Issues: Whether a resident individual opting for the new tax regime for assessment year 2024-25 is entitled to rebate under section 87A on tax payable on long-term capital gains taxable under section 112.

Analysis: Section 87A grants rebate by reference to the assessee's total income, which includes long-term capital gains forming part of total income under sections 2(45) and 5. The plain meaning of section 87A and section 112 contains no express statutory exclusion denying rebate in respect of long-term capital gains taxable at the special rate under section 112. In contrast, section 112A(6) specifically excludes rebate for the tax payable on gains covered by that provision. The later restriction introduced by the Finance Act, 2025 for income taxable at special rates is a substantive amendment operating prospectively and cannot be applied to assessment year 2024-25.

Conclusion: The issue is decided in favour of the assessee; rebate under section 87A is available against tax payable on long-term capital gains taxable under section 112 for assessment year 2024-25, where the prescribed total-income condition is satisfied.

Issues: Whether interest and other income of a co-operative society providing credit facilities to its members is deductible under Section 80P(2)(a)(i) of the Income-tax Act, 1961 as income attributable to that activity.

Analysis: Section 80P(2)(a)(i) allows deduction of the whole income attributable to the business of providing credit facilities to members. The expression "attributable to" has a wider scope than "derived from" and covers interest earned by deploying funds not immediately required for lending to members. The precedent concerning interest on amounts retained and payable to members was distinguishable, as it concerned a different factual setting and a claim under Section 80P(2)(d).

Conclusion: The interest and other income constitute business income attributable to the activity of providing credit facilities to members and are fully deductible under Section 80P(2)(a)(i), in favour of the assessee.

Issues: (i) Whether GST input tax credit mandatorily reversed upon Building Use Permission, attributable to unsold units, is deductible as business expenditure in the relevant assessment year; (ii) Whether the GST reversal provision of Rs. 85,59,538 is allowable where its claim requires verification across assessment years to prevent double deduction.

Issue (i): Whether GST input tax credit mandatorily reversed upon Building Use Permission, attributable to unsold units, is deductible as business expenditure in the relevant assessment year.

Analysis: Section 17(2) of the Central Goods and Services Tax Act, 2017 restricts common input tax credit to the portion attributable to taxable supplies, while Section 17(3) includes post-completion sale of building in the exempt-supply computation. Paragraph 5(b) of Schedule II treats construction for sale as a supply of service only where consideration is received before completion; post-completion sales of unsold units do not attract output GST. Rules 42 and 43 of the Central Goods and Services Tax Rules, 2017 prescribe project-wise input tax credit apportionment and final adjustment at completion, including by reference to the unsold carpet-area ratio.

Analysis: Upon Building Use Permission, the statutory restriction crystallised in respect of the unsold portion of the project. The reversal was neither voluntary nor a mere accounting adjustment: GST paid on project inputs had earlier been represented by a valid credit asset, which became irrecoverable by operation of law when it could no longer be set off against output tax. The absence of a fresh cash payment on reversal did not negate the resulting irrecoverable business expenditure. Since final statutory attribution arose only on completion, the deduction could not have been claimed in the earlier years when the credit remained validly available; the Matching Principle did not require otherwise.

Conclusion: The GST input tax credit reversal of Rs. 2,64,11,386, attributable to unsold units on Building Use Permission, is allowable as business expenditure in the assessment year under consideration.

Issue (ii): Whether the GST reversal provision of Rs. 85,59,538 is allowable where its claim requires verification across assessment years to prevent double deduction.

Analysis: The amount represented the proportionate GST reversal relating to purchases of materials and services, and the same statutory principle governing the main input tax credit reversal applied. Verification was required to identify the appropriate assessment year for allowance and to ensure that the expenditure was not claimed twice.

Conclusion: The claim is to be examined for assessment year 2023-24 and allowed in only one assessment year, with no double deduction.

Final Conclusion: Mandatory reversal of common input tax credit at project completion becomes an irrecoverable project cost when the credit attributable to unsold units ceases to be utilizable; the related GST claim must be granted once in the appropriate assessment year after verification.

