S. 37(1) : Business expenditure–Vehicle expenses and insurance on vehicle-Personal expenses–Disallowance of 10% of expenses is held to be justified.

S. 37(1) : Business expenditure–Provision for warranty- Marketing of software products-Authorities were justified in restricting amount of allowable provision at 2.14 per cent of sale as adopted in earlier years, as there was no reversal after expiry of relevant period based on actual utilisation. [S. 145]

S. 37(1) : Business expenditure-Illegal payments-Interest-Bogus purchases–Survey by Maharashtra VAT Authorities-Interest paid under S. 30(2) of MVAT Act, 2002 was not penal in nature hence allowable ; however, interest paid under S. 30(4) of MVAT Act, 2002 which was in addition to interest payable under section 30(2) was penal in nature and could not be allowed in view of provision of Explanation 1 to S.37(1) [ MVAT Act, 2002, S. 25, 29(3), 30(2), 30(4)]

S. 14A : Disallowance of expenditure-Exempt income–When no exempt earned during the assessment year, no disallowances can be made. [R. 8D]

S. 13 : Denial of exemption-Trust or institution-Investment restrictions – Trust is not paying the rent which it occupied third and fourth floor- Repair and renovation of building owned by Trustee done by the Trust –Assessing Officer could not have disallowed expenditure incurred towards repairs and renovation of building owned by trustee on ground that it was in contravention of provisions of section 13(1)(c) as a benefit had accrued to trustee through such payment as the trustees were required to repay the expenditure incurred – Matter remanded. [S. 11, 12]

S. 12A : Registration–Trust or institution-Registration cannot be denied on the ground that the return of income was filed in response to notice u/s 148. of the Act-Requirement of filing report of audit in prescribed form is merely procedural and, therefore, directory in nature and not mandatory for the purpose of claiming exemption under S. 11 and 12 of the Act. [ S.11, 148 ]

S. 12A : Registration–Trust or institution-Education-Profit-making per se cannot be regarded as detrimental as long as a society pursue a charitable purpose; activities of a trust/institution promoting education need not target to serve poor, but it should function in conformity with its objects- matter remanded. [S.2(15)]

S. 10(23C) : Educational institution-Object clause-Wrong jurisdiction-When trust filed affidavit stating that the trust was created with main object of educating public by establishing schools, technical colleges and other educational institutes and it was not doing any activities other than educational services, registration cannot be denied merely because aims and object of assessee-trust included some clauses which were not for purposes of education. [ S. 10(23C)(vi)]

S. 9(1)(vii) : Income deemed to accrue or arise in India – Fees for technical services -A Limited Liability Partnership incorporated under Laws of United Kingdom (UK), providing legal advisory services to its clients worldwide including India-By rendering those services, assessee did not ‘make available’ any technical knowledge, know-how or experience to its clients-Amount received by it was not taxable in India as fee for technical services. – Article 15 of India-UK DTAA applies to determine taxable income in hands of individual and not other persons, assessee being a partnership firm, amount of fee received by assessee for rendering legal advisory services was not taxable in India- Reimbursement of expenses being of routine nature and, moreover, there was no mark up involved amount in question could not be brought to tax as assessee’s income-DTAA- India -UK. [S.90, Art. 5(2)(k), 7, 13, 15]

S. 276CC : Offences and prosecutions – Failure to furnish return of income-Failure to furnish return in response to notice under S.142(1)-Mere fact that subsequently furnished return of income and no amount of tax was due, would not exempt from liability to be prosecuted. Disobedience of each of said provisions of law itself constitute a distict offence[S. 139(1), 142(1), 148, Criminal Procedure Code, 1973, S. 482]