S. 37(1) : Business expenditure-Indian subsidiary-Head office- Payment to holding company for providing services-Matter remanded.

S. 36(1)(viii) : Eligible business-Special reserve–Development of housing-Long term finance-Construction/purchase of residential houses- Not entitle to deduction in respect of income from loans given for individual residential houses.

S. 36(1)(viia) : Bad debt-Provision for bad and doubtful debts- Schedule bank-Co-operative bank- Eligible for deduction of provision for doubtful debt and loss assets to extent of 7.5 per cent of business income (computed before making any deduction under this clause and Chapter VIA). [S. 37(1)]

S. 36(1)(vii) : Bad debt-Amounts written off of bad debts-Entitle to deduction. [S. 36(2)]

S. 36(1)(iii) : Interest on borrowed capital–Interest free advances-Notional disallowance-Burden is on revenue to prove that borrowed capital has been used for interest free advance or loan-No disallowance can be made.

S. 32 : Depreciation-Co-operative bank-Securities held as ‘Available for sale’ which was computed and claimed consistently by assessee every year in its profit and loss account- Held to be allowable.

S. 22 : Income from house property–letting out property– Assessable as income from house property and not as business income.[S. 28(i)]

S. 14A : Disallowance of expenditure – Exempt income – Suo moto disallowance which is more than exempt income- No disallowance can be made. [R. 8D]

S. 12A : Registration–Trust or institution-Medical relief- Rejection of application for registration merely on the ground that activities envisaged in aims and objects of assessee-society had not been carried out is held to be not valid -Matter remanded. [S.2(15), 12AA]

S. 9(1)(vi) : Income deemed to accrue or arise in India–Royalty– Non-resident–Sale of software -Copyrighted products–Not liable to tax as royalty–DTAA-India-Ireland. [Art. 12]