Limitation under the first proviso to section 149(1) retains the pre-amendment reassessment time limit for assessment years beginning on or before 1 April 2021. For assessment year 2015-16, the applicable six-year period ended on 31 March 2022; consequently, a section 148 notice issued on 7 April 2022 was time-barred. The amended extended period does not revive reassessment proceedings already barred by limitation. Later provisos permitting exclusion of time were neither in force on the notice date nor applicable where no additional time to respond under section 148A(b) had been sought. The consequential reassessment was vitiated.

Overdue receivables arising solely from software development and ITES transactions accepted at arm's length must be assessed within the transfer-pricing analysis of those underlying transactions. Rule 10B requires reasonably accurate adjustments to uncontrolled comparables for material differences affecting price, cost or profit. Denying a working capital adjustment while making a separate notional-interest adjustment for delayed associated-enterprise receivables is inconsistent with that framework. Working capital adjustment must be granted first; once allowed, no separate transfer-pricing adjustment for interest on the overdue receivables is warranted.

Transfer pricing adjustment was recomputed at nil in the order giving effect to the Dispute Resolution Panel's directions. The Assessing Officer consequently accepted the taxpayer's returned income. As no transfer pricing adjustment survived, the taxpayer's grounds became infructuous.

Election to pursue objections before the Dispute Resolution Panel prevents an assessee from relying on the assessment-completion period applicable where objections are not filed or proposed variations are accepted. Rejection of those objections as belated does not revive that alternative limitation period, so the final assessment is not time-barred on that basis. Where the Panel rejects belated objections without issuing directions on proposed variations, the resulting order is an assessment simpliciter rather than an order implementing Panel directions. The statutory first appeal lies before the Commissioner of Income-tax (Appeals), which must consider the grounds on merits without treating that appeal as time-barred.

Uncorroborated third-party seized material, including unsigned or vague records, cannot support additions for undisclosed payments or unaccounted sales against an assessee. The statutory presumption relating to seized material applies against the searched person and cannot be extended to a third party without reliable independent evidence. Reliance on a retracted statement where cross-examination is denied breaches natural justice. Disallowance computed under the normal-income mechanism for exempt-income expenditure cannot be imported into book-profit computation, which operates as a separate code. Components integral to a cogeneration system and incapable of independent operation qualify for the depreciation rate applicable to that system.

Selling commission paid to associated enterprises, when included as an operating cost of a software development services segment benchmarked under the Transactional Net Margin Method, is a closely linked cost and cannot be separately benchmarked at a nil arm's length price. Acceptance of TNMM as the most appropriate method and of the segment's arm's length outcome covers the commission within the operating-cost base used to compute the segment margin. Verification under an appellate direction resulted in deletion of the proposed transfer-pricing adjustment. Consequently, no separate adjustment for the selling commission was warranted.

Accepted Transactional Net Margin Method benchmarking of aggregated manufacturing and service transactions precludes separately testing the markup on closely linked IT support services without justification, eliminating the proposed downward adjustment. Notional interest on overdue associated-enterprise receivables is unwarranted where the taxpayer is debt-free, has no significant interest cost, and identical earlier factual findings remain undistinguished. Section 115BAA excludes the weighted scientific-research deduction under Section 35(2AB), but does not restrict deduction for qualifying capital scientific-research expenditure under Section 35(1)(iv). Form 3CM is not a statutory condition for the latter deduction where no depreciation or weighted deduction is claimed.

Profit embedded in unaccounted on-money receipts should be assessed after considering related cash expenditure recorded in the same seized material, as both form an integrated business stream. A uniform 15% profit rate lacks support where it rests only on general industry assumptions rather than historical margins, comparable projects, or tangible evidence. Fluctuating yearly results, project characteristics and uncorrelated receipts and expenditure make a fixed higher margin excessive, although an aggregate deficit does not establish absence of taxable income. Profit is estimated at 5% of net on-money receipts after adjusting booking cancellations.

For transfer-pricing benchmarking of software development services, companies with turnover exceeding ten times the tested party's turnover may be unsuitable comparables where their scale and brand value materially affect comparability. Applying this turnover filter, entities within up to ten times the assessee's turnover may ordinarily remain in the comparable set. Tata Consultancy Services, LTIMindtree, Mindtree and Tata Elxsi are excluded because their substantially higher turnover makes them unsuitable for a fair comparability analysis. The arm's length price requires recomputation in accordance with law after providing an opportunity of hearing.

Penalty for unexplained money under Section 271AAC(1) was not leviable where cash deposits connected with trading activity were assessed only by estimating an embedded profit element. Restriction of the quantum addition to 10% of the deposits reflected an ad hoc estimation rather than proof of conscious concealment or undisclosed income. The penalty was therefore deleted.

