S. 40(a)(ia) : Amounts not deductible-Deduction at source-Upon failure on the part of the Assessee to provide reconciliation of expenses, its nature and TDS deductions, the alternate plea to allocate the expenses so disallowed over the STPI units of the assessee while computing the relief under section 10A was accepted.

S. 37(1) : Business expenditure-Telephone expenses-Club membership fee-Allowable as business expenditure-Entertainment Expenses-Expenses incurred on cigarettes and wines not allowable.

S. 37(1) : Business expenditure-Fabrication charges-Books of account not rejected-Disallowance of fabrication charges is not justified. [S. 145]

S. 37(1) : Business expenditure-Educational sponsorship of son of Director-Recipient of sponsorship undertaking to serve company after completion of studies and later joining service of assessee-Entitle to deduction.

S. 37(1) : Business expenditure-Capital or revenue-Pre-operative interest expenses-Pending for allocation-Not debited in profit and loss account-Disallowance is not valid.

S. 37(1) : Business expenditure-Expenses incurred for the business cannot be disallowed by the AO on the question of commercial expediency.

S. 37(1) : Business expenditure-Supervisory fees-The AO cannot sit in the armchair of businessman and decide whether particular expenditure is required to be incurred for the business or not-Deduction is allowable in the year of payment of tax deduction at source. [S.40(a)(i)]

S. 36(1)(iii) : Interest on borrowed capital-Investments in acquisition of shares in companies to have controlling stake-Investment for purpose of business-No disallowance of interest expenses. [S. 14A]

S. 36(1)(iii) : Interest on borrowed capital-Capital work-in-progress-Interest required to be capitalised-Matter remanded.

S. 36(1)(iii) : Interest on borrowed capital-Interest free loans to wholly-owned subsidiary-Commercial expediency-Interest on borrowed capital allowable as deduction.