Section 40A(9) of the Income Tax Act

The sale of 'canned software' in physical form is the sale of a copyrighted article and constitutes 'goods,' distinct from the underlying copyright. This case provides foundational principles for distinguishing copyrighted works from copyrighted articles and for what qualifies as 'production or manufacturing of goods or articles' under tax laws.

The Calcutta High Court held that a lump sum revenue expenditure, which is of a significant amount and provides benefits spread over several years, can be allowed as a deduction proportionately over the period of benefit. This approach prevents distortion of the profits of a single assessment year.

An Income Tax Officer assessing income must determine the assessee's system of accountancy and, for the mercantile system, ascertain when the right to receive the income legally accrued.

Expenditure incurred in respect of abandoned cell towers is an allowable business expenditure under Section 37(1) of the Income-tax Act, 1961, especially when no new business was being set up by the assessee.

Expenditure incurred for the expansion of an existing business is revenue in nature and allowable as a deduction if it does not create a new asset. Accounting entries in books of accounts do not solely determine the allowability of an expenditure for income tax purposes.

For banks, bad debts written off from non-rural advances are not subject to the limitations of the provisos to sections 36(1)(vii) and 36(1)(viii), as these provisos apply only to rural advances; section 36(1)(viia) also applies exclusively to rural advances. Additionally, depreciation on investments valued at market price on the balance sheet date is eligible for deduction.

Broken period interest paid on the purchase of securities constitutes capital expenditure and is therefore not allowable as a revenue deduction.

Advances made by banks that become bad debts are eligible for deduction under Section 36(1)(vii) if they meet the conditions specified in Section 36(2).

Expenditure is allowable as a deduction if it is incurred wholly and exclusively for the purpose of the assessee's business. This reiterates the view taken in Hindustan Aluminum Corporation Ltd.'s case.

When investments are made in accordance with the Income Tax Act, and the market price of these investments changes from the value shown in the opening balance at the year-end, depreciation on such investments can be allowed.