S. 144C: Reference to dispute resolution panel-Assessment-Limitation-Assessing Officer required to complete assessment within one month from the end of the month in which directions of Dispute Resolution Panel received-Directions of Panel dated 21-9-2021-Final order passed on 18-11-2021, after due date of 31-10-2021-Time-barred-Final assessment order void ab initio. [S. 92CA(3), 92CA(5), 144C(5), 144C(13)]

S. 92C: Transfer pricing-Arm’s length price-Avoidance of tax-International transaction-Advertising, marketing and promotion expenses-No agreement with associated enterprise to share/reimburse expenses-Not an international transaction-Addition not justified.-Royalty for trademark separate from royalty for technology-Cannot be clubbed-Adjustment on royalty for technology deleted-Arms length price-To be determined only by one of five prescribed methods-Ad hoc estimation of salary and man-hours not permissible-Adjustment deleted-Income-Disallowance of expenditure relating to exempt income-Sufficient own funds available-No disallowance warranted-Direct/indirect expenses remitted for verification-Business loss-Foreign exchange loss on forward contracts terminated by bank on/after maturity, not prematurely cancelled by assessee-Integral to export of goods-Allowable as business loss-Special deduction-Allocation of operating and establishment expenses on ratio of unit’s revenue to total revenue-Method consistently accepted in earlier years-Deduction allowable-Interest-No delay in filing return-No interest under section 234A-Interest under section 234C levied on assessed income instead of returned income-Matter remitted for recomputation. [S. 14A, R. 8D, 28(i),80IC, 234A, 234C]

S. 68 : Cash credits –Demonetisation-Cash deposits in bank during demonetisation period-Explanation that deposits were from recorded cash sales-Stocks existing on date of sale, no backdating-Complete stock tally maintained, books audited, no deviation in gross profit ratio, parties identified, proper invoices and VAT returns filed-No evidence of bogus sales-Cash deposits cannot be treated as unexplained income. [S. 115BBE]

S. 43B : Deduction only on actual payment-Rectification of mistakes-Gratuity amount incorrectly claimed under wrong schedule in return-Not reflected in tax audit report-Centralised Processing Centre disallowing claim under section 143(1)-Assessee filing revised tax audit report-Genuine claim could not be denied-CBDT Circular-Income of assessee should not be over-assessed-Legitimate deduction not to be denied merely because of a mistake made by assessee. [S. 143(1), 154]

S. 43B : Deduction only on actual payment-Unpaid interest on loan from World Bank-Section 43B(d), (da), (e) covering only interest payable to specific financial institutions, non-banking financial companies, scheduled banks or co-operative banks-World Bank or State Government loans not included-Disallowance deleted-Deduction only on actual payment-Statutory liability-Electricity duty collected from consumers but not remitted to Government-Assessee merely a conduit between consumer and Government-No independent liability-Disallowance rightly deleted.[S.43B(a), 43B(d), 43B(da), 43B(e)]

S. 28(i): Business loss-Assessee a share trader and investor-Losses from share transactions including listed securities-Assessing Officer disallowing claim treating shares as penny stocks-Assessee transacting huge volumes of shares-Addition made on basis of preconceived idea after general investigation of investigating authority-Order set aside and addition quashed. [S. 45, 69]

S. 11: Property held for charitable purposes-Exemption-Capital gains-Sale proceeds reinvested in fixed deposit with scheduled bank-Deemed acquisition of new capital asset-Assessee eligible for exemption on capital gains-Interest earned on fixed deposits retained in bank account and applied for charitable purposes-Qualifies for exemption. [S. 11(5), 11(IA)]

S. 9(1)(vi) : Income deemed to accrue or arise in India-Royalty-Double Taxation Avoidance Agreement not affected by amendments in Act-Assessee entitled to advantage of provisions under Agreement-Assessee a non-resident telecommunication operator providing international carriage and connectivity services in Sri Lanka-Interconnect user charges not royalty-Not taxable in India-DTAA-India-Sri Lanka.[S. 9(1)(vi), Explns. 2, 5, 6, 147 , arts. 7, 12]

S. 45: Capital gains – Income from other sources – Transfer of Development Rights — Compensation received under a redevelopment agreement is assessable as Capital Gains and not as Income from Other Sources. Exemption under section 54EC is allowable. [ S. 2(14), 2(47), 54EC, 56, 50C & 147)

S. 80IB: Industrial undertakings – Special category States –
– Research & Development (R&D) expenditure – Allocation of R&D expenses to eligible manufacturing units – No allocation permissible in the absence of direct nexus between R&D activity and eligible units – Revenue’s appeal dismissed. [S. 35(2AB), 80IC , 260A)