“Section 132(5)”

Taxing statutes must be interpreted strictly, assuming that the law-making authority does not commit a mistake or make an omission. There is no room for purposive interpretation under direct tax laws.

Interest, sales tax, and purchase tax subsidies received by an assessee are generally considered capital receipts, not revenue income, for income tax purposes.

If an assessee possesses sufficient interest-free own funds to cover investments yielding exempt income, it is presumed that such investments are made from these own funds, precluding any disallowance of interest expenditure under Section 14A, even when borrowed funds are also available.

A subsidy is classified as a capital receipt if its object is to enable the assessee to set up or expand a new or existing unit. Conversely, it is a revenue receipt if its purpose is to help the assessee run the business more profitably.

Income from unsold flats held as stock-in-trade by a builder or developer is assessable as business income, not income from house property, for assessment years prior to the insertion of Section 23(5) of the Income-tax Act.

For a charitable trust, a violation of Section 13(1)(d) does not lead to the denial of exemption under Section 11 on its total income. Instead, only income derived from investments or deposits made in violation of Section 11(5) or income diverted under Section 13(1)(c) or 13(1)(d) is taxable.

The Assessing Officer must grant the correct deduction after due verification of claims made by the assessee, even if not perfectly articulated initially. This principle applies in assessment proceedings, including those involving specific deductions like those for export-oriented units under Section 10B.

A statutory authority vested with discretion must exercise that power independently, based on its own judgment, and not under the dictation or instructions of a higher authority. Exercising discretion under superior direction constitutes a failure to exercise it at all.