Clerical omission of income-from-other-sources particulars from a return schedule does not justify an unexplained-money addition where that income was included in taxable income and the related liability was paid through advance tax, tax deduction and self-assessment tax. Consistent disclosures in preceding and succeeding years support treatment of the omission as inadvertent. Directions allowing a Tribunal challenge without applying limitation, while excluding the pendency period of related proceedings, rendered the appeal maintainable when filed immediately after receipt of the relevant order. The unexplained-money addition was consequently set aside.

Cost of improvement in computing capital gains must be attributable to the capital asset or ownership interest transferred. Where jointly owned land is improved but an assessee transfers only a one-tenth interest, expenditure cannot be deducted in full merely because the assessee incurred it or other co-owners made no claim. Without a legally enforceable arrangement or cogent evidence entitling the assessee to set off the entire expenditure against proceeds from the individual share, deduction is restricted to the proportion corresponding to the transferred interest. Accordingly, only one-tenth of the improvement cost is allowable.

Condonation of delay may be warranted where COVID-19 disruption, flood-related relocation, limited staffing and professional default collectively establish sufficient cause. Deduction under section 80P(2)(a)(i) requires examination of annual accounts and identification of income attributable to eligible business activities. Additions for unexplained cash deposits require verification of the assessee's explanation and supporting member KYC particulars after an effective hearing. Quantum and consequential penalty matters require fresh determination on a complete factual record, with penalty consequences dependent on the revised quantum outcome.

Ad hoc disallowance of purchases as business income was unjustified where purchase records, supplier confirmations, bank statements, invoices, stock records and transport evidence supported the transactions. Corresponding purchase and sales quantities, predominantly banking-channel payments, and minimal cash purchases weakened any allegation of bogus purchases. Absence of GST registration or GST numbers on invoices did not support an adverse inference because live bovine animals were GST-exempt. Computer-generated invoices and thumb impressions on cash vouchers, without material proving non-genuineness, were insufficient grounds for disallowance. The purchase disallowance was deleted.

Revision under Section 263 is available where an assessment order is both erroneous and prejudicial to Revenue interests, including where required inquiries or verification were not undertaken. A general request for TDS details and ledger extracts does not establish a conscious examination of substantial commission or brokerage expenditure, the reason for non-deduction of tax, or whether the payment was commission, discount, or another arrangement. Verification may require examination of franchise agreements, invoices, accounting treatment, retention terms, and applicable TDS obligations. Absence of this material inquiry supports setting aside the assessment for fresh examination while leaving ultimate taxability open.

Claimed Form 3CD reporting errors require factual verification against underlying records before a corresponding addition is sustained; the asserted duplication or typographical inflation of an ESI amount therefore remains for Assessing Officer verification. Employee PF/ESI contributions are distinct from employer contributions and are deductible only when deposited within the due dates under the relevant welfare laws. Payment before the income-tax return filing due date does not cure a delay for employee contributions. Accordingly, contributions paid after the statutory due dates are non-deductible for Assessment Year 2020-21.

Penalty proceedings under Section 271AAB require a notice under Section 274 to specify the precise statutory charge, including the applicable clause under Section 271AAB and the related penalty exposure. A notice merely referring to undisclosed income found in a search and proposing penalty under Section 271AAB, without identifying whether clause (a), (b), or (c) applies or stating the relevant conditions, does not provide a meaningful opportunity to respond and breaches natural justice. Such defective notices are invalid; consequently, the associated penalty cannot be sustained.

Unsecured corporate loans supported by lender confirmations, income-tax returns, financial statements and bank records satisfy the assessee's initial Section 68 burden on identity, creditworthiness and genuineness. Additions cannot rest solely on Investigation Wing information or a retracted accommodation-entry statement where no independent lender verification or contrary material exists. A lender's later striking off does not negate loans advanced and repaid when it was active. The second proviso's source-of-source requirement applies only from assessment year 2023-24 and did not govern the years concerned; the loans were satisfactorily explained.

Section 68 applies only to sums credited in the books during the relevant previous year. Unsecured loans received in an earlier year and carried as opening balances therefore cannot be treated as cash credits for that year. Banking-channel receipts, interest payments after tax deduction, and proof of the loans supported the assessee's explanation; unverified Investigation Wing information did not justify the addition. The Section 68 addition was consequently unsustainable and deleted.

The restriction on eligible-unit deductions for transfer-pricing adjustments applies where tax authorities enhance income through an arm's-length-price determination, not where the taxpayer voluntarily computes and returns the adjustment as business income. Exempt-income expenditure cannot be disallowed on an ad hoc basis where investments have no opening or closing balance, own funds are sufficient, and no related expenditure is identified. Foreign-exchange fluctuation loss recognised at the balance-sheet date is allowable business expenditure. For captive ITeS transactions, comparables may be excluded when functionally dissimilar, lacking reliable segmental data, or failing related-party-transaction or employee-cost filters; prior functional analysis may be followed where material facts remain unchanged.

