Section 68 permits an unexplained-credit addition only where a credit is entered in the relevant previous year and the taxpayer fails to establish the investor's identity, creditworthiness and the transaction's genuineness. Confirmations, tax records, audited financials, banking trails and source-of-source material support those requirements unless contrary evidence discredits them. Repayment of an existing loan balance, without receipt of a fresh loan, does not create a relevant-year credit. An investor's accepted funding source may satisfy source-of-source requirements, while a Section 132(4) statement must specifically link the investor or transaction to an accommodation entry. A commission addition requires an independent evidentiary basis.

Section 68 requires an assessee receiving share capital to establish each investor's identity and creditworthiness and the genuineness of the transaction. Confirmations, tax returns, audited financial statements, bank records, share-allotment documents and evidence of immediate funding sources may substantiate that burden. Investor creditworthiness may be supported by loan repayments received from financially capable entities, liquidation of investments, and sufficient net worth. Banking-channel transactions and unrebutted documentary evidence remain material; low returned income or an investor's location alone does not disprove creditworthiness. The evidentiary requirement can extend to explaining the investors' source of funds.

Reassessment under Sections 148A(b) and 148A(d) requires consistency between the foundational allegation in the notice and the reasons supporting the determination that income escaped assessment. Where the notice alleged that a land purchase was unrecorded, but the subsequent determination accepted disclosure of the property and instead questioned the source of funds received from a holding company, the reassessment rested on an impermissible new ground. This divergence created a jurisdictional defect, rendering the reassessment invalid and liable to be quashed.

Documented IPO acquisition, demat-account credit, screen-based share sales and banking-channel receipts support the genuineness of share transactions. General suspicion concerning a scrip, investigation material unconnected to the taxpayer, and an inference based on human probabilities do not displace contemporaneous documentary evidence without cogent material linking the taxpayer to price rigging, entry operations or manipulation. Consequently, share-sale proceeds are not treated as unexplained cash credits, declared long-term capital gains remain acceptable, and a commission addition premised on bogus transactions has no independent basis.

Section 45(2) applies only when an owner converts a capital asset into, or treats it as, stock-in-trade of a business carried on by that owner. Entering a joint development agreement under which another party undertakes development does not, without evidence of conversion or real-estate business, alter the land's capital-asset character; the long-term capital-gains addition was therefore deleted. Business-income treatment of flats transferred to a spouse requires proof of a sale for actual consideration. Unrebutted affidavit and bank evidence of non-payment outweigh a sale-deed recital or value stated for duty purposes, so no taxable business income arose and the addition was deleted.

Limitation for notice under Section 153C is determined from the deemed date of search, fixed by the handing over of seized material to the assessing officer of the other person. The material was handed over on 17 September 2021. The proviso to Section 153C(3), read with Section 153(3), barred issuance of the notice after 1 April 2021. Consequently, the notice issued on 9 October 2021 was beyond the prescribed limitation period and was invalid for lack of jurisdiction, as was the consequential assessment.

Timely issuance and recorded service of a scrutiny notice within the statutory period preserve assessment validity where no evidence disproves service or identifies another mandatory breach. For unexplained-money treatment, possession creates only a rebuttable presumption of ownership. A consistent search-stage explanation that cash was held in safe custody for an employer, supported by the employer's cash book and audited accounts, rebuts that presumption unless the revenue discredits those records or proves personal ownership. The cash is therefore not assessable in the individual's hands as unexplained money, and the consequential special tax treatment does not arise.

Reassessment under sections 147 and 148 requires a legally sustainable reopening based on recorded information. Where the recorded reasons concern specified financial transactions but no addition is made on those transactions, an addition on unrelated surplus funds cannot be sustained. The absence of an addition on the issue forming the basis for reopening prevents reassessment from supporting a separate, unconnected addition; consequently, the reassessment and the surplus-fund addition are legally unsustainable.

Section 148 reassessment notices must state a definite jurisdictional basis. Treating an assessee alternatively as a searched person and another person leaves jurisdiction indeterminate and invalidates the notice. Section 151 approval requires genuine examination of the recorded reasons; an unexplained mismatch between the escaped-income figure in the reasons and approval demonstrates mechanical approval. These defects invalidated the reassessment proceedings and resulted in quashing of the assessment.

Section 54F relief depends on qualifying residential construction and actual net consideration, not merely the commercial description of the plot or the construction as a godown. Where co-owners hold the same transferred asset and new property on identical facts, consistent treatment is required; however, each co-owner's relief must be limited to the verified share of actual investment so that aggregate relief does not exceed the asset's actual cost. Deemed stamp-duty valuation under section 50C cannot replace stated sale consideration when calculating section 54F relief.

