Disallowance of expenditure relating to exempt income under section 14A read with Rule 8D cannot exceed the exempt income earned for the relevant year. For assessment years preceding 1 April 2022, the Explanation inserted into section 14A by the Finance Act, 2022 is prospective and does not alter the pre-amendment position. Accordingly, the disallowance must be restricted to the exempt income actually earned, and the later Explanation does not apply to assessment year 2018-19.

Deductibility of a genuine compensatory patent-settlement payment is examined under section 37(1), with the payment characterised as revenue expenditure where it resolves foreign patent litigation, protects business interests, and involves no proven guilt or prohibited purpose under the applicable law. Related financing interest is treated as consequential to the settlement's allowability. The material also addresses transfer-pricing treatment of captive-power transfers and associated-enterprise transactions; the cap on section 14A disallowance at exempt income and exclusion from book-profit computation; business-promotion expenditure; foreign-tax credit verification; research-and-development deductions; and wealth-tax provisions in book-profit computation. Software expenditure remains capital where depreciation has been claimed and allowed.

Amortisation of goodwill arising from a business acquisition or merger is characterised as a non-operating expense for computing the profit level indicator under the Transactional Net Margin Method. Because goodwill amortisation stems from an exceptional acquisition event rather than ordinary business operations, it should be excluded from operating costs to ensure that the taxpayer's operating margin is comparable with uncontrolled entities. Accordingly, the Assessing Officer or Transfer Pricing Officer must exclude goodwill amortisation when determining the profit level indicator for transfer-pricing adjustments.

Reassessment based solely on a suspicious transaction report was invalid where audited financial statements, capital accounts and tax-audit material showed that the questioned receipts were capital infusion or withdrawal by a partner under the partnership arrangement. Withdrawal of a partner's capital balance did not itself demonstrate income escaping assessment, and the reassessment order failed to address the taxpayer's explanation and supporting evidence. In the absence of third-party statements, incriminating material, or evidence that the bank transactions were bogus or accommodation entries, mere suspicion could not justify reopening. The reassessment notices and orders were quashed.

Reassessment requires material giving reason to believe that taxable income has escaped assessment. A suspicious transaction report concerning transactions between an assessee and related partnership or proprietary concerns does not, by itself, meet that standard where the transactions are recorded in the books and supported by audit reports, financial statements, bank records, cash books and ledgers. Incorrectly treating supporting details as unsubmitted, without independent material, third-party statements or seized evidence showing bogus or accommodation entries, cannot establish escapement of income. Inter se loans must also be linked to taxable income alleged to have escaped assessment. Mere suspicion based on transaction patterns is insufficient; reassessment initiated solely on that basis is invalid.

Share capital and share premium additions under Section 68 were unsustainable where the subscriber's identity, transaction genuineness, creditworthiness, financial statements, bank records, money trail and source of investment were established. The subscriber's scrutiny assessment contained no adverse finding on the investment, and its receipt of funds from group companies for that investment satisfied the second proviso to Section 68. As these factual requirements were met, the temporal operation of the proviso did not require determination. Deletion of the unexplained cash credit addition was therefore sustained, with no substantial question of law arising.

In an appeal under Section 260A, the High Court cannot reappreciate seized loose sheets, visitors' slips and diary entries merely to replace the Tribunal's factual conclusions. The Tribunal had examined the documents, accepted the assessee's explanations, and noted the absence of verification from students, parents or other independent sources. The material did not justify extrapolating alleged unaccounted fee collections across years, estimating receipts for unverified seats, or equating COMED-K cancellation-seat fees with management-quota fees. As the Revenue showed no ignored material, lack of evidence or perversity, deletion of the additions remained undisturbed.

Appeals under Section 19 of the Black Money and Imposition of Tax Act, 2015 are to be classified and registered as Tax Appeals under Rule 1(3A) of the High Court of Karnataka Rules, 1959, because the Act provides for the levy of tax. Section 19 provides for an appeal to the High Court from a Tribunal order and requires consideration by a Division Bench. The appeal was therefore permitted to be converted and registered as a Tax Appeal.

Reassessment after processing under Section 143(1) still requires recorded reasons based on tangible, relevant material establishing a rational live link to income escaping assessment. Although no prior opinion is formed through such processing, the absence of change of opinion does not remove this jurisdictional condition. Treating client funds received by a regulated stock-broker as its income merely because they exceeded reported turnover, without material showing conversion into proprietary income, reflects suspicion and an erroneous understanding of the transactions. The reassessment notice and consequential reassessment were therefore invalid for lack of jurisdiction.

