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.

Reassessment initiated more than three years after the relevant assessment year requires approval under section 151(ii) from the Principal Chief Commissioner, Principal Director General, Chief Commissioner or Director General. Approval by a Principal Commissioner is not approval by the specified authority. This defect affects the Assessing Officer's jurisdiction and is not a curable procedural irregularity. Consequently, an invalid approval vitiates the order under section 148A(d), the notice under section 148, the reassessment proceedings and the reassessment order.

Goodwill arising from the assumption of excess liabilities in a slump-sale acquisition of a going concern constitutes consideration for acquired business and commercial rights. Its absence as separately stated monetary consideration or an individual asset valuation does not make it a mere book entry. For assessment years preceding the prospective statutory exclusion of goodwill from depreciable assets, depreciation on such goodwill is allowable; consequential book-profit adjustments based on its disallowance cannot stand. TDS credit belongs to the assessment year in which the related income is assessable, subject to verification through the return, books of account and Form 26AS that the income was offered to tax in that year.

Commission expenditure under section 37(1) was supported by recipient-wise details, PAN particulars, TDS records, Form 26Q and payment evidence, discharging the assessee's initial burden of proving business expenditure. A referral-based business model supported the commercial basis for commission payments. No recipient or payment was specifically identified as non-genuine, excessive or unrelated to business. An estimated commission benchmark without comparable cases, market data or other cogent material could not support an ad hoc disallowance, particularly where the commission ratio broadly aligned with preceding years. The disallowance was therefore deleted.

Rectification under section 154 is confined to an obvious, patent error apparent from the record and cannot resolve matters requiring substantive evidence or extended inquiry. The relevant record may include connected assessment records of the taxpayer; therefore, an addition of share capital and securities premium in an incorrect assessment year may warrant fresh determination after verification of supporting material and coordinated consideration with the original assessment proceedings. Conversely, an addition for share application money received in the relevant year, where identity, source and genuineness require evidentiary appraisal, falls outside rectification. The former claim requires fresh adjudication, while the latter remains unrectifiable under section 154.

Cancellation of charitable registration under sections 12AA(3) and 12AA(4) requires the Principal Commissioner or Commissioner to have demonstrable jurisdiction over the assessee under section 120 and applicable jurisdictional orders or notifications. Centralisation of assessment proceedings with a Central Circle does not, by itself, transfer separate jurisdiction over registration or its cancellation. A Central Commissioner may exercise such functions only where a valid assignment under section 127 places the matter with an Assessing Officer subordinate to that Commissioner. In the absence of a produced transfer order, notification, or other instrument establishing that assignment, cancellation jurisdiction is not established; the cancellation is without jurisdiction and registration remains restored on its original terms.

Territorial and subject-matter jurisdiction remains necessary for cancellation of charitable registration; designation as a Principal Commissioner or Commissioner does not itself confer authority over exemption registration. Exemption jurisdiction continues with the designated exemption authority unless lawfully transferred. Centralisation of group assessments for investigation does not establish transfer of registration jurisdiction without a transfer order, notification, or other jurisdictional instrument assigning an Assessing Officer under the relevant Central Commissioner. Notification No. 70/2014 applies only where such assignment is proved. On these principles, cancellation of registration for want of jurisdiction was quashed and the original registration restored, while the underlying allegations and retrospective-cancellation issue remained unresolved.