S. 2(22)(e) : Deemed dividend- Loans to shareholder – Business of money lending – loan from two companies which were substantially involved in business of money lending- Addition cannot be made as deemed dividend. [S. 2(22)(e)(ii)]

S. 263 : Commissioner-Revision of orders prejudicial to revenue- Stamp valuation–Accepting the claim as per agreement– Provision of S.50C is applicable-Revision is held to be valid. [S. 45, 50C]

S. 40A(2) : Expenses or payments not deductible–Excessive or unreasonable–Ad hoc disallowance of 50 % of rent–Held to be not justified.

S. 40(a)(ia) : Amounts not deductible-Deduction at source-Interest paid to resident–Failure to deduct tax at source-recipient has shown as income-Second proviso to section 40(a)(ia) inserted by Finance (No. 2) Act, 2004, with effect from 1-4-2005 is curative and has retrospective effect- No disallowances can be made. [S. 201]

S. 37(1) : Business expenditure–Capital or revenue–Replacement of spare parts of machinery -Held to be revenue expenditure.

S. 36(1)(iii) : Interest on borrowed capital-Advance of security deposit – Substantial interest free funds–No disallowances can be made.

S. 32 : Depreciation-Unabsorbed depreciation-Carry forward and set off – Unabsorbed depreciation pertaining to assessment year 1997-98, was allowed to be carried forward and adjusted after lapse of 8 years. [S. 32(2)]

S. 28(i) : Business loss- Share transactions-Registered stock exchange-Prevailing market prices–STT paid-Produced contract rates, demat statements and bank statements-loss cannot be disallowed as bogus. [S. 68]

S. 28(i) : Business loss–Advances not recoverable-Write off Advances given to suppliers for purchase of raw materials- Failure to produce evidence to show that the advances were paid in the ordinary course of business-Not allowable as business loss. [S. 36(1)(vii), 36(2)]

S. 12AA : Procedure for registration –Trust or institution- Old denomination notes was found during search on premises of assessee’s bank where management of assessee had effective control- Scholarship to several students and had produced several documents in support of said scholarship payments- Non-appearance of certain students for verification – Purchase of plot of land and built a school building – Registration cannot be denied. [S. 11, 12A, 13]