Ratio Decidendi: A statutorily mandated reversal of previously eligible common input tax credit upon project completion, to the extent allocated to unsold units resulting in exempt post-completion sales, becomes an irrecoverable project cost deductible when final statutory attribution crystallises.

Issues: Whether the foreign enterprise had a fixed place permanent establishment or a dependent agency permanent establishment in India under Article 5 of the India-US Double Taxation Avoidance Agreement, permitting attribution of profit from offshore supplies.

Analysis: The burden to establish a permanent establishment lay on the Assessing Officer. A consolidated Form 10-K containing group-wide information and website information relating to the Indian subsidiary did not establish that the subsidiary's premises were at the disposal of the foreign enterprise. Mere subsidiary status could not constitute a fixed place permanent establishment without evidence that the foreign enterprise had a right to use or control the premises for carrying on its business.

Analysis: The Indian subsidiary operated an independent manufacturing business, had substantial dealings with other parties, purchased goods on a principal-to-principal basis, and bore the relevant business risks. No material established that it habitually concluded contracts, maintained and delivered stock on behalf of the foreign enterprise, or habitually secured orders for it. The licensing agreement concerning royalty income could not establish agency status for the separate offshore supply transactions.

Conclusion: No fixed place permanent establishment or dependent agency permanent establishment existed in India; consequently, no profits from the offshore supplies could be attributed in India.

Issues: Whether the final assessment order passed pursuant to the DRP directions was barred by statutory limitation under Section 144C(13) of the Income-tax Act, 1961.

Analysis: The DRP directions were uploaded on the ITBA portal on 29.09.2021. Section 144C(13) required completion of the assessment within one month from the end of that month, i.e., by 31.10.2021. The final assessment order was passed on 24.11.2021, beyond the prescribed period.

Conclusion: The final assessment order was time-barred, void and set aside, in favour of the assessee.

Issues: Whether penalty under section 271D for alleged acceptance of cash in contravention of section 269SS was sustainable where the assessee received and temporarily held the amount as a mediator in a property transaction.

Analysis: Section 269SS applies to acceptance of a loan or deposit. The affidavits of the purchaser and seller, registered sale deed, and bank records supported that the amount was received for temporary safe custody in connection with the property transaction, deposited into the assessee's bank account, and paid to the seller by cheque shortly thereafter. The transaction did not constitute acceptance of a loan or deposit; in any event, its bona fide nature established reasonable cause under section 273B.

Conclusion: The cash receipt was not a loan or deposit attracting section 269SS, and penalty under section 271D was unwarranted. The impugned penalty was directed to be deleted.

Issues: Whether cash deposits made during demonetisation, stated to be from earlier cash sales and household savings, could be treated as unexplained cash credits under section 68.

Analysis: Section 68 permits an addition where the source of the credited amount remains unexplained. The assessee produced material supporting regular sales activity, including cash books and VAT records. The cash available on 08.11.2016 represented receipts from sales made before demonetisation, and the subsequent deposit of that cash in bank accounts did not render its source unexplained. The sales activity and supporting material were sufficient to establish the genuineness of the source.

Conclusion: The cash deposits were satisfactorily explained and could not be added as unexplained cash credits under section 68; the addition of Rs. 44,15,000 was directed to be deleted.

Issues: (i) Whether shares received as a gift and taxed under Section 56(2)(x) retain their character as a gift, requiring inclusion of the previous owner's holding period, and are long-term capital assets; (ii) Whether indexation is available where the cost of acquisition is determined under Section 49(4); and (iii) From which date indexation is to be computed where the shares were received as a taxable gift.

Issue (i): Whether shares received as a gift and taxed under Section 56(2)(x) retain their character as a gift, requiring inclusion of the previous owner's holding period, and are long-term capital assets.

Analysis: Explanation 1(b) to Section 2(42A), read with Section 49(1)(ii), mandates tacking of the previous owner's holding period where property is acquired by gift. Taxation of the gift value under Section 56(2)(x) does not recharacterise the transfer or displace the mode of acquisition as a gift. Section 49(4) modifies only the cost of acquisition and does not alter the period-of-holding rule. Section 47(iii) further supports the continued character of the transaction as a gift.

Conclusion: The shares are long-term capital assets, and the resulting gains are chargeable as long-term capital gains, in favour of the assessee.

