Unverifiable purchases may justify rejecting books of account to that extent where the supplier cannot be produced, stock records are lacking, and adverse information undermines purchase invoices. Where manufacturing, corresponding sales, and business use of goods are accepted, with no evidence that goods were not received or used, the full purchase value should not be taxed. The addition may instead be confined to the profit element from procurement through unrecorded sources; an estimate of 12.5% was treated as reasonable based on the disclosed gross-profit rate and consistent treatment of similar transactions.

Deduction for donations to an approved scientific research institution under Section 35(1)(ii) remains supportable where the donor substantiates payment through bank records, donation receipts, registration material and approval valid on the donation date. The recipient institution's failure to comply with a verification notice under Section 133(6) does not by itself disprove a genuine donation, absent evidence that funds were returned to the donor in cash. Subsequent withdrawal of the institution's approval does not retrospectively affect deductions for payments made while approval subsisted.

Convenience fee retention by an online ticket-booking platform does not attract tax deduction at source as commission or brokerage unless the platform receives consideration while acting on behalf of the theatre operator. Independent provision of booking, payment-processing and customer-facing services, ownership of customer data, assumption of operational and consumer-claim risks, and entitlement of the theatre operator only to ticket price plus a fixed per-ticket amount indicated no agency relationship. A cap on convenience charges and commercial coordination did not establish representative authority. Without an underlying commission obligation and agency relationship, retention could not constitute constructive payment. Consequently, no tax-deduction obligation or related interest liability arose.

Manpower-supply businesses may claim the employment-generation deduction for personnel they recruit, retain on their payroll and depute to client premises where they pay wages and statutory dues, control assignment, remuneration, discipline and termination, and remain responsible for labour-law compliance. Client-side daily supervision does not by itself displace the employer-employee relationship. Recovering wage costs plus a service margin through client invoices is a commercial arrangement and does not negate the supplier's independent wage and statutory obligations. The incentive should be construed liberally to advance employment generation, and consistent treatment may be relevant where identical claims were previously accepted without material factual or business changes.

Buy-back of a company's own shares below fair market value, followed by statutorily required extinguishment, constitutes a reduction of share capital rather than receipt of property for section 56(2)(x). Interest expenditure is not disallowable under section 36(1)(iii) where interest-free own funds exceed advances, borrowings lack nexus to those advances, and mixed funds alone cannot justify a proportionate disallowance. Loans written off qualify as bad debts under sections 36(1)(vii) and 36(2)(i) when they arise in the ordinary course of an organised money-lending business and are actually written off; a lending licence is not determinative.

Disputed stamp-duty valuation of jointly purchased immovable property, supported by the assessee's valuation material, requires a reference to the Departmental Valuation Officer before determining any taxable difference. The Assessing Officer must address a request for such reference and reconsider the valuation after providing a reasonable hearing. Where ownership shares are identified, the entire differential amount cannot be assessed in one co-owner's hands merely because the other co-owner's share was not assessed; taxation must reflect the respective ownership interests.

Expenditure written off on an abandoned manufacturing project may be deductible as business expenditure where the project expands an existing business rather than establishing a separate line of business. Failure to obtain water-supply approval and the absence of any completed capital asset or enduring advantage support revenue treatment. The expenditure's real commercial character prevails over its earlier classification as capital work-in-progress. The matching principle does not bar a statutory deduction merely because the expenditure was accumulated in prior years. The project write-off was therefore allowable in the relevant year.

Independent application of mind is required for sanction under Section 151; a bare "Approved" endorsement without examination of material or satisfaction on reopening is mechanically granted and invalid. Reassessment based on cash deposits in jointly held bank accounts also requires recorded reasons establishing a live nexus between the assessee and income escaping assessment. Where the assessee is only the second account holder, no material links the entire deposits to taxable income, and agricultural activity supports the explanation, the reopening lacks jurisdiction. The reassessment and consequential additions are unsustainable.

Statutory refund interest under section 244A(1)(a) applies to refunds arising from advance tax or tax deducted at source, including refunds resulting from an appellate reduction in the applicable tax rate. Section 244A(2) permits exclusion only for a definite, identifiable period causally delayed by the assessee; an incorrect original tax position, failure to revise a return, or pursuit of a sustainable claim does not alone establish attributable delay. Additional interest under section 244A(1A) applies where an appellate refund is granted after the statutory period for giving effect to the appellate order, absent a valid extension, withholding, adjustment, or assessee-caused delay.

Under the cash system of accounting, genuine business expenditure is deductible on actual payment, even where the underlying Work Contract Tax relates to earlier financial years, unless the accounting method is validly rejected under the applicable statutory framework. Acceptance of the books and consistently followed cash method prevents selective application of mercantile principles merely because the liability arose earlier. Interest paid for delayed Work Contract Tax remains deductible where it compensates the State for delayed payment and is not imposed as a penalty for an offence or prohibited conduct. Assessed income requires recomputation after allowing both deductions.

