Section 35ABB of the Income Tax Act

The rule of consistency applies when facts or legal positions remain unchanged in earlier assessment years, preventing the Revenue from adopting a divergent stance in subsequent years without new material. This ensures stability and predictability in tax assessments.

The Revenue is bound by the rule of consistency and cannot adopt a divergent position in a subsequent assessment year unless there is a change in facts or law.

Discounts offered to distributors under a tightly controlled relationship constitute commission and are subject to tax deduction at source under Section 194H of the Income-tax Act.

Provisions of section 194H of the Income-tax Act are not applicable on the discount extended by a company to its distributors.

Payments made for different subject matters, even if part of a larger transaction, can be separately classified as capital or revenue expenditure based on their individual nature and purpose. This distinction is crucial for determining tax deductibility, often applying the enduring benefit test.

Section 194H of the Income-tax Act is not applicable to discounts extended by a principal to its distributors, as such discounts are not considered commission or brokerage liable for TDS.

Compensation paid for a restrictive covenant not to carry on a similar business for a specified period (e.g., up to five years) is treated as a separate transaction from the transfer of business assets and goodwill. Such payments are an allowable expense if the restrictive period is not of an enduring capital nature.

Payments under an agreement, such as license fees, are characterized for tax purposes based on each payment's specific subject matter. The enduring benefit test applies to individual, divisible rights.

The Revenue cannot change the complexion of the case for the first time before the Appellate Tribunal. The Tribunal is not vested with the power to enhance an assessment or withdraw relief granted by the assessing authority.