Political-contribution deductions require a genuine contribution. Banking-channel payments and donation receipts do not by themselves establish genuineness where investigation material, physical verification, recipient party non-compliance, and fund layering indicate an accommodation-entry arrangement. Applying human probabilities and preponderance of probabilities, the claimed donation did not represent a genuine political contribution. The deduction claimed under Section 80GGC was therefore disallowed.

Revision under Section 263 requires an assessment order to be both erroneous and prejudicial to the Revenue's interests. Construction expenditure treated as unexplained investment had been examined by the Assessing Officer and brought to tax in subsequent assessment years. Since the expenditure was already assessed in those years, no further addition was warranted in the earlier assessment year. The conditions for invoking revisionary jurisdiction were therefore not satisfied, and the revision order was quashed.

Unexplained-expenditure additions under the Income-tax Act require a sustainable evidentiary basis and cannot rest solely on an uncorroborated third-party statement when cross-examination is denied and statutory enquiry supports the taxpayer's explanation. Rule 46A governs the admission and verification of additional evidence, including opportunities for the Assessing Officer to examine the material. A payer's failure to deduct tax at source does not by itself alter the character of the recipient's receipts, because the deduction obligation rests with the payer. Books of account, payment records, job-work registers, delivery records and payer confirmations may corroborate disclosed job-work receipts.

Penalty under Section 271(1)(c) for concealment or furnishing inaccurate particulars is not attracted merely because an addition is made on a debatable issue. An addition relating to an area development fund involved a matter considered by the Supreme Court in comparable proceedings, supporting its debatable nature. Where relevant particulars were disclosed during assessment, the addition alone does not establish concealment or inaccurate particulars. Penalty on that addition is therefore not imposable and must be deleted.

Search-derived material following a Section 132 search triggers the special reassessment framework under Sections 147 and 148, including the deemed-information rule in Explanation 2 to Section 148. Where an assessment relies on that material and related statements, a pending Section 143(3) scrutiny cannot continue merely because a Section 143(2) notice was previously issued; the special mechanism prevails over the general scrutiny route. Section 148B separately requires prior statutory approval. Approval under an administrative CBDT instruction, even by the relevant approving authority, does not meet that mandatory requirement. Non-compliance renders the assessment unsustainable, leaving the Section 69C addition unexamined on merits.

Revisionary jurisdiction under section 263 requires an assessment order to be both erroneous and prejudicial to Revenue interests. Where the Assessing Officer specifically examines employee stock option scheme expenditure, considers supporting material and accepts the claim, a brief assessment order does not establish inadequate inquiry. Employee stock option discount may constitute employee compensation and deductible revenue expenditure under section 37(1). A pending challenge to precedent, without stay or reversal, does not alter that position. Revision cannot substitute the Principal Commissioner's view for a permissible view reached after inquiry.

Section 68 is inapplicable where purchases are capitalised as construction work-in-progress, no corresponding credit appears in the books, and purchase records are supported by tax filings, supplier evidence, invoices and audited accounts. Share application money is explained when the applicant's identity, creditworthiness and transaction genuineness are established through corporate, financial and banking records, absent material linking the assessee to alleged entry operators. Declared agricultural income is not unexplained credit where land ownership, production, sales and expenditure evidence substantiate cultivation and higher realisation is supported by the nature of the produce. The three additions were deleted.

Assessment of a company struck off and dissolved requires restoration of its legal existence through the prescribed corporate-law process before proceedings may be initiated or continued. Participation in proceedings does not cure the jurisdictional defect of assessing a non-existent entity. An outward bank remittance made through banking channels for import purchases is an application of funds, not unexplained money. Such an addition requires proof that the assessee owned unrecorded money or another specified valuable article; an unproved source of expenditure cannot replace that ownership requirement.

Reassessment requires the Assessing Officer to dispose of an assessee's objections to reopening by a speaking order before taking any further step. Issuing a notice for scrutiny assessment before deciding those objections constitutes proceeding with reassessment prematurely. Where the notice was issued while objections to the reopening remained pending, the reassessment proceedings and consequential reassessment order were unsustainable and were quashed.

Corporate guarantees issued for associated enterprises constitute international transactions and require arm's-length benchmarking, with the guarantee fee determined at 0.50% rather than 1%. Sales and marketing commission paid to a US associated enterprise is not subject to Indian withholding where it is not Fees for Included Services under the India-USA treaty; the corresponding disallowance does not apply. The Section 10AA deduction requires fresh examination of Form 56F, the bifurcated profit and loss account, and unit-wise eligible-profit computations, rather than turnover-based reallocation of common expenditure.

