S. 9(1)(i) : Income deemed to accrue or arise in India-Business connection-Dependent agency permanent establishment — Remunerated by the assessee for commission activities on arm’s length basis, no further attribution was required. The Assessing Officer was directed to delete the addition.

S. 4 : Charge of income-tax-Block of assets-Assessee reducing Block of assets from item and claimed depreciation on reduced Block of asset — Addition is not sustainable.[S. 2(11)]

S. 4 : Charge of income-tax-Interest received on deposits in Consolidated fund of India-Not chargeable to tax-Directed the Assessing Officer to verify the facts.[S.143(3)]

S. 4 : Charge of income-tax-Principle of mutuality — Payments were reimbursement and exempt from taxation and covered by principle of mutuality.

S. 4 : Charge of income-tax-Capital or revenue-Duty credit entitlement under served from India Scheme-credit only be utilised by set off against duties arising on purchase of capital goods or spare-Capital in nature.[S. 28(i), 32, 43(1)]

S. 2(22)(d) : Dividend-Any distribution to its share holders on the reduction of its share capital-Buy back of shares-Scheme of arrangement or compromise-There was a capital reduction and distribution out of accumulated profit of company to its shareholders, same would entail release of all or part of assets of a company on reduction of capital and would attract provisions of section 2(22)(d), and consequently, assessee was liable for payment of DDT under section 115-O. [S. 115O, 115QA, Companies Act 1956, S. 77, 77A 100 to104, 391, 292, 393]

S. 271D : Penalty-Takes or accepts any loan or deposit-Ignorance of law and bona fides-Non-Resident directors not material-Not mere technical violation in case of companies-Levy of penalty Justified. [S.269SS, 269T, 271E]

S. 271AA : Penalty-Failure to keep and maintain books of accounts-Documents-International transaction-Transfer pricing-Non-compliance of provisions occurred due to opinion given by Chartered Accountant-Reasonable cause-Penalty unsustainable.[S.40A(2)(b), 92D, 92E, 273B]

S. 271(1)(c) : Penalty-Concealment-Additional depreciation-Claim not sustained by authorities-Penalty is not leviable.[S. 32]

S. 271(1)(c) : Penalty-Concealment-Prosecution on same facts quashed-No ground for levy of penalty. [S. 276C(1), 276D, 277]