S. 54F : Capital gains-Investment in a residential house–Entire net consideration had been invested-Entitle to exemption in respect of whole of capital gains-Valuation determined by stamp authority is relevant for determination u/s.50C however it cannot be considered as consideration received or accrued to the assessee for the purpose of S.54F of the Act. [S. 45, 48, 50C]

S. 50C : Capital gains-Full value of consideration-Stamp valuation –Property sold for Rs 50 lakhs–Stamp valuation was Rs 90.20 lakhs-DVO estimated at Rs 81.68 lakhs-location of property, potential development in near future, availability and accessibility to infrastructure facility such as road, airport, educational institutions, etc. were not properly considered either by Approved Valuer or by Departmental Valuation Officer, while valuing property sold by assessee- Tribunal estimated the value at Rs. 69 lakhs. [S. 45]

S. 37(1) : Business expenditure–Interest paid on loan taken on land for purchase of land is held to be not allowable as business expenditure as commission is the main source of income and not the sale of land.

S. 37(1) : Business expenditure–Vehicle expenses and insurance on vehicle-Personal expenses–Disallowance of 10% of expenses is held to be justified.

S. 37(1) : Business expenditure–Provision for warranty- Marketing of software products-Authorities were justified in restricting amount of allowable provision at 2.14 per cent of sale as adopted in earlier years, as there was no reversal after expiry of relevant period based on actual utilisation. [S. 145]

S. 37(1) : Business expenditure-Illegal payments-Interest-Bogus purchases–Survey by Maharashtra VAT Authorities-Interest paid under S. 30(2) of MVAT Act, 2002 was not penal in nature hence allowable ; however, interest paid under S. 30(4) of MVAT Act, 2002 which was in addition to interest payable under section 30(2) was penal in nature and could not be allowed in view of provision of Explanation 1 to S.37(1) [ MVAT Act, 2002, S. 25, 29(3), 30(2), 30(4)]

S. 14A : Disallowance of expenditure-Exempt income–When no exempt earned during the assessment year, no disallowances can be made. [R. 8D]

S. 13 : Denial of exemption-Trust or institution-Investment restrictions – Trust is not paying the rent which it occupied third and fourth floor- Repair and renovation of building owned by Trustee done by the Trust –Assessing Officer could not have disallowed expenditure incurred towards repairs and renovation of building owned by trustee on ground that it was in contravention of provisions of section 13(1)(c) as a benefit had accrued to trustee through such payment as the trustees were required to repay the expenditure incurred – Matter remanded. [S. 11, 12]

S. 12A : Registration–Trust or institution-Registration cannot be denied on the ground that the return of income was filed in response to notice u/s 148. of the Act-Requirement of filing report of audit in prescribed form is merely procedural and, therefore, directory in nature and not mandatory for the purpose of claiming exemption under S. 11 and 12 of the Act. [ S.11, 148 ]

S. 12A : Registration–Trust or institution-Education-Profit-making per se cannot be regarded as detrimental as long as a society pursue a charitable purpose; activities of a trust/institution promoting education need not target to serve poor, but it should function in conformity with its objects- matter remanded. [S.2(15)]