S. 9(1)(i) : Income deemed to accrue or arise in India-Business connection-Permanent establishment-Test of “virtual projection” cannot be applied on perception or theory-Liaison office and wholly-owned subsidiary do not constitute PE in absence of evidence of disposal, control or authority to conclude contracts-Onus on Revenue to establish existence of PE-Subsidiary carrying on independent business on principal-to-principal basis-No fixed place or dependent agent PE-Interest on delayed consideration taxable-Supply of software not royalty or FTS under-DTAA-India-Finland.(1985) 152 ITR (St.) 57)-SLP of revenue dismissed on account of delay of 286 days.[S. 90(2), Art. 5(8), Art. 136]

S. 5: Scope of total income-Accrual-Non-resident-Base note-Deposits in an HSBC Geneva account opened abroad, and Revenue failed to establish that such income accrued, arose, or was received in India, addition of peak balance was unsustainable as income outside India was not taxable without a clear nexus with India. [S. 5(2),9(1)(i), 260A]

S. 5 : Scope of total income-Accrual-Forward contracts-Profits from forward commodity contracts-Unrealised ‘mark-to-market’ gains made on forward contracts were not liable to tax in the relevant year prior to actual accrual or realisation on maturity of the instrument.[S.4, 145, 260A]

S. 5 : Scope of total income-Accrual-Interest accrued-Agreement indicating that assessee would be entitled to claim 21 per cent interest per annum; income automatically accrued to it with lapse of time and there was no question of amount being whisked away as not being income by calling in aid theory of no real income, etc.-Order of High Court affirmed.[S. 4, 145, Art. 136]

S. 4: Charge of income-tax-Income-Sales tax incentive/remission received under a State incentive scheme constituted a capital receipt not chargeable to tax. [S. 2(24)]

S. 4 : Charge of income-tax-Arbitral award-Deduction of tax at source-Amount deposited pursuant to interim order of Karnataka High Court-Right to receive had not crystallised and would be taxable only when dispute was finally resolved in assessee’s favour-Order of Tribunal set aside. [S. 145, 260A]

S. 4 : Charge of income-tax-Sales tax subsidy-Capital Investment Incentive Policy-Capital receipt-Order of Tribunal affirmed. [S.28(i), 260A]

S. 2(14)(iii) : Capital asset-Agricultural land-Classification of land is the exclusive prerogative of State under the Constitution of India, a Central Act cannot transgress into the domain of the State by providing a different definition of ‘agricultural land’ for the purpose of collecting income tax-Land was treated as agricultural land-Not liable to capital gains tax. [S. 45, 254(1)]

S. 197: Deduction at source – Certificate for lower rate – Foreign company –Non -Resident – No permanent establishment – Assessing Officer was directed to issue certificate for nil withholding tax. [S. 6(3),195, Rule 28AA, Art. 226 ]

S. 148A: Reassessment – Notice under section 148A(1) issued within the limitation, but material information was not furnished along with the notice – Subsequent supply of information after expiry of limitation – Invalid notice – Right issue of shares – Difference between the subscription price and the fair market value of the shares. Reassessment notice and consequential orders are quashed. [S. 56(2)(x), 147, 148, 148A(b), 148A(d), 149, Art. 226 ]