“Section 2(81)”

Rule 8D, for computing disallowance under Section 14A for expenses related to exempt income, applies from Assessment Year 2008-09 onwards; for prior years, a reasonable disallowance must be made. The disallowance under Section 14A cannot exceed the actual exempt income earned.

A revision under section 263(1) is justified when the assessment order is erroneous and prejudicial to the interest of the revenue due to an inadequate enquiry or non-application of mind by the assessing officer.

Foreign exchange fluctuation gains or losses are operational in nature and must be included in the computation of the operating margin for both the assessee and comparable companies when determining the Arm's Length Price.

The case is cited for the principle that when a payment is made for a non-compete agreement which is part of a larger business transfer, the characterisation of the payment depends on whether it is for the enduring benefit of the business or for the loss of potential profits.

Expenditure incurred for business exigency is allowable as a deduction under Section 37 of the Income Tax Act. Litigation expenses incurred to protect business are revenue expenditure.

Non-compliance with notices issued under section 133(6) alone is not a sufficient basis to deny the genuineness of expenditure incurred by a company. The assessee's obligation extends to providing correct names and addresses of parties, not ensuring their response.

Unabsorbed depreciation available as on April 1, 2002, can be carried forward indefinitely under Section 32(2) of the Income Tax Act, 1961.

Trademark expenditure incurred to facilitate business operations is considered revenue expenditure, as it does not create an enduring benefit. Product registration expenditure is also revenue in nature as it enables the sale of products.