Penalty for misreporting under section 270A is unsustainable where the statutory notice fails to identify the particular circumstance of misreporting alleged under section 270A(9). Withdrawal of a political-donation deduction in the return filed after reopening, followed by acceptance of revised income in assessment, did not support the penalty. Precedent involving a notice that expressly specified the relevant section 270A(9) clause was distinguishable. The penalty was deleted.

Undisclosed income for search-penalty purposes includes unrecorded money, entries or transactions detected during a search and not disclosed beforehand. Reduction of a quantum addition alone does not remove its undisclosed or concealed character where the surviving amount remains unrecorded or concealed. The applicable minimum penalty rate under section 271AAB(1)(c) at the relevant time was 30%, not 60%. For section 271(1)(c), a penalty notice identifying concealment as the specific charge, supported by recorded assessment-stage satisfaction, can sustain penalty despite a reduced quantum addition.

Tax deduction at source default does not arise where an employer, while making leave fare concession reimbursements involving foreign travel, complies with an operative interim judicial direction requiring the reimbursement not to be treated as income for TDS. Although such reimbursements may be substantively taxable and ineligible for leave fare concession exemption, compliance with the binding interim direction precludes treatment as an assessee in default. A later declaration of the substantive tax position cannot retrospectively convert that compliant conduct into a default. Consequently, interest consequential to the alleged TDS default does not survive.

CBDT Instruction No. 1916 regulates jewellery seizure during searches but does not provide an unconditional exemption from assessment. Ownership, nature and source of jewellery must be established on the facts. Jewellery identified in the assessee's bedroom was assessable separately where the applicable benefit for the assessee and family had already been allowed, and jewellery found with brothers had been considered in their respective assessments. Joint occupation of a residence did not establish common ownership or permit unutilised family-member relief to be adjusted against the assessee's jewellery. The addition for unexplained gold jewellery was therefore sustained.

Revenue appeals before the ITAT are not maintainable where the tax effect falls below the monetary threshold prescribed by CBDT Circular No. 09/2024. As the tax effect was below the applicable threshold for departmental Tribunal appeals, the Revenue appeal was treated as non-maintainable, in favour of the assessee.

Section 50C(2)(a) allows a valuation reference only where the taxpayer timely disputes the stamp-duty value before the Assessing Officer and statutory conditions are met; a limited remand cannot reopen a valuation issue that has become final. Section 54B applies to short-term as well as long-term capital gains, but requires reliable proof that the transferred land was used for agriculture by the taxpayer or parent throughout the prescribed two-year period. For unexplained investment and bank-credit claims, identity evidence, bank receipts, confirmations, and tax records alone do not establish source, nature, or genuineness without contemporaneous evidence showing the payment arrangement and nexus.

Reassessment notices issued beyond three years from the end of the relevant assessment year may rely on the extended limitation only where escaped income, represented by an asset, is at least Rs. 50 lakh. Where the alleged escaped income fell below that threshold after excluding a non-taxable agricultural-land transaction, the extended period under section 149(1)(b) was unavailable. The notice under section 148 and consequential assessment were therefore barred by limitation.

Rebate under section 87A is available to an assessee chargeable under section 115BAC(1A) where total income, including short-term capital gains taxable at special rates, does not exceed Rs. 7,00,000. The proviso focuses on total income and does not exclude income taxable at special rates from determining eligibility. Restricting the rebate despite total income remaining within the statutory threshold was unsustainable, and the full prescribed rebate applied.

Section 87A rebate applies to short-term capital gains taxable under Section 111A where total income, including those gains, remains below the prescribed threshold and the rebate is within the applicable limit. The restriction expressly applicable to long-term capital gains under Section 112A(6) does not extend to short-term capital gains under Section 111A. Consequently, rebate may be claimed against such short-term capital gains, and a disallowance on that basis is not sustainable.

Pure legal challenges to a reassessment notice may be admitted where they require no further factual inquiry and affect the root of reassessment. However, grounds not adjudicated by the first appellate authority do not arise from its order and cannot be determined at the Tribunal stage. The first-appellate order was set aside, and the reassessment challenge and remaining grounds were remitted to the Commissioner (Appeals) for adjudication. No determination was made on reassessment validity or the addition.