Issue (ii): Whether indexation is available where the cost of acquisition is determined under Section 49(4).

Analysis: The second proviso to Section 48 permits indexed cost of acquisition for long-term capital assets. Section 49(4) substitutes the value already subjected to tax under Section 56(2)(x) as the statutory cost of acquisition, but does not exclude indexation on that cost.

Conclusion: Indexation is available on the deemed cost of acquisition determined under Section 49(4), in favour of the assessee.

Issue (iii): From which date indexation is to be computed where the shares were received as a taxable gift.

Analysis: The previous owner's holding period determines the character of the asset, whereas the cost under Section 49(4) is an independent statutory deeming fiction that arose only when the fair market value was taxed under Section 56(2)(x). Indexation cannot be applied from a period during which that deemed cost did not exist. The applicable cost inflation index is consequently that of financial year 2020-21, when the value was brought to tax.

Conclusion: Indexation must be computed from financial year 2020-21, commencing from 24.03.2021, and not from the period during which the previous owner held the shares, against the assessee to that extent.

Final Conclusion: The capital gains require recomputation as long-term capital gains by applying indexation to the Section 49(4) deemed cost from financial year 2020-21.

Ratio Decidendi: For assets received by gift and taxed under Section 56(2)(x), the previous owner's holding period is included to determine the nature of the asset, but the deemed cost under Section 49(4) is indexed only from the year in which that value was subjected to tax.

Issues: (i) Whether additions for unsecured loans of Rs. 1.10 crore were sustainable under Section 68 of the Income-tax Act, 1961; (ii) Whether remand to verify whether the Rs. 11.25 lakh sale receipt had already been offered to tax was proper; (iii) Whether corpus fund and society/security deposits of Rs. 2,87,75,495 could be assessed under Section 68 of the Income-tax Act, 1961 or by a 10% notional-interest addition.

Issue (i): Whether additions for unsecured loans of Rs. 1.10 crore were sustainable under Section 68 of the Income-tax Act, 1961.

Analysis: Non-response to notices under Section 133(6) of the Income-tax Act, 1961 was not determinative and had to be assessed with the remaining evidence. The Rs. 10 lakh credit pertained to an earlier financial year and was not a credit of the relevant previous year. For the Rs. 1 crore loan, confirmation, banking-channel receipt and repayment during the same financial year were on record, without further substantive material establishing that it was an accommodation entry.

Conclusion: No; the addition of Rs. 1.10 crore was deleted in favour of the assessee.

Issue (ii): Whether remand to verify whether the Rs. 11.25 lakh sale receipt had already been offered to tax was proper.

Analysis: Whether the receipt had already been offered to tax was capable of verification from the books of account and assessment records. Verification of that factual assertion was necessary before determining whether an addition under Section 68 of the Income-tax Act, 1961 could survive.

Conclusion: Yes; the direction for verification was upheld, and taxability remains subject to that verification.

Issue (iii): Whether corpus fund and society/security deposits of Rs. 2,87,75,495 could be assessed under Section 68 of the Income-tax Act, 1961 or by a 10% notional-interest addition.

Analysis: No specific material established that the receipts were not from flat purchasers, that the liabilities were fictitious, or that they represented the assessee's unexplained funds. Retention or possible use of the funds did not by itself convert the principal into unexplained income, and actual income from deployment could not be determined through an unsupported notional rate. However, balance-sheet disclosure and general contractual terms alone did not conclusively establish the nature and source of each purchaser-wise credit; purchaser-wise evidence, agreements, ledger accounts, modes of receipt and subsequent treatment required examination.

Conclusion: Neither the Section 68 addition nor the 10% notional-interest addition was sustained; the matter was restored for fresh purchaser-wise examination.

Final Conclusion: Credit-wise evidentiary determination is required instead of assumptions founded merely on non-response to notices, recording of amounts as liabilities, or retention of funds.

Ratio Decidendi: For purposes of Section 68 of the Income-tax Act, 1961, the nature and source of individual credits must be determined from supporting evidence; unexplained-credit treatment or deemed income cannot rest solely on presumptions.

