Retention money previously included in income and recorded as receivables meets the prior-inclusion condition for bad-debt deduction when actually written off as irrecoverable. Under the post-1989 rule, separate proof that the debt became irrecoverable in the particular year is not required. Related-party rent may be disallowed only to the extent it is excessive or unreasonable against the fair market value of facilities; suspicion, an assertion of lack of revenue neutrality, or absence of comparable evidence does not establish that condition. On those principles, disallowances of the written-off retention money and rent are unsustainable.

Section 68 additions for share capital, share premium and unsecured loans are unsustainable where creditor identity, financial capacity and transaction genuineness are established through confirmations, audited records, tax details, banking trails and verification, with no adverse material emerging. An undisclosed inspector's report without cross-examination cannot displace that evidence. Industrial incentives, including transport, interest and insurance subsidies, excise-duty exemptions, and VAT and CST remissions, are capital receipts where their purpose is to promote industrial establishment, expansion, investment and employment in a backward region rather than supplement trading profits. Such non-income receipts are excluded from normal income computation and, where adjudicated, book profit under minimum alternate tax provisions.

Section 147 reassessment requires the Assessing Officer to form an independent reason to believe that taxable income has escaped assessment. Investigation-wing information concerning alleged circular transactions may prompt examination but does not alone establish escapement in an assessee's hands. Recorded reasons should demonstrate verification of the assessee's receipt of funds, role in relevant transactions, and satisfaction of the conditions for deemed dividend under Section 2(22)(e). Mere suspicion, without a prima facie nexus to escaped income, is insufficient.

Section 149 bars a reassessment notice issued more than three years after the relevant assessment year unless the extended-period conditions apply. The extended period requires alleged escaped income, represented by an asset, expenditure, or book entry, to amount to or likely amount to the prescribed statutory threshold. Where the notice for the relevant assessment year was issued after five years and the alleged escapement was below that threshold, it was time-barred. The reassessment proceedings were therefore quashed.

Reassessment under Section 147 may be based on Investigation Wing information concerning transactions and modus operandi where it does not rely on material seized in a third-party search; proceedings under Section 153C need not be invoked in those circumstances. Where purchases are doubtful or linked to accommodation-entry patterns, the addition may be confined to the profit element embedded in disputed purchases rather than the full purchase value. The stated approach sustains an addition of 6% of the disputed purchases.

Reassessment notices issued more than three years after the relevant assessment year require prior sanction from the specified higher authority; approval by a Principal Commissioner does not meet that jurisdictional requirement, invalidating the notice and consequential assessment. Where an original return is treated as filed in response to a reassessment notice, a notice under Section 143(2) is mandatory before assessment; its absence invalidates the assessment. Section 56(2)(vii)(b) does not apply where the agreement, full payment and possession of immovable property were completed before the provision took effect, notwithstanding subsequent conveyance registration.

Share-sale proceeds supported by recognised stock-exchange transactions, registered brokers, demat records, securities transaction tax payments and banking-channel receipts were treated as sufficiently substantiated. General investigation information concerning the scrip, assumptions based on company financials and suspicion did not establish that the taxpayer participated in accommodation entries, price manipulation or a sham arrangement. The addition as unexplained cash credit was therefore deleted. The estimated commission addition as unexplained expenditure also lacked an independent evidentiary basis once the underlying share-sale addition failed, and was deleted.

Income first declared in a return filed pursuant to a section 148 notice constitutes under-reported income under section 270A(2) where it exceeds the maximum amount not chargeable to tax, even if accepted without additions. The section 270A(6) exclusion does not apply where no explanation is given for failure to file the original return and the return follows reassessment proceedings. Enhanced penalty requires under-reporting to result from a statutory misreporting category under section 270A(9). Non-filing alone does not establish misreporting where cash deposits are explained as business sales and no addition is made; penalty is limited to 50% of tax payable on under-reported income.

Common indirect shareholding exceeding the statutory threshold, coupled with wholly owned step-down subsidiaries, establishes associated-enterprise status and supports a transfer-pricing reference. Chapter X computes arm's length pricing of taxable business income rather than taxing notional income; adjustments require use of a prescribed most appropriate method and, where compliance information is absent, may require fresh determination rather than deletion. Capital scientific-research expenditure is deductible only when linked to the taxpayer's own business, not group entities' businesses. Unpaid leave encashment fails the payment condition. Long-term software may be capital, whereas one-year software may be revenue; research expenditure requires characterisation by its prospective enduring benefit.

Reassessment under Sections 148A(3) and 148 requires genuine consideration of the assessee's response and supporting material before a reasoned opinion is formed on issuing a reassessment notice. Where alleged undisclosed business turnover is explained as loan funding from known entities, ledgers and bank statements must be examined rather than disregarded for further investigation. Prior approval obtained before considering the reply may indicate predisposition. Failure to apply mind to the explanation and evidence renders the order and consequential notice defective and requires fresh consideration by the assessing authority.

Reassessment initiation under Sections 147, 148A(3) and 148 requires a meaningful opportunity for the assessee to clarify alleged unreported turnover and provide supporting loan confirmations. Ledger accounts and bank statements identifying the disputed receipts as unsecured loans, together with an explanation of an incorrect financial-year reference, required further examination before concluding that income had escaped assessment. The preliminary reassessment orders, approval and notices could not stand without that opportunity, and reassessment fitness required fresh determination after receiving the requested clarifications.

