Section 68 requires an assessee to establish the creditor's identity and creditworthiness and the genuineness of the transaction. Debits to a partner's capital account were supported by the partnership firm's confirmation, audited financial statements, bank records and evidence that they represented capital withdrawals and expenditure met from the firm's available funds, with no evidence of fund recycling. An individual lender's confirmation, income-tax return, capital position, loan confirmation and bank statements established sufficient funds and liquidity. The evidentiary burden was therefore discharged, rendering the partnership-firm addition unsustainable and supporting deletion of the addition concerning the individual lender.

Transfer-pricing adjustments cannot recharacterise commercially substantiated exclusivity payments, transition-cost reimbursements or upfront discounts as loans merely because of their unconventional form; arm's-length pricing must use a prescribed benchmarking method. Secondary adjustments are unavailable for assessment years commencing before 1 April 2016. Foreign-currency associated-enterprise loans should use a currency-specific benchmark, with LIBOR plus appropriate risk adjustment. Exempt-income disallowance requires objective satisfaction from the accounts; only income-yielding investments count, and sufficient own interest-free funds negate interest disallowance. Export-turnover exclusions cannot include costs never included in that turnover. TDS credit depends on verification of certificates and tax deposit. Education-cess deduction under section 37(1) is unavailable under the retrospective Finance Act, 2022 amendment.

Section 80JJAA deduction applies where the entity retains substantive authority over appointment, remuneration, deployment, discipline and termination of personnel; customer operational supervision does not negate employer status. A one-day delay in filing Form 10DA is condonable, while second- and third-year claims require verification. The first proviso to section 92C(4) bars Chapter VI-A deductions, including section 80JJAA, from income enhanced by an arm's length price adjustment. Transfer-pricing determinations involving KPO characterisation, functional comparables with segmental data, intra-group service charges including Salesforce allocation, and GAP/GSS programme revenue require examination of supporting material and fresh arm's length price determination.

Transfer-pricing comparables for ITES/BPO transactions must be functionally and economically comparable. A consistently accepted comparable may be retained, while entities with materially different outsourcing models, substantially greater scale or brand value, brand and goodwill ownership, unavailable segmental data, or high-end KPO and engineering-design functions should be excluded. Such differences can render an arm's length price adjustment unsustainable. Call-centre, back-office and data-processing services fall within notified computer-software-related services under Section 10A where they involve customised electronic data or similar notified services. Eligibility is reinforced where the activities remain unchanged from prior years in which the deduction was accepted.

Revisionary jurisdiction under Section 263 cannot be invoked merely because the Assessing Officer accepted an explanation for demonetisation-period cash deposits after inquiry. Where the officer considered the explanation, obtained and recorded supporting affidavit evidence, and adopted a plausible view, revision requires material showing that the assessment is both erroneous and prejudicial to Revenue interests. Revision also cannot rest on an incorrect factual premise that penalty proceedings were not initiated when they had been initiated and later dropped following cancellation of the assessment. Neither ground satisfied the statutory conditions for disturbing the assessment.

Interest on borrowed capital is deductible where strategic investments to acquire or retain control in group companies form part of the taxpayer's business and are commercially expedient. Business purpose is not negated by low operational receipts or dividend income being separately classified. Where interest-free funds exceed the relevant investments or advances, those investments may be presumed to have been funded from interest-free sources without requiring a direct fund-wise nexus. Each assessment year remains independently examinable; acceptance of similar claims in other years or for group entities does not prevent scrutiny in the relevant year.

Souharda Sahakaris registered under the Karnataka Souharda Sahakari Act, 1997 qualify as co-operative societies for income-tax purposes where they provide credit facilities exclusively to members. Dealings with members retain the character of mutuality notwithstanding the character or number of associate members permitted under the bye-laws. Profits and gains attributable to member credit facilities, including income connected with that eligible activity, qualify for deduction under section 80P(2)(a)(i). The deduction extends to the entire eligible income derived from providing such credit facilities to members.

Section 263 revision is barred where the revisionary order is passed after the two-year limitation period running from the end of the financial year in which the assessment order was made. The revision also fails where the assessment had examined software arrangements, copyright rights, treaty treatment and relevant Supreme Court precedent before accepting that software-related receipts were not royalty. As no assessment error prejudicial to Revenue was established, the revisionary order was quashed and the original assessment remained undisturbed.

Penalty immunity requires an opportunity of hearing before an application can be rejected, and the rejection must identify the statutory conditions that remain unmet. Where the penalty order does not disclose non-compliance, the immunity application requires fresh consideration, including the taxpayer's compliance with prescribed conditions and any delay in filing Form No. 68. Income disclosed only in response to reassessment notice may constitute under-reported income where no original return was filed and no explanation is provided. If immunity is unavailable, penalty must be determined through a reasoned proceeding after a further hearing.

