Composite supply of milling allocated wheat, fortifying the flour and packing it for Public Distribution System delivery has milling as its principal supply; fortification and packaging are ancillary. Total consideration includes cash and agreed non-cash consideration represented by retained gunny bags, bran and refractor, rather than their future disposal proceeds. Where goods used for fortification and packing remain within 25 per cent of total composite-supply value, the supply to the State Government qualifies for Serial No. 3A exemption because it relates to public distribution, a function under Article 243G. If the goods component exceeds that threshold, exemption is unavailable and the supply is taxable as food-related job work at 5 per cent.

GST exemption for educational services applies to fees charged by a statutory university for diploma and certificate programmes of one year or more where the programmes form part of a structured curriculum leading to qualifications recognised by law. Statutory authority to institute diplomas and certificates and prescribe their academic content supports recognition of long-duration qualifications. Fees for short-duration diploma or certificate courses do not qualify for exemption because they do not meet the requirement of education forming part of a curriculum leading to a legally recognised qualification.

Section 205 protects a salary recipient from direct tax recovery to the extent tax has already been deducted from salary, even where the corresponding TDS credit is not fully reflected in Form 26AS. Responsibility for depositing deducted tax and correctly reporting it lies with the employer-deductor, who may be treated as an assessee in default for non-compliance. Claimed TDS must be factually verified through supporting evidence and, where necessary, confirmation or records from the deductor. Pending rectification requests require examination after hearing the taxpayer, followed by rectification or amendment of outstanding demands where the TDS claim is established.

Additional depreciation is available for new plant and machinery installed in captive and wind power-generation facilities where the statutory conditions are met. Electricity is movable property capable of transmission, transfer, delivery and possession; it therefore constitutes an article or thing, and its generation amounts to production. Eligibility also arises where an assessee engaged in manufacturing uses the generated power in its manufacturing operations. Revisional jurisdiction cannot be exercised unless the assessment order is both erroneous and prejudicial to the interests of the Revenue. A correct allowance of additional depreciation satisfies neither condition and cannot support revision.

Statutory timelines for disposal of income-tax appeals prevail over administrative circulars that assign priority categories for out-of-turn disposal. Where the prescribed timeline has not been followed, pending appeals must be decided expeditiously and cannot be deferred solely because they do not fall within an administrative priority category. The appellate authority must provide a proper and reasonable opportunity of hearing and dispose of the pending appeals within three months, without adjudication of their merits at this stage.

Amended section 270AA permits waiver applications for penalties imposed for under-reporting arising from misreporting of income, subject to payment of the prescribed additional income tax. The earlier exclusion of misreporting cases does not govern applications under the amended regime. Receipt of a penalty order creates a fresh statutory right to apply within one month from the end of the month of receipt, notwithstanding an earlier application under the former provision. Where the statutory conditions are fulfilled and the applicable appeal period has expired, the Assessing Officer must waive the penalty and grant immunity from specified prosecution proceedings.

Under the PMLA, property equivalent in value to unavailable proceeds of crime may be attached without a direct nexus to the offence where receipt and expenditure of tainted cash are admitted; statements recorded under Section 50 may support that conclusion if unretracted and corroborated. Holders, including non-accused persons, bear the burden of proving a legitimate source of acquisition; income-tax returns or unsupported claims do not discharge it, although capital-account withdrawals must be considered. Provisional attachment also requires a reasoned apprehension of concealment, transfer or dealing that could frustrate confiscation; property already in investigative custody or subject to a bank mortgage may not satisfy that condition. Recorded reasons and consideration of objections support a valid attachment process.

Royalty and technical-fee payments to an associated enterprise may be benchmarked by reference to a unilateral advance pricing agreement accepted by CBDT where its methodology is applicable; the payments were benchmarked at 1.9% of net sales rather than reduced to nil. Related-party manufacturing expenditure covered by section 40A(2)(b), once excluded from specified domestic transactions under section 92BA, cannot support a transfer-pricing adjustment. The manufacturing adjustment was therefore deleted, and the appeal was partly allowed.

Valid exercise of a domestic company's option under section 115BAB for its first eligible assessment year continues for later years and cannot be withdrawn. Absence of income or tax computation under that provision in the initial year neither withdraws nor cancels the option, since the provision does not require tax to have been payable in that year. Continuing validity of the option does not by itself secure the concessional corporate tax rate; the company must satisfy the statutory eligibility conditions for each relevant year. Eligibility for the later year requires verification of the conditions under section 115BAB(2).

Revision under section 263 is not sustainable where the Assessing Officer has made specific inquiries, considered supporting material, and adopted a permissible view; a brief assessment order alone does not show lack of inquiry or permit substitution of the Commissioner's view. Administrative and finance expenses remained connected with the taxpayer's continuing business and retained loans, notwithstanding transfer of stock to an LLP. Capital loss on the sale of rented investment property and cost of improvement were supported by audited accounts, construction records and loan documents. Fixed-asset adjustments reflecting transfers between branches at book cost, without change in ownership or fresh capital expenditure, also did not justify revision. The revisionary order was quashed and the original assessment restored.

