S. 14A : Disallowance of expenditure-Exempt income-Interest free funds available-Presumption that interest free funds for investments yielding tax free income in preference to borrowed funds-Disallowance of expenditure cannot exceed exempt income. [R. 8D]

S. 11 : Property held for charitable purposes–Application of income-Capital gains-Sale of bonds and debentures- Failure to disclose investment made by way of purchase of mutual fund- Deduction is not allowable from capital gains–Accumulation of income- Failure to file any details with regard to availability of funds for making investment in modes specified under section 11(5), claim could not be allowed. [S. 11(5), 45]

S. 11 : Property held for charitable purposes-Application of income -Income from house property – Rental income derived from Trust -No Standard deduction at 30 percent is not allowable–Repairs and maintenance expenses incurred on trust property being meant for objects of charitable trust is to be allowed in computing income of the Trust as application of income. [S. 24(a)]

S. 2(22)(e) : Deemed dividend- Loans to shareholder – Business of money lending – loan from two companies which were substantially involved in business of money lending- Addition cannot be made as deemed dividend. [S. 2(22)(e)(ii)]

S. 263 : Commissioner-Revision of orders prejudicial to revenue- Stamp valuation–Accepting the claim as per agreement– Provision of S.50C is applicable-Revision is held to be valid. [S. 45, 50C]

S. 40A(2) : Expenses or payments not deductible–Excessive or unreasonable–Ad hoc disallowance of 50 % of rent–Held to be not justified.

S. 40(a)(ia) : Amounts not deductible-Deduction at source-Interest paid to resident–Failure to deduct tax at source-recipient has shown as income-Second proviso to section 40(a)(ia) inserted by Finance (No. 2) Act, 2004, with effect from 1-4-2005 is curative and has retrospective effect- No disallowances can be made. [S. 201]

S. 37(1) : Business expenditure–Capital or revenue–Replacement of spare parts of machinery -Held to be revenue expenditure.

S. 36(1)(iii) : Interest on borrowed capital-Advance of security deposit – Substantial interest free funds–No disallowances can be made.

S. 32 : Depreciation-Unabsorbed depreciation-Carry forward and set off – Unabsorbed depreciation pertaining to assessment year 1997-98, was allowed to be carried forward and adjusted after lapse of 8 years. [S. 32(2)]