S. 37(1) : Business expenditure – Service charges to employees- Held to be allowable as business expenditure – The Assessing Officer should not have used the expression “modus operandi” to mean that the assessee had adopted dubious tactics to inflate its expenditure.

S. 35 : Scientific research -Donation- When a valid registration exists while donation was given by the assessee and if at a later point of time such registration is cancelled with retrospective effect , no disallowance can be made [ S.35(1) (ii) ]

S. 10AA : Special economic zones – Profit of eligible unit should be allowed without set off of loss of other units [ S.72 ]

S. 10(37) : Capital gains – Agricultural land – Interest received on enhanced consideration as per Land acquisition Act, 1894 is held to be not taxable [ S .4, 56(2) (viii) Land Acquisition Act , 1894 , S 4, 28, 34 ]

S. 4: Charge of income tax – Capital or revenue- Business income-Receipts from Construction company – Netting of receipts and payments- Receipts from the Construction Company being intrinsically connected with construction of assessee’s plant, would be considered as a capital receipt and not income of assessee from any independent source-Amounts received by the assessee would go to reduction of cost of construction. [S, 28(i), 56, 145]

S.4 :Charge of income-tax – Mutuality – Receipts by Co-operative society form its members i.e. Non-occupancy charges, transfer charges common amenity fund charges and other charges, are exempt from income-tax Act based on the principle of mutuality [S. 2(24)(vii) ; Maharashtra Co-operative Societies Act, 1960 S. 79A ]

S. 4: Charge of income-tax – Legislative power of retrospective amendment – Legislature cannot by way of introducing an amendment overturn a judicial pronouncement to declare it to be wrong or nullity – Rather Legislature can amend provisions of any statute to remove basis of judgment – Clause in statute – Prohibiting payment of interest on amount of security deposit is not arbitrary or violative of Article 14 of the Constitution of India. [Constitution of India , Art . 14 ]

S. 4 :Charge of income-tax -Accrual of income—Mercantile system of accounting – Accounting principle of real income—Enhanced rates shown as receipts in accounts but amounts not realised due to litigation and subsequent takeover of undertaking by Government- Amount due on such enhancement had not accrued and was not assessable [ S. 145 ]

S. 4: Charge of income-tax – Hindu undivided family – Sole surviving coparcener – Assessable as Hindu undivided family [Indian Income-tax Act, 1922 S.3 ]

S.4: Charge of income-tax – Cash credits- Assessee must prove the source of receipt -In the absence of such proof the Assessing Officer is entitled to treat it as taxable income – Cash credits could be assessed as undisclosed income [ S. 147, Indian Income-tax Act, 1922, S.34 ]