SALES TAX COLLECTED BUT NOT PAID DUE TO DISPUTE IS REVENUE RECIEPT FOR ASSESSEE FOLLOWING MERCANTILE SYSTEM IN THE YEAR OF COLLECTION.
In the case of an assessee who maintains his accounts on Mercantile system, sales tax collected but not paid to the sales tax department as some dispute was pending for adjudication over his liability to pay tax, is a revenue receipt of the year in which it was collected. [Followed - Jonnalall Narasimharao and company Vs CIT 200 ITR 588 (SC)]

INTERESTED ON DELAYED PAYMENTS OF CONTRACT RECEIPT IS BUSINESS INCOME
Interest received on payment of contract receipts has character of business receipts and not "income from other sources". A receipt will fall in residual category i.e "other sources" only when it cannot be covered under other heads e.g. business income. [Followed in 208 ITR 914 (KER); 238 ITR 450 (ALL.) 527 ITR 305 (MAD); 259 ITR 754 (SC)]

SUFFICIENCY OF REASON FOR REOPENING ASSESSMENTS IS NOT FOR THE COURT JUDE
147(a)- failure to disclose truly material facts - cash loans- originally accepted as genuine- subsequent information from A.O. of a company that its M.D. has confessed - he or his company has not advanced any loan to any person during the relevant period - subsequent information is definite, specified and reliable. Sufficiency of reasons for formation of belief is not for the court to judge. Reassessment notices are valid.
[Applied /followed in -208 ITR 196 (RAJ): 208 ITR 266 (DEL) :209 ITR 01(BOM): 209 ITR 135 (BOM): Assam Forest Products (P) Ltd. - VS - CIT :211 ITR 447 (SC): 214 ITR 669 (RAJ): 221 ITR 538 (SC): 226 ITR 352 (GUH): 237 ITR 549 (BOM): 248 ITR 493 (P & H): ITO - VS - Selected Dulurband Coal Co Pvt Ltd . 217 ITR 597 (SC): 253 ITR 83(DEL) 257 ITR 481 (Guj)]

JURISDICTION TO IMPOSE PENALTY FOR CONCEALMENT
On penalty for concealment: For authority who can impose penalty - the law which is applicable is the one as on the date when satisfaction was arrived at by A.O about fact of concealment of income. That is the date of Assessment Order. For quantum of penalty - the law which is applicable is the one as on the date when offence was committed i.e the date when return was filed.
[Followed/ applied in 218 itr 08 (MAD); 221 ITR 304 (MAD); 225 ITR 47 (MAD); 226 ITR 403 (MAD)]

U/S 64(1)(i) and (ii) income of wife or minor child in firm in which assessee is a partner - not to be included where assessee is a partner in HUF Capacity - (This was before amendment w.e.f 1.4.76) (Based on L.Hriday narain -Vs - ITO 78 (SC) ITR 26 and CIT - Vs - Anand Swaroop 121 ITR 873)
Clause (I) of 64( 1) is omitted w.e.f. 1.4.93 (which was introduced w.e.f 1.4.76) - regarding inclusion of share of wife from partnership firm).
Clause (ii) of 64 (1) is amended w.e.f 1.4.76 providing Expl that Salary/Commission /Fee to the wife on account of her skill/experience is not includible. Inclusion of income of minor child benefits of partnership was introduced w.e.f 1.4.76 but omitted w.e.f. 1.4.93.
[Applied/followed in211 ITR 353 (MAD); 217 ITR 465 (MAD) 217 ITR 785 (SC); 220 ITR 37 (PAT); 235 ITR 715 (ALL); 238 ITR 1044 (SC); 221 ITR 433 (GAU); 235 ITR 715 (ALL); 240 ITR 21(GUJ); 241 ITR 478 (MAD); 246 ITR 39 (MAD) 211 ITR 111 (SC)]

The value of assets, which were transferred to spouse or minor child directly or indirectly, for inclusion purposes, will be the value as on the valuation date and not the original cost or the value of asset so transferred.

On premature termination of his employment contract assessee was paid a sum of Rs.7 lakhs on 30.11.1949. it was claimed to be a compensation for loss of employment and therefore not taxable. The claim was accepted upto High Court stage.

In 1956 a commission of enquiry headed by a Supreme Court judge enquired into some Dalmia Group companies one of which was also a company which employed the applicant. The enquiry commission found that the term about the period of employment and provision about compensation in the letter dated 31.10.43 was an after thought. Such letter issued to the assessee and produced before I. T. authorities to get tax exemption (as capital receipt, being, for loss of employment)was an after thought and forged one. A notice, on the basis of enquiry commission report was issued to the assessee u/s 148. it was challenged by way of writ petition. The petition was dismissed. Assessment was completed in 1977. At that stage the assessee applied to the ITSC u/s 245C. after enquiry ITSC found sum of Rs.7 lakh was of a composite nature and only sum of Rs.5lakh was of taxable character. The assessee filed appeal to Supreme Court.

It was held:-
i) Finding by enquiry commission did constitute relevant material.
ii) Supreme Court would not go into question of facts or reversal the finding of ITSC. It can interfere in the orders of ITSC only when they are contrary to the provisions of IT Act.
iii) The ITSC has given 8 reasons to support its findings. If one is not sustainable, the other reasons are perfectly adequet to support the finding of the commission.
iv) The ITSC was right in holding that a substantial portion of Rs. 7 lakhs should be treated as taxable.

Assessee had land situated near Railway station within one kilometer of Surat Municipality. Agreement was made with the colonizer to sell the land at the rate of Rs.23 per square yard. Permission was sought to convert from agricultural to non-agricultural before sale agreement was executed and after receiving such permission sales were effected and within three days the colonizers started constructing the flats. The Court held that capital gains will be chargeable and it would be immaterial that assessee was doing agriculture operation near the period of sale, it had no other source of income except agriculture, there was no evidence that land was used for non-agriculture operation or that there were other agriculture land abutting the land. [Applied in 209 ITR 631 (BOM)]

Where burden of proof is shifted on the assessee by "presuming" concealment in the Act" the burden remains on the assessee, unless discharged, that failure to return correct income did not arise from fraud or willful neglect on his part. [Followed/ applied in 213 ITR 64(DEL);219 ITR 131(ALL); 236 ITR 977(SC); 250 ITR 157 (DEL); 259 ITR 132 (RAJ)]

In the case of a dealer in share-where shares are held as stock in trade and surplus is received on liquidation of a company, such surplus is revenue receipt.