“Section 45(4)”

Disallowance under Section 14A of the Income Tax Act, 1961, cannot exceed the actual tax-exempt income earned by the assessee during the relevant year. If no tax-exempt income is earned, no disallowance under Section 14A is warranted.

Income of a charitable trust, other than from a business undertaking covered by Section 11(4), is determined based on its books of account. Payments of income tax and wealth tax by the trust are considered an application of income for charitable purposes under Section 11.

A partner's contribution of a personal asset to a partnership firm does not amount to a "transfer" for capital gains purposes under the Income-tax Act, as the consideration (the partner's interest in the firm) is indeterminate, and the computational machinery for capital gains fails.

The terms 'income' or 'profits and gains' are inclusive of losses, signifying that losses are 'minus income' to be factored into the computation of taxable income. Therefore, set-off and carry forward provisions for losses apply exclusively to taxable income or gains and cannot be pressed into service against non-taxable gains, such as those exempt under a DTAA or other specific provisions.

In an assessment completed under section 153A, only undisclosed income and undisclosed assets detected during a search can be brought to tax.

The distribution of capital assets to a partner upon the dissolution of a partnership firm does not constitute a 'transfer' and is therefore not taxable as capital gains.

When the Supreme Court decides an issue, the orders of the authorities below merge with the order of the Supreme Court. This applies to appeals before the Supreme Court.

When a partner retires from a partnership firm and receives consideration, including a proportionate share of goodwill, it is not considered a transfer for capital gains tax purposes.