Issues: Whether interference under writ jurisdiction was warranted with the assessment order issued under Section 62 despite the delayed challenge and the petitioner's claim of having discharged tax liability through a subsequently filed return.

Analysis: The assessment order was passed on 09.01.2024, whereas the writ petition was instituted in September 2026. The cancellation of GST registration occurred only on 07.12.2024, and no satisfactory explanation was shown for not challenging the assessment order before that date. There was also no material showing that the assessed demand was being recovered through further proceedings.

Conclusion: Interference with the assessment order was not warranted, against the assessee.

Issues: (i) Whether the Berry ratio (OP/VAE) was an appropriate profit level indicator for benchmarking the assessee's sales to associated enterprises; (ii) Whether notional interest on receivables from associated enterprises was sustainable; and (iii) Whether transfer-pricing adjustments could be added while computing book profit under Section 115JB of the Income-tax Act, 1961.

Issue (i): Whether the Berry ratio (OP/VAE) was an appropriate profit level indicator for benchmarking the assessee's sales to associated enterprises.

Analysis: Rule 10B(1)(e)(i) of the Income-tax Rules, 1962 permits computation of net profit margin with reference to an appropriate and reliable base, while Rule 10C(1) requires selection of the most appropriate method. The Berry ratio is suitable only where the value of goods, inventory risks, and tangible assets do not materially contribute to profits and operating expenses capture the material functions and risks.

Analysis: The assessee was a full-fledged manufacturer performing procurement, designing, production, quality-control and warehousing functions, using substantial plant and machinery, and bearing inventory, price and manufacturing risks. Material costs constituted the predominant operating cost and were substantially incurred from unrelated parties. Excluding those costs from the profit base through OP/VAE did not reflect the assessee's functions, assets and risks. Consistent coordinate decisions on materially identical facts had rejected the Berry ratio, and their pendency before a higher forum without a stay, modification or reversal did not justify departure from them under judicial discipline.

Conclusion: The Berry ratio was not an appropriate profit level indicator, and the transfer-pricing adjustments on sales to associated enterprises for both assessment years were deleted. In favour of the assessee.

Issue (ii): Whether notional interest on receivables from associated enterprises was sustainable.

Analysis: Although receivables fall within the definition of an international transaction under Explanation (i)(c) to Section 92B of the Income-tax Act, 1961, an adjustment requires proof that associated enterprises received a benefit not extended to unrelated customers. The relevant test is parity in credit terms, delay in realisation, and charging of interest to associated and non-associated enterprises.

Analysis: For the first assessment year, invoice-wise material established that the assessee allowed a uniform 180-day credit period and did not charge interest from either associated enterprises or unrelated customers despite comparable delayed realisations. The 60-day period adopted for imputation of interest was therefore unsustainable. For the second assessment year, the record did not contain corresponding realisation data for unrelated customers; factual verification was consequently required. Any surviving adjustment must relate only to invoices realised beyond 180 days and be computed using six-month LIBOR plus the applicable bank spread, rather than an ad hoc 400-basis-point mark-up.

Conclusion: The interest adjustment for the first assessment year was deleted. For the second assessment year, the issue was restored for verification and redetermination under the prescribed parity test and rate. In favour of the assessee for the first assessment year.

Issue (iii): Whether transfer-pricing adjustments could be added while computing book profit under Section 115JB of the Income-tax Act, 1961.

Analysis: Section 115JB permits only specified adjustments in computing book profit. Sections 144C(10) and 144C(13) of the Income-tax Act, 1961 make the directions of the Dispute Resolution Panel binding and require assessment in conformity with them. The directions had expressly excluded transfer-pricing adjustments from book-profit computation.

Conclusion: Book profit for both assessment years must be recomputed without adding transfer-pricing adjustments, including any receivables adjustment ultimately determined. In favour of the assessee.

Final Conclusion: The assessee's full-fledged manufacturing functions, material-cost exposure and asset base precluded benchmarking through a value-added-expense-based Berry ratio; receivables adjustment depends upon demonstrated unequal treatment of associated enterprises; and book profit remains confined to statutorily permitted adjustments.

Ratio Decidendi: Where a taxpayer is a full-fledged manufacturer bearing inventory risk and using significant tangible assets, a Berry ratio that excludes material costs is not a reliable profit-level indicator for determining the arm's length price.

