“Section 30(3)”

Expenditure is defined as money paid out or away, which is gone irretrievably. To be deductible under Section 37(1), expenditure must be wholly and exclusively for business, not capital or personal, and not fall under specific provisions of Sections 30 to 36, often justifiable on grounds of commercial expediency.

For calculation of deduction under Section 80HHC, if total interest is netted off after adjusting interest paid and received, the 90% reduction specified in Explanation (baa) is not applicable.

Each assessment year is an independent unit for income-tax purposes, requiring the issuance of a separate notice under Section 148 of the Income-tax Act for a valid reassessment. Failure to issue such separate notices renders the assessment invalid.

Rule 5(a) of the First Schedule to the Income Tax Act applies to add back an amount only if it is an expenditure or allowance contemplated in sections 30 to 43A and is specifically disallowed. Without such a specific prohibition, amounts like provisions for preference share redemption or amortization cannot be added back to an insurance company's profits.

Expenditure qualifies as 'current repairs' if it maintains existing machinery without replacement, creates no new asset, restores functional efficiency without increasing capacity, and is not an independent unit. Conversely, the cost of replacing machinery, especially independent units, constitutes capital expenditure.

The burden of proof lies on the assessee to rebut the contents of documents or incriminating material discovered during a search and seizure operation, especially concerning undisclosed income, leveraging presumptions under sections like 132(4A) and 292C.

This case lays down a crucial test to distinguish between revenue expenditure (current repairs) and capital expenditure. Expenditure is considered revenue if its object is to preserve and maintain an existing asset without bringing a new asset into existence or obtaining a new or fresh advantage.

Expenditure incurred wholly and exclusively for the purpose of business is deductible, even if it is unremunerative or does not yield an immediate profit. The absence of a corresponding receipt does not negate the deductibility of such an expense.