Transactional Net Margin Method benchmarking requires comparables to match the tested party's functions, assets and risks; product developers, intangible-owning entities, entrepreneurial businesses, education or publishing entities, unsegmented diversified providers and online gaming companies are unsuitable for a limited-risk distributor or routine service provider. Comparable margins must use correct data, with working-capital adjustment granted on verification where material and proportionate adjustment applied consistently. Back-office, sales and marketing support costs integral to assured-margin subscription and service segments cannot be separately valued at nil once segmental margins are arm's length, as this would create a double adjustment. Tax deducted at source credit and consequential interest require recomputation.

Appellate jurisdiction under Section 250 is confined to the assessment and assessment year that form the subject matter of the appeal. An appellate authority cannot direct reopening or reassessment under Section 147 for a distinct assessment year concerning an issue not before it. Where reopening is initiated solely under such an extra-jurisdictional direction, the direction is without jurisdiction. The resulting reassessment, including an addition for unexplained investment, is void ab initio and cannot survive.

Depreciation on fixed assets may be treated as application of income where the asset's acquisition cost has not been claimed as application of income in the same or an earlier year. Section 11(6) prevents depreciation only to the extent necessary to avoid a double deduction when capital expenditure on the relevant asset has already been treated as application of income. Where financial records establish that capital expenditure was not included in the application claimed and only depreciation was claimed, the statutory restriction does not apply. Depreciation is consequently allowable as application of income.

Agricultural income claimed as exempt required verification against supporting documentary evidence before it could be treated as unexplained money. Partial evidence had been furnished during assessment, while sale invoices could not be uploaded because of portal-size constraints and submission in hard copy was sought. As the assessment was completed without further opportunity and the additional evidence was not admitted on appeal, the addition was set aside for de novo verification and adjudication by the Assessing Officer after adequate opportunity to the assessee.

Section 115BAA permits a domestic company to elect the concessional tax regime by filing Form No. 10-IC under Rule 21AE. The option is irrevocable and, once exercised for a previous year, cannot be withdrawn for that or any subsequent previous year. Consequently, the election continues for subsequent assessment years without requiring a fresh Form No. 10-IC each year. A domestic company that has validly exercised the option remains entitled to the concessional tax regime for later years, subject to the statutory conditions.

Unaccounted cash-receipt additions cannot rest on price differentials, internal records, employee statements, electronic communications or median-rate estimates without reliable, transaction-specific proof that cash was actually received. Accepted books, registered sale documents and banking receipts cannot be displaced by uncorroborated suspicion; estimation may quantify an established undisclosed receipt but cannot establish it. Similarly, a vendor's notebook notation does not prove unrecorded land consideration where the alleged cash payment lacks independent evidence, the vendor's explanation remains unrebutted, and disclosed consideration is supported by books and banking records. Deeming provisions for unexplained investment or money require proof of actual investment or possession. Both additions were deleted.

Section 154 permits rectification only of a patent, self-evident mistake apparent from the record and does not permit review of a debatable issue or substitution of one possible view for another. Where a final assessment order expressly applied the India-Mauritius DTAA rate to interest on an income-tax refund, a subsequent rectification could not replace that rate with the domestic-law rate merely by referring to the return of income or the assessment order's lack of detailed discussion. Such reconsideration requires legal examination and falls outside rectification jurisdiction. The treaty rate remained applicable to the refund interest.

Interest on NRE deposits may qualify for exemption under Section 10(4)(ii) even where the individual is resident in India, if the RBI permits continued maintenance of the NRE account. The provision and its proviso prescribe alternative eligibility conditions: residence outside India under the foreign-exchange framework, or RBI permission to maintain the account. Residential status alone does not determine entitlement. Eligibility requires verification of whether the deposits could lawfully continue under the applicable RBI/FEMA framework after the change in residential status. The exemption claim was remitted for limited fresh verification on this issue.

Material non-compliance before the assessing and first appellate authorities warranted a fresh opportunity to substantiate objections and supporting evidence in reassessment proceedings. The first appellate order was set aside and the matter remitted to the Assessing Officer for de novo reassessment after providing the assessee a reasonable opportunity of hearing. The operative principle is that where non-compliance prevents adjudication of tax claims on evidence, a de novo assessment may be directed to preserve principles of natural justice and fair play.

Outright assignment of trademark ownership for lump-sum consideration constitutes acquisition of a capital asset, not royalty for use of intellectual-property rights. Where the transferor's ownership, the rights assigned, commercial terms and tax residency are supported by the agreement and related materials, the remittance is not chargeable to tax in India as royalty. Tax withholding on foreign remittances applies only where the payment is chargeable to tax in India; consequently, no tax-deduction obligation arises and the payer cannot be treated as an assessee in default. The related demand for tax and interest is deleted.

