S. 80P: Co-operative societies-Deduction-Surplus profit earned from the business of providing credit facilities to the members kept in the bank-Interest income earned therefrom is eligible for deduction under section 80P of the Act.[S.80P(2)(a),80P(2)(d)]

S. 69 : Unexplained investments-Bogus purchases-Red flagged by the Sales Tax Department –Quantity tally-No defects in the books of account-No disallowance warranted without bringing on record any other evidence to prove that the purchases made by assessee were not genuine-Order of Tribunal deleting the addition is affirmed. [S.68]

S. 68 : Cash credits-Gift from third parties-Genuineness of gifts had not been proved-Preponderance of probability-Order of Tribunal is affirmed. [S. 260A]

S. 43A : Rate of exchange-Foreign currency –Capital or revenue-Tribunal allowed foreign exchange losses towards the loan taken for acquisition of assets within India-However, Tribunal failed to analyze whether the expenditure in question could not be regarded as capital expenditure-Matter was to be remanded to Tribunal for fresh consideration. [S. 37(1), 260A].

S. 40A(9) : Expenses or payments not deductible-Bonus to employees-Business expenditure-Contribution to employees welfare trust-Community services-Payments under a Memorandum of Settlement with the trade union-Expenditure not covered by Section 30 to Section 36, and expenditure made for purposes of business shall be allowed as business expenditure. [S. 37(1), 30 to 36]

S. 37(1) : Business expenditure-Capital or revenue-Professional and consultancy charges-Enduring nature, expenditure is capital in nature-Order of Tribunal is affirmed.[S.260A]

S. 37(1): Business expenditure-Compensation-Breach of contract-Real estate and land development-Agreement entered into by managing partner in his individual capacity-Terms and Conditions of the agreement relevant-Arbitral Award-Not allowable as business expenditure. [S. 145, 260A, Indian Partnership Act, 1932, S.14]

S. 37(1): Business expenditure-Banking business –Capital or revenue-Stock in trade-Broken period interest paid on the purchase of securities is revenue expenditure since securities constitute stock-in-trade. [S. 145, 260A]

S. 37(1) : Business expenditure-Foreign Exchange losses towards loan in nature of external commercial borrowings for acquisition of assets from outside India and from within India-The Tribunal failed to look at substance of expenditure and erroneously interpreted the provisions of Section 43A-Matter remanded back to the Tribunal for an effective adjudication of specific issue.[S.43A, 254(1), 260A]

S. 37(1): Business expenditure-Commissioner of Income Tax (Appeals) directed to decide the issue on disallowance of deduction claimed on debenture resumption within 3 months as matter pertains to year 1997-98-Revenue has accepted the finding of Tribunal in assessee’s own case in previous years regarding disallowance of expenses on entertainment expenditure and expenses related to school the same question of law cannot be raised in a subsequent year. [S. 40A (9), S. 246A, 260A].