Reassessment under Sections 147 and 148 may be initiated on information indicating escaped income, with the approval required under Section 151; proceedings under Section 153A are not mandatory without an Income-tax Department search or requisition. Cash found in possession may be explained through an unregistered land-sale agreement when subsequent registered sale deeds, purchaser statements and related payments corroborate the transaction. Jewellery and silver holdings may be assessed against reasonable family-holding benchmarks recognised in CBDT Instruction No. 1916, considering customary acquisition and unavailable historic records. Cheque receipts from verified land purchasers following registered sale deeds are not unexplained money where the transaction, identity and source are undisputed.

Employee stock option plan discount granted as employee compensation may constitute deductible business expenditure, reflecting the cost of obtaining and retaining employee services during the vesting period. Its non-cash nature does not by itself make it notional or capital expenditure, and employee perquisite taxation operates independently of employer deductibility. Revisionary jurisdiction requires an assessment order to be both erroneous and prejudicial to Revenue; these conditions are conjunctive. A legally sustainable view cannot be displaced merely because a revisional authority prefers another view or seeks further enquiry. Explanation 2 does not remove the need to establish legal error and resulting prejudice.

Transfer-pricing benchmarking of interest on Indian rupee-denominated non-convertible debentures requires reliable comparability between the tested debt transaction and any proposed benchmark. Domestic lending conditions support use of SBI BPLR/PLR for fixed-rate rupee NCDs. An EBLR-based benchmark requires comparison of tenure, repayment terms, security, interest structure, credit profile and other contractual features of underlying lending transactions. A credit-risk premium does not substitute for this comparability analysis. Accordingly, EBLR cannot be preferred without establishing appropriate comparability.

Functional comparability under the Transactional Net Margin Method depends on the tested party's actual functions, assets and risks; a taxpayer's initial inclusion of a comparable does not prevent exclusion where it is functionally dissimilar. A manufacturing concern was excluded from the comparable set for a trading entity, requiring recomputation of the arm's-length margin and verification-based deletion of the sale-of-goods adjustment. Notional interest on an interest-free loan to an associated enterprise was removed because the loan had reasonable commercial expediency and was connected to goods sales. A potentially duplicated return-processing addition requires verification and deletion if substantiated.

Paragraph 3.3(a) of CBDT Instruction No. 3/2016 permits a transfer-pricing reference in a case selected on non-transfer-pricing parameters only where the section 92E accountant's report was not filed or the relevant international transaction was not disclosed. Form 3CEB disclosed and quantified interest on fully and compulsorily convertible debentures, which was the transaction subjected to adjustment. Differences between the return and financial statements did not establish a separate undisclosed international transaction, and procedural steps could not replace the substantive preconditions for a reference. The transfer-pricing adjustment relating to disclosed debenture interest was deleted.

The enhanced leave-encashment exemption ceiling of Rs. 25,00,000 applies beneficially to retirement claims falling within the revised limit, supporting exemption of the full amount received where it does not exceed that ceiling. For condonation of delay, a taxpayer's reliance on a tax consultant may justify a liberal approach where the consultant failed to communicate an appellate order or pursue further proceedings. Consultant negligence is not attributed to a retired taxpayer unfamiliar with tax law where that reliance caused the delay, advancing substantial justice.

An appellate authority must independently address the claimed head of income and associated expenditure on their merits; rejecting supporting material solely because no separate Rule 46A application was filed, without considering the evidentiary claim or granting an effective hearing, requires fresh adjudication. The income-classification and expenditure issues were therefore remitted for de novo determination. The appellate order was not invalidated by the asserted prior death of the assessee because written submissions existed and there was no proof that notices were issued to a deceased person or that the appellate authority had been informed. A challenge to penalty initiation was premature without a penalty order.

Section 115JB(5) preserves the application of other Income-tax Act provisions in MAT book-profit computation unless expressly excluded. Capital-gains exemption under section 54G, once accepted under normal provisions, must therefore be reflected in book profit because section 115JB contains no exclusion. Omission of the MAT adjustment in the return does not defeat relief arising from disclosed and accepted facts, particularly where the return form lacks a specific adjustment field. A return filed within the CBDT-extended period for belated returns does not independently bar the claim. No remand is required where eligibility and quantum were already accepted under normal computation.

Revisional jurisdiction under section 263 applies where an assessment is both erroneous and prejudicial to Revenue interests. A legally possible view protects an assessment only after the Assessing Officer has made enquiries and consciously formed that view. Acceptance of advertisement, sales-promotion, and ESOP expenditure without examining their nature, business-expansion connection, scheme terms, valuation, vesting, lapses, computation, or accrual may justify limited revision for verification. Potential allowability as business expenditure or deferred preliminary expenditure requires factual examination. An audit objection may supply information, but revision requires the Principal Commissioner's independent satisfaction based on assessment records and taxpayer replies. Explanation 2 does not create a new basis where the show-cause notice already identifies lack of enquiry.

