A charge is wider than mortgage - it would cover within its ambit mortgage also. Therefore when a first charge is created by operation of law under Sales Tax Act or Income tax Act, over any property, that charge will have precedence over an existing mortgage.

A rectification order can further be rectified if application is within four years of the order to be rectified. Limitation for 4 years for Rectification need not run from date of original assessment order but would run from the date of the order sought to be rectified. [Followed in 230 ITR 139 (MAD)]

Issuance of a notice of reassessment within the period of limitation gave jurisdiction to the A.O. to make re-assessment (notice of reassessment should be dispatched by registered post) (thus, service of the notice before the limitation is not necessary)

A firm holding Abkari license - partners entering into sub partnership for finance - such sub partnership is not prohitited in Partnership Act or in Excise Act; sub - partnership is entitled for registration.
[Affirmed in 223 ITR 333(SC)]

Some amount was found as credits in the books of the assessee and it was claimed to be winning from jackpots and treble events at turf clubs in Bangalore, Madras and Hydrabad. The AAC confirmed the addition made by A.O. u/s 68, the assessee moved to ITSC, which by a majority held that explanation of the Assessee was not genuine for the following reasons:-
i) The knowledge of Assessee about racing was meager.
ii) The claim that assessee won numbers of jackpots in 3 / 4 seasons at different places like Madras, Bangalore, Hydrabad appeared wild and contrary to statistical theories, frequencies and probabilities. A jackpot is a stack of five events in a single day. Only a regular and experienced punter may clear jackpot occasionally.
iii) Books of assessee did not show any withdrawal on the day of Horse racing or previous day for purchase of jackpot tickets.
iv) No debit of capital account for expenses for traveling to different places was found. v) Exceptional luck and then loss of interest subsequently assumes important.
Finding that claim was not justified, burden of proof is on the assessee that amounts credited in books did not represent his income was not discharged.

A co-owner of House property is entitled to statutory deduction u/s 23(2) in respect of his share if it is definite and ascertainable.

Application for extention of time to file a return can be furnished even after expiry of time allowed u/s 139(2) or extended time allowed because of use of the words "it has not been possible" in form 6.
[Relied/ applied in 222 ITR 253(Del); 248 ITR 484(Mad)]
(No longer a good law:- 139(2) omitted w.e.f 1.04.89)

Entertainment expenditure is an expression of wide import. But for section 37(2A) of the IT Act the word "Entertainment" must be construed strictly and not expansively. Ordinarily "Entertainment" connotes something, which may be beneficial for mental or physical well-being but is not essential or indispensable for human existence. A bare necessity like ordinary meal is essential or indispensable and is therefore not an entertainment. It is only an hospitality which is not included in the meaning of "entertainment". Enlarged meaning given to entertainment so as to include hospitality is applicable with effect from 1.4.76 as explanation 2 is inserted with effect from that date, being not clarificatory, in nature it is not retrospective.
[Followed/relied/applied in 220 ITR 318 (ALL); 221 ITR 90 (PAT); 222 ITR 772 (P & H); 225 ITR 123(AP); 225 ITR 829 (MAD); 226 ITR 81 (MAD); 226 ITR 399(DEL); 232 ITR 454(MAD); 235 ITR 491(MAD); 237 ITR 102 (MAD); 237 ITR 415 (GUJ); 240 ITR 297 (GAU); 240 ITR 335 (MAD); 241 ITR 407 (MAD); 249 ITR 253 (CAL); 249 ITR 465 (DEL); 250 ITR 786 (DEL); 251 ITR 764 (MED); 252 ITR 352 (DEL); 254 ITR 447 (DEL; 255 ITR 294 (GUJ); 259 ITR 752 (DEL)]

Returns of loss were filed. The ITO refused to take cognizance of the return on the ground that they were filed beyond time and informed the assessee that no cognizance could be taken of the said returns. Assessee did not file appeal against the order of ITO refusing to take cognizance of the returns. It was held that assessee cannot now claim in assessment proceedings of subsequent year that losses in the above yeas(for which belated returns were filed and assessments were not done) should be determined, carried forward and set off against the profits in such subsequent year. Principles laid down in Khusal Chand Daga's case 42 ITR 177 (SC) could not be applied here as default is anterior in stage - assessments were not framed whereas in Khusal Chand Daga's case assessment were made on the loss return but intimation was not given.

For allowing set off of brought forward depreciation in the current year there is no necessity that same business should continue in the current year also or that same asset (on which depreciation was allowed in the earlier year but could not be set of and had to be carried forward to current year) should continue to exist. [Followed/ applied in 232 ITR 634 (Mad); 232 ITR 637 (Mad); 238 ITR 221(Guj); 258 ITR 23(Del)]