S. 41(1) : Profits chargeable to tax-Remission or cessation of trading liability -Assignment of loan to third party by making a payment in terms of present value of future liability-Surplus resulting from assignment of loan was not cessation or extinguishment of liability as loan was to be repaid by third party- Cannot be assessed as cessation of trading liability.[S. 28(iv)]

S. 41(1) : Profits chargeable to tax-Remission or cessation of trading liability-Waiver of loan per se does not amount to cessation of trading liability-Not assessable as income-Matter remanded for verification. [S. 28(iv)]

S. 40(b)(ii) : Amounts not deductible-Working partner– Remuneration–Bonus-Supplementary partnership deed– Allowable as deduction.

S. 40(a)(ia) : Amounts not deductible-Deduction at source- burden is on assessee to prove that recipient had declared the income-AO is directed to calculate the interest only for period of default. [S. 201(1), 201(ia)]

S. 40(a)(ia) : Amounts not deductible-Deduction at source-Payments to transporters-Permanent Account Number and addresses of transporters before the Assessing Officer-Provision of S.194C(6) is complied with–No disallowance can be made. [S. 194C(6)]

S. 37(4) : Business expenditure-Guest house expenses-Held to be not allowable.

S. 45 : Capital gains-Sale of shares-Entry operator-Bogus long term capital gains- Produced sufficient material-Addition cannot be made as cash credits. [S. 10(38), 68]

S. 37(1) : Business expenditure–Expenditure incurred on earning on term deposit is allowable as deduction.

S. 37(1) : Business expenditure–Illegal expenses-Distribution of ball pens, medical gifts etc. with logo of the company to doctors and hospitals–Allowable as business expenditure-Explanation 1 to S. 37(1) is not applicable.

S. 37(1) : Business expenditure-Interest bearing loans–Charged interest at 9% – Disallowance of interest at 12% is held to be not justified. [S. 36(1)(iii)]