“Section 41(1)(5)”

The Legislature abolished terminal depreciation under section 32(1)(iii) and the taxing of balancing charge under section 41(2), replacing these provisions with the requirement to reduce sale proceeds of depreciable assets from the block of assets.

Subsidies granted under a Government Industrial Scheme to accelerate industrial development and generate employment are capital in nature, determined by the 'purpose test', regardless of the timing, source, or form of the subsidy.

The write-back or waiver of a loan obtained for business purposes constitutes taxable business income under Section 28. This applies even if no prior deduction was claimed, thereby not attracting Section 41(1).

Section 14A disallowance is computed by considering the income that has actually been subjected to tax. If certain income is exempt, no expenditure is deemed to have been incurred for earning that exempt income.

Depreciation on a building used for business purposes should be allowed following the rule of consistency if it was allowed in earlier assessment orders and the Assessing Officer raised no doubts about its use.

The eligibility for deductions under sections 80-IB and 80-IA, and related issues like the initial assessment year, demerger, and resulting company status, are significant considerations in the context of company restructuring and tax benefits.

Depreciation must be allowed on the entire block of assets as defined in Section 2(11) of the Income-tax Act, and individual assets of each unit cannot be considered separately for this purpose.

An order transferring the jurisdiction for an assessment is required under section 127 of the Income Tax Act, 1961, for an assessment to be validly initiated by an officer without territorial jurisdiction.