S. 69 : Unexplained investments–Cash payments-diary seized from sister concern -Since no other evidence was recorded during search nor concerned person against whose name entry in diary appeared was examined, said addition was to be deleted. [S. 132(4)]

S. 68 : Cash credits- Bank details and other particulars were furnished–Merely on the basis of report addition cannot be made -Deletion of addition is held to be justified. [S. 260A]

S. 45 : Capital gains-Business income-Sale of shares-Only 10 scripts-Assessable as capital gains. [S. 28(i)]

S. 40A(3) : Expenses or payments not deductible – Cash payments exceeding prescribed limits-Payment made to notified dealer- District Supply Officer’s order did not mandate any mode of payment either in cash or by cheque, and, moreover, there were banking channels available even when supplies had been effected, impugned disallowance was rightly made by authorities. [S. 260A, R.6DD]

S. 37(1) : Business expenditure–Capital or revenue-Encashment of bank guarantee -Failure to perform its part of concessionaire agreement, DTC encashed bank guarantee-Allowable as revenue expenditure.

S. 36(1)(iii) : Interest on borrowed capital- Interest free loans to subsidiaries – Advance to sister concern for business purposes – Allowable as deduction.

S. 12AA : Procedure for registration–Trust or institution- Non communication of changes in the object clause – Registration cannot be refused. [S. 11, 13]

S. 10A : Free trade zone – Development of software- Receiving basic engine from non-eligible unit, developed software at its eligible unit -Entitle to exemption. [S. 260A]

S. 9(1)(vi) : Income deemed to accrue or arise in India – Royalty – Fees for technical services – Developed basic engine and sent same to a non-resident company of Austria to design a new 3-valve cylinder head for improvement of fuel efficiency, performance and meeting Indian emission standard, payment made to Austrian company would not constitute royalty- DTAA-India –Austria. [Art. 6(2), 12]

S. 2(22)(e) : Deemed dividend –Loan to share holder -Holding more than 10 per cent of equity shares of lending company and also having substantial interest in borrowing company- Amount of loan given by lender company to borrower company is held to be assessable as deemed dividend.