Issues: Whether the assessee's intra-group services could be benchmarked separately at nil under the Other Method rather than being aggregated with closely linked international transactions under the Transactional Net Margin Method.

Analysis: Section 92C(1) of the Income-tax Act, 1961 and Rule 10A(d) of the Income-tax Rules, 1962 permit aggregation of closely linked transactions for arm's length determination. The intra-group service agreements and supporting material described the services and their economic value. The other international transactions connected with the manufacturing business had been accepted under aggregated TNMM, and aggregation of management-fee payments had also been accepted in earlier years. The separate nil valuation of intra-group services under the Other Method was inconsistent with the accepted aggregated approach for inextricably linked transactions.

Conclusion: The rejection of aggregation and the nil arm's length price determination for intra-group services were set aside, and aggregated TNMM was accepted for benchmarking those services.

Issues: Whether penalty under section 271(1)(c) could be imposed where the assessment order recorded initiation of penalty proceedings only under section 271AAC.

Analysis: Penalty under section 271(1)(c) requires satisfaction during the assessment proceedings that the assessee concealed income particulars or furnished inaccurate particulars. The statutory deeming under section 271(1B) also requires a direction in the assessment order for initiation under section 271(1)(c). The assessment order contained a categorical direction to initiate penalty under section 271AAC and contained neither satisfaction nor a direction under section 271(1)(c). These provisions operate in distinct statutory fields with separate charges and consequences. A subsequent penalty-order recital or notice under section 271(1)(c) could not create or substitute the foundational satisfaction absent from the assessment order. The pending quantum appeal and the assessee's prior non-compliance could not cure this jurisdictional defect.

Conclusion: The penalty imposed under section 271(1)(c), without valid initiation or satisfaction under that provision, was without jurisdiction and was deleted.

Issues: Whether writ jurisdiction could be invoked to challenge an order-in-original on merits despite failure to timely pursue the statutory appellate remedy, in the absence of a jurisdictional error.

Analysis: The governing principle of writ jurisdiction requires recourse to an efficacious statutory remedy unless exceptional grounds, including lack of jurisdiction or incompetence of the authority, are established. Expiry of the appellate limitation period and the requirement of pre-deposit do not justify bypassing that remedy. No jurisdictional or competence-based challenge was raised.

Conclusion: The challenge on merits could not be entertained in writ jurisdiction.

Issues: (i) Whether the 60-day delay caused by bona fide pursuit of rectification proceedings should be condoned; (ii) Whether an addition based on the DVO's valuation could be sustained where the excess of that valuation over the reported sale consideration was less than 10% under the third proviso to Section 50C of the Income-tax Act, 1961.

Issue (i): Whether the 60-day delay caused by bona fide pursuit of rectification proceedings should be condoned.

Analysis: The assessee had pursued a rectification application before the appellate authority under a bona fide belief that the valuation difference would be rectified. Its rejection was followed promptly by filing of the appeal. This established reasonable cause for not filing the appeal within the prescribed period.

Conclusion: The delay of 60 days was condoned in favour of the assessee.

Issue (ii): Whether an addition based on the DVO's valuation could be sustained where the excess of that valuation over the reported sale consideration was less than 10% under the third proviso to Section 50C of the Income-tax Act, 1961.

Analysis: The reported sale consideration was Rs. 80,00,000, while the DVO determined the value at Rs. 83,54,000, resulting in a difference below 10%. The third proviso to Section 50C provides a tolerance limit where the valuation adopted does not exceed 10% of the consideration. The provision, though introduced with effect from 01.04.2019, was treated as beneficial and applicable retrospectively to the relevant assessment year.

Conclusion: The addition under Section 50C was deleted and the reported sale consideration was directed to be adopted, in favour of the assessee.

Final Conclusion: The valuation difference being within the permissible 10% tolerance band, no addition was sustainable on the basis of the DVO's valuation.

Ratio Decidendi: A beneficial 10% tolerance provision governing valuation differences under Section 50C applies retrospectively, and no addition can be made where the difference between the declared consideration and the DVO's valuation falls within that limit.

