S. 37(1) : Business expenditure-Designing and development expenses-Capital or revenue-Held to be capital expenditure-Directed to allow the depreciation-R&D expenditure-Failure to produce evidence not allowed-Directed the AO to allow depreciation-Reassessment order passed beyond four years-Order was quashed. [S. 32, 35(1)(iv), 147, 148]

S. 37(1) : Business expenditure-Arrears of wages on the basis of 6th Pay Commission-Quantified and paid latter years-Allowable as deduction. [S. 40(a)(ia),145]

S. 37(1) : Business expenditure-Weighted deduction-R&D facility-Allowable as revenue expenditure-Interest on borrowed amount-Matter remanded-Exempt income-While computing disallowance under section 14A only average value of such investment from which yielded exempt income is to be considered. [S. 14A, 35(2AB), 36(1)(iii), R. 8D(2)(iii)]

S. 37(1) : Business expenditure-Ad-hoc disallowance-Not pointed out any specific defect-Not justified in making 20 percent ad-hoc disallowance. [S. 143(3)]

S. 37(1) : Business expenditure-Professional fees paid for incorporation of company-Web site expenses-Allowable as revenue expenditure.

S. 36(1)(vii) : Bad debt-Sale of unit by way of slump sale-Deliberately keeping entries in accounts to claim loss at end of year-Not allowable ad bad debt. [S. 50B]

S. 36(1)(vii) : Bad debt-Sale of unit by way of slump sale-Deliberately keeping entries in accounts to claim loss at end of year-Not allowable ad bad debt. [S. 50B]

S. 36(1)(iii) : Interest on borrowed capital-Advance to sister concern-No advances made during the year-Sufficient interest free funds-Addition is not valid on notional basis.

S. 36(1)(iii) : Interest on borrowed capital-Foreign currency convertible Bonds-Premium on maturity-Allowable as deduction.

S. 36(1)(iii) : Interest on borrowed capital-Explaining that all loans and advances utilised for business purpose-Order of CIT(A) is affirmed.