Payments to a government authority for business-specific restoration of roads excavated for a commercial pipeline constitute consideration for a taxable service, rather than compensation, liquidated damages, or a non-supply. Targeted restoration undertaken to facilitate private commercial activity does not qualify as a sovereign or public-utility function; reverse-charge treatment therefore applies to the business recipient, and exemption or non-supply claims are unavailable. Electronically authenticated GST portal notices and orders remain valid despite the absence of a physical DIN where the notice identifies the factual and legal basis, the recipient responds fully, and no prejudice or breach of natural justice is established.

Request-specific road restoration performed by a government authority after business-directed road cutting is treated as a taxable supply for consideration, rather than a sovereign public-road function, liquidated damages, or unilateral compensation. Public-function exemptions and non-supply treatment do not extend to customised commercial restoration services, requiring the business recipient to discharge GST under reverse charge. Refund sanctions issued in other jurisdictions neither create binding precedent nor res judicata. An unsubstantiated claim that the supplier previously paid tax does not displace reverse-charge liability. Electronic proceedings remain valid where the notice provides adequate particulars and the portal record establishes procedural integrity without prejudice.

Refund of unutilised Compensation Cess credit under the inverted tax structure mechanism requires accumulation because the tax rate on inputs exceeds the rate on output supplies under section 54(3)(ii). Eligibility to take such credit and the absence of blocked-credit restrictions do not independently establish a cash-refund entitlement. Compensation Cess credit is ordinarily restricted to payment of Compensation Cess, and inability to offset it against other liabilities does not itself justify refund. Rule 89(5) cannot create substantive eligibility. Circulars concerning qualifying zero-rated supplies do not extend unconditional refund treatment to domestic supplies that do not attract Compensation Cess; accumulated credit attributable to such supplies is inadmissible unless statutory refund conditions are met.

Place of supply under GST is determined by the location where movement of goods terminates for delivery to the recipient. Where statutory records, including the invoice and e-way bill, identify a stated destination, an allegation of diversion to another State is undermined by inconsistent records. GST law does not require a supplier to declare or use a particular transport route; route deviation alone does not constitute a contravention when valid transit documents are undisputed. Detention penalties require evidence of an existing contravention and intent to evade tax, not an uncorroborated driver statement or a presumed future diversion before unloading.

Input tax credit cannot be denied and extended recovery proceedings cannot rest solely on a supplier's later non-existence where contemporaneous invoices, e-way bills, transport records, accounts, GST records and banking-channel payments support actual receipt and eligibility, absent cogent rebuttal or proof of fraud, wilful misstatement or intentional suppression. The claimant bears the burden of proving ITC eligibility, including actual receipt of goods. Where supplier invoices remain unpaid beyond the prescribed period, proportionate ITC reversal with applicable interest applies, and credit may be re-availed after payment subject to statutory conditions. Voluntary reversal alone does not establish grounds for extended recovery proceedings.

Debit of the prescribed pre-deposit from the electronic credit ledger, rather than the electronic cash ledger, under the delayed-appeal amnesty scheme is a curable procedural defect where the entire amount was secured and a portal glitch caused the payment mode. Technical failures on the official portal should not prejudice the statutory appellate remedy. The taxpayer should receive a reasonable opportunity to make good the stipulated cash component before rejection of the delayed first appeal. Substantial compliance with the pre-deposit condition supports adjudication of the first appeal on merits after the deficiency is cured, rather than rejection as time-barred solely because of the ledger used.

Input tax credit eligibility requires cumulative satisfaction of statutory conditions, including actual receipt of goods and tax payment, with the claimant bearing the burden of proof. Supplier registration, invoices, portal reflection and banking payments are relevant but not conclusive where the supply is disputed; nor does a supplier's later absence conclusively negate an earlier supply. Verification of invoices, e-way bills, transport records and related material must support reasoned findings. Monetary-limit rules may permit a departmental appeal on a recurring interpretive issue where the requisite approval exists. Disputed credit claims require fresh adjudication after documentary verification and an effective opportunity to the claimant.

Unaccounted or excess goods found during a survey of business premises must be addressed through the GST tax-determination mechanism. Section 35 requires registered persons to maintain true and correct accounts, and Section 35(6) treats unaccounted goods or services as supplied for determining tax liability. Sections 73 and 74 therefore govern assessment and recovery of tax on such goods. Direct confiscation and penalty proceedings under Section 130(2) read with Section 122 are unsustainable where the allegation is limited to excess or unaccounted stock discovered at the premises.

Input tax credit must be determined by statutory eligibility conditions and evidence of the recipient's transaction, rather than solely by allegations that the supplier is bogus. Purchase orders, tax invoices, e-way bills, banking records, books of account, stock registers, consignment documents, vehicle details, supplier returns and tax-payment records supported actual purchase, transportation and receipt of goods. The supplier's restored registration and the departmental opportunity to examine the material also negated any breach of natural justice. Input tax credit was therefore allowed on the available evidence.