S. 69 : Income form undisclosed-Bogus purchases-The CIT(A) is not justified in enhancing the assessment to disallow 100% of the bogus purchases-The only addition which can be made is to account for profit element embedded in the purchase transactions to factorize for profit earned by assessee against possible purchase of material in the grey market and undue benefit of VAT against such bogus purchases. [S. 251]

S. 62 : Transfer irrevocable for a specified period–Revocable after three years – Income arising by virtue of a revocable transfer of assets would be chargeable to tax as income of transferors and would be included in their total income- Trust cannot be taxed as an AOP at maximum marginal rate. [S.61(1), 62(2), 164]

S. 56 : Income from other Sources-Purchase of shares at Rs. 4 per shares when the market price was Rs. 140 per share-Failure to explain by credible evidence or any reason or no motive for tax evasion- Difference is held to be taxable as income. [S.56(2)(vii) (c)]

S. 41(1) : Profits chargeable to tax-Remission or cessation of trading liability-Cash credits-Liabilities doubted-Cannot be taxed u/s. 41(1) [S.68]

S. 37(1) : Business expenditure–Capital or revenue-Amount forfeited by seller upon failure to pay full instalments within stipulated time period would be capital expenditure.[S. 28(i)]

S. 35 : Scientific research–Weighted deduction-Research and Development-Expenditure on development of “Research and Development’ facility was allowable even though approval of concerned Ministry of Central Government was under consideration or awaited. [S. 35(2AB)]

S. 32 : Depreciation-Intangible asset-Non-compete fee-The expression “or any other business or commercial rights of similar nature” used in Explanation 3 to sub-section 32(1)(ii) is wide enough to include non-compete rights–Eligible for depreciation. [S.32(i(ii)]

S. 32 : Depreciation-Unabsorbed depreciation-Carry forward and set off-Eligible and for carry forward and set off against business profits. [S. 32(2)]

S. 32 : Depreciation-Additional depreciation-Revision of orders prejudicial to revenue-Tribunal allowed assessee’s claim for additional depreciation by following order of jurisdictional High Court – Revision is held to be not valid. [S. 263]

S. 28(i) : Business loss-Future and options loss-Client code modification- Repetitive client code modifications-Client code modifications are tainted with collusive action and manipulation– Loss is held to be bogus–Not allowable as business loss- Reassessment is also upheld. [S.133(6), 147, 148]