S. 145 : Method of accounting –Banking company-Stock in trade-Securities held on basis of ‘Held to Maturity’ (HTM) were to be regarded as stock-in-trade and, thus, same had to be valued at cost or market value whichever was less.

S.142(2A): Inquiry before assessment–Special audit–Principal Commissioner, before deciding issue of approval for Special Audit gave opportunity to assessee- Writ is dismissed.[ Art .226 ]

S. 139 : Return of income –Failure to file tax audit report-Direction of the Assessing Officer to rectify the mistake- Revised return filed beyond period prescribed by Assessing Officer –No condonation of application was filed either before Assessing Officer , CIT(A) or Tribunal-Treating the return as in valid is held to be justified .[ S.44AB, 139(9)]

S. 139 : Return of income –Revised return- Rejection of revised return on the ground that it was not accompanied with tax audit report without giving an opportunity to rectify the mistake is held to be bad in law- Order was set aside and matter was to be remanded back for disposal afresh.[ S.44AB,139(5), 139(9)]

S.115JB: Book profit-Whether the provision of S.115JB is applicable to Banking Company is substantial question of law-Appeal of the revenue is admitted [ S.260A ]

S. 43B : Certain deductions only on actual payment –Service tax payable-Since services were rendered, liability to pay service tax in respect of consideration would arise only upon assessee receiving funds and not otherwise-liability claimed by assessee could not be disallowed.

S. 41(1) :Profits chargeable to tax – Remission or cessation of trading liability -Non-payment of outstanding liability which is admitted and acknowledged as due and payable cannot be assessed as remission or cessation of liability.

S. 40A(3) : Expenses or payments not deductible – Cash payments exceeding prescribed limits – Factory was situated in backward area and payments to transporters had to be made in cash because such persons were not having banking facility around factory area Freight and cartage payments to drivers-Held to be allowable as deduction .[ R.6DD ]

S. 37(1) : Business expenditure – Foreign education and training expenses of a partner –Held to be allowable as business expenditure as the post graduate course underwent was directly related to profession carried on by firm – Professional fee received by firm had substantially increased after completion of post graduate degree by said partner, several important contracts were secured by firm, which firm attributed to educational qualification and expertise acquired by said partner abroad .

S. 37(1) : Business expenditure –Capital or revenue- Manufacture of PVC and caustic soda and business of shipping , starting textile business- Abandoned project – Manufacture of New venture was managed from common funds, control over all business units and there was unity of control, it could not be said that pre-operative expenditure was incurred on a new line of business- Held to be allowable as revenue expenditure.