Reassessment jurisdiction requires tangible material with a live nexus to income that escaped assessment in the relevant assessment year. A loan received in a preceding year could not justify reopening for a year involving only repayments, so the reopening lacked jurisdiction. Loan receipts, repayments and interest payments routed through banking channels and recorded in books and returns could not be treated as unexplained money absent corroborative material that the loan was fictitious or represented undisclosed funds. The deletion of the addition was sustained.

For AY 2019-20, an option for deemed application of charitable income under clause (2) of Explanation 1 to section 11(1) could be exercised by filing Form No. 9A before expiry of the time allowed under section 139(1), including an extended return-filing due date. The requirement to furnish the option at least two months before that due date applied only from AY 2023-24. Statutory accumulation of up to 15% under section 11(1)(a) operates independently of Form No. 9A and is available where the amount remains within the prescribed limit. Both reliefs remain subject to the other conditions for exemption under section 11.

Section 271(1)(c), read with Explanation 7, does not treat a bona fide transfer-pricing or deduction claim as furnishing inaccurate particulars merely because an adjustment or disallowance arises. Export benchmarking, comparable selection, loan terms, interest-rate methodology and CUP-based arm's-length computations must demonstrate good faith, due diligence and full disclosure of material facts. A leave-encashment claim founded on prevailing judicial directions and a documented legal-fee claim in computing capital gains similarly do not warrant penalty where the claims and supporting material are disclosed. Deletion of the underlying quantum addition removes the basis for penalty on that claim.

Section 69 permits assessment of unaccounted cash consideration for property as unexplained investment when the purchaser fails to satisfactorily explain its source. Seized digital records matching the unit and purchaser, corroborated by admissions of unaccounted cash transactions, may establish the payment; a bare denial does not displace that evidence. Cross-examination is not indispensable where the assessment rests principally on corroborated documentary material rather than statements alone. Co-ownership, inaction concerning other transactions, presumptive-tax treatment, absence of books, and subsequent registration do not negate evidence that cash payment occurred in the relevant year. Such cash consideration remains assessable as unexplained investment.

Unrebutted valuation findings confirming that declared property sale and purchase values matched fair market value preclude unexplained-money additions under section 69A; the additions were deleted. Failure to obtain an audit attracts penalty under section 271B where taxpayers neither plead nor establish reasonable cause arising from circumstances beyond their control; the penalties remained intact. The valuation determination therefore governs the property-value issue, whereas the absence of proved reasonable cause sustains the audit-default penalties.

Regulatory stock-exchange charges arising from delivery, reporting, deposit, margin and client-code lapses are compensatory rather than expenditure for an offence or a purpose prohibited by law. Their description as penalties or fines in a tax-audit report does not change that character, so they remain allowable business expenditure. A health and education cess deduction claimed with full disclosure under the then-prevailing judicial interpretation does not constitute under-reporting or misreporting merely because a later retrospective amendment disallows the claim. No penalty arises for such a bona fide disclosed claim.

Penalty for contravening section 269SS requires specific findings that the taxpayer accepted a loan, deposit, or specified sum in cash from an identifiable person and that the applicable monetary threshold was met. Penalty provisions are strictly construed, and the burden under section 273B arises only after these foundational requirements are established. Cash deposits in a bank account, or rejection of an explanation for their source in assessment proceedings, do not alone prove acceptance of a prohibited loan, deposit, or specified sum. Without evidence identifying the counterparty and transaction character, penalty under section 271D cannot be sustained.

Approved engineer valuation reports support a claimed cost of improvement where construction is undisputed, the report shows no defect, and no contrary valuation material exists. Tax authorities should not replace such a report with unsupported per-square-foot estimates or plinth-area rates without a technical basis or alternative valuation. Long-term capital gains should therefore include the substantiated improvement cost. By contrast, interior expenditure lacking bills, vouchers, or other supporting material does not qualify for the Section 54F deduction.

Penalty for concealment under section 271(1)(c) applies where an assessee knowingly claims inadmissible Chapter VI-A deductions in a revised return, thereby seeking an improper refund. Disclosure of correct income only after detection in survey proceedings and issuance of a reassessment notice supports a finding of conscious concealment. Reliance on allegedly incorrect advice from a tax consultant does not rebut that finding where the assessee was aware that the deductions were not allowable. The concealment penalty was therefore sustained.

