Asset valuation discrepancies must be referred to the Valuation Officer for reassessment of lower declared values.
If an asset's value returned in an assessment year is less than its value as returned or determined in any earlier year or less than its cost price, the valuation must be referred to the Valuation Officer and further action taken accordingly; approved valuer reports reducing prior declared values should not be accepted without engaging the Valuation Cell.

Reporting obligation for excess small-savings investments requires assessors to promptly notify the finance department and Board.
Assessing officers who, during income-tax or other direct tax assessments, detect investments in specified small savings schemes exceeding prescribed single or joint limits must report the particulars to the Secretary, Department of Economic Affairs, Ministry of Finance, New Delhi, and send a copy to the Central Board of Direct Taxes; the instruction includes a table of maximum limits for named schemes and notes discontinued issues.

Depreciation reporting: require depreciation schedules in rupees to ensure correct tax computation and review past assessments.
The instruction requires assessees to furnish depreciation schedules and return annexures in Indian rupees for computation of income under the Income-tax Act and Rules, directs Income-tax Officers to insist on rupee-denominated depreciation schedules to avoid currency-driven excess allowances, and mandates a review of past completed assessments to detect such mistakes and report the tax effect to the Board.

Time-bound completion of reopened tax assessments required; programme and monthly progress reports mandated, with reasons for non-finalisation.
Directs Commissioners to implement a time-bound programme to finalise all re-opened and set-aside income-tax assessments for assessment years 1970-71 and earlier by the prescribed deadline, in line with the two-year administrative time limit. Requires submission of monthly results for April-July in the prescribed proforma by the Board's reporting date. Commissioners must obtain and forward detailed reasons for any cases that cannot be completed and take a serious view of officer inaction unless unavoidable circumstances are shown to their satisfaction.

Development rebate withdrawal applies when assets or reserves transfer on cessation of an assessee, causing loss of rebate.
Section 34(3)(b) permits withdrawal of development rebate where the asset on which the rebate was allowed is sold or otherwise transferred before expiry of the limitation period. On firm dissolution the original assessee ceases to exist and a new firm becomes owner of assets and reserve, which constitutes a transfer; transfers effected as steps in business reorganisation or expansion (e.g., proprietor or joint family forming a partnership) will attract withdrawal if within the limitation period.

Contingent liability for leave wages is not deductible under income tax; deduction arises only when the obligation becomes payable.
An employer's obligation to pay "leave with wages" becomes payable only when a worker takes leave, is discharged, or quits after refusal; until such triggering events occur the liability is a contingent, unascertained obligation, and anticipatory provisions for these leave payments are not allowable deductions under the Income-tax Act.

Tax exemption for scheduled tribes applies only where income source is within specified areas; employers must verify salary TDS.
The Board clarifies that exemption for members of Scheduled Tribes (other than dividend and interest on securities) applies only where the source of income is within areas specified by the Act, and that failures to apply that rule and to verify employer-filed annual salary returns (Form No.24 under Rule 35 and returns required by section 206) caused revenue loss; officials must adhere to the Board's circular and properly verify annual returns of salary.

Capitalisation of reserves does not increase company capital for surtax when paid up capital is merely converted from reserves.
Conversion of general reserve into bonus issue paid up capital does not increase the company's capital for surtax purposes because the Second Schedule treats paid up capital and the general reserve as components of capital on the first day of the relevant previous year; a transfer between those components is a compensating readjustment leaving total capital unchanged, and therefore the addition provided by Rule 3, which applies only where capital increases during the previous year, does not apply.

Market value determination: government or central bank approved consideration is treated as market value, interim relief if transferor claims higher.
Where consideration for a transfer of property is determined, fixed or approved by the Central Government or the Reserve Bank of India, that consideration shall be taken to be the market value of the property at the date of transfer. If the transferor contends that the market value is higher than the amount so determined, the amount claimed by the transferor shall be treated as the market value until a final decision is arrived at as to the amount actually payable.

Conversion of rebate to deduction applies where specified relief was allowed, modifying earlier statutory illustration accordingly.
Instruction 691/CBDT applies Instruction No.623 to treat relief as a deduction from total income from the assessment year when the rebate system was substituted by deduction, and extends that application to earlier assessment years in which the education-related relief was allowed, thereby modifying the illustrative example in the Finance Act circular.