Cash deposits reflected in regularly maintained books require examination of the cash book, purchase and sale registers, bank ledgers and supporting material before they may be treated as unexplained money. An unexplained-money addition is unsustainable where records correlate deposits with recorded cash balances but are neither scrutinised nor found unreliable. Penalty for non-compliance with information notices lacks basis where the assessee subsequently responds, participates in assessment, and those replies support completion of assessment. Scrutiny of the books and relevant evidence remains necessary for fresh factual determination of the cash-deposit issue.

LLPs whose accounts require audit under the Limited Liability Partnership Rules qualify for the extended return-filing due date under Explanation 2(a)(ii) to section 139(1), which covers audits mandated by laws other than the Income-tax Act. This entitlement does not depend on meeting the tax-audit turnover threshold under section 44AB. A return filed within that extended due date permits carry-forward of business loss because section 80 does not apply to a timely return. Treating an LLP as a non-audit case despite audit particulars disclosed in the return constitutes a mistake apparent from the record and may be rectified under section 154.

Registration under section 12AB cannot be refused merely because an investor-protection fund is financed by a stock exchange and its members. Compensation is payable only to eligible investors whose admitted claims remain unpaid following a trading member's default and insufficient assets; defaulting members neither receive payments nor obtain rights in the fund. Securities-market investors constitute a section of the public sharing a common public interest, not a private group of specified persons. Investor protection, awareness and research activities remain consistent with charitable objects where they are not conducted as trade, commerce, business, or services for consideration. The refusal was unsustainable because the activities were genuine, aligned with the stated objects, and outside the proviso to section 2(15).

Section 151(ii) requires reassessment notices issued after three years from the end of the relevant assessment year to receive prior approval from the Principal Chief Commissioner or Chief Commissioner. For assessment year 2016-17, a notice and an order under Section 148A(d) issued in July 2022 were approved by the Principal Commissioner. Even after accounting for the TOLA extension, approval by that authority did not satisfy Section 151(ii). The defect concerned jurisdiction to issue the reassessment notice, rendering the notice invalid and preventing the consequential reassessment proceedings and assessment from surviving.

Profit-margin comparisons alone do not justify an adjustment to profits of an eligible unit under Section 10A(7) read with Section 80IA(10). The provisions require the contemplated arrangement affecting profits; a higher net-profit margin, without evidence of such an arrangement, is insufficient. On that basis, deletion of the profit addition was sustained, with no substantial question of law arising.

Reassessment under Sections 148A and 148 requires verified material directly linking the assessee to alleged escaped income. An undated complaint that was not investigated, unsupported cash-receipt imagery, and data recovered from the phone of an employee of an unrelated entity do not establish that nexus. Statements recorded later that do not support the alleged cash transaction further weaken the basis for reopening. Reassessment founded on such unverified material, surmises and conjectures lacks a valid foundation.

Reassessment following a completed scrutiny assessment cannot be initiated merely from bank-credit information that was already furnished, queried and examined during the original proceedings. Detailed requisitions for bank-account particulars and statements, followed by acceptance of returned income, indicate conscious consideration of cash deposits and related RTGS transactions. Portal information repeating those records does not establish income escaping assessment. A successor Assessing Officer cannot reopen an examined transaction solely on a different view. Recorded reasons must disclose the completed scrutiny assessment, identify previously undisclosed transactions, and support any allegation that full and true disclosure was not made. Without those jurisdictional facts, reassessment and the consequential demand lack legal basis.

Closure of criminal proceedings cannot rest on an assumption that prosecution's purpose is satisfied where assessment and appellate orders have been partly set aside and remitted, leaving tax liability unresolved. Liability determined and discharged only after the closure order does not establish that it had been fully satisfied when closure was ordered. The closure lacked a sustainable basis and requires reconsideration by the Trial Court after taking account of subsequent developments.

A reassessment notice under Section 148 must be validly issued as a jurisdictional precondition to reassessment under Section 147. Section 159 permits proceedings to continue against legal representatives only when proceedings were initiated during the deceased assessee's lifetime; it does not cure or validate proceedings initiated by a notice addressed to a person already deceased. Where the legal heir objects to jurisdiction without participating in the proceedings, a notice issued after the assessee's death cannot be treated as a notice to that heir. The notice and any direction treating it as issued to the legal heir are void from inception and without jurisdiction.

Unsigned appeal memoranda are a curable procedural defect and should not ordinarily prevent adjudication of underlying tax disputes on merits. The High Court found that, although the assessee had failed to rectify the notified defect and was expected to exercise greater diligence, refusing restoration would make the Tribunal's default dismissals final without merits review. The Tribunal appeals were therefore restored, subject to payment of costs and rectification of the defects within the stipulated period, and were directed to be decided on merits.