S. 40A(3): Expenses or payments not deductible-Cash payments exceeding prescribed limits-Payment to supplier on Saturday at around 5:30 P.M. after closure of banking hours-Payment was made on a day when the bank was observing half-day working-Rule 6DD(j) could not be invoked-Disallowance upheld. [R.6DD (j)]
S. 40A(2): Expenses or payments not deductible-Excessive or unreasonable-Cash payment to partners-No legal bar on cash payment to partners-Genuineness of payment was not doubted-Addition was deleted. [S.40A(b)(v)]
S. 40A(2): Expenses or payments not deductible-Excessive or unreasonable-Long term capital gains-Commission payment to wife-Allowable as deduction. [S. 45, 48]
S. 40(a)(ia): Amounts not deductible-Deduction at source-Pre-EMI interest-Recipient had paid due tax-Matter remanded.
S. 40(a)(i): Amounts not deductible-Deduction at source-Non-resident –Commission-Non-resident carried out its activities outside India and income earned by it was not taxable in India-Not liable to deduct tax at source. [S. 9(1)(vi),9(1)(vii), 195]
S.37(1): Business expenditure-Bogus creditors-Trading in fabrics-Goods purchased were duly sold, and sales stood accepted; input of goods could not be doubted, and expenditure was to be treated as genuine, but 25 per cent of unverifiable purchases was disallowed. [S.41(1), 133(6)]
S.37(1): Business expenditure-Special reserve-Amount transferred to special reserve pursuant to the provision of section 45 IC of the RBI Act, 1934 is an appropriation of profit and not allowable as a deduction or excludable; the amount transferred was required to be added back to book profit under section 115JB [S.115JB RBI Act, 1934, S.451C]
S.37(1): Business expenditure-Salary to employees-No disallowance was proposed in the show-cause notice-Order of CIT(A) deleting the disallowance was affirmed.
S.37(1): Business expenditure-Insurance premium-Loan to firm on an insurance policy on the life of one of its partners-Insurance premium paid allowable as a deduction.
S.37(1): Business expenditure-Setting up of business-Power Purchase Agreement-Expenditure incurred for the purpose of business after setting up of business was allowable for deduction.