Compliance with binding interim judicial directions requiring a bank not to treat foreign-leg Leave Fare Concession reimbursement as income for tax deduction at source prevents a later declaration of substantive taxability from creating a retrospective deductor default. The reimbursement's taxability and the bank's liability as deductor are distinct. The bank therefore could not be treated as an assessee in default under section 201(1), and consequential interest under section 201(1A) did not survive; the contrary orders were set aside.

The statutory notification exempting interest payments to corporations established under Central, State or Provincial Acts applies to the National Highways Authority of India as a Central Act corporation. CBDT Circular No. 18/2017, which concerns entities with unconditionally exempt income, cannot add conditions to or narrow that statutory notification. Accordingly, interest paid on mobilisation advances to the Authority is not subject to tax deduction at source, and the payer cannot be treated as an assessee-in-default or charged consequential interest.

Section 115BBE's enhanced 60% rate, effective from 1 April 2017, operates prospectively and does not govern income surrendered during survey in Financial Year 2016-17. Tax liability for that year is determined under the law in force on 1 April 2016, when the provision prescribed a 30% rate. The later enhanced rate therefore cannot be imposed on the surrendered income; the declared income is taxable at the normal applicable rates. Application of the higher rate depends on transactions undertaken on or after 1 April 2017.

For a Kachha Arhatia, sales made for principals in commission transactions are not the agent's turnover; only gross commission is relevant. A GST turnover figure therefore cannot be mechanically compared with income-tax-return turnover where reconciliation identifies own trading sales, commission income and intra-day trading profit. Rejection of audited books requires a specific defect affecting their correctness or completeness, and no such defect was identified. Gross-profit estimation without comparable cases, past history, or supporting material is arbitrary. The rejection of books and consequential profit estimation were unsustainable, and returned income was directed to be accepted.

Delayed furnishing of a statement of financial transactions may attract penalty, but belated filing alone does not exclude the statutory defence of reasonable cause. Penalty should not be sustained without examining the taxpayer's explanation and supporting evidence for the delay. Where the first appellate authority has dismissed the matter without deciding the grounds on merits or considering reasonable cause, it should provide due opportunity, examine that defence, and determine the penalty afresh in accordance with law.

The Finance Act, 2022 amendment to section 14A applies prospectively from assessment year 2022-23 and does not govern assessment year 2018-19. Disallowance of expenditure relating to exempt income under section 14A read with rule 8D cannot exceed the exempt income earned during the relevant year. Where the taxpayer's voluntary disallowance already equalled the exempt income, no additional disallowance was warranted. The deletion of the further disallowance was sustained and the Revenue's appeal was dismissed.

Interest paid on overdrafts secured against fixed deposits is deductible under section 57(iii) only where the taxpayer establishes a direct nexus between the borrowing cost and interest income taxable as income from other sources. Failure to prove the purpose for which overdraft funds were used, or their connection with the fixed-deposit interest income, prevents deduction of the interest expenditure. On the stated facts, the claimed interest expenditure was disallowed because the required nexus was not established.

Income arising from the sale of property gifted by a husband is ordinarily assessable in the husband's hands under the clubbing provisions. A belated clubbing claim may fail where the recipient spouse neither filed a return nor raised the claim in response to reassessment proceedings, but asserted it only after the limitation for reassessing the husband had expired. Where the husband also filed no return enabling assessment of that income, the delayed claim can be treated as an attempt to avoid assessment in either spouse's hands. Capital gains were consequently sustained in the recipient spouse's assessment.

Employee stock-option discount is revenue expenditure where the liability accrues during the vesting period, notwithstanding the absence of cash outflow. Royalty benchmarking requires satisfaction of both associated-enterprise conditions and prefers reliable internal comparable uncontrolled price transactions, supported by examination of contractual, functional and consistency factors. Trading, IT support and digital marketing comparables must match the tested party's functions; entities with materially different activities, significant intangibles, unavailable segmental data or exceptional circumstances are unsuitable. The other method may use gross margin as a profit level indicator where purchase-to-sale price comparison is justified, capacity-utilisation differences affect direct-cost recovery, and TNMM adjustment data is unavailable.

Interest-free own funds substantially exceeding an advance to a fellow subsidiary, where the advance predated interest-bearing debentures, negate any presumption that borrowed funds financed the advance; the related interest disallowance was deleted. Share-premium credits require an independent investor-wise examination of financial statements, bank records, available funds and transaction evidence to establish the statutory conditions for unexplained credits. Alternative Investment Fund status does not remove that verification requirement. A pre-amendment approach was inapplicable for AY 2023-24, and the share-premium issue was remitted for fresh adjudication after allowing an effective hearing.