“Section 201(3)(ii)”

An expenditure is classified as either capital or revenue; the 'enduring benefit' test is a key criterion for this distinction, and income tax law does not generally recognize deferred revenue expenditure unless specifically provided.

Capital gains arising on a depreciable asset, which are exempt under Section 50, are to be excluded from the calculation of deemed profits under Section 115JA, as the exemption is preserved by Section 115JA(4).

Disallowance under Section 40A(2)(b) is not maintainable when both the payer and payee are assessed at the maximum marginal rate, as it results in a revenue-neutral situation.

The case establishes that benefits flowing out of statutory provisions cannot be denied to an assessee company. It also suggests that if the legislature intends to exclude certain deductions (like under Section 80IB(10)) from Minimum Alternate Tax (MAT) calculations, a specific provision would be present in Section 115JB, similar to provisions found in Section 115JC.

Interest paid on delayed remittances of service tax is compensatory in nature and not a penalty hit by the Explanation to Section 37(1) of the Income Tax Act, 1961, making it a allowable business expenditure.

Interest chargeable under section 201(1A) of the Income Tax Act is not penal in nature and therefore cannot be waived on the basis of intentional default or other grounds.

Notional income, which does not represent real profit or accrual for the company during the financial year, should be excluded when computing book profit under Section 115JB of the Income Tax Act.

Receipts that are not income in nature should be excluded from the profit and loss account before computing Minimum Alternate Tax (MAT) under section 115JB.