S. 81C : Undertakings – Special category states – Manufacture of vibration testing system for the defence, aerospace and automobile industries-Merely on the basis of report of the inspector without giving an opportunity to challenge the same such a report cannot be used as evidence against the assessee – Matter remanded to the AO to re -decide in accordance with law.

S. 56 : Income from other sources -Receipt of shares without adequate consideration or for inadequate consideration — Assessee Filing Reply Before Assessing Officer supported by documentary evidence with certificate of Chartered Accountant and report of registered Valuer — AO was directed to decide issue a fresh [ S.56(2) viib)]

S. 50C : Capital gains – Full value of consideration – Stamp valuation -Property was tenanted and Court cases were pending , certain portion to be taken over by authority for road widening -Objections of the assessee was not dealt with authorities – Addition on account of difference in stamp valuation and sale deed is held to be not valid .[ S.45 ]

S. 40A(2): Expenses or payments not deductible – Excessive or unreasonable -Payment of interest on unsecured loans at rates between 15 % an 18% can not be held to be excessive.

S.40(a)(ia):Amounts not deductible – Deduction at source – Payee in its return disclosing payment received, no disallowance can be made for failure to deduct tax at source – Second proviso to S.40(a) of the Act is to be read as applicable with retrospective effect.

S.37(1): Business expenditure- Lease hold premises – Repairs and maintenance – Order of CIT(A) lacked quasi -Judicial investigation and analysis fair to both the assessee as well as the department- Repair and maintenance expenses and business promotion expenses- Matter was remanded to CIT(A) for fresh adjudication .

S. 36(1)(iii) :Interest on borrowed capital – Own funds more than investment- Disallowance of interest cannot be made.

S.32: Depreciation — Additional depreciation — Lab Equipment and Electrical Items is essential for manufacturing process which is entitled to additional depreciation [ S.32(1)(iii) ]

S. 32 : Depreciation -Motor Car — Company purchasing car in name of its manager which is used for the purpose of its business is entitle to depreciation.

S.28(i):Business loss — Fluctuation in foreign exchange loss — Derivative Contracts —Actual contract for sale of Merchandise is not speculative transaction is deductible.[ S.43(5) ]