S. 40A(2) : Expenses or payments not deductible–Excessive or unreasonable-Sub-contractors-Relatives of partners–20% of disallowance up held by the Tribunal is affirmed. [S. 37(1) ]

S. 37(1) : Business expenditure–Cheque issued–Realised in next assessment year–Cheque is not dishonoured but encashed, payment relates back to date of tendering of cheque and date of payment would be date of delivery of cheque-Allowable as deduction during previous year.

S. 32 : Depreciation-Passive use of the assets-Unabsorbed depreciation-Business was stopped and assets were not in use for period of 24 years-Depreciation is neither allowable nor set off of carried forward of depreciation for previous year. [S. 32 (2), 72]

S. 32 : Depreciation–Amalgamation-Receipt of the Auditors report subsequently-Directed to allow the depreciation on the basis of Auditor’s report.

S. 23 : Income from house property-Annual value–Arrears of rent – Arrears of rent accruing in a prior years, not received in those years, could not be assessed in a subsequent year when same were received as income from house property-Arrears of rent attributable to preceding years cannot be brought to tax under the head income from other sources-Provision of section 25B inserted by Finance Act, 2000 with effect from 1-4-2001 would apply prospectively. [S. 22, 25B, 56]

S. 14A : Disallowance of expenditure-Exempt income-Recording of satisfaction-AO has not recorded the satisfaction how the disallowance made by the Assessee is not correct–Deletion of disallowance by the Tribunal is affirmed. [R. 8D]

S. 14A : Disallowance of expenditure-Exempt income-In the absence of any exempt income, disallowance is not permissible. [R. 8D]

S. 12AA : Procedure for registration–Trust or institution- Charitable purpose-Cancellation of registration is held to be not valid- Orders made by the CIT and ITAT are quashed and the registration held by the GIDC is ordered to be revived. [S. 2(15), 11, 12A]

S. 10(23AAA) : Funds established for welfare of employees-No renewal was required once a Pension fund set up by assessee approved by concerned authority. [S.10(25), 12A]

S. 4 : Charge of income-tax–Capital or revenue–Business of accepting deposits from members and lending the same to non members-Waiver of deposit–Waiver of principal component of deposits and debentures–Capital receipts. [S. 28(i)]