Deduction of tax at source from insurance commission: prescribed withholding rates, remittance, certificates, and reporting obligations.
Deduction of tax at source is required on payments of income by way of insurance commission under the Finance Act, 1974, at rates for 1974-75 specified for residents under section 194D and for non residents under section 195; "insurance commission" covers remuneration for soliciting, procuring, renewing, reviving or continuing insurance business, tax is deductible on amounts credited or paid after 31 May 1973 at the earlier of credit or payment, and withholding agents must remit tax timely, follow rounding rules, issue Forms No.19D and file Forms No.26D, 26E and 26 I as prescribed.

Rectification of audit pointed mistakes requires aggregating all adjustments; limitation waived only if net relief to assessee results.
The limitation waiver for rectifying audit-pointed mistakes applies only when all such mistakes, taken on their merits without regard to time-bar, produce a net benefit to the assessee; consequently, both favourable and adverse mistakes must be aggregated and considered before invoking the waiver.

Tax deduction at source on non securities interest: payer obligations and specified resident versus non resident rates.
Deduction of tax at source is required on payments of interest other than interest on securities for 1974-75. Persons other than individuals and Hindu undivided families paying residents must deduct tax at the time of credit or payment under section 194A at rates in Part II of the First Schedule, with separate rate treatment for companies. Persons responsible for paying interest to non residents must deduct tax at the time of payment under section 195 at the rates in force for non resident payments, reflecting higher rates and surcharge distinctions.

Relief under Section 50 allows deduction of court fees when they relate to estate-duty leviable property despite valuation or exemption differences.
Relief under Section 50 allows deduction of court fees paid for probate or similar documents to the extent those fees relate to property leviable to estate duty; distinctions between "leviable" and "payable" mean relief must be allowed even where computation exemptions apply, and where valuations for court fees and estate duty differ, provided the fees relate to the same property.

Joint family property doctrine cannot shift partnership liabilities or tax assessment from a partner to the HUF.
A partner's unilateral declaration converting his partnership share into joint family property is ineffective where that conversion would burden the HUF with partnership liabilities; the blending doctrine does not apply to assets that carry liabilities, partners remain jointly and severally liable for firm obligations, and such declarations must be ignored for tax assessment, with reviews of completed assessments to rectify any revenue loss.

Tax arrears reporting: adopt the prescribed effective/net arrears formula and disclose unrecoverable categories when reporting.
Instruction prescribes that effective arrears equal total gross demand outstanding on 31 March less demands payable after that date; figures supplied to Accountants General must include a note quantifying unrecoverable portions under: amounts awaiting adjustment/verification, amounts under stay, and amounts with instalment grants. Detailed break-up continues to be furnished to the Director of Inspection (RS&P). For parliamentary replies, net arrears are gross demand on a given date less amounts not fallen due, amounts awaiting adjustment/verification, amounts under stay, and instalment amounts.

Auditor access to records allows audit work before director approval; same day signing not proof of inadequate audit.
Auditors have a right of access to a company's books and vouchers at all times, permitting them to begin audit work, subject to the company's convenience, before formal board approval of accounts. Directors retain responsibility for preparing and approving accounts, while auditors issue a report at the end of the audit process; signing financial statements on the same date as board approval is not by itself proof of an inadequate audit.

Valuer registration requirements: tax liability certificate must confirm no outstanding tax or satisfactory payment arrangements, issued without prescribed form.
Applicants for registration as valuers must declare any outstanding income-tax, wealth-tax or gift-tax liabilities and attach a certificate from the Income-tax Officer confirming either no liability or that satisfactory arrangements for payment have been made; no specific form is prescribed for this certificate and the Income-tax Officer may issue it on plain paper, signed and stamped, upon written request.

Security exemption under Wealth-tax Section 5: notified government securities excluded up to overall exemption, only excess taxable.
Securities exempted by statutory notification under the Wealth-tax Act are not chargeable to wealth-tax but their value is included in net-wealth; such notified securities must be excluded from computation only to the extent of the overall exemption, and only the value in excess of that overall exemption shall enter the net-wealth computation for determining wealth-tax rates.

Penalty under the Income Tax Act applies where earlier penalty proceedings continue and are deemed continued under the new law.
Penalty liability for assessments completed after the appointed day must be imposed under the Income-tax Act, 1961 even if penalty proceedings were initiated under the earlier statute; proceedings validly initiated under the old law are deemed to have been initiated and continued under the 1961 Act by virtue of the transitional deeming provision, and officers should apply this position when handling audit objections.