Leave encashment allowed on payment; Foreign Trade Policy incentives are capital receipts under section 115JB

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....The ITAT partly allowed the appeal, directing that leave encashment expenses be allowed only upon actual payment. Interest under section 234C was held payable on returned income, not assessed income, limiting the AO's levy accordingly, while interest under sections 234B and 234D were to be charged on the income computed per the Tribunal's order. Incentives received under the Foreign Trade Policy's Focus Product Scheme were held to be capital receipts, exempt from inclusion in total income and excluded from book profits for MAT computation under section 115JB. The disallowance of rent paid for a guest house was deleted due to lack of evidence of non-business use. No further disallowance under section 14A was warranted beyond the dividend inc.........