S.40(a)(ia):Amounts not deductible – Deduction at source –. A party cannot be called upon to perform an impossible Act i.e. to comply with a provision not in force at the relevant time but introduced later by retrospective amendment. S. 40(a)(i) disallowance can be made only if the royalty falls under Explanation 2 to s. 9(1)(vi) but not if it falls under Explanation 6 to s. 9(1)(vi) [ S.9(1)(vi), 194C,194J, 195 ]

S.40(a)(ia):Amount not deductible- Deduction at source-Purchase made from different group companies –Difference opinion – Matter was referred to Chief Justice for appropriate order -DTAA-India Japan –USA [ S.9(1)(i), 90, 195,Art ,24 ]

S.40(a)(ia):Amounts not deductible – Deduction at source – Proviso excepting assessee from disallowance where payee has declared payment in his return and paid tax thereon has retrospectively applicable, hence no disallowance can be made .[ S. 201(1) ]

S.40(a)(i): Amounts not deductible- Payment to non –resident -Proviso amended by Finance (No.2) Act, 2004 is not applicable for year 2002-03, hence not liable to deduct tax at source [S.9(1)(i),195 ]

S. 37(1): Business expenditure -Bogus purchase -Restriction of profit rate of 12.5% per. cent. of bogus purchases was held to be proper.

S.37(1): Business expenditure — Bogus purchases —Civil contractor – Merely on the basis of information form sales tax department purchases cannot be disallowed without giving an opportunity of cross examination .

S. 37(1): Business expenditure — Civil contractor — Purchases- No defects was found in the books of account – No disallowance can be made [ S. 145 ]

S.37(1): Business expenditure — Ad hoc disallowance was held to be not sustainable .

S. 37(1) : Business expenditure – Deep excavation and road work related to mining operation was held to be allowable deduction. Miscellaneous capital expenditure was held to be not allowable .

S. 37(1) : Business expenditure -Godown rent, travelling expenses was held to be allowable as deduction.