S. 37(1) : Business expenditure–Capital or revenue-Pre-Operative expenses -Expenditure incurred on estimate basis could be reduced from dividends-Transfer pricing adjustment to consultancy charges-High Court has failed to independently evaluate the merits-Matter remanded to High Court for fresh consideration. [S. 80M, 92C]

S. 36(1)(iii) :Interest on borrowed capital – Interest-free funds available with assessee is sufficient to meet investment — Presumption is that investments in subsidiaries were out of interest free funds — No disallowance can be made.

S. 32 : Depreciation- Prior to insertion of Explanation 5 to S.32 of the Act- Optional and could not be thrust upon-Matter remanded.

S. 12AA : Procedure for registration –Trust or institution-High Court directing inquiry allegations regarding irregularities committed by charitable institution – During pendency of inquiry registration cannot be cancelled. [S. 11]

S.68: Cash credits- Bogus capital gains-Penny stocks-Plea that opportunity to cross-examine the witness was not given & investigation report was not furnished is not relevant if assessee unable to successfully controvert findings of the AO and such argument was never made before the lower authorities-Addition is held to be justified [ S. 10(38).45 ]

S.68: Cash credits- Undisclosed income -Bogus capital gains -Penny stocks- Mere furnishing of contract note etc does not inspire the confidence-Addition as cash credit is held to be justified – Commission addition estimated at 6% was restricted to 2% [ S.45, 48 ]

S. 271C : Penalty – Failure to deduct at source – Interest- Failure to deduct tax at source at the time of credit of payee-No reasonable cause is shown -Liable to penalty. [S. 194A(4), 273B]

S. 263 : Commissioner-Revision of orders prejudicial to revenue – Clearing and forwarding -Estimate of income -Renting of godown as integral part of business-Plausible view – Revision is held to be not valid. [S. 145]

S. 254(2) : Appellate Tribunal-Rectification of mistake apparent from the record–Accommodation entries–Addition was confirmed as cash credits-Opportunity of cross examination- Rejection of rectification was held to be justified. [S. 68]

S. 254(1) : Appellate Tribunal-Duties-Bogus creditors -Gross profit – Reassessment -Business in iron and steel-Order passed without considering the material placed on record-Matter remanded to reconsideration. [S.68, 147, 148]