Issues: (i) Whether penalty under Section 271(1)(c) was leviable on disallowance of statutory-tax liabilities under Section 43B; (ii) Whether penalty under Section 271(1)(c) was leviable for foreign dividend income disclosed in Schedule SI but omitted from the summary computation.

Issue (i): Whether penalty under Section 271(1)(c) was leviable on disallowance of statutory-tax liabilities under Section 43B.

Analysis: Section 43B applies to an expenditure otherwise allowable as a deduction. The statutory-tax liabilities were accounted for through the balance sheet under the exclusive method and were not claimed as expenditure in the profit and loss account. The liabilities and available input-tax credit were fully disclosed in the tax-audit report, and the claim rested on a plausible legal interpretation. Sustenance of a quantum disallowance, without concealment or inaccurate particulars, does not by itself justify penalty.

Conclusion: No penalty was leviable on the Section 43B disallowance; the finding is in favour of the assessee.

Issue (ii): Whether penalty under Section 271(1)(c) was leviable for foreign dividend income disclosed in Schedule SI but omitted from the summary computation.

Analysis: The foreign dividend was disclosed in Schedule SI and offered at the applicable special rate under Section 115BBD. Its omission from the Part B-TI summary resulted from a reporting mismatch. A suo moto rectification application under Section 154 was filed before the matter arose in the revisionary proceedings, seeking inclusion of the dividend in the computation. These facts excluded deliberate suppression and any tax sought to be evaded.

Conclusion: No penalty was leviable on the foreign-dividend addition; the finding is in favour of the assessee.

Final Conclusion: The penalty for both the statutory-tax-liability disallowance and the foreign-dividend reporting mismatch was unsustainable.

Ratio Decidendi: Penalty for concealment or inaccurate particulars cannot rest solely on a quantum addition where material facts were fully disclosed and the claim or reporting error was bona fide without tax evasion.

Issues: (i) Whether deletion of the disallowance under Section 14A of the Income-tax Act, 1961 was justified where no exempt income was earned during the relevant previous year; (ii) Whether restricting the addition relating to an outstanding sundry creditor to 12.5% was justified.

Issue (i): Whether deletion of the disallowance under Section 14A of the Income-tax Act, 1961 was justified where no exempt income was earned during the relevant previous year.

Analysis: For Assessment Year 2018-19, no disallowance under Section 14A could be made in the absence of exempt income. The Explanation inserted to Section 14A through the Finance Act, 2022, which extends the provision to years without exempt income, operates prospectively from Assessment Year 2022-23 and does not apply to the year in question.

Conclusion: The deletion of the Section 14A disallowance was justified, in favour of the assessee.

Issue (ii): Whether restricting the addition relating to an outstanding sundry creditor to 12.5% was justified.

Analysis: The assessee discharged its primary onus by producing books of account, ledger extracts, payment particulars and supporting contemporaneous documents. Non-response by the creditor to a notice under Section 133(6), without material showing that the transaction was fictitious or the liability was not genuine, could not justify addition of the entire outstanding balance. The restricted disallowance represented a reasonable treatment of the incomplete verification.

Conclusion: Restriction of the addition to 12.5% of the disputed liability was justified, in favour of the assessee.

Final Conclusion: The appellate relief concerning both the absence of exempt income and the substantiated creditor liability remains sustained.

Issues: Whether the assessee's business income from receipts accepted as turnover of a vegetable-market commission agency should be estimated at 4% or at a lower net-profit rate.

Analysis: Once the receipts were accepted as business turnover of a commission agent, the income estimate had to reflect the actual nature of that activity and the expenses incurred for loading, unloading, salaries and administration. The accepted net-profit results in the assessee's immediately succeeding assessment year and in the comparable case of the assessee's brother were relevant indicators, though not mechanically determinative. The absence of complete records and the substantial volume of transactions nevertheless warranted a reasonable estimated profit.

Conclusion: The business income shall be estimated at 2% of the total receipts, with consequential recomputation.

Issues: Whether penalty proceedings under Section 271D were validly initiated absent the Assessing Officer's recorded satisfaction during assessment proceedings.