Section 43CB and ICDS-III do not apply where a developer bears commercial risk and sells developed units on its own account rather than carrying out construction or services for another person. The Project Completion Method may continue for a project commenced before 1 April 2016 where consistently followed and accepted, subject to the ICDS-III transitional provision. Percentage Completion Method profit cannot be recognised where there is no construction progress and revenue is calculated from cumulative cost and advances while only current-year costs are deducted, creating a mismatch. Enhancement requires prior reasonable opportunity under section 251(2); without separate notice and identifiable corresponding revenue, treating capitalised work-in-progress costs as income is unsustainable.

Section 14A disallowance read with Rule 8D cannot be imposed for AY 2014-15 where no exempt income accrued, arose, or was received. The Finance Act 2022 Explanation altered the earlier position on disallowance despite the absence of exempt income. Although expressed as removing doubts, an amendment that changes the law does not apply retrospectively. The Explanation operates from AY 2022-23 and cannot govern earlier assessment years, so it does not support a disallowance for AY 2014-15.

Section 54F may treat two adjoining units as one residential house where physical interconnection and actual functional use establish a single composite dwelling. Separate conveyances, flat numbers, titles, parking spaces, or lack of municipal or RERA amalgamation approval are relevant but not conclusive. Ownership of one pre-existing residential house does not trigger the statutory bar, which applies only when the assessee owns more than one such house other than the new asset. Joint registration with a spouse does not defeat exemption where the assessee alone funded acquisition. Eligibility remains subject to factual verification of integrated residential use.

Rule 10CA deems an actual royalty price within the 35th-to-65th-percentile arm's-length range to be the arm's-length price; the median applies only if the actual price falls outside that range. Intra-group service charges require review of business need, actual rendition, expected commercial benefit, duplication, shareholder activity and a statutory pricing exercise supported by objective economic material. Operational records, service evidence and reliable allocation keys may establish genuine business services, while a nil price cannot rest solely on subjective views of commercial necessity after rejecting TNMM. Separately, deductibility of service expenditure depends on genuine, wholly and exclusively business use; commercial expediency is not displaced because the Revenue considers alternatives preferable.

Section 144C(13) requires the final assessment order to follow DRP directions. Transfer-pricing objections concerning separate benchmarking of global procurement charges and outstanding receivables, their interlinkage with other international transactions, and acceptance of the Transactional Net Margin Method in earlier years under the principle of consistency require reasoned adjudication. Where those objections remain unaddressed, the final assessment order requires setting aside and restoration to the DRP for a reasoned determination of all objections.

Cash payments recorded in a ledger account attracted an addition as unexplained money under Section 69A. On substantially similar facts, the referenced coordinate approach restricted the addition to 10% of the disclosed cash payment rather than the full amount. The restricted addition was to be taxed under the Act's normal provisions.

Limitation for an appeal from refusal of rectification runs from service of the rectification order or its intimation, rather than from an earlier processing intimation. Confused chronology and pursuit of rectification may support condonation of the delay so calculated. A contingent liability disclosed in a tax audit report, but neither debited in the accounts nor claimed as a deduction, is not expenditure subject to disallowance. Where processing independently adds that amount despite no deduction claim, the adjustment constitutes a mistake apparent from the record and is rectifiable under section 154, requiring recomputation of income, tax and consequential interest.

Article 12(4) of the India-Netherlands DTAA does not treat managed cloud application and IT support receipts as equipment royalty where customers receive service output without any right to use or control the underlying cloud infrastructure. Article 12(5) does not characterise those receipts as fees for technical services unless the services are ancillary and subsidiary to a qualifying royalty payment or make available technical knowledge, experience, skill, know-how or processes for independent application. Managed cloud and IT support services meeting neither condition fall outside Article 12 as both royalty and fees for technical services.

Internal TNMM may benchmark international freight-forwarding transactions where the enterprise's non-AE segment is separately identifiable and materially comparable in functions, assets, risks, contractual terms, economic conditions and shipment composition. Entity-level losses alone do not make segmental results unreliable; where enterprise-specific variables are neutralised, internal comparables are more reliable than external TNMM. Arm's-length income under sections 92 and 92C must be determined only for transactions with associated enterprises. Accordingly, external-TNMM adjustments cannot be computed on entity-wide results that include uncontrolled non-AE transactions.

Compulsorily convertible debentures carrying a fixed coupon, no pre-conversion voting rights and a debtor-creditor relationship retain debt character until conversion. Compulsory conversion alone does not support equity recharacterisation, a nil arm's-length price for interest, or an interest disallowance based on equity treatment; transfer-pricing analysis must follow the prescribed framework. Business-support-services adjustments require fresh consideration where additional evidence on service rendition, cost allocation and benchmarking was not assessed. A deduction claim supported by revised computation and certification requires factual examination of statutory conditions, prescribed-form compliance and procedural requirements.

Business-expenditure deductions require substantiation, but a blanket percentage disallowance cannot rest solely on self-made vouchers, presumed unverifiability, or possible personal use where detailed records and party-wise particulars are furnished and no specific defect is identified. The specified expense disallowances were deleted. MAT credit may be set off only to the extent eligible credit is established; its availability and quantum require factual verification. The MAT-credit claim therefore requires examination under the statutory framework.