Functional comparability under the Transactional Net Margin Method requires assessment of a comparable's actual business and financial profile for the relevant year. An entity performing infrastructure management, network operations, cloud computing, engineering and quality-assurance services alongside software development cannot be benchmarked at entity level against a software-development service provider where reliable segmental revenue and results are unavailable. Comparable margins must be recomputed in accordance with directions issued under section 144C(5) after verification and revision of the comparable set. Outstanding-receivable interest adjustments require verification of domestic balances and a transaction-specific arm's length rate based on the associated enterprise's financial standing, creditworthiness, and comparable uncontrolled terms.

Cost-to-cost reimbursement of salary and travel costs for temporarily seconded employees did not warrant a transfer-pricing mark-up where it was not consideration for a continuing service, had been consistently accepted, and was recognised in a bilateral advance pricing agreement. Under the rule of consistency, no contrary treatment applied without changed facts. Amalgamation expenditure incurred and paid after approval was amortised over five years from the year of actual incurrence, since computation from an earlier appointed date would require deduction before the expenditure was incurred and offend the principle of impossibility of performance. The fifth annual deduction was therefore available for the relevant assessment year.

For traded edible-oil purchases between associated enterprises, the Other Method based on contemporaneous independent market quotations is appropriate where it reflects the transaction, functional profile, and reliable comparable uncontrolled data. Prior acceptance of that method for identical transactions supports consistency where no material change in transactions or functions is established; a different approach in another taxpayer's matter does not displace it without materially similar facts. The resulting arm's-length adjustment requires recomputation after verifying comparables, margins, reliable data, and any working-capital adjustment.

Rule 10B(3) permits an uncontrolled transaction to serve as a comparable only where material differences do not affect profit or can be neutralised through reasonably accurate adjustments. Capacity underutilisation, resulting depreciation differences, and customs-duty burdens require examination against audited data, together with functional comparability, in manufacturing-segment benchmarking; the adjustment requires fresh arm's-length determination. ECB interest remains subject to section 92C benchmarking despite RBI all-in-cost compliance. A single transaction with materially different credit profile, scale and risk attributes is not a reliable benchmark, requiring fresh comparability analysis after an opportunity to substantiate claims.

Arm's-length pricing of proven intra-group GHO and RHO services requires an applicable prescribed benchmarking method; a nil valuation without the Rule 10AB analysis cannot support a transfer-pricing adjustment. Assessed income must reflect a subsequent rectification of the original processing intimation where the rectification recomputes total income. Employee ESI contributions paid by the stipulated due date remain allowable despite an inadvertent contrary entry in the tax-audit report. Where book depreciation has been added back and tax depreciation claimed, the computation requires verification before consequential adjustment, preventing duplication of depreciation disallowance.

Section 54F permits capital-gains exemption where a new residential property is acquired within one year before transfer of the original asset. The provision does not require direct use of the original asset's sale proceeds to purchase the new property; loan financing does not reduce the qualifying investment. Where the qualifying investment exceeds the capital gain, full exemption applies. Cash deposits remain unexplained where no documentary evidence establishes their source and the explanations given are inconsistent.

Penalty for under-reported income arising from misreporting applies where depreciation and amortisation are claimed on bogus transactions. Misrepresentation or suppression of facts, and recording false book entries, encompasses dealings with a non-existent accommodation-entry provider lacking genuine business substance. A surrender made after adverse survey material and independent enquiries, without disclosure through a revised return, is not voluntary merely because it seeks peace or avoids litigation. Section 270A's misreporting provisions override the general protection available for under-reported income, sustaining the penalty.

Direct HO/OB expenditure specifically attributable to an Indian branch is distinguishable from general head-office expenditure and may be considered under section 37(1), subject to evidence and allocation verification, rather than the section 44C cap. Under the India-France DTAA, interest paid by an Indian branch to its HO/OB is not independently taxable within the same enterprise, and treaty rate ceilings for interest and FTS exclude additional surcharge and cess. Transfer-pricing analysis of marketing, guarantee and common-cost transactions requires prescribed methods, functional benchmarking and avoidance of duplicate disallowance. ECB-interest computation must avoid double taxation after PE attribution, while tax deducted at source credit and consequential interest require verification and recomputation.

Notional interest on interest-free tenant security deposits is not taxable where no contractual right to interest exists and the deposits do not mask suppressed rent, because only real income that accrues or arises is taxable. Capital introduced by an identified partner through verified bank accounts cannot be added in the firm's assessment under section 68 absent evidence that the firm's own funds were routed through the partner. Cash deposits already treated as verified partner capital cannot be added again; an uncorrelated balance requires reconciliation and verification. Section 14A does not support an ad hoc expenditure disallowance where no exempt income was earned and no specific expenditure defect is identified.