The proviso to Section 142(2D), which places liability for a Special Auditor's fee on specified income-tax authorities, was applied to require the Union of India to bear the fee despite the auditor's appointment before the proviso took effect. The special audit had been completed, making the challenge to the audit direction infructuous. The stated legislative policy, completion of the audit under the Assessing Officer's order, and the assessee's non-appearance supported closure of the proceedings with the fee borne by the Union of India.

Section 69C requires the assessee to explain the source of expenditure; an addition cannot rest merely on an unsupported allegation that transactions were accommodation entries. Documentary support including stock statements, tax assessment material, purchaser details, sales confirmations, recovery proceedings and bank-funded encashment of letters of credit established the stated source. Rejecting that material without independent inquiry, document verification, examination of beneficiary entities or cogent contrary evidence does not establish unexplained expenditure. Consequently, addition of outstanding letters of credit as unexplained expenditure and consequential taxation under section 115BBE were unsustainable.

The Supreme Court declined to interfere with the High Court's judgment concerning tax treatment of payments received by a US tax resident for cloud computing services from Indian entities. The dispute concerned whether the payments constituted royalty or fees for technical services under domestic tax law and the India-US DTAA, including issues relating to equipment use, non-exclusive licences, the "make available" condition and withholding tax. The Supreme Court dismissed the Special Leave Petitions, leaving the High Court's judgment undisturbed.

The Supreme Court declined to interfere with the High Court order concerning the availability of deduction under section 80P to Regional Rural Banks as co-operative societies, including the statutory deeming fiction under the Regional Rural Banks Act. The Special Leave Petition was dismissed, while any questions of law were expressly kept open.

Loading railway-owned ballast into stationary railway wagons using JCB loaders is treated as an independent cargo-handling service, not a works contract or composite supply. A works contract requires specified activity relating to immovable property and transfer of property in goods, which was absent. Ballast supply was completed on delivery and transfer of ownership, while subsequent loading was separately instructed, priced and invoiced; the activities were not naturally bundled and no principal supply arose. As loading involved no transportation, wagon movement, shunting, towing or other railway operation, it is classified as cargo handling under SAC 996719 and taxable at 18%.

Ineffective electronic communication of pre-show-cause notices, show-cause notices, reminders and the adjudication order solely through the 'Additional Notices and Orders' tab did not satisfy the communication required under Section 73(1). Fixing the personal-hearing date before expiry of the period for responding to the show-cause notice also denied an effective opportunity to defend. A separate appeal dismissed as time-barred concerned a different intimation and did not affect the writ petition's maintainability. The ex parte adjudication order was therefore quashed for breach of natural justice.

Alleged forced GST payment was not prima facie sustainable at the interim stage because the withdrawal pursis recorded that reasonable amounts had been deposited and the proceedings concerning payment indicated voluntary payment. Non-disclosure of the anticipatory-bail application and its withdrawal was treated as material suppression requiring explanation. The petitioner was directed to deposit costs and file an affidavit explaining the suppressed facts, with the matter listed for further hearing.

GST proceedings under section 74(1) must be initiated against a person chargeable with tax. An individual proprietor is a "person" under section 2(84), but proceedings cannot validly be initiated or concluded in the name of a proprietor who died before the notice and consequential demand order were issued. Where the taxpayer's prior death is undisputed, the notice and demand order are without jurisdiction and void. The issue was resolved in favour of the assessee.

Where a person seeking release of goods detained in transit establishes ownership, the release mechanism under Section 129(1)(a) of the Central Goods and Services Tax Act, 2017 applies. For that purpose, valuation cannot be enhanced, and penalty must be determined by reference to the invoice and e-way bill. The stated position requires release of the goods in favour of the assessee under Section 129(1)(a).

Anticipatory bail was denied in an investigation into alleged wrongful availment and utilisation of input tax credit through invoices issued by non-existent entities. The applicant's role as a director remained under investigation, while a co-director had been arrested in the same matter. The need to establish the applicant's role and identify other persons involved meant that custodial interrogation could not be ruled out. The applicant was therefore not entitled to anticipatory bail.

Writ jurisdiction need not be exercised where an efficacious statutory appeal can examine jurisdictional objections, the reasonable period for issuing a notice under Section 76, and factual disputes over input tax credit and tax payment. The reasonable-period question depends on the facts of each matter, while the appellate remedy can also consider the applicable provision for the relevant financial years. Since the adjudication followed consideration of the reply and an opportunity of hearing, the writ petition was not entertained and the statutory appellate remedy remained available.