S.37(1):Business expenditure- Education expenses of director’s son- No direct nexus with the business of the company – Not allowable as deduction .

S. 36(1)(viii) : Eligible business – Special reserve -Artificial increase of profit by assessee by adding back amortization and depreciation in SLR investment so as to arrive higher amount of profit for claiming deduction under section 36(1)(viii) was unjustified.

S. 36(1)(iii) :Interest on borrowed capital -Manufacture and sale of fruit juice and like products- Joint venture company for production of milk -Interest borrowed for setting up of joint venture is held to be allowable as deduction.

S. 23: Income from house property – Annual value -Vacancy allowance -Construction business- Some flats constructed by assessee were not let out during year -Properties held as stock-in-trade were not let out for any previous years, vacancy allowance is not available-Liable to pay tax on the sum for which the property might reasonably be expected to let from year to year under S. 23(1)(a) of the Act. [ S. 22,23(1)(a), 23(1)(c) ]

S. 14A : Disallowance of expenditure – Exempt income -Disallowance cannot be made in excess of actual exempted income-Matter remanded . [ R.8D ]

S. 4 : Charge of income-tax -Capital or revenue -Power subsidy received by assessee company from State Government under Power Intensive Industries Scheme, 2005, for setting up a new industrial unit in backward area was capital receipt and, thus, not liable to tax

S. 4 : Charge of income-tax – Interest on bank deposits out of share capital- Prior to commencement of business operations- Interest is liable to be assesses as income from other sources- interest income would go to reduce capital cost of project and was on capital account and same could not be taxed as income from other sources [ S.56 , 145 ]