Prior sanction under Section 151 must be communicated to the Assessing Officer before a reassessment notice is issued under Section 148. Same-date approval is insufficient where the record establishes that the officer received sanction only after issuing the notice; the resulting reassessment and consequential assessment lack jurisdictional validity. A collective Section 151 approval covering multiple entities is also invalid for reassessment purposes. Notices founded on such consolidated approval, together with consequential additions, cannot be sustained.

Refund of a transportation advance is not an unexplained cash credit where documentary confirmation and ledger records establish the source and character of the receipt. Recording the refund under a slightly different transporter name created only a naming discrepancy and did not rebut evidence that the amount was returned against an earlier advance. The receipt therefore retained the character of an advance refund, and the corresponding addition was deleted.

Section 270A may be triggered where a return is first filed in response to a section 148 notice and assessed income exceeds the non-taxable threshold, but this does not create an automatic penalty. Income is excluded from under-reported income where the taxpayer gives a bona fide explanation and fully discloses material facts under section 270A(6)(a). Delay caused by statutory audit and a pending condonation application, coupled with figures accepted without adjustment and payment of tax and interest, supported deletion of the penalty.

Statutory valuation fiction under section 56(2)(vii)(b) permits substitution of stamp-duty value for stated consideration in assessment, but does not by itself establish concealment of income or furnishing of inaccurate particulars for penalty under section 271(1)(c). Penalty requires evidence that actual undisclosed consideration was paid or that disclosed purchase and payment particulars were false. Explanation 1 does not apply where the taxpayer's explanation is substantiated, bona fide and not found false. Acceptance of an assessment addition does not amount to an admission of concealment because assessment and penalty proceedings are distinct. A penalty notice remains valid where it specifically identifies concealment as the charge.

Uncorroborated survey statements, particularly disclosures based on pro forma accounts rather than actual books, cannot alone establish unexplained money where no unrecorded assets are found and audited books have not been rejected. Corroborative evidence is required before estimated income may be treated as unexplained money. Failure to upload a tax-audit report may be protected from penalty where the audit was completed within time and a bona fide technical lapse, including an auditor's illness, establishes reasonable cause.

Foreign tax credit under Section 90 is treated as a substantive entitlement not defeated by delayed furnishing of the prescribed form where Rule 128(9) imposes a deadline without prescribing denial as a consequence. Late filing is not included among the specified grounds for non-allowance of credit, supporting a directory construction of the procedural requirement. A computation that records available foreign tax credit in its annexures but enters nil credit in the calculation contains an apparent internal inconsistency. Such an error is capable of rectification under Section 154, followed by consequential recomputation of the credit.

Rejection of books of account under section 145(3) is permissible where primary books, bills and vouchers are not produced and the correctness or completeness of accounts cannot be verified. An audit report does not replace underlying records. Best judgment assessment after such rejection requires an honest estimate with a reasoned nexus to supporting material; rejection alone does not justify an arbitrary expenditure disallowance. Where no specific bogus or inflated expenditure, basis for the selected rate, or corroborative material exists, the quantum requires verification. Audited financial statements from adjacent years may be admitted as additional evidence for verification under the applicable appellate rules.

Profit estimation on unrecorded sales requires a reasonable nexus to the assessee's accepted business results and supporting material. Where audited results, turnover methodology and prior-year treatment are accepted, a higher gross-profit estimate without justification lacks evidentiary foundation. Cash-credit provisions apply only to sums credited in the assessee's own books; entries found solely in an employee's electronic records, without corroborated receipt by the assessee, do not trigger the statutory burden regarding identity, creditworthiness and genuineness. Treating receipts already assessed as another person's group-fund income or as unrecorded sales turnover as separate taxable credits would also conflict with the real-income principle and create double taxation.

Section 68, as applicable to the relevant year, required a borrower to establish a loan creditor's identity, creditworthiness and transaction genuineness, but not the source of the creditor's funds. Corporate records, tax returns, confirmations, banking transactions, interest-tax deductions and documented brokerage supported the unsecured loans; a creditor's non-response to notice, without further Revenue inquiry or evidence of accommodation entries, was insufficient for an adverse addition. A novation agreement discovered after assessment in relation to an insolvent creditor fell within Rule 46A additional-evidence grounds. Interest capitalised to unsold land stock, rather than claimed as a revenue deduction, could not be disallowed.

A penalty notice under Section 274 must clearly specify whether proceedings concern concealment of income or furnishing inaccurate particulars. Retaining both alternatives in a standard-form notice, while the assessment order alleges furnishing inaccurate particulars and the penalty order imposes penalty for concealment, fails to communicate a definite charge and shows non-application of mind. The assessee's participation or response on merits does not cure this defect. Consequently, the notice is invalid and the penalty imposed under Section 271(1)(c) cannot be sustained.