Dividend exemption under the Income-tax Act applies to dividend actually received during the relevant assessment year. Corporate resolutions and financial statements may establish the dividend rate approved for the preceding financial year and its receipt in the relevant year. A proposed dividend for a succeeding financial year cannot replace the dividend actually received when determining the exemption. The full dividend receipt was therefore treated as exempt, and the related disallowance was deleted.

Revision under section 263 may take account of a Departmental Valuation Officer's report received after assessment because the revisional record encompasses material available when the revisional authority examines it. Where an assessment accepts declared acquisition cost without considering a valuation report sought by the Assessing Officer, that omission may render the assessment erroneous and prejudicial to Revenue interests, requiring redetermination after hearing the assessee. For assessment limitation, the period from the valuation reference to actual receipt of the report is excluded; receipt beyond six months does not itself invalidate the report.

Search-derived information obtained after 1 April 2021 from a third-party search falls within the exclusion from the section 148A procedure. Where alleged escaped income is below the threshold for the extended limitation period, a reassessment notice must be issued within the ordinary limitation period. Time spent using the excluded section 148A process cannot be excluded from limitation. Portal-based communication does not alter the search-derived character of the information, and participation without prejudice cannot cure a jurisdictional defect. Consequently, the delayed reassessment notice and reassessment founded on it were without jurisdiction.

Income-tax returns and net taxable-income details are personal information protected by the RTI Act exemption where disclosure lacks a connection with public activity or interest or would unjustifiably invade privacy. A spouse's private need for financial information in matrimonial maintenance proceedings does not constitute the larger public interest required to override that exemption. Financial particulars should instead be obtained through the maintenance process, which requires both parties to file affidavits disclosing income, assets and liabilities. Accordingly, RTI disclosure of a spouse's income-tax details for a maintenance claim is not justified without an established larger public interest.

Effective cross-examination is required where a seized slip and a third-party statement are the sole basis for an assessment addition. Requiring the assessee to attend cross-examination the following morning does not provide a real or meaningful opportunity and is illusory for natural-justice purposes. An assessment founded on such material without an effective opportunity to test the third party's evidence cannot be sustained; the addition requires fresh determination after that opportunity is provided. Remaining objections to the addition are not addressed.

Section 107 of the CGST Act caps the FAA's authority to condone delayed appeals; equitable relief available in constitutional writ jurisdiction cannot extend that statutory outer limit. Condonation beyond the prescribed period is ultra vires and without jurisdiction. Where registration-restoration orders have been implemented, taxpayers have resumed business, and intervening liabilities have been discharged, a departmental challenge may yield no effective relief without disturbing restored registrations and transactions. Failure to access portal-based revocation under Rule 23 after expiry of its period does not remove the independent appellate remedy under Section 107.

Statutory appellate limitation confines the First Appellate Authority's power to condone delay to the expressly prescribed outer period; discretionary writ relief cannot expand that jurisdiction. Implementation of registration-restoration orders may make a departmental challenge ineffective where registrations have been restored and subsequent business transactions enabled, absent consideration of restoration's consequences. The revocation process for cancelled registration and the statutory appellate remedy operate independently: where portal restrictions prevent a delayed revocation application, failure to seek revocation does not extinguish the right to appeal against cancellation. Equity cannot override an express statutory limitation period.

Circular No. 135/05/2020 has limited application to accumulated input tax credit caused by different tax rates applying to the same input and output supply at different times. It does not govern refund claims where credit accumulates because certain inputs are taxed at rates higher than the output supply, even where a principal input and output attract the same rate. Refund eligibility under Section 54(3) of the Central Goods and Services Tax Act, 2017 must therefore be assessed under that provision rather than denied solely under the Circular.

CGST audit limitation runs from the later of the date records are made available and the date the audit is instituted at the registered person's business premises. An on-site audit commenced after records were furnished is therefore within time when measured from that later date. Before finalising audit findings, the registered person must receive the discrepancy intimation, be given a meaningful opportunity to respond, and have that response considered. An intimation of discrepancies is not final audit findings; a show cause notice based on findings finalised without this opportunity lacks procedural validity.

Failure to decide a Section 74 proceeding on its scheduled hearing date requires the adjudicating authority to fix and communicate a further hearing date. Non-communication denies the assessee an effective opportunity for personal hearing and breaches principles of natural justice. An ex parte adjudication made in those circumstances is liable to be set aside. The matter requires a fresh personal hearing, followed by a reasoned order in accordance with law.

Payment of the prescribed cumulative pre-deposit for a GST Tribunal appeal triggers a statutory stay on recovery of the unpaid disputed demand. CBIC clarification confirms that recovery remains stayed once the required pre-deposit has been made. During that stay, eligible GST refunds cannot be appropriated or adjusted against the balance disputed demand. Where such adjustment has occurred despite the statutory stay, the appropriation must be reversed and the eligible refund restored to the assessee.