A delayed conveyance fulfilling a promoter's pre-existing statutory and contractual obligation does not constitute a fresh receipt of immovable property for inadequate consideration under section 56(2)(x). Where flat purchasers and the co-operative society had long possessed, occupied and beneficially enjoyed the completed building, the subsequent conveyance merely regularised and perfected legal title by transferring outstanding reversionary and leasehold interests. Settlement consideration paid to resolve intervening disputes, without evidence of unaccounted consideration, a colourable arrangement, or receipt of commercially distinct property in the relevant year, does not make the stamp duty value differential taxable as income.

Professional income must be assessed on a net-income basis and cannot automatically equal gross professional receipts merely because no return was filed or assessment notices were not complied with. Although subsequent-year acceptance of presumptive taxation under Section 44ADA does not independently establish eligibility for the year concerned, it may support the reasonableness of an income estimate where the profession continued without material change. The offer of 50% of receipts as income, tax payment on that basis, and consistent subsequent-year acceptance supported assessment of professional income at 50% of gross receipts.

Cash deposits during demonetisation, where linked to cash sales already recorded in business results, should not be treated as unexplained cash credit when purchases, stock-in-trade and sales remain undisputed. In a trading business, accepted purchases reasonably support corresponding sales. Increased bank deposits may also reflect the inability to use demonetised currency for cash purchases or expenditure, requiring available cash to be deposited. As the profit embedded in those sales has already been offered to tax, assessing the sale proceeds again as unexplained income would result in double taxation. The addition was therefore deleted.

Interest received from loans advanced to companies is taxable under Income from Other Sources where no agency or management contract, or termination or modification of such contract, supports assessment under Section 28(ii)(a). Although lending may be viewed as an adventure in the nature of trade, the stated basis of assessment cannot be replaced at the appellate stage with a different general basis under Section 28. Interest paid on borrowed funds used to make the interest-bearing advances is deductible under Section 57(iii) when a reasonable and proximate nexus with the income earned is established. The Explanation to Section 37(1) does not govern expenditure once the related income is assessed under Income from Other Sources.

Stamp-duty payment is not unexplained investment under Section 69 where the assessee substantiates its source through funds received from a father-in-law. The father-in-law's income-tax return established identity and financial capacity, while the supporting material on creditworthiness was neither disputed nor independently discredited. The explanation for the payment source was therefore sufficiently supported, precluding an addition as unexplained investment.

Properties devolving on a beneficiary upon dissolution of a family trust fall within succession, inheritance or devolution under Section 49(1)(iii)(a). Where acquisition cost is determined by reference to the previous owner, the previous owner's holding period must be included in determining whether the asset is long-term under Explanation 1(b) to Section 2(42A). The same deeming framework applies to indexed cost under Section 48, permitting indexation from the year in which the previous owner first held the property. Accordingly, sale gains are treated as long-term capital gains rather than short-term gains.

Depreciation on goodwill arising from amalgamation, and on brands and trade names transferred through demerger, was treated as allowable where consistent prior treatment applied and no distinguishing facts existed. For captive-power inter-unit electricity transfers, market value was the price paid by the recipient manufacturing unit for open-market electricity, rather than the generator-to-distributor tariff. Steam transferred from an eligible captive-power unit to a non-eligible unit could not be assigned nil value merely because it was a by-product; arm's length valuation may rely on reliable external market comparables rather than internal cost. The disallowances and transfer-pricing adjustments were deleted.

Unexplained cash credits described as advances against future sales require independent evidence of the customers' identity, creditworthiness and the genuineness of the transactions; self-maintained ledgers and matching subsequent sales entries do not establish the original credits. The addition was therefore sustained. Where no binding jurisdictional or Supreme Court authority resolves divergent interpretations of a taxing amendment, the interpretation favourable to the assessee applies. The enhanced tax rate under amended section 115BBE was prospective from assessment year 2018-19 and did not apply to assessment year 2017-18; the sustained addition was taxable at the pre-amendment rate.

Reassessment notices issued beyond four years under the pre-2021 regime could be sanctioned by any authority specified in Section 151(1), including the Principal Commissioner; exclusive approval by the Principal Chief Commissioner was not required. Valid jurisdiction nevertheless required recorded reasons showing a bona fide belief of escaped income and meaningful statutory satisfaction. Incorrect PAN details, the false assertion that no return was filed, absence of a link between reported transactions and escaped taxable income, failure to quantify escaped income at the statutory threshold, and an approval proposal repeating those defects demonstrated invalid jurisdiction. The reassessment notice, consequential reassessment and additions were therefore quashed.

Agricultural-land exclusion from capital gains depends on the land's recorded status, contractual description, actual use and intended use at transfer. Land described in registered instruments as industrial-purpose, recorded as uncultivated and acquired for non-agricultural use may be treated as a capital asset rather than excluded agricultural land. Reinvestment relief under Section 54B requires fulfilment of the prescribed agricultural-use conditions, including use of the transferred land for agriculture during the relevant preceding period. An unchallenged revision order cannot be collaterally contested in proceedings concerning the consequential assessment.