“Section 97(1)”

Disallowance under Section 14A read with Rule 8D is not warranted if the assessee has not earned any exempt income in the relevant assessment year.

The doctrine of mutuality applies only when there is complete identity between the contributors to a common fund and the participants in its surplus. Income received from non-members or distinct classes of members who do not share this identity is not covered by mutuality and is taxable.

A mere irregularity in granting approval under Section 158BG of the Income-tax Act does not render the resulting assessment order invalid or fatal.

Reassessment proceedings under Section 147 cannot be initiated based on a mere change of opinion or having second thoughts on the same material that was available during the original assessment. The Assessing Officer's omission to draw a correct legal presumption or inference from disclosed facts, without any failure to disclose fully and truly all material facts, does not warrant reopening.

Expenditure incurred on the purchase and evaluation of seismic data of foreign blocks for the purpose of exploration and production of hydrocarbons is allowable as business expenditure under section 37(1) of the Income-tax Act, 1961.

Interest paid on borrowed funds used to acquire equity in a subsidiary is deductible under Section 36(1)(iii) if the holding company has a deep interest in the subsidiary's business and the investment is for commercial expediency. The Supreme Court noted that the S.A. Builders Ltd. case may need reconsideration in this context.

A penalty notice is not automatically invalid for failure to strike off inappropriate grounds if no prejudice is caused to the assessee. Prejudice must be demonstrated.

Interest paid by an Indian branch of a bank to its overseas head office is not allowable as a deduction. This is because the payment is not considered chargeable to tax in India, and therefore, Section 195 TDS provisions are not attracted.