Reassessment after four years may be sustained where fresh survey information reveals possible accommodation entries or bogus transactions and the original assessment did not examine the relevant purchases and sales. Producing records alone does not establish full and true disclosure of primary facts concerning transaction genuineness, and reopening on such fresh material is not merely a change of opinion. Where alleged bogus purchases and corresponding sales arise from the same unsubstantiated dealings, the full purchase amount should not be added while sales are accepted. Taxable income should instead be estimated on turnover by applying a 5% gross-profit rate, after credit for profit already disclosed.

Internal TNMM is the appropriate method for benchmarking ITeS transactions where associated-enterprise and non-associated-enterprise segments perform broadly similar customer-care and technical-support functions. Segmental results prepared using allocation keys remain reliable unless specific defects in those keys or in the segmental analysis are identified; lack of audited segment accounts alone does not justify rejecting the internal comparison. Internal segmental financial data provides a more reliable basis than external comparables for applying TNMM, making substitution of External TNMM unsustainable.

Tax deduction at source under Section 194C applies to external development charges paid to an urban development authority where binding jurisdictional precedent governs their TDS character. A pending challenge before the Supreme Court does not displace that precedent, although implementation remains subject to the eventual outcome. Payments described as administrative charges connected with changes in beneficial interest and development rights require verification of their true character, the applicable government scheme, and resulting Chapter XVII-B obligations before TDS liability can be determined. Materially disputed payment character therefore requires fresh fact-based and legal examination.

Penalty for concealment or furnishing inaccurate particulars cannot be sustained where the statutory notice retains both charges without identifying the precise default, denying the taxpayer a definite charge to answer. A penalty order issued in the name of an entity that ceased to exist on amalgamation is also unsustainable, particularly where that status was disclosed and the underlying assessment in that name was quashed. Further, restriction of licence-fee expenditure does not establish concealment or inaccurate particulars where material facts were disclosed and no incorrect facts were asserted. These defects remove the jurisdictional and factual basis for penalty.

Cancellation of charitable registration under Section 12AB(4) requires a prior inquiry, satisfaction of a specified violation, and a notice identifying the relevant violation with a reasonable opportunity to respond. General notices that combine the inquiry and cancellation stages, or rely on allegations not put to the trust, do not meet that procedure. Cash deposits already accepted as disclosed fee income cannot establish non-genuine charitable activity. Alleged benefits to specified persons through asset-related payments fall for assessment under Section 13(1)(c), unless evidence establishes non-charitable application, diversion, or activities outside charitable objects; they do not alone constitute a specified violation warranting cancellation or refusal of renewal.

Faceless-assessment requirements under sections 144B and 144C do not invalidate an assessment made by the jurisdictional Assessing Officer where the faceless procedure does not apply and statutory assessment notices were issued. Best-judgment assessment and rejection of books under sections 144 and 145(3) require established material irregularities or substantial accounting discrepancies. In share-trading businesses, broker-ledger entries, contract notes and adjustments of sale proceeds against purchases may explain absent bank entries. Gross-profit estimates must address relevant material, identify accounting defects and rest on a rational, methodical basis suited to the business; unsupported profit rates cannot sustain an addition.

Trust registration requires both charitable objects and prima facie evidence that the trust carries on genuine charitable activities. Educational objects in a trust deed do not alone establish genuineness where accounts and responses fail to identify educational institutions operated or managed by the trust, statutory recognition, or verifiable details of students and staff. Leasing premises to another entity that runs an educational institution, and receiving lease rent, does not demonstrate the trust's own educational activity unless the trust establishes its charitable role or application of rental income to charitable purposes. Registration was therefore not grantable.

Tax deduction at source applies to external development charges paid to Haryana Shehri Vikas Pradhikaran. Statutory creation and performance of functions resembling governmental functions do not make the authority "Government" for the relevant statutory exclusion. Applying the jurisdictional High Court's binding determination, failure to deduct tax at source on those payments results in the payer being treated as an assessee in default.

Reassessment notices and consequential orders were invalid where the recorded reasons rested on unverified and factually incorrect information. For one assessment year, reopening proceeded on the false premise that the assessee had not filed a return, and transaction descriptions were ambiguous. For the other, the notice lacked transaction-wise and party-wise particulars, incorrectly characterised bank transactions and amounts advanced as undisclosed income, and relied on an unverified aggregate. A substantial later reduction in the alleged escaped income reinforced the lack of verification. These defects established non-application of mind both in recording reasons and granting statutory approval, requiring the notices and consequential reassessment orders to be quashed.

A BOT road-concessionaire may deduct a scientifically estimated provision for future major repairs when enforceable contractual maintenance obligations have accrued during the accounting year. Periodic repair duties, consequences of breach, and defect-cure obligations on termination establish a present business liability. Where the provision is based on a detailed and reasonably certain estimate, supported by subsequent actual expenditure, deferred quantification or payment does not make it contingent. The provision for major repairs is therefore an allowable deduction despite the expenditure being incurred in a later period.

Retired employees seeking exemption for leave encashment under the enhanced limit effective from 1 April 2023 may pursue statutory remedies under the Income-tax Act, 1961, including filing revised returns where available. The writ petitions were disposed of with liberty to use those remedies, while preserving all rights and contentions. No substantive determination of eligibility for the enhanced exemption or the availability of revised returns was made.