S.37(1): Business expenditure – Capital or revenue -Sub -lease -Payment made to vacate the premises – Through negotiation assessee acquired some kind of an enduring right of possession over occupied area of said premises surrendered to them by those occupants—It had incidents of permanence— Expenditure is capital in nature .

S. 226 : Collection and recovery – Modes of recovery – illegal Recovery – Strictures against DCIT- Adjustment of refund -High Court was not justified in its remarks against the DCIT and in issuing directions that (i) ‘deadwood’ should be weeded out (ii) personal costs of Rs. 1.5 lakh should be imposed (iii) adverse entry should be made in the Annual Confidential Report (iv) Denial of promotion etc. The directions were wholly unnecessary to the lis before the Court & are expunged [ S.234]

S. 80HH :Newly established industrial undertakings –Income -Profits and gains-Deduction has to be computed on the profits and gains without deducting therefrom ‘depreciation’ and ‘investment allowance’ & not from income as computed under the Act. S. 80AB is prospective. [ S.80AB, 80I]

S. 68 : Cash credits- Bogus share capital/ premium-The Assessee is under legal obligation to prove the receipt of share capital/premium to the satisfaction of the AO, failure of which, would justify addition of the said amount to the income of the Assessee- Mere mention of income tax file number of an investor is not sufficient to discharge the onus -Credit worthiness of the investor companies was not discharged -Order of AO is confirmed .

S. 254(1) :Appellate Tribunal – Additional ground – validity of the assessment can be challenged at any time as it goes to the root of the matter and is a legal issue.

S. 143(3) : Assessment – Assessment of amalgamating company-Notices were issued prior to the amalgamation with another company – Assessment proceedings cannot be held to be invalid [ S.142(1) 143(2) ]

S. 43B : Deductions on actual payment – Provision for leave encashment- Not allowable unless the amount is actually paid .

S. 40(a)(i) : Amounts not deductible – Deduction at source -Non-resident – Amount not claimed as expenditure- No disallowance can be made – Exemption certificate for non deduction of tax at source- Once certificate has been issued no disallowances can be made – If income is not chargeable to tax in India -No disallowance can be made- Once it is held that income is not chargeable to tax in India, no disallowance can be made. [ S.195 , 197 ]

S. 37(1) : Business expenditure –Brand building – Advertisement expenses- Held to be revenue expenditure

S. 22 : Income from house property – letting out of its permanent structured on regular basis is assessable as income from house property – Receipt of license fee for use of craft stalls organized with object of promoting tourism, is taxable as business income [ S.28 (i) ]