Section 80P(2)(d) allows a co-operative society to deduct interest or dividend income earned from investments with another co-operative society. A co-operative bank continues to qualify as a co-operative society for this purpose. Section 80P(4) restricts a co-operative bank's own eligibility for deduction; it does not prevent another co-operative society from claiming deduction on interest received from investments with that bank. Interest income from investments with co-operative banks is therefore eligible for deduction under section 80P(2)(d).

Reassessment under Sections 147 and 148A(d) cannot duplicate identical additions from an original assessment when those additions have already been adjudicated on merits by the first appellate authority and remain under examination in pending tax appeals. A precedent allowing reopening after annulment of an assessment solely on a technical ground does not apply where the appellate decision also addresses the merits. The doctrine of merger and the bar against parallel proceedings preclude a second assessment process on unchanged additions. Reassessment in these circumstances is legally impermissible.

Interest earned on funds provided by the Government is not assessable as the recipient entity's income where legal ownership of that interest remains with the Government, regardless of its earlier tax treatment. A signature bonus received on transferring developed power projects constitutes taxable business revenue when it arises from the ordinary activity of developing and transferring those projects. Such consideration is not a capital receipt where it does not compensate for the extinction or sterilisation of an income-producing source, particularly when related development expenditure has been claimed as revenue expenditure.

Form No. 10B accepted after the return is filed but before the extended return-filing deadline satisfies the audit-report requirement for charitable exemption where the report was obtained and uploaded on the filing date. The audit requirement is substantive, while the timing and electronic mode of portal acceptance are procedural; a one-day acceptance delay should not defeat exemption. Relief under Section 119(2)(b) is an additional, not mandatory, remedy, and its circular-based time limit cannot displace entitlement based on substantial compliance. Availability of an appellate remedy does not bar relief where validation occurs within the extended filing period.

Deletion of an addition for alleged unaccounted foreign-bank deposits is supportable where concurrent factual findings establish that the credited amount was transferred from funds already held in another foreign-bank account, rather than constituting a fresh deposit in the relevant year. In the absence of cogent material disproving the explained source, an addition resting solely on presumption lacks factual basis. Such fact-bound findings do not ordinarily raise a substantial question of law in a further appeal.

Section 143(2) requires a valid notice as a jurisdictional condition for an assessment under Section 143(3). Where a return discloses the taxpayer's death, is filed by a registered legal heir, and that registration is approved before notice issuance, notice addressed to the deceased person is invalid. Such defective service creates a jurisdictional defect rather than a curable irregularity, rendering the resulting assessment proceedings without legal validity.

Explanation 7 to Section 271(1)(c) requires assessment of whether the arm's length price was determined under Section 92C and whether the taxpayer acted in good faith and with due diligence. Use of the transactional net margin method, coupled with disclosure of filters, comparables and operating-margin computations in a transfer-pricing study, supports compliance where no finding establishes a departure from the statutory framework or lack of good faith. Methodological differences over the profit-level indicator or treatment of operating items, without false or inaccurate particulars, do not sustain a transfer-pricing penalty.

Reassessment proceedings cannot rest solely on unverified Insight portal information where the notice and order disclose no transaction or material linking the alleged escaped income to the assessee. Reuse of the same alleged amount in proceedings against multiple ceramic dealers, without supplying or independently verifying the underlying material, did not establish the required nexus or application of mind. A roving and fishing inquiry cannot justify reassessment. The High Court quashed the reassessment notice and the order treating issuance of notice as a fit case.

Revision under Section 263 requires an assessment order to be both erroneous and prejudicial to the interests of the Revenue. Explanation 2(a) applies where an order is passed without inquiries or verification that should have been undertaken. Where the Assessing Officer called for and examined books of account, bank statements, lender details, confirmations, balance sheets and returns concerning unsecured loans, the absence of detailed discussion in the assessment order does not by itself establish lack of inquiry or non-application of mind. Revision is not sustainable merely because further inquiry or a different view is preferred.

Clean-slate going-concern sales in liquidation extinguish prior liabilities and investigations, preventing reassessment from being founded on those historical liabilities. Reopening for alleged cessation of interest liability requires a factual basis: where interest was not claimed as a deduction and the liability has not ceased, the alleged escapement of income lacks support. Reassessment proceedings must also remain confined to grounds stated in the show cause notice; introducing bogus-purchase allegations only in the subsequent order denies an opportunity to respond, breaches natural justice, and indicates non-application of mind. These principles support invalidation of the reassessment.