S.68: Cash credits —Evidence of loan and creditworthiness of lenders were furnished –Amount not assessable as cash credits.

S. 56 : Income from other sources –Gifts from relatives-Maternal aunt- Gift need not be on a particular occasion-Addition cannot be made as income from other sources [ S.56 (2)(v)68 ]

S. 43B : Certain deductions on actual payment -Excise duty — Unutilised modvat credit of earlier years, which is adjusted in current Assessment Year, cannot be treated as actual payment. Customs duty and sales tax of earlier years is allowable as deductions.[ S.145A ]

S. 40(a)(i) : Amounts not deductible – Deduction at source -Non-resident-Operated outside India- Not liable to deduct tax at source. [S.195]

S.32: Depreciation — Actual cost —Customs duty paid could be capitalised with retrospective effect and depreciation was to be calculated by including the said amount.[ S.43(1)]

S. 14A : Disallowance of expenditure – Exempt income – Sufficient funds- Onus is on department to establish nexus between expenditure disallowed and earning of interest income —Deletion of disallowance is held to be justified . [ R.8D ]

S. 10 (23C):Educational institution-Notice issued by authority other than prescribed authority — Order withdrawing approval is held to be invalid.[ S. 10( 23C) (vi),11(5), 13 ]

S. 9(1)(i):Income deemed to accrue or arise in India –Business connection-Liaison Offices In India is not permanent establishment — Income directly or indirectly attributable to these branches or offices was not taxable in India- DTAA-India Japan [ Art, 5(6) (E ).]

S. 5 : Scope of total income -Accrual of income — Duty drawback is taxable when income has accrued.[ S.4, 145]

Karnataka VAT Act-Strictures-Court is pained by the manner in which the authority has passed the order just ignoring the applicable Notification and throwing it to winds. The said order is nothing less than suffering from malice-in- facts as well as malice-in-law. The responsible officer deserves to pay the exemplary costs of Rs 50000 for passing such whimsical order from her personal resources or by deduction from salary