S. 145 : Method of accounting – offering of income and allowability of expenses – Assessee floated a scheme wherein it received money in first year and the payment to the subscribers were to flow in subsequent years – held, taxing of income in first year and allowability of expenses in subsequent years based on cash system presented a skewed picture – Held, method of accounting should be such which does not affect the interest of the Revenue and at the same time should not put the assessee in undue hardship. Held, mercantile system to be followed.[ S.4 ]

S. 145 : Method of accounting – Assessee followed mercantile system of accounting – Certain percentage of expenses were debited in the year and the balance was deferred – Also, certain percentage of income was booked in the year and balance was deferred for a period of 12 years – Held, the accounts were liable to be rejected.

S.115JB: Book profits —Generation and distribution of electricity — Accounts to be prepared under state legislation — Provision computing book profit is not applicable.

S. 69A : Unexplained money – Cash deposit in the bank account of the assessee – source of such cash deposit was cash withdrawal from the account of one contractor – Held, entire cash deposit cannot be taxed – such cash deposit is part of business receipts – Held, to meet the interest of justice 8% taxable.

S.69: Unexplained investments – Books rejected in original proceedings and income estimated at 8 percent. of the gross contact receipts- Addition cannot be made u/s 69 in reassessment proceedings. [S.147]

S. 69 :Unexplained investments – jewellery found during the course of search – Held, jewellery found was within the normal limits of jewellery specified under Board’s Circular, no addition justified.

S.68: Cash credits – Share application money – In the absence of any falsity having been found in the documents submitted by the assessee to prove the identity, creditworthiness and genuineness of the share transaction, these documents could not be summarily rejected as had been done by the Assessing Officer- Deletion of addition is held to be justified .

S. 68 : Cash credits – cash deposited in bank – Held, opening balance was no doubted – Held, nothing to show that opening cash balance was utilized somewhere else – Held, accepted part deposit out of the said balance and only part not accepted. Held, addition not justified.

S. 50C : Capital gains – Full value of consideration – Stamp valuation – Conversion of agricultural land into residential plots – AO applied S. 50C – CIT(A) held that income in the nature of business income therefore, S.50C not applicable – Held, S. 45(2) not taken into consideration and therefore, matter remanded back to CIT(A). [S. 45(2)]

S. 40A(3) :Expenses or payments not deductible – Cash payments exceeding prescribed limits – payment exceeding Rs. 20000 – payment to truck driver who generally insist payment in cash – Held, AO did not doubt genuineness of the payment – Disallowance cannot be made .