S. 45 : Capital gains-Capital loss-Loss incurred on account of sale of shares to sister concern-Neither fraudulent nor colourable device-Allowable as capital loss. [S. 260A]

S. 37(1) : Business expenditure-Year of allowability of expenditure-Method of accounting-Rate of tax is same in both assessment years-Question academic-No question of law. [S. 145, 260A]

S. 37(1) : Business expenditure-Capital or revenue-Manufacture of yarn-Replacement of old machinery by purchase and installation of new machinery-Not allowable as revenue expenditure.

S. 37(1) : Business expenditure—Commission paid to persons who have referred the students–Disallowance of 50% of commission is held to be justified.

S. 28(i) : Business Loss-Embezzlement of cash by director- Recovery of amount or outcome of pending criminal prosecution against director before Metropolitan Magistrate is irrelevant– Allowable as deduction. [S. 36(2), 37(1)]

S. 28(i) : Business loss-Bank guarantee-Loss due to encashment of bank guarantee is allowable as business loss.

S. 12AA : Procedure for registration–Trust or institution-Execution of contract with Railways for cleaning coaches is not charitable purpose-Employment of poor persons would not make it charitable-Cancellation of registration is justified.[S. 2(15)]

S. 11 : Property held for charitable purposes-Amount spent on acquisition of capital assets – Allowed as deduction-Depreciation on such assets is also allowable. [S. 32]

S. 10B : Export oriented undertakings-Manufacture or production- Conversion of benzarone crude to benzarone pure constitutes manufacture-Entitled to exemption-Conversion of benzarone crude to BFX-P is not manufacture-Not entitled to exemption.

S. 10A : Free trade zone–Export through third party-Entitle to deduction.