S. 4 : Charge of income-tax–Subsidy from foreign company – Capital receipt not liable to tax.

S. 271B : Penalty-Failure to get accounts audited-Illness of Director cannot be the reasonable cause for long delay in complying audit obligation – Levy of penalty is held to be justified. [S. 44AB, 273B]

S. 145A : Method of accounting – Valuation of stock- Excise duty- Not added to purchases, sales or valuation of inventories – Valuation of closing stock, excise duty had rightly been excluded from value of closing stock of finished goods at end of accounting period.

S. 68 : Cash credits-Books of account-Sale of shares-long term capital gains–Bank statement is not books of account-Addition cannot be made without giving an opportunity of cross examination–Addition is deleted. [S. 2(12A), 44AA]

S. 37(1) : Business expenditure–Construction business- Accounting Standard-2- Justified in debiting all expenses to work-in-progress except expenses related to administration, selling, marketing, etc. [S. 145]

S. 37(1) : Business expenditure-Asset management company– Date of approval given by SEBI was to be regarded as date on which assessee set up its business and was ready to commence said business- Expenses incurred for purpose of business after said date of approval were eligible for deduction. [S. 3, Regulation 21 of the SEBI (Mutual Fund) Regulations, 1996]

S. 12AA : Procedure for registration–Trust or institution- Possibility of misuse of donations-Approval u/s 80G cannot be denied. [S. 80G ]

Precedent—Appeal–Merger–Dismissal of appeal on ground of low tax effect-High Court order does not merge in order of Supreme Court.

S. 245D : Settlement Commission–Full and true disclosure-Surrender of income in the course of search- Retraction after two years- Application for settlement showing undisclosed income much lower figure–Report of revenue was not considered- Settlement Commission determining the income higher than the disclosed income–Order of Settlement Commission was quashed. [S. 132(4), 245C, 245D(4)]

S. 245D : Settlement Commission–Restoration of matter to Settlement Commission by High Court-Computation of period of 18 months-Period taken by assessee in pursuing remedy before Court and period during which order stayed to be excluded. [S. 245D(4A)]