Reassessment notices issued under the substituted regime introduced by the Finance Act, 2021 require approval under Section 151(ii) where more than three years have elapsed from the end of the relevant assessment year. Approval by a Principal Commissioner is not valid for that period because Section 151(ii) limits sanctioning authority to the Principal Chief Commissioner, Principal Director General, Chief Commissioner, or Director General. Consequently, a notice issued under Section 148 on a Principal Commissioner's sanction is jurisdictionally defective, and the consequential reassessment proceedings lack jurisdiction.

Limitation-based dismissal without adjudicating the grounds on merits requires reconsideration where the appeal was rejected solely for delay. An unsupported explanation attributing non-compliance and delayed filing to an authorised representative may justify costs, but does not remove the need for substantive adjudication. Presumptive application of tax-deduction requirements to all purchases is insufficient without examining whether purchases from each relevant party exceeded the prescribed threshold. Merits must be considered after allowing additional evidence, obtaining the Assessing Officer's remand report, and payment of imposed costs.

Sufficient cause supported by a tax professional's affidavit, including health-related inability to attend assessment and appellate proceedings, warrants condonation of delay so that substantial justice prevails over procedural default. Where an assessment is completed ex parte without an effective opportunity to explain bank deposits and furnish supporting evidence for claimed business receipts, the deposits require fresh examination. De novo adjudication should allow the taxpayer to substantiate the source and nature of the deposits before the Assessing Officer.

Penalty for under-reported income arising from misreporting remains leviable where deductions for interest and dividend income were maintained during assessment and penalty proceedings. Section 270A(6) permits relief on a bona fide explanation, but section 270A(8) excludes that relief when the under-reporting constitutes misreporting under section 270A(9)(a). Payment of tax and interest after scrutiny assessment and initiation of penalty proceedings is consequential compliance, not voluntary disclosure demonstrating a bona fide error. Accordingly, the penalty at 200% for under-reporting resulting from misreporting was valid.

Diminution in the value of investment in a wholly owned subsidiary made to expand and strengthen existing business operations may qualify as a business loss where binding jurisdictional precedent supports that treatment. An intimation issued under section 143(1)(a) performs a quasi-judicial function and cannot disregard such precedent solely because the tax audit report characterises the expenditure as capital. Failure to consider a jurisdictional High Court decision already in force when the intimation was issued constitutes a mistake apparent from the record. Rectification under section 154 was therefore maintainable, and the disallowance was liable to be deleted.

Section 145 permits rejection of books only on a reasonable and cogent basis that accounts are incorrect, incomplete, or incapable of determining true income. A consistently followed completed contract or project-completion method is not invalid merely because another revenue-recognition method is preferred. Variations in flat-booking prices, without proof of suppressed sales, unrecorded receipts, or accounting defects, do not establish unreliability of accounts. Similarly, a uniform base price cannot support an addition for undisclosed consideration without evidence that the differential amount was received by the assessee. Payments under separate extra-work arrangements require evidence linking them to the assessee.

Reassessment for escaped capital gains was sustained because the taxpayer had not filed a return despite taxable income, did not dispute the property sale or resulting gains, and produced no material showing that the reopening information was incorrect or mechanically acted upon. Capital-gains exemption for investment in two flats was disallowed because construction agreements did not substantiate instalment dates or payments, sale deeds did not record the asserted prior payments, and completion of the unfinished flats within the prescribed three-year period was not established. Qualifying construction-based exemption requires reliable proof of investment and timely completion.

For property purchases where the agreement date and registration date differ, stamp-duty valuation may be determined as of the agreement date if consideration, wholly or partly, was paid through prescribed banking modes on or before that date. Where the agreement pre-dated the introduction of section 56(2)(x), the sale deed recorded the agreed consideration and payments, and the payment condition was met, the registration-date guideline value could not replace the agreed consideration. The agreement-date value governed, and the addition based on the guideline value at registration was deleted.

Section 28(iv) applies to non-monetary benefits or perquisites arising from business or profession. Acquisition of land at a materially lower value than its established value constitutes a benefit received in kind and is taxable as business income under that provision. The rule excluding monetary receipts from Section 28(iv) does not apply where the benefit is land rather than cash. Taxation of that benefit cannot be offset by increasing the land's stock-in-trade cost, because deductible cost must be actually incurred. The levy is authorised by the Income-tax Act and is not defeated by Article 265 of the Constitution.

Stamp-duty valuation differences within the 10% tolerance band for purchase of immovable property are protected by the curative and beneficial relaxation under section 56(2)(vii)(b). A variation of approximately 6.2% to 6.6% between the stamp-duty value and actual consideration was treated as a marginal bona fide valuation difference. Applying the coordinate-bench view that the enhanced tolerance band operates retrospectively, the addition based on the valuation difference was unsustainable and required deletion.