S. 40A(2): Expenses or payments not deductible-Excessive or unreasonable-Long term capital gains-Commission payment to wife-Allowable as deduction. [S. 45, 48]

S. 40(a)(ia): Amounts not deductible-Deduction at source-Pre-EMI interest-Recipient had paid due tax-Matter remanded.

S. 40(a)(i): Amounts not deductible-Deduction at source-Non-resident –Commission-Non-resident carried out its activities outside India and income earned by it was not taxable in India-Not liable to deduct tax at source. [S. 9(1)(vi),9(1)(vii), 195]

S.37(1): Business expenditure-Bogus creditors-Trading in fabrics-Goods purchased were duly sold, and sales stood accepted; input of goods could not be doubted, and expenditure was to be treated as genuine, but 25 per cent of unverifiable purchases was disallowed. [S.41(1), 133(6)]

S.37(1): Business expenditure-Special reserve-Amount transferred to special reserve pursuant to the provision of section 45 IC of the RBI Act, 1934 is an appropriation of profit and not allowable as a deduction or excludable; the amount transferred was required to be added back to book profit under section 115JB [S.115JB RBI Act, 1934, S.451C]

S.37(1): Business expenditure-Salary to employees-No disallowance was proposed in the show-cause notice-Order of CIT(A) deleting the disallowance was affirmed.

S.37(1): Business expenditure-Insurance premium-Loan to firm on an insurance policy on the life of one of its partners-Insurance premium paid allowable as a deduction.

S.37(1): Business expenditure-Setting up of business-Power Purchase Agreement-Expenditure incurred for the purpose of business after setting up of business was allowable for deduction.

S.37(1): Business expenditure-towards Employee Stock Option Plan (ESOP)-International Stock Ownership Plan (ISOP)-Paid to parent company-Allowable as deduction.

S. 36(1)(viii): Eligible business-Special reserve-Minimum alternate tax-Taxable in the year in which the amount is withdrawn from such reserve-Amount transferred to reserve under section 36(1)(viii) shall not be included in book profit under section 115JB.[S.115JB]