the Chairman can direct a particular course of action to be taken or a particular order being passed in pending judicial proceedings. Court also observed that ,to avoid an allegation of the nature made in these Writ Petitions, the Chairman would be well advised not to chart this course hereafter. We leave the matter entirely to his wisdom and say nothing more. Court also held that , apprehensions of assessee of adverse order , court will not interfere in ending proceedings . Assessee at liberty , if adverse order is passed to challenge it . [ Art, 226 , 227 ]