“Section 206(1)”

Where purchases are supported by bills, reflected in books of account, and payments are made through account payee cheques, such purchases cannot be treated as bogus in the absence of specific contrary evidence from the Assessing Officer.

Losses arising from the conversion of foreign currency or from foreign exchange forward contracts entered into for business transactions, such as hedging export proceeds, are considered revenue or trading losses and are deductible as business expenditure under Section 37(1). The amortization of premium paid on such foreign exchange contracts is also an allowable deduction.

An assessment order directing the initiation of penalty proceedings under section 271(1)(c) is deemed to constitute the Assessing Officer's satisfaction for initiating penalty proceedings under section 271(1B). This applies even after amendments to the law.

Expenditure on the right to use leasehold land is allowable as revenue expenditure. Such an issue, being debatable, can preclude the levy of penalty under Section 271(1)(c).

Non-maintenance of stock by an assessee, which has a substantial effect on profit determination, justifies an inference that accounts were not maintained properly, allowing for estimation of income.

Reopening of assessment is invalid if based solely on a change of opinion by the Assessing Officer without any tangible material.