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.

Agricultural land within a municipality meeting the prescribed population condition is treated as a capital asset; aerial-distance criteria apply only to land outside municipal limits. Classification must rest on underlying municipal records, notifications or maps establishing jurisdiction on the transfer date, rather than an unverified report. Where the land qualifies as a capital asset, an alternative claim for capital-gains exemption for reinvestment in agricultural land may be raised in appellate proceedings despite not being made earlier. Relief remains conditional on evidence of prescribed prior agricultural use and timely purchase of replacement agricultural land.

Advertisement, publicity and sales-promotion outlays incurred recurrently to sustain business in a competitive market were treated as revenue expenditure because they neither acquired a capital asset nor produced an enduring benefit. Consistent acceptance of comparable expenditure as revenue in preceding and succeeding years, including scrutiny assessments, supported application of consistency where no material factual change existed. ITAT therefore allowed the expenditure in full and deleted its capitalisation-based disallowance.

Penalty proceedings under Section 270A require a notice under Section 274 to identify the precise statutory limb or sub-clause forming the proposed charge. A standard-form notice that omits this material specification indicates lack of application of mind and cannot validly support a consequential penalty. Consistency, judicial discipline and uniformity also require materially identical donation claims involving the same political entity and assessment period to receive equivalent treatment, unless a rational distinction exists. Denial of an exclusion allowed in parallel proceedings on identical facts makes the penalty unsustainable. The penalty proceedings and consequential penalty were therefore quashed and deleted.

Taxability of a stamp-value differential on purchase of immovable property under Section 56(2)(x) depended on an increase in valuation between payment of registration charges and execution of the registered sale deed. Additional registration charges were paid following that increase. Before the revised valuation, the difference between the purchase consideration and stamp-duty value fell within the 10% tolerance limit. The addition, made without a valuation-officer reference, was treated as unsustainable and directed to be deleted.

Advertisement, marketing and promotion expenditure paid to third parties does not constitute an international transaction merely because it may benefit an associated enterprise. A transfer-pricing adjustment under Chapter X requires the Revenue to establish an agreement, arrangement, or understanding between associated enterprises concerning the AMP expenditure. The bright line test cannot replace proof of an underlying international transaction. In the absence of such evidence, AMP expenditure is outside transfer-pricing adjustment and no arm's-length-price determination is permissible.

Section 40A(3) applies only where an assessee incurs expenditure and makes payment outside the prescribed modes. Loan funds received from finance companies and passed to identified borrowers by a vehicle-finance facilitator do not constitute its business expenditure where only commission or brokerage is recognised as income. Finance records, payment advices, agreements and confirmations may establish the facilitator's intermediary role. Routing loan funds through its bank account does not, by itself, convert onward disbursements into expenditure incurred by the facilitator; consequently, disallowance under section 40A(3) does not apply.

Section 153B(1) required search-related assessments to be completed within twelve months from the end of the financial year in which the final search authorisation was executed. Where the final authorisation was executed in financial year 2020-21, the statutory deadline was 31 March 2022. The COVID-19 limitation extension applied only to judicial and quasi-judicial matters, including appeals, suits and petitions, and did not extend deadlines for original assessment proceedings. Assessments completed on 11 April 2022 were consequently beyond limitation and invalid.

Completed, unabated assessments may be subjected to additions under Section 153A only where the search yields incriminating material relating to the assessee; absent such material, the additions are unsustainable. Reassessment requires recorded reasons founded on correct material facts and genuine application of mind; an erroneous factual premise prevents valid formation of the requisite belief and renders reopening void from inception. A concealment penalty cannot continue where its sole underlying quantum addition has been deleted, because no independent basis remains.