Section 275(1)(c) requires a concealment-penalty order to be made by the later of the end of the relevant financial year or six months from the month in which penalty proceedings begin. Where proceedings began through an assessment order in September 2024, the six-month period ended on 31 March 2025. A penalty order made on 17 April 2025 was therefore time-barred, requiring deletion of the concealment penalty.

Section 69A does not apply to cash deposits arising from cash sales that are recorded in the books of account. Where the books remain unrejected and the related purchases, stock position, and sales are not disputed, the deposits cannot be treated as unexplained money. As the cash sales were already disclosed as income, deletion of the addition is sustained.

Assignable contractual rights, including rights reinforced by a specific-performance decree to obtain conveyance of immovable property, are property and capital assets. Their assignment for consideration is a transfer taxable as capital gains rather than income from other sources, even where title or possession has not passed. Claims for indexed cost of improvement and residential-investment exemption require verification of supporting records and fresh adjudication. In alleged penny-stock share sales, surrounding circumstances may, on a preponderance-of-probabilities assessment, displace banking and demat documentation and require the taxpayer to establish genuineness. Unusual off-market acquisition, abnormal market movement and lack of credible investment rationale supported treatment of proceeds as unexplained cash credit.

Domestic enforcement of the MFN clause requires a notification under section 90(1). The notification modifying Article 11(2) of the India-Netherlands DTAA reduced source taxation of interest for beneficial owners but did not incorporate the exemption for government-approved debt claims in the India-USA DTAA or a comparable India-Italy DTAA exemption. In the absence of a specific notification extending a nil rate, interest on income-tax refunds under section 244A remains taxable at 10% under Article 11(2) of the India-Netherlands DTAA.

Interest earned by a co-operative credit society on temporary deposits of funds not immediately required for lending to members is attributable to its business of providing credit facilities. Such interest qualifies for deduction under Section 80P(2)(a)(i) where the deposits represent the society's own deployable funds rather than amounts retained for, or payable to, members. The separate deduction applicable to investments with another co-operative society does not govern this position. Interest on bank deposits was therefore treated as qualifying business income, requiring deletion of the addition made for non-qualifying income.

Section 54B exemption for reinvestment in agricultural land was allowable where a co-owner's identical claim, based on the same sale and reinvestment, had been accepted in reassessment; the corresponding claim could not be denied for either assessment year. Agricultural income could not be newly assessed as income from other sources at appellate stage where the original assessment had not addressed that taxability and no notice of enhancement under section 251(2) was issued. The additions were unsustainable and excluded from taxable income.

Revisionary jurisdiction requires an assessment order to be both erroneous and prejudicial to the Revenue. Enquiries into trademark acquisition, capitalisation and depreciation, including supporting bills, financial statements and explanations, may support a plausible assessment view without a mandatory valuation report. The distinction between absence of enquiry and inadequate enquiry remains material despite Explanation 2(a); a revisionary authority cannot replace the Assessing Officer's plausible view or order fishing and roving verification merely because further enquiry appears desirable. As these conditions were not established, the revisionary order was quashed and the original assessment restored.

Bank-account attachment pending a restored statutory appeal should be replaced by proportionate security where the appeal has been remitted for fresh decision and remains undecided. Revenue protection is achieved by requiring deposit of 20% of the assessed tax liability within three weeks, after which the accounts must be released. The restored appeal is to receive priority disposal within six months.

Section 69A applies only where the taxpayer does not satisfactorily explain the nature and source of money. Cash deposited during demonetisation was explained as business cash, including advances returned by paddy-procurement agents, supported by cash books, financial statements, agent details and comparative deposit data. As the books were not rejected and available evidence supported the business practice, the source was treated as satisfactorily explained. No addition for unexplained cash deposits was warranted, and the factual finding raised no substantial question of law under Section 260A.

Agricultural treatment of social forestry losses depends on basic agricultural operations on land and operations integrally connected with them. Seed-route cultivation of saplings on land, including consequential pot or polybag operations, is agricultural; landless clonal propagation and post-sale supervision of farmers' trees are business activities for raw-material procurement. The agricultural-loss disallowance, including depreciation, and the corresponding Section 115JB book-profit adjustment were confined to the land-based component. Concealment penalty does not arise where the impugned addition leaves tax liability unchanged under the book-profit regime, because no tax has been sought to be avoided.

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