Analysis: Penalty under Section 271D for a contravention of Section 269SS requires the Assessing Officer to record satisfaction regarding the alleged violation during the assessment proceedings. The assessment order completed under Section 144 contained no recorded satisfaction regarding contravention of Section 269SS or initiation of penalty proceedings under Section 271D. The absence of such jurisdictional satisfaction rendered the initiation of penalty proceedings invalid.

Conclusion: The penalty proceedings under Section 271D were unsustainable for want of valid assumption of jurisdiction, and the penalty was directed to be deleted.

Issues: (i) Whether cash deposits could be assessed as unexplained cash credits under Section 68 of the Income-tax Act, 1961 where the assessee maintained no books of account; (ii) Whether the claimed indexed cost of conversion charges and other improvement expenditure required verification for deduction in computing long-term capital gains; (iii) Whether claims seeking exclusion of capital gains on land allegedly owned by the ex-husband and rental income from a foreign property could be refused merely because they were outside the draft-order variations; and (iv) Whether a fresh exemption claim under Section 54F of the Income-tax Act, 1961 could be entertained without a factual foundation in the record.

Issue (i): Whether cash deposits could be assessed as unexplained cash credits under Section 68 of the Income-tax Act, 1961 where the assessee maintained no books of account.

Analysis: Section 68 applies only where a sum is credited in books maintained by the assessee. The assessee was neither carrying on a business or profession nor maintaining books of account, and a bank passbook or account statement is not the assessee's books of account. Further, the final assessment repeated the addition under Section 68 despite the direction under Section 144C to assess the amount under Section 69, although such directions are binding on the Assessing Officer.

Conclusion: The addition of Rs. 55 lakh under Section 68 was deleted in favour of the assessee.

Issue (ii): Whether the claimed indexed cost of conversion charges and other improvement expenditure required verification for deduction in computing long-term capital gains.

Analysis: The Collector's order concerning conversion charges and the common survey-number reference in the purchase deed and conversion proceedings constituted material evidence bearing on the claimed cost of improvement. Section 144C(6) and the Explanation to Section 144C(8) require consideration of evidence and matters arising from the draft assessment proceedings. The factual nexus of the larger land extent with the portion transferred required verification. The claimed expenditure on land levelling, compound wall and allied work also required verification of its nature, period and nexus because original vouchers were unavailable.

Conclusion: In favour of the assessee to the extent that the indexed conversion-charge claim of Rs. 27,14,836 and the indexed other-improvement claim of Rs. 5,03,992 were restored to the Assessing Officer for verification and adjudication in accordance with law.

Issue (iii): Whether claims seeking exclusion of capital gains on land allegedly owned by the ex-husband and rental income from a foreign property could be refused merely because they were outside the draft-order variations.

Analysis: Both claims were raised during the statutory DRP proceedings and directly concerned computation of the correct taxable income. Their absence from the proposed draft-order variations was not, by itself, a valid basis to refuse examination. The capital-gain claim required verification of title documents, sale deeds, power of attorney, divorce records, sale consideration and accounting treatment. The foreign-rental claim required verification of residential status, ownership, source and nature of income, supporting evidence, and the applicable domestic law and tax-treaty provisions.

Conclusion: In favour of the assessee to the extent that both claims were restored to the Assessing Officer for fresh verification and determination of the income chargeable to tax.

Issue (iv): Whether a fresh exemption claim under Section 54F of the Income-tax Act, 1961 could be entertained without a factual foundation in the record.

Analysis: The claim had not been made before, or examined by, either the Assessing Officer or the DRP. Eligibility depended on unverified factual matters, including acquisition or construction dates, actual investment, source and utilisation of funds, ownership, completion, and satisfaction of statutory conditions. It was therefore not a pure question of law arising from facts already on record.

Conclusion: The fresh claim under Section 54F was rejected as not maintainable before the Tribunal, against the assessee.

Final Conclusion: The impermissible cash-credit addition was eliminated, while the claims affecting capital-gain computation and foreign rental income require factual verification by the Assessing Officer; the unsupported fresh exemption claim cannot be pursued at this stage.

Ratio Decidendi: A bank passbook or bank account statement is not books of account of an assessee who maintains no books, and therefore cannot satisfy the foundational requirement for an addition under Section 68 of the Income-tax Act, 1961.