S. 40(b)(iii) : Amounts not deductible-Working partner– Remuneration–Interest-Rejection of books of account and assessment adopting 8 Per cent. of gross turnover as net profit-Separate deduction towards interest on partner’s capital account and remuneration to partner is to be allowed, when net profit is estimated from gross receipts. [S. 133A]

S. 40(a)(ia) : Amounts not deductible-Deduction at source–Service rendered by foreign agent–Contradictory finding–New workmen-Should be regular workmen employed in financial year relevant to assessment year–Matter remanded to the AO. [S. 80JJA, 195,254(1)]

S. 37(1) : Business expenditure-Consultancy fee-Failure to submit original bills cannot be a ground for making disallowance– Disallowances cannot be made on ad-hoc basis. [S. 145]

S. 36(1)(iii) : Interest on borrowed capital-Share application money is capital borrowed for purpose of business or profession until shares are allotted-Allowable as deduction. Consulting charges-Matter remanded to AO. [S. 37(1)]

S. 36(1)(iii) : Interest on borrowed capital-Advances for construction of factory building-No disallowance can be made-Reimbursement of expenses–Matter remanded. [S. 40(a)(ia)]

S. 36(1)(iii) : Interest on borrowed capital-Interest free loans and advances to related party-Free funds available-Presumption that investments from interest-free funds available-No disallowances can be made.

S. 32 : Depreciation-Not in business of running vehicles on hire-Not entitled to depreciation at higher rate.

S. 28(i) : Business loss-Housing Finance-Pre-termination of loan– Onus on AO to show that loss claimed by assessee was tax evasion device-Matter remanded. [S. 254(1)]

S. 23 : Income from house property-Business income-Annual letting value-Non-resident Director-Flat used as residence as well as carrying on business–Notional value from property cannot be assessed as income from house property. [S.22, 23(1), 23(4), 28(i)]

S. 22 : Income from house property-Business income-Unsold flats-Stock in trade-No rental income to be computed when flats held as stock-in-trade. [S. 23(5), 28(i)]