S. 73 : Losses in speculation business–Explanation–business of purchase and sale of shares–Held, loss speculative in nature and cannot be set off against income from other source–Held, main income being from other source need not be seen in the year of set off.

S. 69C : Unexplained expenditure–Bogus purchases- Accommodation entries-Additional grounds-Approval is not available in the file-On the basis of affidavit filed by the AO , the Tribunal is presumed that the approval was obtained before issue of notice–100% addition is confirmed for alleged bogus purchases, considering the statements and material available on the record. [S. 153A, 153D]

S. 69 : Unexplained investments–Excess stock-Restriction of addition to a sum of Rs. 10 lacs by way of estimate and preponderance of probability cannot be said to be arbitrary and illegal.

S. 69 : Unexplained investments–evidence found during the course of search in respect of later years and not in respect of prior years–Held, such evidence can be used to make estimations even for the earlier years. [S. 158BB]

S. 68 : Cash credits–Bogus share capital being Rs. 5.72 crores which was not returned or refunded–Assessee’s contention that additions be restricted considering peak credit as there was rotation of money is not sustainable.

S. 43B : Certain deductions on actual payment–Payment of interest on delayed payment of custom duty is part of duty– Allowable as deduction in the year of payment. [S. 37(1)]

S. 40A(3) : Expenses or payments not deductible-Cash payments exceeding prescribed limits – During assessment proceedings, assessee submitted revised accounts showing all payments below Rs .20000 – Not accepted by any lower authority–Held, assessee failed to substantiate its claim – Held, no substantial question of law. [S. 260A]

S. 40A(2) : Expenses or payments not deductible–Excessive or unreasonable–Agreement between assessee and related partnership firm in which one director had substantial interest –Expenditure disallowed in absence of genuineness of the transaction. [S.40A(2)(b)]

S. 37(1) : Business expenditure–Liquidated damages- Compensation for breach of contract where penalty stipulated– section covers cases where amount paid in case of breach– Liability crystallized and cannot be contingent in nature- Allowable as deduction. [Indian Contract Act, 1872, S. 73, 74]

S. 37(1) : Business expenditure–Setting up of business– Preliminary steps taken including appointment of key personnel to setting up main substantial commercial venture–Linkage between preliminary steps and ultimate activity maybe a relevant factor and assessee’s claim for deduction would be allowed.