S. 9(1)(i): Income deemed to accrue or arise in India – Business connection- Reassessment -A representative assessee represents all income of a non-resident accruing or arising in India directly or indirectly from any business connection in India. It is wrong to contend that the representative assessee is not liable for income which has directly arisen or accrued in India. It is also wrong that if the department chooses to make an assessment of the person resident outside India directly, it cannot assess the agent or representative assessee. The Dept has the choice of proceeding against either- Order of Tribunal is set aside [ S.5, 147,148, 160,163

S. 147 : Reassessment –With in four years-Disclosure in computation – The fact that the AO did not raise specific queries and is silent in the assessment order does not mean there is no application of mind – Reassessment is held to be bad in law .[ S.143(3),148 ]

S. 68: Cash credits – Bogus share capital-Failure by the AO to offer cross-examination of the persons whose statements are relied upon means that no adverse inference can be drawn against the assessee. Dept’s plea for a remand is not acceptable if the assessee has discharged primary onus .

S.28(i): Business loss- Speculation –Tax planning- The fact that the assessee bought and sold shares of groups concerns with a view to book loss and off-set the capital gains from another transaction does not mean that the loss can be treated as bogus if the documentation is in order. The loss cannot be treated as “speculation loss” under the Explanation to S.73 because the shares were held as investments.

S. 2(22)(e): Deemed dividend- Addition is up held – Contention that only a proportionate addition of deemed dividend can be made taking into consideration the percentage of the shareholding in the borrowing company in cases where (a) there is only one shareholder that has a shareholding in the lending company as well as in the borrowing company & (b) two or more shareholders are shareholders of the same lending company and the same borrowing company is rejected .

S. 279 : Offences and prosecutions – Sanction – Chief Commissioner – Commissioner -The expression “amount sought to be evaded” in CBDT’s compounding guidelines dated 23.12.2014 means the amount of “tax sought to be evaded” and not the amount of “income sought to be evaded”- Directed the department to refund the excess amount paid by the assessee latest by 31.10.2018.. [ S. 271(1) ( c), 276C ]

S. 260A : Appeal – High Court –Strictures- Subsequent event was not brought to the notice of High Court by revenue – Court held that there is no discipline in the manner the Dept conducts matters. The Dept should not take legal matters casually and lightly. There should be a dedicated legal team in the department. Lack of preparation is affecting the performance of the advocates. They do not have full records & do not have the assistance of officials who can give instructions. The Commissioner of income tax should devote more time to their work rather than attending some administrative meetings and thereafter boasting about revenue collection in Mumbai.

S. 192 : Deduction at source – Salary – Bar against direct demand – If the deductor has deducted TDS and issued Form 16A, the deductee has to be given credit even if the deductor has defaulted in his obligation to deposit the TDS with the Government revenue [ S.205, 221 ]

S. 4 :Charge of income-tax –Development agreement – The “right to sue” which arises on breach of a development agreement is a “personal right” and not a “capital asset” which can be transferred. Consequently, the damages received for relinquishment of the “right to sue” is a non-taxable capital receipt [ S. 2(14) 28(va) ]

S. 263 : Commissioner – Revision of orders prejudicial to revenue – U/s 114(e) of the Evidence Act, there is a presumption that a s. 143(3) assessment order is regularly passed after application of mind. If the assessee is consistently following the same method of valuation of closing stock, the CIT is not entitled to disturb the consistent method [ S.143(3),145A, , Evidence Act , S.114( e) ]